Strategic HR Planning Report

SHR
PlanningJoseph Winthrop B.
Godoy
Joseph Charles
Villadelgado
MMT – Batch 36

Strategic HR ManagementStrategic HR Management
• Strategic Human Resource ManagementStrategic Human Resource Management
– Involves aligning initiatives involving how people are managed
with organizational mission & objectives
• Strategic Management ProcessStrategic Management Process
– DDeterminingetermining what needs to be done to achieve corporatewhat needs to be done to achieve corporate
objectives over 3 - 5 yearsobjectives over 3 - 5 years
– EExaminingxamining organization & competitive environmentorganization & competitive environment
– EEstablishingstablishing optimal fit between organization & its environmentoptimal fit between organization & its environment
– RReviewingeviewing && revisingrevising strategic planstrategic plan

Process of Strategic ManagementProcess of Strategic Management

Major Factors Affecting HRM
StrategicStrategic
HRMHRM
TechnologicalTechnological
AdvancementAdvancement
DemographicsDemographics
and Diversityand Diversity
GlobalizationGlobalization

The Human Resource
Environment

What do you think are the
possible common job of
the people in the pictures
here?

Human Resource Planning
• What is Planning?
– Planning is the process of predetermining a
course of action.
1.Planning is both a function and a skill.
a) As a function, planning includes setting objectives,
scheduling work, evaluating suggestions and the
skill of planning.
b) The skill of planning is the process of devising the
methods by which the organization will proceed
from its present situation

• What is Planning?
2. Planning is selecting and relating facts and
devising and employing assumption about the
future in the formulation of proposed activities
believed necessary to accomplish desired
results .
• Through planning, managers and supervisors try to
look ahead, anticipate eventualities, prepare for
contingencies, map out activities, and provide an
orderly sequence for achieving the objective.

• What is Strategic Planning?
– is an organizational management activity that is used
to set priorities, focus energy and resources,
strengthen operations, ensure that employees
and other stakeholders are working toward
common goals, establish
agreement around intended outcomes/results, and
assess and adjust the organization's direction in
response to a changing environment.

• What is Strategic Planning?
– It is a disciplined effort that produces fundamental
decisions and actions that shape and guide what an
organization is, who it serves, what it does, and why it
does it, with a focus on the future.
– Effective strategic planning articulates not only where
an organization is going and the actions needed to
make progress, but also how it will know if it is
successful.
– Involves aligning initiatives involving how people are
managed with organizational mission & objectives

• What is a Strategic Plan?
– A strategic plan is a document used to
communicate with the organization the
organizations goals, the actions needed to
achieve those goals and all of the other
critical elements developed during the
planning exercise.

• Why Plan?
1. Planning provides for effective utilization of all
company resources, including personnel,
facilities and capital.
2. Planning helps reduce the potential problems
associated with the uncertainties and risks
that the future may bring.

• When to Plan?
1. Planning must take place before acting. To
reverse this relationship would be an
absurdity.
2. All plans are tentative and subject to revision
as new facts become known.
3. Typically, plans are re-examined frequently
and, if necessary, modified to provide for new
conditions.
4. “If you fail to plan, you plan to fail!”

• How to Plan?
– Planning will give you freedom to determine
how to accomplish your plan or objectives
spelled out by management or immediate
superior.
– Planning is part of every manager’s
responsibility.
1. Asses the present situation.
– Analyse all your current responsibilities to identify
exactly what is being achieved and what isn’t.
– Know where you stand, where you will go and how to
get there (goals)

• How to Plan?
2. Identify and state the problem that the planning is
intended to solve.
– Determine exactly what you are trying to accomplish by
planning.
– Identify what present conditions appear to to require
modification or elimination and what additional activities,
personnel, and other resources seem desirable
– Consider what major hurdle (stumbling block) will have
to be overcome
2. Forecast the future environment.
– With knowledge and experiences
– Identify the most important variables
– Develop contingency plans in advance of future situation

• How to Plan?
4. Obtain and classify information about the
proposed activities.
– Examine carefully all the information available to you
about the plan might include.
– Classify the information to reveal what is relevant to the
planning at hand and what relationship is among the
various pieces of information.
4. Select planning premises.
– After forecasting future conditions and classifying
relevant information, identify the assumptions under
which the future activities are to be carried out
– These assumptions constitute the planning premises

• How to Plan?
6. Examine alternative courses of actions.
– The goals that have been set for every Department can
be achieved through various alternatives. Narrow them
down to the few that seem to offer the best possibilities.
Then examine these more closely.
6. Select a course of action.
– When you have decided upon a course of action, you
have, in effect, adopted a plan.
6. Determine the details and timing of the selected
plan.

