1.3_HR Planning - PGD_2

Human Resources Planning


“HR Planning is the process of using an organisation’s

goals and strategy to forecast the organisation’s HR

needs in terms of finding, developing and keeping a

qualified workforce.”

Answers the Question:

“What must we do today to be prepared for

tomorrow”

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HRM Planning

HRM planning is a process by which an organization ensures that it has the right number and kinds of people, at the right time, capable of effectively and efficiently completing those tasks that will help the organization to achieve its overall strategic objectives.

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HRM &Organizational Strategy

Human resource planning ultimately translate the organization's overall goals into number and types of employees needed to meet those goals.

Employment planning cannot exist in isolation . It must be linked to the organization’s overall strategy.

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Mission Determining what businessthe organization is in

ObjectivesAnd goals

Setting goals and objective

Strategy Determining how the goals and objectives will be achieved

Structure Determining what job need to bedone and by whom

People Matching skills, knowledgeand abilities to require the job

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Planning Model

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Strategic Planning and HR Planning

Strategic PlanningProcedures for making decisions about the organization’s long-term goals and strategies

Strategic Human Resources ManagementThe pattern of human resources deployments and activities that enable an organization to achieve its strategic goals.

Strategy Formulation — providing input as to what is possible given the types and numbers of people available.

Strategy Implementation — making primary resource allocation decisions about structure, processes, and human resources.


Strategic PlanningStrategic PlanningHR PlanningHR Planning

-Reciprocal and interdependent relationship

-Environmental scanning critical for both

-Reciprocal and interdependent relationship

-Environmental scanning critical for both

Importance Of HRP

1. FUTURE PERSONNEL NEEDS• Surplus or deficiency in staff strength• Results in the anomaly of surplus labour with the lack of top

executives

2. COPING WITH CHANGE• Enables an enterprise to cope with changes in competitive forces,

markets, technology, products & government regulations

3. CREATING HIGHLY TALENTED PERSONNEL• HR manager must use his/her ingenuity to attract & retain

qualified & skilled personnel• Succession planning

4. PROTECTION OF WEAKER SECTIONS• SC/ST candidates, physically handicapped, children of the socially

disabled & physically oppressed and backward class citizens.

Importance Of HRP (contd.)

5. INTERNATIONAL STRATEGIES• Fill key jobs with foreign nationals and re-assignment of employees

from within or across national borders

6. FOUNDATION FOR PERSONNEL FUNCTIONS• Provides information for designing & implementing recruiting,

selection, personnel movement(transfers, promotions, layoffs) & training & development

7. INCREASING INVESTMENTS IN HUMAN RESOURCES• Human assets increase in value

8. RESISTANCE TO CHANGE AND MOVE• Proper planning is required to do this

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Importance Of HRP (contd.)

9. OTHER BENEFITS• Upper management has a better view of the HR

dimensions of business decision• More time is provided to locate talent• Better opportunities exist to include women &

minority groups in future growth plans• Better planning of assignments to develop

managers can be done


-Vacant positions create costly inefficiencies

-Overtime hours at premium cost

-Simultaneous layoffs and hiring

-Mass layoffs requiring:

-severance pay

-extended notice periods

-Vacant positions create costly inefficiencies

-Overtime hours at premium cost

-Simultaneous layoffs and hiring

-Mass layoffs requiring:

-severance pay

-extended notice periods

Results of Inadequate HR Planning


-Ineffective training, development, career planning

-Turnover of high performers

-Problems with employment equity goals

-Inability to meet operational and strategic plans

-Ineffective training, development, career planning

-Turnover of high performers

-Problems with employment equity goals

-Inability to meet operational and strategic plans

Results of Inadequate HR Planning

Factors Affecting HRP

Internal growth

Informal

Inflexible

Growth through M & A

Reactive

Flexible

Proactive

Formal

1. TYPE & STRATEGY OF ORGANISATION

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II. ORGANIZATIONAL GROWTH CYCLES & PLANNING• Embryonic/ Introduction stage – No personnel

planning• Growth stage – HR forecasting is essential• Maturity stage – Planning more formalized & less

flexible• Declining stage – Planning for layoff, retrenchment &

retirement

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III. ENVIRONMENTAL UNCERTAINITIES• Political, social & economic changes• Balancing programmes are built into the HRM

programme through succession planning, promotion channels, layoffs, flexi time, job sharing, retirement, voluntary retirement scheme(VRS), etc….

