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Planning for Human Resources


Chapter 3 Planning for Human Resources * * * * * * * * * * * * * * * * * * * * * * * * * * * Understand how human resource planning contributes to a firm s ... – PowerPoint PPT presentation

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Title: Planning for Human Resources

Chapter 3
Planning for Human Resources
Chapter 3 Objectives
  • Understand how human resource planning
    contributes to a firms competitive advantage
  • Explain why and how firms engage in strategic
  • Explain why and how human resource planning
    activities are conducted
  • Describe how HRM practices developed in response
    to the HR plan
  • Understand the role of human resource information
    systems in planning and other HRM practices

Opening Case Gaining Competitive Advantage at
General Motors
  • Problem Time spent on completing HR transactions
    hurts employee and HR productivity.
  • Solution Developing an employee services center
  • How the employee services center enhanced
    competitive advantage
  • Significant reduction in cost and time.
  • Improvement in speed and quality of employee
  • Improvement in the productivity of HR department.

Linking Human Resource Planning to Competitive
  • HR planning Process of identifying and
    responding to organizational needs and charting
    new policies, systems, and programs that will
    assure effective human resource management under
    changing conditions.
  • Objectives of HR planning
  • Enable organizations to anticipate
    their future HRM needs.
  • Identify practices that will help them
    meet those needs.

Linking Human Resource Planning to Competitive
Advantage (Cont.)
  • HR planning ties together all human resource
    activities and integrates these with the rest of
    the organization.
  • It enables companies to gain control of their
    future by preparing for events that are likely to

Linking Human Resource Planning to Competitive
Advantage (Cont.)
Linking Human Resource Planning to Competitive
Advantage (Cont.)
  • Consequences associated with the failure to
    plan for human resources
  • Employers are forced to respond to events after
    they occur that is, they
    become reactive, rather than proactive.
  • An organization may be unable to correctly
    anticipate an increase in its future demand for
    employees, leading to understaffing.
  • Understaffing leads to consequences such as
    increased stress levels, increase in back orders,
    decrease in customer goodwill, an increase in
    competition, and a loss of market share.

Strategic Planning
  • Through the strategic planning process,
    organizations determine where they are going.
  • The process consists of the following activities

Strategic Planning
Step 1 Determine the Organizational Mission
Strategic Planning
Step 2 Scan the Organizational Environment
  • External and internal environments must be
    scanned to identify threats and opportunities.
  • External environment Includes political, legal,
    economic, social, and technological issues the
    industry environment must also be scanned.
  • Internal environment Assessment of the firms
    strengths and weaknesses in order to form
    strategic goals that take advantage of strengths.
  • The task of gathering information for strategy
    formulation rests with all managers and

Strategic Planning
Step 3 Set Strategic Goals
  • Strategic goals specify the desired outcomes that
    must be reached for the firm to accomplish its
  • They should be specific, challenging, and

Strategic Planning
Step 4 Formulate a Strategic Plan
  • Strategic plan specifies the courses of action a
    firm must take in order to meet its strategic
  • Formulated by
  • Translating organizational goals into more narrow
    functional or departmental goals.
  • Devising strategies for meeting these goals.

Human Resource Planning
  • Through HR planning, an organization is able to
    generate a list of future human resource needs
    and a plan for meeting them.
  • To derive HR needs, the organization must
    forecast its demand and supply.

Human Resource Planning (Cont.)
  • Demand forecasting involves predicting the number
    and types of people the organization will need at
    some future point in time.
  • Supply forecasting involves estimating which
    organizational positions are expected to be
    already filled.

Human Resource Planning (Cont.)
  • Demand Forecasting Statistical Approaches
  • An organization predicts needed workforce size on
    the basis of certain business factors.
  • A business factor is an attribute of the business
    such as sales volume or market share, which
    closely relates to the size of the needed
  • Is used when an organization operates in a stable
  • Most commonly used statistical methods are trend,
    ratio, and regression analysis.

Human Resource Planning (Cont.)
  • Demand Forecasting Statistical Approaches

Human Resource Planning (Cont.)
  • Demand Forecasting Statistical Approaches
  • Precaution regarding the use of statistical
  • Statistical methods of demand forecasting assume
    that the relationship between workforce size and
    the business factor remains constant over time.
  • If this relationship were to change unexpectedly,
    the forecast would become inaccurate.

Human Resource Planning (Cont.)
  • Demand Forecasting Judgmental Approaches
  • Involves the use of human judgment, rather than a
    manipulation of numbers.
  • Two most common techniques
  • Group brainstorming
  • Sales force estimates

Human Resource Planning (Cont.)
  • Supply Forecasting
  • Steps to supply forecasting
  • Step 1 Organization groups its positions by
    title, function, and level of responsibility.
  • Step 2 Estimate within each job group, how many
    of its current employees will
  • Remain in their positions during the planning
  • How many will move to another position.
  • How many will leave the organization.

Human Resource Planning (Cont.)
  • Estimating Future HR Needs

A firm derives its specific staffing needs by
combining the results of the supply and demand
forecasts within each job group
Outcomes of the HR Planning Process
  • Dealing with an Oversupply of Employees
  • The current trend toward organizational
    restructuring usually results in a smaller
  • When an organizations strategic plan calls for
    restructuring, the HRM response is usually one of
  • Downsizing usually means layoffs.
  • Because of the negative outcomes that are often
    associated with layoffs, employers are encouraged
    to seek alternatives.

Outcomes of the HR Planning Process
  • Dealing with an Undersupply of Employees
  • Hiring additional workers
  • Alternatives to additional hiring
  • Improve productivity of existing workforce
    through additional training
  • Overtime
  • Additional shifts
  • Job reassignments
  • Temporary workers
  • Improve retention rates

Human Resource Information Systems (HRIS)
  • A computerized information package that provides
    management with increasing capacity to record,
    store, manipulate, and communicate information
    across wide geographic boundaries, with access to
    many users

Human Resource Information Systems (HRIS) (Cont.)
A Companys HRIS contains information about
Human Resource Information Systems (HRIS) (Cont.)
Purposes served by a companys HRIS
Human Resource Information Systems (HRIS) (Cont.)
  • HRIS on the Net Intranet
  • Internet networks that are accessible only to
    employees within the company.
  • They can store a great deal of HR information.
  • It allows companies to save money by eliminating
    printing and distribution costs.
  • Employees like it because it allows them to
    quickly and privately access HR information.
  • HRIS on the Net Extranet
  • Link a firm's intranet to a variety of outside
    organizations and vendors.
  • Gives employees secure access to information and
    services from outside parties.

Human Resource Information Systems (HRIS) (Cont.)
  • Ensuring the confidentiality of HRIS information
  • The organization must ensure that user access is
    limited to relevant information.
  • Sensitive and confidential information should
    only be accessible by the HRM department or
    specified individuals.
  • Institute strong written policies that stipulate
    the organizations intention to protect employee
    privacy rights.