• How to Plan?
8. Determine the details and timing of the selected
plan.
– In developing the details of your plan, address the
following questions:
» What is necessary?
» Where will the activities take place?
» When will the activities occur?
» Who will do it?
» How will the work be done?

• What to avoid?
1. Adhering too rigidly to the planning procedures.
1. Not consulting all levels before finalizing a plan.
1. Making assumptions about critical elements.
2. Overlooking training.

• Steps in Planning (Christian Practical View)
• Luke 14:28-30 (28) If one of you is planning to build a
tower, you sit down first and figure out what it will cost, to
see if you have enough money to finish the job. (29) If you
don't, you will not be able to finish the tower after laying
the foundation; and all who see what happened will make
fun of you. (30) 'You began to build but can't finish the job!'
they will say.
1. Pray – ask God’s wisdom for the plan – WHAT?
2. Objective – to achieve the set goal/s – WHERE?
3. Program – possible activities to be done - HOW?
4. Schedule – beginning to the end of work - WHEN?
5. Budget – manpower/people need funds – WHO?

A person may plan his
own journey, but the
LORD directs his steps.
Proverbs 16:9 (God’s Word)

Strategic Human Resource
Planning

Planning
• Human Resources Planning
(HRP) is a process that
identifies current and future
human resources needs for an
organization to achieve its goals.
• Human Resources Planning
should serve as a link between
human resources management
and the overall strategic plan of
an organization.

Planning
• Right number of people with right skills at
right place at right time to implement
organizational strategies in order to achieve
organizational objectives
• In light of the organization’s objectives,
corporate and business level strategies, HRP
is the process of analyzing an organization’s
human resource needs and developing plans,
policies, and systems to satisfy those needs

Planning
• Setting human resource objectives
and deciding how to meet them
• Ensuring HR resource supply meets
human resource demands

FactorsFactors
Affecting HRPAffecting HRP

Internal Factors
 These are the factors that relate to what is already
happening inside the business.
 This includes how the organisation is changing to cope
with new methods of working or new demands made
on it, such as the introduction of technology or new
products or services.
 Also a way of considering the new skills that will be
needed in the future and those that the existing staff
already have. The gap between the skills already
present and those that are needed can be measured.

Internal Planning Factors
1. Organizational Needs
2. Skills Requirements
3. Workforce Profiles

Organizational Needs
 The workforce needs to be able to adapt to changes.
 Demand for products and services will affect the
number of people needed in certain roles.
 More staff may be needed in as the business grows.

Skills Requirements
 Assessing the skills of the current workforce is an
essential part of HR planning as it enables a business
to build up a profile of the training, experience and
qualifications that employees already have.
 This is very important whether the business is capital
intensive or labour intensive.
 As the nature and type of work changes within an
organization, so do the skills requirements. An
organization must measure the skill levels of its
workforce in order to plan for the future - appraisals,
awards, certificates etc.

Workforce Profiles
 This means that a manager can view and monitor the
types of employee working for the business.
 The people involved in HRP usually include details
such as age, gender, ethnicity and availability.
 Knowing ages can help you plan for the future and
also ensures that you fulfill any legislation
requirements.
 Profiling the qualifications and training of your
workforce allows a business to make use of any special
skills staff members have.

External Planning
Factors These are the factors that influence the business from
outside its direct control.
1. Supply of Labor
2. Labor Costs
3. Workforce Skills
4. Government Policies
5. Labor Market Competition

External Planning
Factors
6. Changing Nature of Work
7. Employee Expectations
8. Impact of Automation
9. Demand for Products and Services

Supply of Labor
 Typically, the supply of labour is dependent on trends
in unemployment and the types of skills that are
needed by employers.

