Chapter 2

Human
Resources
Planning

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 Learning Outcomes
After studying this chapter, you should be able to:

⚫ 2.1 Definition-Strategic HR Management

⚫ 2.2 Concept and purpose of strategic HRP
⚫ 2.3 Scanning/Analyzing the external and internal environment
⚫ 2.4 Forecasting HR supply and demand

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 2.1 Definition
⚫ Strategic planning – Procedures for making decisions
about the organization’s long-term goals and strategies
(page 39)
⚫ -process of defining organizational strategy, or direction,
and allocating resource (capital and people) towards its
achievement.
⚫ The strategic planning cycle typically covers a
three-to-five –a year time frame. Although some firms
conduct long-term planning that can cover 10 years or
more

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⚫ Human resources planning (HRP) – The
process of anticipating and providing for the
movement of people into, within, and out of an
organization
(page 39)

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⚫ Strategic human resources management –
The pattern of human resources deployments
and activities that enable an organization to
achieve its strategic goals. (page 39)

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https://www.youtube.com/watch?v=G_-IqmYJj1E
(STRATEGIC PLANNING)

https://www.youtube.com/watch?v=CNsI-Nol7Xg
https://www.youtube.com/watch?v=WwVsn-rJxVY
(HRP)

https://www.youtube.com/watch?v=llTvxMRJsHQ
(STRATEGIC HR)
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 Figure 2.1: Linking Strategic
Planning and Human Resources

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 2.2 Step One:
Mission, Vision, and Values
⚫ Mission – The basic purpose of the organization
as well as its scope of operations
⚫ Strategic vision – A statement about where the
company is going and what it can become in the
future
⚫ Core values – The strong and enduring beliefs
and principles that guide a firm’s decisions and
are the foundation of its corporate culture

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 2.2b HR’s Role in Establishing and Reinforcing
a Firm’s Mission, Vision, and Values
⚫ HR managers help embody the firm’s mission,
vision, and values within the organization by
doing the following:
⚫ Communicating them frequently, both informally and
formally, via verbal and written communications
⚫ Recruiting and hiring employees whose values are
consistent with the organization
⚫ Translating the mission, vision, and values into job
descriptions and specific behaviors and recognizing
and rewarding employees based on them

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https://www.youtube.com/watch?v=8wem6FZAucw
(MISSION, VISION & VALUES)

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 2.3 Step Two: External Analysis
⚫ SWOT analysis – A comparison of one’s strengths,
weaknesses, opportunities, and threats for strategy
formulation purposes
⚫ Summarizes the major facts and forecasts derived from external
and internal analyses
⚫ Environmental scanning – Systematic monitoring of
the major external forces influencing the organization
⚫ Includes forces in the business environment (also called the
remote environment) and the competitive environment
⚫ Business environment – Factors in the external environment that a
firm cannot directly control but that can affect its strategy and
performance

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 The Business Environment
⚫ Economic Changes
⚫ Ecological Changes
⚫ Technological Changes
⚫ Demographic and Social Changes
⚫ Legal and Regulatory

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https://www.youtube.com/watch?v=Z9g4rFqZ5Oc

https://www.youtube.com/watch?v=Z0eNuPMUs0o

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 Figure 2.2:
The Five Forces Framework

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 Discussion Starter #1
What external forces influence a firm’s strategy?

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 2.4 Step Three: Internal Analysis
⚫ In addition to an external analysis, organizations
must also analyze their own strengths and
weaknesses.

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 2.4a Core Capabilities
⚫ Core capabilities – Integrated knowledge sets within an
organization that distinguish it from its competitors and deliver value
to customers
⚫ Value creation – What a firm adds to a product or service by virtue of
making it; the amount of benefits provided by the product or service
once the costs of making it are subtracted
⚫ Core capabilities can consist of a combination of three resources:
1. Processes – “Recipes” or standard routines for how work will be done
and results will be accomplished
2. Systems (technologies) – Include information systems, databases,
proprietary technologies, and the like
3. People – Include the knowledge, skills, and abilities of employees most
critical for executing the firm’s plan to create the most value for
customers and whose skills are difficult to replicate or replace

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 2.4b Sustaining a Competitive
Advantage Through People
⚫ Organizations can achieve a sustained
competitive advantage if they have
resources—particularly people—that meet the
following criteria:
⚫ The resources must be valuable.
⚫ The resources must be rare.
⚫ The resources must be difficult to imitate.
⚫ The resources must be organized.

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Figure 2.7: Model of HR Forecasting

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 2.4e Forecasting (slide 1 of 3)
Forecasting a Firm’s Demand for Employees
Quantitative Approaches
⚫ Trend analysis – A quantitative approach to forecasting labor demand
based on a factor such as sales
⚫ More sophisticated statistical planning methods include modeling or
multiple predictive techniques.
Qualitative Approaches
⚫ Management forecasts – The opinions (judgments) of supervisors,
department managers, experts, or others knowledgeable about the
organization’s future employment needs
⚫ Delphi technique – Attempts to decrease the subjectivity of forecasts by
soliciting and summarizing the judgments of a preselected group of
individuals

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 2.4e Forecasting (slide 2 of 3)
Forecasting the Supply of Employees
Staffing Tables and Markov Analyses
⚫ Staffing table – A table that shows a firm’s jobs, along with the numbers
of employees currently occupying those jobs and future (monthly or
yearly) employment requirements
⚫ Markov analysis – A method for tracking the pattern of employee
movements through various jobs in a firm
⚫ Quality of fill – A metric designed to measure how well new hires that
fill positions are performing on the job
Skill Inventories and Management Inventories
⚫ Skill inventories – Files of personnel education, experience, interests,
skills, and so on that allow managers to quickly match job openings with
employee backgrounds.
⚫ Management inventories – Data gathered on managers

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