1. CHAPTER 5:
HUMAN RESOURCE PLANNING

2. Human Resource Planning (HRP)
First component of HRM strategy
All other functional HR activities are derived from & flow out of HRP process
Personnel planning involves deciding what positions the firms will have to fill, and how to fill them
Basis in considerations of future HR requirements in light of present HR capabilities & capacities
Proactive in anticipating & preparing flexible responses to changing HR requirements

3. HR planning Human Resource Planning (HRP) identifies:
HR needs or HR demand
and
Supply of internal candidates
Supply of external candidates
HRP also identifies the skills, knowledge and behavior that employees should possess

4. Key Objectives of HR Planning
Prevent overstaffing & understaffing
Ensure organization has right employees with right skills in right places at right times
Ensure organization is responsive to changes in environment
Provide direction & coherence to all HR activities & systems
Unite perspectives of line & staff managers

5. Types of Planning Aggregate Planning Succession Planning
Anticipating needs for groups of employees in specific, usually lower level jobs & general skills employees will need to ensure sustained high performance
Succession Planning
Focuses on ensuring key critical management positions in organization remain filled with individuals who provide best fit

6. Aggregate Planning Forecasting demand
Considers firm’s strategic plan’s effects on increases or decreases in demand for products or services
Assumptions on which forecast is predicated should be written down & revisited when conditions change
Unit forecasting (bottom-up planning) involves “point of contact” estimation of future demand for employees
Top-down forecasting involves senior managers allocating a fixed payroll budget across organizational hierarchy
Demand for employee skills requirements must also be considered

7. Trend Analysis
Trend analysis involves investigating the variation of firm’s employment levels over the last few years
You might compute the number of employees at the end of each of the past 5 years
Alternatively, you can study the variation of individual departments
The aim is to identify the trends that might keep going

8. Google’s trend analysis
This statistic represents the number of Google employees between 2012 and As of that year, the American multinational internet company, headquartered in Menlo Park, California, had 53,600 full-time employees.
Year
Number
2012
53,861
2013
47,756
2014
53,600
2015
???

9. Ratio Analysis
Ratio analysis involves making forecasts based on the historical ratio between causal factors
Causal factors might include production levels and number of employees
For example, one person produces 10,000 units per year. You would need 4 new sales people next year if you want to produce extra 40,000 units next year

10. Ratio Analysis
Causal factors could be sales volume and number of employees required
one person can sell $15,000 per year. You would need 5 salespersons next year if you want to sell $75,000 next year

11. The Scatter Plot
Through graphical representation, a scatter plot demonstrates how two variable such as sales and number of employees are related
Imagine, a 500-bed hospital is aiming to expand to 900 beds over the next few years
How many nurses do you need to support 900 beds?

12. The Scatter Plot (Cont.)
You have the following information
Number of beds
Number of nurses
200
240
300
260
400
470
500
900
???

13. The Scatter Plot (Cont.)

14. Group Discussion
Which tool is most useful in forecasting HR needs? Include 4 reasons to justify the answer.

15. Aggregate Planning: Forecast the supply of internal candidates
You need information regarding performance, educational background and promotability
Useful Sources for information :
Manual System- Small firms use manual devices to track employee qualification
Personnel replacement chart- shows the present performance and promotability of the top managers

16. Aggregate Planning: Forecast the supply of internal candidates (Cont.)

17. Aggregate Planning: Forecast the supply of internal candidates (Cont.)
Position replacement card- establish a card for individual positions showing the replacement and the performance, promotion potential, and training of the candidates

19. Aggregate Planning: Forecast the supply of internal candidates (Cont.)
Computerized skills inventories
The level and quantities of abilities, skills & experiences can be determined using Skills Inventory.
- Annually updated human resource information system (HRIS) is dynamic source of HR information
Large firms cannot depend on manual devices
They computerize information using software systems
Search on the system by using keywords

20. Aggregate Planning : Identifying the retention rate
Markov analysis can be used to create transition probability matrix that predicts mobility of employees within organization

21. Exhibit 5-2 Transition Probability Matrix for Restaurant

22. Strategies for Managing Shortages
Recruit new permanent employees
Offer incentives to postpone retirement
Rehire retirees part-time
Attempt to reduce turnover
Work current staff overtime
Subcontract work out
Hire temporary employees
Redesign job processes so fewer employees are needed

23. Strategies for Managing Surpluses
Hiring freezes
Do not replace those who leave
Offer early retirement incentives
Reduce work hours
Voluntary severance leaves of absence
Across-the-board pay cuts
Layoffs
Reduce outsourced work
Employee training
Switch to variable pay plan
Expand operations

24. Aggregate Planning: Forecasting the supply of external candidates
General economic condition
Unemployment rate
Education level of the workforce
Demographic changes

25. Succession Planning
Involves identifying key management positions the organization cannot afford to have vacant
Purposes of succession planning
Facilitates transition when employee leaves
Identifies development needs of high-potential employees & assists in career planning
Many organizations fail to implement succession planning effectively
Qualified successors may seek external career advancement opportunities if succession is not forthcoming

26. Succession Planning (cont.)
Succession planning is crucial when it comes to filling a top position
Generally top positions are filled by the internal people
Succession planning includes 3 steps-
Identify key needs
Develop inside candidates
Assess and choose

27. Succession planning of Apple

28. Succession planning of Apple (cont.)

29. Succession planning of Apple (cont.)
To the Apple Board of Directors and the Apple Community:
“I have always said if there ever came a day when I could no longer meet my
duties and expectations as Apple’s CEO, I would be the first to let you know.
Unfortunately, that day has come. I hereby resign as CEO of Apple. I would like to serve, if the Board sees fit, as Chairman of the Board, director and Apple
employee. As far as my successor goes, I strongly recommend that we execute our
succession plan and name Tim Cook as CEO of Apple. I believe Apple’s brightest
and most innovative days are ahead of it. And I look forward to watching and
contributing to its success in a new role. I have made some of the best friends of
my life at Apple, and I thank you all for the many years of being able to work
alongside you.” Steve

30. Succession planning of Apple (cont.)

31. Exhibit 5-5 Pros & Cons of Disclosing Succession Planning

32. “You can have the best strategy and the best building in the world, but if you don’t have the hearts and minds of the people who work with you, none of it comes to life.”– Renee West. “Do not hire a man who does your work for money, but him who does it for the love of it.”– Henry David Thoreau