Human Resource Planning

Chapter 6
 HRP
• Human Resource (HR) planning is the process of analyzing and
identifying the need for and availability of human resources so that
the organization can meet its objectives

Prentice Hall

• Human Resource Planning (HR Planning) is both a process and a set

of plans

• It is dynamic in nature and often keeps evolving

 HRP and Recruitment
HRP Recruitment

•Involves planning, •Primarily involves meeting

forecasting and human resource needs
implementation to meet through a series of methods
human resource needs

•Through HR planning, •Through recruitment

managers can anticipate managers start enlisting
forces that will influence the prospective employees
future supply of and demand
for employees
Process of HRP
 Factors affecting HRP
• Based on the previous slide, what are the factors that affect HRP

• Business strategy

• External and internal environmental influences

• Availability of resources

• Geographical distribution of resources and the geography of the

requirement
 Who does HR Planning
• Top HR specialists and their subordinates

But

• Managers provide the date needed for the analysis

 Forecasting
• HR Forecasting attempts to determine the supply and demand for
various types of human resources, and to predict areas within the
organization where there will be labor shortages or surpluses

• There are three major steps to forecasting:

• Forecasting the demand for labor

• Determining labor supply
• Determining labor surpluses and shortages
 Forecasting and Analyzing
• Trend Analysis

• Ratio Analysis

• Scatter plot method

• Use of computerized systems

 Trend Analysis
• Study of a firm’s past employment needs over a period of years to
predict future needs
Gary Dessler

• Trend analysis may be done for the last five years of the entire
company and may even segregate needs per department

• Trend analysis may provide an initial estimate however other

factors like changes in volume, demand of work, economic
conditions need to be considered while predicting future needs
 Ratio Analysis
• A forecasting technique for determining future staff needs by using
ratios between related factors for e.g. sales volume and number of
employees needed to achieve that target

• For instance, say one sales person traditionally generates $500,000

in sales. The company’s projection is $3 million in sales. How many
sales people would you need to reach this target?

• 6

• In this example, we assume that the productivity remain the same

for all which may not be true
 Scatter Plot Analysis
• A graphical method used to identify the relationship between two
variables

• If the variables in question are related then you can use the model
to predict one variable when you are given the other
 Scatter Plot Analysis
Size of the hospital Number of nurses

200 240
300 260
400 470
500 500
600 620
700 660
800 820
900 860
Scatter Plot Analysis
 Use of computerized systems
• HRIS – Human Resource Information System is an integrated system
designed to provide information used in HR decision making

• It serves two primary purposes:

• A: Administrative function
• B: Planning and predicting function
Uses of HRIS
 Forecasting and Analyzing
• Trend Analysis

• Ratio Analysis
Quantitative
Techniques
• Scatter plot method

• Use of computerized systems

 Quantitative Techniques of
Forecasting and Analyzing
• Uses statistical and mathematical techniques

• The focus of this approach is on forecasting HR shortages, surpluses

and career blockages

• Its aim is to reconcile the supply and demand for human resources
given the organization's objectives

• Examples are trend analysis, ratio analysis, etc.

 Qualitative Techniques of
Forecasting and Analyzing
• The qualitative approach to HR planning uses expert opinion
(usually a line manager) to predict the future

• For example, the marketing manager will be asked to estimate the

future personnel requirements for the marketing department

• The focus is on evaluations of employee performance and the

ability to promote an employee or transition an employee

• Examples include Delphi Technique and Nominal Group technique.

 Qualitative Techniques of
Forecasting and Analyzing
• The Delphi Technique

• Nominal Group Technique

 Qualitative Techniques…Delphi
• A panel of experts, such as key line Managers, make independent
anonymous predictions in answer to questions relating to HR
planning

• The responses are analyzed by the HR department and the

confidential results are fed back to the experts along with series of
questions. The managers revise their original estimates in the light
of this new information

• The disadvantage of the Delphi technique

• It is time consuming
• It is costly
 Qualitative Techniques…Nominal
Group
• After a problem has been presented, each team member, without
discussion, independently generates as many solutions as possible
and writes them down. Then, in turn, each member describes a
solution to the group. No criticism or debate is undertaken, but
team members can seek clarification.

• After all solutions have been presented, the group members silently
and independently rank each proposed solution.

• The solution with the highest total ranking becomes the final
decision.
 Qualitative Techniques…Nominal
Group
• The advantage of the nominal group technique are:

• Allows group members to meet without restricting the

independence of their thinking

• It produces more and better quality ideas than a traditional group.

 Class Exercise

Microsoft Office
Word 97 - 2003 Document
 Class Exercise
• What is the essential difference in all these case studies
compared to what we have studied.

• They all target new business initiatives so essentially you may

not have past company data in the same field.

• You may use related data but you may also need to do a lot of
secondary data analysis from other sources
End of Chapter 6