Human Resource Planning

What is Human Resource

Planning (HRP)?
 Human resource planning
∟ Process of determining the human
resources needs of an organization and
ensuring that the organization has the right
number of qualified people in the right jobs at
the right time
The Importance of HRP

• Trends and events that affect the economy also create

opportunities and problems in obtaining HR.

• HRP concentrates on assessing the HRs, required by an

organization through the different stages of the
organization’s life cycle and through changes in its
conditions over time.

 Organizations should carry out HR planning so as to meet

business objectives and gain a competitive advantage
over competitors.
External Factors Affecting HRP

 Economy
 Technology
 Law
 Demography
 Geographic conditions
 Society
Overview of HR Planning Process

Figure 2.2:
 Qualitative Forecasting: Managerial Judgements

- In this process, managers discuss and agree on a

requirement of manpower. There are two common ways of
doing it: the bottoms-up approach and the top-down
approach
- Allocation planning: This method involves judgments about
labor supply or demand on the basis of the observation of
the movement of employees across different roles at the
same organizational level.
 Quantitative Forecasting

•Trend analysis: Constructing and applying statistical models that

predict labor demand for next year, given relatively objective statistics
from previous year.

•Ratio analysis: Like trend analysis, this uses the ratio between some
causal factor (such as production volume) and the number of skilled
operators to forecast the requirement (e.g., the number of operators).

- Transitional matrix/Flow model: This model bases the HR demand

forecast on analyses of different kinds of movement of employees
over specific time periods in the past.
 Transitional Matrix –
Auto Parts Manufacturer Example
Table 2.1:
Determine Labor Surplus or Shortage

• Based on forecasts for labor demand and supply,

planner can compare figures to determine whether
there will be a shortage or surplus of labor for each
job category.
Options for Reducing a Surplus

Pay or hour
Downsizing reductions Demotions

Transfers Work sharing Hiring freeze

Natural attrition Early retirement Retraining

Downsizing - Four Objectives

1. Reduce Costs

2. Replace Labor with Technology

3. Mergers and Acquisitions

4. Move to More Economical Location

Options for Avoiding a Shortage

Temporary
Overtime Outsourcing
employees

Retrained Turnover New external

transfers reductions hires

Technological
innovation
Employing Temporary Workers and
Outsourcing

The most widespread methods for eliminating a

labor shortage are hiring temporary and contract
workers and outsourcing work.
• Outsourcing - contracting with another
organization to perform a broad set of
services.
HR Strategies for Addressing a Labor
Shortage or Surplus
Table 2.2:
 Global Staffing Policy
Types of Staffing Policies
 The ethnocentric approach: key management positions
are filled by parent-country nationals
 The polycentric approach: host country nationals manage
local subsidiaries and parent country nationals hold
positions at HQ
 The geocentric approach: the best people are sought for
key jobs throughout the organization, regardless of their
nationality
 The most attractive policy is the geocentric approach, however
it is not always easy to implement
 Sources of Human Resources

Home-country Host-country Third-country

nationals. nationals. nationals.

Temporary or
contingent
Inpatriates.
employees when
outsourcing.

© McGraw-Hill Education 16
 Home-Country Nationals

Home-country nationals are managers who are citizens of the country where the
MNC is headquartered.
These managers commonly are called expatriates, or simply “expats,” which
refers to those who live and work outside their home country.

• In many instances, host-country nationals may

be better suited for the job.
In recent years,
• A common reason for using home-country
there has been a
nationals is in start up operations.
trend away from
• Another is to provide technical expertise. using home-
• A third is to help the MNC maintain financial country nationals.
control over the operation.
 Home-Country Nationals

• Attractive when:
• There is a lack of qualified individuals in the host
country to fill senior management positions
• A unified corporate culture is desired
• The firm wants to transfer knowledge of core
competencies to the foreign operation
• Unattractive because:
• It limits the advancement of host country nationals
• It can lead to cultural myopia

© McGraw-Hill Education 18
 Host-Country Nationals

Host-country nationals are local managers who are hired

by the MNC.
Attractive because:
• The firm is less likely to suffer from cultural myopia
• It may be less expensive to implement
Unattractive because:
• Host country nationals do not gain foreign experience and
cannot progress beyond senior positions in their own
subsidiaries
• A gap can form between host country and parent
managers

