CHAPTER 1- NATURE OF HUMAN RESOURCE

MANAGEMENT Goals and Objectives of Human resource

What is Human Resource? management
 Human resources (HR) is the set of people These include:
who makeup the workforce of an organization,  Increased job satisfaction.
business sector, industry, or economy.  Better work culture.
 A narrower concept is human capital, the  Improved rates of customer satisfaction.
knowledge and skills which the individuals  Efficient resource management.
command.  A proactive approach to managing
employees.
o Similar terms include manpower,  Productivity helping hand
labor, labor-power, or personal
Goals and Objectives of Human resource
What is Human Resource Management? management
 Human resource management (HRM)  Key components of strategic HR management
encompasses the tasks and processes involved in include alignment with organizational goals,
managing and retaining employees. long- term planning, and comprehensive HR
 Human resource management is organizing, policies and practices.
coordinating, and managing employees within It also includes:
an organization to accomplish its mission,  creating HR policies that support strategic
vision, goals and objectives. objectives,
 adopting industry best practices, and
o This includes recruiting, hiring,
 managing talent effectively
training, compensating, retaining, and
motivating employees.
Benefits of human resource management
What is Strategic Human Resource Management?  HRM systems streamline routine administrative
tasks, such as payroll accounting and processing,
 Strategic HRM, or 'people strategy', is about
attendance tracking, and benefits management.
creating a coherent, comprehensible or
o This reduces manual work, minimizes
understandable framework for employees to be
errors, and delivers HR staff to focus on
hired, managed and developed to support an
higher-order tasks, like developing
organization's long-term goals.
strategies for employee motivation
o It helps ensure that the various aspects
of people management work together
Benefits of Strategic Human Resource Management
to drive the behavior and climate to
meet performance targets o Improved Alignment with Organizational
Goals
What is Strategic Human Resource Management? o One of the primary benefits of
 Strategic human resource management SHRM is its ability to align the HR
(SHRM) can be defined as the process of function with the broader
managing people in a way that optimizes the organizational strategy.
business's goals and objectives.  Instead of HR being a
o Basically, strategic HRM is a process separate entity, SHRM
ensures that HR practices
that helps companies align their HR
and policies are closely
activities with the broader business
integrated with the
strategy and objectives
company's goals and
objectives.
What is the Aim of Strategic Human Resource
 This alignment helps ensure
Management?
that HR efforts are directed
 Strategic human resource management is the towards achieving the
connection between a company’s human strategic goals of the
resources and its strategies, objectives, and organization, resulting in
goals. increased productivity and
The aim of strategic human resource efficiency
management is to:
o Advance flexibility, innovation, and o Enhanced Recruitment and Retention
competitive advantage. o Strategic human resource
o Develop a fit for purpose organizational management emphasizes the
culture. importance of recruiting, selecting,
o Improve business performance and retaining top talent.
 By identifying the skills and
Why is strategic human resource management competencies needed to
important? drive the organization
 Companies are more likely to be successful forward, HR can attract
when all teams are working towards the same candidates who are the best
objectives. fit for the company's long-
 Strategic HR carries out analysis of employees term goals.
and determines the actions required to increase  Additionally, SHRM focuses
their value to the company. on employee development
 Strategic human resource management also uses and engagement, which
the results of this analysis to develop HR helps in retaining valuable
techniques to address employee weaknesses employees, reducing
 turnover costs, and employee feedback,
maintaining a motivated organizations can make
workforce. informed decisions about talent
 Increased Employee Productivity acquisition, performance
o SHRM places a strong emphasis on management, and employee
training and development programs that engagement.
enhance the skills and knowledge of  This data-driven approach
employees. helps HR leaders and top
 When employees feel that their management in making
growth is a priority for the decisions that positively impact
organization, they are more the organization's bottom line
likely to invest their time and
effort in their work. Human Resource as Strategic Business Partners:
 As a result, there is a noticeable  When executive leadership recognizes the
increase in employee importance of human capital, there is
productivity and performance, encouragement to vote for inclusion of human
leading to improved overall resources in C-level Suite.
organizational effectiveness  C-level Suite – the chief leadership team or
highest level management such as:
 Strategic Workforce Planning  Chief executive officer
o Effective workforce planning is a  Chief human resource officer
cornerstone of SHRM.  Chief financial officer
 By analyzing the current  Influences of HR in terms of:
workforce and anticipating o Profitability
future needs, organizations can o Funding
make informed decisions about o Perception
staffing levels, skill gaps, and o Balance
succession planning.
o Value
 This proactive approach
ensures that the organization
has the right people with the
right skills at the right time,
reducing the risks associated
with workforce shortages or
surpluses.

 Adaptability in a Dynamic Environment

o The business environment is constantly
changing, and organizations must be
attentive and adaptable to stay
competitive.
 SHRM equips HR departments
with the tools and strategies to
quickly respond to shifts in the
marketplace, changes in
technology, and evolving
customer demands.
 This adaptability is essential for
organizations to thrive in
today's fast-paced world

 Cost Efficiency
o Strategic human resource management
doesn't just focus on attracting and
retaining talent but also on optimizing
HR processes and reducing unnecessary
costs.
 By streamlining HR operations
and automating routine tasks,
organizations can allocate
resources more efficiently and
reduce administrative overhead.
 This, in turn, allows HR to
invest more in strategic
initiatives and employee
development

 Enhanced Decision-Making
o Data-driven decision-making is a key
aspect of SHRM.
 Through the collection and
analysis of HR metrics and
 quiet insistence that sufficient time is spent on
laying the foundations.