IV. TIME HORIZONSShort-term & Long-term plans

V. TYPE & QUALITY OF FORECASTING INFORMATION• Type of information which should be used in making

forecastsVI. NATURE OF JOBS BEING FILLED

• Difference in employing a shop-floor worker & a managerial personnel

The Human Resource Planning Process

Corporate Analysis

Forecast Demand for Labor

Forecast Internal Supply of Labor

Develop Plan to Match Demand with Supply

Forecast External Supply of Labor

Strategic Planning

Human Resource Planning

Forecasting HumanResourceDemand

Comparison of Requirements and

Availability

Forecasting HumanResource

Supply

EXTERNAL ENVIRONMENT

INTERNAL ENVIRONMENT

Demand =Supply

NoAction

Surplus of Workers

Restricted Hiring, Reduced Hours, Early Retirement,

Layoff

Shortage of Workers

Recruitment

Selection

The Human Resource Planning Model

Elements of Effective HR Planning

2. Forecast Future Internal/External Candidates (Supply)

1. Forecast Future HR Needs (Demand)

3. Implement Plans to Balance Supply and Demand

4. Monitor and Evaluate Results

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Four Phases HR Planning

The overall process of HR planning generally occurs in four closely related phases:

1. Assessing supply and demand

2. Developing objectives

3. Designing and implementing programs

4. Evaluating outcomes

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Phase 1: Assessing Supply and Demand

Situation analysis and environmental scanning; Forecasting HR demands

(Trend projection, unit -demand forecasting) ; Reconciling the budget; Forecast HR supply (skills inventory).

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Phase 2 : Developing Objectives

Considering corporate strategy & goals; The objectives set will also depend upon the

needs identified in phase 1; Organizational culture and employee

attitudes such as commitment and customer focus.

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Phase 3 : Designing and Implementing Programs

To increase the supply of certain categories of employees or to decrease the number of current employees;

To make organizations more attractive to a broader of applicants;

To improve the organizations socialization efforts so that good employees want to remain with the organization;

To downsize or ‘right-size’ the organization.

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Phase 4 : Evaluating Outcomes

To quantify the value of HR; An HRIS facilitates rapid and frequent collection of

data; Data collection is important for evaluating

programs and making adjustments; Determining the effectiveness of HR plans; Demonstrating the significance of planning and

HRM department itself to the organization as a whole.

FORECASTING DEMANDFORECASTING DEMAND

Human Resource Planning Technique Model

Figure 4.3

Considerations• Product/service demand• Technology• Financial resources• Absenteeism/turnover• Organizational growth• Management philosophy

Considerations• Product/service demand• Technology• Financial resources• Absenteeism/turnover• Organizational growth• Management philosophy

Techniques• Trend analysis•Regression Analysis•Ratio Analysis• Managerial judgment• Delphi technique

Techniques• Trend analysis•Regression Analysis•Ratio Analysis• Managerial judgment• Delphi technique

Techniques• Staffing tables• Markov analysis• Skills inventories• Management inventories• Replacement charts• Succession Planning

Techniques• Staffing tables• Markov analysis• Skills inventories• Management inventories• Replacement charts• Succession Planning

Considerations• Demographic changes• Education of the workforce• Labor Mobility• Government policies• Unemployment rate

Considerations• Demographic changes• Education of the workforce• Labor Mobility• Government policies• Unemployment rate

