Chapter
Strategy and Human
Resources Planning
Managing Human Resources
PowerPoint Presentation by Monica Belcourt, York University
and Charlie Cook, The University of West Alabama
Learning Outcomes
1.
2.
3.
4.
5.
Identify the advantages of integrating human resources
planning and strategic planning.
Understand how an organization’s competitive
environment influences strategic planning.
Understand why it is important for an organization to do
an internal resource analysis.
Describe the basic tools for human resources
forecasting.
Explain the linkages between competitive strategies and
HR.
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2–2
Learning Outcomes (cont’d)
6.
7.
Understand what is required for a firm to successfully
implement a strategy.
Recognize the methods for assessing and measuring the
effectiveness of strategy.
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2–3
Strategic Planning and Human Resources
Strategic Planning
Human Resources Planning (HRP)
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2–4
Strategic Planning and HR Planning
 Strategic Human Resources
Management (SHRM)
 The pattern of human resources deployments and
activities that enable an organization to achieve its
strategic goals.
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2–5
HRP and Strategic Planning
 Strategic Analysis
 Strategic Formulation
 Strategic Implementation
Human Resources
Planning
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Strategic
Planning
2–6
Step One: Mission, Vision, and Values
 Mission
 Strategic Vision
 Core Values
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Step Two: Environmental Analysis
 Environmental Analysis
 The systematic monitoring of the major external forces influencing the
organization.
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Figure 2–2
Five Forces Framework
New Entrants
Suppliers
Rival
Firms
Customers
Substitutes
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Step Three: Internal Analysis
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Scanning the Internal Environment
 Cultural Audits
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Competitive Advantage through People
 Core Competencies
 Sustained competitive advantage through
people is achieved if these human
resources:
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Composition: The Human Capital Architecture
 Strategic knowledge workers
 Core employees
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Composition: The Human Capital Architecture
(cont’d)
 Supporting Labour
 Alliance or Partners
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Forecasting: A Critical Element of Planning
 Forecasting involves:
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Figure 2–4
Model of HR Forecasting
FORECASTING DEMAND
Considerations
Techniques
• Product/service demand
• Technology
• Financial resources
• Absenteeism/turnover
• Organizational growth
• Management philosophy
• Trend analysis
• Managerial estimates
• Delphi technique
Techniques
• Staffing tables
• Markov analysis
• Skills inventories
• Management inventories
• Replacement charts
• Succession planning
BALANCING
SUPPLY AND
DEMAND
(Shortage)
Recruitment
• Full-time
• Part-time
• Recalls
External Considerations
• Demographic changes
• Education of the workforce
• Labour mobility
• Government policies
• Unemployment rate
(Surplus)
Reductions
• Layoff
• Attrition
• Termination
FORECASTING SUPPLY
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Forecasting a Firm’s Demand for Employees
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Quantitative Approach: Trend Analysis
 Forecasting labour demand based on an organizational
index such as sales:
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Figure 2–5
Example of Trend Analysis of HR Demand
BUSINESS
FACTOR
YEAR

(SALES IN THOUSANDS)
LABOUR
PRODUCTIVITY
(SALES/EMPLOYEE)
=
HUMAN RESOURCES
DEMAND
(NUMBER OF EMPLOYEES)
2002
$2,351
14.33
164
2003
$2,613
11.12
235
2004
$2,935
8.34
352
2005
$3,306
10.02
330
2006
$3,613
11.12
325
2007
$3,748
11.12
337
2008
$3,880
12.52
310
2009*
$4,095
12.52
327
2010*
$4,283
12.52
342
2011*
$4,446
12.52
355
*Projected figures
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Qualitative Approaches
 Management Forecasts
 Delphi Technique
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Forecasting the Supply of Employees: Internal
Labour Supply
 Staffing Tables
 Markov Analysis
 Skill Inventories
 Replacement Charts
 Succession Planning
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Forecasting Internal Labour Supply
 Staffing Tables
 Markov Analysis
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Hypothetical Markov Analysis for a
Telecommunication Company
Year 2011
Director
Marketing
Year
2012
Senior Manager
Marketing
Regional Manager
Marketing
Exit
Director
Marketing (n =
4)
3 (75%)
-
Senior
Manager
Marketing (n=6)
2 (33%)
1 (17%)
1 (17%)
2 (33%)
Regional
Manager
Marketing (n=5)
-
2 (40%)
1 (20%)
2 (40%)
Supply (n=15)
5
3
2
5
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1 (25%)
2–23
Internal Demand Forecasting Tools
 Skill Inventories
 Replacement Charts
 Succession Planning
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External Labour Supply
 Canadian Occupational
Projection System
(COPS)
 Job Futures
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2–25
Step Four: Formulating Strategy
 Strategy Formulation
 SWOT analysis
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Corporate Strategy
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Business Strategy
 Value Creation
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Functional Strategy: Ensuring Alignment
 External Fit (or External Alignment)
 Internal Fit (or Internal Alignment)
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Step 5 Strategy Implementation
 Human resources
management is critical to
every aspect of strategy
implementation.
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Human Capital Readiness: Gap Analysis
 The process of evaluating the availability of critical
talent in the company and comparing it to the
form’s strategy.
Demand
Supply
Gap
(shortage or surplus)
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Labour Surpluses
 Downsizing
 Restructuring
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Lay off strategies
 Collective agreements
 Last hired, first fired
 By units
 Seniority
 Least competent
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Workforce Reduction options
 Reduce hours
 Eliminate shifts
 Transfers
 Attrition
 Hiring freeze
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Termination Strategies
 Severance pay
 Outplacement services
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Effectiveness of Restructuring
 Financial measures
 Climate
 Public image
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Labour Shortages
 Hiring full time
 Working overtime
 Hiring part time
 Temporary staffing agencies
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Step Six: Evaluation and Assessment
 Evaluation and Assessment Issues
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2–38
Measuring Strategic Alignment
 Strategy Mapping and the Balanced Scorecard
 Balanced Scorecard (BSC)
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Ensuring Strategic Flexibility for the Future
 Organizational Capability
 Capacity of the organization to act and change in pursuit of sustainable
competitive advantage.
 Coordination flexibility
 Resource flexibility
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Assessing the HR Function
 Compliance
 Client satisfaction
 Culture management
 Cost control
 Contribution
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