stevenson operations management 3e - Chapter 5

7/24/2019 stevenson operations management 3e - Chapter 5

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HUMAN RESOURCE PLANNING

.


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Human Resource Planning (HRP)Human Resource Planning (HRP)


First component of HRM strategyFirst component of HRM strategy

All other functional HR activities are derived fromAll other functional HR activities are derived from

& flow out of HRP process& flow out of HRP process

Basis in considerations of future HR requirementsBasis in considerations of future HR requirementsin light of present HR capailities & capacitiesin light of present HR capailities & capacities

Proactive in anticipating & preparing fle!ileProactive in anticipating & preparing fle!ile

responses to changing HR requirementsresponses to changing HR requirements Both internal & e!ternal focusBoth internal & e!ternal focus

First component of HRM strategyFirst component of HRM strategy

All other functional HR activities are derived fromAll other functional HR activities are derived from

& flow out of HRP process& flow out of HRP process

Basis in considerations of future HR requirementsBasis in considerations of future HR requirementsin light of present HR capailities & capacitiesin light of present HR capailities & capacities

Proactive in anticipating & preparing fle!ileProactive in anticipating & preparing fle!ile

responses to changing HR requirementsresponses to changing HR requirements

Both internal & e!ternal focusBoth internal & e!ternal focus


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"oes eyond simple hiring & firing"oes eyond simple hiring & firing

#nvolves planning for deployment of human#nvolves planning for deployment of human

capital in line with organi$ation &%or usiness unitcapital in line with organi$ation &%or usiness unit

strategystrategy May involveMay involve

ReassignmentReassignment

Training & developmentTraining & development

OutsourcingOutsourcing

Using temporary help or outside contractorsUsing temporary help or outside contractors

'eeds as much fle!iility as possile'eeds as much fle!iility as possile

"oes eyond simple hiring & firing"oes eyond simple hiring & firing

#nvolves planning for deployment of human#nvolves planning for deployment of human

capital in line with organi$ation &%or usiness unitcapital in line with organi$ation &%or usiness unit

strategystrategy May involveMay involve

ReassignmentReassignment

Training & developmentTraining & development

OutsourcingOutsourcing

Using temporary help or outside contractorsUsing temporary help or outside contractors

'eeds as much fle!iility as possile'eeds as much fle!iility as possile


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Key Objectives of HR PlanningKey Objectives of HR Planning

Key Objectives of HR PlanningKey Objectives of HR Planning

Prevent overstaffing & understaffingPrevent overstaffing & understaffing

(nsure organi$ation has right employees(nsure organi$ation has right employees

with right s)ills in right places at right timeswith right s)ills in right places at right times

(nsure organi$ation is responsive to(nsure organi$ation is responsive to

changes in environmentchanges in environment

Provide direction & coherence to all HRProvide direction & coherence to all HR

activities & systemsactivities & systems

*nite perspectives of line & staff managers*nite perspectives of line & staff managers

Prevent overstaffing & understaffingPrevent overstaffing & understaffing

(nsure organi$ation has right employees(nsure organi$ation has right employees

with right s)ills in right places at right timeswith right s)ills in right places at right times

(nsure organi$ation is responsive to(nsure organi$ation is responsive to

changes in environmentchanges in environment

Provide direction & coherence to all HRProvide direction & coherence to all HR

activities & systemsactivities & systems

*nite perspectives of line & staff managers*nite perspectives of line & staff managers


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Types of PlanningTypes of Planning

Types of PlanningTypes of Planning

Aggregate PlanningAggregate Planning

Anticipating needs for groups of employees inAnticipating needs for groups of employees in

specific, usually lower level jobs & general sillsspecific, usually lower level jobs & general sills

employees will need to ensure sustained highemployees will need to ensure sustained highperformanceperformance

+uccession Planning+uccession Planning

!ocuses on ensuring ey critical management!ocuses on ensuring ey critical managementpositions in organi"ation remain filled withpositions in organi"ation remain filled with

individuals who provide best fitindividuals who provide best fit


Anticipating needs for groups of employees inAnticipating needs for groups of employees in

specific, usually lower level jobs & general sillsspecific, usually lower level jobs & general sills

employees will need to ensure sustained highemployees will need to ensure sustained highperformanceperformance