© McGraw-Hill Education 19
 Third-Country Nationals

Third-country nationals (TCNs) are An inpatriate is from a host country

citizens of countries other than the or a third-country national assigned
MNC’s home country or the host to work in the home country.
country.
• This growing use of inpats is
• Salary and benefit packages are helping MNCs better develop
usually less. their global core competencies.
• They have working knowledge or • Global managers or transnational
speak the local language. managers are emerging.
• They can often achieve objectives • These new managers manage
more effectively than expatriates across borders and do not fit the
or local nationals. traditional mold.
• They offer different views. • These global managers are in
• In JVs, TCNs can demonstrate a great demand.
global image.

© McGraw-Hill Education 20
 Subcontracting and Outsourcing

Offshore outsourcing is made possible by the increasing organizational

and technological capacity of companies to separate, coordinate, and
integrate geographically dispersed human resources.
• Whether employed directly by the firm or contracted out.
• Lean production systems, advanced telecommunications, and rising
levels of education worldwide, make outsourcing attractive for HR.
These developments are not without controversy.
• Though politically controversial, outsourcing can save companies
significant costs.
• Outsourcing can create quality control problems for some
companies.
Overall, offshoring is a trend that does not appear to be on its way out

© McGraw-Hill Education 21
 Job Analysis
and Designing Job
Video

 What is Work Design?

 Why Work Design is important?
 Job Analysis: Job Descriptions; Job Specifications

[Link]
b_channel=CentreforTransformativeWorkDesign
 Need to Know

1. Elements of work-flow analysis and how work-flow is related

to an organization’s structure.
2. How to obtain information for a job analysis.
3. Elements and trends in job analysis and their significance in
HRM.
4. Methods for designing a job so that it can be done efficiently
and motivating.
5. How organizations apply ergonomics to design safe jobs and
plan for mental demands of a job.
Work Flow In Organizations

Figure 2.6:

Work Flow
Position Job
Design
• Process of • Set of job • Set of related
analyzing tasks duties duties.
necessary for performed by a
production of a particular
product or person.
service.
 Figure 2.7:
Developing a Work-Flow Analysis
Work-Flow Design and Organization’s
Structure
Within an organization, units and individuals must
cooperate to create outputs.
The organization’s structure brings together people who
must collaborate to efficiently produce desired outputs.
1. Centralized
2. Decentralized
3. Functional
4. Product or Customer
Firefighters work as a team.
They and their equipment are
the inputs and the output is an
extinguished fire and the rescue
of people and pets.
In any organization or team,
workers need to be cross-
trained in several skills to create
an effective team.
 Job Analysis

Figure 2.8:
Job Analysis
Process of getting
detailed information
about jobs.
Job Descriptions

Job Specifications
Job Descriptions

Job Description: a list of tasks, duties, and

responsibilities (TDRs) that a particular job entails.
Key components:
 Job Title
 Brief description of the TDRs
 List of the essential duties with detailed specifications of the
tasks involved in carrying out each duty
 Figure 2.9
Sample Job Description
Job Specifications

Job Specification: list of knowledge, skills, abilities,

and other characteristics (KSAO needed to perform
a particular job.
1. Knowledge: factual or procedural information
necessary for successfully performing a task.
2. Skill: an individual’s level of proficiency at performing
a particular task.
3. Ability: a general enduring capability that an
individual possesses.
4. Other Characteristics: job-related licensing,
certifications, or personality traits.
 Figure 2.10:
Sample Job Specifications
Sources of Job Information

Incumbents – people who currently hold the position

in the organization.

