Individual Assignment 1
1. Define and explain the significance of the term ‘derived demand’ as it applies to Strategic Human Resources Planning. (5 marks) Derived demand is the demand for a product/services occurs as a result of a demand for another immediate good or service. When apply this concept on labour demand, the more a company's product or service the market wants, the higher the demand for labour to involve in the production process. The essence of strategic human resources planning is to align human resources planning organization's business strategy. This means company cannot perform their personnel forecast solely based on the product demand because there is some other factor that will affect the product demand. Thus, company need to have a thorough analysis of the external environment and examine potential factor that will affect the overall demand of product/service, then examine how these factors will affect the overall big picture. HR professionals will then be required to view how will these factors affect the business objectives in terms of operations and tried to look for different flexible interventions in order to support the corporate values. 2. Explain ‘derived demand’ as it applies specifically to Stonewall Industries. (5 marks) The production of the gypsum wallboard is derived from the housing demand. This means if there is a lot of housing activities in the construction and property industry, it will affect the overall demand of the production of gypsum board; this will ultimately affect the overall labour demand. In 1982, the derived demand of labour was extremely low since there were lack of housing starts, which lead to stagnate of consumption of gypsum wallboard. Subsequently, Stonewall had to terminate employees with this low demand of the gypsum board. On the contrary, housing starts increased in 1991, which led to a relatively high derived demand of the gypsum wallboard. This led to the derived demand of labour increased significantly because more workers would be required in the production plant to keep up with the gypsum board order. 3. The Senior Executive Team at Stonewall has to consider a number of environmental factors that impact on its Human Resources Planning activities. Describe these environmental factors and explain their impact. (10 marks) There are several environmental factors that the senior executive team has to considered when performing HR planning activities and they are economic, political and legislative, technological, social and cultural and demographic factors. (Belcourt and McBey, p.64-70). (1) Economic factors
Economic factors are variables that affect the macro-economy and create a huge impact to the entire society as well as factors that affect individuals and business entities. On the monetary policy standpoint, interest rates will be a key factor that affects Stonewall's HR planning activities. Since the company's major operation is based on the production and the sales of gypsum wallboard (a construction material use in building walls and ceilings), an increase in interest rate will reduce amount of investment and projects on construction, which will reduce the overall demand for gypsum wallboard. For this reason, Stonewall has to alter the amount of workforce in the production of wallboard to minimize the lost such as relocating part of the workers to the plastic division, or invest on another profitable segment to minimize cost attribute to the fluctuation of the interest rate. An important component of HR planning is to "forecast the number of people and skills required by the organization during a given period of time, and look for the best option to obtain these individual when they are required." (MacKellar, 2012). When the Bank of Canada announced there will be some adjustment in the interest rate, Stonewall should already have contingency plans. For example, if interest rate has dropped, the company will have to expand its...
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