+uccession Planning+uccession Planning

!ocuses on ensuring ey critical management!ocuses on ensuring ey critical managementpositions in organi"ation remain filled withpositions in organi"ation remain filled with

individuals who provide best fitindividuals who provide best fit


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Forecasting demandForecasting demand

#onsiders firm$s strategic plan$s effects on increases or#onsiders firm$s strategic plan$s effects on increases or

decreases in demand for products or servicesdecreases in demand for products or services

Assumptions on which forecast is predicated should beAssumptions on which forecast is predicated should bewritten down & revisited when conditions changewritten down & revisited when conditions change

Unit forecastingUnit forecasting%bottomup planning' involves (point of%bottomup planning' involves (point of

contact) estimation of future demand for employeescontact) estimation of future demand for employees

Top-down forecastingTop-down forecastinginvolves senior managers allocating ainvolves senior managers allocating afi*ed payroll budget across organi"ational hierarchyfi*ed payroll budget across organi"ational hierarchy

+emand for employee sills reuirements must also be+emand for employee sills reuirements must also be

consideredconsidered

Forecasting demandForecasting demand

#onsiders firm$s strategic plan$s effects on increases or#onsiders firm$s strategic plan$s effects on increases or

decreases in demand for products or servicesdecreases in demand for products or services

Assumptions on which forecast is predicated should beAssumptions on which forecast is predicated should be

written down & revisited when conditions changewritten down & revisited when conditions change

Unit forecastingUnit forecasting%bottomup planning' involves (point of%bottomup planning' involves (point of

contact) estimation of future demand for employeescontact) estimation of future demand for employees

Top-down forecastingTop-down forecastinginvolves senior managers allocating ainvolves senior managers allocating a

fi*ed payroll budget across organi"ational hierarchyfi*ed payroll budget across organi"ational hierarchy

+emand for employee sills reuirements must also be+emand for employee sills reuirements must also be

consideredconsidered


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Aggregate PlanningAggregate PlanningAggregate PlanningAggregate Planning

Forecasting supplyForecasting supply

The level and uantities of abilities, sills &The level and uantities of abilities, sills &

e*periences can be determined usinge*periences can be determined using SkillsSkills

InventoryInventory-- Annually updated human resource informationAnnually updated human resource information

system %.R/0' is dynamic source of .R informationsystem %.R/0' is dynamic source of .R information

1arov analysis can be used to create transition1arov analysis can be used to create transitionprobability matri* that predicts mobility of employeesprobability matri* that predicts mobility of employees

within organi"ationwithin organi"ation

Forecasting supplyForecasting supply

The level and uantities of abilities, sills &The level and uantities of abilities, sills &

e*periences can be determined usinge*periences can be determined using SkillsSkills

InventoryInventory-- Annually updated human resource informationAnnually updated human resource information

system %.R/0' is dynamic source of .R informationsystem %.R/0' is dynamic source of .R information

1arov analysis can be used to create transition1arov analysis can be used to create transition

probability matri* that predicts mobility of employeesprobability matri* that predicts mobility of employees

within organi"ationwithin organi"ation


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Exibit !"#Exibit !"#

Transition Probability $atrix forTransition Probability $atrix for

RestaurantRestaurant

Exibit !"#Exibit !"#

Transition Probability $atrix forTransition Probability $atrix for

RestaurantRestaurant


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%trategies for $anaging%trategies for $anaging

%ortages%ortages

%trategies for $anaging%trategies for $anaging

%ortages%ortages

Recruit newRecruit new

permanent employeespermanent employees

,ffer incentives to,ffer incentives to

postpone retirementpostpone retirement Rehire retirees part-Rehire retirees part-

timetime

Attempt to reduceAttempt to reduceturnoverturnover

Recruit newRecruit new

permanent employeespermanent employees

,ffer incentives to,ffer incentives to

postpone retirementpostpone retirement Rehire retirees part-Rehire retirees part-

timetime

Attempt to reduceAttempt to reduce

turnoverturnover

.or) current staff.or) current staff

overtimeovertime

+ucontract wor) out+ucontract wor) out

Hire temporaryHire temporaryemployeesemployees

Redesign /oRedesign /o

processes so fewerprocesses so feweremployees are neededemployees are needed

.or) current staff.or) current staff

overtimeovertime

+ucontract wor) out+ucontract wor) out

Hire temporaryHire temporaryemployeesemployees

Redesign /oRedesign /o

processes so fewerprocesses so fewer

employees are neededemployees are needed


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%trategies for $anaging %urpluses%trategies for $anaging %urpluses%trategies for $anaging %urpluses%trategies for $anaging %urpluses

