HR Planning

HR Planning

 What is HR Planning?

 Why is it rarely done?

 What is the connection between a firm’s
strategic orientation and HR planning?
 Organizational Life-Cycle Stages
and HR Activities
LIFE-CYCLE TRAINING AND LABOR /
STAGE STAFFING COMPENSATION DEVELOPMENT EMPLOYEE
RELATIONS

Introduction Attract best Meet or exceed Define future Set basic

technical and labor market rates skill employee-
professional to attract needed requirements relations
talent. talent. and begin philosophy of
establishing organization.
career ladders.

Growth Recruit adequate Meet external Mold effective Maintain labor

numbers and mix market but management peace,
of qualifies consider internal team through employee
workers. Plan equity effects. management motivation,
management Establish formal development and morale.
succession. compensation and
Mange rapid structures. organizational
internal labor development.
market
movements
 Organizational Life-Cycle
Stages and HR Activities
(cont’d)
LIFE-CYCLE TRAINING AND LABOR /
STAGE STAFFING COMPENSATION DEVELOPMENT EMPLOYEE
RELATIONS

Maturity Encourage Control Maintain flexibility Control labor

sufficient turnover compensation and skills of an costs and
to minimize layoffs costs. aging workforce. maintain labor
and provide new peace. Improve
openings. productivity.
Encourage mobility
as reorganizations
shift jobs around.

Decline Plan and implement Implement tighter Implement Improve

workforce cost control. retraining and productivity and
reductions and career consulting achieve flexibility
reallocations, services. in work rules.
downsizing and Negotiate job
outplacement may security and
occur during this employment-
stage. adjustment
 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 other’s 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 group’s 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 other’s ideas and propose a final

judgment.

Leader looks
for consensus

Leader accepts consensus judgment as group’s 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 Description
Regression analysis 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 ratios
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.
Project Staffing Demand Needs
(cont’d)
Name Description
Personnel ratios 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.

Time series analysis 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?

2. What are our future personnel

needs? (demand forecast cont.)
b. Statistical (cont.)
 Ratio analysis
 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
Percent Using
Alternative (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 84%
week.
• Flextime: A system than enables employees to vary their schedules:
40%
Usually, the flexibility applies to starting and finishing times.
• Compressed workweek: A full-week schedule (usually 40 hours) than
23%
occurs in fewer than five days, such as four 10-hour days.
• Job sharing: Two or more employees split a full-time position, diving
18%
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 13%
referred to as “flexplace” or “telecommuting.”
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.