HR Planning

HR Planning
What is HR Planning?
Why is it rarely done?
What is the connection between a firms
strategic orientation and HR planning?
Organizational Life-Cycle Stages and
HR Activities
LIFE-
CYCLE
STAGE

STAFFING

COMPENSATION
TRAINING
AND
DEVELOPMENT
LABOR /
EMPLOYEE
RELATIONS
Introduction Attract best
technical and
professional
talent.
Meet or exceed
labor market rates
to attract needed
talent.
Define future
skill
requirements
and begin
establishing
career ladders.
Set basic
employee-
relations
philosophy of
organization.
Growth Recruit adequate
numbers and mix
of qualifies
workers. Plan
management
succession. Mange
rapid internal labor
market
movements
Meet external
market but consider
internal equity
effects. Establish
formal
compensation
structures.
Mold effective
management
team through
management
development
and
organizational
development.
Maintain labor
peace,
employee
motivation,
and morale.
Organizational Life-Cycle Stages
and HR Activities (contd)
LIFE-CYCLE
STAGE

STAFFING

COMPENSATION
TRAINING AND
DEVELOPMENT
LABOR /
EMPLOYEE
RELATIONS
Maturity Encourage sufficient
turnover to minimize
layoffs and provide
new openings.
Encourage mobility
as reorganizations
shift jobs around.
Control
compensation
costs.
Maintain flexibility
and skills of an
aging workforce.
Control labor costs
and maintain labor
peace. Improve
productivity.
Decline Plan and implement
workforce
reductions and
reallocations,
downsizing and
outplacement may
occur during this
stage.
Implement tighter
cost control.
Implement
retraining and
career consulting
services.
Improve
productivity and
achieve flexibility
in work rules.
Negotiate job
security and
employment-
adjustment
policies
How does HR Planning occur?
1. What does the environment look like?
2. What are our future personnel needs?
(forecast demand)
a. Judgmental
Estimates
Rule of Thumb
Delphi Technique
NGT
Brainstorming
The Nominal Group Technique
A small group of 4-5 people gathers around a table. Leader
identifies judgment issue and gives participants procedural
instructions.
Participants write down all ideas that occur to them, keeping
their lists private at this point. Creativity is encouraged during
this phase.
Leader asks each participant to present ideas and writes them
on a blackboard or flipchart, continuing until all ideas have been
recorded.
Participants discuss each others ideas, clarifying, expanding,
and evaluating them as a group.
Participants rank ideas privately in their own personal order and
preference.
The idea that ranks highest among the participants is adopted
as the groups judgment.
The Delphi Technique
Leader identifies judgment issues and develops questionnaire.
Prospective participants are identified and asked to cooperate.
Leaders send questionnaire to willing participants, who record
their judgments and recommendations and return the
questionnaire.
Leaders compiles summaries and reproduces participants
responses.
Leader sends the compiled list of judgment to all participants.
Participants comment on each others ideas and propose a final
judgment.
Leader looks
for consensus
Leader accepts consensus judgment as groups choice.
How does HR Planning occur?
1. What does the environment look like?
2. What are our future personnel needs?
(forecast demand)


b. Statistical

Regression
Statistical Techniques Used to Project
Staffing Demand Needs
Name
Regression analysis






Productivity ratios
Description
Past levels of various work load indicators, such as sales,
production levels, and value added, are examined for
statistical relationships with staffing levels. Where
sufficiently strong relationships are found, a regression (or
multiple regression) model is derived. Forecasted levels of
the retained indicator(s) are entered into the resulting
model and used to calculate the associated level of
human resource requirements.

Historical data are used to examine past levels of a
productivity index (P):

P = Work load / Number of People

Where constant, or systematic, relationships are found,
human resource requirements can be computed by diving
predicted work loads by P.
Statistical Techniques Used to Project
Staffing Demand Needs (contd)
Name
Personnel ratios





Time series analysis
Description
Past personnel data are examined to determine historical
relationships among the employees in various jobs or job
categories. Regression analysis or productivity ratios are
then used to project either total or key-group human
resource requirements, and personnel ratios are used to
allocated total requirements to various job categories or to
estimate for non-key groups.


