1. Chapter 4
Human Resource Planning
Falkenberg, Stone, and Meltz
Human Resource Management
in Canada
Fourth Edition
Copyright © 1999 Harcourt Brace & Company Canada, Ltd.

2. Chapter Overview
s The need for human resource planning
s Purposes of human resource planning
s Relation to other human resource
functions
s The human resource planning process
s Projecting human resource supply
4.1

3. Chapter Overview (cont’d.)
s Forecasting future human resource needs
s Comparing forecast needs with projected
supply
s Planning policies and programs
s Evaluating human resource planning
effectiveness
s The HRM audit
4.2

4. Purposes of Human
Resource Planning
s Setting goals and objectives
s Examining the effects of
alternative human resource
policies and programs
4.3

5. Examples of
Organizational Goals
s To increase company profits by 10% in the next
fiscal year (profitability)
s To close 25 retail outlets in the next four years
(downsizing)
s To bottle 10% more diet pop in the next year
(production)
s To guarantee one-day delivery of all first-class
mail within the province by 2001 (service level)
4.4

6. The Human Resource
Planning Process
s Project future human resource supply
s Forecast future human resource needs
s Compare forecast needs with projected
supply
s Plan policies and programs to meet
human resource needs
s Evaluate human resource planning
effectiveness
4.5

7. Projecting Human
Resource Supply
s Assessment of current supply
s Skills inventories
s Analysis of human resource
flows
s Stochastic models
4.6

8. Examples of Human
Resource Flows
Employees may
- stay in the same job
- move across to another, but not a higher-level job
(transfer or lateral move)
- move up to a higher-level job (promotion)
- move out of the organization through voluntary
termination (resignation) or involuntary
termination (lay-off, dismissal)
- move down (demotion)
4.7

9. Typical Data Elements in a Human
Resources Information System
Employee personal data Salary administration
Benefits information Skills
Benefits plans Attendance
Employee benefits information Performance/Discipline
Dependents Health and Safety
Training and development Payroll
Employee work data
Salary
Performance review
Job information
Employment status information
Hire/Termination information 4.8
Work information

10. Forecasting Future Human
Resource Needs
s Planning for the status quo
s Rules of thumb
s Unit forecasting
s The Delphi method
s Scenarios
s Computer simulation
4.9

11. Five Steps in the Delphi Method
1. An issue, question, or problem is identified.
2. A small group or panel of ten or fewer experts
is identified.
3. Independent judgements about the issue are
obtained from each expert through a
questionnaire or structured interview.
4. An intermediary or facilitator collects,
analyzes, and feeds back information from the
first questionnaire or interview to each expert.
5. Steps 3 and 4 are repeated until there is a
consensus on the issue or problem. 4.10

12. Sample Questions from a Unit
Forecasting Questionnaire
s List any jobs that have changed since the last
forecasting period and any that will change in the
next forecasting period.
s If vacancy can be filled with present employees,
note whether training will be required. Specify
nature of training needs.
s What percentage of employees are performing
jobs up to standard?
s How many employees will be absent in the next
forecasting period because of disability,
educational, or other leaves? 4.11

13. Planning for Anticipated Shortages
s Transfer employees to jobs in
which shortages exist
s Train employees to move up to
jobs in which shortages exist
s Have employees work overtime
s Increase employee productivity
s Hire part-time employees
4.12

14. Planning for Anticipated Shortages
(cont’d.)
s Hire temporary full-time employees
s Hire permanent full-time employees
s Subcontract work to other firms
s Forgo increases in production
s Install equipment to perform some of
the tasks that would be done by
workers (capital substitution)
4.13

15. Ways to Increase Employee
Productivity
s Offer monetary incentives, e.g. bonuses, for
higher productivity or performance levels
s Improve employees’ job skills to produce
more in less time or at lower cost
s Re-design work processes and methods so
greater outputs are achieved
s Use more efficient equipment so greater
outputs are achieved
4.14

16. Planning for Anticipated
Labour Surpluses
s Close plants
s Lay off some workers permanently
s Give incentives for early retirement
s Let the workforce shrink by attrition
s Retrain and transfer workers
s Shut down plants (or parts of them) temporarily
s Lay off workers temporarily
s Reduce the work week
s Use work sharing
s Cut or freeze pay and/or benefits 4.15

17. Evaluating Alternatives to the
Problem of Labour Shortages
or Surpluses
s Determine size of the anticipated
shortages or surpluses
s Determine the expected duration
of the change in the demand for
human resources
s Determine the amount of lead time
before shortages or surpluses
occur
4.16

18. Information Needed to Identify
Appropriate Ways to Deal with Labour
Surplus/Shortage
s Financial and human costs and benefits
s Effects on other organizational
components
s Length of time to implement the
alternatives and generate desired
results
s Probability of success in reducing the
shortage or surplus
4.17

19. Programs for Human
Resource Planning
s Linear programming, e.g. to minimize total
labour costs within certain constraints
s Goal programming, e.g. setting multiple
goals such as increasing profits by 10% and
hiring bilingual salespeople
s Computer simulation, e.g. to examine the
effects of various programs to reduce
surpluses or shortages
4.18

20. HRM Auditing Model
s Strategic-Level HRM — determines the
effectiveness of HRM functions in the overall
strategic plan of the organization
s Managerial-Level HRM — determines
effectiveness of HRM functions within
departments and units
s Operational-Level HRM — determines the
effectiveness of HRM functions throughout the
organization
4.19

21. Reasons for Conducting
HRM Audits
s When labour costs are large or the largest
component of total product or service costs
s The personnel audit is used to justify the
existence of budgets of staff and programs
s The personnel audit provides valuable feedback
from employees and line managers
s The personnel audit may uncover problems
such as unqualified HRM staff, lack of HRM
policy compliance, or low employee satisfaction
4.20