FORECASTING SUPPLYFORECASTING SUPPLY

BALANCING SUPPLY AND

DEMAND

BALANCING SUPPLY AND

DEMAND

(Shortage) Recruitment

• Full-time• Part-time• Recalls

(Shortage) Recruitment

• Full-time• Part-time• Recalls

(Surplus) Reductions

• Layoffs• Terminations• Demotions• Retirements

(Surplus) Reductions

• Layoffs• Terminations• Demotions• Retirements

Forecasting Demand for Employees

Quantitative MethodsQuantitative MethodsQuantitative MethodsQuantitative Methods

Qualitative MethodsQualitative MethodsQualitative MethodsQualitative Methods

Forecasting DemandForecasting DemandForecasting DemandForecasting Demand

Forecasting Future HR Needs (Demand)

Quantitative Approaches

Trend analysis: Review past employment levels

Ratio analysis: Ratio of business activity/employees

Scatter plot: Graph of business activity/employees

Regression analysis: Statistical relationship

between business activity and employees

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Quantitative Approach: Trend Analysis

Trend analysis means study of a firm’s past employment needs

over a period of years to predict future

needs.

Quantitative Approach: Trend Analysis

Forecasting labor demand based on an organizational index such as sales:

Select a business factor that best predicts human resources needs.

Plot the business factor in relation to the number of employees to determine the labor productivity ratio.

Compute the productivity ratio for the past five years.

Calculate human resources demand by multiplying the business factor by the productivity ratio.

Project human resources demand out to the target year(s).

A forecasting technique for determining future staff needs by using ratios between sales volume and number of employees needed.

Quantitative Approach: Ratio Analysis

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Quantitative Approach: Regression Analysis

REGRESSION ANALYSIS

• Drawing a statistical comparison of past relationship among variables

• This valuable forecasting technique enables us to plan and execute recruitment, selection, training, and development programs in a planned, proactive fashion to ensure the trained marketing staff are on hand exactly when required by the organization.

• Statistical relationship between no. of patients (business factor) & employment level of nurses in a nursing home may be useful in forecasting the no. of employees that will be needed if the no. of patients increases by say 20%

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Qualitative Approach: Managerial Judgment

In this all managers sit together, discuss and arrive at a figure which would be the future demand for labour.

This technique may involve a ‘bottom-up’ or ‘top-down’ approach. A combination of both could yield positive results.

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Qualitative Approach: Delphi Technique

This technique is the method of forecasting personnel needs.

It solicits estimates of personnel needs from a group of experts, usually managers.

The HRP experts act as intermediaries, summarize the various responses and report the findings back to the experts.

Summaries and surveys are repeated until the experts opinion begin to agree.

Forecasting HR Supply

Forecasting the supply of labor is really two tasks:

Forecasting Internal Supply

The number and type of employees who will be in the firm at some future date

Forecasting External Supply

The number and type of people who will be available for hiring from the labor market at large

Forecasting Supply of Employees: Internal Labor

Supply

Staffing TablesMarkov AnalysisSkill InventoriesReplacement ChartsSuccession Planning

Forecasting Internal Labor Supply

Staffing TablesGraphic representations of all organizational jobs, along with the numbers of employees currently occupying those jobs and future (monthly or yearly) employment requirements.

Markov AnalysisA method for tracking the pattern of employee movements through various jobs.

