PRINCIPLES & THEORIES OF MANAGEMENT
What is People Management?
People management is defined as a set of practices that encompass the end-to-end
processes of talent acquisition, talent optimization, and talent retention while providing
continued support for the business and guidance for the employees of an organization.
Key Components of People Management – Best Practices to Navigate the Evolving Work Ecosystem
The umbrella term, MAN or people management, holds within its spectrum five key
components that can together effectively build an engaging employee experience to
optimize and retain the best talent better.
1. Create – when we say create, this is not just building a workforce but building also a better future
2. Comprehend – to understand or understanding the present and the future better, hindi lang yung
ngayon yung iniisip kundi pangmatagalan.
3. Communicate – yes! This is very important. Because in best communication, we open channels to
connect effectively
4. Collaborate – cooperating smarter, faster and stronger
5. Challenge – this is not to oppose, instead, optimizing on healthy differences
It’s no secret that people management is probably one of the most important soft leadership skills. This is due
to the following reasons:
It influences productivity via its impact on staff morale and motivation.
It is critical during periods of transition, uncertainty and change.
It is the key to a successful project change management.
Despite these definitions, questions still remain.
What is the essence of people management?
What are the best people management strategies you can implement?
The Essence of People Management in Change Management Processes
Every CEO or senior executive who has overseen a major merger or integration project entailing different and
diverse groups of employees knows the importance of people management during such an operational change
process.
Keep in mind the following during such situations:
Inspire people to change for the better.
Assuage fears when faced with organizational changes and uncertainties.
Introduce new work processes that are essential to the business.
Embark on a new business strategy.
Provide transformational leadership while changing the employees' roles & responsibilities
Aside from all of these things, you need to learn these 4 people management strategies for the benefit of the
entire organization.
4 People Management Strategies You Should Learn Today
1. Know the dynamics of human behavior
When it comes to people management, knowing the dynamics of human behavior is critical.
You need to understand that every person behaves differently when faced with a particular situation. This is
due to the fact that behavior is shaped from various influences such as family and the environment, as well as
from various beliefs, culture and ideology.
You can never expect that you will get the same answers, behaviors and results from all people. Learning all
kinds of behavioral types and social conditioning can help you understand each of the team members you
have in the organization.
In the case of project change management, this will help you anticipate and mitigate potential problems that
might arise.
2. Implement communication transparency
Once you know the behavioral types, implement communication transparency.
Good communication in a project change management process creates an atmosphere of trust among all
those affected by the change. Leaders should share their plans, decision milestones and immediate next steps
with their staff.
Transparency regarding the impact of changes on operations management and related processes leads to
understanding and support from employees.
Note that effective people management also requires that communications be two-way. While you have the
prerogative to speak, you should also listen.
Do you want to see a bigger impact on your team?
3. Give your team a sense of ownership
People management in a change situation can work best if you can give your team a sense of ownership.
Lead by example and entrust team members with specific tasks that best fit their skills.
Once you’ve given your team a sense of ownership, members of your team will grow in confidence and buy-in
to the project change management experience. This holds throughout the process: recognize and
acknowledge employees' responsibilities in achieving mutual successes. Your team will be better motivated
through this transition, as well as any that may follow.
4. Enroll yourself in a leadership development program
As it turns out, your people management skills need to be the sharpest when you have a project change
management experience on the horizon. It pays to be prepared.
Many business management schools offer leadership courses led by skilled trainers with both theoretical and
practical experience to help you develop your personal leadership strengths.
In fact, behavior-based learning including leadership exercises and leadership coaching lets you test and
perfect your approaches with groups. You will also learn better conflict management skills,
effective negotiation skills, and team-building skills to complement your experience and bring you to a new
level in people management.
The Psychology of Relationships
Transactional Analysis is one of the most accessible theories of modern psychology. Transactional
Analysis was founded by Eric Berne, and the famous 'parent adult child' theory is still being developed
today. Transactional Analysis has wide applications in clinical, therapeutic, organizational and personal
development, encompassing communications, management, personality, relationships and behaviour.
Whether you're in business, a parent, a social worker or interested in personal development, Eric
Berne's Transactional Analysis theories, and those of his followers, will enrich your dealings with
people, and your understanding of yourself. This section covers the background to Transactional
Analysis, and Transactional Analysis underpinning theory. See also the modern Transactional Analysis
theory article.
