Orienting development strategy of human resource in powercompany no.2 in perido 2010 - 2020

Group No 6 Griggs University – Hanoi National University


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GRIGGS UNIVERSITY
GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM




CAPSTONE PROJECT REPORT

ORIENTING DEVELOPMENT STRATEGY
OF HUMAN RESOURCE IN POWER COMPANY No.2
IN PERIDO 2010 - 2020


Group: No.6
Students’ name:

1/ Ho Quang Ai group’s leader
2/ Ho Quoc Viet
3/ Duong Huu Tuong
4/ Lam Hoang Phuoc



HANOI, 2009

ACKNOWLEDGEMENTS

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We - the students of Group 6 - would like to express my heartfelt gratitude to
all of leaders of the Training Program Master of Business Administration
International (Gemba) for facilitating to implement our Capstone Project Report
and creating good conditions to associate the knowledge and skills learned from the
dedicated guidance throughout the MBA program with practical business issues and
providing valuable guidance and comments to complete graduate homework
program;
We would like to express my thanks to all faculty and staff members who
guide (teach) GeMBA01.E04 class for their instruction and convey special
knowledge to all students together with good feelings that they give the students
during the study.
We would like to express my faithful appreciation to Leaders and
Professional Departments of Power Company No.2 for their enthusiastic support
during the period of data collection and constructive suggestions to complete this
thesis.
The Capstone Project Report has referred to the lecture note (of the MBA
program)… In spite of many efforts and close coordination of the members in the
group 6, because of limited time, the thesis has certainly shortcomings, thanks for
the sympathy of the Instructors and leaders of program.

Best regards,
Group No 6 Griggs University – Hanoi National University

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TABLE OF CONTENTS
ACKNOWLEDGEMENTS i
TABLE OF CONTENTS iii
LIST OF ABBREVIATIONS vi
LIST OF TABLES vii
LIST OF FIGURES, GRAPHS ix
INTRODUCTION 1
1. The nessesary for our project 1
2. Objective and task of our project 2
2.1. Objective 2
2.2. Tasks 2
3. Object and scope of studying 3
3.1. Object of Studying 3
3.2. Scope of study 3
4. Method and source material 3
4.1. The method 3
4.2. Source material 3
5. Benefit of our project 4
6. Content of project 4
Chapter 1 5
THEORETIC BASIS OF HUMAN RESOURCE MANAGEMENT 5
1.1 OVERVIEW OF MANAGEMENT 5
1.1.1 Concept of strategic management 5
1.1.2 Requirement during building and implementing strategy 5
1.1.3 Role of strategic management 5
1.1.4 Stages of strategic management 6
1.1.5 The levels of strategic management 6
1.1.6 Methods and instruments for building strategy 7
1.2 OVERVIEW OF THE HUMAN RESOURCE MANAGEMENT 8

1.2.1 Concept and the role of human resource management 8
1.2.2 Goals, principles and functions of HR 11
1.2.3 Areas of human resource management in enterprises 12
1.3 HUMAN RESOURCE PLANNING 13
1.3.1 Concept and the role of human resource planning 13
1.3.2 Process of human resource planning 14
1.3.3 Forecast manpower 14
1.4 PLANNING POLICY OF GUARANTEE EMPLOYMENT FOR BUSINESS 16
1.4.1 Method of policymaker to ensure human resource 16
1.4.2 Attracting and recruiting human 17
1.4.3 Assessing capacity to implement the work of staff 20
1.4.4 Policies of payment, reward and treatment 24
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1.4.5 Training and development of human resource 27
1.4.6 Labor relations in enterprises 32
CONCLUSION OF CHAPTER 1 36
Chapter 2 37
ANALYSING MANPOWER ISSUE IN POWER COMPANY No.2 37
2.1 ABOUT POWER COMPANY No.2 37
2.1.1 The process of formation and development 37
2.1.2 Functions and tasks and decentralization 39
2.1.3 The specific points of Power Company No.2: 41
2.2 BUSINESS SITUATION FOR 5 YEARS 2004-2008 43
2.2.1 Situation of developing power grid 43
2.2.2 The situation of developing clients 47
2.2.3 Situation growth of commercial electricity 48
2.2.4 Situation of the average electricity price 50

