HR Planning. Introduction)

8/9/2019 HR Planning. Introduction)

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HR Planning: An evolving area of knowledge?

Look at the current scenario in various industriesEstablish the relevance of Planning

Stu dies made by:

B ecker and Huselid (1999), Waghner (1999)B rockbank (1999), Chew and Chong (1999)

Fields, Chan, and Akhtar (2000), Gratton (1999)


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Planning always leads t o Perfec t ion

T imes proved that ineffective planning leadsto chaos

This is the Order of the day ..in competitivemarket scenario.Good planning is assumed as Half-waysuccess.Avoids ambiguity in all respects.


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Wh a t are t h e drivers for HRP?

R ise of SB P (strategic business planning ) SBU s etcNeed for Pro-active H R Guys / Professionals as Change AgentsInvitation from Strategic Leadership Roles:

This amounts to attracting, retaining and developing in t ellec tu al capi t alof the firm .As a competitive edge from rivalsTool for innovation in organization


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How do yo u define HRP?

Human beings represent the IC (intellectualcapital) to be managed..The shift from manpower planning to H R Planning .Delivering organiza t ional o ut comes such as:survival, profitability, customer satisfaction levels,good performance by workforce through a

strategic alignment of human resources withfirm s objectives agenda.


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No wide acceptability on H R PMany professionals locate it from technical side:

Mathematical and B ehavioral methods of planningSome locate it from Managerial Side .Some distinguish between Strategic H R P that talksabout long-range plans and Operational H R P that deals

with daily H R issues.


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Another Distinction:HRP for Organiza t ion : Planning solely for meeting

organizational demands, objectives, goals etc.

HRP for individ u al : Focuses on implications of suchplans for individual career planning


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B y and large, H R P focuses on analyzingorganization s H R needs as the organization'sconditions change, and then supplyingstrategies to respond proactively to thosechanges over time.HR P also ensures righ t people for righ t kind of places at righ t t imes to translateorganizational plans to reali t y .


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The process of planning acquires strategiccolor once attempt is made to anticipate long-term HR su pplies and demands relative tochanging conditions.

Lam and White (1998) say that organizationsthat manage H R P on strategic lines are tend toout perform others who do not..


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Evol ut ion of HRP

Manpower planning..the predecessor to H R Pof modern times..

Frenchman Henri Fayol (1841-1925) gave significanceto this. His famour 14 poin t s of Managemen t stillhold value in this regard.. stability of tenure of

personnel

Human and material organization is consistent withthe objectives, resources, and requirements of thebusiness concern resembling modern H R P.


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1950 s recession also forced the thinkers toview differently.. people were viewed as assetswhich could either be developed or wasted..

This thinking continued till 60s and 70s leadingto redesign of organizations and jobs thatpermit individuals greater latitudes of self-expression .


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Hu man crea t ivit y and Job S a t isfac t ion formedto be the most important concerns of Management philosophy.Accordingly, manpower planning departmentsrechristened as H R P. This reflects the h u manside of the organization

From 1990 s onwards technology penetrationalso permitted the H R P to go hand-in-hand formaking new attempts successful.


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Posi t ion : location of organization relative toits competitiors and environmental factors

Perspective : gestalt or personality of theorganization.

strategy implies both purpose and plan ..


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St ra t egy: S ome Types

Corporate Strategies and B usiness Strategies

Corporate can be grouped into:Restructuring, Growth and Maintenance

Restructuring takes place when organization is

not achieving goals etc. They are:


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Tu rnaro u nd : restoring money loosing businessesto healthy profitability. Methods include stoppingproduct lines, layoffs, brand repositioning etc.

Dives t itu re : spinning off a business or selling itoutright. Eg: Air Canada attempted to divest itself of its aeroplain business and put on maintenancedivision in tact.Liqu ida t ion: Plants are closed, employees arereleased, goods are auctioned off. Little returnsto shareholders in this way.


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Bankr u p t cy: company ceases to exist andassets are divided among creditors. Eg:Insurance Company Confederation Life wentbankrupt owing its creditors $740 million.


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Ch arac t eris t ics of HRP

Human resource planning has the following distinctiveand limiting characteristics :Conscious; that is, it makes assumptions explicit

Analytical; because it is based on facts and judgementsPurposive, in that it is a means to decide on actionsForward-looking, because it is future-orientedDynamic, given the changes in the environmentAggregate, as it is concerned with groups, notindividualsQuantitative, because it concerns numbers


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Benefi t s of HRPTo optimize use of resources and/or make them more flexible.To acquire and nurture skills that take time to develop.To identify potential problems.To minimize the chances of making a bad decision.To understand the present in order to confront the future.To challenge assumptions/liberate thinking.To make explicit decisions which can later be challenged.To stand back, providing an overview.To ensure long-term thinking is not driven out by short-tern focus.

To communicate plans so as to obtain support/adherence to them.To link HR plans to business plans so as to influence them .To (re)gain corporate control over operating units .To coordinate/integrate organizational decision-making and actions.


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Processes

At Sub-unit level: (Micro)Team-based approach to H R needs

Evaluation of on-going projects and futureendeavours at Team level

Organizational Level: (Macro)Taking cognizance of entire firms agenda andbusiness plans. A long-term perspective.