Hiring free$esHiring free$es

0o not replace those0o not replace those

who leavewho leave

,ffer early retirement,ffer early retirementincentivesincentives

Reduce wor) hoursReduce wor) hours

1oluntary severance1oluntary severanceleaves of asenceleaves of asence

Hiring free$esHiring free$es

0o not replace those0o not replace those

who leavewho leave

,ffer early retirement,ffer early retirementincentivesincentives

Reduce wor) hoursReduce wor) hours

1oluntary severance1oluntary severanceleaves of asenceleaves of asence

Across-the-oard payAcross-the-oard pay

cutscuts

2ayoffs2ayoffs

Reduce outsourcedReduce outsourcedwor)wor)

(mployee training(mployee training

+witch to variale pay+witch to variale payplanplan

(!pand operations(!pand operations

Across-the-oard payAcross-the-oard pay

cutscuts

2ayoffs2ayoffs

Reduce outsourcedReduce outsourcedwor)wor)

(mployee training(mployee training

+witch to variale pay+witch to variale payplanplan

(!pand operations(!pand operations


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%uccession Planning%uccession Planning%uccession Planning%uccession Planning

#nvolves identifying )ey management positions#nvolves identifying )ey management positions

the organi$ation cannot afford to have vacantthe organi$ation cannot afford to have vacant

Purposes of succession planningPurposes of succession planning

!acilitates transition when employee leaves!acilitates transition when employee leaves /dentifies development needs of highpotential employees &/dentifies development needs of highpotential employees &

assists in career planningassists in career planning

Many organi$ations fail to implement successionMany organi$ations fail to implement succession

planning effectivelyplanning effectively

2ualified successors may see e*ternal career advancement2ualified successors may see e*ternal career advancement

opportunities if succession is not forthcomingopportunities if succession is not forthcoming

#nvolves identifying )ey management positions#nvolves identifying )ey management positions

the organi$ation cannot afford to have vacantthe organi$ation cannot afford to have vacant

Purposes of succession planningPurposes of succession planning

!acilitates transition when employee leaves!acilitates transition when employee leaves /dentifies development needs of highpotential employees &/dentifies development needs of highpotential employees &

assists in career planningassists in career planning

Many organi$ations fail to implement successionMany organi$ations fail to implement succession

planning effectivelyplanning effectively 2ualified successors may see e*ternal career advancement2ualified successors may see e*ternal career advancement

opportunities if succession is not forthcomingopportunities if succession is not forthcoming


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Exibit !"&Exibit !"&

%ample Replacement 'art%ample Replacement 'art

Exibit !"&Exibit !"&

%ample Replacement 'art%ample Replacement 'art


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uielines for E*ective %uccessionuielines for E*ective %uccession

PlanningPlanning

uielines for E*ective %uccessionuielines for E*ective %uccession

PlanningPlanning

3ie into organi$ation4s strategy 5and modified accordingly63ie into organi$ation4s strategy 5and modified accordingly6

Monitor the progress and measure outcomes of successionMonitor the progress and measure outcomes of succession

planning initiativesplanning initiatives

(nsure that all HR functions that impact the succession(nsure that all HR functions that impact the succession

plan are iterated and wor)ing in tandemplan are iterated and wor)ing in tandem

(nsure centrali$ed coordination of succession planning(nsure centrali$ed coordination of succession planning

(ngage and involve managers throughout the organi$ation(ngage and involve managers throughout the organi$ation

3ie into organi$ation4s strategy 5and modified accordingly63ie into organi$ation4s strategy 5and modified accordingly6

Monitor the progress and measure outcomes of successionMonitor the progress and measure outcomes of succession

planning initiativesplanning initiatives

(nsure that all HR functions that impact the succession(nsure that all HR functions that impact the succession

plan are iterated and wor)ing in tandemplan are iterated and wor)ing in tandem

(nsure centrali$ed coordination of succession planning(nsure centrali$ed coordination of succession planning

(ngage and involve managers throughout the organi$ation(ngage and involve managers throughout the organi$ation


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Exibit !"+Exibit !"+

Pros , 'ons of -isclosing %uccessionPros , 'ons of -isclosing %uccession

PlanningPlanning

Exibit !"+Exibit !"+

Pros , 'ons of -isclosing %uccessionPros , 'ons of -isclosing %uccession

PlanningPlanning


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Reaing !".Reaing !".

