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Chapter 4

Ch4 - Human Resources Planning

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Shawn Komar

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Chapter 4 Human Resource Planning Strategic Importance of Human Resources Planning Human Resources Planning (HRP) is the process of forecasting future human resources requirements to ensure that the organization will have the required number of employees with the necessary skills to meet its strategic objectives.  Forecasted shortage of 1M workers over the next 15 years. Steps in Human Resource Planning  forecasting demand for labour o considerations: organizational strategic plans; economic conditions; market trends; social concerns; demographic trends, etc. o techniques utilized: trend analysis; ratio analysis; scatter plot; Delphi technique; staffing tables; managerial judgement, etc.  analyzing the labour supply o Internal Analysis: skills inventories; replacement summaries; succession planning o External Analysis: labour market conditions; occupational market conditions  planning and implementing HR programs to balance supply and demand o Labour Shortage: overtime; temp workers; subcontract; recruitment; transfer; promotion o Labour Surplus: hiring freeze; buyouts and early retirement; job sharing; part time; reduced workweek; layoffs; termination; outplacement assistance o Equal Labour Demand and Supply: vacancy filled internally through transfers/promotions The Relationship between HRP and Strategic Planning  It is clear that HRP and strategic planning become effective when a reciprocal and interdependent relationship exists between them. Determining how many people will be available to carry out the strategic goals of the organization as well as what skills they have is essential to the strategic planning process. The Importance of Environmental Scanning The most successful organizations are prepared for change before it even occurs.  The external environmental factors most frequently monitored include: o economic conditions (general, regional, and local) – affects demand for products o market and competitive trends o new or revised laws o social concerns related to health care, childcare, and educational priorities o technological changes o demographic trends – demographic composition affecting lack of Gen X & Y to fill baby boomers STEP 1: Forecasting Future Human Resource Needs (Demand) Involves forecasting for the number and type of people needed to meet organizational objectives. Forecasting is based on:  projected turnover as a result of resignations or terminations  quality and nature of employees relative to needs of the organization  decisions regarding product quality and new markets, and the required employee skill mix  plans for technological and administrative changes to increase productivity and reduce headcount  financial resources available Quantitative Approaches: relies on statistical analysis.  trend analysis: reviewing past employment levels to predict future needs; used for initial estimate only  ratio analysis: ratio of some causal factor and number of employees needed (assumes productivity and volume do not change, like trend analysis)  scatter plot: used to determine whether two factors (business activity and staffing levels) are related; a graphical method to help identify the relationship between two variables; line of best fit gives estimation  regression analysis: examines the statistical relationship between business activity and employees; a statistical technique involving the use of a mathematical formula to project future demands based on an established relationship between an organization’s employment and some measureable factor of output Qualitative Approaches: rely solely on expert judgment.  Nominal Group Technique o decision making technique that involves a group of experts meeting face to face o steps include independent idea generation, clarification and open discussion, and private assessment (ranking of ideas)  Delphi Technique o judgmental forecasting method used to arrive at a group decision, typically involving outside experts as well as organizational employees o ideas are exchanged without face-to-face interaction and feedback is provided and used to fine- tune independent judgements until a consensus is reached o better for long-range forecasting  Managerial judgment o Using professional judgement plays a key role even in quantitative forecasting as trends are unlikely to be unchanging in the future. o Staffing Table  a pictorial representation of all jobs within the organization, along with the number of current incumbents and future employment requirements (monthly or yearly) for each STEP 2: Forecasting Availability of Internal and External Candidates (Supply) Forecasting the Supply of INTERNAL Candidates  Markov Analysis o a method of forecasting internal labour supply that involves tracking the pattern of employee movements through various jobs and developing a transitional probability matrix; shows transitory movement through jobs and exits  Skills Inventories o manual or computerized records summarizing employees’ education, experience, interests, skills, and so on, which are used to identify internal candidates eligible for transfer and/or promotion; if skills pertaining to the job are updated they must let HR know  Management Inventories o records summarizing the qualifications, interests, and skills of management employees, along with the number and types of employees supervised, duties of such employees, total budget managed, previous managerial duties and responsibilities, and managerial training received  Replacement Charts o visual representations of who will replace whom in the event of a job opening o likely internal candidates are listed, along with their age, present performance rating, and promotability status  Replacement Summaries o lists of likely replacements for each position and their relative strengths and weaknesses, as well as information about current position, performance, promotability, age, and experience  Succession Planning o process of ensuring suitable supply of successors for current and future senior or key jobs so th
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