Dictionary of Occupational Titles (DOT) – published by

U.S. Department of Labor

Occupational Information Network (O*NET) – an

online job description database developed by the
Labor Department
Firgure 2.11:
 Position Analysis Questionnaire (PAQ)

What is it? Key sections:

A standardized job analysis 1. Information input
questionnaire containing 2. Mental processes
194 questions about work 3. Work output
behaviors, work conditions, 4. Relationships with other
and job characteristics that persons
apply to a wide variety of 5. Job context
jobs. 6. Other characteristics
Fleishman Job Analysis System

What is it? Categories of Abilities:

Job analysis technique • Written comprehension
that asks subject-matter • Deductive reasoning
experts to evaluate a job • Manual dexterity
in terms of the abilities • Stamina
required to perform the • Originality
job.
 Analyzing Teamwork

Figure 2.12:
Importance of Job Analysis

Job analysis is so • Work redesign

important to HR managers • HR planning
that it has been called the • Selection
building block of all HRM • Training
functions.
Almost every HRM • Performance appraisal
program requires some • Career planning
type of information • Job evaluation
determined by job analysis.
 Table 2.4:

Competency Model
Trends in Job Analysis

Organizations are viewed as a field of work needing to

be done, rather than as a set series of jobs held by
individual
Dejobbing – designing work by project rather than jobs.
Job Design

Job Design: the process of defining how work will be

performed and what tasks will be required in a given
job.
Job Redesign: a similar process that involves changing
an existing job design.
To design jobs effectively, a person must thoroughly
understand:
 job itself (through job analysis) and
 its place in the units work-flow (work-flow analysis)
 Figure 2.14:
Approaches to Job Design
Designing Efficient Jobs

Industrial Engineering: study of jobs to find simplest

way to structure work to maximize efficiency.
Reduces complexity of work.
Allows almost anyone to be trained quickly and easily
perform the job.
Used for highly specialized and repetitive jobs.
 Figure 2.15:
Characteristics of a Motivating Job
Designing Jobs That Motivate:
The Job Characteristics Model
1. Skill variety – extent to which a job requires a variety
of skills to carry out tasks involved.
2. Task identity – degree to which a job requires
completing a “whole” piece of work from beginning
to end.
3. Task significance – extent to which the job has an
important impact on lives of other people.
Designing Jobs that Motivate:
Job Characteristics Model

4. Autonomy – degree to which the job allows an

individual to make decisions about the way work will
be carried out.
5. Feedback - extent to which a person receives clear
information about performance effectiveness from
the work itself.
 Figure 2.16:
Characteristics of a Motivating Job
Designing Jobs That Motivate
Job Enlargement

Job Enlargement - Broadening types of tasks

performed in a job.

Job Extension - Enlarging

Job Rotation - Enlarging
jobs by combining several
jobs by moving employees
relatively simple jobs to
among several different
form a job with a wider
jobs.
range of tasks.
Designing Jobs That Motivate

Job Enrichment Self-Managing Work Teams

• Empowering workers by Have authority for an
adding more decision- entire work process or
making authority to segment
Team members
jobs. motivated by autonomy,
• Based on Herzberg’s skill variety, and task
theory of motivation. identity.
• Individuals motivated
more by intrinsic
aspects of work.
Designing Jobs That Motivate
Flexible Work Schedules
Flextime Job Sharing
•A scheduling policy in which •A work option in which two
full-time employees may part-time employees carry
choose starting and ending out tasks associated with a
times within guidelines. single job.
•A work schedule that allows
time for community and •Enables an organization to
family interests can be attract or retain valued
extremely motivating. employees who want more
time to attend school family
matters.
Figure 2.17:
Alternatives to
8-to-5 Job
Designing Jobs That Motivate Telework

Telework – the broad term for doing one’s work away

from a centrally located office.
•Advantages to employers include:
less need for office space
greater flexibility to employees with special needs
•Easiest to implement for managerial, professional, or
sales jobs.
•Difficult to set up for manufacturing workers.
Designing Ergonomic Jobs

Ergonomics – study of interface between individuals’

physiology and characteristics of physical work
environment.
•Goal is to minimize physical strain on the worker by
structuring physical work environment around the way
the human body works.
•Redesigning work to make it more worker- friendly can
lead to increased efficiencies.
Designing Jobs That Meet Mental
Capabilities and Limitations

• Work is designed to reduce information- processing

requirements of the job.
• Workers may be less likely to make mistakes or have
accidents.
• Simpler jobs may be less motivating.
• Technology tools may be distracting employees from
their primary task resulting in increased mistakes and
accidents.
Ways to Simplify a
Job’s Mental Demands
Limit amount of information and memorization that
the job requires.
Organizations can provide:
adequate lighting
easy-to-read gauges and displays
simple-to-operate equipment
clear instructions