2.2.5 Current Situation of labor productivity 51
2.2.6 Results of the manufacturing and business in 5 years from 2004 to 2008
52
2.2.7 General Comments 55
2.3 CURRENT STATUS OF MANPOWER IN POWER COMPANY 2 55
2.3.1 Model of Organization 55
2.3.2 Analysis of staff employees of the Power Company No.2: 58
2.3.3 Analysis of leadership and management staff of Power Company
No.2 62
2.3.4 Recruited Activities and recruiting manpower of Power Company
No.2 66
2.3.5 Arranging and using of human resources of Power Company No. 2 68
2.3.6 Regarding to salaries, allowances and other material incentive 70
2.3.7 Training and development of human resources 77
2.3.8 Assessing the human conditions of Power Company No.2: 80
2.3.9 Analysis of external environment 85
CONCLUSION OF CHAPTER 2 93
Chapter 3 95
FORECASTING NEEDS AND ORIENTING DEVELOPMENT OF
POWERMAN OF POWER COMPANY No.2 UP TO 2020 95
3.1 DEVELOPMENT OBJECTIVES OF THE COMPANY POWER No.2 TO 2020
95
3.1.1 Policies of Gobernement for the electricity industry: 95
3.1.2 Identify PC2‟s vision and mission 96
3.1.3 Development objectives of the Power Company No.2: 98
3.1.4 Orienting human resources development in PC2 100
3.2 ORIENTING MANPOWER DEMAND OF POWER COMPANY No.2 UNTIL
2020 102
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3.2.1 Human resource development Policy of the Electricity of Vietnam 102
3.2.2 Orienting human resources development in Power Company No.2 until
2020 104
3.3 SOME SOLUTIONS TO WARRANT MANPOWER FOR DEVELOPMENT
NEEDS OF POWER COMPANY NO.2 TO 2020 113
3.3.1. Policymaking to ensure human resource in company 114
3.3.2. Organizations implement good recruited and employed working 118
3.3.3. Evaluating the effectiveness of work and payment of salaries, bonuses
122
3.3.4. Implement training and development of human resource 132
CONCLUSION 148
REFERENCES 152

Group No 6 Griggs University – Hanoi National University


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LIST OF ABBREVIATIONS

ADB
- Asia Development Bank
AFD
- French Development Agency
EDC
- Electricity of Cambodia
EVN
- Electricity of Vietnam
FDI

- Foreign Direct Investment
JBIC
- Japan Bank for International Cooperation
HRM
- Human Resource Management
ODA
- Official Development Assitance
PC2
- Power Company No.2
WB
- World Bank
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LIST OF TABLES
Table 2.1 Situation of Developing Grid over 2004 - 2008 (Source: Technical
Department) 44
Table 2.2 Power loss rate of the years from 2004 to 2008 (Source: Technical
Department) 46
Table 2.3 The situation of developing customers from 2004 to 2008. 47
Table 2.4 Growth rate in commercial electricity over 2004 - 2008 48
Table 2.5 Average electricity selling price over 2004 - 2008 50
Table 2.6 Situation of implementing labor productivity 52
Table 2.7 Results of business operations for 5 years from 2004 to 2008 53
Table 2.8 Labor structure by level 58
Table 2.9 Distributing labor in Power Company No.2 59
Table 2.10 Analysing labor by specialized training (Source: Personnel and Training
Department) 60
Table 2.11 Analysing staff by education 63

Table 2.12 Analysing staff by age 65
Table 2.13 Arranging staff in Power Company No. 2 69
Table 2.14 – Skill level of technical workers in PC2 80
Table 2.15 – Qualification of technical experts (Engineers, BSc in PC2) 80
Table 2:16 Comparison of labor productivity index of PC2 with the other
countries‟electricity sector. 81
Table 2.17 Labor structure by education 82
Table. 2.18 Comparison of labor productivity index of PC2 82
with the other other companies. 82
Table 3.1: Identify the needs of the labor in PC2 to 2020 106
Table 3.2: Number of employment needs to recruit to 2020 107
Unit: person 107
Table 3.3: Expected structure of the labor force by level of PC2 108
Table 3.4 Labor demand by level of PC2 109
Table 3.5 plan of adjustment, supplement labor under level structure 110
Table 3.6: labor structure is expected by 2020 111
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Table 3.7: Predict the number of managers should be added to 2020 112
Unit : person 112
Table 3.8 Training cost over years 2004 – 2008 138
and estimated cost for training to 2020 138
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LIST OF FIGURES, GRAPHS
Figure 1.1 Process of human resource policies 17

