© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. Chapter 3 Planning for Human Resources

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 3-1b Linking Human Resource Planning to Competitive Advantage HR planning: Process of identifying and responding to organizational needs and charting new policies, systems, and programs that will assure effective human resource management under changing conditions. Objectives of HR planning  Enable organizations to anticipate their future HRM needs.  Identify practices that will help them meet those needs.

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 3-1b Linking Human Resource Planning to Competitive Advantage (cont.) Consequences associated with the failure to plan for human resources  Employers are forced to respond to events after they occur; that is, they become reactive, rather than proactive.  An organization may be unable to correctly anticipate an increase in its future demand for employees, leading to understaffing.  Understaffing leads to consequences such as increased stress levels, increase in back orders, decrease in customer goodwill, an increase in competition, and a loss of market share.

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 3-2a Strategic Planning Through the strategic planning process, organizations determine where they are going. The process consists of the following activities:  Determine the organizational mission.  Scan the organizational environment.  Set strategic goals.  Formulate a strategic plan, part of which addresses human resource needs.

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 3-2a Strategic Planning (cont.) Determine the organizational mission  Mission statement is a declaration of the organization’s overall purpose.  It defines the basic business scope and operations that distinguish the organization from others of a similar nature.

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 3-2a Mission Statement -Mary Kay Cosmetics "To give unlimited opportunity to women.“ -Wal-Mart "To give ordinary folk the chance to buy the same thing as rich people.” -Walt Disney "To make people happy.“ -Starbucks To inspire and nurture the human spirit— one person, one cup, and one neighborhood at a time.

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 3-2a Mission Statement "The New Ventures Mission is to scout profitable growth opportunities in relationships, both internally and externally, in emerging, mission inclusive markets, and explore new paradigms and then filter and communicate and evangelize the findings."

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 3-2a Strategic Planning Scan the organizational environment  External and internal environments must be scanned to identify threats and opportunities.  External environment: political, legal, economic, social, and technological issues  Internal environment: SWOT

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 3-2a Strategic Planning (cont.) Set strategic goals  Strategic goals specify the desired outcomes that must be reached for the firm to accomplish its mission.  They should be specific, challenging, and measurable.

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 3-2a Strategic Planning (cont.) Formulate a strategic plan  Strategic plan specifies the courses of action a firm must take in order to meet its strategic goals.  Formulated by: -Translating organizational goals into more narrow functional or departmental goals. -Devising strategies for meeting these goals.

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 3-2b Human Resource Planning Through HR planning, an organization is able to generate a list of future human resource needs and a plan for meeting them. To derive HR needs, the organization must forecast its demand and supply.

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 3-2b Human Resource Planning (cont.) Statistical approaches to demand forecasting  Using business factors. -A business factor is an attribute of the business such as sales volume or market share, which closely relates to the size of the needed workforce.  Is used when an organization operates in a stable environment.  Most commonly used statistical methods are trend, ratio, and regression analysis.

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 3-2b Human Resource Planning (cont.) Trend analysis: Future demand for human resources is projected on the basis of past business trends regarding a business factor. Ratio analysis: Process of determining future HR demand by computing an exact ratio between the specific business factor and the number of employees needed. Regression analysis: A statistically sophisticated tool where forecasts are based on the relationship between a business factor and workforce size.

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 3-2b Human Resource Planning (cont.) Judgmental approaches  Involves the use of human judgment, rather than a manipulation of numbers.  Two most common techniques: -Group brainstorming -Sales force estimates

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 3-2b Human Resource Planning (cont.) Supply forecasting: The process used to estimate which positions will be filled at a particular point in time. Steps to supply forecasting  Step 1: Organization groups its positions by title, function, and level of responsibility.  Step 2: Estimate within each job group, how many of its current employees will: -Remain in their positions during the planning period. -How many will move to another position. -How many will leave the organization.

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 3-2c Outcomes of the HR Planning Process Oversupply of employees  Downsizing or other alternatives? Undersupply of employees  Hiring additional workers or alternatives?

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 3-2d Human Resource Information Systems Human Resource Information Systems (HRIS): A computerized information package that provides management with increasing capacity to record, store, manipulate, and communicate information across wide geographic boundaries, with access to many users  HumaNet, Optimum Human Resources

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 3-2d Human Resource Information Systems (cont.) Purposes served by HRIS  Handles most of the record keeping done by HR professionals.  Reduces paperwork and cuts administrative costs.  Organizational members outside the HRM department can more easily access the information.  Store information essential for filling vacant positions.

© 2010 Cengage Learning. Atomic Dog is a trademark used herein under license. All rights reserved. 3-2d Human Resource Information Systems (cont.) HRIS on the “Net” – Intranet HRIS on the “Net” – Extranet