CHAPTER 2 - HR'S ROLE IN CHANGE AND The Architecture of Change

INNOVATION There are four primary architectural components of
change that HR practitioners can check are understood,
Great organizations are ones that know how to let go of tested and satisfied to ensure there will be a meaningful
an old way of doing something, creating and embracing and sustainable impact on the organization and its
a breakthrough that brings even better results. performance:
The wisdom to do this exists throughout an organization, 1. Relevance is about deeply understanding the
not just at the top. Any company needs HR Professionals reasons behind and the business case for change.
who can involve and engage stakeholders in making It involves asking questions that test the
creative change happen. soundness of the thought processes that have led
to the proposal of change now.
HR'S ROLE IN CHANGE 2. Readiness is about understanding what in the
One of the essential skills for any HR practitioner to organization's leadership thinking, its culture
master is the successful management of change. An HR and its history of change will help or hinder the
leader, business partner or specialist may be called upon successful implementation of what is proposed.
to play one or more of four primary roles in change. Questions here examine the accelerators and the
Here are the primary roles of HR in change brakes on change in general and on this one in
management: particular.
1. Change leader/owner - It is taking full 3. Robustness is about designing strength into the
responsibility for the planning and nuts and bolts of the change and this usually
implementation of their own change project. The attracts the most effort and energy in projects. It
most obvious of these would be an HR director involves understanding the changes we are
transforming all or part of the HR function, but making to the systems, processes, structure,
it could also be on a smaller scale, for example a roles, location, suppliers, contractual
restructuring of a team or the introduction of a arrangements and all the other inanimate aspects
new intranet-based service. of the plans and designs.
2. Change educator - It is bringing specialist 4. Responsiveness is about acknowledging and
knowledge and expertise to help clients dealing with the human impact of change and is
understand more about the structure and process often the least attended-to factor in unsuccessful
of successfully managing change. This will change projects. It involves understanding and
often fall to the center of expertise specialists responding to the emotional journey that we all
and may involve running workshops, designing experience when faced with change, regardless
practical tools or making available other of whether we perceive it to be positive or
resources, such as reading materials or negative.
theoretical models.
3. Change advisor - It is working with clients Paying insufficient attention to one of the components
directly through the process of designing and will not necessarily cause an entire change project to
implementing change, challenging and guiding fail, but it is extremely likely to make it more painful to
them to get it right. This role will often be the implement and more difficult to sustain.
remit of the HR business partner, for example in
the restructuring of the sales function, or could Key Skills for HR in Change
also be played by the HR director in the case of A major contribution HR can make in any change
wholesale organizational change. process is understanding the architecture, ensuring it is
4. Change Participant - It is being part of a applied, and educating everyone involved: the leaders,
change that affects them personally. In this role the teams running work-streams and those directly and
any HR practitioner can use their knowledge of indirectly affected. This takes some skill to achieve and
change to set their expectations of the process, it is worth considering here some of the most important
troubleshoot problems and understand and capabilities needed.
manage their own and others' reactions to 1) Recognizing when change is happening -
events. Achieving mastery involves first Change comes in many sizes: large, medium
understanding the architecture of successful and small. It tends to gain people's attention
change: having a clear picture of all the elements when it is large-scale. Access to the change
necessary for a sound process, built on a solid leaders should be quite simple and HR and
foundation. HR practitioners can add huge value systemic will normally have a natural
in change situations by guiding the organization platform for ensuring the architecture of
to pay attention to all the important aspects, change is considered in constructing the
even when it is unpopular and may seem plans.
unnecessary to those eager for swift action. 2) Influence - Lucky is the HR practitioner
There will also be skills, tools, methodologies whose advice is followed without challenge
and interventions they can use as the change and who is consulted before any action is
progresses, but their greatest value can be in the taken toward change. More often, change is
 already underway by the time FIR is first  Prepare for change - By taking steps such as
involved-thought processes gone through, defining your change management strategy,
decisions have been made and perhaps even developing your change management team, and
action taken. outlining key roles.
3) Diagnosis - Rarely does the path of true  Manage the change - By creating and executing
change run smooth, and when projects stall change management plans that include
or derail, HR has a key role to play. communications, operations and resistance
Questions are a basic tool of the HR trade. management.
Armed with a knowledge and understanding  Reinforce the change - By collecting and
of the structure of change and the ability to analyzing feedback and then implementing
ask the right questions, HR is perfectly corrective actions where needed
placed to diagnose the most likely root cause 4. Communicating change - Failing to tell employees
of any problems that arise. in advance about organizational changes can increase
4) Planning - Project planning is usually done employee misconduct. An integral part of every stage of
as a matter of course when large-scale the change management process, communication must
change is planned, but this discipline may be be a two-way street in order to ensure the success of the
less rigorously applied in seemingly simpler organizational change.
situations.
Think quality over quantity when it comes to
HR and Effective Change Management communicating with employees, and consider these
communication strategies for successful implementation:
1. Overcoming resistance - Although employee  Pre-and post-surveys allow for feedback both
resistance is a natural reaction to widespread before and after the change has been
organizational changes, organizations can overcome that implemented, which can enhance the overall
resistance by focusing on several key strategies: process.
 Clearly and consistently communicate about the  Engage resistors in one-on-one sessions prior to
change well in advance of its implementation. the solution's implementation to allow them to
 Help employees better understand the need for provide their input
the change and the rationale behind the  Be clear, consistent and explicit, especially
decisions, as well as the ways the change may when it comes to timeline and responsibilities.
affect them.  Use both formal and informal communication
 Ensure that change management team includes approaches, including email, intranet, in-person
change champions who can help spread positive meetings, signage and voice mails.
messages about the change, as well as take the  Offer opportunities for employees to provide
temperature of employee reactions to the feedback into the process, and then be sure to
