Chapter 2 STRATEGIC HUMAN RESOURCE PLANNING OBJECTIVES: After this lesson, you should be able to: + Discuss the role of the human resource in strategic planning; + Explain the two important components in human resource planning; . + Determine the different kinds of human resource planning and the important Elements in Strategic Human Resource Planning; + Know the advantages in using the elements of human resource planning; + Enumerate the five steps inn human resource planning; and + Discuss the different kinds of planning techniques in human resource management. 21 Scanned with CamScannerHuman Resource Planning (HRP) nltinan Resource Planning (HRD) is the process of systematically reviewing human resource Tequirements to ensure that the number of employees matches the required skills It is the process vr matching the internal and external supplies Te OPle with job openings anticipated in the organization over a specific period of time. Some organizations continue to provide lip service to these important functions, Nevertheless, ‘presently HRP is increasingly being recognized as an important Component of Human Resource Management, What is Strategic Planning? Strategic Planning is the determination of the overall organizational purpose and goals and how they are to be achieved. Human resource is the integral component of a strategic plan, which greatly affects productivity and organization performance, After the strategic plans have been formulated, human resource strategic planning is to be undertaken, Along these lines, strategies are reduced to specific quantitative and qualitative human resource plans. The HRD shall determine the total manpower component to execute the planned strategic activities. Two Important Components of the Human Resource Planning 1. Requirement Forecasting human requirements involves deter of employees needed. The level of skills has to be determined and matched with the Plan operations. The analysis will reflect various factors such as production plans, and changes in productivity together with the introduction of new" technology if there is any. The HRD, in order to forecast availability must look to bath inte val and external sources. Internal sources refer to existing manpower that could be re-assigned to new positions or be promoted to higher vacant positions, Extemel sources refer to positions that are not available inside the organization and need to be sourced out. mining the number and types 2. Availability When employee requirements have been analyzed, the firm determines whether there is a surplus or shortage of manpower. If there is 0 surplus, ways must be instituted to reduce the number of employees. Some of thee vwomeee include restricted hiring, reduced work hours, early retirement of old employees, and the worst is to layoff some employees. If the manpower forecast reveals shortage, the HRD must obtain the proper quantity and quality of workers outside 7m within. Human resource tion could affect the entire ions of forecasts, the organization after exhausting efforts to find fro) planning must be continuous, as changing condi organization thereby requiring extensive modificati Scanned with CamScannerAspects of Human Resource Planning 1. Systematic Forecasting of Manpower Needs On the basis of business conditions and forecasts, manpower needs are planned and monitored closely. 1 Performance Management Analyzing, improving and monitoring the performance of each employee and of the organization as a whole. Career Management Determining, planning and monitoring the career aspiration each individual in the organization and developing them for improved productivity. Management Development Assessing and determining the developmental needs managers for future succession requirements. Advantages in using the Elements of HR Planning ds Through a systematic planning of human resources, a company can be better assisted in attaining its goals and objectives Ithelps the company determine its manpower needs and provides a method of meeting them. It can be an effective means of planning the development and growth of the employees. It can assist in placing the employees properly in jobs where they can maximize the use of their skills and potentials. It can assist the company to attract and retain better qualified employees. Five Steps to Human Resource Planning - Determining the workload inputs based on the corporate goals and objectives Once the company’s objectives are known, the operating executives can determine what they are responsible for in the common endeavor of attaining the corporate goals. The kind and magnitude of workload determine the organizational structure, the number and quality (skills) of employees needed to man the organization or department under a desirable level of performance. Several factors that should be considered in determining work inputs: a. Business Development and Assumptions Scanned with CamScannerr Corporate planning Economic Forecasts ‘Changes in Plans and Products ao j &. New Product Lines {Mergers and Consolidations ti 8 iting the job description and jg, | 2. Studying the jobs in the company and writing specifications Forecasting of manpower needs : le required for | a. Determination of the number and skills of people red the work. ©. Forecasting manpower nds cme nest afte deternning the wo | input, and is known as the planned and logical method of eee tiene both quantitatively and qualitatively the employ: hon i work inputs to enable the company to attain its goals. 