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HUMAN RESOURCE MANAGEMENT. HUMAN RESOURCE PLANNING IN ORGANISATIONS Dr Joe Azzopardi. The Role of HRP. Definition: “The process for ensuring that the HR requirements of an organisation are identified and plans are made for satisfying those requirements.” Activities involved:

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Dr Joe Azzopardi

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The Role of HRP

  • Definition:

    “The process for ensuring that the HR requirements of an organisation are identified and plans are made for satisfying those requirements.”

  • Activities involved:

    • Identify and acquire the right number of people with the proper skills.

    • Motivate them to achieve high performance.

    • Create interactive links between business objectives and people-planning activities.

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Hard HRP

Quantitative analysis to ensure that the right number and sort of people are available when needed

Soft HRP

Ensuring the availability of people with the right type of attitudes and motivation who are committed to the organisation and engaged in their work and who behave accordingly


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Soft HRP

  • Soft HRP is based on assessments of the requirement for these qualities and measurements of the extent to which they exist, by:

    • Using staff surveys

    • Analysing outcomes of performance management reviews

    • Analysing opinions generated by focus groups

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Results of Assessments and Analyses

  • Plans for improving the work environment

  • Opportunities to develop skills and careers

  • Adopting a ‘total reward’ approach focusing on non-financial rewards

  • The creation of a high commitment management strategy

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High Commitment Management Strategy

  • Create functional flexibility

  • Design jobs to provide intrinsic motivation

  • Emphasise team working

  • De-emphasise hierarchies and status differentials

  • Increase employment security

  • Reward people on basis of organisational performance

  • Enact organisation-specific values and a culture that bind the organisation together and give it focus

    Soft HRP synonymous with the whole subject of HRM

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The HRP Process

Four main categories of staff:

  • Existing staff

  • New recruits

  • Potential staff

  • Leavers

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Existing staff

Decisions required about:

Performance appraisal





Promotion/career development

Decisions involved

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New recruits

Decisions required about:

Recruitment methods

Selection procedures



Terms of contract

Decisions involved

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Decisions involved


Potential staff


Decisions required about:

Recruitment methods

Public relations

Wage/salary levels

Employee benefits

Dismissals for poor performance


Redundancy procedures

Labour turnover

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The process

Corporate objectives

Demand for personnel

Market demand

Assess personnel supply

Labour market



Personnel estimates

Recruitment plans

Training plans


Pay/productivity proposals

Retirement/redundancy programmes

Periodic reviews

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Aims of Human Resource Planning

  • Attract and retain the number of people required with the appropriate skills, expertise and competencies;

  • Anticipate the problems of potential surpluses or deficits of people;

  • Develop a well trained and flexible workforce to contribute to the organisation’s ability to adapt to an uncertain and changing environment;

  • Reduce dependence on external recruitment when key skills are in short supply by formulating retention, as well as employee development strategies;

  • Improve the utilisation of people by introducing more flexible systems of work.

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Some Useful Tips for Practice

  • Resourcing strategy

  • Scenario planning

  • Estimating future requirements

  • Labour turnover

  • Action planning

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Resourcing Strategy


Resourcing plans

Find people from within and/or train to help people learn new skills

If not attract high quality candidates as ‘employer of choice’

Flexibility plans

To enable the best use of people and to adapt swiftly to changing circumstances

Retention plans

To retain the people we need – loyalty & commitment

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Resourcing Strategy


  • In the light of the business plan how many people do we need in each of our key operational or functional areas in the short and longer term?

  • What skills are we likely to need in the future?

  • Will we be able to meet them from within the organisation? If not … what… where?

  • Do we have problems in attracting and retaining key staff?

  • Is there scope to make better use of people by increasing flexibility?

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Scenario Planning

Oxford English dictionary:

“an imagined sequence of future events”


A formal strategic planning technique


An informal approach to thinking about the future in broad terms


A combination of both!

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Scenario Planning


To obtain a better understanding of the possible situations that may have to be dealt with in the future

That involves:

An intellectual process seeking to identify issues and to examine the possible consequences of events

To open minds to a range of possibilities that organisations may have to confront

Possibilities are then ordered to produce a series of internally consistent pictures of alternative futures

Broad assessments of likely internal development (Where do we want to go from here?) and the likely implications on people requirements.

