Chapter 4
Human Resource Planning
Falkenberg, Stone, and Meltz
Human Resource Management
in Canada
Fourth Edition
Copyright © 1999 Harcourt Brace &
Company Canada, Ltd.
Chapter Overview
The need for human resource planning
 Purposes of human resource planning
 Relation to other human resource
functions
 The human resource planning process
 Projecting human resource supply

4.1
Chapter Overview (cont’d.)
Forecasting future human resource needs
 Comparing forecast needs with projected
supply
 Planning policies and programs
 Evaluating human resource planning
effectiveness
 The HRM audit

4.2
Purposes of Human
Resource Planning
 Setting
goals and objectives
 Examining the effects of
alternative human resource
policies and programs
4.3
Examples of
Organizational Goals

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To increase company profits by 10% in the next
fiscal year (profitability)
To close 25 retail outlets in the next four years
(downsizing)
To bottle 10% more diet pop in the next year
(production)
To guarantee one-day delivery of all first-class
mail within the province by 2001 (service level)
4.4
The Human Resource
Planning Process
Project future human resource supply
 Forecast future human resource needs
 Compare forecast needs with projected
supply
 Plan policies and programs to meet
human resource needs
 Evaluate human resource planning
effectiveness

4.5
Projecting Human
Resource Supply
 Assessment
of current supply
 Skills inventories
 Analysis of human resource
flows
 Stochastic models
4.6
Examples of Human
Resource Flows
Employees may
- stay in the same job
- move across to another, but not a higher-level job
(transfer or lateral move)
- move up to a higher-level job (promotion)
- move out of the organization through voluntary
termination (resignation) or involuntary
termination (lay-off, dismissal)
- move down (demotion)
4.7
Typical Data Elements in a Human
Resources Information System
Employee personal data
Benefits information
Salary administration
Skills
Benefits plans
Attendance
Employee benefits information Performance/Discipline
Dependents
Health and Safety
Training and development
Payroll
Employee work data
Salary
Performance review
Job information
Employment status information
Hire/Termination information
Work information
4.8
Forecasting Future Human
Resource Needs
 Planning
for the status quo
 Rules of thumb
 Unit forecasting
 The Delphi method
 Scenarios
 Computer simulation
4.9
Five Steps in the Delphi Method
1. An issue, question, or problem is identified.
2. A small group or panel of ten or fewer experts
is identified.
3. Independent judgements about the issue are
obtained from each expert through a
questionnaire or structured interview.
4. An intermediary or facilitator collects,
analyzes, and feeds back information from the
first questionnaire or interview to each expert.
5. Steps 3 and 4 are repeated until there is a
4.10
consensus on the issue or problem.
Sample Questions from a Unit
Forecasting Questionnaire

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List any jobs that have changed since the last
forecasting period and any that will change in the
next forecasting period.
If vacancy can be filled with present employees,
note whether training will be required. Specify
nature of training needs.
What percentage of employees are performing
jobs up to standard?
How many employees will be absent in the next
forecasting period because of disability,
4.11
educational, or other leaves?
Planning for Anticipated Shortages
Transfer employees to jobs in
which shortages exist
 Train employees to move up to
jobs in which shortages exist
 Have employees work overtime
 Increase employee productivity
 Hire part-time employees

4.12
Planning for Anticipated Shortages
(cont’d.)

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Hire temporary full-time employees
Hire permanent full-time employees
Subcontract work to other firms
Forgo increases in production
Install equipment to perform some of
the tasks that would be done by
workers (capital substitution)
4.13
Ways to Increase Employee
Productivity

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Offer monetary incentives, e.g. bonuses, for
higher productivity or performance levels
Improve employees’ job skills to produce
more in less time or at lower cost
Re-design work processes and methods so
greater outputs are achieved
Use more efficient equipment so greater
outputs are achieved
4.14
Planning for Anticipated
Labour Surpluses

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Close plants
Lay off some workers permanently
Give incentives for early retirement
Let the workforce shrink by attrition
Retrain and transfer workers
Shut down plants (or parts of them) temporarily
Lay off workers temporarily
Reduce the work week
Use work sharing
Cut or freeze pay and/or benefits
4.15
Evaluating Alternatives to the
Problem of Labour Shortages
or Surpluses
Determine size of the anticipated
shortages or surpluses
 Determine the expected duration
of the change in the demand for
human resources
 Determine the amount of lead time
before shortages or surpluses
occur

4.16
Information Needed to Identify
Appropriate Ways to Deal with Labour
Surplus/Shortage
Financial and human costs and benefits
 Effects on other organizational
components
 Length of time to implement the
alternatives and generate desired
results
 Probability of success in reducing the
shortage or surplus

4.17
Programs for Human
Resource Planning

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Linear programming, e.g. to minimize total
labour costs within certain constraints
Goal programming, e.g. setting multiple
goals such as increasing profits by 10% and
hiring bilingual salespeople
Computer simulation, e.g. to examine the
effects of various programs to reduce
surpluses or shortages
4.18
HRM Auditing Model

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Strategic-Level HRM — determines the
effectiveness of HRM functions in the overall
strategic plan of the organization
Managerial-Level HRM — determines
effectiveness of HRM functions within
departments and units
Operational-Level HRM — determines the
effectiveness of HRM functions throughout the
organization
4.19
Reasons for Conducting
HRM Audits

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When labour costs are large or the largest
component of total product or service costs
The personnel audit is used to justify the
existence of budgets of staff and programs
The personnel audit provides valuable feedback
from employees and line managers
The personnel audit may uncover problems
such as unqualified HRM staff, lack of HRM
policy compliance, or low employee satisfaction
4.20