Organizational Resource

Management

ORM 2: Nov-2012

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Westford School of Management – All rights reserved

HR PLANNING

HR PLANNING DEFINITION

HR PLANNING MAY BE DEFINED AS A STRATEGY FOR THE ACQUISITION, UTILISATION, IMPROVEMENT & RETENTION OF THE HUMAN RESOURCES REQUIRED BY THE ENTERPRISE IN PURSUIT OF ITS OBJECTIVES.

INTEGRATION OF STRATEGY & HR PLANNING

o EVOLUTION OF STRATEGY & HR PLANNING. FOUR STAGES OF LINKAGES BETWEEN STRATEGIC BUSINESS PLANNING & HRM.

o Administrative linkage’ represents the scenario where there is no HR department and some other figurehead (such as the Finance or Accounts executive) looks after the HR function of the firm. The HR unit is relegated here to a paper-processing role. In such conditions there is no real linkage between business strategy and HRM. o ONE-WAY LINKAGE - where HRM comes into play only at the implementation stage of the strategy. o TWO-WAY LINKAGE - is more of a reciprocal situation where HRM is not only involved at the implementation stage but also at the corporate strategy formation stage.o INTEGRATIVE LINKAGE - where HRM has equal involvement with other organisational functional areas for business development

Contd………………

HR PLANNING

TRADITIONAL MANPOWER PLANNING MODEL:

1. FORECAST DEMAND FOR SPECIFIC SKILLS, COMPETENCES OR GRADES.

2. FORECAST SUPPLY OF THESE SKILLS, COMPETENCES OR GRADES, BOTH WITHIN & OUTSIDE ORGANIZATION.

3. PLAN TO REMOVE ANY DISCREPANCY BETWEEN DEMAND AND SUPPLY.

HR PLANNING

MODERN MANPOWER PLANNING MODEL:1. RECRUITING HIGH CALIBRE QUALITY OF

STAFF.2. RETAINING THE QUALITY OF STAFF.3. UTILISING THE STAFF IN MOST EFFICIENT &

EFFECTIVE MANNER BY INCREASING PRODUCTIVITY, MULTI-SKILLING ABILITIES, ETC.

4. IMPROVING THE SKILLS, CAPABILITIES & MOTIVATION OF STAFF.

HR PLANNING

HRP BASIC CONSIDERATIONS:1. HRP IS A FORM OF RISK MANAGEMENT.2. IT INVOLVES REALISTICALLY APPRAISING

THE PRESENT SYSTEM & ANTICIPATING THE FUTURE.

3. THE BASIC AIM IS TO GET THE RIGHT PEOPLE INTO THE RIGHT JOBS AT THE RIGHT TIME & MANAGING EMPLOYEE BEHAVIOUR, ORGANIZATIONAL CULTURE & SYSTEMS IN ORDER TO MAXIMISE THE HUMAN RESOURCE IN RESPONSE TO ANTICIPATED OPPORTUNITIES & THREATS.

HRP & CORPORATE PLANNING

HR PLANNING IS CRITICAL TO ORGANIZATIONAL

STRATEGY, AS IT IS ABLE TO IDENTIFY:1. SHORTFALLS IN ORGANIZATIONAL

CAPABILITY (SKILLS, KNOWLEDGE, PEOPLE).

2. SURPLUSES IN ORGANIZATIONAL CAPABILITY.

3. POOR UTILIZATION OF PEOPLE.

ACTIVITY 1

WHAT ARE SOME OF THE REASONS WHY A BUSINESS MIGHT FIND ITSELF EXPERIENCING A SHORTAGE OF A PARTICULAR SKILL OR TYPE OF EMPLOYEE.

Process of HRP

Organizational Objectives and Policies

• Downsizing/Expansion.• Technology up gradation.• New Market and New products.• Training & Re-training

HR Demand Forecast

It is a process of estimating future quantity and quality of manpower required for an organization

External Factors- competition, laws & regulation, economic climate, changes in technology and social factors

Internal Factors- budget constraints, production levels, new product & services, organizational structure & employee separations

HR Supply Forecast

Supply Analysis

Existing Human Resources Internal Sources of Supply External Sources of Supply

HR Programming

Balancing Demand and Supply

HR Plan Implementation

Recruitment, Selection & Placement

Training & Development Retraining & Redeployment Retention Plan Downsizing Plan

Control & Evaluation

• Are Budgets, Targets & Standard met?

