Effective Planning Process - Essay Example

Running Head: An effective planning process is essential to optimizing the organization's HR An effective planning process is essential to optimizing the organization's HR Authors Name Institution Name Introduction An organization is consisting of numerous individuals with diverse objectives. Thus, the major function of a manager is manpower development, or accumulating these individuals into a productive work force which will attain the firm's goals. This function can simply be accomplished by procuring the collaboration of the individuals in the work force and synchronizing their efforts into a more productive system (Armstrong, M. 1999). The progression of creating such work teams entails employing the needed personnel in the right quantities and qualities, developing them into competent and effective employees, and moving them into positions where they can function most productively (Fisher, C. et al. 1999). Therefore, management's first and most fundamental problem is selecting the right individuals with the prospective for development. evenly important is the placement of those individuals in positions in the organizational structure where their talents are most desired. Manpower development instigates with human resources planning also known as manpower planning, which establishes a firm's specific personnel rations. These are attained by a qualitative fortitude of the individual job specifications and of the specific characteristics requisite of a person for the successful performance of each job. Once these job requirements are recognized, it is essential to forecast the number of persons desired for each job. This stage of employment is quantitative, as it entails estimates that are relatively easy to calculate from sales forecasts, labor turnover records, and other sources of data. Human resource planning involves: manpower planning and forecasting; studying the labor market; manpower recruiting; determining supply sources; selecting personnel with appropriate skills and qualifications; placing them on the job; and developing them into more productive employees (McDuff, N. 1995). Hercus (1993) summarizes human resource planning by affirming that it is a management process linking the following elements: Forecasting human resource rations for an organization to perform its business plan; Forecasting human resources accessible for meeting these needs and doing a scan of the internal and external environments of the organization; Recognizing the gaps between what will be needed and what will be accessible and developing the necessary action plans to bridge the gaps; Implementing and monitoring these actions plans Definition of planning process and definition of optimization Human resources planning imply a broad spectrum of activities touching many parts of an organisation. The focus of human resources planning is on decision support and policy making. It is concerned with aggregate flows of people into, within, and out of the organisation and with co-ordination of persons and jobs on an individual level. (Niehaus, 1979). Human resource planning is of great importance as it determines manpower requirements and the means for meeting those requirements in order to carry out the integrated plans of the organization (Fombrun, C.J, Tichy, N M, Devanna, M.A, 1984). It includes determining the required types of skills and capabilities and the needed numbers of people, as well as the location and timing of the manpower needs. Optimization in manpower planning is emergent where human resources are treated as capital assets in much the same way that plant and equipment are currently treated. In essence, this system attempts through an accounting model to measure the cost of the resources, what it would cost to reinstate the resources, and what their value would be based upon their potential earning ability. This system emphasizes that man is a unique entity needing individualized consideration. Thus, managers are becoming more concerned with accounting for the human resources, both in terms of the cost involved and in terms of general information to be used in long-range manpower planning and for decision-making purposes. This planning system supply management with a management audit to forecast requirements, to acquire the necessary human resources, and then to develop the human asset to its optimum capacity. Thus, optimization in HR planning would be at the level where Higher management would insist upon recruiting and selecting the best people; more emphasis would be placed upon the completion of human development programs; greater devotion would be given to an individual's developmental activities; and time and consideration would be given to matching employees with jobs in order to ensure that they were placed in challenging positions which would effectively utilize their capabilities. The aim of the firm would be to ensure a maximum return on investment on their human resources. In attempting to achieve this goal, managers would strive to expand the span of responsibility of employees who would be construed to represent major investments even when formal positions of advancement are not available. Management would also become more selective in making its initial investments in human resources. This form of accounting could provide management with an