change. use the input to inform the plan.
 Provide strong support for the changing  Gather employees to explore worst-case
environment, such as ensuring that managers are scenarios and then develop strategies to address
provided with the training and information they them.
need to answer employee questions.
2. Engaging employees - Employees who are engaged HR'S ROLE IN INNOVATION
in the change are more likely to put in the effort Definitions of innovation can vary wildly; for some it is
necessary to help implement the change and ensure a incremental and common, e.g. process improvements
positive outcome for the organization. Help create high which will not have the flash and explosion impact.
levels of employee engagement during change process Whereas for others, innovation refers to a company
by: coming up with a new product or service that did not
 Developing a team approach that includes exist prior and successfully implements their new idea.
employees' perspectives from a variety of Both are examples of innovation. In reality, a company
departments and levels. should seek to be making innovative decisions on a day-
 Assigning and clarifying roles and to-day basis so that looking back it can see how far
responsibilities. you've come from where it started.
 Increasing focus on the workers who are
affected most by the change. It is, clear that HR can drive the culture and capabilities
 Including resistance leaders in the change required for an organization to become more innovative.
process to help overcome pushback from other It is already positioned as the strategic driver and being
employees. strategic means being innovative. But, the reality is that
 Understanding and taking into account the no organizational change of this magnitude can happen
different motivational factors for each employee. without the leader of the business supporting HR's role
3. Implementing change in phases - For companies to create transformative change. It needs to be an
planning a major change initiative, taking a phased organizational change program, with human resources
approach can help ensure that the transition to a new being a leader in facilitating that change.
system or process is as smooth and seamless as possible.
Leading change management firms recommend three HR contributes to innovation agenda by:
phases:
 1. Do nothing - accept that HR does not have a
role to play in innovation. Some organizations provide employee teams with the
2. Minimalist - a drive on simplicity to eliminate time, tools, training and settings to address specific
those employee policies and work patterns and business challenges in creative ways.
processes that are operating as constraints to 1. Put in place discrete budgets to fund
innovation. An agenda of ongoing and innovation projects external to the enterprise
incremental improvement in current HR (i.e. to generate ideas or products from non-
practice. employees) - Don't limit avenues of innovation,
3. Moderate - targeting and enhancing specific HR many groundbreaking ideas come from unlikely
practices with high leverage for innovation, sources, and when it comes to innovation, more
notably in recruitment, reward and retention. is almost always better. Even small rewards can
Here the focus is to make innovation an be enough to interest customers in submitting
increasingly important element of the their ideas.
organization's way of doing business, 2. Have a formal program to find and promote
4. Proactive - HR is repositioned to: creative/innovative programs, products, or
a) Support-HR strategic planning to ensure HR ideas - There's innovation happening all the time
priorities are consistent with the innovation at any organization, without a way to harness
imperatives of business strategy. and showcase that creativity, much of it could be
b) Advance leadership development and going to waste.
succession to embed innovation within 3. Tie individual bonuses and/or salary
leadership performance and progression. increases to innovation - Creativity cannot be
c) Talent management through acquiring, bought, but it can be shown that innovation is a
developing, motivating and retaining those key component of any organization by
who will make innovation happen. rewarding the innovative minds in business.
d) Organizational effectiveness by facilitating There are only few companies that offer
organizational design and cultural change financial rewards for innovation which is
and renewal to ensure innovation is part of certainly an area for improvement. Some
the organizational DNA. companies have instituted programs that reward
creative ideas and innovations monetarily and
Improve Workplace Creativity and Innovation through recognition. They offer two bi-yearly
through HR awards focused specifically on innovation, one
chosen for the best idea and results overall, the
The best news is that all of the practices that were found other for the best cost reduction idea. Include
to be the most effective were those on which FIR could innovation as a major competency in leadership
have immediate impact, from seemingly small things development plans - Having innovative leaders
like promoting values to major changes such as the helps promote the commitment to creativity in
creation of online forums to foster new ideas. any organization, but only a few companies
1. Reward innovation via more engaging work include innovation as a key competency. At 3M,
and/or autonomy - Creative types aren't always innovation and leadership are linked directly,
motivated by money because for them, the work and innovation is part of each leader's
is the reward. Allow those creative minds the responsibility.
flexibility and space to create. 4. Define and promote organizational values
2. Track innovation talent at both the college related to innovation - Having an explicit
undergraduate and/or graduate level - message that innovation is important creates a
Innovation is one of the largest differentiators more robust environment for innovation, and
between high- and low-performing can allow employees to feel safer when taking
organizations, and the battle for that innovative the risks necessary for successful innovation.
talent is heating up once again. The most 5. Use technology - enabled collaboration/social
effective companies find the brightest minds media tools to share knowledge-By using
earlier than their competitors sometimes even forums, intranets, and other media for group
before graduation. efforts, top companies are able to gather ideas
3. Put in place a formalized or structured ideal from a diverse group of employees and
innovation review process - When the creative sometimes even customers and company
ideas come flowing in, the next step is to create outsiders. IBM did some research on their online
gates that allow all purposeful review of those communications and found that the more
ideas, so that budgets for new projects can be sources of diversity that were represented the
allocated correctly more productive, engaged, and inter-
4. Provide internal training in creativity and communicative people were. Creating avenues
innovation practices - Innovation and creativity for communication and championing policies
levels vary from person to person, but that that embrace more input from social media can
doesn't mean those abilities can't be improved. help find those diverse viewpoints.
Research shows there are proven methods, of
improving the innovation process in the brain so
take advantage of these.
 At the heart of planning activities is the knowledge
gained from scanning the external environment for
changes. Scanning especially affects HR planning
because every organisation must draw from the same
labor market that supplies all other employers. External
environmental factors that affect labor supply are the
workforce composition and the work patterns existing in
a country, government influences, economic/geographic
influences, and competitive conditions.