Labor Costs
 The cost of labor will depend on whether the business
is capital or labor intensive, as well as the extent to
which the skills needed by that organization are
available and accessible.

Workforce Skills
 Using published national statistics, organizations can
see the types of skills that are available in their local
area or region.
 Businesses need to consider their future needs and
those of their competitors in order to make sure they
attract the right people - this may mean extra
incentives being offered.

Government Policies
 Government policies and changes to education
policies can lead to gaps in skills, or gaps in skills
being addressed.

Labor Market
Competition As a business plans its workforce needs for the future,
so do other businesses within the same industry.
 There may not be enough skilled employees for each
business, so you may need to offer more money to
attract the right staff, however, you need to manage
your funds well to make a profit.

Changing Nature of
Work Nowadays, employees need a wider range of skills and
be willing to change employer and job role in order to
stay in work.
 Overnight working, flexible working hours and
working from home are now common in the
workplace. Flat organizational structures mean
employees may have to move to get a promotion.

Employee Expectations
 Differing types of contracts (part-time, full-time,
temporary, casual, permanent) Everyone is different
and employees may have business at home to take care
of meaning they cannot work full-time.

Impact of Automation
 This addresses the changes in technology over time
and how this affects organisations - such as the
internet and email, no need for phone operators,
customers entering their own details online.

Demand of Products and
Services A business may have to alter or change its HR
requirements or staff levels based on the natural
changes in demand for goods or services.
 Excess capacity is when an organization has too many
goods or services on offer compared to the number of
customers.

HRP Process
• Interfacing with strategic planning and
scanning the environment
• Taking an inventory of the company’s
current human resources
• Forecasting demand for human resources
• Forecasting the supply of HR from within
the organization and in the external labor
market

HRP Process Cont.
• Comparing forecasts of demand and
supply
• Planning the actions needed to deal
with anticipated shortage or
overages
• Feeding back such information into
the strategic planning process.

Example of the Basic Human
Resources Planning Model
Organization
al Objectives
Human Resource
Requirements
Human Resource
Programs
Feasibility
Analysis

HRP Model
• Strategic Human Resource Planning
– Links 1 & 5: HR objectives are linked to
organizational objectives and planning
• Designed to insure consistency between
organization's strategic planning process and HRP.
– So objectives of strategic plan are feasible and
– HR programs are designed around what
organizational objectives and strategies require in
terms of human resource goals

Example of the Basic
Human Resources
Planning Model
Organization
al Objectives
Human Resource
Requirements
Human Resource
Programs
Feasibility
Analysis
1 2 3
4
5

HRP Model Cont.
• Operational Human Resource Planning
– Steps 2,3, & 4
• Ensure HRP programs are coordinated
and allows the organization to meet its
human resource requirements.

Example of the Basic Human
Resource Planning Model
Open new
product line
Open new
factory and
distribution
system
Open new
product line
Open new
factory and
distribution
system
Develop staffing for
new installation
•Production
workers
•Supervisors
•Technical staff
•Other managers
Develop staffing for
new installation
•Production
workers
•Supervisors
•Technical staff
•Other managers
Recruiting and
training
programs
feasible
Transfers
infeasible
because of lack
of managers
with right skills
Recruiting and
training
programs
feasible
Transfers
infeasible
because of lack
of managers
with right skills
Recruit skilled
workers
Develop technical
training programs
Transfer managers
from other facilities
Recruit skilled
workers
Develop technical
training programs
Transfer managers
from other facilities
Develop new
objectives
and plans
Develop new
objectives
and plans Recruit managers
from outside
Recruit managers
from outside
Too costly to hire
from outside
Too costly to hire
from outside
1 2 3
4
5
6

Link 1: Determine Demand
(labor requirements)
• How many people need to be working and in what
jobs to implement organizational strategies and attain
organizational objectives.
• Involves forecasting HR needs based on
organizational objectives
• Involves consideration of alternative ways of
organizing jobs (job design, organizational
design or staffing jobs)
• Example - Peak production could be handled by
temporary workers or assigning overtime. Machine
breakdowns assigned to maintenance department or
handled by machine operators