Early Theory
In the 1950s Eric Berne began to develop his theories of Transactional Analysis. He said that verbal
communication, particularly face-to-face, is at the centre of human social relationships and
psychoanalysis.
His starting point was that when two people encounter each other, one of them will speak to the other.
This he called the Transaction Stimulus. The reaction from the other person he called the Transaction
Response.
The person sending the Stimulus is called the Agent. The person who responds is called the
Respondent.
Transactional Analysis became the method of examining the transaction wherein: 'I do something to
you, and you do something back'.
Berne also said that each person is made up of three alter ego states:
1. Parent
This is our ingrained voice of authority, absorbed conditioning, learning and attitudes from when we
were young. We were conditioned by our real parents, teachers, older people, next-door neighbours,
aunts and uncles, Father Christmas and Jack Frost. Our Parent is made up of a huge number of hidden
and overt recorded playbacks. Typically embodied by phrases and attitudes starting with 'how to', 'under
no circumstances, 'always' and 'never forget', 'don't lie, cheat, steal', etc. Our parent is formed by
external events and influences upon us as we grow through early childhood. We can change it, but this
is easier said than done.
2. Child
Our internal reaction and feelings to external events form the 'Child'. This is the seeing, hearing, feeling,
and emotional body of data within each of us. When anger or despair dominates reason, the Child is in
control. Like our Parent we can change it, but it is no easier.
3. Adult
Our 'Adult' is our ability to think and determine action for ourselves, based on received data. The adult
in us begins to form at around ten months old and is the means by which we keep our Parent and Child
under control. If we are to change our Parent or Child we must do so through our adult.
In other words:
Parent is our 'Taught' concept of life
Child is our 'Felt' concept of life
Adult is our 'Thought' concept of life
When we communicate we are doing so from one of our own alter ego states, our Parent, Adult or
Child. Our feelings at the time determine which one we use, and at any time something can trigger a
shift from one state to another. When we respond, we are also doing this from one of the three states,
and it is in the analysis of these stimuli and responses that the essence of Transactional Analysis lies.
At the core of Berne's theory is the rule that effective transactions (ie successful communications) must
be complementary. They must go back from the receiving ego state to the sending ego state. For
example, if the stimulus is Parent to Child, the response must be Child to Parent, or the transaction is
'crossed', and there will be a problem between sender and receiver.
If a crossed transaction occurs, there is ineffective communication. Worse still either or both parties will
be upset. In order for the relationship to continue smoothly, the agent or the respondent must rescue
the situation with a complementary transaction.
In serious break-downs, there is no chance of immediately resuming a discussion about the original
subject matter. Attention is focused on the relationship. The discussion can only continue constructively
when and if the relationship is mended.
Here are some simple clues as to the ego state sending the signal. You will be able to see these clearly
in others, and in yourself:
Parent
Physical - angry or impatient body-language and expressions, finger-pointing, patronising gestures,
Verbal - always, never, for once and for all, judgmental words, critical words, patronising language,
posturing language.
N.B. beware of cultural differences in body language or emphases that appear 'Parental'.
Child
Physical - emotionally sad expressions, despair, temper tantrums, whining voice, rolling eyes,
shrugging shoulders, teasing, delight, laughter, speaking behind hand, raising hand to speak, squirming
and giggling.
Verbal - baby talk, I wish, I dunno, I want, I'm gonna, I don't care, oh no, not again, things never go right
for me, worst day of my life, bigger, biggest, best, many superlatives, words to impress.
Adult
Physical - attentive, interested, straight-forward, tilted head, non-threatening and non-threatened.
Verbal - why, what, how, who, where and when, how much, in what way, comparative expressions,
reasoned statements, true, false, probably, possibly, I think, I realise, I see, I believe, in my opinion.
And remember, when you are trying to identify ego states: words are only part of the story.
To analyse a transaction you need to see and feel what is being said as well.
Only 7% of meaning is in the words spoken.
38% of meaning is paralinguistic (the way that the words are said).
