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Nankervis_9e_04_HRplanningin.ppt
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Week 4

CQU HRMT20024

Human Resource Planning in

a Changing Environment

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Objectives

Define human resource planning (HRP) and understand its crucial relationship with strategic organisational planning

Recognise the links between HRP and strategic human resource management (SHRM)

Describe the nature and role of human resource information management systems (HRIMS) in HRP and SHRM

Apply the techniques of HRP

Discuss the advantages and disadvantages of HRP

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Introduction

Human resource planning:

‘The bridge between HR strategies and HR functions is the formulation of human resource plans that incorporate the desired outcomes of HR strategies, are responsive to continual changes in dynamic national and global industry environments, and can be implemented through efficient and effective HR functions.’

– p. 132 of the textbook

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Strategic Alignment

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Human Resource Planning (HRP)

  • Ensures organisational objectives are met through effective utilisation of human resources.
  • Takes into consideration changing circumstances within and outside the organisation.
  • Is an ongoing process, focused on the long-term.
  • Is cognisant of contemporary changes in both internal and external environments.
  • Is a series of processes, with long-, medium- and short-term contingency options.
  • Is based upon efficient, effective, user-friendly HRIMS.

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Human Resource Planning (cont.)

  • Sometimes called ‘workforce planning’, HRP:
  • ensures that organisations have the right people, in the right place, with the right skills, at the right time and at the right price
  • estimates the future supply of and demand for human capital and then figures out how to close the gaps
  • Translates organisational plans into HR plans that guide the long-term acquisition, use and development of intellectual capital and knowledge assets.

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Importance of Human Resource Planning

  • HRP provides the foundation for establishing an effective HRM program, and for coordinating all the HRM functions.

  • The failure to adequately plan for an organisation’s human resources can result in losses in efficiency and substantial costs to the organisation.

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HRP and Strategic Organisational Planning

  • A strategic corporate planning process usually includes:
  • a definition of the corporate philosophy
  • scanning of environmental conditions (both internal and external)
  • evaluation of the organisation’s strengths and weaknesses
  • development of objectives and goals
  • the formulation of suitable strategies.
  • SWOT analysis
  • PEST analysis
  • Strategic capability analysis

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Approaches to SHRP

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Ideal RelationshIps

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The Process of HRP

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The Systematic Process of HRP

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Labour Demand Forecasting

  • Estimating in advance the number and type of employees required.
  • Complex or simple techniques can be used.
  • Dependent upon:
  • expertise of HR specialist
  • complexity of organisational structures
  • market factors
  • external environment.
  • Labour demand forecasting is more an art than a science.

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Labour demand forecasting techniques

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Quantitative – indexation

  • Forecasts of employment requirements in relation to one or several fixed organisational indices.

  • The production function model (Leontieff’s model) assumes a continuing relationship between output and employment numbers.

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Quantitative – indexation (cont.)

  • Suitable for small organisations within a relatively stable environment.

  • .

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Quantitative – trend analysis

  • Forecasts of employment requirements are based on a study of past human resources growth.
  • ‘Same as before’ (SAB) approach.
  • Reactive method.
  • Fails to take account of changing requirements or opportunities for greater employee efficiency.

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Simulations and scenario planning

  • Use computer-based systems to develop highly complex ‘scenarios’.

  • Scenario planning is ‘a process of positing several informed, plausible and imagined future environments in which decisions may be played out for the purpose of changing current thinking, improving decision-making, enhancing human and organisational learning, and improving performance’ (Chermack and Swanson, 2009; see p. 150 in the textbook).

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Qualitative – trend analysis

  • Qualitative approaches attempt to involve employees and their supervisors and managers in HR forecasting.

  • Three varieties of this forecasting model are the Delphi technique, the managerial judgement model and the nominal group technique (NGT).

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The Delphi technique

The forecasting problem is identified. Relevant data is collected.

Specialists are consulted, using a structured and weighted questionnaire. These experts are deliberately kept apart.

All responses are collated and returned to the individual experts for further comment.

