Transcript Strategic Human Resource Management

CHAPTER 5:
HUMAN RESOURCE
PLANNING
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Human Resource Planning (HRP)
• First component of HRM strategy
• All other functional HR activities are derived from
and flow out of HRP process
• Basis in considerations of future HR requirements
in light of present HR capabilities and capacities
• Proactive in anticipating and preparing flexible
responses to changing HR requirements
• Both internal and external focus
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Human Resource Planning (HRP)
• Goes beyond simply hiring and firing
• Involves planning for deployment of human
capital in line with organization and/or business
unit strategy
• May involve:
–
–
–
–
Reassignment
Training and development
Outsourcing
Using temporary help or outside contractors
• Needs as much flexibility as possible
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Key Objectives of HR Planning
• Prevent overstaffing and understaffing
• Ensure organization has right employees with
right skills in right places at right times
• Ensure organization is responsive to changes in
environment
• Provide direction and coherence to all HR
activities and systems
• Unite perspectives of line and staff managers
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Types of Planning
• Aggregate Planning
– Anticipating needs for groups of employees in
specific, usually lower level jobs, and general skills
employees will need to ensure sustained high
performance
• Succession Planning
– Most often focuses on ensuring key critical
management positions in organization remain filled
with individuals who provide best fit
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Aggregate Planning
• Forecasting demand
– Considers the effects of the firm’s strategic plans on
increases or decreases in demand for products or services
– Assumptions on which forecast is predicated should be
written down and revisited when conditions change
– Unit forecasting (bottom-up planning) involves “point of
contact” estimation of future demand for employees
– Top-down forecasting involves senior managers allocating a
fixed payroll budget across organizational hierarchy
– Demand for employee skills requirements must also be
considered
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1–6
Aggregate Planning
• Forecasting supply
– The level and quantities of abilities, skills and
experiences can be determined using a Skills
Inventory.
– Annually updated human resource information
system (HRIS) is a dynamic source of HR
information
– Markov analysis can be used to create a transition
probability matrix that predicts mobility of employees
within organization
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Exhibit 5-2
Transition Probability Matrix for Restaurant
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Strategies for Managing Shortages
• Recruit new
permanent employees
• Offer incentives to
postpone retirement
• Rehire retirees parttime
• Attempt to reduce
turnover
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• Work current staff
overtime
• Subcontract work out
• Hire temporary
employees
• Redesign job
processes so fewer
employees are needed
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Strategies for Managing Surpluses
• Hiring freezes
• Do not replace those
who leave
• Offer early retirement
incentives
• Reduce work hours
• Voluntary severance
leaves of absence
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• Across-the-board pay
cuts
• Layoffs
• Reduce outsourced
work
• Employee training
• Switch to variable pay
plan
• Expand operations
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Succession Planning
• Involves identifying key management positions the
organization cannot afford to have vacant
• Purposes of succession planning
– Facilitates transition when employee leaves
– Identifies development needs of high-potential employees
and assists in career planning
• Many organizations fail to implement succession
planning effectively
– Qualified successors may seek external career advancement
opportunities if succession is not forthcoming
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Exhibit 5-4
Sample Replacement Chart
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Exhibit 5-5
Pros & Cons of Disclosing Succession Planning
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Reading 5.1 (Grossman)
Heirs Unapparent
• Experts are looking more carefully at
leadership needs for 21st century, and
warning of:
– A shrinkage in pool of available managers
– Escalating costs in recruiting outside talent
– A lack of attention to developing leaders from within
• Blame inattention to succession planning on
corporate world’s concentration on costcutting and downsizing
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Reading 5.1
Heirs Unapparent
• Old solutions to succession planning
won’t work in an increasingly complex
world
• Essential to develop executives who
can cope with globalization, and
flourish in new corporate climate
buffeted by changes
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1–15
Reading 5.2 (Metz)
Succession Planning Design Shifts
• Key design shifts for succession systems:
– Identify core strategic capabilities/competencies related to
key positions, and develop a leadership model
– Place initiative and responsibility for individual development
in hands of candidate employees
– Development process that aligns mastery of competencies
with firm’s strategic goals and mission
– Create succession process that is more open and less
exclusive and secretive
– Design succession process for ongoing and frequent review
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Reading 5.2
Succession Planning Design Shifts
• A succession system must:
– Make sense for and be usable by different business units,
each having unique needs
– Be a process to focus and guide development of executives
to meet strategic purposes
– Be aligned with other HR processes also in transition
– Assure pool of potential leaders is being prepared for
executive positions
– Be owned by senior management
– Deal with diversity issues and changing demographics
– Measurably add value and contribute to business success
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Reading 5.3 (Brockbank)
Strategic Levels of HR
• Long-term
– Is activity conceptualized
as long-term value?
• Comprehensive
– Does it cover entire
organization or isolated
components?
• Planned
– Is it thought out ahead of
time, and is it well
documented?
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• Integrated
– Does it provide basis for
integrating multifaceted
activities that might
otherwise be fragmented
and disconnected?
• High value-added
– Does it focus on critical
business success
issues, or on things that
must be done but are not
critical?
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Reading 5.3
Strategic Levels of HR
• Operationally reactive HR
– Focuses on implementing day-to-day demands for HR
• Operationally proactive HR
– Improves upon design and delivery of existing HR basics
before problems set in
• Strategically reactive HR
– Focuses on supporting successful implementation of
business strategy
• Strategically proactive HR
– Focuses on creating strategic alternatives
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Reading 5.3
Strategic Levels of HR
• HR becomes strategically reactive in
business strategy implementation through:
– Supporting execution of tactics that drive long-term
strategies
– Developing cultural and technical capabilities
necessary for long-term success
– By providing change management support for
tactical activities
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Reading 5.3
Strategic Levels of HR
1. Define business unit for which HR practices are
being designed
2. Specify key trends in external business
environment
3. Identify and prioritize firm’s sources of
competitive advantage
4. Define required culture and technical knowledge
and skill areas required to support the sources of
competitive advantage
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Reading 5.3
Strategic Levels of HR
5. Identify cultural characteristics that firm should
reduce or eliminate if it is to optimize competitive
advantage
6. Design HR practices that will have greatest impact
on creating desired culture
7. With these decisions made, firm should establish
action plans for detailed design of HR processes
8. Final step specifies means by which effectiveness
of entire process is measured
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Reading 5.3
Strategic Levels of HR
• Become proactive by:
– Learning enough about other functional areas to allow HR to
contribute to business
– Expanding/enriching parameters of HR agendas through
which strategic alternatives are define and created
• Creates culture of of creativity and innovation
• Involved in full breadth of mergers and
acquisition activities
• Creates internal capabilities based on future
external environmental requirements
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