1-1

1-2

Human Resource Planning and Alignment

McGraw-Hill/Irwin Human Resource Management, 10/e

2007 The McGraw-Hill Companies, Inc. All rights reserved.

1-3

Introduction
Success

in business is dependent on: Reacting quickly to opportunities Rapid access to accurate information resource planning (HR planning): How organizations assess the future supply of, and demand for, human resources Provides mechanisms to eliminate gaps that may exist between supply and demand Requires readjustment as labor market conditions change

Human

1-4

Introduction
If

effective utilization of human resources is not a significant goal for the organization: Employment planning is likely to be informal and slipshod top management values stable growth: HR planning will be less important than if the goals include rapid expansion or diversification

If

1-5

Introduction

The

U.S. Dept. of Labor projects that: Asians and Hispanics will join the labor force at rates of 44 and 36 percent White non-Hispanics will increase by 9 percent Workers 55-64 will increase by 52 percent Workers 65 and older will increase by 30 percent

1-6

Introduction
HR

related government policies and regulations: Equal opportunity and promotion call for more HR planning for women and minorities The age of mandatory retirement is being raised Organizations are encouraged to hire veterans and the disabled

1-7

Introduction
The

types of people employed and the tasks they perform determine the kind of planning necessary HR planning is critical for implementation of the organizations strategic plan HR policies have direct effects on profitability

Strategic

human resource management (SHRM) means acknowledging that HR policies/practices have critical links to an organizations overall strategy

1-8

The HR Planning Process

The

four phases or stages of HR planning: Situation analysis or environmental scanning Forecasting demand Analysis of the supply Development of action plans

1-9

Situation Analysis & Environmental Scanning

The

first stage of HR planning is the point at which HRM and strategic planning first interact The strategic plan must adapt to environmental circumstances HRM is one of the primary mechanisms an organization can use during the adaptation process a plan to support recruitment and selection, it is impossible to stay competitive The problems associated with changing environments are greater today than ever before Success now depends on being a global scanner

Without

1-10

Forecasting Demand for Employees

This

phase of the process involves estimating: How many employees will be needed What kinds of employees will be needed

Quantitative

tools can help with forecasting, but it involves a great deal of human judgment The demand for employees is closely tied to the strategic direction that the organization has chosen Growth Reengineering Reorganization

1-11

Forecasting Demand for Employees

Techniques

to help reduce the uncertainty inherent in HR planning: Expert estimates Trend projections Statistical modeling Unit-demand forecasting to effective planning is accurately and freely sharing information

Key

1-12

The Expert Estimate

One

or more experts provide the organization with demand estimates based on: Experience Guesses Intuition Subjective assessments of available economic and labor force indicators
This

is the least mathematically sophisticated approach

1-13

The Expert Estimate

The

Delphi technique elicits expert estimates from a number of individuals in an iterative manner Developed by the Rand Corporation Estimates are revised by each individual based on knowledge of the other individuals estimates

With

the nominal group technique (NGT), individual estimates are followed by group brainstorming The goal is to generate a group decision that is preferred over any individual decision

1-14

Trend Projection
This

top-down technique: Develops a forecast based on a past relationship between a factor related to employment and employment itself Example: Sales levels are related to employment needs

1-15

Modeling & Multiple-Predictive Techniques

This

top-down approach uses the most sophisticated forecasting and modeling techniques Trend projections relate a single factor, such as sales, to employment Environmental factors could be gross national product or discretionary income Or, the organization may be mathematically modeled so that simulations can be run

1-16

Modeling & Multiple-Predictive Techniques

Markov

chain analysis involves: Developing a matrix to show the probability of an employees moving from one position to another or leaving the organization The process begins with an analysis of staffing levels from one period to another Markov analysis can identify the probability of lower employee retention It does not suggest a solution to the problem

1-17

Modeling & Multiple-Predictive Techniques

Regression

analysis is a mathematical procedure: It predicts the dependent variable on the basis of factors (independent variables)

With

simple linear regression, one dependent and one independent variable are studied With multiple regression, more than one independent variable is studied

1-18

Unit Demand Forecasting

This

is a bottom-up approach Unit managers analyze current and future needs person-by-person and job-by-job Headquarters totals the unit forecasts The sum is the corporate employment forecast If both bottom-up and top-down approaches are used, the forecasts may conflict This can be resolved by averaging the variances The Delphi technique or NGT could also be used

1-19

Analyzing the Current Supply of Employees

This

phase of HR planning should answer the question: How many and what kinds of employees do I currently have, in terms of the skills and training necessary for the future?

