LU3 HR Planning

LEARNING UNIT 3
Human
Resource
Planning
HUMAN RESOURCE PLANNING
 A process in which an organization estimate its demands
for labor and to evaluate the size, nature and sources of
the supply that will be required to meet the demand
Intention – to identify areas for action resulting from the

analysis
Examples:
• Developmental planning for strategic leadership – succession planning
• Assess strategic alternatives
Forecast availability of employees with certain critical skills
• Contributions to HRM – developing HR, avoiding shortages,
information for decisions,, budgeting, strategic salary planning –
compatibility with organizational goals and strategies
FACTORS THAT DETERMINE HR PLANS
HR PLANNING PROCESS
External Environment
Internal Environment
Strategic Planning
Human Resource Planning
Forecasting Comparing Forecasting Human

Human Resource Requirements and Resource Availability
Requirements Availability
Demand = Supply Surplus of Workers Shortage of Workers
No Action Restricted Hiring, Recruitment

Reduced Hours, Early
Retirement, Layoff,
Downsizing Selection
HR Forecasting Techniques
• Judgmental Methods:
 Bottom-up approach
 Top-down forecasting
• Mathematical models :
 Multiple regression
 Productivity ratios
 Staffing ratios.
Forecasting HR Requirements using
sales as sales demand
Number of
Employees
500
400
300
200
100
0 10 20 30 40 50 60
Sales (thousands)
Determining the
Relationship Between
Hospital Size and Number of
Nurses
Note: After fitting the line, you

can project how many employees
you’ll need, given your projected
volume.
Size of Hospital Number of

(Number Registered
of Beds) Nurses
200 240
300 260
400 470
500 500
600 620
700 660
800 820
900 860
MANAGING HUMAN RESOURCE SHORTAGE
• Recruitment
• Incentives for retirement postponement
• Rehire retired employees
• Try to reduce turnover
• Overtime
• Subcontract
• Temporary staff
• Re-engineering
MANAGING HUMAN RESOURCE SURPLUS
Workforce Reduction Workforce Realignment
Attrition and hiring freezes Causes
 Not replacing departing employees  Economic—Decreased demand,
& not hiring new ones market share
Early retirement buyouts  Structural—technological change,
 Incentives to encourage senior mergers & acquisitions
employees to leave early Positive consequences
Retrenchment/Downsizing  Increase competitiveness &
 Adequate notice & LIFO Concept.
productivity
Layoffs Negative consequences
 Employees given unpaid leave until
 Loss of specialized skills and
business improve experience
 Selected based on seniority/
 Loss of growth & innovation skills
performance or combination Managing survivors
Outplacement services to support  Provide explanations for actions
displaced employees: and the future
 Career counseling, job retraining,
 Involve survivors in transition or
referral assistance, etc. regrouping activities
HR Strategies for Addressing a Labor
Shortage or Surplus
The Managerial Pyramid
Time Frame Typical responsibility
HR Director/Division
2-5-10 years Strategic Or function director
HR manager/senior
1 mth-1 year
Tactical/ Personnel officer/
Decision support Senior line manager
Day to day
Operational/ HR officer/ HR
Administrative Assistant Line
Manager
HUMAN RESOURCE INFORMATION SYSTEM
Goal: Integrate Core Processes into Seamless System
Input Data Types Output Data Uses* Contribute Toward Achievement of:
Job Analysis Employee Tracking
Recruitment Diversity Programs
Selection/Job Posting/ Hiring Decisions Organizational
Employee Referral
Training Programs/E- Strategic Plans
T&D learning/Management
Human Succession
Performance Appraisal
Compensation Resource Compensation Programs
Information Benefit Programs (e.g.,
Benefits
System prescription drug programs)
Safety Human
Health Programs (e.g.,
Health Employee Assistance Resource
Labor Relations Programs) Management
Bargaining Strategies
Plans
Employee Relations
Employee Services
*Certain data are available to employees at work or at home. Examples: supervisors might
access just-in-time training for conducting performance appraisal reviews. Operative employees
might enter time and labor data. All employees may be able to review leave balances, transfer
funds, make benefit elections, set annual performance goals, update personnel data.
COMPUTER-AIDED MANAGEMENT
 Degree of structure of tasks performed determine the
system to be used:
 Transaction processing system

 Highly structured tasks
 example: handling hourly payroll
 MIS
 Moderately structured tasks
 Example: prepare reports about trends in overtime
 Decision support system:
 Unstructured tasks
 Example: planning to ensure balance of overtime costs & hiring
temporary workers
MANAGING A HRIS FOR HR PLANNING
A) Determining information needs
 Information provided must support planning
 Information needed to determine future & to evaluate current
status
 Strategic planning – information on the environment
 Tactical & Business level – information about the organization:
structure, culture & budgetary process
 Operational planning – information on movement of employees
& key persons and systems that support movements
 Information base – can be modified and improved upon as
planning evolves
B) Choosing Repositories
 Combination of repositories that allow storage & retrieval of
the most useful information in a cost-efficient manner
 A technology can be a very efficient repository for information
to be used for a specific purpose. Example:
 How to carry out planning
 Tracking & planning for management of HR flows
 Use of outside repositories
 Using information in storage devices of other
organizations
 Hiring consultants for short-term work
C) Promoting effectiveness
 Information delivered - timely, current, accurate, reliable, &
relevant

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LEARNING UNIT 3

Intention – to identify areas for action resulting from the

Human Resource Planning

Forecasting Comparing Forecasting Human

Demand = Supply Surplus of Workers Shortage of Workers

No Action Restricted Hiring, Recruitment

Note: After fitting the line, you

Size of Hospital Number of

Time Frame Typical responsibility

 Transaction processing system

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