1) Government Influences - A major element

affecting labor supply is the government via
legislation (labor law, social security legislation,
tax law, equal employment opportunity law),
CHAPTER 3 - HR PLANNING
government policies and regulations.Therefore,
There is always an ongoing process of systematic an organisation must consider government
planning to achieve optimum use of an organization's intervention when doing HR planning:
most valuable asset - its human resources. The objective 2) Economic Conditions - The general business
of human resource (HR) planning is to ensure the best fit cycle also affects HR planning. Such factors as
between employees and jobs, while avoiding manpower interest rates, inflation and economic growth
shortages or surpluses. The three key elements of the HR help determine the availability of employees and
planning process are forecasting labor demand,
figure into organizational plans and objectives.
analyzing present labor supply, and balancing projected
labor demand and supply: Decisions on wages, the need for overtime, and
whether to hire or lay off workers all hinge on
NEED AND IMPORTANCE OF HR PLANNING economic conditions.
 Human resource planning consists of 3) Geographic and Competitive Concerns - As a
analyzing and identifying the need for and global competition for labor appears to be
availability of human resources required by an developing in most economies, employers must
organisation to meet its objectives.It is a process
by which an organisation ensures that it has the consider the following geographic and
right number and kinds of people, at the right competitive concerns when they engage in HR
place, at the right time, capable of effectively planning
and efficiently completing those tasks that will
help the organisation achieve its overall goals a) Other employers in the area - Other
and objectives. employers in a geographic region can
greatly expand or diminish the labor supply.
OBJECTIVES OF HR PLANNING b) Employee resistance to geographic
The main objective of having human resource planning relocation - In the last couple of years, there
is to have an accurate number of employees required, has been a growing reluctance on the part of
with matching skill requirements to accomplish many employees, particularly those with
organizational goals. working spouses to accept geographic
relocation as a precondition of moving up in
In other words, the objectives of human resource the organisation. This trend may force
planning are to: organizations to change their employee
1. Ensure adequate supply of manpower as and development policies and practices and their
when required. HR plans.
2. Ensure proper use of existing human resources c) Direct competitors and international
in the organisation. competition - Direct competitors are
3. Forecast future requirements of human resources another important external force in the
with different levels of skills. planning as well as staffing activities of an
4. Assess surplus or shortage, if any, of human organisation. Failure to consider the
resources available over a specified period of competitive labor market and to offer pay,
time. scales and benefits competitive with
5. Anticipate the impact of technology on jobs and organizations in the same general industry
requirements for human resources. and geographic location may cost a
6. Control the human resources already deployed company dearly in the long run.
in the organisation. Underpaying or under competing may result
7. Provide lead time available to select and train in a much lower-quality workforce.
the required additional human resource over a
specified time period Finally, the impact of international competition must be
considered as part of environmental scanning - for
In addition the ultimate objective of human resource instance, how diversity in the Philippine workforce
planning is to relate future human resources to future influences HR planning:
enterprise need so as to maximize the future return on
investment in human resources. STEP 2: An Internal Analysis of Jobs and People

HR PLANNING PROCESS Analyzing the jobs that will need to be done and the
skills of people currently available to do them is the next
STEP 1: Scanning the External Environment part of HR planning after scanning the external
environment. The needs of the organisation must be
compared against the labor supply available. Forecasting Demand
1) Auditing Jobs - The starting point for
evaluating internal strengths and weaknesses is The main emphasis to date has been on forecasting
an audit of jobs currently being done in the organizational needs for human resources. Forecasts of
organisation. A comprehensive analysis of all HR demand may be either judgmental or mathematical.
current jobs provides a basis for forecasting jobs However, even mathematical methods usually still
that will need to be done in the future. A planner require some judgmental human input.
should examine the following questions: Judgmental approaches include:
a. What jobs now exist? 1) Estimates - These forecasts can be either top-
b. How many individuals are performing down or bottom-up, but it is very important to
each job? incorporate people that are in a position to know
c. What are the reporting relationships of and can supply answers to the questions being
jobs? made. The success of these estimates depends on
d. How essential is each job? the quality of the information available to the
e. What jobs will be needed to implement experts. Useful information can include data on
the organizational strategy? current and projected productivity levels, market
f. What are the characteristics of demand, and sales forecasts, as well as current
anticipated jobs? staffing levels and mobility information.
2) Auditing Skills - Once planners obtain an 2) Rules of Thumb - These forecasts rely on
understanding of current jobs and the new jobs general guidelines applied to a specific situation
that will be necessary to carry out the within the organisation, for example, one
organization's plans, they can make a detailed operations manager per five reporting
audit of current employees and their skills. The supervisors' aids in forecasting the number of
basic source of data on employees and their supervisors needed in a division.
skills comprises the use of human resource 3) The Delphi Technique - In this technique, input
information systems (HRIS) or the computerized from a group of experts is sought by
HR records of the organisation. administering them separate questionnaires to be
3) Creating an Employee Skills Inventory - An filled out anonymously on what forecasted
employee skills inventory is defined as a situations will be. These expert opinions are then
compilation of data on the skills and aggregated and returned to the experts for a
characteristics of employees, including: second anonymous opinion. This process
a) education and training continues through several rounds until the
b) mobility and geographic preferences experts essentially agree on a judgment. The
c) specific aptitudes, abilities and interests Delphi technique has been shown to produce
d) areas of interest and internal promotion better one-year forecasts as compared to linear
ladders regression analysis, but it does have some
e) anticipated retirement limitations. Difficulties can arise in integrating
4) Drawing Aggregate Workforce Profiles - the expert's opinions. This particular technique,
Once the data on individual employees is however, appears to be particularly useful in
available it can be aggregated into a profile of generating insights in highly unstructured or
the organization's current workforce. This undeveloped subject areas - such as human
profile will reveal many of the organization's resource planning.
strengths and weaknesses. For example, the 4) The Nominal - Group Technique-A related
absence of some skills, such as computer skills, method is the Nominal Group Technique. Yet,
may affect the ability of an organisation to take unlike the Delphi Method, the Nominal Group
advantage of new technological developments. Technique requires people to meet face-to-face.
If a large group of skilled employees are all in These ideas are usually generated independently
the same age bracket, their retirement plans may at first and then discussed as a group. Although
leave a major void in the organisation, etc. the Nominal Group and the Delphi Techniques
are similar, usually, the Delphi. Technique is
It may prove helpful to plot charts giving an overview of more frequently used to generate predictions
the employee situation for each department in an whereas; the Nominal Group Technique is more
organisation, suggesting where external candidates frequently used to identify current
might be needed to fill future positions; or indicating an organizational problems and solutions to those
available reservoir of trained people that the employer problems.
can tap to meet future conditions. Although all these judgmental forecasts are less complex
and rely on less data than those based on statistical
STEP 3: Forecasting techniques, they tend to dominate in practice.