Figure 1.2 The process of recruiting manpower 18
Figure 1.3 Bilateral relationship of recruitment and other HRM functions 19
Figure 2.1 Geographical areas of business operations of Power Company No.2 37
Figure 2.2 The Groundbreaking Ceremony of distribution network rehabilitation
and expansion Project in Thu Dau Mot Town, Binh Duong Province, ADB loans. 39
Chart 2.1 Developing transmission lines and substations for 5 years 2004 - 2008 46
Chart 2.2 Power loss for 5 years from 2004 to 2008 47
Chart 2.3 Developing customer for 5 years from 2004 to 2008 48
Chart 2.4 Growth of commercial electricity over 2004 - 2008 50
Chart 2.5 - Average selling price over 2004 - 2008 51
Chart 2.6 Implementation of labor productivity from 2004 to 2008 52
Chart 2.7 Revenue and profits for 5 years from 2004 to 2008 54
Figure 2.3 Organization chart of Power Company No.2 57
Chart 2.8 Labor structure by education 58
Chart 2.9: Labor structure by age 62
Chart 2.10 Analysing staff by education 64
Chart 2.11 Analysing staff by age 66
Figure 3.1- Solutions to ensure human resource in Power Company No.2 113
Group No 6 Griggs University – Hanoi National University


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INTRODUCTION

1. The nessesary for our project
To survive, develop and go up in competition of market economy, there are
many factors to effect business activities of enterprises such as facilities, property,
materials, etc., but the important factor is human. It is derived from the man, who is
impossible without in any enterprise, playing important role in operating and
deciding the success or failure of it, so that Human Resouce Management (HRM) is

the most important management in the process of manufacturing and business of all
enterprises.
Power Company No.2 (PC2), subsidiary of Vietnam Electricity (EVN), is
independent accounting company. PC2‟s main function is distributing and trading
power for twenty provinces and cities from Ninh Thuan – Lam Dong to Kien Giang
– Ca Mau in The South of Vietnam (except Ho Chi Minh city and Dong Nai
province). Along with the development of Vietnam‟s power sector, over the years,
PC2 have been always renovated and developed in all respects such as enhancing
the stability in operating of power system; ensuring to supply power with safety,
continuity and quality; contributing to develop social and economy in Vietnam.
According to General scheme of Vietnam Electrical Development Phase VI
was approved by the Goverment, in 2020 commercial electricity output which is
expected to reach 164.96 billion kWh will be more than three times in 2006. Many
advanced and modern power plants as well as electrical transmission and
distribution networks will be built. Demand for training and retraining of human
resource to managing and operating the electrical system is very difficult problem
that Electricity of Vietnam has to solve. And now, there are also many opportunities
and challenges that PC2 has to face when Vietnam integrating into international
market economy.
For the urgent request as mentioned above, we choose to research project
named "Orienting development strategy of human resources in Power Company
No.2 in period 2010 – 2020”. Our project focuses on studying deeply in theoretics
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and some skills in Human Resource Management, to evaluate the existing human
conditions in PC2 and to propose solutions to ensure demand development of
human resource in Power Company No.2 up to 2020.
The achivement of this project is based on knowledge that we are learned in

MBA of Griggs University and practical experience that we have collected during
working at PC2.
Group‟s members are:
1. Ho Quang Ai
2. Ho Quoc Viet
3. Duong Huu Tuong
4. Lam Hoang Phuoc.
2. Objective and task of our project
2.1. Objective
We would like to clarify the scientific background of human resource
management, in particular, based on business development strategy in PC2 (such as
electrical output, productivity, customer services, prestige, …) to orient human
resources development strategy; Analysing the existing manpower in PC2 to find
out advantages and limits. Since then, we propose some feasibility solutions to
ensure developing human resource in PC2 until 2020.
2.2. Tasks
To achieve objectives as mentioned above, we have to solve deeply the
following tasks:
- In theoretics: some fundamentals will be systemized as well as practical
issues will be researched to show the new concept in HRM.
- In practice: after analyzing the existing human conditions in PC2, we have
found out the reasons which causes to restrict on quantity and quality of PC2
staff and employees. And then, we propose some solutions to ensure
developing human resource in PC2 up to 2020.
Content of our project:
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- Based on fundamentals of human resource management, we have applied the

