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  • 1. Chapter 4Human Resource Planning Falkenberg, Stone, and Meltz Human Resource Management in Canada Fourth Edition Copyright © 1999 Harcourt Brace & Company Canada, Ltd.
  • 2. Chapter OverviewThe need for human resource planningPurposes of human resource planningRelation to other human resourcefunctionsThe human resource planning processProjecting human resource supply 4.1
  • 3. Chapter Overview (cont ’d.)Forecasting future human resourceneedsComparing forecast needs withprojected supplyPlanning policies and programsEvaluating human resource planningeffectivenessThe HRM audit 4.2
  • 4. Purposes of Human Resource PlanningSetting goals and objectivesExamining the effects ofalternative human resourcepolicies and programs 4.3
  • 5. Examples of Organizational GoalsTo increase company profits by 10% in thenext fiscal year (profitability)To close 25 retail outlets in the next fouryears (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) 4.4
  • 6. The Human Resource Planning ProcessProject future human resource supplyForecast future human resource needsCompare forecast needs with projectedsupplyPlan policies and programs to meethuman resource needsEvaluate human resource planningeffectiveness 4.5
  • 7. Projecting Human Resource SupplyAssessment of current supplySkills inventoriesAnalysis of human resourceflowsStochastic models 4.6
  • 8. Examples of Human Resource FlowsEmployees 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) 4.7
  • 9. Typical Data Elements in a Human Resources Information SystemEmployee 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 4.8 Work information
  • 10. Forecasting Future Human Resource NeedsPlanning for the status quoRules of thumbUnit forecastingThe Delphi methodScenariosComputer simulation 4.9
  • 11. Five Steps in the Delphi Method1. An issue, question, or problem is identified.2. A small group or panel of ten or fewer experts is identified.3. Independent judgements about the issue are obtained from each expert through a questionnaire or structured interview.4. An intermediary or facilitator collects, analyzes, and feeds back information from the first questionnaire or interview to each expert.5. Steps 3 and 4 are repeated until there is a 4.10 consensus on the issue or problem.
  • 12. Sample Questions from a Unit Forecasting QuestionnaireList any jobs that have changed since the lastforecasting period and any that will change inthe next forecasting period.If vacancy can be filled with present employees,note whether training will be required. Specifynature of training needs.What percentage of employees are performingjobs up to standard?How many employees will be absent in the nextforecasting period because of disability,educational, or other leaves? 4.11
  • 13. Planning for Anticipated Shortages Transfer employees to jobs in which shortages exist Train employees to move up to jobs in which shortages exist Have employees work overtime Increase employee productivity Hire part-time employees 4.12
  • 14. Planning for Anticipated Shortages (cont ’d.)Hire temporary full-time employeesHire permanent full-time employeesSubcontract work to other firmsForgo increases in productionInstall equipment to perform someof the tasks that would be done byworkers (capital substitution) 4.13
  • 15. Ways to Increase Employee ProductivityOffer monetary incentives, e.g. bonuses,for higher productivity or performancelevelsImprove employees ’ job skills to producemore in less time or at lower costRe-design work processes and methodsso greater outputs are achievedUse more efficient equipment so greateroutputs are achieved 4.14
  • 16. Planning for Anticipated Labour SurplusesClose plantsLay off some workers permanentlyGive incentives for early retirementLet the workforce shrink by attritionRetrain and transfer workersShut down plants (or parts of them) temporarilyLay off workers temporarilyReduce the work weekUse work sharingCut or freeze pay and/or benefits 4.15
  • 17. Evaluating Alternatives to theProblem of Labour Shortages or SurplusesDetermine size of the anticipatedshortages or surplusesDetermine the expected durationof the change in the demand forhuman resourcesDetermine the amount of leadtime before shortages orsurpluses occur 4.16
  • 18. Information Needed to IdentifyAppropriate Ways to Deal with Labour Surplus/ShortageFinancial and human costs andbenefitsEffects on other organizationalcomponentsLength of time to implement thealternatives and generate desiredresultsProbability of success in reducing theshortage or surplus 4.17
  • 19. Programs for Human Resource PlanningLinear programming, e.g. to minimize totallabour costs within certain constraintsGoal programming, e.g. setting multiplegoals such as increasing profits by 10%and hiring bilingual salespeopleComputer simulation, e.g. to examine theeffects of various programs to reducesurpluses or shortages 4.18
  • 20. HRM Auditing ModelStrategic-Level HRM — determines theeffectiveness of HRM functions in the overallstrategic plan of the organizationManagerial-Level HRM — determineseffectiveness of HRM functions withindepartments and unitsOperational-Level HRM — determines theeffectiveness of HRM functions throughout theorganization 4.19
  • 21. Reasons for Conducting HRM AuditsWhen labour costs are large or the largestcomponent of total product or service costsThe personnel audit is used to justify theexistence of budgets of staff and programsThe personnel audit provides valuablefeedback from employees and line managersThe personnel audit may uncover problemssuch as unqualified HRM staff, lack of HRMpolicy compliance, or low employeesatisfaction 4.20