Hrp

Human Resource Planning

Business Strategy INTERNAL FIT HR Philosophy HR Policy HR System HR Practices Company Values Competitive Challenges Environ- ment EXTERNAL FIT Achieving Strategic Fit

Ensuring the Fit between HR and Organisation Strategy
External Fit (or External Alignment)
Focuses on the connection between the business objectives and the major initiatives in HR.
Internal Fit (or Internal Alignment)
Aligning HR practices with one another to establish a configuration that is mutually reinforcing.

Strategic Flexibility
Organizational Capability
Capacity of the organization to act and change in pursuit of sustainable competitive advantage.
Coordination flexibility
The ability to rapidly reallocate resources to new or changing needs.
Resource flexibility
Having human resources who can do many different things in different ways.

Human Resource Planning (HRP)
Is the first component of HRM strategy
All other functional HR activities are derived from and flow out of the HRP process.
Has its basis in considerations of future HR requirements in light of present HR capabilities and capacities.
Is proactive in anticipating and preparing flexible responses to changing HR requirements.
Has both an internal and external focus.

HRP and Strategic Planning
Strategic Analysis
What human resources are needed and what are available?
Strategic Formulation
What is required and necessary in support of human resources?
Strategic Implementation
How will the human resources be allocated?
Human Resource Planning Strategic Planning

HR Planning Issues
Staffing Questions:
How do we manage staffing in times of recession or expansion?
What impact does technology change, mergers or relocation have on staffing issues?
Do we always have the right people in the right jobs at the right time?
How do we get our human resources: buy them or make them or both?

Major Objectives of HRP
Preventing understaffing and overstaffing
Ensure the organisation has the right employees with the right skills at the right place at the right time
Ensure the organisation is responsive to changes in its environment
Provide direction and coherence to all HR activities and systems

Types of Planning
Aggregate Planning
Anticipating the needs for groups of employees in specific, usually lower level jobs and the general skills employees will need to ensure sustained high performance.
Succession Planning
Focuses on ensuring that key individual management positions in the organization remain filled with individuals who provide the best fit for these critical positions.

HRP and Environmental Scanning
Environmental Scanning
The systematic monitoring of the major external forces influencing the organization.
Economic factors
Competitive trends
Technological changes
Political and legislative issues
Social concerns
Demographic trends

Scanning the Internal Environment
Cultural Audits
Audits of the culture and quality of work life in an organization.
How do employees spend their time?
How do they interact with each other?
Are employees empowered?
What is the predominant leadership style of managers?
Benchmarking
The process of comparing the organization’s processes and practices with those of other companies.

Human Resource Planning Model FORECASTING DEMAND
Considerations
Technology
Financial resources
Organizational growth
Mgmt. philosophy
Techniques
Trend analysis
Managerial estimates
Delphi technique
Techniques
HR inventories
Markov analysis
Skill inventories
Replacement charts
Succession Planning
External Considerations
Wkforce changes
Mobility
Govt policies
Unemployment
FORECASTING SUPPLY BALANCING SUPPLY AND DEMAND (Shortage) Recruitment Full-time / Part-time
(Surplus) Reductions
Layoffs
Terminations
Demotions
Retirements

Forecasting Demand for Employees Forecasting Demand Quantitative Methods Qualitative Methods

Quantitative Approach: Trend Analysis
Forecasting labor demand based on an organizational index:
Select a business factor, e.g. sales, that best predicts human resources needs.
Plot the business factor in relation to the number of employees to determine average labor productivity.
Compute labor productivity for the past five years.
Project human resources demand out to the target year(s).

Example of Trend Analysis of HR Demand 1999 Rs. 2,935 8.34 352 2000 Rs. 3,306 10.02 330 2001 Rs. 3,613 11.12 325 2002 Rs. 3,748 11.12 337 2003 Rs. 3,880 12.52 310 2004 Rs. 4,095 12.52 327 2005* Rs. 4,283 12.52 342 2006* Rs. 4,446 12.52 355 BUSINESS LABOR HR FACTOR PROD TY DEMAND YEAR (SALES IN ‘000) (SALES/EMPLOYEE) (NO. OF EMPLOYEES ) *Projected figures ÷ =

Qualitative Approaches to Demand Forecasting
Management Forecasts
The opinions (judgments) of supervisors, department managers, experts, or others knowledgeable about the organization’s future employment needs.
Delphi Technique
An attempt to decrease the subjectivity of forecasts by soliciting and summarizing the judgments of a preselected group of individuals.
The final forecast represents a composite group judgment.

Forecasting Supply of Employees: Internal Labor Supply
Staffing Tables
Markov Analysis
Skill Inventories
Replacement Charts
Succession Planning

Forecasting Internal Labor Supply
Staffing Tables
Graphic representations of all organizational jobs, along with the numbers of employees currently occupying those jobs and future (monthly or yearly) employment requirements.
Markov Analysis
A method for tracking the pattern of employee movements through various jobs.

Hypothetical Markov Analysis for a Retail Company

Internal Supply Forecasting Tools
Skill Inventories
Files of personnel education, experience, interests, skills, etc., that allow managers to quickly match job openings with employee backgrounds.
Replacement Charts
Listings of current jobholders and persons who are potential replacements if an opening occurs.

An Executive Replacement Chart

Forecasting Supply of Employees: External Labor Supply
Factors Influencing the External Labor Supply:
Demographic changes in the population
National and regional economics
Education level of the workforce
Demand for specific employee skills
Population mobility
Governmental policies

Sources of Information About External Labor Markets
Department of Labor publications
State and local planning and development agencies
Chambers of Commerce
Industry and trade group publications
State and local employment agencies

HRP Considerations
Balancing supply and demand

Elements of The HR Plan
Acquisition of personnel
Effective Utilization
redeployment
methods improvement
training to prevent obsolescence
Development and Improvement
broad-based training and development
performance management systems
Retention
proper remuneration
long-term career planning
healthy employee relations
good working environment

Requisites for Successful HRP
HRP must be seen as equally vital as business planning
Top-management support
Periodic review and revision of the forecasting techniques and the forecasts
Without long range planning concentration becomes focussed on short-term needs resulting in “crisis management” reactions
An excellent and up-to-date HRIS
Active involvement of line managers and co-ordination between line mgrs and HR function

Hrp

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Hrp