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MHR 523 (469)


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Ryerson University
Human Resources
MHR 523
Al- Karim Samnani

MHR Chapter 3: Human Resource Planning (pg 91-123) Planning allows HR departments to be proactive which in turn improve the department’s contributions to the organization’s objectives. RELATIONSHIP OF HRP LANNING TO STRATEGIC P LANNING Proper Staffing is Critical for Strategic Success If an organization is not properly staffed with the right number and types of people, strategic success is endangered. Different Strategies Require Varying HR Plans Aggressive hiring, training and/or promotions vs. cost reduction strategy often necessitate layoff and early retirement of surplus employees. A shift from cost leadership to focus/differentiation strategy requires changes in the number and skill levels of employees. HR Planning Facilitates Proactive Responses HR planning or employment planning by facilitating better recruitment, selection and training strategies not only helps companies meet their legal obligation but also allows them to face challenges proactively. Successful Tactical Plans Require Appropriate HR Plans  The overall organizational strategy defines the HR objectives that are accomplished through the implementation of appropriate HR plans. Successful organizations recognize the importance of “intellectual” or “human” capital. An effective HR plan is a critical tool to take advantage of this valuable asset.  HR planning is more than head counting and matching supply w/demand – it involves the creation of an HR vision for the future, including answering questions such as, what should our employees look like, what competencies should they possess, how should we groom our employees for emerging challenges and opportunities.  Through planning w/short term and long term goals, organizations are better able to develop their corporate and functional plans and integrate these with their HR plans as well. Ensures better fit between short and long term goals plans in organization  Employment planning is more common in large organizations because it allows them to: o Improve the utilization of HR o Match HR related activities and future organization objectives efficiently o Achieve economies in hiring new workers o Expand the HR management information base to assist other HR activities and other organizational units o Make major demands on local labour markets successfully o Coordinate different HR management programs such as employment equity plans and hiring needs THE D EMAND FOR H UMAN RESOURCES Causes of Demand External Challenges  Economic Developments: difficult for HR specialists to predict in short run and sometimes impossible to estimate in long run  Social-Political-Legal Changes: easier to predict but implications are seldom clear (ex. as demographics change, so do employee attitudes toward work and their employers; impact on HR planning of the Canadian Human Rights Act, passed more than 20 yrs ago, is still somewhat unclear)  Technological Changes: difficult to predict can affect both demand and supply of human resources; very often, technological changes tend to reduce employment in one department while increasing it in another  Competitors: affect organizations demand for HR but not in any uniform manner (ex. traditional sectors – barely any growth because of foreign competition and a push for productivity improvement but in electronic industries, competition causes lower prices) MHR Chapter 3: Human Resource Planning (pg 91-123) Organizational Decisions  Strategic Plan: involves identification of a firm’s mission and objectives and plan for achieving those objectives. Commits the firm to long range objectives which determine the numbers and types of employees needed in the future. Has decisive influence on HR plans and the competitive strategies used (focus, cost leadership, differentiation)  Budgets: increases or cuts are most significant short run influence on HR needs  Sales and Production Forecasts: less exact than budgets by may provide even quicker notice of short run changes in HR demand  New Ventures: mean new HR demands; by acquisitions and mergers cause an immediate revision of HR demands; positions may have to be eliminated to avoid duplication while new integrated ones may have to be created for smooth operating of merged units :  Organizational and Job Design: changes in structure have major implications for HR needs; automation, computerization and job redesign also necessitate major revisions in HR need estimates Workforce Factors: demand is modified by employee actions such as retirement, resignations, terminations, deaths and leaves of absence. When large numbers of employees are involved, past experience usually serves as a reasonably accurate guide. However, reliance on past experience means that HR specialists must be sensitive to changes elsewhere Forecasting Human Resource Needs Forecasts: estimates of future resource needs and changes; best viewed as approximations. Expert Forecasts: rely on those who are knowledgeable to estimate future HR needs  Nominal Group Technique: focused, group discussion where member write down their ideas and share them. All new thoughts on top are recorded and ranked for importance  Delphi Technique: soliciting of predictions about specified future event from a panel of experts, using repeated surveys until convergence in opinions occurs Trend Projection Forecasts: crude, short run approximations because they assume that the causes of demand remain constant, which is seldom the case; very inaccurate for long range HR projections  Extrapolation: extending past rates of change into the future  Indexation: a method of estimating future employment needs by matching employment growth with a selected index, such as the ratio of production employees to sales Other Forecasting Methods:  Budget and Planning Analysis: detailed budgets and long range plans  New-Venture Analysis: requires planners to estimate HR needs by comparison with firms that already perform similar operations  Computer-Based Simulation Models: most sophisticated; computer models are a series of mathematical formulas that use extrapolation, indexation, survey results, and estimates of workforce changes to compute future HR needs. They simulate and forecast changes in demand for HR caused by various internal and external factors Listing Human Resource Requirements Long range plans are of necessity, general statements of probable needs; specific numbers are either omitted or estimated. Staffing Table/Manning Table: used to report short term plans as they are more specific  List of anticipated employment openings for each type of job; may be specific number or approximate range of needs  Neither complete nor wholly accurate; only approximations but they allow HR specialists to match short run demand and supply THE SUPPLY OF H UMAN R ESOURCES Internal Supply Estimates Markov analysis: forecast of a firm’s future HR supplies, using transitional probability matrices reflecting historical/expected movements of employees across jobs MHR Chapter 3: Human Resource Planning (pg 91-123) Human Resource Audits: summarize employee’s skills and abilities and generate skills and management inventories that in turn facilitate the preparation of replacement chart and replacement summaries  Skill Inventories: summaries of each non-managerial worker’s skills and abilities catalogues each comprehensive understanding of the capabilities found in the organization’s workforce; failure to update can lead to present employees being overlooked for hob opening within the organization  Management Inventories: comprehensive reports of available management capabilities in the organization; topics included are: o number of employees supervised o management training received o types of employees supervised o duties of subordinates o total budget managed o previous management duties  Replacement Charts: visual representation of who will replace whom when a job opening occurs; replacement status consists of two variables: o Present performance – determined largely from supervisory evaluations o Promotability – based on present performance and the estimates by immediate supervisors of future success in a new job  Replacement Summaries: lists of likely replacements for each job and their relative strengths and weaknesses; provide considerably more data than the replacement chart which allows decision makers to make more informed decisions In the long run, HR departments can encourage employees to upgrade capabilities and prepare for future vacancies. In the short run, opening without a suitable replacement requires that someone be hired from the external labour market. Transition Matrices and Markov Analysis  Predicting internal supply of HR in the future. Useful where employees move from one job (or rank) to another on a regular basis and where jobs/HR movements don’t fluctuate rapidly due to external/internal change  Transition Matrices: describe the probabilities of how quickly a job position turns over and what an incumbent employee may do over a forecast period of time, such as stay in the current position, move to another position within the firm or accept another job in the organization; when matrix is multiplied by the number of employees in each job at the beginning of a y
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