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ADM 551

HUMAN RESOURCE

MANAGEMENT

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HUMAN RESOURCE PLANNING (HRP)

By: Fadilah Bt PutehFSPPP, UiTM Shah Alam

TOPIC 2

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Learning Outcomes

After studying this chapter, you should be able to:

1. Identify the advantages of integrating human resources planning and strategicplanning.

2. Understand how an organization’s competitive environment influences strategicplanning

3. Recognize the importance of internal resource analysis

4. Describe the basic approaches to human resources planning.

5. Explain the linkages between competitive strategies and HR.

6. Understanding the requirements of strategy implementation

7. Recognize the methods for assessing and measuring the effectiveness ofstrategy.

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Process of anticipating and making provision for the movement of people into,within and out of an organization. (Snell & Bohlander)

A process of systematically reviewing human resources requirements to ensurethat the required number of employees with the required skills are available whenneeded. (Mondy & Noe)

The process of deciding what positions the firm will have to fill and how to fillthem. (Gary Dessler)

Process of analyzing and identifying the need for availability of human resourcesso that the organization can meet its objectives. (Mathis & Jackson)

What is HRP?

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The importance of HRP

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HR Planning Responsibilities

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Staff Manager (HR Department Manager) Line Managers

Participates in strategic planning

process for entire organization.

Identify supply-and-demand needs for

each division/department.

Identify HR strategies Review/discuss HR planning

information with HR specialist

Design HR Planning data system Integrate HR plan with departmental

plans.

Compiles and analyzes data from

managers on staffing needs

Monitor HR plan to identify changes

need.

Implements HR plan as approved by

top management.

Review employee succession plans

associated with HR plan.

HR Planning Responsibilities

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Organization’s long term goals and strategies or known as strategic planning (SP) aremade by focusing on how the organization will position itself in relative to competitorsto ensure survival, values and growth.

Firms SP must be based on the areas of strength that an organization has which isreferred as core competencies. Core competency refers to an unique capability thatcreates high value that differentiates the organization from its competitors. In manyorganizations, their core competencies are human resources. Human resourcescertainly contribute to a competitive advantage for the organizations when they havespecial KSA that competitors cannot easily imitate.

SP and HRM must focuses on the development of core competencies wherebydifferent skill groups in any organization can be classified according to the degree towhich they create strategic value, rare and unique to the organization.

Many factors determine whether an organization will be successful; human resourcesare one of them. Firm use its employees to gain or keep competitive advantageagainst competitors. Firms competitive advantage derived from a proper HRP whichensure effective staffing decisions.

Effective management decides the direction of the organization by setting up strategichuman resource management (SHRM). SHRM is the pattern of human resourcesdeployments and activities that enable an organization to achieve its strategic goals.

SHRM = SP + HRP

Strategic Planning and Human Resources

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HRP and SP

Level of Organizational Strategic Planning (Mondy & Noe)

Strategic planning at this level provide and

formulate general direction of the firm.

Strategic planning at business level provides

direction for each department (SBU) to achieve

firm goals.

All strategic planning in each SBU is done at this

level involving critical activities that determine the

department success to achieve organizational

goals.

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Linking HRP and SP Processes

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Strategic Planning

HRP

Forecasting HR

Requirements

Comparing

Requirements &

Availability

Forecasting HR

Availability

Demand = Supply (dd=ss)

No Action

Surplus (dd<ss) Shortage (dd>ss)

Layoff, Early Retirement,

Downsizing, Restricted

Hiring, Reduced Hours

Recruitment

Selection

HRP Process / StepsMondy & Noe (2005)

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HRP Process / StepsMathis & Jackson (2003)

Organizational Objectives and Strategies

Scan External Environment for Changes

Affecting Labor Supply

Analyze Internal Inventory of

HR Capabilities

Forecasting

Organizational Need for People Survey of People Available

HR Strategies and Plans

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HRP Process / StepsBohlander & Snell (2009)

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Human Resource Forecasting

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Model of HR Forecasting

FORECASTING DEMAND

Considerations

• Product/service demand

• Technology

• Financial resources

• Absenteeism/turnover

• Organizational growth

• Management philosophy

Techniques

• Trend analysis

• Managerial estimates

• Delphi technique

Techniques

• Staffing tables

• Markov analysis

• Skills inventories

• Management inventories

• Replacement charts

• Succession planning

External Considerations

• Demographic changes

• Education of the workforce

• Labor mobility

• Government policies

• Unemployment rate

FORECASTING SUPPLY

BALANCING

SUPPLY AND

DEMAND

(Shortage)

Recruitment

• Full-time, part time

• Contracts, recalls

• Outsourcing

(Surplus)

Reductions

• Layoffs

• Terminations

• Demotions

• Retirements

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Forecasting Employee Demand

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Example of Trend Analysis

1997 $2,351 14.33 164

1998 $2,613 11.12 235

1999 $2,935 8.34 352

2000 $3,306 10.02 330

2001 $3,613 11.12 325

2002 $3,748 11.12 337

2003 $3,880 12.52 310

2004* $4,095 12.52 327

2005* $4,283 12.52 342

2006* $4,446 12.52 355

BUSINESS LABOR = HUMAN RESOURCES

FACTOR PRODUCTIVITY DEMANDYEAR (SALES IN THOUSANDS) (SALES/EMPLOYEE) (NUMBER OF EMPLOYEES)

*Projected figures

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Forecasting Employee Demand

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Forecasting Employee Supply

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An Executive Replacement Chart

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Markov Analysis for a Retail Company

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HRP Results

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Managing Labor Surplus

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Managing Labor Surplus

Advantages Disadvantages

Downsizing, pay reductions,

demotions

Deliver fast results May hurt surviving employees’

motivation and future recruiting

Hiring freeze or natural

attrition

Avoid the pain of layoffs Slow to take effect

Early retirement Less painful than layoffs Induce the best employees to

leave and may be slow to

implement

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Managing Labor Shortage

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Managing Labor Shortage

Advantages Disadvantages

Overtime Can easily be changed if

conditions change

May exhaust workers and

can hurt morale

Temporary

employees,

outsourcing

Staffing level can be quickly and

easily modified

Do not build an in-house

pool of talent

Hiring new employees Strengthens the organization if

labor needs are expected to

expand for the long term

Slow and expensive

Transferring and

retraining

Require investment of time and

money

Enhance the quality of the

organizations human

resources

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Problems That Hinder Effective HRP

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Problems That Hinder Effective HRP

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END OF PRESENTATION

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Tutorial Questions

1. Discuss why HR is a core competency for organizations?.

2. Define HRP and outline the HRP process.

3. Identify factors to be considered in forecasting the supply and demand for humanresource in an organization.

4. Discuss several ways to manage surplus of human resources.

5. Discuss ways to overcome shortage of workers.

6. Discuss requirements and availability forecasts.

7. Explain relationship between strategic planning and HRP.

8. Identify the 3 key elements of the HRP model & discuss the relationship amongthem.

9. Distinguish between the qualitative & quantitative approaches to forecasting theneed for HR.

10. Discuss the importance of HRP.