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Macro Models

This is reinforced through educational planningwith the following two principles:

Manpower Requirement Approach (M R A)

The R ate of Return Approach ( RR A). This is alsoknown as Cost- B enefit Analysis of Human Capital.


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Establishing linear relationship between themanpower category in different industrygroups and their output M R A helps to projectthe demand for manpower at the macro level.

For educational planning at national level thisapproach is much useful.


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It establishes linear rela t ions h ip betweenemployment and output and then

extrapolates manpower requirements indifferent categories for years to come.Initially category wise manpower coefficientsare computed, based on past data, which thenare applied on the hypothesized growthpattern of different industry groups.


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Thereafter, aggregate manpower requirementof different categories are worked out.T

hese inputs are then converted to differenttype of educational requirements.


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Ra t e of Re tu rn Approac h (RRA)

RR A or cos t -benefi t analysis is applied todecide the aggregate inves t men t req u iremen t for different skill developmen t .Cos t and earnings of an individual over hisproductive life cycle is first computed and

then their discounted value is estimated toassess the rate of return.


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What jobs need to be filled during the next 12months?

Answering this question involves predictingwho will leave jobs and create vacancies. Thisrequires projecting the historical trends intofuture.


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How and where will we get people to fill those jobs?Determining the desired characteristics of employees who fill the jobs of interest.Checking the current and potential employeesthat are inventoried by and tracked by H R

planners.Discussion between Line Managers and H R Planners about the required traits and skill sets.


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S h or t t ime HR objec t ives :Increasing the No. of people who are attracted to organization.

(increase of applicants pool)

Attracting different mix of applicantsImproving qualifications of new hiresIncreasing the stay of employees with organization.

Helping the employees recruited to improve skill sets required by firm.


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S h or t -t erm Programs:Recruiting programs are used to influence the

size and qu

ality of applicant pool .Selection programs are developed for making

hiring decisions.Performance appraisal systems identifyperformance deficiencies to be corrected andcompetencies to be rewarded.


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Barden Corpora t ion case

Donald K. B rush VP had explained how short

term HR

planning efforts helped hisorganization to achieve its strategic goals.Training of business skills has been given on amuch rigorous scale leading to more output.


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In t ermedia t e- t erm HR Planning (2-3 yrs)

What will be available?

How can we determine what will be neededand what will be available?Interaction between Line Managers and H R Planners leads to forecasting IntermediateDemands..


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Strategic planners predict organizationaloutputs..expected production, volume andsales etc. This in combination with technologyadopts, dictate the H R needs of anorganization.Future demands from market place, size of market for goods etc also would determinethe H R needs.


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HR predictions in stable environments need toconstruct models based on quantifiable valuesof variables..using statistical forecastingtechniques such as regression analysis , t ime-series analysis and st oc h as t ic modeling etc.Given the complexity of statistical forecasting,it is understandable that ju dgmen t alt ec h niq u es are more commonly used


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A simple type of judgmental type of forecasting is managerial es t ima t ion ..

Here estimates of staffing needs are made bymiddle and lower level line managers whopass them up to top managers for furtherrevisions to form overall demand forecast. H R planners are involved in these stages of estimation.


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More sophisticated method of judgmentalforecasting is the Delp h i t ec h niq u e ..

In a Delphi meeting (which need to be faceto face) several experts take turns presentingtheir forecasts and assumptions.Delphi techniques appears to be useful forgenerating solutions to unstructured andcomplex questions arise out of H R planning.


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B oth managerial estimates and Delphitechniques typically focus on forecasting thenumber of employees needed.Least attention is paid to job analysis ..this isgoing to affect the future-oriented jobforecasting.This is a serious impediment before I/ Opsyc h ologis t s..


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Intermediate-term objectives includereadjusting employees skills, attitudes, andbehaviours to fit major changes in the needs

of the business, as well as adjusting H R practices to fit changes in the needs of employees .

Training and retraining programs are oftenthe method of choice for achieving theseobjectives.


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Factors influence the training scenario:Changing technology creates the need for

training.Shortage of well-prepared new hires spursoutreach programs.Economic conditions force downsizing..Workforce diversities..


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Long- t erm HR Planning:rapidly changing and highly competitivemarket place is causing firms to turn to theirHR for survival and competitiveness henceplanning for H R effectiveness.

Long term planning is an activity that demands

integration of skills and knowledge of HR

planner and all other executives responsiblefor strategic planning.


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What type of managers do we need runningthe business into the 21 st century, and how dowe make sure we have them?

This brings to light the phenomenon of Su ccession Planning ..(Sp)


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Key ac t ivit ies in S PIdentifying high-potential employeesIdentifying needed competencies andproviding learning experiences to developthese competencies.Programs introduced by I B M, Exxon, Squibb

and GE represent large investments inintegrated human resource managementsystems.


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Case:Ford Motor company s massive qualityimprovement program in 1979 stands asexample for integration of business needswith that of H R planning..

The results shown that employee involvement,

quality of work life and organizationalrestructuring helped in achieving high qualitygoods at low cost..


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Documents

HR Planning. Introduction)