• Responsibilities for Implementation & Control

• Reports for Monitoring HR plan

PROCESS OF HRP

FORECASTING DEMAND FACTORS:1. OBJECTIVES OF THE

ORGANIZATION.2. STAFF UTILIZATION.3. COST OF LABOUR.4. ENVIRONMENTAL FACTORS LIKE

ECONOMIC RECESSION & DEVELOPMENT IN ICT.

PROCESS OF HRP

FORECASTING SUPPLY FACTORS:1. COMPETENCE, SKILLS & CURRENT PRODUCTIVITY

LEVELS OF EXISTING WORKFORCE.2. STRUCTURE OF EXISTING WORKFORCE IN TERMS

OF AGE, HOURS OF WORK, RATES OF PAY, ETC.3. WASTAGE IN TERMS OF TURNOVER THROUGH

RESIGNATIONS & RETIREMENTS, PROMOTIONS & TRANSFERS, ABSENTEEISM, ETC.

4. THE PRESENT & POTENTIAL FUTURE SUPPLY OF RELEVANT SKILLED LABOUR IN THE ENVIRONMENT – THAT IS, THE EXTERNAL LABOUR MARKET.

HR MANAGER & STRATEGIC PLANNING

o PLANNING PROBLEMS. oMANY MANAGERS DO NOT LIKE TO PLAN.oLACK OF TOP-LEVEL EXECUTIVE COMMITMENT TO THE STRATEGIC PLANNING PROCESS.

o REQUIREMENTS FOR STRATEGIC HR MANAGERS.o INFORMATION MANGEMENT SKILLS.o PLANNING SKILLS.o MANAGEMENT SKILLS.o INTEGRATION SKILLS.o CHANGE MANAGEMENT SKILLS.

STRATEGIC ROLE OF HR PLANNING

o ADDING VALUE.o STRATEGIC HR PLANNING IS POSTIVELY RELATED TO FINANCIAL PERFORMANCE.

o CONTRIBUTIONS TO STRATEGIC HR MANAGEMENT..oAN ASSOCIATION BETWEEN THE DEVELOPMENT OF AFFIRMATIVE ACTION STRATEGIES & HR PLANNING.

o STRATEGIC SALARY PLANNING.o COMPENSATION SYSTEMS HAVE TO BE COMPATIBLE WITH ORGANIZATIONAL GOALS. IN REALITY.o AN ORGANIZATION’S BUSINESS STRATEGY LEADS TO A STAFFING STRATEGY & THAT, IN TURN, PROVIDES A BASIS FOR DEVELOPING THE COMPENSATION STRATEGY.

OVERVIEW OF HR PLANNING

o HR PLANNING ENCOMPASSES THE FOLLOWING STEPS:o INTERFACING WITH STRATEGIC PLANNING & SCANNING THE ENVIRONMENT.o TAKING AN INVENTORY OF THE COMPANY’S CURRENT HUMAN RESOURCES.o FORECASTING THE DEMAND FOR HUMAN RESOURCES.o FORECASTING THE SUPPLY OF HR BOTH FROM WITHIN THE ORGANIZATION & IN THE EXTERNAL LABOUR MARKET.o COMPARING FORECASTS OF DEMAND & SUPPLY.o PLANNING THE ACTIONS NEEDED TO DEAL WITH ANTICIPATED SHORTAGES OR SURPLUSSES.o FEEDING BACK SUCH INFORMATION INTO THE STRATEGIC PLANNING PROCESS.

ACTIVITY 3

-CAN HR PLANNING GIVE COMPETITIVE ADVANTAGE TO AN ORGANIZATION?-CAN HR PLANNING CONTRIBUTE TOWARDS ORGANIZATION’S OVERALL PROFITABILITY?