The information gathered from external environmental Apart from judgmental methods of forecasting HR
scanning and assessment of internal strengths and demand, there are also various mathematical and/or
weaknesses is used to predict, or forecast, HR supply statistical techniques. Some of the more common ones
and demand in light of organizational goals and include:
strategies. Forecasting uses information from the past
and present to identify expected future conditions. There 1) Trend Analysis is a study of a firm's past
are a number of approaches to forecasting HR range employment needs over a period. of years to
from a manager's best guess to a rigorous and complex predict future needs. For example, you may
computer situation. It should be noted, however, that compute the number of each subgroup of your
despite the availability of sophisticated mathematical employees [like salespeople, production people,
models and techniques, forecasting should be a secretarial and administrative staff] at the end of
combination of quantitative method and subjective each of the last five years. The purpose of trend
judgement. analysis is to identify employment trends that
 you think might continue into the future. Yet, programnmes, transfer and promotion policies,
while trend analysis is valuable as an initial and retirement policies - among other factors.
estimate, employment levels rarely actually
depend only on the passage of time. Other Internally, succession analysis is a widely used method
factors like changes in sales volumes and to forecast the supply of people for certain positions. It
productivity will at the end also affect your relies on replacement charts, which are succession plans
future staffing needs. developed to identify potential personnel changes, select
2) The Scatter Plot is a graphical method used to back-up candidates, promote individuals, and keep tract
help identify the relationship between two of resignations and retirements [attrition] for each
variables. If these two variables - for example, a department in an organisation. Replacement charts are
measure of business activity and your staffing the most widely used forecasting technique in HR
levels- are related, then if you forecast the planning
measure of business activity, you should be able STEP 4: Establishing Objectives
to forecast your HR requirements.
3) Statistical Regression Analysis makes a After forecasting HR demand and supply, HR objectives
statistical comparison of past relationship among are developed. They are, or should be, a natural outcome
various factors. For example, a statistical of the established corporate goals. The importance of an
relationship between gross sales and number of organization's objectives for HR planning seems difficult
employees in a retail chain may prove useful in to deny; thus, it is not surprising that more and more
forecasting the number of employees needed in
firms are establishing human resource objectives and
the future if the retailer's sales increase by 30 %.
4) Simulation Models are representations of real policies.
situations in abstract form. STEP 5: Designing and Implementing Action Plans:
They may include available economic models.
5) Productivity Ratios calculate the average Making Workforce Adjustments
number of units produced per employee. These The next step in the process of HR planning is Action
can then be applied to sales forecasts to
Planning and Program Implementation which is an
determine the number of employees needed.
6) Staffing Ratios can be used to estimate indirect extremely important extension of all previous activities.
labor. For example, if the company usually used After an organization's needs are assessed, action
one clerical person for every twenty-five planning must be developed to serve those needs. Action
production employees, that ratio can be used to plans can be designed to increase the supply of the right
help estimate the need for clerical people. employees in the organisation (if the forecasts showed
that demand exceeded supply), or to decrease the
Thus, the demand-pull approach to forecasting, as
number of current employees (if the forecasts showed
contrasted with the supply-push approach considers
specific openings that are likely to occur and uses that as that supply exceeded demand). Consideration will be
the basis for planning. The openings or demands are given here to managing a surplus of employees, since
created when employees leave a position because of managing a shortage is dealt via recruitment and
promotions, transfers and terminations. The analysis training.
always begins with the top positions in the organisation,
because from those there can be no promotions to a There are a variety of ways that a surplus of workers can
higher level. Yet, unfortunately, the accuracy of be managed within an HR plan. But regardless of the
forecasts for human resources demand has been means the actions are difficult because they require that
relatively week. some employees be removed from the organisation.
Alternatives that organizations can use to manage a HR
Forecasting Supply
surplus include: downsizing, attrition, early
Forecasting the availability of human resources retirements/buyouts, layoffs and outplacements.
considers both external and internal supplies. Although
internal supply is easier to calculate, it is important  Downsizing - Downsizing is reducing the size of
calculate the external supply also. an organizational workforce.
1. External Supply - The external supply of A wave of merger and acquisition activity in the
potential employees available to the organisation US has often left the new, combined companies
can be estimated by considering the following with redundant departments, plants, and people.
factors: Another cause for downsizing is the need to
meet foreign competition and cut costs. Studies
a) Net migration in and out of area.
b) Individuals entering / leaving the of the effects of downsizing show mixed results.
workforce. Cost control is most often the reason given for
c) Individuals graduating from schools and downsizing, but the relationship between
universities. downsizing and increases in profitability appears
d) Changing workforce composition and questionable. Lastly, some studies even show a
patterns. negative or at best indifferent effect on quality,
e) Economic forecasts for the next few
productivity and morale.
years.
f) F. Technological developments and  Attrition and Hiring Freeze - Through attrition,
shifts. individuals who quit, die or retire are not
g) Actions of competitors. replaced. With this approach, no one is cut of a
h) Government regulations and pressures. job, but those who remain must handle the same
workload with fewer people. This method is
2. Internal Supply - The internal supply is usually received with better employee
influenced by training and development
understanding than many of the other
  Early Retirement/Buyouts - Early retirement is outcomes negatively affect productivity and may result
a means of encouraging more senior workers to in higher employee turnover.
leave the organisation early. To provide this
Matching Skills to Current Organizational Needs- As
voluntary incentive, employers make additional
the company grows, the management function becomes
payments to employees so that they will not be
more complex. Instead of everyone reporting to the
penalized too much economically until their
owner, layers are added to the organization structure.
pensions and Social Security benefits take
The management team must supervise additional
effect. Such voluntary termination programs or
employees. Addressing these changing needs requires
buyouts entice an employee to quit with
the business owner to determine if the current
financial incentives. They are widely viewed as
management team has the necessary experience and
ways to accomplish workforce reduction without
skills to succeed in a larger, mote structured, more
the general ugliness of layoffs and individual
complex organization. If he identifies gaps, he creates
firings.
new positions and hires new people.
 Layoffs - Layoffs occur when employees are put
on unpaid leaves of absence. Building an Ethical Business Culture - A business
If business improves for the employer, then owner often creates a code of conduct for employees to
employees can be called back to work. Layoffs follow which defines what is considered ethical such as
may be an appropriate strategy to follow if there good like conduct in dealing with customers, suppliers
is a temporary downturn in an industry. and co-workers. The aim of building an ethical culture
 Outplacement - Outplacement is a group of can be furthered by bringing on new hires who have a
services provided to displace employees to give track record of high ethical behavior. This may require a
them support and assistance. It most often is more in-depth interviewing process in which the hiring
used with those involuntarily removed because manager asks candidates how they have dealt with
of plant closings or elimination of departments. ethical dilemmas on the job. Just because a sales
Outplacement services typically include manager has a track record of meeting or exceeding
personal career counseling, resume preparation quotas in past positions, he may not live up to the ethical
and typing services, interviewing workshops, standards the owner wants to set for his organization.
and referral assistance. Other aids include
retraining for different jobs, establishing on-site Finding Team Players - A critical but difficult aspect of
career centers, and contacting other employers human resource planning is determining whether
for job placement possibilities. Typically, prospective new hires will fit in with existing members
outplacement is done using outside firms that of the team. The owner wants to foster a harmonious
specialize in providing such assistance. work environment characterized by open and honest
communication, so the more specifically he can
STEP 6: Controlling and Evaluating HR Programs. articulate the corporate culture he seeks to create, the
better the chances that candidates for new positions can
Control and evaluation of HR action plans are important
articulate why they believe they would fit in.
to manage people effectively. Efforts in this area are
clearly aimed at quantifying the value of human Identifying Employees Ready for Advancement -
resources. Evaluation is an important process for Human resource planning should include creating a path
determining the effectiveness of HR plans. Possible for advancement for each employee. The business owner
criteria for evaluating HR planning include measuring: must assess which employees are ready to move up in
the organization and which might need more seasoning
1. Actual staffing levels against established
in their current positions. He wants to make sure his
staffing requirements
organization is developing its own in-house managerial
2. Productivity levels against established goals
talent, and he may provide education and training
3. Actual personnel flow rates against desired rates
opportunities to move the employees down the path
4. Programmes implemented against action plans
toward taking on additional responsibilities.
5. Program results against expected outcomes
6. Labor and program costs against budgets
7. Ratios of program results to program costs

