Chapter 3—Planning for Human Resources

1. Chapter 3—Planning for Human Resources

2. 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

3. 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

4. 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

5. Gaining Competitive Advantage • System has the following information (People File): • Job history • Education • Strengths and Weaknesses • Leadership Development needs • Developmental Plans • Training • Special skills

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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 • Political • Social • Legal • Economic • Technological issues

13. Strategic Planning Steps • Internal • 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

14. 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

15. Strategic Planning Steps • Step 4—Formulate a Strategic Plan • Once internal and external are scanned goals are set and org formulates its strategic plan

16. 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

17. 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

18. 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

19. 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

20. 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

21. Outcomes of HR Planning Process • Oversupply employees: • Smaller workforce—restructuring—due to downsizing • 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

22. 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

23. 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

24. 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

25. 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

26. 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

27. 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

28. 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)

29. 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)