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Human Human Resource Resource PlanningPlanning
PGP 2007-09
Human Resource Planning (HRP)
Is the first component of HRM strategyAll other functional HR activities are derived
from and flow out of the HRP process.Has its basis in considerations of future HR
requirements in light of present HR capabilities and capacities.
Is proactive in anticipating and preparing flexible responses to changing HR requirements.
Has both an internal and external focus.
PGP 2007-09
Human Resource PlanningDefinition: Acc to Stainer “Strategy for acquisition, utilization
improvement and preservation of enterprises human resources”
Beatty And Schneier defines it as a sequential process embodying the following five elements-
1.Imputs into HRP 2. Analysis of existing HR 3. Forecast of future HR needs 4. Implementing HR plan 5. Evaluation and redesign of the HR Plan
PGP 2007-09
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 Human Resource Resource PlanningPlanning
Human Human Resource Resource PlanningPlanning
StrategicStrategicPlanningPlanning
StrategicStrategicPlanningPlanning
PGP 2007-09
HR Planning Issues
Staffing Questions: How do we manage staffing in times of
recession or expansion? What impact does technology change,
mergers or relocation have on staffing issues?
Do we always have the right people in the right jobs at the right time?
How do we get our human resources: buy them or make them or both?
PGP 2007-09
Major Objectives of HRP Preventing understaffing and overstaffing Ensure the organisation has the right
employees with the right skills at the right place at the right time
Ensure the organisation is responsive to changes in its environment
Provide direction and coherence to all HR activities and systems
PGP 2007-09
Types of Planning
Aggregate Planning Anticipating the needs for groups of
employees in specific, usually lower level jobs and the general skills employees will need to ensure sustained high performance.
Succession Planning Focuses on ensuring that key individual
management positions in the organization remain filled with individuals who provide the best fit for these critical positions.
PGP 2007-09
HRP and Environmental Scanning
Environmental Scanning The systematic monitoring of the
major external forces influencing the organization. Economic factors Competitive trends Technological changes Political and legislative issues Social concerns Demographic trends
PGP 2007-09
Scanning the Internal Environment Cultural Audits
Audits of the culture and quality of work life in an organization. How do employees spend their time? How do they interact with each other? Are employees empowered? What is the predominant leadership style of
managers? Benchmarking
The process of comparing the organization’s processes and practices with those of other companies.
PGP 2007-09
FORECASTING DEMANDFORECASTING DEMANDFORECASTING DEMANDFORECASTING DEMAND
Human Resource Planning Model
ConsiderationsConsiderations• TechnologyTechnology• Financial resourcesFinancial resources• Organizational growthOrganizational growth• Mgmt. philosophyMgmt. philosophy
ConsiderationsConsiderations• TechnologyTechnology• Financial resourcesFinancial resources• Organizational growthOrganizational growth• Mgmt. philosophyMgmt. philosophy
TechniquesTechniques• Trend analysisTrend analysis• Managerial Managerial
estimatesestimates• Delphi techniqueDelphi technique
TechniquesTechniques• Trend analysisTrend analysis• Managerial Managerial
estimatesestimates• Delphi techniqueDelphi technique
TechniquesTechniques• HR inventoriesHR inventories• Markov analysisMarkov analysis• Skill inventoriesSkill inventories• Replacement chartsReplacement charts• Succession PlanningSuccession Planning
TechniquesTechniques• HR inventoriesHR inventories• Markov analysisMarkov analysis• Skill inventoriesSkill inventories• Replacement chartsReplacement charts• Succession PlanningSuccession Planning
External External ConsiderationsConsiderations• Wkforce changesWkforce changes• MobilityMobility• Govt policiesGovt policies• UnemploymentUnemployment
External External ConsiderationsConsiderations• Wkforce changesWkforce changes• MobilityMobility• Govt policiesGovt policies• UnemploymentUnemployment
FORECASTING SUPPLYFORECASTING SUPPLYFORECASTING SUPPLYFORECASTING SUPPLY
BALANCING BALANCING SUPPLY AND SUPPLY AND
DEMANDDEMAND
BALANCING BALANCING SUPPLY AND SUPPLY AND
DEMANDDEMAND
(Shortage) (Shortage) RecruitmentRecruitment
Full-time / Part-timeFull-time / Part-time
(Shortage) (Shortage) RecruitmentRecruitment
Full-time / Part-timeFull-time / Part-time
(Surplus) (Surplus) ReductionsReductions
• LayoffsLayoffs• TerminationsTerminations• DemotionsDemotions• RetirementsRetirements
(Surplus) (Surplus) ReductionsReductions
• LayoffsLayoffs• TerminationsTerminations• DemotionsDemotions• RetirementsRetirements
PGP 2007-09
Quantitative Approach: Trend Analysis
Forecasting labor demand based on an organizational index: Select a business factor, e.g. sales, that
best predicts human resources needs. Plot the business factor in relation to the
number of employees to determine average labor productivity.
Compute labor productivity for the past five years.
Project human resources demand out to the target year(s).
PGP 2007-09
Example of Trend Analysis of HR Demand
1999 Rs. 2,935 8.34 352
2000 Rs. 3,306 10.02 330
2001 Rs. 3,613 11.12 325
2002 Rs. 3,748 11.12 337
2003 Rs. 3,880 12.52 310
2004 Rs. 4,095 12.52 327
2005* Rs. 4,283 12.52 342
2006* Rs. 4,446 12.52 355
BUSINESS LABOR HR FACTOR PRODTY DEMAND
YEAR (SALES IN ‘000) (SALES/EMPLOYEE) (NO. OF EMPLOYEES)
*Projected figures
÷ =
PGP 2007-09
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.
PGP 2007-09
Forecasting Supply of Employees: Internal Labor Supply Staffing Tables Markov Analysis Skill Inventories Replacement Charts Succession Planning
PGP 2007-09
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.
PGP 2007-09
Hypothetical Markov Analysis for a Retail Company
PGP 2007-09
Internal Supply Forecasting Tools
Skill Inventories Files of personnel education,
experience, interests, skills, etc., that allow managers to quickly match job openings with employee backgrounds.
Replacement Charts Listings of current jobholders and
persons who are potential replacements if an opening occurs.
PGP 2007-09
An Executive Replacement Chart
PGP 2007-09
Forecasting Supply of Employees: External Labor Supply
Factors Influencing the External Labor Supply: Demographic changes in the population National and regional economics Education level of the workforce Demand for specific employee skills Population mobility Governmental policies
PGP 2007-09
Sources of Information About External Labor Markets
Department of Labor publications State and local planning and
development agencies Chambers of Commerce Industry and trade group publications State and local employment agencies
PGP 2007-09
HRP Considerations
Balancing supply and demand
PGP 2007-09
Elements of The HR Plan Acquisition of personnel Effective Utilization
redeployment methods improvement training to prevent obsolescence
Development and Improvement broad-based training and development performance management systems
Retention proper remuneration long-term career planning healthy employee relations good working environment
PGP 2007-09
Requisites for Successful HRP
HRP must be seen as equally vital as business planning
Top-management support Periodic review and revision of the forecasting
techniques and the forecasts Without long range planning concentration
becomes focussed on short-term needs resulting in “crisis management” reactions
An excellent and up-to-date HRIS Active involvement of line managers and co-
ordination between line mgrs and HR function