This

involves more than simply counting current employees The smaller and more centralized the organization, the easier it is to conduct a skills inventory

1-20

The Skills Inventory

Both

a skills inventory and a management inventory: Identify the skills, abilities, experiences, and training employees currently have Are useful for career planning, management development, and related activities

In

its simplest form, a skills inventory is a list of: Names Characteristics Skills

1-21

The Skills Inventory

Skills

inventories vary greatly in their sophistication Some are as simple as a file drawer of index cards Others involve expensive and complex computer databases

1-22

Contents of the Skills Inventory

The

only data available to the organization for later use is what was designed into the system
Name Present location Date of employment Employee number Date of birth Job classification

Skills, knowledge, education Foreign language skill Professional qualifications Licenses and patents Publications Hobbies

Supervisory evaluations

Salary range

1-23

Contents of the Skills Inventory

Often

omitted, but increasingly important, are: Employees stated career goals Geographical preferences Intended retirement date main categories within a skills inventory: Data summarizing the employees past Data summarizing present skills Data that focus on the future many skills inventories are more complex

The

Today,

1-24

Maintaining the Skills Inventory

The

two principal methods for gathering data: the interview and the questionnaire The questionnaire is faster and cheaper, but can be inaccurate Some contend that a trained interviewer can complete questionnaires more quickly and accurately for keeping files updated must be made The more often changes are made and the data is used, the more often updates should be performed

Plans

1-25

Maintaining the Skills Inventory

Should

data be stored in a manual system or on a computer? How much does the computer system cost? How frequently the data will be used? A computer allows comparative analysis over time

Skills

inventories are useful only if management uses the data to make significant decisions Before accessing the data, managers must be trained to avoid abuse of the system

1-26

Action Decisions in HR Planning

After

the supply of and demand for workers has been analyzed, the two forecasts must be compared Whenever there is a gap between the two estimates, a course of action must be chosen

1-27

Action Decisions in HR Planning

If

the supply of workers is less than the demand: It can be filled with present employees who are willing to work overtime there is a shortage of skilled employees: Train and/or promote present employees Recruit less-skilled employees Recall employees who were previously laid off

If

1-28

Action Decisions in HR Planning

Organizations

are using more: Part-time workers Subcontractors Independent professionals

This is in response to: Intense global competition Rapid technological change Fears caused by recent workforce reductions 5 million U.S. citizens are contingent workers

Over

1-29

Action Decisions in HR Planning

Possible

solutions to an employee surplus: Attrition Early retirements Demotions Layoffs Terminations

Employees

who are considered surplus are seldom responsible for the conditions leading to the surplus

1-30

Action Decisions in HR Planning

Most

organizations avoid layoffs by using attrition, early retirement, creation of work, and so on Attrition can be accelerated by encouraging employees to leave early to losing workers over the age of 50: They tend to be healthier than younger workers They have fewer work-related injuries They are less likely to change jobs They take critical skills and experience with them

Drawbacks

1-31

Action Decisions in HR Planning

By

2010, the median age of the U.S. workforce will be 40.6 years Over half the workforce will be protected by the Age Discrimination in Employment Act should not be made that cant be kept Once promised, it may be illegal to change them

Promises

1-32

Action Decisions in HR Planning

If

voluntary reductions dont eliminate the gap between supply and demand, layoffs may be necessary Corporations too frequently and quickly turn to layoffs They fail to consider the consequences About one-third lay off too many workers Poorly designed workforce reductions can kill morale

1-33

Human Resource Information Systems

Information

is the key to successful HR planning A human resource information system (HRIS) is an integrated way to acquire, store, analyze, and control information flow through an organization

highly developed HRIS can increase the efficiency and response times of: Tracking applicants Skills inventory Career planning Employee service programs

1-34

Human Resource Information Systems

Computer

technology makes it possible to integrate multiple HR needs into a single system: Enrolling in benefits programs Processing employee transactions (pay increases) Using learning modules

An

HRIS developed for use by upper-level executives is called an executive information system (EISs) Computerized HRISs have allowed organizations to broaden their view of succession planning

1-35

Human Resource Information Systems

Factors

that make succession planning for executive level positions more important than ever: Large numbers of aging executives Increasingly popular early retirement
Fortune

500 companies anticipate 33 percent turnover among their executives over the next five years

Many

companies now realize the critical need for a comprehensive retention plan This plan may include consulting and part-time assignments

1-36

Employee Privacy, Identity Theft, & HRIS

HRIS

makes it easier to invade employee privacy Danger lies both within and outside the organization The friendlier the system, the easier it can be for unauthorized access theft occurs when: Someone uses anothers name, address, social security number, or other information: Without the persons knowledge With the intent to commit fraud or other crimes

Identity

1-37

Employee Privacy, Identity Theft, & HRIS

Identity

theft is fast becoming a national problem Complaints from U.S. victims rose from 1,380 in 1999 to over 210,000 in 2003 Identify theft is a felony under the Identity Theft and Assumption Deterrence Act of 1998 The problem will continue to escalate

1-38

Employee Privacy, Identity Theft, & HRIS

The

costs of identify theft to the employee are numerous: Average 175 researching and tracking the crime 23 months correcting credit reports $800 in out-of-pocket expenses to restore financial health and standing

1-39

Employee Privacy, Identity Theft, & HRIS

Safeguards

to minimize privacy risks in an HRIS: Determine the best way to collect data Limit the information collected to what is relevant Tell employees what information is kept on file and how it is used Let employees inspect and correct their information Keep sensitive information separate Limit internal use of personal information Only disclose personal information to outsiders with employee consent

1-40

Employee Privacy, Identity Theft, & HRIS

Organizations

should carefully evaluate their policies regarding access to HRIS data to determine: How much information, legally The greatest threat to privacy is and ethically, should be disclosed when employees How much control employees dont retain the right to authorize should have over the release of the release personal information federal legislation guarantees employees the right to inspect and amend data in an HRIS

No