method of predicting the needs and orientation human resource to plan for
developing human resource in PC2 in the future.
- Analysing the quantity and quality of esixting human conditions in PC2.
- Predicting demand for human resource and proposing some solutions to
develop human resource in PC2 up to 2020.
3. Object and scope of studying
3.1. Object of Studying
Human resource management (overview of the role and function of human
resource management), human resource planning, human resource orienting
and related issues such as attracting and recruiting employees, evaluating
performance of staff, salary and allowance policy, training and developing
human resource, maintaining employee relationships.
3.2. Scope of study
- Time: Studying activities of PC2 from 2003 to 2008.
- Scope: studying in 20 cities and provinces belong to management of PC2.
4. Method and source material
4.1. The method
The methods as follows is applied:
+ Method of investigation and statistics.
+ Method of comparison.
+ Method of analysing system.
Based on the methods as mentioned above, we give proposing and measuring
to improve of human resource management at Power Company No.2.
4.2. Source material
Source material was taken mainly from the reports of Power Company No.2;
EVN‟s documents; The Goverment Decrees and Decisions; articles in
newspapers and magazines relating the electrical sector.
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5. Benefit of our project
- Contributing to systemize theoretics of human resource planning (predicting
demand) and orienting policies to ensure human resource in business;
clarifying characteristics of staff and employees in electrical sector and
objective condition in recuiting and training staff and employees of Power
Company No.2 in renovated period.
- Based on analysing, evaluating and comparing as mentioned above, we have
remarked on advantages, limits and causes of HRM, and then we propose
planning and policy to ensure human resource in PC2 up to 2020 to meet the
requests of economyics in industrialization and modernization period of our
country.
- Clarifying and giving our points of views in methods of attracting and
recuiting employees, evaluating performance of staff; salary and allowance
policy; training and developing human resource, maintaining empolyee
relationships in Power Company No.2 in the renovated period.
6. Content of project
Beside the introduction, conclusion, documents for reference and appendix,
there are also three chapters in our project as follows:
- Chapter 1: Theoretic Basis of Human Resource Management.
- Chapter 2: Analysing of the existing human conditions in PC2.
- Chapter 3: Predicting the needs and orientation of human resource in Power
Company No.2 up to 2020.
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Chapter 1
THEORETIC BASIS OF HUMAN RESOURCE MANAGEMENT

1.1 OVERVIEW OF MANAGEMENT
1.1.1 Concept of strategic management
“Strategic management is a process of studying current environment as well
as future environment; planning aims of organization; proposing,
implementing and check decisions which were done; to achieve these aims in
current and future environment”. Besides, strategy is appropriate
combination of three factors: Choose the right of stop point; ability of
implementing strategy; exploiting efficiently potential.
1.1.2 Requirement during building and implementing strategy
- Goal of strategy is to enhance influence of business and obtain competitive
advantages.
- Strategy have to ensure the safety in trade of business. Business strategy
has safe zone in which the risk can be happened at minimum level.
- Determine scope of business, the goals and basic conditions to implement
these ones.
- Forecast the business environment in future. The more forecast is precise,
the more business strategy is suitable.
- It should have a standby strategy.
- It should be combination of available chances.
1.1.3 Role of strategic management
The process of strategic management helps the organizasions recognise their
goals and oriented their policies, use every capability and reduce the least of
risk. In the most of reseached projects, the company using strategic
management is obtained more good results than the company not using
strategic management.
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However, there are disadvantages in strategic management such as it takes