55% is in facial expression. (source: Albert Mehrabian - more info )
There is no general rule as to the effectiveness of any ego state in any given situation (some people
get results by being dictatorial (Parent to Child), or by having temper tantrums, (Child to Parent), but
for a balanced approach to life, Adult to Adult is generally recommended.
Transactional Analysis is effectively a language within a language; a language of true meaning, feeling
and motive. It can help you in every situation, firstly through being able to understand more clearly what
is going on, and secondly, by virtue of this knowledge, we give ourselves choices of what ego states to
adopt, which signals to send, and where to send them. This enables us to make the most of all our
communications and therefore create, develop and maintain better relationships.
Understanding Our Ego States
Transactional Analysis (TA) is a theory of personality and behaviour which helps us understand the
psychological make-up of individuals. It was formulated by an American Psychiatrist Eric Berne in 1958.
Berne observed that as you watch and listen to people you can see them change before your eyes. There
are simultaneous changes in facial expression, vocabulary, gestures, posture and body functions. He
realised the existence of ego states when he made an interesting observation in a client. In a session, at
times his client had the voice and manner of a small child and suddenly she would transform to a selfrighteous parent who was critical and dogmatic in her manner. There were also moments when she
sounded like a grown-up woman who reasoned her situation logically.
This lead to a study which interpreted the above observation as follows — within each one of us lies our
our own parents, our versions of ourselves when we were children and an adult which has been
developing all along in response to the current reality.
These three states of being are psychological realities — the Parent Ego State, the Adult Ego State and
the Child Ego State.
In this context, ‘Ego’ does not mean what it usually does in our day-to-day life (that is self-importance).
An Ego State is a state of being that the person experiences at a given point of time.
The Parent Ego State
Is a set of feelings, attitudes and behaviours taken from the parents and other significant parental figures
in the environment. The parent is a huge collection of recordings in the brain as perceived by the person
in roughly first five years of his life. Everything the child saw his parents say or do is recorded in the
parent. This data is taken in directly without any editing or questioning. So parental prejudices,
preferences, decisions are taken into the child’s belief system and sit in a state of being called the
Parent.
If parents, amongst themselves, don’t have consistent views then the recordings in the child are
weakened leading to a fragmented parent. In this case, since the data recorded from both parents is not
in harmony, it doesn’t prove to be a strong positive influence in the child’s life. There is more confusion
rather than a strong sense of direction.
These recordings are not just from parents. The parent ego state also has information learnt from older
siblings, teachers and other figures of authority. Much of the parent data appears in the ‘how to’ category.
Basically, how to make a meal, how to respond to people, how to shake hands, etc. The parent ego state
contains thousands of rules, most fortified with never and always.
A person whose early instructions were accompanied by stern intensity may find it more difficult to
examine the old ways and hang onto them long after they are useful, having developed a compulsion
to do it ‘this way or no other way’-Thomas Harris, Psychiatrist
Exercise : Think of one behaviour you have in response to a given situation that exactly matches either
of your parents. For example: If one of your parents habitually reprimanded offenders in a loud voice,
in a similar situation would you do the same? If so, then that is an example of your Parent Ego State.
The response has been swallowed without questioning its usefulness in the current day situation.
The Child Ego state
Is the archaic feelings, attitudes and behaviours which are remnants of the person’s past. While external
events are being recorded as the body of data called The Parent, the internal events (responses of the
little person to what he sees and hears) are recorded in The Child. Since the little child does not really
have a developed vocabulary most of his early experiences are recorded as feelings.
In Adulthood, when the person is faced with difficult situations it could transport him back to his
childhood feelings of frustration, anger or rejection as the child in him replays repressed emotions. The
people around have changed but the feelings of helplessness, anger and disappointment are the same.
It’s a play out of old feelings that were imbibed during development.
The child also has happy emotions recorded — like the first time he played in mud, got wet in the rain,
cuddled a pet, etc. Creativity and curiosity both come from the child in us.
Exercise : Recall a situation where you responded just the way you would when you were a little child.
For example: In childhood, when your parents scolded you, would you sulk for hours because you didn’t
have permission to express your anger at them? Or, would you shout back at them? Either way, is this
the same way you respond when you get angry with others today? If so, this is an example of your Child
Ego State.
