1. Copyright © 1999 Harcourt Brace & Company Canada, Ltd. Chapter 4 Human Resource Planning Falkenberg, Stone, and Meltz Human Resource Management in Canada Fourth Edition

2. 4.1 2 Chapter Overview n n The need for human resource planning n n Purposes of human resource planning n n Relation to other human resource functions n n The human resource planning process n n Projecting human resource supply

3. 4.2 Chapter Overview (contd.) n n Forecasting future human resource needs n n Comparing forecast needs with projected supply n n Planning policies and programs n n Evaluating human resource planning effectiveness n n The HRM audit

4. 4.3 Purposes of Human Resource Planning n n Setting goals and objectives n n Examining the effects of alternative human resource policies and programs

5. 4.4 Examples of Organizational Goals n n To increase company profits by 10% in the next fiscal year (profitability) n n To close 25 retail outlets in the next four years (downsizing) n n To bottle 10% more diet pop in the next year (production) n n To guarantee one-day delivery of all first-class mail within the province by 2001 (service level)

6. 4.5 The Human Resource Planning Process n n Project future human resource supply n n Forecast future human resource needs n n Compare forecast needs with projected supply n n Plan policies and programs to meet human resource needs n n Evaluate human resource planning effectiveness n n Project future human resource supply n n Forecast future human resource needs n n Compare forecast needs with projected supply n n Plan policies and programs to meet human resource needs n n Evaluate human resource planning effectiveness

7. 4.6 Projecting Human Resource Supply n n Assessment of current supply n n Skills inventories n n Analysis of human resource flows n n Stochastic models n n Assessment of current supply n n Skills inventories n n Analysis of human resource flows n n Stochastic models

8. 4.7 Examples of Human Resource Flows Employees may - stay in the same job - move across to another, but not a higher-level job (transfer or lateral move) - move up to a higher-level job (promotion) - move out of the organization through voluntary termination (resignation) or involuntary termination (lay-off, dismissal) - move down (demotion)

9. 4.8 Typical Data Elements in a Human Resources Information System Employee personal dataSalary administration Benefits informationSkills Benefits plans Attendance Employee benefits information Performance/Discipline Dependents Health and Safety Training and development Payroll Employee work data Salary Performance review Job information Employment status information Hire/Termination information Work information

10. 4.9 Forecasting Future Human Resource Needs n Planning for the status quo n Rules of thumb n Unit forecasting n The Delphi method n Scenarios n Computer simulation

11. 4.10 Five Steps in the Delphi Method 1. An issue, question, or problem is identified. 2. A small group or panel of ten or fewer experts is identified. 3. Independent judgements about the issue are obtained from each expert through a questionnaire or structured interview. 4. An intermediary or facilitator collects, analyzes, and feeds back information from the first questionnaire or interview to each expert. 5. Steps 3 and 4 are repeated until there is a consensus on the issue or problem.

12. 4.11 Sample Questions from a Unit Forecasting Questionnaire n List any jobs that have changed since the last forecasting period and any that will change in the next forecasting period. n If vacancy can be filled with present employees, note whether training will be required. Specify nature of training needs. n What percentage of employees are performing jobs up to standard? n How many employees will be absent in the next forecasting period because of disability, educational, or other leaves?

13. 4.12 Planning for Anticipated Shortages n Transfer employees to jobs in which shortages exist n Train employees to move up to jobs in which shortages exist n Have employees work overtime n Increase employee productivity n Hire part-time employees

14. 4.13 Planning for Anticipated Shortages (contd.) n n Hire temporary full-time employees n n Hire permanent full-time employees n n Subcontract work to other firms n n Forgo increases in production n n Install equipment to perform some of the tasks that would be done by workers (capital substitution)

15. 4.14 Ways to Increase Employee Productivity n n Offer monetary incentives, e.g. bonuses, for higher productivity or performance levels n n Improve employees job skills to produce more in less time or at lower cost n n Re-design work processes and methods so greater outputs are achieved n n Use more efficient equipment so greater outputs are achieved

16. 4.15 Planning for Anticipated Labour Surpluses n Close plants n Lay off some workers permanently n Give incentives for early retirement n Let the workforce shrink by attrition n Retrain and transfer workers n Shut down plants (or parts of them) temporarily n Lay off workers temporarily n Reduce the work week n Use work sharing n Cut or freeze pay and/or benefits

17. 4.16 Evaluating Alternatives to the Problem of Labour Shortages or Surpluses n n Determine size of the anticipated shortages or surpluses n n Determine the expected duration of the change in the demand for human resources n n Determine the amount of lead time before shortages or surpluses occur

18. 4.17 Information Needed to Identify Appropriate Ways to Deal with Labour Surplus/Shortage n n Financial and human costs and benefits n n Effects on other organizational components n n Length of time to implement the alternatives and generate desired results n n Probability of success in reducing the shortage or surplus

19. 4.18 Programs for Human Resource Planning n Linear programming, e.g. to minimize total labour costs within certain constraints n Goal programming, e.g. setting multiple goals such as increasing profits by 10% and hiring bilingual salespeople n Computer simulation, e.g. to examine the effects of various programs to reduce surpluses or shortages

20. 4.19 HRM Auditing Model n n Strategic-Level HRM determines the effectiveness of HRM functions in the overall strategic plan of the organization n n Managerial-Level HRM determines effectiveness of HRM functions within departments and units n n Operational-Level HRM determines the effectiveness of HRM functions throughout the organization

21. 4.20 Reasons for Conducting HRM Audits n n When labour costs are large or the largest component of total product or service costs n n The personnel audit is used to justify the existence of budgets of staff and programs n n The personnel audit provides valuable feedback from employees and line managers n n The personnel audit may uncover problems such as unqualified HRM staff, lack of HRM policy compliance, or low employee satisfaction