Link 2: Determine HR Supply (availability)
• Choose HRM programs (supply)
• Involves forecasting or predicting effect of various
HR programs on employee flowing into, through
and out various job classifications.
• First determine how well existing programs are
doing then forecast what additional programs or
combination of programs will do
• Need to know capabilities of various programs and
program combinations

Determine Feasibility Links 3 & 4
• Capable of being done
– Requires knowledge of programs, how programs
fit together and external environmental constraints
(e.g., labor force, labor unions, technology created
skill shortages) and internal environmental
constraints (skill shortages within the
organization, financial resources, managerial
attitudes, culture)
• Do the benefits outweigh the costs
– Difficulty in quantifying costs and benefits

Revise Organizational Objectives and
Strategies Link 5
If no feasible HR program can be devised,
the organization must revise strategic
plans.

Shortcomings of the model -
HRP in Practice
• Oversimplification of planning process
-Planning does not normally proceeds
till find first acceptable plan
• More than one set of HR goals to satisfy
link 1 and more that one acceptable plan
to satisfy link 2 so:
• Typically choose the best HR goal for
the strategic plan and the best program
to satisfy that HR goal

Shortcomings of the model -
HRP in Practice
• Oversimplification of the benefit of planning is the
specific plans that result
– Planning process has value in and of itself
• HRP in practice is usually less rational and may omit
one or more of the steps
– May lack knowledge required for forecasting
– Incorrect assumptions about effectiveness of HR
programs
– Does not engage in strategic planning
– Resistance to change present HR systems

HRP should be :
• Done to guide and coordinate all HR activities
so they work together to support the overall
strategy
• Responsive to internal and external
environment
• Planning - done in advance
• Strategic - linked with higher level planning

Human Resource Forecasting
• Process of projecting the organization’s
future HR needs (demand) and how it will
meet those needs (supply) under a given
set of assumptions about the
organization’s policies and the
environmental conditions in which it
operates.
• Without forecasting cannot assess the
disparity between supply and demand nor
how effective an HR program is in
reducing the disparity.

Forecasting as a Part of HRP
DEMAND
FORECASTING
SUPPLY
FORECASTING
Determine
organizational
objectives
Determine
organizational
objectives
Demand
forecast for
each objective
Demand
forecast for
each objective
Aggregate
demand
forecast
Aggregate
demand
forecast
Does aggregate
supply meet
aggregate
demand?
Go to feasibility analysis stepsGo to feasibility analysis steps
Choose human
resource programs
External programs
• Recruiting
• External selection
•Executive
exchange
Internal programs
•Promotion
•Transfer
•Career planning
•Training
•Turnover control
Internal supply forecast External supply forecast
Aggregate
supply forecast
Aggregate
supply forecast
No
Yes

Internal Supply Forecasting
Information
• Organizational features (e.g.,
staffing capabilities)
• Productivity - rates of productivity,
productivity changes
• Rates of promotion, demotion,
transfer and turnover

External Supply Forecasting
Information
• External labor market factors
(retirements, mobility, education,
unemployment)
• Controllable company factors on
external factors (entry-level
openings, recruiting, compensation)

Demand Forecasting
Information
• Organizational and unit strategic
plans
• Size of organization
• Staff and Managerial Support
• Organizational design

Considerations in Establishing
a Forecasting System
• How sophisticated
• Appropriate time frame
• Subjective versus objective
forecasting methods

System Sophistication
• Organizational size
– large organizations require more complex
forecasting systems and likely to have the required
skilled staff
• Organizational complexity
– complex career paths and diverse skill
requirements lead to more complex forecasting
systems
• Organizational objectives
– the greater the gap between current HR situation
and desired HR situation the more sophisticated
the system
• Organizational plans and strategies
– the complex the plans are the more complex the
forecasting system

Forecasting Time Frame
Depends on degree of environmental
uncertainty
Factors creating uncertainty (shortening time
frame)
– many new competitors, changes in technology, changes
in social, political and economic climate, unstable
product demand
Factors promoting stability (longer time
frame)
– strong competitive position, slowly developing
technology, stable product demand.