HRP AND STRATEGIC ORGANIZATIONAL

PLANNING

Assuring Adequate Staff Levels - A primary function of

human resources planning is making certain that various
company departments have sufficient staff to complete
all the work required to meet the organization's goals.
The business owner also must make sure that the
workload is balanced - no individual or department
should be so overburdened with work that it is
impossible to complete all assigned tasks on time. The
results of this type of poor human resource planning
include heightened stress levels for employees, burnout,
missing deadlines and mistakes and errors. All of these
 2. Identifying Resources - When HR must make
decisions such as how much manpower will be
required, it may want to determine quickly what
resources are already at its disposal. Using an
HRIMS, HR can make better decisions. Instead
of jumping immediately to a plan to recruit and
train new employees for factory production
expansion, it could pull a report from the
HRIMS identifying employees who have skills
and training required to be promoted to the new
positions. Then, it can recruit less-skilled
workers to replace them.
3. Compliance - In most firms, there is a critical
need to manage how employees are treated,
especially to comply with the requirements of
civil rights law and that which relates to
disabilities ruling. This is easier when HR has
all the ways that applicants and employees are
handled and their data, from their application to
their termination in one powerful information
system. For example, an HR manager could pull
a report about the diversity of the organization,
including percentages of employees in each
occupation by their race, gender or national
origin. This report would help to show whether
the business is complying with equal
CHAPTER 4 – HR INFORMATION employment opportunity regulations.
MANAGEMENT SYSTEM 4. Meeting Training Needs - An HRIMS system
can help employers manage training needs,
A HRIMS, which is also known as a human resource allowing them to complete mandated and
information management system, is basically an optional training For example, in the HRIMS, an
intersection of human resources and information employee might go into a description of
technology through HR software. This allows HR available training courses and request courses
activities and processes to occur electronically. A for his personal learning. When that training
company that takes the time to invest in a HRIMS that becomes available, the HRIMS notifies him so
fits their goals, objectives, mission and values, is a he can register and complete the training. In this
company that is investing in its future and in its success. kind of model, the HRIMS helps the
It will be necessary to customize any HRIMS to the organization to automatically manage the
unique needs of a company so the system will remain fulfillment of many training needs. Also, when
flexible and relevant throughout the life of the company employees are ready to apply for a promotion,
or enterprise. they may already have much of the training they
need because they have taken it in anticipation
NEED OF HRIMS of promotion.

