1. Human Resource Management (HRM)
BA in MBA III.
HRM strategies and HR Planning
András Kun
University of Debrecen – Faculty of Economics and Business Administration

2. Textbook chapters 7, 8 & 25 (without action planning in 25)
Readings
Textbook chapters 7, 8 & 25 (without action planning in 25)
HRM is strategic: enable the organization to achieve its strategic goals & have an impact on these goals

3. Strategy
The direction and scope of an organization over the long term.
It should match the resources of the organization to its changing environment (markets, customers and other stakeholders).
Strategy determines the direction where the organization is going

4. The stakeholders (figure from Wikipedia)

5. The concept of strategy
It is a long term plan
It is the pattern of the organizations’s behavior over time: it provides consistency
It is a perspective : a fundamental way of doing things (mission)
A ploy: a specific manoeuvre to outwit a competitor

6. The concept of strategic management
Vision and mission
Strategic goals (expression of strategy)
Strategic plans (development and implementation of st.)
Implementing the strategy
(business strategy via functional strategies)
Managing strategy itself (goals, plans, implementation)

7. Strategic fit in 3 senses
Capabilities and resources to the environment (opportunities and threats)
The business (or corporate) strategy to functional strategies and strategies of business units
Every part of the strategy area should be mutually supportive
Achieving strategic fit is a goal of strategic management of firms.

8. Strategic HRM (SHRM) vs. HRM
A strategic approach to HRM
Focus on:
(Business) strategy
Integration
Coherence
It plans, not only reacts (HRM strategy is vertically integrated with business strategy)
People are strategic resources (+ human capital approach)
It is both integrated and integrative (focuses on strategic fit)
Strategic decision making (long-term impact on success)

9. HR strategies (as part of HRM)

10. An ideal HR strategy: satisfy the needs of the business strategy
guides HRM development and programms
is founded on detailed analysis
can be turned into actionable programmes
is coherent and integrated
takes account of the needs of line managers, employees and other stakeholders
Can we reach this ideal strategy? What are the constraints? Why analysisi is needed?

11. An HR strategy can be Overarching (general)
Specific: focuses on specific areas
Talent management
Human resource development
Reward management …
Do we need both (an overarching + some specific)?

12. Human resource planning

13. Definition of HR planning
The process for ensuring that the human resource requirements of an organization are identified and plans are made for satisfying those requirements.
It is generally concerned with matching resources to business needs on the longer term and sometimes on the shorter term (operative planning).
Two main questions:
How many people (quantity)
What short of people (quality)

14. As an integrated part of business planning it has to adapt
Changes in environment and activities
Core competences
Skill and work requirements
Motivational requirements and possibilities
Focus on specific areas if it is needed
HR plan is interpreting the business plan in terms of personnel issues

15. Hard & soft HR planning Hard (≈ manpower planning): Soft:
quantitative analysis
right number of the right short of people
Soft:
Right attitudes and motivation
Commitment and engagement
Behavior & culture

16. A shift from simple manpower planning
Reconciling numbers of employees & predictable stable jobs (quantity)
Skills, competency development (quality)

17. Classic 3 steps model Demand forecasting (future jobs)
Supply forecasting (people)
Plans to match supply and demand
Complexity and continuous changes
Skills and competences instead of number of workers

18. „Managers don’t like HR planning”
Difficulties of predictions
Priorities and strategies are also changing
Distrust: they simply don’t like theory or planning but pragmatic solutions
Lack of evidence that it works
How can we predict numbers and qualities of labor?

19. Evidence on the benefits
Planning for substantive reasons
Supporting decisions
Identifying potential problems
Optimizing resources
Benefits from the planning process
Understanding the HR processes
Planning for organizational reasons
Linking HR to business plans
Regaining control over operating units
Coordinating decision making

20. Aims of HR planning
Attract and retain the number of people required with the appropriate skills
Anticipate the problems of potential surpluses or deficit of manpower
Development goals
Reduces dependence on external factors (like external recruitment)
Designing work systems to be more efficient (utilization)
As a conclusion from previously discussed slides. Work system: labor + other producion factors + processes.

21. Process of HR planning Its non-linear (feedbacking, replanning)
Strategy is more likely to be evolutionary than deliberate
Remember the Michigan school model from previous class.

22. The place of HR planning in the hierarchy of planning
Business planning
Resourcing strategy
Scenario planning
Demand/supply forecasting
HR plans
Action planning

23. Forcasting and analysis
Macro and micro environment: especially labor market
Labor turnover analysis: actual and trends (part of supply forecast)
Work environment analysis: skill development and job satisfaction
Operational effectiveness analysis: productivity, utilization, fexibility

24. Methods of forecasting
Subjective:
Expert judgment
Using team techniques
Objective:
Ratio trend analysis (statistics)
Work study techniques

25. Labor turnover It is costly:
Money: administration, replacement (recruiting & training), opportunity cost of managing the leavings, decreasing productivity before leaving, productivity loss during the training of the replacement
Impact on the work environment
It is normal (it should be measured and forcasted)
Question: is zero turnover good or bad?

26. Usual reasons for quit Payment Career Job security Skill development
Work conditions
Poor relationship with the boss
Harassment
Personal (not connected to the firm)
Question: Which one is the most frequent inner-firm reason to quit?

27. Measuring labor turnover
Indices:
Labor turnover index (% of the average number of workers)
Survival rate (% of the total entrants in a certain period)
Half-life index (time taken to reducing a cohort to the half of its original size)
Stability index (those who had at least 1 yr service / those employed 1 yr ago): focusing on continuity
Length of service analysis (ratios of groups with different service levels, average service time, average service time of the leavers, etc.)
Analysing reasons of leave (exit interview)
Benchmarking turnover

28. Calculation of labor turnover index
Number of separations in a month: 9
Average employees in the same month: 50
Solution: 18%

29. Typology of turnover Total = incoming + leaving
Reasons: controlability
Question: which one is the more (most) important? Why?

30. Thank you for your attention