The Adult Ego State
is the set of feelings, attitudes and behaviours that are in direct response to the here-and-now reality.
Responses are not based on the past. The Adult state of being is attentive to the present, evaluates prosand-cons, gathers data, asks questions, clarifies, reasons logically and takes responsibility. This ego state
starts developing at the age of ten months.
Under excessive stress, the Adult might get impaired and not be able to function normally. The
boundaries between Parent, Adult and Child Ego states are fragile. In the event of bad news, the Adult
might get overwhelmed enough to quit being a problem-solver and become a mere onlooker. Like a
muscle in the body, the Adult grows and develops through training and use. The Adult function develops
best through self-work and introspection.
Exercise : Think of a situation you handled without prejudice or baggage. A decision you made logically
with an open mind. This is an example of using your adult function. It’s a response which could be
different from from how your parents would have responded in a similar situation. It’s also different
from how the child in you would have dealt with it.
Decisions taken from the Adult are usually beneficial in problem-solving. For example: When somebody
is angry with you, instead of teaching them a lesson (Parent Ego state) or crying (Child Ego State), you
ask the person what he needs from you (Adult Ego State).
For healthy living we need all Ego states. The goal is not to do away with the Parent and Child but to
examine these bodies of data.
-Eric Berne, Psychiatrist
The above theory can help us make some interesting observations about ourselves. When someone
comes knocking at the front door of life, who responds first? The Parent, the Adult or the Child?
Introduction to Transactional Analysis series
Today most of us want to understand who we are, why we are, where are we going with our lives. I
would like to introduce Transactional Analysis (TA) as a model for understanding self and others. I will
be writing this as a series so do follow if you are interested and ask questions. I will start by explaining
Transactional Analysis. Transaction Analysis (TA) is a field of applied psychology developed by Dr. Eric
Berne (Author of Games people play) in the 1960s. It is widely recognized as a theory of personality,
communications, child development and psychopathology. TA offers a systematic framework for
personal growth and development; understanding human interactions and dysfunctions; and improving
human relations.
How is TA helpful to us?
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TA is a wonderful model to understand individuals and relationships.
TA can provide deep insights into a person’s personality.
TA can be used to improve inter-personal relationships
TA helps to re-evaluate life-goals
What Is Behavior Modification? Psychology, Definition, Techniques & Applications
Behavior modification is the process of changing patterns of human behavior over the long term using
various motivational techniques, mainly consequences (negative reinforcement) and rewards (positive
reinforcement). With positive and negative reinforcement, the ultimate goal is to swap objectionable,
problematic, or disagreeable behaviors with more positive, desirable behaviors. Behavior modification
techniques work with just about everyone and have many potential applications, from improving a
child’s behavior to motivating employees to work more efficiently.
Behavior modification is also used often to treat obsessive-compulsive disorder (OCD), attention deficit
hyperactivity disorder (ADHD), irrational fears, drug and alcohol addiction issues, generalized anxiety
disorder, and separation anxiety disorder in clinical settings.
It’s easy to make a change. The hard part comes in making the change stick. Anyone can say they’re
going to quit smoking and then ignore one or two cravings, or commit to an exercise regimen and then
hit the gym twice in a week. The challenge is to stick with the new habit, which is not so easy. This is
where behavior modification comes in.
Behavior modification says that we can change the way we act, or react, by learning and by attaching
consequences to our actions. You can’t force someone to change their behavior. You can, however,
motivate them to change their behavior by changing the environment and offering incentives.
The psychologist B.F. Skinner, known for his research on operant conditioning (the precursor to
behavior modification) and behavior analysis, postulated that if the consequences of an action are
negative, there is a good chance the action or behavior will not be repeated, and if the consequences
are positive, the chances are better that the action or behavior will be repeated. He referred to this
concept as “the principle of reinforcement.”
Put simply, Skinner’s behavior analysis modification model is a way to change habits by following
actions up with positive consequences and negative consequences to either break bad habits or
reinforce good habits to continue.
You can try to develop and implement a behavior modification plan on your own, or you can find a
counselor or therapist who specializes in behavior modification therapy.