Organizations must look for ways to manage their NATURE AND BENEFITS OF HRIMS
internal processes efficiently while preserving the Modern human resource information systems are
integrity of each practice. In human resources, this comprehensive, accurate and accessible systems for
involves many transactions affecting people, including recording employee and work data relevant to HRM, HR
the benefits they receive and the ways they are treated by and organizational planning.
the organization. Tracking HR activities through a
human resources information management system is HRIMS systems are, in essence, large databases.
efficient and effective for many business organizations. Depending on the size and nature of the organization, the
For the owner, it's usually a matter of which system is HRIMS might consist of a single database or a number
affordable and suited to the organization's needs. The of interconnected ones. These databases will store basic
following are the basic need for HRIMS : employee information (personal details, company role,
salary etc.), as well as information regarding benefits
1. Identify Manpower Requirements - In the most administration, payroll and an almost limitless range of
basic sense, an HR information system other aspects of human resources. Furthermore, a good
organizes information about every job in the HRIMS system will allow the organization to keep track
organization: This information might include of employment applications; for example, it might be
details such as who is currently in the position, able to store and review CVs, and search for suitable
what he is paid and what his job responsibilities, previous applicants when a new vacancy arises.
training needs and assigned benefits are. HR can
use reports about groups of positions or the TYPES OF HRIMS
entire workforce to determine manpower In the last few years, the software industry has produced
requirements. To increase production on the several products that organize the various human
factory floor, for example, HR must ensure there resource information management systems into
are enough employees to staff the expansion as integrated software referred to as human resource
per schedule. With a computerized system, HR information management systems, in HRMS, software.
can study the impact of expansion, such as how
much it will cost to add the employees that will Strategic HRIMS
be needed 1. Information Systems Supporting Workforce
Planning - Organization involved in long-term
 strategic planning, such as those planning to turnover rates and about the success of past
expand into new market areas, construct placements.
factories or offices in new locations, or add new 3. Compensation and Benefits Information Systems -
products, will need information about the The Compensation and Benefits Information
quantity and quality of the available workforce Systems may support a variety of tactical human
to achieve their goals. Information systems that resource decisions, especially when compensation
support workforce planning serve this purpose. and benefits information is related to information
2. Information Systems Supporting Labor from internal and external sources. Compensation
Negotiations - Negotiating with craft and benefit plans can play an important part in
maintenance, office, and factory unions requires improving an organization's productivity. Tying
information gathered from many of the human employer productivity to pay or encouraging
resource information systems. The human increased productivity with incentive pay plans can
resource team completing the negotiating needs often improve an organization's productivity
to be able to obtain numerous ad hoc reports that substantially.
analyze the organization's and union's positions 4. Employee Training and Development Systems -The
within the framework of both the industry and training offered by the employee training and
the current economic situation. It is also development systems must meet the needs of jobs
important that the negotiating team be able to available in the organization is identified through the
receive ad hoc reports on a very timely basis position control system and the job analysis and
because additional questions and tactics will design system. The training should also be directed
occur to the team while they are conducting at those persons interested and capable of benefiting
labor negotiations. from it as identified by the skills inventory and
3. Specialized Human Resource Information human resource files.
Systems Software - A great deal of software has
been specifically designed for the human Operational HRIS
resource function. This software is available for Operational human resources information
all types and sizes of computers, including management system - to provide the manager with data
microcomputers, Software specifically designed to support routine and repetitive human resource
for the human resource management function decisions. Several operational-level information systems
can be divided into two basic categories collect and report human resource data. These systems
comprehensive human resource information include information about the organization's positions
systems software and limited-function packages and employees and about governmental regulations.
that support one or a few human resource
activities. 1. Employer Information Systems-The human
resource department must maintain information on
Tactical HRIS each of the organization's employees for a variety of
Tactical Information management systems provide decision and reporting purposes. One part of this
managers with support for decisions that emphasize the employee information system is a set of human
allocation of resources. Within the human resource resource profile records. An employer profile
management area, these decisions include recruitment usually contains personal and organization-related
decisions, job analysis and design decisions training and information such as name, address, sex, minority
development decisions, and status, marital status, citizenship, years of service or
employer compensation plan decisions. seniority data, education and training, previous
experience, employment history within the
1. Job Analysis and Design Information Systems - organization, salary rate, salary or wage grade, and
The information inputs to the job analysis and retirement and health plan choices. The employer
design information system include data from inventory may also contain data about employee
interviews with supervisors and workers affirmative preferences for geographical locations and work
action guidelines. Inputs also include information shifts. Another part of an employer information
from sources external to the firm, such as labor system is an employee skills inventory. The skills
unions competitors, and government from sources inventory contains information about every
external to the firm, such as labor unions, employee, such as work experience work
competitors, and government agencies. The outputs preferences, test scores, interests, and special skills
of the job analysis information system are job or proficiencies.
descriptions and job specifications. These outputs
provide managers with the basis for many tactical 2. Position Control Systems - A job is usually defined
human resource decisions. as a group of identical positions. A position on the
2. Recruiting Information Systems -In order to direct other hand, consists of tasks performed by one
the recruiting function, the organization needs to worker. The purpose of a position control system is
develop a recruiting plan. The recruiting plan to identify each position in the organization, the job
specifies the positions to be filled and the skills title within which the position is classified, and the
required of the employees for these positions. In employee currently assigned to the position.
order to develop the plan and to monitor its success, Reference to the position control system allows a
a recruiting information system is necessary to human resource manager to identify the details about
collect and process the many different types of unfilled positions.
information needed to construct the plan including a