additional indicator of an employee's potential growth before advancement is made in his position. This system would focus attention on the employee as a valuable investment which enhances earning power rather than as an operating expense which acts to drain the organization's financial resources (Herzberg, F. 1987). Paradoxically, accounting for man as a capital asset should restore the personality of each individual and pave the way to more humanistic treatment of employees. Greater attention would be given to an individual's selection, development, placement, advancement, motivation, and redevelopment. Finally, the dangers of overextending an individual, underutilizing his talents, and allowing for managerial obsolescence, would probably be avoided (Lulewicz, S. 1995). Thus, the manpower planning is systematic steps that is related to human resource system to the overall activity of the enterprise; make long-range estimations of the firm's specific and general needs; and maximize the return on investment in human resources. The below diagram showed the ongoing process of HRM system. Source: A Strategic Human Resource Management System for the 21st Century. Naval Personnel Task Force, September 2000 Source: A Strategic Human Resource Management System for the 21st Century. Naval Personnel Task Force, September 2000 It is probably an underestimation to say that an organization's manpower planning function constitutes one of its most important personnel responsibilities. The results obtained from recruiting, selecting, placing, training, developing, and motivating employees, depend directly for their success upon the effectiveness of the planning and forecasting phase of manpower development. However, because of the systems concept, manpower planning cannot be studied in isolation; organizational planning and manpower planning are interrelated and interacting. Organizational planning, by its nature, takes precedence over, and provides direction to, manpower planning (Neo R.A., Hollenbeck J.R., Gerhat B. and Wright P.M. 2000). The latter, in turn, can be most effectively done within the framework of properly structured organizational relationships and predetermined positions. For example Johnson Brian, president of human resources at Digital Equipment Corporation, integrated connection between business and human resource plans as one by which their human resource as well as line managers work equally to widen business plans and establish human resource needs, investigate the work force profile in terms of future business strategies, appraise emerging human resource concerns, and develop programs to deal with the issues and support the business plans that outcome in highest turnover. According to Brian, such joint efforts take place while human resource planners persuade corporate business planners that "human resources embody a major competitive advantage" that can boost profits when managed with awareness. Manpower planning and forecasting Forecasting techniques vary from easy to difficult, visual to numerical, subjective to objective. Every technique is most appropriate for a specific use. The mainly classy method of judgmental forecasting is the Delphi technique, which is a decision making method, intended to exploit the benefits and diminish the dysfunctional aspects of group decision making. In a Delphi "meeting" that require not be face to face, numerous experts take turns presenting their forecasts and postulations (Torrington D. and Hall L. 1995). A mediator passes each expert's forecast and conjectures to the others, who then make modifications in their own forecasts. This process persists until a workable compound forecast emerges. The compound might symbolize explicit projections or an array of projections, depending on the experts' positions. The Delphi technique emerges to be principally useful for engendering solutions to unstructured and composite questions, such as those that take place during human resource planning. It does have limits, though. Less commonly used techniques to forecast supply are statistical techniques that comprise simple inventory models, Markov analysis, and simulation (based on Markov analysis). Markov analysis develops the number of people in every job category by the possibility of movement linking job categories to forecast the number of people who will be in every category after a certain period of time (e.g., year end). It is used to forecast effects of different HR strategies such as. increasing or decreasing promotion rates. A skills inventory is a management information system that portrays the organization's workforce. Skills inventories might be intended for numerous purposes. For instance, they might be used to tactically monitor workforce potentials and performance, or to support in the recognition of employees for promotion, transfer and/or training. The value of any skills inventory depends upon the suitability, ease of access and current validity. Trend projections plan past numbers of people hired across time. Draw line to plan future demand.Appropriate for prediction while things doubtful to change drastically in the organization. Engenders rough estimates. Turnover analysis is a Number of employees who leave in one year X 100 = % Average number employed in the past year. Besides that, a productivity ratio that measures the numeral of times