Past staffing levels (instead of work load indicators) are
used to project future human resource requirements. Past
staffing levels are examined to isolate and cyclical
variation, long-tem terms, and random movement. Long-
term trends are then extrapolated or projected using a
moving average, exponential smoothing, or regression
technique.
Regression Analysis
1. Statically identify historical predictor of workforce size
Example: FTEs = a + b1 sales + b2 new customers

2. Only use equations with predictors found to be
statistically significant

3. Predict future HR requirements, using equation
Example: (a) FTEs = 7 + .0004 sales + .02 new
customers
(b) Projected sales = $1,000,000
Projected new customers = 300
(c) HR requirements = 7 + 400 + 6 = 413
Determining the Relationship Between
Hospital Size and Number of Nurses
How does HR Planning occur?
b. Statistical (cont.)
Ratio analysis
2. What are our future personnel needs?
(demand forecast cont.)
How does HR Planning occur?
3. Are resources available internally or
externally to fill those needs?
a. Internal
Replacement charts
Employee Replacement Chart for
Succession Planning
How does HR Planning occur?
3. Are resources available internally or
externally to fill those needs?
a. Internal
Replacement charts
Promotability
How does HR Planning occur?
3. Are resources available internally or
externally to fill those needs?
a. Internal
Replacement charts
Promotability
Succession planning
Skills inventory
Transition (Markov) matrix
A Sample Transition Matrix
Part A: Personnel Supply
Estimated Personnel Classification in Year T + 1 (%)
Classifications in Year T P M S Sr A Exit
Partner .70 .30
Manager .10 .80 .10
Supervisor .12 .60 .28
Senior .20 .55 .25
Accountant .15 .65 .20

Part B. Staffing Levels
Estimated Personnel Availabilities in Year T + 1 (%)
Beginning
Classifications in Year T Levels P M S Sr A Exit
Partner 10 7 3
Manager 30 3 24 3
Supervisor 50 6 30 14
Senior 100 20 55 25
Accountant 200 30 130 40
10 30 50 85 130

How does HR Planning occur?
3. Are resources available internally or
externally to fill those needs?
b. External what do you look at?

- try to determine availability of
qualified labor; Surplus? Shortage?
How does HR Planning occur?
4. What should we do?
- create plan of action to reconcile supply
and demand
a. Set objectives
b. Generate alternatives
Staffing Alternatives to Deal with
Employee Surpluses
Source: Compliments of Dan Ward, GTE Corporation
Staffing Alternatives to Deal with
Employee Shortages
Source: Compliments of Dan Ward, GTE Corporation
How does HR Planning occur?
4. What should we do?
- create plan of action to reconcile supply
and demand
a. Set objectives
b. Generate alternatives
c. Assess alternatives
Alternative Scheduling Options
Alternative
Percent Using
(N = 427 companies)
The following definitions were used in this survey
for alternative scheduling strategies:
Part-time: A regular employee who works fewer than 35 hours per
week.
Flextime: A system than enables employees to vary their schedules:
Usually, the flexibility applies to starting and finishing times.
Compressed workweek: A full-week schedule (usually 40 hours) than
occurs in fewer than five days, such as four 10-hour days.
Job sharing: Two or more employees split a full-time position, diving
the responsibilities, and, to some degree, the compensation.
Work-at-home: A program that enables employees to complete work at
home (or at a remote office closer to home) on a regular basis. It is often
referred to as flexplace or telecommuting.
84%


40%

23%

18%

13%
How does HR Planning occur?
4. What should we do?
- create plan of action to reconcile supply
and demand
a. Set objectives
b. Generate alternatives
c. Assess alternatives
d. Choose alternative KEEP
PHILOSOPHY IN MIND
How does HR Planning occur?
5. How did we do?
a. Did company avoid surplus/shortage?
b. Evaluate usefulness of methods used
c. Goals v. Production Levels, etc.