list of unfilled positions, the duties and requirements 3. Applicant Selection and Placement Information
of these positions, lists of planned employee Systems- After jobs and the employee requirements
retirements, transfers, or terminations, information for those jobs have been identified and after a
about the skills and preferences of current suitable pool of job candidates has been recruited,
employees, and summaries of employee appraisals the candidates must be screened evaluated, selected,
Other inputs to the recruiting plan include data about and placed in the positions that are open. The
primary purpose of the applicant selection and
 placement information system is to assist human Having this information readily accessible by
resource staff in these tasks. managers and human resources representatives
4. Performance Management Information Systems - is an asset when developing new training
Performance Management Information Systems programs or when restructuring department or
include performance appraisal data and productivity positions.
information data. Performance management 4. Risk Management- Human resource
information systems data is frequently used as information management systems also minimize
evidence in employee grievance matters. Careful risks and potential liabilities This is
documentation of employee performance and of how accomplished by keeping electronic records of
the performance was measured and reported is items such as employee discipline notices safety
critical to acceptance of appraisal information in training employees have received, accident logs
grievance hearings. Performance management and workers compensation claims This data is
information can lead to a number of decisions analyzed by the HR department to identity wars
beyond merely supporting the operational decision to improve workplace conditions, safety training
to retain, promote, transfer, or terminate a single classes and disciplinary process to ensure
employee. compliance with all federal and state labor laws.
5. Government Reporting and Compliance
Information Systems - Government Reporting and PRODUCTIVITY AND HRIMS
Compliance Information Systems provide In the area of HR. employee productivity matters
information needed both to maintain compliance significantly. If an HR staff in not able to complete tasks
with government regulations and to improve in a timely manner the rest of the company is directly
productivity and reduce costs associated with affected. Companies can waste thousands of dollars and
employees. hour on ineffective systems and procedures. By
implementing a human resources information
STRATEGIC HR PLANNING AND HRIMS management system (HRIMS), any company can
eliminate these effective processes and experience
As technology evolves, so does its impact on strategic significant cost savings across the business. A HRIMS
human resource planning. Human resource information can positively impact the company's bottom line
management systems are electronic systems that compile through:
information in databases to be easily accessed and
analyzed. Some information systems allow automation 1. Increased productivity
of processes such as payroll tax calculations, while 2. Standardized processes
others streamline processes by minimizing the need for 3. Better compliance
manual data entry and paper records, thus increasing 4. Direct cost savings
accuracy and efficiency.
It is also important to note that HRUMS provides
1. Total Rewards - One HR function that can everything needed to be an effective HR manager. It
benefit from the use of human resource organizes all important employee, payroll, benefits,
information systems is total rewards which attendance, training, and recruiting information in a
refers to all components of the overall single integrated solution so be never have to spend time
compensation, model, including salary and hunting for key data.
benefits. Any company's HR department can
more effectively track and plan for changes to EMPLOYEE PERFORMANCE AND HRIMS
employees' salary, insurance, retirement and
other benefits options using an HRIMS. HRIMS can also help management produce highly
Electronic records keep track of current effective performance reviews to further improve
expenses, and many systems offer projection performance management.
models and calculators that can help analyze the 1. Optimal Goal Setting - Although technology
impact of various changes. This is especially has changed many aspects of human resources
useful when preparing for annual increases or management, using the SMART acronym is still
benefits open enrollment. helpful when setting goals. Making goals
2. Workforce Planning -Human resource Specific, Measurable. Attainable, Relevant, and
information management systems keep track of Timely can help employees to be more clear on
critical employee data such as demographic what the goals are and how and when to achieve
information and job titles Storing this them. This can help with prioritization for both
information in an electronic database allows HR employees and managers.
to analyze it more easily when working on 2. Performance Tracking-HRIMS can help to
recruitment strategies, progression planning and alter the view of employee performance from a
affirmative actions programs HK can quickly snapshot approach to a progressive approach.
run reports to determine items such as how With employee performance being tracked on
many employees were hired last year, average paper, it is difficult to see the continuous process
length of tenure and a breakdown of the of employee development and performance.
employee population by criteria such as gender With employee data being saved and available in
and race. one place using HRIMS, the journey becomes
3. Training and Development - Small businesses clearer and it is easier to spot patterns and see
also may look to an HRIMS to assist with improvements or opportunities.
training and development initiatives. Depending 3. Faster Feedback -The data about employee
on the needs of the company, it can use an performance that is gathered and tracked using
HRIMS to facilitate the annual performance HRIMS should not be moving in only one
review process to allow employees to sign sip direction. Managers benefit greatly from using
for company-sponsored training classes or to HRIMS features to give employees feedback on
build a talent inventory of what education a highly regular basis, whether it's on a day-by-
experience and training each employee has day or goal-by-goal basis. By showing
 employees exactly what was done right and what
could be improved aspects are completed,
managers can dramatically improve productivity
and the quality of work.
4. Ties Actions to Consequences -I employee
performance management is disorganized or
untimely, employee actions may not be tied
directly to consequences. This is dangerous, as it
undermines the effectiveness of incentives and
penalties in managing employee performance.
The real-time reporting that HRIMS allows
managers to have access to allows managers to
respond to employee performance immediately,
rewarding great performance as it occurs and
working with employees to improve poor
performance before the bottom line is affected.
5. Collect Feedback from Peers- Using HRIMS
to track numerical results only is a mistake
HRIMS open up opportunities to include
feedback about employees from other
employees, managers in other departments,
customers, and the employees themselves when
tracking performance Reviewing information
from all of these sources may give managers a
better-rounded view of an employee's
performance and allow managers to personalize
employee development methods more
effectively.
6. Performance Review- When HRIMS is used
regularly to track employee achievements,
training, and errors, generating performance
reviews becomes much easier. It is no longer
necessary for managers to try to remember
events from immediately after the last review or
to arbitrarily gauge overall progress. Concrete
facts and notes are available in the system, so
managers can review the employee's
performance and give a review based on the
whole picture of the employee's life within the
company rather than pieces gleaned from past
reviews impressions.