long time to establish process of strategic management; it is not applied
correctly, or used inflexible when issuing by documents.The mistake of long-
term forecast sometimes can be very large.
Because of disadvantages as mentioned above, some companies do not
applied strategic management, and if we know how to overcome
disadvantages and apply correctly strategic management, advantages of
strategic management is larger than disadvantages of strategic management.
1.1.4 Stages of strategic management
a. Strategy Form: is a process of establishing trade planning, investigate and
collect information of business such as: the strength, the weak, the risk from
outside or inside, establishing long-term goals, building and choosing
standby strategy
b. Strategy Implementation: is the stage of operating strategic management.
The fundamental activities of this stage which establish short-term targets,
propose policies and distribute resources are often the most difficult stage of
strategic management process. Role of managers and employees is very
important, to achieve the success, every department in company should
answer the questions: “What should we do to implement our tasks in
strategic management of organization?” and “How do we do to complete our
tasks in the best way?.
c. Check and assess strategy: this stage is necessary because the current
results do not ensure the success in future.
1.1.5 The levels of strategic management
a. Company-level strategy: denfine and show the goals and business
activities of company, specify policies and basic plans to achieve the goals of
company. The company strategy defines the business activities of company
competing with other companies, and distributing resources for these
business activities.
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b. Business-level strategy: define product or specify market for business
operation inside company, and identify how the company competes with
other companies which product or trade the same production. Business-level
strategy identifies method of each division applying to achieve division‟s
target and contributing to complete company‟s goals.
c. Function-level strategy: support arrangement of company strategy and
focus on business field and cooperation fields.
1.1.6 Methods and instruments for building strategy
SWOT analysis


POSITIVE / useful
to achieve the goals
NEGATIVE / harmful
to achieve the goals
Internal
assessments /factors of
organisation

S trengths
Things, which is good
now, are maintained,
built and used as
leverage
W eaknesses
Things, which is bad
now, are repaired,
modified or stopped.

External
assessments/environment
factor, activities
organisation

O pportunities
Things, which is good
for future, priority them,
capture them, build on
them and optimize
T hreats
Things, which is bad
for future, take them in
plan to manage or
access

A SWOT analysis is an planning instrument to identifying the strengths (S),
weaknesses (W), O pportunities (O), and Threates (T) regarding to a project
or business. It regards to identify the goals of business or a project and
identify internal and external factors for support or reduce disadvantages.
SWOT is used to a part of strategic planning process.
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Building strategy on SWOT matrix
SWOT matrix includes Strength (S), Weakness (W), Opportunity (O), Threat
(T). This is the important combination instrument helping managers to
develop 4 strategies:
 Strength – Opportunity strategy (SO): using inside strengths of

company to salvage outside opportunities. All managers expect their
organisations belong to position in which internal strengths can be used
to take the trend or events of outside environment.
 Weakness – Opportunity strategy (WO): improving internal weaknesses
by taking external opportunities. Sometimes, the large opportunities
exist from outside but internal weaknesses of company prevent them.
 Strength-Threat strategy (ST): using strengths of company to avoid or
reduce impacts of external threats. Sometimes, a strength organisation
also faces with external threats.
 Weakness-Threat strategy (WT): is defensive strategy which reduce
internal weakness and avoid external threats. An organisation facing
with a number of external threats and internal weakness is always not
safe.
1.2 OVERVIEW OF THE HUMAN RESOURCE MANAGEMENT
1.2.1 Concept and the role of human resource management
Human Resource Management relates to basic issues which are
"management" and "human resources". Management is the process to make
activities which are completed with high efficiency, through people. Problem
of management is the coordination between leadership art and science .
Enterprises/ businesses (from here we use business in stead of enterprise or
business) have the resources including capital, resources, material,
equipment and people need to create goods and services that businesses
brings to the market. Most businesses are building rules, regulations and
procedures for providing capital, raw materials and equipment to ensure
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adequately supplying when they need. Similarly, businesses should pay
attention to process for human management - this is an important resource.

