HUman resource managemenr 2e s keiman chapter3

3-1b Linking Human Resource Planning to Competitive Advantage • HR planning: Process of identifying and responding to organizational needs and charting new policies, systems, and progra

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Chapter 3

Planning for Human Resources

Chapter Outline

• 3-1 Gaining Competitive Advantage

• 3-2 HRM Issues and Practices

• 3-3 The Manager’s Guide

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3-1a Opening Case: Gaining Competitive Advantage at General Motors

• Problem: Time spent on completing HR transactions

hurts employee and HR productivity.

• Solution: Developing an employee services center

website.

• How the employee services center enhanced

competitive advantage:

 Significant reduction is cost and time

 Improvement in speed and quality of employee work

 Improvement in the productivity of HR department

3-1b Linking Human Resource Planning

to Competitive Advantage

• HR planning: Process of identifying and responding

to organizational needs and charting new policies, systems, and programs that will assure effective

human resource management under changing

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3-1b Linking Human Resource Planning

to Competitive Advantage (cont.)

• HR planning ties together all human resource

activities and integrates these with the rest of the

organization.

• It enables companies to gain control of their future by

preparing for events that are likely to occur.

3-1b Linking Human Resource Planning

to Competitive Advantage (cont.)

• Consequences associated with the failure to plan for

human resources

 Employers are forced to respond to events after they occur; that is, they become reactive, rather than

proactive

 An organization may be unable to correctly anticipate

an increase in its future demand for employees, leading to understaffing

 Understaffing leads to consequences such as

increased stress levels, increase in back orders, decrease in customer goodwill, an increase in competition, and a loss of market share

3-2a Strategic Planning

• Through the strategic planning process,

organizations determine where they are going

• The process consists of the following activities:

 Determine the organizational mission

 Scan the organizational environment

 Set strategic goals

 Formulate a strategic plan, part of which addresses human resource needs

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3-2a Strategic Planning (cont.)

• Determine the organizational mission

 Mission statement is a declaration of the organization’s overall purpose

 It defines the basic business scope and operations

that distinguish the organization from others of a similar nature

3-2a Strategic Planning (cont.)

• Scan the organizational environment

 External and internal environments must be scanned

to identify threats and opportunities

 External environment: Includes political, legal,

economic, social, and technological issues; the industry environment must also be scanned

 Internal environment: Assessment of the firm’s

strengths and weaknesses in order to form strategic goals that take advantage of strengths

 The task of gathering information for strategy

formulation rests with all managers and employees

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3-2a Strategic Planning (cont.)

• Set strategic goals

 Strategic goals specify the desired outcomes that must

be reached for the firm to accomplish its mission

 They should be specific, challenging, and measurable

3-2a Strategic Planning (cont.)

• Formulate a strategic plan

 Strategic plan specifies the courses of action a firm must take in order to meet its strategic goals

 Formulated by:

- Translating organizational goals into more narrow

functional or departmental goals

- Devising strategies for meeting these goals

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3-2b Human Resource Planning

• Through HR planning, an organization is able to

generate a list of future human resource needs and a plan for meeting them.

• To derive HR needs, the organization must forecast

its demand and supply.

• Demand forecasting involves predicting the number

and types of people the organization will need at

some future point in time

3-2b Human Resource Planning

• Supply forecasting involves estimating which

organizational positions will be filled at some future point in time.

• The two general approaches to demand forecasting

are – statistical and judgmental.

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3-2b Human Resource Planning (cont.)

• Statistical approaches to demand forecasting

 An organization predicts needed workforce size on the basis of certain business factors

- A business factor is an attribute of the business such as

sales volume or market share, which closely relates to the size of the needed workforce

 Is used when an organization operates in a stable

environment

 Most commonly used statistical methods are trend,

ratio, and regression analysis

3-2b Human Resource Planning (cont.)

• Trend analysis: Future demand for human resources

is projected on the basis of past business trends

regarding a business factor.

• Ratio analysis: Process of determining future HR

demand by computing an exact ratio between the

specific business factor and the number of

employees needed.

• Regression analysis: A statistically sophisticated tool

where forecasts are based on the relationship

between a business factor and workforce size.

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3-2b Human Resource Planning (cont.)