Talent Management for the Twenty-FirstTalent Management for the Twenty-First

CenturyCentury



CenturyCentury

Parallels of talent management to supply chain management are numerous andParallels of talent management to supply chain management are numerous and

includeinclude

forecasting product demand is comparale to forecasting talent needs7forecasting product demand is comparale to forecasting talent needs7

estimating the cheapest and fastest ways to manufacture products is theestimating the cheapest and fastest ways to manufacture products is the

equivalent of cost-effectively developing talent7equivalent of cost-effectively developing talent7

outsourcing certain aspects of manufacturing processes is li)e hiring outside7outsourcing certain aspects of manufacturing processes is li)e hiring outside7

ensuring timely delivery relates to planning for succession events8ensuring timely delivery relates to planning for succession events8

3he issues and challenges in managing an internal talent pipeline 9 how3he issues and challenges in managing an internal talent pipeline 9 how

employees advance through development /os and e!periences 9 areemployees advance through development /os and e!periences 9 are

remar)aly similar to how products move through a supply chain reducingremar)aly similar to how products move through a supply chain reducingottlenec)s that loc) advancement: speeding up processing time: improvingottlenec)s that loc) advancement: speeding up processing time: improving

forecasts to avoid mismatches8forecasts to avoid mismatches8

Parallels of talent management to supply chain management are numerous andParallels of talent management to supply chain management are numerous andincludeinclude

forecasting product demand is comparale to forecasting talent needs7forecasting product demand is comparale to forecasting talent needs7

estimating the cheapest and fastest ways to manufacture products is theestimating the cheapest and fastest ways to manufacture products is the

equivalent of cost-effectively developing talent7equivalent of cost-effectively developing talent7

outsourcing certain aspects of manufacturing processes is li)e hiring outside7outsourcing certain aspects of manufacturing processes is li)e hiring outside7 ensuring timely delivery relates to planning for succession events8ensuring timely delivery relates to planning for succession events8

3he issues and challenges in managing an internal talent pipeline 9 how3he issues and challenges in managing an internal talent pipeline 9 how

employees advance through development /os and e!periences 9 areemployees advance through development /os and e!periences 9 are

remar)aly similar to how products move through a supply chain reducingremar)aly similar to how products move through a supply chain reducingottlenec)s that loc) advancement: speeding up processing time: improvingottlenec)s that loc) advancement: speeding up processing time: improving

forecasts to avoid mismatches8forecasts to avoid mismatches8


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CenturyCentury



CenturyCentury

3he most innovative approaches to managing talent use four particular3he most innovative approaches to managing talent use four particular

principles drawn from operations and supply chain management8principles drawn from operations and supply chain management8

3wo of them address uncertainty on the demand side3wo of them address uncertainty on the demand side

how to alance ma)e-versus-uy decisionshow to alance ma)e-versus-uy decisions how to reduce the ris)s in forecasting the demand for talenthow to reduce the ris)s in forecasting the demand for talent

3he other two address uncertainty on the supply side3he other two address uncertainty on the supply side

how to improve the return on investment in development effortshow to improve the return on investment in development efforts

how to protect that investment y generating internal opportunitieshow to protect that investment y generating internal opportunities

that encourage newly trained managers to stic) with the firmthat encourage newly trained managers to stic) with the firm

3he most innovative approaches to managing talent use four particular3he most innovative approaches to managing talent use four particularprinciples drawn from operations and supply chain management8principles drawn from operations and supply chain management8

3wo of them address uncertainty on the demand side3wo of them address uncertainty on the demand side

how to alance ma)e-versus-uy decisionshow to alance ma)e-versus-uy decisions

how to reduce the ris)s in forecasting the demand for talenthow to reduce the ris)s in forecasting the demand for talent