Forecasting Future HR Supply

• manual or computerized records• used to identify internal candidates for transfer

or promotion• summary of each employee’s:

• education• experience• interests• skills

• manual or computerized records• used to identify internal candidates for transfer

or promotion• summary of each employee’s:

• education• experience• interests• skills

Skills Inventories


• summary of each management employee’s:• background• qualifications• interests• skills• managerial responsibilities• duties in current/previous positions• management training

• summary of each management employee’s:• background• qualifications• interests• skills• managerial responsibilities• duties in current/previous positions• management training

Management Inventories


• visual representations of likely internal replacement employees for each position

• data on each candidate includes:• age• present performance rating• promotability status

• visual representations of likely internal replacement employees for each position

• data on each candidate includes:• age• present performance rating• promotability status

Replacement Charts

PERSONNEL REPLACEMENT CHART

*** M s . R ah im a (5 5 )E xp erien ce-9 years

** M r. K ab ir (4 7 )E xp erien ce-2 years

0 0 M r. M am u n (5 1 )E xp erien ce-1 years

* M r. M on ir (4 9 )E xp erien ce-1 years

V P P erson n e l*** M r. R ah im (6 0 )E xp erien ce-6 years

*** M r. S a fiq u e (4 2 )E xp erien ce-3 years

0 0 M r. A rif (4 0 )E xp erien ce-4 years

* M r. Z ak ir (3 9 )E xp erien ce-2 years

V P M arke tin g0 0 M r. K arim (5 2 )

E xp erien ce-5 years

* M r. R a fiq u e (5 4 )E xp erien ce-6 years

0 0 M s . N ish a t (5 6 )E xp erien ce-8 years

0 M r. N ayeem (5 2 )E xp erien ce-3 years

V P F in an ce* M r. M ah b u b (4 5 )E xp erien ce-1 years

** M r. E n am u l (5 0 )E xp erien ce-8 years

* M r. F iroze (4 9 )E xp erien ce-3 years

V P P rod u c tion0 0 M r. H am id (4 3 )E xp erien ce-4 years

P R E S ID E N T

***Promotable now **Promotable in one year

* Potential for further promotion

00 Satisfactory, but not promotable 0 Dismiss


• analyze demand for managers/professionals• audit existing executives, project future supply• individual career planning/career counseling• accelerated promotions• performance-related training and development• planned strategic recruitment

• analyze demand for managers/professionals• audit existing executives, project future supply• individual career planning/career counseling• accelerated promotions• performance-related training and development• planned strategic recruitment

Succession Planning


• general economic conditions• national labour market conditions• local labour market conditions• occupational market conditions

• general economic conditions• national labour market conditions• local labour market conditions• occupational market conditions

Forecasting Supply of External Candidates

Sources of Information About External Labor Markets

Bureau of StatisticsLabor Force Survey

Planning and development agenciesChambers of CommerceIndustry and trade group publicationsState and local employment agencies

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ProductDemand

LaborProductivity

InternalLabor Market

ExternalLabor Market

Labor Demand Labor Supply

Conditions and Select Responses

1. Labor Demand Exceeds Labor Supply•Training or retraining•Promotion from within•Recruitment from outside•Use of part-timers or temporary workers

•Succession planning•Subcontracting•Use of overtime

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ProductDemand

LaborProductivity

InternalLabor Market

ExternalLabor Market

Labor Demand Labor Supply

Conditions and Select Responses

2. Labor Supply Exceeds Labor Demand•Pay cuts•Reduced hours•Voluntary early retirements•Inducements to quit (for example, severance pay)

•Layoffs •Work Sharing

3. Labor Demand Equals Labor Supply•Replacement of quits from inside or outside•Internal transfers and redeployment

Balancing Supply and Demand

Dealing with a Labor Surplus

• hiring freeze• early retirement programs• reducing hours (job sharing, reduced

workweek, part-time work, work sharing)• internal transfers• layoffs• termination with outplacement assistance

• hiring freeze• early retirement programs• reducing hours (job sharing, reduced

workweek, part-time work, work sharing)• internal transfers• layoffs• termination with outplacement assistance

Balancing Supply and Demand

Dealing with a Labor Shortage

• overtime• hiring temporary employees• subcontracting work• external recruitment• transfers• promotions

• overtime• hiring temporary employees• subcontracting work• external recruitment• transfers• promotions

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THANK

YOU

1.3_HR Planning - PGD_2

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