1. Human Resource Management MBA & BBA
Human Resource Planning
Course Lecturer: Farhan Mir

2. Objectives After studying this chapter, you should be able to:
Identify the advantages of integrating human resources planning and strategic planning.
Describe the basic approaches to human resources planning.
Identify the tools and techniques of HR planning
Overview the emerging role of HR Information Systems

3. Human Resources Planning
Human Resources Planning (HRP)
Process of anticipating and making provision for the movement (flow) of people into, within, and out of an organization.
HRP’s purpose is the effective deployment of human resources through:
Anticipating organizational labor supply and demand.
Providing expanded employment opportunities for women, minorities, and the disabled.
Guiding the development and training the workforce.

4. What Is Planning? Defining the organization’s goals
Desired outcomes for individuals, groups, or entire organizations
Establishing an overall strategy for achieving those goals
How shall we achieve the goals?
Developing a comprehensive set of plans to integrate and coordinate organizational work
Who is going to do what?
How will resources be allocated?

5. The Relationships Between Goals and Plans

6. Purposes of Planning - Provides direction - Reduces uncertainty
- Minimizes waste and redundancy
- Sets the standards for controlling

7. Four Phases to HR Planning
“What will we need?”
Determine future HR requirements
“What’s available?”
Determine future HR availabilities
Internally
Externally
Reconcile requirements and availabilities
Anticipate “gaps”
Develop action plans
Control and evaluate 66

8. Strategic Human Resource Management
The acknowledgement that HR policies and practices have critical linkages with an organization’s overall strategy
Central premise is that HR policies will have direct effects on an organization’s profitability
HR must “fit” strategically with the mission of the organization

9. 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 Resources Planning
Strategic Planning

10. The Strategic Management Process

11. Linking the Processes of HRP and Strategic Planning
Strategic Analysis
Establish the context:
Business goals
Company strengths/weaknesses
External opportunities/threats
Source of competitive advantage
Strategy Formulation
Clarify performance expectations and future management method:
Values, guiding principles
Business mission
Objectives and priorities
Resource allocations
Strategy Implementation
Implement processes to achieve desired results:
Business goals
Company strengths/weaknesses
External opportunities/threats
Source of competitive advantage
Identify people-related business issues
Define HR strategies, objectives, and action plans
Implement HR processes, policies, and practices
Source: Adapted from James W. Walker, “Integrating the Human Resource Function with the Business,” Human Resource Planning 14, no. 2 (1996): 59–77. Reprinted with permission.
Presentation Slide 4–1
Figure 4.1

12. Human Resource Planning

13. Strategic Planning & HR Planning at IBM
Remember IBM
World Leader in Computer Hardware & Pioneer in Personal Computers
Divided itself into 14 autonomous divisions worldwide
At IBM Strategic Planning begins at Top and then translated downwards
Executives in different business areas develop strategies
Then divisions create functional strategies for development, manufacturing, marketing and service
The linkage between Business Plans & HR Plans
The HR Department plays a crucial role
HR concerns and objectives are inserted into the plans by HR specialists at divisional plans in coordination with divisional managers

14. Human Resource Planning Model
FORECASTING DEMAND
Considerations
Product/service demand
Technology
Financial resources
Absenteeism/turnover
Organizational growth
Management philosophy
Techniques
Trend analysis
Managerial estimates
Delphi technique
BALANCING SUPPLY AND DEMAND
(Shortage) Recruitment
Full-time
Part-time
Recalls
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
(Surplus) Reductions
Layoffs
Terminations
Demotions
Retirements
FORECASTING SUPPLY

15. The Human Resource Planning Process
Strategic Planning
Technology forecasts Economic forecasts Market forecasts Organizational planning Investment planning Annual operating plans
HR Demand
Annual employment requirements:
numbers
skills
occupation categories
HR Supply
Existing employment inventory:
After application of expected loss and attrition rates
Compared
with
If none
Variances
End
If Surplus
If Shortage
Action decisions
Layoff Retirement Termination
Overtime Recruitment Contractors
End
End

16. Human Resource Planning (HRP)
Six steps of effective HRP
environmental scanning—identify and anticipate sources of threats and opportunities, scanning the external environment (competitors, regulation) and internal environment ( strategy, technology, culture)
labor analysis—project how business needs will affect HR needs, using qualitative methods (e.g., Delphi, nominal) and quantitative methods (trend analysis, simple and multiple linear regression analysis)
supply analysis—project resource availability from internal and external sources
gap analysis—reconcile the forecast of labor supply and demand
action programming—implement the recommended solution from the gap analysis
evaluation—monitor the effects of the HRP by defining and measuring critical criteria (e.g., turnover costs, break-even costs of new hires)

17. HRP and Environmental Scanning
The systematic monitoring of the major external forces influencing the organization.
Economic factors: general and regional conditions
Competitive trends: new processes, services, and innovations
Technological changes: robotics and office automation
Political and legislative issues: laws and administrative rulings
Social concerns: child care and educational priorities
Demographic trends: age, composition,and literacy

18. Forecasting Demand for Employees
Quantitative Methods
Qualitative Methods
Forecasting Demand

19. 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.

20. 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).

21. Example of Trend Analysis of HR Demand
BUSINESS  LABOR = HUMAN RESOURCES FACTOR PRODUCTIVITY DEMAND
YEAR (SALES IN THOUSANDS) (SALES/EMPLOYEE) (NUMBER OF EMPLOYEES)
1997 $2,
1998 $2,
1999 $2,
2000 $3,
2001 $3,
2002 $3,
2003 $3,
2004* $4,
2005* $4,
2006* $4,
*Projected figures
Figure 4.4

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

23. 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.

24. Forecasting Labor Supply
Succession Planning
Technique that identifies specific people to fill future openings in key positions throughout the organization
Organizational Replacement Charts
Charts that shows both incumbents and potential replacements for given positions within the organization
Commitment Manpower Planning
Systematic approach to HR planning designed to get managers and their subordinates thinking about and involved in human resource planning

25. Action Plans
Managers must develop complete action plan to accomplish HR objectives
Adding Human Resources
Ad hoc Placement
Temporary & Outsourcing
Permanent
Reducing Human Resources
Downsizing
Layoffs, termination
Other approaches
Reclassification
Transfers
Work Sharing

26. Internal Methods of Locating Qualified Job Candidates
Human Resources Information Systems (HRIS)
Database systems containing the records and qualifications of each employee that can be accessed to identify and screen candidates for an internal job opening.
Job Posting and Bidding
Posting vacancy notices and maintaining lists of employees looking for upgraded positions.

27. Human Resource Information Systems (HRIS)
Integrated approach to acquiring, storing, analyzing, and controlling the flow of information about an organization
Useful in nearly all HRM functions
Can increase efficiency and response times of labor/time intensive human resource activities

28. HRIS Applications Clerical Applications Applicant information
Basic Employee Records
Job Database
Sub Modules based on functions
Training
Turnover Analysis
Succession Planning
Benefits Management
Monitoring functions
Attendance

29. A Common HRIS