November 2022

Chapter 4

Human Resource Planning

References:
• Strategic Human Resource Management by Jeffrey A. Mello
• Strategic Human Resource Management by Charles R. Greer
• Fundamentals of Human Resource Management by DeCenzo/Robbins

Resource Person: Furqan-ul-haq Siddiqui

The Great Pyramid of Giza
 The Great Pyramid of Giza is one of the greatest
mysteries of time.
 When it was first built it was 145 meters tall, making it
the tallest structure on the earth for over 4,300 years.
 Egyptologists argue that even with all of the human and
technological advancements achieved to date, it would
be nearly impossible to replicate the production of these
pyramids.
 Archaeologists have their own methods for determining
how many workers (mostly slaves) were employed at
Giza, but a majority agree that the Great Pyramid was
built by approximately 4,000 primary laborers—quarry
workers, haulers, and masons.
 These primary laborers would have been supported by
16,000 to 20,000 secondary workers—ramp builders,
tool-makers, mortar mixers, and those providing back-up
services such as supplying food, clothing, and fuel.
These estimates suggest a total of 20,000 to 25,000
employees who labored for 22 years to build the
pyramids.
 Some Egyptologists claim that at least 100000 workers
were engaged at a time in the construction of pyramids .
 The HR planning of the project would be among the
biggest challenges to face.
Human Resource Planning
(HRP)
 Once the corporate and business unit strategies have
been established (with the consent of HR
professionals), then the
 Next Stage HRP.
 The HR strategy involves taking the organization’s
strategic goals and objectives and translating them
into a consistent, integrated, complementary set of
programs and policies for managing employees.
 Human Resource Planning (HRP)
 Human resource planning is a process by which an
organization ensures that
 ithas the right number and kinds of people
 at the right place
 at the right time
 capable of effectively and efficiently completing those
tasks that will help the organization achieve its overall
strategic objectives
 A process in which an organization attempts to
estimate the demand for labor and evaluate the size,
nature and sources of supply which will be required
to meet the demand.
Linking Organizational Strategy to HR Planning
STRATEGIC DIRECTION

V&M determining organization’s

business

setting goals and

objectives and goals
objectives

strategy determining how to attain

goals and objectives

determining what jobs need to be

structure
done and by whom

matching skills, knowledge,

people and abilities to required jobs
 Human Resource Planning
(HRP)
 The first component of human
resource management strategy is
human resource planning.
 All other functional HR activities,
such as staffing, training,
performance management,
compensation, labor relations, and
employee separation, are derived
and should flow from the HRP
process.
 The Relationship between HRP and
Strategic Planning
 HR planning must be linked to the
organization’s overall strategy to compete
domestically and globally, translated into the
number and types of workers needed
 An organization’s strategic decision to expand,
redirect, diverge, divest, partner, or merge will have
an associated effect on the HR expectations and
plans of the organization.
 When undertaking human resource planning,
the organization considers the implications of;
 its future plans on the nature and types of
individuals it will need to employ and
 the necessary skills and training they will require.
 The organization will also need to assess its
current stock of employees as well as those
available for employment externally.
 The key facet of human resource planning is that it
is a proactive process.
 As human resource planning involves
making assumptions about the future,
therefore plans should be flexible.
 Changes to any planning initiatives
should not be viewed as a weakness
in the planning process.
 Rather, they should be a positive sign
that the organization is carefully
monitoring its external environment
and responding appropriately to any
changes taking place.
Major Objectives of HRP

 Societe de Transport de Montreal

(STM) Case Study
HR Planning Process

5–14
 Human Resource Planning Process
External Environment
Internal Environment
Strategic Planning

Human Resource Planning

Forecasting Comparing Forecasting

Human Requirements Human Resource
Resource and Availability Availability
Requirements