Subjective VS. Objective
Forecasting
Objective is inappropriate when:
– Lack expertise to use objective
methods
– Lack the historical data or HR data
base is inadequate
– Forecasting horizon is too long for
the available objective method

Demand Forecasting Methods
• Delphi Method
• Staffing Table Approach
• Regression Analysis
• Time Series Analysis
• Linear Programming

Supply Forecasting Methods
• Skills Inventory
• Replacement Charts
• Succession Planning
• Flow Modeling/Markov Analysis
• Computer Simulations

Organizational Life-Cycle
Stages and HR Activities
LIFE-
CYCLE
STAGE
STAFFING COMPENSATION
TRAINING
AND
DEVELOPMEN
T
LABOR /
EMPLOYEE
RELATIONS
Introductio
n
Attract best
technical and
professional talent.
Meet or exceed labor
market rates to
attract needed talent.
Define future skill
requirements and
begin establishing
career ladders.
Set basic
employee-
relations
philosophy of
organization.
Growth Recruit adequate
numbers and mix of
qualifies workers.
Plan management
succession. Mange
rapid internal labor
market movements
Meet external market
but consider internal
equity effects.
Establish formal
compensation
structures.
Mold effective
management
team through
management
development and
organizational
development.
Maintain labor
peace,
employee
motivation, and
morale.

Organizational Life-Cycle
Stages and HR Activities
(cont’d)
LIFE-
CYCLE
STAGE
STAFFING COMPENSATI
ON
TRAINING AND
DEVELOPMEN
T
LABOR /
EMPLOYEE
RELATIONS
Maturity Encourage
sufficient turnover
to minimize layoffs
and provide new
openings.
Encourage mobility
as reorganizations
shift jobs around.
Control
compensation
costs.
Maintain flexibility
and skills of an
aging workforce.
Control labor
costs and
maintain labor
peace. Improve
productivity.
Decline Plan and
implement
workforce
reductions and
reallocations,
downsizing and
outplacement may
occur during this
Implement tighter
cost control.
Implement
retraining and
career consulting
services.
Improve
productivity and
achieve flexibility
in work rules.
Negotiate job
security and
employment-
adjustment

How does HR Planning
occur?
1. What does the environment look like?
2. What are our future personnel needs?
(forecast demand)
a. Judgmental
 Estimates
 Rule of Thumb
 Delphi Technique
 NGT
 Brainstorming

The Nominal Group Technique
A small group of 4-5 people gathers around a table.
Leader identifies judgment issue and gives participants
procedural instructions.
Participants write down all ideas that occur to them,
keeping their lists private at this point. Creativity is
encouraged during this phase.
Leader asks each participant to present ideas and writes
them on a blackboard or flipchart, continuing until all
ideas have been recorded.
Participants discuss each other’s ideas, clarifying,
expanding, and evaluating them as a group.
Participants rank ideas privately in their own personal
order and preference.
The idea that ranks highest among the participants is
adopted as the group’s judgment.

The Delphi Technique
Leader identifies judgment issues and develops questionnaire.
Prospective participants are identified and asked to cooperate.
Leaders send questionnaire to willing participants, who record
their judgments and recommendations and return the
questionnaire.
Leaders compiles summaries and reproduces participants’
responses.
Leader sends the compiled list of judgment to all participants.
Participants comment on each other’s ideas and propose a final
judgment.
Leader looks
for consensus
Leader accepts consensus judgment as group’s choice.

occur?
1. What does the environment look like?
(forecast demand)
b. Statistical
 Regression

Statistical Techniques Used to
Project Staffing Demand Needs
Name
Regression
analysis
Productivity
ratios
Description
Past levels of various work load indicators, such as
sales, production levels, and value added, are
examined for statistical relationships with staffing levels.
Where sufficiently strong relationships are found, a
regression (or multiple regression) model is derived.
Forecasted levels of the retained indicator(s) are
entered into the resulting model and used to calculate
the associated level of human resource requirements.
Historical data are used to examine past levels of a
productivity index (P):
P = Work load / Number of People
Where constant, or systematic, relationships are found,
human resource requirements can be computed by
diving predicted work loads by P.