a. Concept Human Resource (HR)
HR is presented in several aspects:
+ With the concept is one of the essential functions of management process:
human resource management includes planning, organizing, commanding,
coordinating and controlling activities relating to attraction, using and
development of employees in organizations.
+ In aspect of labor process organization, "Managing human resources is a
field of monitoring, guiding, adjusting and testing to combine the human and
material factors of nature in the process of creating material and spiritual
wealth to meet the needs of people and society”.
+ Focusing deeply on the content of the HR, "Management of human
resource are recruitment, use, maintenance and development as well as
providing facilities for employees in organizations.
In short, the most common concept of human resource management is
defined as follows: "Management of human resources is activities to enhance
the effective contribution of individuals to organizational goals,
simultaneously to try to achieve social goals and personal goals.
b. The important difference between the traditional and the modern
opinions on HR
+ At First: function of modern human resource management is larger than
function of traditional human resource management.
+ The Second: Modern human resource management is interested in training
and educating, for which the costs are more and more increasing.
+ The Third: Modern human resource management through implemeting
many management functions have brought economic efficiency for the
organization.
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+ The Fourth: Modern human resource management considering staffs and
employees as "the society" is different with personnel management
considering staffs and employees as "the economy".
c. The role of human resource management
Any business when conducting production and business activities must also
meet factors that are human resource, material resource and financial
resource. In particular, human are the most important, who decides to survive
and develope the enterprises.
Firstly, due to increasing fierce competition in the market economy, to
survive and develop the businesses must improve their organizations towards
compact, dynamic, in which human factors are calculated with decision.
People – by their skills, their education, have used facilities to impact on
material to create goods and products to society.
Secondly, the advancement of science and technology with the economic
development requires the administrator knows how to make your
organization to adapt.
Thirdly, research human resource management to help administrators
achieving goals, results through others.
Finally, research human resource management to help administrators
learning how dealing with others, find out common language and being
sensitive to the needs of employees, how to accurately assess staff and
employees, entice staff having a passion for their works and eventually it
may lead the people strategy to become the organic parts of the business
strategy of the business, contributing to improving the quality and
effectiveness of the work of the organization.
In short, human resource management plays a central role in the process of
production and business activities of enterprises in general, it can help
businesses to survive, grow and go up in the competition. Focus of this role
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comes from the role of man: man is a component of the business; the people
operate businesses and decide the success or failure of the enterprise.
Because of the important role of human resource, human resource
management is an important management field in all enterprises.
1.2.2 Goals, principles and functions of HR
a. Goals
+ Using effectively human resource in order to increase labor productivity
and improve the effectiveness of the organization.
+ Meeting the increasing needs of staff and employees, creating favorable
conditions for staff and employees who do their best with the maximum
capacity, acknowlegde their loyalism, devotion to business.
+ Ensure adequate number of workers with appropriate skill and education,
retain the right people, right job, and the right time to achieve the objectives
of the business.
b. Principles
+ Staff need adequate investment to develop their own ability to satisfy
personal needs, and make labor productivity, high labor performance.
+ Working environment can stimulate to develop and use maximum staff‟s
skills and capacity.
+ The HR function should be done to coordinate and an important part of
business strategy of the business.
c. Functions of HR
+ Function of supplying manpower.
+ Function of developing human resource
+ Function of payment
+ Function of safety and health
+ Function of workfore and labor relations
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1.2.3 Areas of human resource management in enterprises
Major contents of the HR is coordinate an overall plan activities,
recruitment, selection, use, maintenance, development, encouragement and
creating favorable conditions for human resources of enterprises through the
organization to achieve business goals.
Areas of human resource management in the enterprise include:
a. Research on human resource: research of human resource needs (type,
rank, industry structure, gender ) at present, in the future (the required
workforce, excess of workforce, the retrained workforce, etc.).
b. Planning human resources: Planning human resource: The total
calculation and structure of human resource in the development stages of the
business (present, future) associated with the goals of business development.
This is one of the major functions of human resource management.
c. Recruiting human resources: As a concrete step to implementing the
human resource planning.
d. Training and Development: Training is to ensure the employees working
with right skill, to meet the current needs and future of the enterprise.
e. Maintenance and management: After recruiting and training, the next
responsibility of human resource management is management and use of
employees.
f. Management remuneration: This is one important motivation for workers
connecting with business and encouraging development the talent of staff
and empolyees.
g. Management relations in labor: Through regulations and organisation,
employees have realized clearly their roles in business.
h. Creating good atmosphere in the business: The employees consider
business is a part of their lives so that they can become to stick, to unite, to

do their best for business.
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i. Services and welfare issues in business: to solve problems such as
housing, lunches, hygiene, rest and visit, and administrative support, etc.
k. Occupational safety and health: Business must make good the
obligations of workers‟ health and compensation insurance.
l. Opportunity of development: Creating opportunities and equal
environment, extensive to the employees so that they can rise and progress in
the life of enterprise.
1.3 HUMAN RESOURCE PLANNING
1.3.1 Concept and the role of human resource planning
a. Concept
Human resource planning is the process of assessment, determine the human
resources need to achieve organization's objectives and establish labour
planning to meet future needs.
b. The role of human resource planning
Firstly, human resource planning plays a central role in the strategic
management of human resources based on the integration of human
resources and organization.
Secondly, human resource planning has great influence on the organization‟s
effectiveness through intergrating implementation with result.
Thirdly, human resource planning helps the enterprise clearly see how to
manage its human resources, to ensure the right workforce in the right
worplace, at the right time and necessary flexibility to cope with market
changes.
Fourthly, human resource planning regulates the activities of human
resources. It will show how to incorporate all the sectors and determine if