the average volume of stock held moves throughout the business. As through forecasting demand two basic techniques assist forecast inner labor supply-judgmental and statistical. One judgmental technique employed to forecast supply is replacement planning. Replacement charts illustrate the names of current position occupants and the names of probable replacements, offering a rough estimation of the bench strength of the organization. On the replacement chart the current are listed directly in the job title. Those individuals probable to fill the prospective vacancies are listed directly in the incumbent. Such lists can offer an organization with rational estimates which positions are probable to become vacant, and they can specify whether someone will be prepared to fill the vacancy. Present performance levels, ages, and information concerning the constancy of current employees can be used to forecast future vacancies caused by raids of top talent, involuntary turn-over, retirement, and employee started job changes. Constant with the courage of integration, ever more line managers and human resource planners jointly set up replacement charts for middle and upper-level positions. Case examples If a company remains understaffed for a prolonged period, it may ultimately suffer a variety of consequences. HR Trend Analysis for a Firm 2007 2008 2009 2010 2011 Projected sales (thousands of dollars) 11,400 9,800 8,700 9,600 11,000 Number of employees 350 300 275 316 For instance, the understaffing could origin presented employees to experience an immense deal of stress as they effort to meet added demand lacking adequate resources and support. If requisite work is not getting done, the firm finally might experience an amplify in back orders, which could reason a diminish in customer goodwill, an augment in competition, and a loss of market share. While engaged in human resource planning, a company gains its human resource needs by initial forecasting its demand for human resources such as the number and types of people required to perform the work of the organization at several future instance, and then its supply such as the positions that are anticipated to be already packed. The disparity linking the two forecasts indicates the firm's HR needs. For instance, if a firm estimations that it will demand 12 accountants throughout the subsequent fiscal year and supposes to keep its supply of nine who are already on staff, its HR requires would be to hire three added accountants. Demand Forecasting Demand forecasting entails predicting the numeral and types of people the organization will require at several future instance. There are two common approaches to demand forecasting: statistical and judgmental. With a statistical approach, an organization forecasts its required workforce size on the origin of certain business factors. A business factor is an attribute of the business, such as sales volume or market share, which closely relates to the size of the needed workforce. A statistical approach to demand forecasting characteristically is used while an organization operates in a stable environment, where an proper business factor can be forecasts with some quantity of certainty. If the company expects its 2011 sales to be $11 million, it will require raising its workforce to a size of nearly 350, which is the number of employees it had in 2007 while sales were $11.4 million. Judgmental approaches to demand forecasting entail the use of human judgment, somewhat than a exploitation of numbers. Two of the majority usually used judgmental techniques are group brainstorming as well as sales force estimates. The group brainstorming method of demand forecasting uses a panel of experts such as people within the organization who cooperatively recognize the market, the industry, and the technological progresses comportment on HRM needs. These experts are posed to engender a forecast through the procedure of brainstorming. A diversity of brainstorming techniques exists. The majority involve a face-to-face discussion amongst group members, who are requested to attain a consensus. Supply Forecasting Once a demand forecast has been made, an organization has a comparatively good idea of the numeral and nature of positions it will require to carry out its work at a particular instance. It then approximates which of these positions will be filled at that time by individuals who already are employed by the company. The process used to make this assessment is called supply forecasting. Supply forecasting is a two-step process. HR planning packages offer the employer through the means to automate much of these two steps. In the primary step, the organization groups its places by title, function, and accountability level. These groupings must imitate levels of positions transversely which employees might be anticipated to advance. The ensuing step of supply forecasting is to approximation, within every job group, how numerous current employees will linger in their positions throughout the planning period, how numerous will move to a different position, and how numerous will leave the organization. These forecasts are partly based on past mobility trends (e.g., turnover and promotion rates). The organization as well must think any plans for mergers, acquirements, unit or division divestitures, layoffs, retrenchments as well as