Behavior Modification Techniques
Positive reinforcement: Just like it sounds, positive reinforcement is rewarding good behavior with some
kind of motivator. This might take the form of verbal praise, extending a privilege, or offering some kind
of remuneration. Examples include a student who receives a dollar for each A or B on their report car
or a salesperson earning a weekend getaway for reaching a sales goal.
Negative reinforcement: Two types of negative reinforcement are positive punishment, where adding a
consequence is supposed to deter future repetition of bad behavior, and negative punishment, which
involves taking something away. Examples of positive punishment are making your child write an
apology letter to someone, making your child do an extra chore or making them do their sibling’s chores
after dumping a snack on the living room floor or making them go to the bus stop extra early because
they always miss the bus for school. In positive punishment, a stimulus, or punishment is added in
hopes to stop negative behaviors. Where positive punishment adds something, negative punishment
takes something pleasant away. Negative punishment might be taking recess away from a child who
forgot their homework, not allowing a teen to go to the mall with friends after they were caught by
sneaking in after curfew last weekend, or taking away their talk radio when they listen to talk radio
loudly. Negative punishment is meant to encourage good behavior.
Extinction: When the reinforcements for curbing or encouraging behavior are decreased or
discontinued altogether, this is known as extinction. This is most often used in terms of a parent giving
attention to a child who has an attention-seeking habit. If the parent reacts every time the child exhibits
this particular habit, the child will most likely continue to perform the annoying habit to continue receiving
the attention – even though it is negative attention – from the parent. If, on the other hand, the parent
begins to ignore the child when they do this obnoxious thing, the child will be to realize their actions will
no longer produce the reaction – the positive reinforcement in the form of attention – from the parent.
Eventually, knowing she’ll no longer get the positive attention they seek, the obnoxious behavior will
discontinue.
Shaping: The process of shaping reinforces behaviors that are similar to a new, more desirable
behavior. This usually occurs in steps and is often applied in cases where the ultimate goal is to
overcome irrational fears or manage anxiety disorders. Examples of shaping might be for someone
who has arachnophobia (afraid of spiders) to look at a picture of a spider, then work their way up to
holding a stuffed animal spider, to remove the fear’s power and desensitize the individual with the
phobia.
Fading:Also referred to as conditioning, fading is the process of gradually withdrawing the
reinforcement until artificial motivation is no longer needed. After all, the ultimate goal is for the habit or
child’s behavior to become second nature. Examples of fading would include wanting your child to get
A’s on every report card, eventually without having to give them money every time. Fading gradually
removes the old stimulus, getting money in exchange for good grades, when it is replaced with a new
stimulus, such as pride in getting straight A’s and making the most of their education.
Chaining: Behavior chains link individual behaviorsto form a larger behavior. By breaking down a task
into its simplest and most basic steps, it minimizes the potentially overwhelming factor of seeing the
larger behavior by itself. A behavior chain for forming a habit of going to the gym might include steps
like sign up for gym membership, purchase or gather workout clothes, pack gym bag, fill water bottle,
drive to the gym, check in, do 15 minutes of cardio, spend 15 minutes on free weights, stay for yoga
class.
Keys To Success
Consistency and positive reinforcement is especially important when using behavior modification to
change unwanted behavior or establish good behavior in children. The process is most effective when
whatever motivation you choose to use is used each time with the desired behavior until the habit is
established. Examples of positive behavior modification would be if you use a sticker chart to praise a
child for making their bed in the morning, they should get a sticker every morning that they make their
bed for positive reinforcement. If you forget or run out of stickers, the chances are good that they will
eventually lose motivation to keep the habit going.
Negative consequences should be administered with predictable frequency as well. If punishment is
doled out inconsistently, a child will learn that they will only experience consequences once in a while
when performing a bad behavior. What you want them to learn is that the bad behavior will be followed
by the negative consequence instead of creating a negative reinforcer. They will only learn to associate
the behavior with the consequence if the consequence follows the behavior every time. Think of a
toddler who is biting other children. If their teacher or daycare providers only sit them in the time-out
chair once out of every three times they bite another child, it is unlikely they will begin to associate biting
with time-out, and he will continue to bite others. If the teacher sits the child in time-out every time they
bite another child, they will start to realize that they have to sit every time they bite, and they will learn
that to avoid having to sit, they need not to bite other children.