human resource is suitable to its business, and in particular, if human
resource can ensure enterprise competitive advantages.
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Fifthly, human resource planning is the basis for activities of recruiting,
retaining, training and developing workforce.
1.3.2 Process of human resource planning
The main contents of human resource planning in enterprise can be
summarized as follows:
• Step 1: Analyze environment and influent factors
+ External factors and environment, including factors such as economic
context, population and social labor force, laws of the state, culture and
society, competition, science, technology, customers, corporate and
government.
+ Internal environment, including the enterprise mission, goals, strategies,
policies, cultural atmosphere, shareholders, and union.
• Step 2: Analyze current human resource management
+ Qualify enterprise human resource
+ Scheduling future human resource needs
• Step 3: Analysis of supply and demand of human resources and adjustable
possibility.
• Step 4: Test and evaluate the implementation results
1.3.3 Forecast manpower
a. The meaning of human resource forecasting
+ Forecast management may predict the status of extra or lack of workforce,
professional capacity does not meet or exceed the requirements – lack of
appropriate adaptation between organization and human resources.
+ For a certain aspect, forecast management is one of the main aspects of the

"comprehensive quality" in the activities of human resource management.
In short, forecast management is a higher level of human resource
management.
b. Predict for human resource needs
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Prediction for human resource needs can categorize into two methods which
are the method of calculation and quantitative method.
In the method of calculation, the specialist one is used most widely.
Quantitative method is often used in human resource need forecast such as
the method of predicting manpower requirement based on each human
resource unit, the method of calculating depreciation costs of labor, the
method counting on labor productivity, etc.
Method of calculation labor productivity
Basic content of this method: Divide the total output product of the plan year
(in kind or value) by labor productivity per employee in the plan year in
order to determine human resource need in the plan year of organization.
Formula: (source: [2] Textbook of Personnel Management, page 73)

W
Q
D 
(2)
Where:
D: Labor need in plan year,
Q: Total output production of the plan year,
W: Average labor productivity in the plan year.
According to this method, it is necessary to focus on the same unit in

calculating the total output of the plan year and the average labor
productivity in the plan year.
Currently, power sector applies method of calculation labor productivity in
order to determine manpower requirement and establish annual labour plan.
c. Predicting manpower supply
To evaluate, analyze and predict the number of people willing to work for
organization in order to take measures to attract, use and exploitation of
potential employees, therefore to improve the performance of organization.
Group No 6 Griggs University – Hanoi National University


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Predicting manpower supply can be done from two sources: within the
organization (i.e. analysis of existing human resources in the organization)
and outside the organization.
1.4 PLANNING POLICY OF GUARANTEE EMPLOYMENT FOR
BUSINESS
1.4.1 Method of policymaker to ensure human resource
Strategic human resources are very important to the perfection and
effectiveness of the organization. It depends on the relevance of human
resource strategy with the organization's overall strategy, characteristics,
capacity, and environment changes.
In human resource aspect, strategic planning of human resources helps
company clearly sees its direction way to manage human resources, ensure
the right people for the right job at the right time, and have flexible response
to market changes. The Enterprise will miss business opportunities because
exceed workforce increases costs, and lack of workforce or employees does
not meet the requirements and affects product quality. Human resource
planning is the process of research and identify the needs of human
resources, make policy and implement programs and activities to ensure

sufficient human resources with appropriated quality and skill to carry out
high productivity, quality and efficiency in bussiness.
In the competitive market, it is necessary for enterprises to plan and carry out
human resource policies such as talent attraction, special reward (strong
salary discrimination, adequate award for innovation), training, etc. in a
relevant system.
Planed policies ensure human resources in order to implement the objectives,
the enterprise‟s policy activities must meet the following basic requirements:
+ Human resource policies must synchronize consistent with each other;
+ Each human resource policy must be legal;
+ Each human resource policy must appeal to the target candidate.