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Lecture

Chapter 3 Human Resource Planning.docx

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Department
Human Resources
Course Code
MHR 523
Professor
Rasha Narsa

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Chapter 3: Human Resource Planning Relationship of Human Resource Planning and Strategic Planning  Human resource planning systematically forecasts an organization’s future demand for and supply of employees and matches supply with demand. Proper Staffing is Critical for Strategic Success  An organization's strategic plan, involves decisions such as an organization's primary mission, divestiture of current business units, or new ways of doing business.  If an organization is not properly staffed with the right numbers and types of people, strategic success is endangered Different Strategies Require Varying Human Resource Plans  Organization's growth or expansion strategy is usually accompanied by aggressive hiring, training, and/or promotions of employees.  Cost reduction leads to people being laid off or early retirement Human Resource Planning Facilitates Proactive Responses  Human resource planning, by facilitating better recruitment, selection, and training strategies not only helps companies meet their legal obligations but also allows them to face challenges proactively (aka employment planning) Successful Tactical Plans Require Appropriate Human Resource Plans  A firm’s strategic plan is often executed through a number of short-range, tactical (or operational) plans that focus on current operations o Ex. A recall on a defective product is a tactical plan  Several large organizations develop three- and five-year strategic plans followed by shorter, tactical plans. It should be noted that organization strategies and tactics and human resource plans mutually influence each other (this fact is recognized by the dotted arrows  Employment planning is more common in large organizations  Large organizations can benefit from knowledge of employment planning because it reveals ways to make the human resource function more effective. The Demand for Human Resources Causes of Demand  Challenges influence the demand for human resources, changes in the environment, the organization, and the workforce are usually involved. o Common to both short-range and long-range employment plans. External Challenges  Economic Developments. Developments in the organization's environment that are difficult for human resource specialists to predict in the short run and sometimes impossible in the long run.  Social-political-legal challenges. Changes occurring in social, political, and legal spheres are easier to predict, but their implications are seldom clear.  Technological Changes. Normally difficult to predict, can affect both demand for and supply of human resources.  Competitors. Competitors affect an organization's demand for human resources, though not in any uniform manner. Employment in some of the traditional sectors barely grows because of foreign competition and a push for productivity improvement. Organizational Decisions  Strategic Plan. These objectives determine the numbers and types of employees needed in the future. o three alternate competitive strategies (focus, cost leadership, and differentiation) o Strategic plan: involves identification of a firm's mission and objectives and plans for achieving those objectives.  Budgets. Budget increases or cuts are the most significant short-mn influence on human resource needs.  Sales and Production Forecast. The sales and production forecasts are less exact than budgets, but may provide even quicker notice of short-run changes in human resource demand o Ex. Sales decease due to recession, freeze the hiring process for new employees  New Ventures. mean new human resource demands o When begun internally, the lead time may allow planners to develop short-run and long-run employment plans  Organizational and Job Design. Workforce Factors  Retirements, resignations, terminations, deaths, and leaves of absence all increase the need for human resources. Forecasting Human Resource Needs  Forecasts: Estimates of future resource needs and changes. Expert Forecasts  Expert forecasts rely on those who are knowledgeable to estimate future human resource needs.  Nominal group technique: A focused, group discussion where members write down their ideas and share them. All new thoughts on a topic are recorded and ranked for importance.  Delphi technique: The soliciting of predictions about specified future events from a panel of experts, using repeated surveys until convergence in opinion occurs o Ex. the human resource department may survey all production supervisors and managers until an agreement is reached on the number of replacements needed during the next year. Trend Projection Forecast 2 methods:  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. (Figure 3-5) Other Forecasting Methods  Budget and Planning Analysis. Organizations that need human resource planning generally have detailed budgets and long-range plans.  New-Venture Analysis. When new ventures complicate employment planning, planners can use new- venture analysis. New-venture analysis requires planners to estimate human resource needs by comparison with firms that already perform similar operations.  Computer based Simulation Models. Computer models are a series of mathematical formulas that simultaneously use extrapolation, indexation, survey results, and estimates of workforce changes to compute future human resource needs. Listing Human Resource Requirements  Staffing table: A list of anticipated employment openings for each type of job. Aka manning table The Supply of Human Resources  There are two sources of supply: internal and external. o Internal supply consists of present employees who can be transferred, promoted or demoted to meet anticipated needs. Internal Supply Estimates  Planners audit the present workforce to learn about the capabilities of present workers. This information allows planners to estimate tentatively which openings can be filled by present employees  Markov Analysis Forecast: of a firm's future human resource supplies, using transitional probability matrices reflecting historical or expected movements of employees across jobs. o Method of predicting the internal supply of human resources in the future. Human Resource Audits  Summarize the employee's skills and abilities and generate skills and management inventories that, in turn, facilitate the preparation of a replacement chart and replacement summaries  Skills inventories. Skills inventories: Summaries of each non-managerial worker’s skills and abilities. o Inventories of human resources must be updated periodically. Failure to update skills inventories can lead to present employees being overlooked for job openings within the organization.  Management Inventories. Management Inventories: Comprehensive reports of available management capabilities in the organization. o Common topics include  Number of employees supervised  Types of employees supervised  Total budget managed
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