WHICH WAY?Once a boy was walking down the road, and came to a place where the road divided in two, each separate road forking off in a different direction.A girl was standing at the fork in the road. The boy knew that one road led to Lieville, a town where everyone always lied, and the other led to Trueville, a town where everyone always told the truth. He also knew that the girl came from one of those towns, but he didn't know which one.Can you think of a question the boy could ask the girl to find out the way to Trueville?

LATERAL THINKINGLATERAL THINKING

HR PLANNING

LABOUR TURNOVER DEFINITION LABOUR TURNOVER IS THE NUMBER OF EMPLOYEES

LEAVING AN ORGANIZATION & BEING REPLACED.

THE RATE OF TURNOVER IS EXPRESSED AS A PERCENTAGE OF THE AVERAGE NUMBER OF PEOPLE EMPLOYED, IN A GIVEN PERIOD.

THE TERM ‘NATURAL WASTAGE’ IS USED TO DESCRIBE A NORMAL FLOW OF PEOPLE OUT OF AN ORGANIZATION THROUGH RETIREMENT, JOB CHANGES, RELOCATION, ILLNESS, ETC.

HR PLANNING

MEASURING LABOUR TURNOVER:

1. CRUDE LABOUR TURNOVER RATE IS

NUMBER OF LEAVERS IN A PERIOD

--------------------------------------------------- X 100 = % TURNOVER

AVERAGE NUMBER OF PEOPLE EMPLOYED IN THE PERIOD

2. LABOUR STABILITY IS

NUMBER OF EMPLOYEES WITH 1 OR MORE YEARS’ SERVICE

------------------------------------------------------- X 100 = % STABILITY

NUMBER OF EMPLOYEES EMPLOYED AT BEGINNING OF YEAR

ACTIVITY 4SUPPOSE A COMPANY HAS 20 EMPLOYEES AT THE

BEGINNING OF 2009, AND 100 AT THE END OF THE YEAR. DISLIKING THE CULTURE CREATED BY THE EXPANSION, 18 OF THE ORIGINAL EXPERIENCED LABOUR FORCE RESIGN.

CALCULATE:1. THE CRUDE LABOUR TURNOVER RATE.2. THE STABILITY RATE.COMMENT ON THE SIGNIFICANCE OF YOUR RESULTS.

EVALUATING HRP

HRP RELIABILITY:FORECASTING IS NOT AN EXACT SCIENCE, HOWEVER,

STATISTICAL METHODS CAN CREATE MORE ACCURATE MODELS OF FUTURE ESTIMATES.

HR AUDIT - CHECK BASIC SYSTEM OF CONTROL:1. CHECK ACTUAL STAFFING LEVELS & TRENDS AGAINST

BUDGETS.2. CHECK HR RECORDS TO IDENTIFY CHANGES ARE IN LINE

WITH HR PLAN.3. CHECK STAFF UTILIZATION IS EFFICIENTLY EMPLOYED.

HRP COST-EFFECTIVENESS:COMPARISON OF COST OF AN ACTUAL MEASURE WITH AN

EVALUATION OF BENEFITS GAINED FROM IT.