With behavioral treatments, it’s also important to have consistency across the board with community
reinforcement– that is, having parents, grandparents, teachers, and other caregivers all working
together to give a child the same consequences and rewards. The consistent application of the behavior
modification plan will help the child change their behavior quickly.
Once a bad habit is broken, or a good habit is established, you can’t just rest on your laurels. Although
it seems like establishing the new behavior pattern might be the most difficult part, it requires continuity
or perpetuation for the new behavior to stick in the long term. This is known as maintenance in behavior
therapy.
Don’t get discouraged, though, if you fall back into bad habits or maladaptive behavior at some point.
This happens, and in some cases, may be inevitable. In fact, you may even want to prepare for relapse
as if it were just another step in the behavior modification process rather than as a failure of the process.
If you truly want to make a change, you can start again and unlearn a bad habit or learn a good one.
Applications For Behavior Modification
What Is Behavior Modification Used For? Behavior modification is often thought of in terms of
children, students, or classroom management for teachers because it is used effectively with children.
It is also often used by therapists and healthcare professionals in adolescent psychiatry. While most
commonly used in adolescent psychiatry, behavior modification can also be effective in other
circumstances with many demographics; in fact, just about anyone can use behavior modification to
break bad habits or create healthy habits. Many adults work with behavior modification programs and
treatment to quit smoking, eat healthily, exercise regularly, work harder, and reach other various goals.
Because no two people are alike, behavior modification plans and programs are never one-size-fits-all.
You may need to tweak or substitute elements of one plan or another to best suit your situation and
your ultimate goals, and behavior modification therapy may work best in conjunction with medications
or other types of therapy or treatment. If you need additional help creating or modifying behavior
modification plans, visit BetterHelp to connect with a licensed therapist.
Cognitive behavioral therapy is one type of therapy that your counselor may try with you. This is where
you identify unhealthy, unhelpful behaviors and thought patterns and work to replace them with healthy,
helpful behaviors and thought patterns. Because CBT is so common, plenty of research also has been
done on how well it works online. A recent publication considered more than 2,500 of those studies to
come to the conclusion that CBT therapy delivered on a computer is just as effective.
There are plenty of additional pros to online therapy. Online therapy tends to be more flexible, and you
may be able to reach out to your counselor via messaging or some other format when you need
additional support with changing a habit. With no wait list, you’re often connected with your counselor
more quickly in the beginning as well; BetterHelp connects most people within 24 hours.
HUMAN RESOURCE MANAGEMENT
Workforce Planning
Taking the time to plan and make decisions as part of a broader strategy improves every aspect of
your business, including your workforce. Despite the size or type of company, workforce planning is a
valuable HR process that ensures you have the staff to execute your business strategy.
Learn what workforce planning is, how it helps with goals and produces positive outcomes, the
benefits it can offer, five key steps in workforce planning, and what it looks like in practice.
Discover:
What is workforce planning?
Primary workforce planning criteria
The goal of workforce planning
How workforce planning affects HR processes
The benefits of workforce planning
The five core workforce planning steps
1. What is workforce planning?
Workforce planning is the process of analyzing existing employees and planning for future staffing
requirements through talent gap assessment, developing employee management procedures, and
setting recruitment strategies.
With effective workforce planning, your business is always staffed with the necessary talent,
knowledge, and experience to produce positive business results.
Workforce planning requires developing an appropriate and cost-effective strategy for retaining,
recruiting, and training your workforce while also continually assessing employee performance.
A survey by the American Productivity & Quality Center (APQC) shows 89% of 236 organizations
integrated workforce planning into their business operations.
The plan for your workforce, what it will look like moving forward, and how to strategize for specific
goals are unique to your business and depend on many factors. Typical components that affect
workforce planning include:
Talent availability
Business growth
Age of the existing workforce
Current knowledge/skill gaps
And much more
Strategic workforce planning
Strategic workforce planning is a proactive approach to managing staffing needs and aligns HR
processes to business-wide goals. It guides future employee plans and decisions, ensuring they
adhere to the company’s long-term vision.
Strategic workforce planning tends to take place at the senior leadership level and focuses on big
picture goals such as:
Structural organization
Employee redeployment
Succession planning
Staffing budgets
Maintaining capacity
Reducing risk
Operational workforce planning
In contrast to strategic workforce planning, operational workforce planning focuses on the business’s
immediate priorities. For example, which staff level can efficiently meet the current deadlines and
objectives?