This process continues until consensus is achieved.

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Managerial Judgement

  • Supervisors and managers assess their own labour requirements.
  • Each section, division and branch of an organisation develops its own labour targets, which are then consolidated into an overall HR plan.
  • A bottom-up approach.

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The nominal group technique

  • ‘Group process’ techniques.
  • Expert participants are invited to a meeting and involved in brainstorming activities, followed by
    analyses of each listed idea or prediction.
  • Group decisions are then made on the most realistic, ranked predictions.

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Labour supply analysis

  • Determine if the number and types of employees required are available, and when and where they will be needed.
  • Labour supply can come from either internal or external sources.

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Internal supply

  • Skills (or competency) inventories: derived from organisational audits that represent comprehensive analyses of the current level of employee competencies and skills in relation to desired future HR plans.

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An executive replacement chart

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External supply

  • External supply is considered:
  • When the organisation lacks sufficient internal supply
  • for entry-level positions.
  • External supply is influenced by many complex factors.
  • Casual and part-time positions, job-sharing and contract positions can be considered.

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The external environment

  • Global context

  • National context

  • Industry context

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Human capital management

  • The individual and collective impact of SHRM can, and should, be measured and subsequently reported and marketed to the organisation’s stakeholders.

  • 35 per cent of all investment decisions were based on non-financial data, of which more than half was HR-related.

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Human resource information management systems (HRIMS)

  • Originally manual
  • Increasing complexity of legislation
  • Complexity of payroll systems
  • Development of increasingly sophisticated computer hardware and software systems
  • Growth of government legislation
  • Strategic tool for HR planning and cost-effective HRM

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A model of strategic HRP using HRIMS

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Benefits and features of HRIMS

  • Improved planning and program development.
  • More rapid information processing and improved response times.
  • Reduced administrative and HR costs.
  • Enhanced accuracy of information.
  • More comprehensive communication at all levels.
  • Standardised HR processes.
  • Closer links between HR practices, policies and strategies.
  • Capacity for greater global orientation for multinational companies.

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HRIMS overall scope

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Types of HRIMS data

Aggregated data on all aspects of the employment relationship, including:

  • administrative functions
  • industrial awards, HR policies, salary and leave
  • operational data
  • personal and job histories, records on recruitment and selection
  • strategic planning information
  • all of the above, plus wastage, staff positions and labour market trends.

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HR strategic planning process

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Ownership, confidentiality and privacy of HRIMS data

  • Who has access?
  • keys and codes
  • Protection of data
  • Ethical issues
  • Outsourcing
  • Data ownership
  • Freedom of information legislation versus privacy legislation

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Successful HRIMS

  • Successful HRIMS:

– contain accurate employee and job data

– are flexible and adaptable

– clearly link with and contribute to HR plans

– are modular and integrated

– allow clear control of HR costs.

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Formulating human resource plans

  • Once labour demand forecasts and supply analyses have been conducted and compared, a series of integrated staffing plans needs to be developed, in line with corporate strategies.

  • The best-laid plans are likely to be disrupted by internal or external changes.

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Human Resource Planning (HRP)

  • Drawbacks
  • Time-consuming

  • Difficult/complex

  • Costly

  • Inadequate support

  • Obstruction
  • Benefits
  • Better match between employee and organisational objectives

  • Increased productivity and profitability

  • Better integration

  • Timely staffing and skill requirements

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Effective HRP

  • Top management understanding and commitment.
  • Recognition of the equal importance of human and other resources.
  • An understanding of the crucial links between external and internal environmental and organisational strategies.
  • Effective linkage between HRP and HRM.
  • Adequate staff, time and resources.
  • Effective HRIS

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Summary

  • The nature of human resource planning and its crucial relationship to organisational strategies and human resource management programs.
  • A systematic approach, blending qualitative and quantitative HR planning techniques.
  • The internal and external environments of organisations increasingly affect the nature and complexity of HR plans.
  • The benefits and drawbacks of HRP.

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