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Lecture

Chapter 5 MHR.docx


Department
Accounting
Course Code
ACC 100
Professor
Else Grech

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Chapter 5 MHR
- Human resources planning is when we determine the future qualifications of the HR position to
make sure that the company will be equipped with the people who possess the skills to perform
the job and meet the strategic objectives
- The key steps in HRP involve predicting future demand for labor, analyzing the labor supply and
planning and implementing HR programs to balance supply and demand
- No HRP or poor HRP will lead to high costs when unstaffed positions create costly inefficiencies
and when severance pay is required for large numbers of employees being laid off
- HRP proactive is a dynamic process where it expects and influences an organization’s future by
determining the demand for and supply of employees under changing conditions and by
developing plans and activities to satisfy their needs
- Ineffective HR leads to instances where the department is firing employees while another
department is hiring employees who possess similar skills which decreases the motivation to
work, the productivity and will result in losses
- Ineffective HR planning prevents us from achieving short term operational plans and/or long
range strategic plans
Relationship between HRP and strategic planning
- Because strategic plans are created and developed by people, it is important to determine how
many people will be available as a critical element in the strategic planning process
- HRP and strategic planning are efficient when a negative and interdependent relationship exists
between them
- Failure to combine HRP and strategic planning leads to serious consequences
The importance of environmental scanning
- Environmental scanning is an important aspect of HRP and strategic planning processes, these
environmental factors includeI) economic conditions (general, regional and local \), market and
competitive trends, new/revised laws and the decisions of courts and quasi judicial bodies,
social concerns related to health care, childcare and educational priorities, technological
changes, demographic trends
- The wellbeing of the economy effects supply and demand for products and services when then
influences the amount of workers and type of workers needed
- Most important factor relates to the demographic changes in labor force composition
Steps in HRP
- I) forecast future human resource needs (demand)
- Ii) determine the availability of internal and external candidates (supply)
- Iii) planning and implementing HR programs to balance supply and demand
Step 1:

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- A main aspect of HRP is determining the number and type of people that are needed to meet
the organization’s objectives
- Factors list pg 123
- In large organizations, need forecasting is represented by numbers and is the responsibility of
highly trained specialists. Quantitative techniques for determining human resource
requirements include trend analysis, ratio analysis, scatter plot analysis, regression analysis and
computerized forecasting
Quantitative approaches
Trend analysis
- Trend analysis looks at the past to determine the future needs of the company
- Trend analysis is useful where it is used as an early estimate as the recruitment needs of the
company do not fully rely on time but other factors as well
- Purpose of trend analysis is to identify future trends in employment in the future
Ratio analysis
- An assumption made by ratio analysis is that productivity remains the same
- Ratio analysis is a way to make a forecast based on the relationship between a factor and the
number of employees needed
- It can be used to help forecast other employee requirements
- If the productivity levels were to fluctuate, this influences the existing ratios therefore ratios
that were held in the past are no longer useful
Scatter plot
- Is a graphical method use to determine whether a relationship exists between two variables:
business activity and staffing levels
- Points close to the line of best fit indicate a relationship between the two variables
Regression analysis
- Is used to determine the line of best fit
- It uses arithmetic to determine future demands based on an established relationship between
an organization’s employment level and another measurable factor of ouput
- When there is more than one independent and dependent variable, multiple regression analysis
is used
Qualitative approaches
- What makes qualitative approaches different from quantative is that they rely on the judgment
of experts
- Two ways to determine human resources demand/supply is the nominal and Delphi techniques

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Nominal group technique
- The nominal group technique involves experts meeting face to face where it is used to deal with
issues from discovering training needs to determining safety program incentives
- Steps of the nominal process on page 126
- This yields advantages such as being able to involve experts in the decision making process of an
important decision. And that group discussion can facilitate the exchange of ideas and decrease
resistance to change
- The cons of this approach includes narrow mindedness and the more likely individuals may
conform to the group due to pressure therefore leading to less accurate assessment than could
be obtained through other means
The Delphi Technique
- Delphi technique is a judgmental forcecasting method that is used to arrive at a group decision
and involves experts who are objective and internal employees, this is different from nominal
technique where there is no face to face communication involved and feed back is provided and
used to fine tune independent judgments until a consensus is reached
- The Delphi technique is useful for long range forecasting and other strategic planning issues,
- It involves outsiders assuming that they will be able to objectively assess changes in economic,
demographic, governmental, technological and social conditions and their potential impact
- It shares similar advantages with nominal where it allows for involvement of key decision
makers and provides a more future oriented focus, however it allows for the group to critically
assess the wider range of views
- Cons of the Delphi technique include that the judgments may not efficiently use objective data,
the time and costs involved and the possible difficult in integrating diverse opinions
- Pg 126 delphi technique approach
Managerial judgment
- Because it is unlikely ratios will remain the same in the future, judgment is needed to change
the current forecast based on what is expected to change
Summarizing HR requirements
- Long range plans are general statements of potential staffing needs and sometimes do not
include specific numbers
- Short term plans are estimations, are more specific and are presented in a staffing table which
shows all the jobs that are in an organization, the number of people who hold those jobs and
the future criteria for the job
- The outcome of the forecasting process is an estimate of short term and long term HR
requirements
Step 2:
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