STRATEGY IMPLEMENTATION-STRATEGY IMPLEMENTATION-EFFICIENT UTILIZATION OF HREFFICIENT UTILIZATION OF HR

o CROSS-TRAINING & FLEXIBILITY IN ASSIGNING WORK.CROSS-TRAINING & FLEXIBILITY IN ASSIGNING WORK.o CHAPARRAL STEEL IN TEXAS MOTIVATES ITS EMPLOYEES TO CHAPARRAL STEEL IN TEXAS MOTIVATES ITS EMPLOYEES TO MASTER A MASTER A BROAD RANGE OF SKILLSBROAD RANGE OF SKILLS, WHICH ENABLE THEM TO PERFORM WIDE-, WHICH ENABLE THEM TO PERFORM WIDE-RANGING ACTIVITIES. E.G. SECURITY GUARDS PERFORM COMPUTER DATA-RANGING ACTIVITIES. E.G. SECURITY GUARDS PERFORM COMPUTER DATA-ENTRY & SAFETY FUNCTIONS. ENTRY & SAFETY FUNCTIONS. o CHAPARRAL HAS A “NO FAULT” ABSENCE POLICY IN WHICH AN CHAPARRAL HAS A “NO FAULT” ABSENCE POLICY IN WHICH AN EMPLOYEE CAN BE ABSENT FOR EMPLOYEE CAN BE ABSENT FOR A GOOD REASON, NO REASON, OR A BAD A GOOD REASON, NO REASON, OR A BAD REASON.REASON. THEIR DAILY ABSENCE RATE IS LESS THEIR DAILY ABSENCE RATE IS LESS THAN 1%. THAN 1%. THE CEO SAYS THE CEO SAYS THAT THEY HAVE NO POLICIES, AS A LOT OF PROCEDURES IN MANY THAT THEY HAVE NO POLICIES, AS A LOT OF PROCEDURES IN MANY COMPANIES ARE MADE TO COMPANIES ARE MADE TO CATCH 3% WHO ARE TRYING TO CHEAT, CATCH 3% WHO ARE TRYING TO CHEAT, AND AND NOT THE 97% WHO CAN BE TRUSTED.NOT THE 97% WHO CAN BE TRUSTED.o JOB SCOPE & RESPONSIBILITY BROADENING OF AN EMPLOYEEJOB SCOPE & RESPONSIBILITY BROADENING OF AN EMPLOYEE, LEAN , LEAN STAFF, INFORMALITY, INFO AVAILABILTY, FINANCIAL INCENTIVES BASED ON STAFF, INFORMALITY, INFO AVAILABILTY, FINANCIAL INCENTIVES BASED ON COMPANY PERFORMANCE, & A FLAT ORGANIZATIONAL STRUCTURE ARE COMPANY PERFORMANCE, & A FLAT ORGANIZATIONAL STRUCTURE ARE PRE-REQUISITES FOR EFFICIENT UTILIZATION OF THE WORKFORCEPRE-REQUISITES FOR EFFICIENT UTILIZATION OF THE WORKFORCE..

Contd……………Contd……………

STRATEGY IMPLEMENTATION-STRATEGY IMPLEMENTATION-EFFICIENT UTILIZATION OF HREFFICIENT UTILIZATION OF HR

o USING WORK TEAMS.USING WORK TEAMS.o EFFECTIVE TEAMS ALSO HAVE MEMBERS WHOSE EFFECTIVE TEAMS ALSO HAVE MEMBERS WHOSE SKILLS ARE SKILLS ARE COMPLEMENTARYCOMPLEMENTARY

o EFFECTIVE TEAMS EFFECTIVE TEAMS SHARE FEEDBACK SHARE FEEDBACK WITH EACH OTHER & TRUST EACH WITH EACH OTHER & TRUST EACH OTHER.OTHER.

o TEAMS REQUIRE SUBSTANTIAL TEAMS REQUIRE SUBSTANTIAL TRAININGTRAINING..

oCOMPENSATION & REWARDS COMPENSATION & REWARDS INCLUDING PERFORMANCE APPRAISAL INCLUDING PERFORMANCE APPRAISAL SYSTEMS MUST BE ADAPTED TO TEAMS WITH THE MOVE FROM SYSTEMS MUST BE ADAPTED TO TEAMS WITH THE MOVE FROM INDIVIDUAL TO TEAM CONTRIBUTIONS.INDIVIDUAL TO TEAM CONTRIBUTIONS.

o TEAMS SOMETIMES BECOME INNER-ORIENTED & FAIL TO INTERACT TEAMS SOMETIMES BECOME INNER-ORIENTED & FAIL TO INTERACT EFFECTIVELY WITH UNITS OUTSIDE THE TEAM.EFFECTIVELY WITH UNITS OUTSIDE THE TEAM.