4. Inventory of Manpower a. An analysis of the present manpower complement of the company to determine whether it has enough or less or more personnel (both qualitatively and quantitatively) than required. This fourth step in the planning process is the inventory (audit) of available currentmanpower. What happensin this step is the assessment of the skills, career aspirations, strengths and weaknesses of each of the current employees and their potentials for promotion. Each is matched against the positions forecasted in step 3. When the current manpower is matched against forecast of needs, positions are filled either by Promotion, transfer or assignment of qualified personnel taking into account the most effective method of achieving the corporate goals. The net result of this operation is that you either find: a, Enough manpower b. Excess in the number of available manpower, bit lacking the skills required ¢. The number of available manpow er is insufficient, and a also inadequate to meet the needs the skills of the work inputs. 5. Improvement Plans Determination of the appropriate steps to i ii im] | ofder to insure that the company has the Hehe ae ie a | of people, properly assigned to jobs for which they are oon patty | . Scanned with CamScannerincludes action plans to improve the capabilities of current personnel thru training and development. This plan can be part and parcel of the total development program which covers career planning, management development programs, succession programs, etc. Planning Techniques in HR Management L Skills Inventory This approach involves the listing of all the skills possessed by the workforce and they are made to relate to the requirements of the organization. This technique requires detailed information of the experience and training of every individual in the organization. Ratio Analysis This is a technique wherein the personnel who are promotable to the higher positions are identified together with their backup or understudy. There should be a ratio that will ensure that promotions will not create any void. To accomplish this, recruitment must support the backup requirements. At the same time, training must be done to develop the backup ratio. Cascade Approach Under this approach the setting of objectives flows from the top to bottom in the organization so that everyone gets a chance to make his contribution. This approach results in the formulation of a plan wherein the objectives of the rank and file get included in the blueprint for action. The plan is then a participatory planning outputs. Replacement Approach Under this approach, HRP is done to have a body of manpower in the organization that is ready to take over existing jobs on a one-to-one basis within the organization. This approach calls for year-round acceptance of applications for possible replacements. Commitment Planning Approach This technique involves the supervisors and personnel in every component of the organization on the identification of manpower needs in terms, skills, replacements, policy, working conditions and promotion so that human resource in the organization may be up to the challenge of current and future operations. The units thus become conscious of their needs and aware of the ways the human resource requirements can be met. Successor Planning Approach The approach known as successor planning takes into consideration the different components of the old plan and increase them. Proportionately by the desired expansion rate stated by management as to the total manpower needs. Scanned with CamScannerThe cost of doing the activities is likewise increased. Any new concern set UP at a starting scale and viewed in proportion with other comparable a5P000 Ne existing plan. This approach also enables the persorinel staff to get DY ' u having to ask much from management, which in turn does not xP ch from the HR staff in terms of radical change. Common Weaknesses in Human Resource Planning x Over-Planning. A plan is likely to fail through an inherent weakness of Tens ie many aspects of personnel management at the very early stage o _ firm or government office. Technique Overload. The use of so many techniques sometimes leads to the gathering of so much information. Then the techniques do not get to be applied effectively. This makes the techniques serve as a trap rather than a means for action. Bias for the Quantitative. There are plannersin HRP who sometimes make the mistake of being drawn towards emphasizing the quantitative aspects of personnel management to the neglect of the qualitative side. Isolation of the Planners. When top management has a low regard for human resource activities and for the HR staff, they give little encouragement to HRP activities, ignore the plan and withdrawn support for plan implementation, Isolation from Organizational Objectives. When HRP is pursued for its own sake or for narrow viewpoint of concentrating on HRD, the effort leads to the formulation of a plan that does not interphase with organizational development. Lack of Line Supervisors’ Inputs. Any plan to develop the personnel and to improve the conditions of work must use the feedbacks from the line supervisors, since they are the ones who are handling the personnel in the organization. Four Basic Terms of Manpower Forecasting 1 2 Long Term Trend ~ Long term forecasting is usuall 0 tally done for a period of five years or more depending on the company operations and customer demands Cyclical Variations - This refers to reasonable and predictable movement that occur over a period of one year or more. This cyclical movement may be doe Scanned with CamScannerto economic conditions, political instability, peace and order, loss in customer demands and societal pressures. These variations typically last for one to five years. Seasonal Variations ~ This is a reasonable prediction change over a period of one year. This covers firms who manufacture seasonal products and hire temporary workers for temporary increase in demand, like Christmas and other special occasions. 