Chapter 5: Human Resources Planning

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Chapter 5: Human Resources Planning
The Strategic Importance of Human Resources Planning
Human Resources Planning – reviewing HR requirements to ensure
organization has req’d number of employees, with necessary skills, to meet
its goals
HRP and strategic planning are effective when a reciprocal/interdependent
relationship exists between them
Step 1: Forecasting Future Human Resources Needs (Demands)
Quantitative Methods:
oTrend analysis – study firm’s past employment level
oRatio analysis – forecasting technique to determine future staff needs
by using ratios between some causal factor (eg. sales volume) and
number of employees needed
oScatter plot – used to determine whether a measure of business
activity and staffing levels are related
oRegression analysis – uses mathematical formula to project future
demands based on established relationship between employment level
and some measurable factor of output
Qualitative Methods:
oNominal Group Technique – decision-making technique where group of
experts meet face-to-face and generate ideas independently, go
around and present each idea, clarify/discuss/evaluate ideas, and then
rank privately
oThe Delphi Technique – typically involves outside experts as well as
employees; ideas are generated and exchanged anonymously, and
then each individual uses feedback from other experts to fine-tune his
own assessment; process is repeated until a consensus is reached
oManagerial judgment
Staffing table – representation of all jobs within the organization, along w/
number of current incumbents and future requirements for each
Step 2: Forecasting the Availability of Internal and External Candidates
Two sources of supply:
oInternal – present employees, can be transferred/promoted to meet
oExternal – includes those employed elsewhere or are unemployed
Strategies to Forecast Supply of Internal Candidates
oMarkov Analysis – tracking pattern of employee movements through
various jobs and developing a transitional probability matrix
oSkills Inventories and Management Inventories
Skills Inventories – records summarizing employees’ education,
experience, interests, skills, etc.
Management Inventories – summaries of the qualifications,
interests, and skills of management employees, including
number/types of employees supervised, duties of such
employees, total budget managed, previous managerial duties,
and managerial training received
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oReplacement Charts and Replacement Summaries
Replacement charts – visual representations of who will be
replacing whom in the event of a job opening. Lists likely
internal candidates and relevant info (age, present performance
rating, and promotionability status)
Replacement summaries – lists of likely replacements for each
position, including relative strengths/weaknesses, current
position, performance, promotability, age, and experience
oSuccession Planning - process of ensuring suitable supply of
successors for current/future senior/key jobs
Strategies to Forecast Supply of External Candidates
oGeneral Economic Conditions
eg. national unemployment rate
oNational Labour Market Conditions
Supply of labour in Canada will start to shrink as baby boomers
oLocal Labour Market Conditions
eg. community growth rates and attitudes
oOccupational Market Conditions
Analysis of labour supply within a specific occupation
Step 3: Planning and Implementing HR Programs to Balance Supply and
Labour surplus – internal supply of employees > organization’s demand
oHiring freeze – openings filled by reassigning employees, no outside
oAttrition – normal separation of employees through resignation,
retirement, or death
oEarly retirement buyout program – strategy used to accelerate attrition
by offering buyout packages or the opportunity to retire on full pension
with benefits
oJob sharing – reduce number of hours worked by dividing one position’s
duties between 2+ employees
oWork sharing – work 3-4 days/week and receive EI benefits on non-
work days
oReduced workweek – employees work fewer hours and receive less pay
oLayoffs – temporary withdrawal of employment for economic/business
oSupplemental Unemployment Benefits (SUBs) – top-up of EI benefits to
bring income closer to what employee would receive on the job (for
laid off workers)
oTermination – permanent separation from organization for any reason
oSeverance package – lump-sum payment, continuation of benefits for a
specified time, etc. provided to employees terminated through no fault
of their own
oSurvivor sickness – negative emotions experienced by employees who
remain after major restructuring – can include feelings of
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betrayal/violation/guilt/detachment, and can result in stress,
depression, proneness to errors, and reduced productivity
Labour shortage – internal supply of employees < organization’s demand
oInitial response: schedule overtime hours and subcontract work on
temp/permanent basis, or hire temp employees
oRecruit externally
oPromote/train internal employees
oAllow flexible work arrangements
Flextime – employees build own workday around code of midday
Telecommuting – working from home
Reduced workweek
Compressed workweek – allows employees to work four 10-hr
days instead of five 8-hr days
Flexyear – employees choose number of hours they want to
work in each month over the next year
Pre Test
Question 1
Human Resources Planning is a proactive and future oriented process.
Correct: True
Question 2
The second step in the HRP model is to forecast demand for labour.
Correct: False (First)
Question 3
One cost associated with overstaffing is requiring employees to work extra hours.
Correct: False
Question 4
The most successful organization is very reactive in nature.
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