STRATEGY IMPLEMENTATION-DEALING WITH STRATEGY IMPLEMENTATION-DEALING WITH EMPLOYEE SHORTAGESEMPLOYEE SHORTAGES

oSTRATEGIC RECRUITING.STRATEGIC RECRUITING.

o ANOTHER STRATEGY RELATED RECRUITING ISSUE IS THE EXTENT TO WHICH THE ANOTHER STRATEGY RELATED RECRUITING ISSUE IS THE EXTENT TO WHICH THE COMPANY SHOULD RELY ON INTERNAL OR EXTERNAL RECRUITING, OR A MIXTURE COMPANY SHOULD RELY ON INTERNAL OR EXTERNAL RECRUITING, OR A MIXTURE OF THE TWO.OF THE TWO.

o EMPLOYEE SHORTAGES MAY NOT EVEN REQUIRE RECRUITING. OVERTIME, EMPLOYEE SHORTAGES MAY NOT EVEN REQUIRE RECRUITING. OVERTIME, CONTINGENT WORKERS BY TEMPORARY HELP FIRMS CAN FACILITATE FILL THE CONTINGENT WORKERS BY TEMPORARY HELP FIRMS CAN FACILITATE FILL THE GAPS.GAPS.

o SPECIAL RECRUITING FOR MINORITIES & FEMALES.SPECIAL RECRUITING FOR MINORITIES & FEMALES.o COMPANIES HAVE PROVIDED SUPPORT SERVICES SUCH AS COMPANIES HAVE PROVIDED SUPPORT SERVICES SUCH AS CHILD CARE CHILD CARE FACILITIES, WHICH ALSO REDUCE TURNOVER.FACILITIES, WHICH ALSO REDUCE TURNOVER.

o COMPANIES WANT TO RETAIN & FACILITATE ADVANCEMENT OF MINORITIES & COMPANIES WANT TO RETAIN & FACILITATE ADVANCEMENT OF MINORITIES & FEMALES TO FEMALES TO TOP POSITIONS.TOP POSITIONS.

o MANAGEMENT OF MANAGEMENT OF DIVERSITY DIVERSITY IS DIRECTED TOWARD INCREASING PRODUCTIVITY.IS DIRECTED TOWARD INCREASING PRODUCTIVITY.

ACTIVITY 5ACTIVITY 5

CROSS-TRAINING & FLEXIBILITY IN ASSIGNING CROSS-TRAINING & FLEXIBILITY IN ASSIGNING WORK ……OR USING WORK TEAMS, ARE MORE WORK ……OR USING WORK TEAMS, ARE MORE SUITABLE FOR A TYPICAL COMPANY OPERATING SUITABLE FOR A TYPICAL COMPANY OPERATING IN UAE?IN UAE?

STRATEGY IMPLEMENTATION-SELECTION OF EMPLOYEES

oRELIABILITY & VALIDITY.o A TEST OR AN INTERVIEW, NEEDS TO PRODUCE APPROXIMATELY THE SAME RESULT WHEN THE PROCEDURE IS REPEATED. o INTERVIEWS ARE RELIABLE WHEN THERE IS AGREEMENT AMONG THE INTERVIEWERS ABOUT AN APPLICANT.o SELECTION PROCEDURES ALSO MUST BE VALID.

o JOB ANALYSIS.o THE FOUNDATION FOR GOOD SELECTION IS BY IDENTIFYING THE KNOWLEDGE, SKILLS, ABILITIES (KSAs) TO PERFORM THE JOB.

STRATEGY IMPLEMENTATION-SELECTION OF EMPLOYEES

o INTERVIEWS.o RESEARCH HAS SHOWN THAT INTERVIEWS CAN HAVE SUBSTANTIAL VALIDITY, PARTICULARLY WHEN THEY HAVE MORE STRUCTURE & ARE CONDUCTED APPROPRIATELY.

o BEHAVIOURAL INTERVIEWS.o A CANDIDATE MIGHT BE ASKED TO DESCRIBE HOW HE OR SHE DEALT WITH A PARTICULAR SITUATION IN THE PAST. o MORE PREDICTIVE INFORMATION CAN BE OBTAINED THROUGH QUESTIONS COUCHED IN HYPOTHETICAL SITUATIONS.

STRATEGY IMPLEMENTATION-SELECTION OF EMPLOYEES

o TESTING.o COGNITIVE ABILITY TESTS ARE COMMONLY USED TO ASSESS AN APPLICANT’S CAPABILITY TO PERFORM A JOB.o PERSONALITY TESTS ARE ALSO COMMONLY USED FOR SELECTION PURPOSES & THE BIG FIVE PERSONALITY DIMENSIONS ARE:

Personality Questionnaire