4. Random Variations ~ This is one occasion where there is no special pattern and it is quite difficult to predict or determine. The HR practitioner must be careful in his manpower forecast especially in the hiring of employees. Along this line, temporary workers are hired instead of regular workforce. Human Resource Forecasting Techniques 1. The Zero-Base Forecasting Approach -It uses the organizations’ current level of employment as the starting point for determining future staffing needs. The usual references point is the organizational structure pattern based on company production forecast on market and customer demands 2. The Bottom -Up Approach - This forecast uses the progression upward methods from the lower organization units to ultimately provide the aggregate forecast of employment needs. The starting point is the number of , current employees and the progress in operation requirements as the company improves its operation to meet increasing customer demand. 3. Use of Predictor Variables — This methods uses the past employment levels to predict future requirements. Predictor variables are known factors that have an impact on employment. Sales volume determines employment levels. As production increases, demand for manpower increases. It uses regression analyses to predict one item, which is known as the independent variable (current employment level) through the other item (sales volume) that is dependent variables. 4. Simulation ~ It is a technique for the testing of alternatives on mathematical models representing the real world situation. The purpose of this model is to permit the human resource manager to gain considerable insights into a particular problem before making actual decisions. The Important Elements in Strategic Human Resource Planning 1. Organizational Goals - The human resource planning process should be tied up with the organizational strategic goals. It must rest on solid foundation of information about sales forecasts, market trends, technological advances, and major changes in processes and productivity. Considerable effort should be devoted to securing reliable data on business trends and needs in terms of quantity and quality of labor as the basic input for human resource planning. 2. Human Resource Forecast - The second element in the planning proves is the forecasting of human resource needs based on business strategies, production Scanned with CamScanneri plans and the various indicators of chang@in technolosy 284 te hier al t operating methods Forecasting is usually accomplisned bY wg date and ycllabie nition This inchides indirect and aiteet 800) 2S the same with productivity trends. The result of this forecast ny tegote : sheet of employees in terms of number, mix, cost, new skills Se iestond lam bers oa levee of managers Remde.to accom Oe ON strategic goals. Experience has shown that producing this sore ee ahd Right challenging partir the planning process because itequires reat've 7 TB Y participative approaches in dealing with business and echnical onosriauises several years in the future. 3. Employee Information -The third element in the planning process. is ne composition, assignments maintaining accurate information concerning # ‘ and capabilities of the current workforce. This information includes job classification, age, gender, status, organizational Jevel, rate of pay and functions. Employee information may also include the employee's resurrt with such data as skills, education, training, career interest and other important personal data that could be used in the movement or transfer of the employee. 4, Human Resource Availability Projections ~The fourth element of the human ‘e number of current employees and resource planning process is estimating th those that could be available in the future. By projecting the past data about the size, organization and composition of the workforce and about funover, aging, and hiring, availability at a specific future data can be estimated. The result could paint the picture of the organization's current human resources and how they can be expected to evolve over time in terms of turnover, retirement, obsolescence, promotions and other relevant characteristics. 5. Analyzing and Evaluating Human Resource Gaps ~The fifth element in the jruman resource planning process is comparing what is needed with what is available in terms of numbers, mix, skills and technologies. The comparison permits the human resource manager to determine gaps and evaluate where the most serious mismatches likely appear. This type of analysis should help management address issues such as: a. Are there imbalances developing between projected human resources needs and availability? b. What is the effect of current productivity trends and workforce levels and costs? pay rates on the ¢. Do turnover problems exist in certain jobs or age levels? 4. Are there problems of career blockage and obsolescence? Strategy Evaluation and Control The final component to the strategic management process i 5 evaluation and control. Itis extremely important for the company es oe a ya yeness of Both thestrategy and the implementation process, The motrin ; " lonuit Scanned with CamScannermakes it possible for the company to identify problem areas and either revise existing structures or strategies or revise new ones. In this process, we see emergent strategies appear as well as the critical nature of human resources in competitive advantage. Human Resource Role in Providing Competitive Advantage Human resource practices are developed to implement strategies that will make the organization more effective and will answer the companys’ competitive advantage. HER can provide strategic competitive advantage in two ways: 1, Emergent Strategies — consist of strategies that evolve from the grassroots of the organization and can be thought of as what the organizations