Chapter 2 - HR Planning

Lecture 2

HR Planning

• The process of expecting and providing for the movement of people into, within, and out of an organization. 

High Performing Work Systems

• HR practices that increase an organization’s ability to attract, select, hire, develop, and obtain high-performing employees. 

• Do we have the people to do it? 

• SWOT backwards

Mission

• The basic purpose of the organization as well as scope operations

Strategic Vision 

• A statement where the vision of a company is headed in the right decision and what it can become in the future

• This clarifies long-term direction of the company and the strategic intent

Core Values 

• The strong beliefs and principles that the company uses as a foundation for the company’s decisions.

Strategic Analysis

• What HR are needed and what’s available? 

• Constant back and forth between HR and decision makers.

• Can we do this?

Strategic Formulation

• What’s required and necessary in support of the human resource strategy?

Strategic Implementation

• How will the HR resources be allowed for structure, processes, and human capital decisions

• HR resources planning interconnects with strategic planning 

Forecasting

• Demands for labour: Seeing what people and supply is out there that can help out

• Supply the labour 

• Balancing supply and demand behaviours: Making sure we use resources efficiently  

Managerial Judgement

Quantitative Techniques & Qualitative Techniques

Quantitative Techniques

• Use numerical data and statistical analysis to measure, evaluate, and forecast workforce performance and outcomes

• (Ex. Trend approach, make the business function)

Qualitative Techniques

• Gathering and analyzing non-numerical data to understand employee experiences, beliefs, and organizational culture, using methods like interviews

• Adding 4 more staff, asking managers of sale staff, taking objective decision, knowing business, knowing people, believing what the demand is for the whole organization, do we have the budget?

• Take into people’s opinions into account, using your judgement as a manager. 

Supply

• Where can we get workers from?

• What labour is out there to fill out these positions 

External Analysis

• General economic conditions

• National labour market conditions

• Local labour market conditions 

• Occupational market conditions

External Analysis - General Economic Conditions

• The overall economy across the world 

• The stock market in good or bad shape 

• Not many people have jobs

External Analysis - National Labour Market Conditions 

• Unemployment rate in a country 7.2% 

• Replacing people with AI

• Supply is bigger than demand 

External Analysis - Local labour market conditions 

• Local conditions within the city 

External Analysis - Occupational market conditions

• Lawyers, accountants

• What's the labour availability in those areas 

• Attracting more workers/people within cities and people have more money to spend and work, more opportunities 

Internal Analysis

• Tools that companies use to see where workers are needed to be in the company and how many people.

•  Skills/Management Inventories 

• Replacement Charts and summaries

• Computerized Information Systems 

• Succession planning

• Markov Analysis

Formulation Strategy

• Strategy Formulation

• Business Strategy

• Value Creation

• Low-Cost Strategy

• Differentiation Strategy

Strategy Formulation

• Moving from simple analysis to come up with a clear plan. 

Business Strategy

• Companies try to create value. 

• Adding value to their products and service for customers.

Value Creation

• What the firm adds to a product or service by virtue of creating it

• The amount of the benefits provided by the product or service once the costs of making it are subtracted

• ( Benefits - Costs = Value ) 

Benefits

Product

Cost 

How much it takes to make the product

Low-Cost Strategy

• Competing on price, offering services and products at a lower price.

• Competing on productivity and efficiency 

• Keeping low costs to offer an attractive price to consumers (relative to competitors) 

Differentiation Strategy

• Competing on value added (Ex: Disneyland, premium cars, brands) 

• Involves giving something unique and distinctive to customers that the value

• Giving premium services/products for customers 

• Paying workers a lot of money for coming up with innovative ideas that are unique and different. 

Functional Strategy: Ensuring Alignment

• Vertical Fit/Alignment

• Horizontal Fit/Alignment

Vertical Fit / Alignment

• Focuses on the connection between the business objectives and the major initiatives in HR 

• HR aligns with the overall alignment in the strategies, retaining the best workers, support, and investing in HR strategies, to make sure you’re providing value. 

Horizontal Fit/Alignment

• Aligning HR practices with others internally to create a configuration that is mutually reinforcing 

• HR has to invest on both spaces (Ex: Hiring/wages) 

Outsourcing

• Hiring other companies to do another job for you (Ex: Accountants)

• Hiring someone for a short term job 

Taking Action: Reconciling Supply and Demand 

• Balancing supply and demand considerations

• Forecasting business activities (trends) 

• Locating applicants

Organizational downsizing, outsourcing, offshoring 

• Reducing “head count” 

Making Layoff Decisions

• Seniority or performance?

• Collective agreements

Benchmarking

• The process of comparing the organization’s processes and practices to those of other companies

Human Capital Metrics

Assess aspects of the workforce

HR Metrics

• Assess the performance of the HR function itself

Balanced Scorecard (BSC)

• Financial 

• Customer

• Processes 

• Learning