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5-1McGraw-Hill/Irwin Copyright 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved.

fundamentals of

Human Resource Management 4theditionby R.A. Noe, J.R. Hollenbeck, B. Gerhart, and P.M. Wright

CHAPTER 5

Planning for and RecruitingHuman Resources

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The Process of Human Resource Planning

Organizations should carry out human

resource planning so as to meet business

objectives and gain a competitive advantage

over competitors.

Human resource planning compares the present

state of the organization with its goals for the

future Then identifies what changes it must make in its

human resources to meet those goals

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Forecasting

Forecasting:attempts

to determine the supply

and demand for various

types of humanresources to predict

areas within the

organization where

there will be laborshortages or surpluses.

There are three major

steps to forecasting:

1. Forecasting the demand

for labor

2. Determining labor

supply

3. Determining laborsurplus or shortage

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Forecasting the Demand for Labor

Trend Analysis

Constructing and

applying statistical

models that predictlabor demand for the

next year, given

relatively objective

statistics from the

previous year.

Leading Indicators

Objective measures that

accurately predict

future labor demand.

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Determining Labor Supply

Transitional matrix:a

chart that lists job

categories held in one

period and shows theproportion of employees

in each of those job

categories in a future

period.

It answers two questions:

1. Where did people in

each job category go?

2. Where did peoplenow in each job

category come from?

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Determining Labor Surplus or Shortage

Based on the forecasts for labor demand and

supply, the planner can compare the figures to

determine whether there will be a shortage or

surplus of labor for each job category.

Determining expected shortages and

surpluses allows the organization to plan how

to address these challenges.

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Goal Setting and Strategic Planning

The purpose of setting specific numerical goals is to

focus attention on the problem and provide a basis for

measuring the organizations success in addressing

labor shortages and surpluses. The goals should come directly from the analysis of

supply and demand.

For each goal, the organization must choose one or

more human resource strategies.

Organizations should retain and attract employees

who provide a core competency (what makes it better

than competitors)

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Options for Reducing a Surplus

DownsizingPay

reductionsDemotions

TransfersWork

sharing

Hiring

freeze

Natural

attrition

Early

retirementRetraining

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Options for Avoiding a Shortage

OvertimeTemporary

employeesOutsourcing

Retrained

transfers

Turnover

reductions

New external

hires

Technological

innovation

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Table 5.2: HR Strategies for Addressing aLabor Shortage or Surplus

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Implementing and Evaluating the HR Plan

When implementing the HR strategy, the

organization must hold some individual accountable

for achieving the goals.

That person must also have the authority andresources needed to accomplish those goals.

Regular progress reports should be issued.

The evaluation of results should not only look at theactual numbers, but should also identify which parts

of the planning process contributed to success or

failure.

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Applying HR Planning to Affirmative Action

Workforce UtilizationReview: a comparison ofemployees in protectedgroups with the

proportion that eachgroup represents in therelevant labor market.

The steps in a workforce

utilization review areidentical to the steps inthe HR planning process.

The organization must

assess current utilization

patterns, then forecast

how they are likely to

change in the near future.

If the analyses forecast

underutilization of certain

groups, then goals and aplan will be established.

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Recruitment Sources: Internal Sources

Job Posting: the process of communicating

information about a job vacancy:

On company bulletin boards

In employee publications

On corporate intranets

Anywhere else the organization communicates

with employees

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Recruitment Sources: External Sources

Direct applicants

Referrals

Advertisements in

newspapers and

magazines

Electronic recruiting

Public employment

agencies

Private employment

agencies

Colleges and

universities

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Summary

The first step in human resource planning is

personnel forecasting. Through trend analysis and

good judgment, the planner tries to determine the

supply and demand for various human resources. The next step is to determine the labor demand for

workers in various job categories. Analysis of a

transitional matrix can help the planner identify

which job categories can be filled internally and

where high turnover is likely.