Chapter 3—Planning for Human Resources - Department of ...


Nov 8, 2013 (3 years and 7 months ago)


Chapter 3

Planning for
Human Resources


HR Planning Contributes to an
organization’s competitive advantage

Why & How firms engage in Strategic

Why & How HR planning activities are

How HRM practices developed in
response to an HR Plan

Role of HRIS in HRM activities

Gaining Competitive Advantage

Nature of AT&T’s business changed needed to
reexamine many of its HRM practices

Realign staffing practices with its new business

New breed managers

Knowledgeable about the firm’s new products and

Manage mergers and acquisitions

Function effectively in an uncertain environment

Gaining Competitive Advantage


develop a career progression

Purpose of system:

Identify management skills required by the
company’s new global business plans

Track skill levels of all managers aspiring to
top management positions

Groom and select individuals for positions
as vacancies developed

Gaining Competitive Advantage

System has the following information
(People File):

Job history


Strengths and Weaknesses

Leadership Development needs

Developmental Plans


Special skills

Gaining Competitive Advantage

What has the system enabled AT&T to do:

Leaderships skills for top mgmt positions

Specific employees qualified to move into a

Positions with insufficient numbers of “local

Developmental plans for each candidate

Linking HR Planning to Competitive

Business environment is rapidly changing

HRM strategies are developed based on internal
and external variables

Human Resource Planning ties human
resource issues to the organization’s
business needs

HR planning

process of identifying and
responding to organizational needs and
charting new policies, systems and
programs that will assure effective HRM
under changing conditions

Linking HR Planning to Competitive

Purpose of HR Planning:

Enable organization to anticipate their future
HRM needs

Identify practices that will help them meet
those needs

HR planning is “the thread that ties all other
HR activities and integrates these with the
rest of the organization

Linking HR Planning to Competitive


Mission Statement

“Produce high
quality products at low cost”

Fulfill mission organization needed to
change HRM practices to increase
commitment and motivation of its

Discuss Figure 3
1 on page 62

Serving as a Building Block for
Future HRM Practices

Implementation of many HRM practices
discussed in this book require careful HR

(KSAs required)

Discuss Exhibit 3
1 page 63

Consequences associated with failure to plan

Forced to respond to events after they occur become
reactive instead of proactive

can’t forecast demand
for employees accurately

Causes stress in current ees due to increased

HRM Issues & Practices

Strategic Planning ensures organizations
know where they are going

Strategic Planning Activities:

Determine the organizational mission

Scan the organizational environment

Set strategic goals

Formulate a strategic plan, part of which
addresses human resource needs

Strategic Planning Steps

Step I

Development of organizational

purpose for existing)

Step 2

Scan the
organizational environment

internally and externally)

Conduct a SWOT analysis

External environment





Technological issues

Strategic Planning Steps




Current mission

Past history

Number of layers of management

Span of control of management

Skills of the human resources

Leadership and power

Number of functional areas

Strategic Planning Steps

Obtain environmental information

not only the
CEO by it also rests with management and all
other employees

VPs of functional areas provide input into
decisions regarding new strategic direction for
the firm
(Discuss Figure 3
2 page 65

Step 3

Set Strategic Goals

Desired outcomes if org is going to accomplish its

Goals need to be specific, measurable, and achievable

Strategic Planning Steps

Step 4

Formulate a Strategic Plan

Once internal and external are scanned
goals are set and org formulates its
strategic plan

HR Planning

Now we link firm’s HRM practices to its
strategic business needs identified by the
strategic planning process

HR Planning can be both short term and
long term (three or more years)

Identify future needs

Plan for meeting them

Demand Forecasting

Demand forecasting involves predicting the
number and types of people the org will need at
some future point

Statistical approaches

org predicts the needed
workforce size based on certain

Statistical approach is used when an org operates in
a stable environment (patient load to predict number
of nurses needed)

explosive growth need more of a
judgmental approach

Demand Forecasting

Trend analysis

most commonly used
statistical method

Demand for future human resources predicted
on past business trends regarding a business
factor (
Discuss Figure 3
3 page 67

Ratio Analysis

process of determining
future HR demand by computing exact
ratio between the specific business factor
and the number of ees needed

Demand Forecasting

Ratio Analysis

faculty ratio

10,000 students and 500
professors 20:1 faculty student ratio. For every 20
students you have one professor. If enrollment
increases by 1,000 students we would need to hire an
additional 50 faculty

Regression Analysis

similar to both trend and
ratio analyses in that forecasts are based on the
relationship between business factor and
workforce size.

This method is more statistically based


scatter diagram

Discuss Figure 3
2 page 68

Demand Forecasting

Estimating future hr needs;

Supply and demand of each group


five positions becoming vacant

due to turnover and we need to fill three new

total of 8

Outcomes of HR Planning Process

Oversupply employees:

Smaller workforce


due to downsizing

Hiring freezes

Early retirements

Restricted overtime

Job sharing

Pay reductions

Undersupply employees:

Hire additional staff

Fill jobs internally or externally

target protected

older, disabled, foreign
origin individuals

Internal recruitment programs with career
development programs

Outcomes of HR Planning Process

Alternatives to additional hiring:

Improve productivity of existing workforce through
additional training


Additional shifts

Job reassignments

Temporary workers

Improve retention rates

give candidates a realistic
preview of what their jobs would actually be like

Workers want to feel valued by their org

Orgs need to train managers to be good managers

Outcomes of HR Planning Process

Improve retention by having ees actively
participate in the welfare of the

Workers want recognition for their

but must be tailored to the
individual needs of the worker

Telecommuting, job sharing, shorter work
weeks (9/80 at Babcock and Wilcox)

Cafeteria style benefits


Management can record, store, manipulate, and
communicate information across wide
geographic boundaries with access to many

Discuss Exhibit 3
4 page 73

Purposes served by an HRIS:

Central repository for information on benefits, HR
policies, and processes

Allow users to compare different benefit packages

Provide managers with instructions on how to
implement 15 different HR practices

Basis for succession planning program


Through automation HRIS can reduce
paperwork and cut administrative costs

Organizational members outside HR can
access the data

HRIS on the “NET”

Internet and Intranet

Employee handbook

Benefit info

Training courses

HR Planning

Manager’s Guide

HR Planning is an essential function for all
line managers


most important activity

Employee retention

establish good working
relationships with their employees

Need to be effective communicators,
motivators, and effective teachers

How the HR Department Can Help

Now hr professional are included in the
strategic planning process

Now we plan our futures looking at hr
needs on the front end of the strategic
planning process

HR is now a full partner with finance,
operations, and marketing

Developing & Implementing HR

HR professionals’ plans must be aligned with
changes spurred by the organization’s strategic
plan. Plan interventions:

Greater flexibility in the workforce

Greater rigor in training

Increased responsibilities for management

Increased worker participation

The use of performance incentives

As programs get implemented HR must consider
the corporate culture (pattern of shared values,
mores and behaviors)

Evaluation of HR Plans

Only when the operational plans of the HR
department are evaluated can the
organization know if the HR strategies
were effective
(Discuss Exhibit 3
7 page