Statistical Techniques Used to
Project Staffing Demand Needs (cont’d)
Name
Personnel
ratios
Time series
analysis
Description
Past personnel data are examined to determine historical
relationships among the employees in various jobs or job
categories. Regression analysis or productivity ratios are
then used to project either total or key-group human
resource requirements, and personnel ratios are used to
allocated total requirements to various job categories or
to estimate for non-key groups.
Past staffing levels (instead of work load indicators) are
used to project future human resource requirements.
Past staffing levels are examined to isolate and cyclical
variation, long-tem terms, and random movement. Long-
term trends are then extrapolated or projected using a
moving average, exponential smoothing, or regression
technique.

Regression Analysis
1. Statistically identify historical predictor of workforce size
Example: FTEs = a + b1 sales + b2 new customers
2. Only use equations with predictors found to be
statistically significant
3. Predict future HR requirements, using equation
Example: (a) FTEs = 7 + .0004 sales + .02 new
customers
(b) Projected sales = $1,000,000
Projected new customers = 300
(c) HR requirements = 7 + 400 + 6 = 413

Determining the Relationship
Between Hospital Size and
Number of Nurses

occur?
b. Statistical (cont.)
 Ratio analysis
(demand forecast cont.)

occur?
3. Are resources available – internally or
externally – to fill those needs?
a. Internal
 Replacement charts

Employee Replacement
Chart for Succession
Planning

occur?
a. Internal
 Promotability

occur?
a. Internal
 Promotability
 Succession planning
 Skills inventory
 Transition (Markov) matrix

A Sample Transition Matrix
Part A: Personnel Supply
Estimated Personnel Classification in Year T + 1 (%)
Classifications in Year T P M S Sr A Exit
Partner .70 .30
Manager .10 .80 .10
Supervisor .12 .60 .28
Senior .20 .55 .25
Accountant .15 .65 .20
Part B. Staffing Levels
Estimated Personnel Availabilities in Year T + 1 (%)
Beginning
Classifications in Year T Levels P M S Sr A Exit
Partner 10 7 3
Manager 30 3 24 3
Supervisor 50 6 30 14
Senior 100 20 55 25
Accountant 200 30 130 40
10 30 50 85 130

occur?
b. External – what do you look at?
- try to determine availability of
qualified labor; Surplus?
Shortage?

occur?
4. What should we do?
- create plan of action to reconcile supply and
demand
a. Set objectives
b. Generate alternatives

Staffing Alternatives to
Deal with Employee
Surpluses
Source: Compliments of Dan Ward, GTE Corporation

Staffing Alternatives to
Deal with Employee
Shortages
Source: Compliments of Dan Ward, GTE Corporation

occur?
demand
a. Set objectives
c. Assess alternatives

Alternative Scheduling Options
Alternative Percent Using
(N = 427 companies)
The following definitions were used in this survey for alternative
scheduling strategies:
• Part-time: A regular employee who works fewer than 35 hours
per week.
• Flextime: A system than enables employees to vary their schedules:
Usually, the flexibility applies to starting and finishing times.
• Compressed workweek: A full-week schedule (usually 40 hours)
than occurs in fewer than five days, such as four 10-hour days.
• Job sharing: Two or more employees split a full-time position,
diving the responsibilities, and, to some degree, the
compensation.
• Work-at-home: A program that enables employees to
complete work at home (or at a remote office closer to home) on
a regular basis. It is often referred to as “flexplace” or
“telecommuting.”
84%
40%
23%
18%
13%

occur?
demand
a. Set objectives
c. Assess alternatives
d. Choose alternative – KEEP PHILOSOPHY IN MIND

occur?
5. How did we do?
a. Did company avoid surplus/shortage?
b. Evaluate usefulness of methods used
c. Goals v. Production Levels, etc.

Strategic HR Planning Report

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