Module 3 HUMAN RESOURCE PLANNING AND HUMAN RESOURCE INFORMATION SYSTEMSLearning objectives – Discuss how to align a company’s HR planning with its strategic direction – Determine the demand of workers in various job categories – Discuss the advantages and disadvantages of various ways of eliminating a employee surplus and avoiding a shortage – Discuss the types of technologies that can improve the efficiency and effectiveness of HR – Discuss human resource information systems and their various applications for HR activities3 Strategic HR Planning • First component of HRM strategy • All other functional HR activities are derived from and flow out it • Basis in considerations of future HR requirements in light of present HR capabilities and capacities • Proactive in anticipating and preparing flexible responses to changing HR requirements • Both internal and external focus4 Strategic HR Planning • Goes beyond simply hiring and firing • Involves planning for deployment in line with organization and/or business unit strategy • May involve: – Reassignment – Training and development – Outsourcing – Using temporary help or outside contractors – Needs as much flexibility as possibleStrategic Human Resource Planning • Strategic HR planning is a systematic process for identifying the human capital required to meet business goals and developing the strategies to meet these requirements • HR managers, senior executives and line managers work together to develop and implement the organisation’s strategic business plans • Employees’ needs and wishes for career development are integrated with organisational goals • There is adherence to principles of equal opportunityHard Costs  Advertisements  Headhunter, recruiting fees  Interview training  Travel costs  Admin expenses  Costs of lost production  Bonuses  Increased salaries  Cost to replace a fully proficient employee - 70-200% annual salary Soft Costs  Lost business and customer contacts  Decreased productivity due to training and learning curve gaps  Orientation and training time  Decline in team morale and productivity  Increased turnover due to the “follow-me” effect 6 Why HR planning needs to be effective? Cost of replacing employeesOverview of the human resource planning process Step 1 Supply Analysis  Staffing levels  Workforce skills  Workforce demographics\  Employment trends Step 2 Demand Analysis  Workforce skills needed  Staffing patterns  Anticipated workload changes Step 3 Gap Analysis  Compare supply analysis with demand analysis  Determine future gaps (shortages) and surpluses (excesses)  Identify future changes in workforce demographics  Identify areas in which management action will be needed Step 4 Strategy Development  Plan o Recruiting o Succession o Employee development and retraining o Organizational changeForecasting • Attempts to determine the supply of and demand for various types of human resources to predict areas within the organisation where there will be future labour shortages or surpluses: – determining employee demand – determining employee supply • transitional matrices: matrices showing the proportion or number of employees in different job categories at different timesForecasting methods  Trend Analysis – a quantitative approach to forecast future personnel needs based on extrapolating information from historical changes  Delphi Technique –forecasts and judgments of a group of experts are solicited and summarized to determine the future of employment  Impact Analysis –trends are analyzed by a panel of experts who then predict the probability of future events  Scenario Planning –creating future scenarios that differ radically from those created by extrapolation of present trends 9Trend Analysis • Historical relationship between a business index (e.g., sales, contracts, units sold etc.) and the number of employees required to achieve that index (labour demand) Year Sales ($000) # of Employees Ratio (Sales/EE) 2007 $3,000 123 24.39 2008 3,200 155 20.65 2009 3,300 170 19.41 2010 3,400 165 20.61 2011 3,560 180 19.78 2012 3,600 189 19.05 2013 3,800 190 20.00 2014 4,000 199 20.10 Current Year11 Define and refine the issue or question Identify the experts, terms, and time horizon Orient the experts Issue the first-round questionnaire Issue the first-round summary and second-round questionnaire Continue issuing questionnaires Sequential surveys with feedback on opinions in previous rounds Steps in Delphi TechniqueProjections of future demand for human resources based on differing assumptions about future events 12 Optimistic Normal Pessimistic Now T + 2 Years T + 1 Year T + 3 Years Scenario forecastsFigure 7.2 Leading indicators of the demand for labour for a hypothetical car parts manufacturerGoal setting and strategic planning • Reducing an expected employee surplus, e.g. – downsizing, early retirement programs Or • Avoiding an expected employee shortage, e.g. – employing temporary workers, outsourcing, overtime and expanding worker hoursDownsizing The planned elimination of large numbers of personnel to enhance organisational effectiveness – Workforce reduction: a cost-cutting approach emphasising short-term results and redundancies – Organisational redesign: restructuring or delayering the organisation, eliminating functions, layers and work processes – Systemic change: organisational cultural change involving all staffWhy organisations engage in downsizing • Cost reduction • Introduction of new technology • Mergers and acquisitions leading to reduced need for bureaucracy • Globalisation and changing location of businessTable 7.2 Options for reducing an expected labour surplusMajor reasons for the failure of downsizing • Initial cost savings but long-term negative effects • Loss of people who are ‘irreplaceable assets’ • ‘Survivor syndrome’: loss of motivation, self-absorption, risk-aversion • ‘Survivors’ seek new employment • Reputational damageHuman resource information system (HRIS) • A system used to acquire, store, manipulate, analyse, retrieve and distribute information related to a company’s human resources Factors leading to use of more sophisticated HRIS • Development of increasingly complex and comprehensive IT systems • Economic pressures • Increasing demands by government for organisations to collect employee dataBroad functions for HRIS • Used for three broad functions: – Transaction processing: computations and calculations used to review and document HR decisions and practices. This includes documenting relocation, training expenses and course enrolments and filling out government reporting requirements – Decision support systems: help managers solve problems. They usually include a ‘what if ’ feature that allows users to see how outcomes change when assumptions or data changeBroad functions for HRIS – Expert systems: computer systems incorporating the decision rules of people deemed to have expertise in a certain area. Expert systems have three elements: • a knowledge base that contains facts, figures and rules about a specific subject – a decision-making capability that draws conclusions from those facts and figures to solve problems and answer questions – a user interface that gathers and gives information to the person using the systemWhat technology enables • Employees to control their training and benefits enrolments (self-service) • A paperless employment office • Streamlining of HR’s work • Knowledge-based decision-support technology, which allows employees and managers to access knowledge on an as- needed basis • Employees and managers to select the type of media they want to use to send and receive information • Work to be completed at any time, any place, day or night • Closer monitoring of employees’ workHR technologies • Interactive voice technology • Internet • Networks and client-server architecture • Relational databases • Imaging • Laser disc technology • Groupware, intranets and portals • Global positioning systemsHRIS: examples of applications for HRM • HR planning: – succession planning: identifying and tracking high- potential employees capable of filling higher level managerial positions – workforce profile analysis: generating information regarding employee demographics, such as age, the number of employees in each job classification, and the interaction between demographics and company characteristics – workforce dynamics analysis: analysing employee movement over timeHRIS: examples of applications for HRM • Staffing: – applicant recruiting and tracking: helps a company maintain its information on job candidates and identify suitable candidates for particular positions – employee database development • Performance management • Learning and career development • Compensation and benefits: – Payroll, job evaluation, salary surveys, salary, planning, international compensation, benefits management