Human Resource Planning

Presented by Gajaba Perera-Gunawardena Management Consultant

Introduction to

Learning Objectives
Understand the importance of Human Resource

Management to the organization

Understanding HRM as an integral part of

Organizations Strategic Planning Process

Planning as a key function associated with Human

Resource Management

Understand the basic HR planning Process

What is human resource management?

The effective use of people to achieve both organizational and individual goals
The effective recruitment, selection, development, compensation, and utilization of human resources by organizations

Key Functions
Human Resource Planning Recruitment & Selection

Compensation & Benefits

Performance Appraisals Training & Development

What is Human Resource Management?

Key Assumption
Employees are the most important asset of the organization

 Human Resource is the: Most Critical Factor deciding the productivity of all other Factors of Production

Effectiveness

B= f ( P=
Efficiency

Productivity

Competitiveness

 People are the most important resource in any service organization!!!!!! The finest equipment, supplies, areas, and facilities will mean little if competent, dedicated and skilled personnel in sufficient numbers are not available

What is Planning?
Planning is a search problem that requires to find an efficient sequence of actions that transform a system from a given starting state to the goal state Planning is the starting point of the management process Predetermines what the business proposes to accomplish and how it intends realizing its goals

Human Resource Planning (HRP)

Is the first component of HRM strategy All 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.

HR Planning
How many people do we need? Product Demand X Labor Productivity Turnover Where are they coming from? Internal Labor Market Existing employees External Labor Market Potential employees

HR Planning Process

Figure 26

The Process of Human Resource Planning

Organizations need to do human resource planning so they can 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

Human Resource Planning Process

External Environment Internal Environment

Strategic Planning Human Resource Planning

Forecasting Human Resource Requirements

Comparing Requirements and Availability Surplus of Workers

Forecasting Human Resource Availability Shortage of Workers

Demand = Supply

No Action

Restricted Hiring, Reduced Hours, Early Retirement, Layoff, Downsizing

Recruitment
Selection

The Basic Elements of Human Resource Planning

(3) Conduct Environmental Scans

(1) Forecast Labor Requirements

Compare

(4) Determine Gaps

(5) Develop Action Plans

(2) Forecast Labor Availabilities

Human Resource Forecasting

HR Forecasting attempts to determine the supply and demand for various types of human resources, and to predict areas within the organization where there will be labor shortages or surpluses. There are three major steps to forecasting: 1. Forecasting the demand for labor 2. Determining labor supply 3. Determining labor surpluses and shortages

HR Forecasts
Labor demand Labor supply
Labor markets Specific shortages Strategic Planning Succession Planning Managing Retention

Labor Demand

Labor Supply

Forecasting Demand for Employees

Statistical Techniques Trend analysis Regression Probability models

Qualitative Techniques
Ask the experts / Delphi Technique Needs are then compared to current workforce to identify gaps and decide staffing actions.

Forecasting Demand for Employees

Consider the firms strategic plans likely impact on the demand for the firms products or services. Assumptions on which the forecast is predicated should be written down and revisited when conditions change. Unit forecasting (bottom-up planning) involves point of contact estimation of the future demand for employees.

Top-down forecasting involves senior managers allocating a fixed payroll budget across the organizational hierarchy.

Internal Assessment of the Organizational Workforce

Auditing Jobs and Skills

What jobs exist now? How many individuals are performing each job? How essential is each job? What jobs will be needed to implement future organizational strategies? What are the characteristics of anticipated jobs?

Internal Assessment of the Organizational Workforce

Organizational Capabilities Inventory HRIS databasessources of information about employees knowledge, skills, and abilities (KSAs)

Components of an organizational capabilities inventory

Workforce and individual demographics Individual employee career progression Individual job performance data

Forecasting Supply of Employees

Staffing Tables Markov Analysis Skill Inventories Succession Planning

Forecasting Internal Labor Supply

Staffing Tables
Graphic representations of the number of employees currently occupying certain jobs and future employment requirements.

Markov Analysis
A method for tracking the pattern of employee promotions up through and organization.

Markov Analysis for a Retail Company

Modeling & Multiple-Predictive Techniques

Markov chain analysis involves:

Developing a matrix to show the probability of an employees moving from one position to another or leaving the organization The process begins with an analysis of staffing levels from one period to another Markov analysis can identify the probability of lower employee retention It does not suggest a solution to the problem

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Forecasting Internal Labor Supply

Skill Inventories
Databases of employee KSAs, education, and used to match job openings with employee backgrounds.

Succession Planning
The process of identifying, developing, and tracking key individuals for executive positions. Listings of current jobholders and persons who are potential replacements if an opening occurs.

Human Resource Information Systems (HRIS)

Virtually all HR management functions can be enhanced through the use of an HRIS any organized approach for obtaining relevant and time information on which to base HR decisions

HUMAN RESOURCE INFORMATION SYSTEM Goal: Integrate Core Processes into Seamless System

Input Data Types Job Analysis Recruitment Selection/Job Posting/ Employee Referral T&D

Contribute Toward Achievement of: Output Data Uses*

Employee Tracking
Diversity Programs Hiring Decisions

Organizational Strategic Plans

Performance Appraisal
Compensation Benefits Safety Health Labor Relations Employee Relations *

Human Resource Information System

Training Programs/Elearning/Management Succession

Compensation Programs
Benefit Programs (e.g., prescription drug programs) Health Programs (e.g., Employee Assistance Programs) Bargaining Strategies Employee Services

Human Resource Management Plans

Proper planning accomplishes the following

1. Managing Uncertainty
2. Better Focus 3. Improves Coordination 4. Basis for Control 5. Improves Effectiveness

Making Planning Effective

Linked to Long term objectives Consistency Everyone participates Feasible Flexible Simple Top Management Support

Summary
HRM is the effective use of people to achieve both

organizational and individual goals Planning is a key functions associated with Human Resource Management HR Planning involves forecasting HR requirements in the context of the Strategic Plan of the Organization Forecasting covers both internal and external sources of supply

Summary
Helps Lower HR costs through better HR management. More timely recruitment for anticipate HR needs Helps improve overall quality of management in the Organization Improves Growth and Competitiveness of the

Organization

Helps improve social responsibility