Primary workforce planning criteria
Criteria to consider when planning for your company’s future workforce include:
Employee numbers: getting the correct workforce size so the business is not overstaffed and
inefficient but not too small to hinder growth and fail to match demand.
Skillset: having the right mix of skills, capabilities, knowledge, and experience to perform effectively
and achieve your goals.
Budget: finding the optimal staffing expenditure to achieve a high return on investment from
employees and maximize profits.
Flexibility: developing your workforce to be agile and adapt quickly when changes in the market
occur.
The goal of workforce planning
The primary goal of workforce planning is to create a strategy for your staffing needs that ensures you
can meet strategic objectives both now and in the future.
To achieve this goal, workforce planning requires an in-depth understanding of your existing
workforce, employee skills, experience, load capability, and potential talent gaps.
Through performance tracking and employee assessment, you can take a birds-eye view of your
entire workforce and create actionable plans for the future.
Workforce planning allows companies to understand and design their workforce effectively and
efficiently with long-term objectives in mind. It prevents problems from developing and allows
management to spot issues early, creating plans to remedy them. Examples could include:
Identifying understaffed departments and potential bottlenecks
Staffing requirement to scale operations
Excess employees for redeployment or termination
How workforce planning affects HR processes
Recruitment and employee development
Workforce planning provides the game plan for your company’s recruitment and employee
development.
With a clear understanding of your existing workforce and your future goals, you can profile the skills,
experience, and knowledge required to meet your needs and develop hiring and training processes to
match.
Companies are constantly competing for the same high-end talent. With appropriate workforce
planning in place, you can better identify future top employees for your business and develop talent
acquisition strategies to attract them to your company.
Plus, workforce planning analysis can help companies formulate proper training and employee
development to fill talent gaps while also finding individuals capable of excelling with the correct
professional development in place.
Succession planning
This leads us to succession planning and ensuring you maintain successful leadership across your
company.
By recognizing the leadership positions currently open or soon to be available, companies can begin
assessing existing employees for promotion or targeting outside hires with the right mix of skill and
experience.
Workforce planning together with succession planning creates a smooth transition for the critical roles
in your company so you can provide an uninterrupted, seamless service or product for your
customers.
Performance management
A significant outcome of workforce planning is managing the performance of your employees to
increase productivity and efficiency.
With workforce planning, you can understand and develop strategies that get the most out of your
employees to increase output and get a higher return on investment from your staffing expenditure.
The benefits of workforce planning
1. Preparing for the future
With workforce planning, you have a roadmap for your staffing requirements to prepare for the future.
This could mean increasing the number of employees to match growth forecasts or pivoting to a
different business model and finding the staff you need to accomplish this.
2. Discovering workforce gaps
Understanding the gaps of your current workforce informs your future personnel strategy in terms of
recruitment, redeployment, and training.
3. Effective succession planning
By identifying and developing employees with the potential for future leadership roles, you can
effectively plan for staff leaving with minimal disruption.
Succession planning can also have a positive effect on employee engagement. Surveys show that:
62% of employees would be “significantly more engaged” if they had a succession plan at their
company.
94% of employers said having succession plans in place positively impacted employee engagement.
4. Improved Retention strategies
Effective workforce planning gives you a clear understanding of employee skills and where they can
be the most successful in the business.
So rather than terminating employees, you can retain valuable staff through well-planned
redeployment.
5. Flexibility
A clear workforce plan with recruitment and training structures in place can make your business more
agile, with the ability to efficiently anticipate and react to change.
You can reduce your overall staffing costs by developing plans to:
Increase your productivity and workforce ROI
Retain talent and reduce costs associated with employee turnover
Develop a flexible workforce that can meet customer demand in different circumstances
Labor costs can account for up 70% of total business costs. Workforce planning allows you to map
talent to value and ensure you are getting the best results for the costs.
The five core workforce planning steps
Successfully implementing new workforce planning strategies is an extensive procedure. However,
businesses can break down workforce planning into five core steps to simplify the process.