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Scenario Planning


An eight-step guide to developing scenarios

  • Pinpoint the key issue

  • Establish the major local influences

  • Establish the major global influences

  • Classify the influences identified

  • Choose the basis of the scenarios

  • Add detail to the scenarios

  • Review results

  • Choose early warning signals

    Peter Schwartz: the art of the long view: planning for the future in an uncertain world (John Wiley & Sons Ltd)

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Estimating Future Requirements

  • Demand forecasting

    Ideally based on annual budgets and longer term business plans – translating plans into activity levels for each function/department (e.g. setting up a new regional office)

    Techniques include:

    • Managerial judgement (close to scenario planning)

    • Ratio trend analysis (study of past ratios to predict)

    • Work study techniques (work measurements to calculate how long operations take and number of people)

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Estimating Future Requirements

  • Supply forecasting

    Based on:

    • Analysis of existing human resources in terms of numbers in each occupation, skills and potential

    • Forecast losses to existing resources through attrition (labour wastage and retirements)

    • Forecast changes to existing resources through internal promotion

    • Effect of changing conditions of work and absenteeism

    • Sources of supply from with the organisation

    • Sources of supply from outside the organisation in the national and local labour markets

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Estimating Future Requirements

  • Analysing demand and supply forecasts

    • To determine whether there are any deficits/surpluses – basis for recruitment, retention, downsizing plans

    • Computerised planning models can be used but very often basic forecasting can be done with a spreadsheet, e.g.:

  • Number currently employed 70

  • Annual wastage rate based on past records 10%

  • Expected losses during the year 7

  • Balance at end of year 63

  • Number required at end of year 75

  • Number to be obtained during year (5 – 4) 12

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    Labour turnover

    Analysing the numbers of people leaving the organisation – wastage

    Some aspects of labour turnover:

    • Significance

    • Methods of measurement

    • Cost

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    Significance of labour turnover

    • A graphic illustration of the turbulence within an organisation

    • High levels can:

      • Destabilise a business

      • Demotivate people

      • Rises in recruitment, induction and training costs

      • may be a function of negative job attitudes, low job satisfaction and better opportunities elsewhere

    • Normal part of organisational functioning – acceptable levels can be beneficial

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    Methods of measurement

    • The labour turnover index

    • Stability index

    • Survival rate

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    Labour turnover index

    Employee or labour wastage index or the crude wastage method:

    Number of leavers in a specified period (e.g. 1 year) X 100

    Average number of employees during the same period

    25%: satisfactory

    100%: major problem


    • Does not indicate in which areas of the organisation the rate of leavers is high

    • Does not identify the length of service of the leavers

    • Does not indicate any sudden changes in the numbers employed from one year to the next

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    Labour Stability Index

    Links the leaving rate with length of service:

    Number of leavers with more than one year’s service X 100

    Number employed one year ago

    Identifies the extent to which new recruits leave when compared with longer-serving employees


    • Does not identify which units/categories are producing more early leavers

    • Not very satisfactory to consider long-serving employees people with just over one year’s service

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    Survival rate No. surviving to end of year after engagement

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    Reasons for turnover

    Can be derived from exit interviews and classified as follows:

    • More pay

    • Better prospects

    • More security

    • More opportunity to develop skills

    • Better working conditions

    • Poor relationships with manager/team leader

    • Poor relationships with colleagues

    • Bullying or harassment

    • Personal- pregnancy, illness, moving away from area

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    Cost of labour turnover

    Factors to be considered:

    • Leaving costs – payroll costs and personnel admin of leaver

    • Direct cost of recruiting replacements (ads, interviewing, testing)

    • Opportunity cost of time spent by HR and line managers in recruitment

    • Direct cost of introducing replacements (induction course, cost of induction manuals)

    • Direct cost of training replacements in the necessary skills

    • Opportunity cost of time spent by line managers and other staff in providing training

    • Loss of input from those leaving in terms of contribution, output, sales, customer satisfaction and support

    • Loss arising from reduced input from new starters until they are fully trained