actually do. Most emergent strategies are identified with the people in lower level of the management hierarchy. It is usually the lower level rank and file employees who provide ideas for new markets, new products and new strategies being at the front line of operations. HRM should make sure that the information is systematically arranged and should contain the data needed. : Intended Strategies ~ are the results of the rational decision-making by the top management as they develop strategic plans. It is a pattern of plans that integrates an organization's major goals, policies and action sequences in a cohesive whole. The new focus on strategic HRM role is directed primarily on intended strategies. The task is to formulate business related issues relevant to strategy formulation and then development of HR systems that can aid in the implementation of the strategic plan. Human Resource Information System (HRIS) HRIS is any organized approach to obtaining relevant and timely information on which to base human resource decisions. An effective HRIS is crucial to sound human resource decision-making. It is designed to provide information that is~ SMART. Scanned with CamScannerand contain the 1. Systematic ~ Information must be systematically arranged needed data. Is for effective 1 tools 2. Mahagement-Oriented ~The and information are of employees. manpower planning, retention, development, and seP se omen oe e 3. Applicable - The data and information stored in file a be siaried in making human resource decisions. Irrelevant data Jevant to the current Information must be updated from time to time to be bs ery exithe accuraty manpower needs requirements. A manager must be able to rely of the information provided. and the decisions derived .d the employees’ concern. any productivity and 4, Result-Oriented-The results from the information thereat must be both acceptable to management an‘ The end results must contribute to greater comp’ employees’ satisfaction. 5. Time Bound -Relevant human resource information are necessary rfor effective decision-making. The need for timely decisions are crucial to the effective management of human resources The absence of these characteristics reduces the effectiveness of HRIS and complicates the decision-making process. Conversely,“ a system processing characteristics enhances the ease and accuracy of the decision-making process. An effective HRIS also produces and forecasts several important reports related to business operations. 1. Routine Reports ~ These are human resource data summarized on scheduled bases, like current manpowerstatus, regular employees, contractual employees, supervisors and managerial employees on a regular payroll. 2. Exception Reports ~This information may contain confidential data that are available only for managerial decision-making and needs immediate attention. This may pertain to violations of existing company rules and procedures, policies and management programs. 3. On Demand Reports ~ Management may demand some r This may pertain to productivity index, other information that may lead to dow! xy den eports for analysis. individual performance records, and nsizing, and other personnel actions. 4, Manpower Forecast - applies to predictive models b; This may cover increase or decrease in thanpower require men demand or increase customer orders, Human resource a to caren to provide timely information and ready manpower to anew ieaceiete company operations. the need of the ased on specific situations. Software Application for HRM The advent ofthe different HRM software application has mad smanagers’ functions for decision-making just a click on the me c® the human resource major human resource functions ar ™puter programs. The Scanned with CamScanner1. Staffing Applications ~ Common applications used in the area of staffing include the following: a. Applicant recruiting and tracking b. DOLE reporting requirements c. Developing a master employee data base d. Staffing applications for decision-making Human Resource Planning Applications ~ This involves company specific applications in determining future employee turnover, growth rate and promotion patterns and other personnel movements. This includes the following applications: a, Work-Force Profile Analysis ~ It refers to work-force labor supply and demand analysis or work-force profile analysis review. b. Work-Force Dynamic Analysis -Number of new hires, transfer and promotions, Number still needed in the future and those employees who are available to fill up job openings in the future. c. Human Resource Planning for Decision-Making - This application pertains to information about employees who are about to retire, job classification of employees for promotions and those departments that lack basic skills for the job. d. Performance Management Applications - employee performance ratings, disciplinary actions, work-rule violations and the daily productivity index could now be stored in the computer database as bases for management decisions, e. Training and Development Applications ~ These are used primarily to track down the need for employees training programs, courses to attend, certified skills and educational qualifications. Career applications assess the employees’ career interests, work values and career goals. £ Compensation and Benefits Applications - These includes payroll, job evaluation, salary planning and analysis of executive ‘compensation planning and management benefits. Scanned with CamScannerCase Study 2 ; The Outsider enlerral ction busines Peter Movers Corporation was expanding its operation in its eae manpowee and trading activities, Most of the employees come from ear a a new and freak due to the nature of work. The management feel that they need to : executives to bief up the growing work force. ‘nontechnical