1. Deciding strategic direction and goals
Workforce planning is a top-down process requiring clear organizational direction and defined
strategic goals to inform and guide future decisions.
What direction do you see your business going in?
What are you hoping to achieve through workforce planning?
What are the primary goals/milestones you are targeting?
Why does your business need new workforce planning structures?
These are vital questions to ask yourself before analyzing your workforce and implementing new
employee management strategies.
It is also important to remember that every process in your business affects another. Therefore, your
workforce planning must be an organization-wide endeavor and include effective communication
between HR and other departments.
Your new workforce plan must be produced with a collaborative approach that generates a
consensus amongst all invested parties. Without organizational buy-in and a rationale for new
strategies, you cannot reap the benefits of workforce planning.
Consider this step setting the “soft” workforce planning framework that will define the overall strategy
to assess future information rather than the plan’s specific details.
2. Analyze existing workforce
The next step is to properly assess your existing workforce.
Common strategies used in this step include:
Demand Planning – Determining the number of employees needed for each role required to reach
your goal. Demand planning requires accurate business forecasts to determine your workforce’s
future number, structure, and composition.
Internal Supply – Internal supply planning needs accurate talent evaluations, an understanding of
the expected employee turnover rate (retirements, resignations, etc.), and the design of training and
professional development programs.
Gap Analysis – Identifying the gaps in your workforce and making plans to close them through
recruitment, redeployment, and training.
These strategies help to answer the following questions:
Do you have the right-sized workforce?
What skills, knowledge, and experience do your current employees have?
Do your employees need additional training?
What new resources can improve workforce performance?
Is your workforce correctly structured? (This includes organizational design, departments,
communication channels, etc.)
What is your current employee turnover rate?
What you have now is the starting point for future workforce plans. You can begin developing
workforce planning strategies when you know what you have (step 2) and where you want to be (step
1).
A common pitfall of workforce planning is ensuring it is based on high-quality information from within
the organization and external sources. Workforce planning defined by inaccurate forecasts and
undeliverable future goals cannot be successful.
3. Develop your plan
This is where companies must take their overall goal, input the assessment of their existing workforce
and produce a concrete plan for the future.
Businesses must plan their workforce to reflect the value and revenue it produces. A simple example
of workforce planning in action could be:
A company is manufacturing two models of cars. Model A is the business’ flagship car, selling the
most and bringing in the most revenue. However, model B is showing significant growth, and the
income from model A is beginning to stagnate.
The car company can produce a simple revenue table based on 2021 figures and 2022’s forecasts.
The revenue per employee for model A is $250,000, and the revenue per employee for model B is
$300,000.
Based on growth forecasts, you can estimate that staff working on model B will need to increase by
57 to match increased demand. This process assumes the forecasts are accurate and there are no
sudden changes in sales or production. At the same time, model A will likely begin to have a surplus
of staff in 2021 and need a reduction of 8 employees.
With workforce planning structures in place, you can develop plans to retrain and redeploy staff from
Model A to Model B during 2021. This kind of planning minimizes disruption and reduces employee
turnover.
Of course, this is just a plan based on forecasts and does not mean you should immediately move
eight employees from model A to model B and hire 49 more. Instead, the business should put
redeployment, hiring, and training plans in place to execute when key revenue indicators are met and
take a gradual approach that matches the shift in focus of their business.
4. Implement workforce planning
Successfully implementing workforce planning requires:
HR personnel to clearly understand their new roles and responsibilities.
Strategies and processes for recording all relevant data and information.
Effective communication channels between all invested parties to support the plan.
Defined measurement and evaluation criteria to assess the plan’s success.
While the future HR plans for managing your workforce are specific to your business, they will involve
some or all of the following:
Recruitment
Onboarding
Training
Retention
Redeployment
Outsourcing
Succession planning
Deploying new technology
With many new processes to implement, workforce planning does not transform your company
overnight. Instead, it is a gradual endeavor that optimizes each procedure for the given
circumstances to get your business closer to your long-term goals.
5. Monitor results
It is crucial to remember workforce planning is an iterative process whereby progress is monitored
and measured against specific milestones and long-term goals.
Post-implementation, your workforce planning processes may need adjusting due to unexpected
factors within your business or to meet new realities of your industry.