Demand = Surplus of Shortage of

Workers Workers
Supply
No Action Restricted Hiring, Recruitment
Reduced Hours,
Early Retirement, Selection
Layoff, Downsizing
15
Immediate versus Long-Term Workforce Considerations
When Determining the Appropriate Planning Horizon
 Here are some examples of immediate workforce concerns:
o Replacing personnel known to be retiring
o Promoting employees within departments when positions become
available
o Filling vacancies due to turnover
 Here are some examples of long-term workforce concerns:
o Succession planning for key management positions
o Developing employee skill sets to launch new products or
processes
o Working with colleges or universities to increase the number of
graduates with a specific desirable educational background
o Responding to future government or union policy changes
 Types of Planning
 Aggregate Planning
 Anticipating the needs for groups of employees in
specific, usually lower level jobs and the general skills
employees will need to ensure sustained high
performance.
 Succession Planning
 Focuses on ensuring that key individual management
positions in the organization remain filled with
individuals who provide the best fit for these critical
positions.
 Aggregate Planning: Forecasting Demand
 The single greatest indicator of the demand for employees is
demand for the organization’s product or service.
 This may be done through unit forecasting sometimes called
bottom-up planning and top-down planning, or some
combination of both (see next slide for other methods)
o Bottom-up planning- involves “point of contact”
estimation of the future demand for employees.
o Top-down planning- Involves senior managers allocating a
fixed payroll budget across the organizational hierarchy.
 The demand for employee skills requirements must
also be considered.
 Aggregate Planning: Forecasting Supply
 This process involves estimating the actual number of
employees and determining the skills that these employees
must have and whether their backgrounds, training, and career
plans will provide a sufficient fit for the organization’s future
plans.
 The level and quantities of abilities, skills and experiences can
be determined using a Skills Inventory.
 A human resource information system (HRIS), especially
computerized databases, updated at least annually, is a
dynamic source of HR information.
 Markov analysis can be used to create a transition probability
matrix that predicts the mobility of employees within an
organization.
Estimating Internal Labor Supply for a Given Unit
Balancing HR Supply and Demand
 1996 Croatia USAF CT-43 crash
 On April 3, 1996, a United
States Air Force CT-43 crashed
in Croatia while on an official
trade mission. The aircraft was
carrying United States
Secretary of Commerce Ron
Brown and 35 other people
(including 16 corporate
executives).
29
 The September 11 attacks
 Often referred to as September 11th or
9/11were a series of coordinated suicide
attacks on the United States on
September 11, 2001 through four
hijacked commercial passenger jet
airliners.
 The death toll of the attacks was 2,996,
including the 19 hijackers with more
then 6000 injuries.
 The hijackers intentionally crashed two
of the airliners into the Twin Towers of
the World Trade Center in New York
City, killing everyone on board and
many others working in the buildings. 30
 Succession Planning
 The process for identifying and developing people
with the potential to fill key positions in the
company once the position is vacant. Succession
planning increases the availability of experienced
and capable employees that are prepared to assume
these roles as they become available.

31
 Succession Planning
 Involves identifying key management positions the
organization cannot afford to have vacant.
 Purposes of Succession Planning
 Facilitates transition when an employee leaves.
 Identifies the development needs of high-potential
employees and assists in their career planning.
 In actual practice, many organizations fail to
implement succession planning effectively.
 Qualifiedsuccessors may seek external career
advancement opportunities if succession is not
forthcoming.
 “Replacement chart” identifies
 Key positions
 Possible successors for each of these positions
 Whether each potential successor currently has the
background to assume the job responsibilities
 The expected amount of time it will take for the
potential successor to be ready
 Succession Planning (cont’d)

Objective measuring— Specific skills, competencies, and experiences

are missing
 Succession Planning
 However, traditional succession planning
(replacement charting) has become too time-
consuming and inflexible to meet the leadership
continuity needs when facing:
 Continual corporate restructurings, reengineering
 The increasing use of team-based work systems
 M&As
 More partnerships, JVs, and strategic alliances
 Continual massive downsizing in middle management
ranks.
 Succession planning not only helps to ensure that
key management positions remain filled, but it also
helps to identify critical training and development
needs of both individual managers and the
organization as a whole.
 Succession planning clearly involves taking an
investment-oriented approach toward employees.
 Although the benefits of a well-developed
succession planning program can be significant,
such programs can also come at a significant cost to
an organization.
 An Outsider's View of Apple's Succession Plan
https://www.forbes.com/sites/robinferracone/2011/09/13/an-outsiders-view-of-apples-
succession-plan-3/
 One key issue that organizations must address in their
succession planning is the extent to which these efforts will
be public or confidential and whether those targeted for
grooming for higher level assignments are informed of their
“high-potential” status or not.
 Mentoring
 One key tool often used in succession planning is
mentoring, whereby an individual executive or
manager assumes responsibility for the development
of an individual employee.
 In selecting individuals to be mentored, an
organization will usually select an individual who
has proven high levels of performance and/or is high
potential in the case of a new hire.
 Mentoring programs may be formal or informal
although Informal mentoring programs have been
criticized as being less effective.