executive in the person of Roger Santiago was added to the working teams of managers. He was assigned as assistant to the president and chit ive Officer. The work of Mr. Santiago covers analysis of manpower programs and cost related activities and to give advice to the president of some management aspects that are not generally handled by line managers. The appointment of Mr. Santiago wasnot received well by older managers. They felt that insider should have been placed instead as assistant to the president. Mr. Santiago had difficulty getting some important information from line managers, without the expressed orders from the president. Nevertheless, Mr. Santiago continued to prove his worth by instituting new work programs and managerial activities, that brought substantial improvement in the company operation and profitability. He worked for management compensation systems that gave more benefits and produced more dedicated manpower. He made a lot of improvements in system design and work improvement programs. i Five years later, Mr. Santiago was promoted to the position of vice president. During the period of proving his managerial competence, managerial employees slowly began to like him as a person worthy to the position. His Promotion to the position was well received by all. Note: Use the case format Scanned with CamScannerExercise 2 Name: Section: L TRUE or FALSE. Write T on 1 10. the space provided if the statement is correct and F if the statement is incorrect. (10 pts) Strategic planning is the determination of the overall organization Purpose and goals and how they are to be achieved. Human resource planning is the process of systematically reviewing human resource requirements to ensure that the number of. employees match the required skills. The two important components of human resource planning are requirement aid forecasting Long term forecasting refers to reasonable predictable movements that occur over a period of one year or more. Random variation is an occasion where is no special pattem and is quite difficult to predict or determine. The final component to the strategic management process is that of strategy evaluation and control. Intended strategies consist of strategies that evolve from the grassroots of the organization and can be thought of as what the organizations actually do. Emergent strategies are the results of the rational decisign making by top management as they develop strategic plans. Routine reports are human resource data summarized on a schedule basis like current manpower status, regular employees, contractual employees, supervisors and managerial employees ona regular payroll. On demand reports are reports for analysis. This may pertain to productivity index, individual performance records and other information that may lead to downsizing and other personnel actions. Scanned with CamScannerre Manager) I, MULTIPLE CHOICE. (Roles of the Personnel/Human Reso ; t : number. (10 pts) ch, Direction: Choose the best answer by encircling the letter of ea : j: re requirements to 1. It is the process of systematically reviewing human resov! pl jred skills. ensure that the number of employees match the required ski : : iculum planning a. strategic planning cc. curricul b. human resource planning dd. short-term planning : id how th 2. The determination of the overall organization purpose and goals an 2 are to be achieved. a. strategic planning curriculum planning b. human resource planning d. successor planning 3. A planning technique approach which involves the listing of all the skills, possessed by the workforce which are made to relate to the requirements of the organization. a. strategic planning ¢. curriculum planning b. human resource planning d. short-term planning 4, This is a technique wherein the personnel who are promotable to the higher” position are identified together with their backup or understudy. ' a. skills inventory c. cascade approach b. ratio analysis d. replacement approach 5. A plan is likely to fail through an inherent weakness of having covered too many aspects of personnel management at the very early stage of Human Resource Planning in the firm or government office, a. technique over-load c. bias for quantitative ‘b. over-planning d. isolation of planners 6. The use of so many techniques sometimes leads to thé information. Then the techniques do not get to be ap makes the techniques serve as the trap rather than the gathering of so much plied effectively. This Means for action. 4 a, over-planning a ’ bias é i b. technique over-load 4 for quantitative | isolation of planners 4 7. It is the process of combining the factors for atta | the establishment of condition in the physical or ining @ changed situation in social environment, i directing 9. organizing Hi. a. controlling 7 b, planning Scanned with CamScanner8. An aspect of Human Resource Planning which states the basis of business conditions and forecasts; manpower needs are planned and monitored closely. a. Performance Management c. Career Management b. Systematic Forecasting of d. Management Developnient Manpower Needs 9. An aspect of Human Resource Planning of analyzing, improving and monitoring the performance of each employee and of the organization as a. whole. a. Management Development —_c._ Career Management 3 b. Performance Management d._ Systematic-Forecasting of Manpower Needs 10. An aspect of Human Resource Planning of assessing and determining the development needs of managers for future succession requirements. a. Performance Management c. Career Management b. Management Development Systematic Forecasting of Manpower Needs Scanned with CamScannerIIL. Essay. t that are essential é Discuss the personal qualities of the human resource manager in the success of a company. (5 pts.) Scanned with CamScanner