Transcript Chapter 3—Planning for Human Resources

Chapter 3—Planning for
Human Resources
Objectives
• HR Planning Contributes to an
organization’s competitive advantage
• Why & How firms engage in Strategic
Planning
• Why & How HR planning activities are
conducted
• 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
plans
• New breed managers
– Knowledgeable about the firm’s new products and
services
– Manage mergers and acquisitions
– Function effectively in an uncertain environment
Gaining Competitive Advantage
• Solution—develop a career progression
system
• 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
– Education
– Strengths and Weaknesses
– Leadership Development needs
– Developmental Plans
– Training
– 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
position
– Positions with insufficient numbers of “local
candidates”
– Developmental plans for each candidate
Linking HR Planning to Competitive
Advantage
• 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
Advantage
• 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
Advantage
• Ford—Mission Statement– “Produce high
quality products at low cost”
• Fulfill mission organization needed to
change HRM practices to increase
commitment and motivation of its
employees
• 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
planning—(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
workloads
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 mission (org’s
purpose for existing)
• Step 2
– Scan the organizational environment (both
internally and externally)—Conduct a SWOT analysis
– External environment
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Political
Social
Legal
Economic
Technological issues
Strategic Planning Steps
– Internal
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Culture
Structure
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
mission
• 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 business
factors
– 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
– Student-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—regression
analysis—scatter diagram—Discuss Figure 3-2 page 68
Demand Forecasting
• Estimating future hr needs;
– Supply and demand of each group—25
engineers—five positions becoming vacant—
due to turnover and we need to fill three new
jobs—total of 8
Outcomes of HR Planning Process
• Oversupply employees:
– Smaller workforce—restructuring—due to downsizing
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Hiring freezes
Early retirements
Restricted overtime
Job sharing
Pay reductions
• Undersupply employees:
– Hire additional staff
– Fill jobs internally or externally—target protected
groups—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
– Overtime
– 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
organization
• Workers want recognition for their
contribution—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
HRIS
• Management can record, store, manipulate, and
communicate information across wide
geographic boundaries with access to many
users
• 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
HRIS
• 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
– Staffing—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
Plans
• 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
78)