3he other two address uncertainty on the supply side3he other two address uncertainty on the supply side

how to improve the return on investment in development effortshow to improve the return on investment in development efforts

how to protect that investment y generating internal opportunitieshow to protect that investment y generating internal opportunities

that encourage newly trained managers to stic) with the firmthat encourage newly trained managers to stic) with the firm


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CenturyCentury



CenturyCentury

Four principles of supply chain management appliedFour principles of supply chain management applied

to talent managementto talent management

Ma)e A'0 uy to manage ris)Ma)e A'0 uy to manage ris) Adapt to the uncertainty in talent demandAdapt to the uncertainty in talent demand

#mprove the return on investment in developing#mprove the return on investment in developing

employeesemployees Preserve the investment y alancing employee-Preserve the investment y alancing employee-

employer interestsemployer interests

Four principles of supply chain management appliedFour principles of supply chain management applied

to talent managementto talent management

Ma)e A'0 uy to manage ris)Ma)e A'0 uy to manage ris) Adapt to the uncertainty in talent demandAdapt to the uncertainty in talent demand

#mprove the return on investment in developing#mprove the return on investment in developing

employeesemployees Preserve the investment y alancing employee-Preserve the investment y alancing employee-

employer interestsemployer interests


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Reaing !"#Reaing !"#

Designing Succession Planning: Lessons from theDesigning Succession Planning: Lessons from the

Industry LeadersIndustry Leaders




3ypically organi$ation have utili$ed one of three approaches3ypically organi$ation have utili$ed one of three approaches

to managing diversityto managing diversity

an assimilation view that downplays differences7an assimilation view that downplays differences7

an access view that focuses on uilding diversity in orderan access view that focuses on uilding diversity in order

to gain access to ethnic consumer groups7to gain access to ethnic consumer groups7

an integrated view that emphasi$es uniform performancean integrated view that emphasi$es uniform performance

standards: personalstandards: personal

development: openness: acceptance of constructivedevelopment: openness: acceptance of constructive

conflict: empowerment: egalitarianism: and aconflict: empowerment: egalitarianism: and a

nonureaucratic structure that encourages challenges to thenonureaucratic structure that encourages challenges to the

status quostatus quo

3ypically organi$ation have utili$ed one of three approaches3ypically organi$ation have utili$ed one of three approachesto managing diversityto managing diversity

an assimilation view that downplays differences7an assimilation view that downplays differences7

an access view that focuses on uilding diversity in orderan access view that focuses on uilding diversity in order

to gain access to ethnic consumer groups7to gain access to ethnic consumer groups7

an integrated view that emphasi$es uniform performancean integrated view that emphasi$es uniform performance

standards: personalstandards: personal

development: openness: acceptance of constructivedevelopment: openness: acceptance of constructive

conflict: empowerment: egalitarianism: and aconflict: empowerment: egalitarianism: and a

nonureaucratic structure that encourages challenges to thenonureaucratic structure that encourages challenges to the

status quostatus quo


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An integrated approach comined with a culture of inclusiveness areAn integrated approach comined with a culture of inclusiveness are

needed to ensure diverse succession planning8needed to ensure diverse succession planning8

;ommitment from and direct involvement y the ;(, and senior;ommitment from and direct involvement y the ;(, and senior

leadership team are mandatory for diverse succession planningleadership team are mandatory for diverse succession planning

(mployees should e encouraged to loo) upward in the(mployees should e encouraged to loo) upward in the

organi$ational hierarchy to indentify people who are li)e themselvesorgani$ational hierarchy to indentify people who are li)e themselves

+pecific programs which target women and minorities are needed to+pecific programs which target women and minorities are needed toring aout change in the status quo as they may not see people li)ering aout change in the status quo as they may not see people li)e

themselves in positions higher than the one they holdthemselves in positions higher than the one they hold

An integrated approach comined with a culture of inclusiveness areAn integrated approach comined with a culture of inclusiveness areneeded to ensure diverse succession planning8needed to ensure diverse succession planning8

;ommitment from and direct involvement y the ;(, and senior;ommitment from and direct involvement y the ;(, and senior

leadership team are mandatory for diverse succession planningleadership team are mandatory for diverse succession planning

(mployees should e encouraged to loo) upward in the(mployees should e encouraged to loo) upward in the

organi$ational hierarchy to indentify people who are li)e themselvesorgani$ational hierarchy to indentify people who are li)e themselves