downsizing, and even intimidating takeovers. While making its supply forecast, the organization as well must look at explicit individuals. Several might have already announced, for example, that they are retiring at the ending of the year, recurring to school in the fall, or getting married and planning on moving to a diverse part of the country. Estimation Future HR Needs Combining the outcome of the supply and demand forecasts within each job group gains specific staffing requirements. As the consequence of its supply forecast, the firm forecasts that five of these secretarial positions will become empty by the end of the planning time as of retirements, promotions, and so forth. Its demand forecast expects that three new secretarial positions will be desired all through the coming period as of an increased demand for the company's product. By combine these two estimates, the firm now realizes that it must hire eight new secretaries (five to replace those expected to vacate their positions, plus three to fill the newly created positions). HR Planning Process Result While the HR planning process is accomplished, a firm should begin and implement HRM practices so as to meet its human resource needs. The trend to organizational restructuring typically results in a smaller workforce. as a result, while an organization's strategic plan calls for reformation, the HRM response usually is one of downsizing. Downsizing typically consequences in layoff. As the pessimistic outcomes that are frequently linked with layoffs, employers are optimistic to seek substitutes, such as hiring freezes, untimely retirements, limited overtime, job sharing, and pay reductions. While the consequences of demand and supply forecasting project lack of personnel at several future point in time, the organization should decide how to determine this problem. By hiring extra staff, but there are other alternatives. While HR plans point toward an undersupply of employees, firms can employ personnel to staff jobs with estimated vacancies. Internal recruitment attempts can be enhanced through the use of career development programs (Boxall P. and Purcell J. 2003). While designing such a program, the organization must gather work history and skill level information on every employee. In its place of hiring new workers to convene increasing demands, an organization might settle on to get better the productivity of the existing workforce through further training. Other options comprise the use of overtime, extra shifts, job reassignments, and provisional workers. Retention rates can be better at the onset of the employer/employee relationship, while candidates are first recruited (Beardwell I. and Holden L. 1997). Retention rates are probable to progress while applicants are given a practical preview of what their jobs would in fact be like (warts and all), relatively than an overly glowing one. Workers now demand more supple programs to best fit their lifestyles. Organizations can develop retention rates by executing programs to hold these needs, such as job sharing, shortened workweeks, and telecommuting via computer and modem. Lastly, companies as well can develop retention rates by offering striking benefit packages, such as openhanded retirement plans, stock ownership, health and dental insurance, plus employee discount programs. Numerous firms are currently offering "cafeteria plan" benefit packages, which are customized to the explicit needs of every of their employees. In conclusion I must say that planning itself has become an art, a science, and a recognized profession, apart from the goals of the field in which the planning occurs. There are well-recognized principles, techniques, and steps to the planning process that are worth reviewing in the manpower context. References: 1. Niehaus RJ 1979. Computer-assisted human resources planning. John Wiley & Sons 2. Hercus T. 1993. Workforce planning in eight British organisations: a Canadian perspective. In Handbook of 3. Workforce Management. Blackwell 4. A Strategic Human Resource Management System for the 21st Century. Naval Personnel Task Force, September 2000 5. Armstrong, M. 1999 A Handbook of Human Resource Management Practice, Kogan Page, USA 6. Beardwell I. and Holden L. (1997) Human Resource Management: A contemporary Perspective, 2nd Ed Pitman: London 7. Boxall P. and Purcell J. (2003) Strategy and Human Resource Management, Palgrave & Macmillan: New York 8. Neo R.A., Hollenbeck J.R., Gerhat B. and Wright P.M. (2000) Human Resource Managemetn: Gaining a Competitive Advantage, 3rd Ed. McGraw-Hill: New York 9. Torrington D. and Hall L. (1995) Personnel Management: HRM in Action, 3rd Ed., Prenetice Hall: London 10. Herzberg, F. (1987). One more time: how do you motivate employees Harvard Business Review, 65, September-October, 109-120. 11. Lulewicz, S. (1995). Training and development of volunteers. In The Volunteer Management Handbook (T. Connors, ed.) New York, John Wiley and Sons. 12. McDuff, N. (1995). Volunteer and staff relations. In The Volunteer Management Handbook (T. Connors, ed.) New York, John Wiley & Sons. 13. Fisher, C. et al. (1999), 'The Impact of Changes to the Human Resource Function in Australia' Intern. Journal of HRM, 10:3, June 1999, 501-514. 14. Fombrun, C.J, Tichy, N M, Devanna, M.A, (1984), Strategic Human Resource Management, Wiley, New York Read More