• Precaution regarding the use of statistical methods

 Statistical methods of demand forecasting assume that the relationship between workforce size and the

business factor remains constant over time

 If this relationship were to change unexpectedly, the forecast would become inaccurate

3-2b Human Resource Planning (cont.)

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3-2b Human Resource Planning (cont.)

• Supply forecasting: The process used to estimate

which positions will be filled at a particular point in time.

• Steps to supply forecasting

 Step 1: Organization groups its positions by title,

function, and level of responsibility

 Step 2: Estimate within each job group, how many of its current employees will:

- Remain in their positions during the planning period.

- How many will move to another position.

- How many will leave the organization.

3-2b Human Resource Planning (cont.)

• Estimating future human resource needs

 A firm derives its specific staffing needs by combining the results of the supply and demand forecasts within each job group

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3-2c Outcomes of the HR Planning

Process

• Dealing with an oversupply of employees

 The current trend toward organizational restructuring usually results in a smaller workforce

 When an organization’s strategic plan calls for

restructuring, the HRM response is usually one of downsizing

- Downsizing usually means layoffs.

 Because of the negative outcomes that are often

associated with layoffs, employers are encouraged to seek alternatives

3-2c Outcomes of the HR Planning

Process (cont.)

• Dealing with an undersupply of employees

 Hiring additional workers

 Alternatives to additional hiring

- Improve productivity of existing workforce through additional training

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3-2d Human Resource Information

Systems

• Human Resource Information Systems (HRIS): A

computerized information package that provides management with increasing capacity to record, store, manipulate, and communicate information across wide geographic boundaries, with access to many users

3-2d Human Resource Information

Systems (cont.)

• An HRIS contains information about:

 A company’s jobs

- Number and types of jobs

- Number of people needed in each job

- Qualifications needed to perform each job

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3-2d Human Resource Information

Systems (cont.)

• Purposes served by HRIS

 Handles most of the record keeping done by HR

professionals

 Reduces paperwork and cuts administrative costs

 Organizational members outside the HRM department can more easily access the information

 Store information essential for filling vacant positions

3-2d Human Resource Information

Systems (cont.)

• HRIS on the “Net” – Intranet

 Internet networks that are accessible only to

employees within the company

 They can store a great deal of HR information

 It allows companies to save money by eliminating

printing and distribution costs

 Employees like it because it allows them to quickly and privately access HR information

• HRIS on the “Net” – Extranet

 Link a firm's intranet to a variety of outside

organizations and vendors

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3-2d Human Resource Information

Systems (cont.)

• Ensuring the confidentiality of HRIS information

 The organization must ensure that user access is limited to relevant information

- Sensitive and confidential information should only be

accessible by the HRM department or specified individuals.

 Institute strong written policies that stipulate the

organization’s intention to protect employee privacy rights

3-3a HR Planning and the Manager’s Job

• Line managers:

 Formulate goals for their units

 Develop strategies for meeting those goals

 Formulate individual performance goals

• Staffing:

 Ensure that work unit is properly staffed at all times

 Forecast the volume of work to be completed

 Devise a work schedule

 Schedule overtime and vacations

 Adjust work schedules in “emergency” situations

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3-3a HR Planning and the Manager’s Job (cont.)

• Employee retention

 Line managers’ style of management can have a

major impact on a subordinate’s decision to remain with the company

 Managers must be able to establish good working

relationships with their employees by treating them in

a fair and consistent manner, while exhibiting concern for their well-being

 Managers must also be effective teachers, motivators, and communicators

3-3b How the HR Department Can Help

• HR professionals’ plans must be aligned with

changes spurred by the organization’s strategic plan The plan may call for such interventions as:

 Greater flexibility in the workplace

 Greater rigor in training

 Increased responsibilities for management

 Increased worker participation

 The use of performance incentives

• Analysis and measurement of the work of the HRM

department should be ongoing.

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3-3c HRM Skill-Building for Managers

• Information regarding the future needs and workforce

demands of the unit will better enable the HRM

department to help identify, select, and train current and future workers as needed.

• Not all departments have the same needs for human

resources; the functional managers must work

together to develop a comprehensive plan.

• The most direct approach to getting this information

is to meet with an HR professional, top managers,

and other line managers on a regular basis, at least semiannually.