+pecific programs which target women and minorities are needed to+pecific programs which target women and minorities are needed toring aout change in the status quo as they may not see people li)ering aout change in the status quo as they may not see people li)e

themselves in positions higher than the one they holdthemselves in positions higher than the one they hold


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;ross-race mentoring requires that mentors have;ross-race mentoring requires that mentors have

s)ills related to understanding diversitys)ills related to understanding diversity

;ross-gender relationships need to e carefully;ross-gender relationships need to e carefully

managed to prevent any perceptions ofmanaged to prevent any perceptions ofimproprietyimpropriety

,rgani$ation4s such as 0enny4s have made,rgani$ation4s such as 0enny4s have made

thresholds of representation of minorities andthresholds of representation of minorities and

women in management a )ey component ofwomen in management a )ey component of

e!ecutives4 annual onusese!ecutives4 annual onuses

;ross-race mentoring requires that mentors have;ross-race mentoring requires that mentors have

s)ills related to understanding diversitys)ills related to understanding diversity

;ross-gender relationships need to e carefully;ross-gender relationships need to e carefully

managed to prevent any perceptions ofmanaged to prevent any perceptions ofimproprietyimpropriety

,rgani$ation4s such as 0enny4s have made,rgani$ation4s such as 0enny4s have made

thresholds of representation of minorities andthresholds of representation of minorities and

women in management a )ey component ofwomen in management a )ey component ofe!ecutives4 annual onusese!ecutives4 annual onuses


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Reaing !"/Reaing !"/The Annual ! Strategic Planning Process: Design andThe Annual ! Strategic Planning Process: Design and

Facilitation Lessons from Corning Incor"orated uman !esourcesFacilitation Lessons from Corning Incor"orated uman !esources



As part of the planning process: four transformationAs part of the planning process: four transformation

goals were developed which guide thegoals were developed which guide the

organi$ation4s growth 5see Figure


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Reaing !"/Reaing !"/The Annual ! Strategic Planning Process: Design and FacilitationThe Annual ! Strategic Planning Process: Design and Facilitation

Lessons from Corning Incor"orated uman !esourcesLessons from Corning Incor"orated uman !esources




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3hese goals resulted in a four-step process which gave3hese goals resulted in a four-step process which gave

usiness unit generalists comment tools landusiness unit generalists comment tools land

language for translating strategies into action stepslanguage for translating strategies into action steps

for talent development and allow consistency andfor talent development and allow consistency andcomparison for prioriti$ation across usiness linescomparison for prioriti$ation across usiness lines

5see Figure =65see Figure =6

3hese goals resulted in a four-step process which gave3hese goals resulted in a four-step process which gaveusiness unit generalists comment tools landusiness unit generalists comment tools land

language for translating strategies into action stepslanguage for translating strategies into action steps

for talent development and allow consistency andfor talent development and allow consistency and

comparison for prioriti$ation across usiness linescomparison for prioriti$ation across usiness lines

5see Figure =65see Figure =6


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;orning4s annual strategic planning process for HR rings;orning4s annual strategic planning process for HR rings

together several )ey components includingtogether several )ey components including

corporate strategy and the implications of that strategy forcorporate strategy and the implications of that strategy for

HRHR

HR function strategy including the strategic direction forHR function strategy including the strategic direction for

each of the ;,(seach of the ;,(s

the outputs of the Human ;apital Planning process forthe outputs of the Human ;apital Planning process for

each of the usiness units: which is essentially the HReach of the usiness units: which is essentially the HR

implications of each of their usiness strategiesimplications of each of their usiness strategies

5see figure >65see figure >6

;orning4s annual strategic planning process for HR rings;orning4s annual strategic planning process for HR ringstogether several )ey components includingtogether several )ey components including

corporate strategy and the implications of that strategy forcorporate strategy and the implications of that strategy for

HRHR

HR function strategy including the strategic direction forHR function strategy including the strategic direction foreach of the ;,(seach of the ;,(s

the outputs of the Human ;apital Planning process forthe outputs of the Human ;apital Planning process for

each of the usiness units: which is essentially the HReach of the usiness units: which is essentially the HR

implications of each of their usiness strategiesimplications of each of their usiness strategies

5see figure >65see figure >6


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stevenson operations management 3e - Chapter 5

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