Human Resource Planning - Need for Strategic HR - Assignment Example

Human Resource Planning - Need for Strategic HR Introduction Human resource planning is the system to ensure that the right person is in the right job at the right time (Jackson & Schler, 1990). It has been defined as “the process by which management determines how the organization should move from its current manpower position to its desired position”. Through planning, the organization is able to get the right people at the right place at the right time which maximizes long-run benefits both to the individual and the organization. The process of planning involves forecasting the future human needs and planning how those needs can be met. Planning includes establishing objectives and then developing and implementing programs such as staffing, training and appraising. This ensures that people with the desired skills are available when needed. It may also include program that help to improve employee productivity, employee satisfaction and boost organizational creativity. Human resource planning includes collection of data which can help to evaluate the effectiveness of ongoing programs and keep track when revisions may be needed. Need for Strategic HR As changes started taking place in the workplace with intense competition and globalization, companies realized that the human resource has to be part of the strategic business plans. There is a linkage between business and human resource plans in which the human resource and the line managers work jointly to develop business plans and determine the human resource needs (Jackson & Schler, 1990). Joint efforts occur when the HR planners can convince the business planners that human resources are assets of the company. In other words, strategic HR is aligning or integrating the decisions about people with decisions about the results that an organization is trying to achieve. The HR activities, hence, should support the mission goals and build strong HR/management relationships (USOPM, 1999). Because of the forces of change, a flatter, less bureaucratic, less hierarchical, faster and more responsive organization is emerging as the model for the future (Beer, 1997). Such an organization would require certain strategic actions such as: 1. Coordination across functions, business units and borders 2. Employee commitment to continuous improvement 3. Competency in leadership and general management 4. Creativity and entrepreneur 5. Open communication. These actions become essential if the organization has to align its strategic goals with the human resource planning and processes. Integration of human resources with organizational goals Human resources planning takes into account the future personnel requirements and revolve around meeting those requirements. This suggests that human resources planning can be an important input into the strategic plans. Integration of human resources with the organizational goals has been considered important for several reasons. As organizational problems have become complex, integration provides a wider range of solutions to these situations (Lengnick-Hall & Lengnick-Hall, 1988). Integration ensures that human resources are given consideration in setting and assessing capabilities. Integration limits the neglect of human resources that are a vital source of organizational competence and competitive advantage. There are different approaches to matching the strategy with the human resources. Resource-based view A strategic approach to HR implies that firms design and implement a set of internally consistent policies and practices that ensure that the human capital contributes to the firm’s performance (Huselid, Jackson & Schuler, 1997). Strategies are based on different perspectives and there is a link between resource-based perspective on strategy and HRM. Three kinds of resources have been found to assist in strategy formulation of an organization. These include the physical resources, the organizational resources and the human resources. Human resources represent the skills and the know-how of individuals working in the organization. Firms are focusing on creating and sustaining this ‘strategic asset’ through HR policies (Koch & McGrath, 1996). The resources-based view of the firm suggests that a firm’s pool of human capital can provide competitive advantage. This further suggests that the pool of human capital must be unique, difficult to replicate and difficult to substitute (Huselid, Jackson & Schuler, 1997). Normal HRM activities would include selecting and recruiting rate talent and training them to keep them motivates. Strategic HRM would imply that a firm must ensure that its human resources cannot be imitated. Strategic HRM practices include team-based designs, empowerment and the development of talent for long-term. Strategic HRM – three-stage process Strategic HRM can encompass a number of HR strategies. Strategy is not the same as strategic plans. Strategic planning is a formal process that takes place in larger firms to determine how things would be done. Strategy, nevertheless, exists in every organization and defines how plans would be implemented. Strategic HRM is a three stage process that includes strategy formulation, implementation and evaluation (Krishnan & Singh, 2004). The strategy formulation stage is influenced by a number of external and internal factors. The technological, economical, socio-cultural and political environments constitute the external factors. Changes in these environments are evident from the demographic changes, political influences, automation, economic growth and other technological advancements. These necessitate that the human resource management should be aligned with these changes. These external environment factors affect the competitive strategy formulation (Lengnick-Hall & Lengnick-Hall, 1988). The competitive strategy is influenced by economic conditions, industry structure, and competitive advantage. The HR strategy is influenced by the labour market, the skills and the culture. The internal factors influence the organizational culture and the internal stakeholders. The cooperation of line managers is essential in SHRM. Strategic HR has led to the redefining of roles of the top management. It has become essential for the top management to devolve the responsibilities to the line managers because certain issues are too complex for the top management to comprehend. Since the line managers are in direct contact with the supervisory staff, they are in a better position to understand, liaise, communicate and execute certain functions (Budhwar, 2000). The top management thus has to acquire “transformational leadership” and share their vision for future success with other employees. Since cost effectiveness has been a primary concern (Beer, 1997), devolving of responsibilities to the middle managers reduces the requirement of manpower at the top level. The middle managers must then, have the ability to inspire, encourage, motivate, enable and facilitate change. They would thus encourage the employees to become committed to the organization (Thornhill & Saunders, 1998). The second stage is the implementation stage where different systems such as the recruitment and selection, compensation, performance evaluation, and career progression are aligned with the HR strategy (Krishnan & Singh, 2004). This stage also includes interventions required for organizational development or effectiveness and managing change during processes such as mergers and acquisition. Outsourcing is another strategic decision that contributes to effective functioning of the HR department. Outsourcing of recruitment and selection and even training and development has been taking place. Outsourcing recruitment process alleviates the administrative burden of sourcing and screening candidates with the right skills (Mill, 2002) but Fish and Macklin (2004) warn that the HRM professionals must ensure that the service providers have knowledge, integrity, conscientiousness, and effectiveness. In the implementation of the second stage, the line managers, employees and customers play an important role. The third stage is the evaluation stage where the effectiveness of the HRM system and their strategic integration is reviewed (Krishnan & Singh, 2004). This takes place in the form of surveys and evaluation process. Evaluation is a difficult process because most organizations are unsure of what they want to evaluate. The outcome of various HRM practices have to be measured which may include outcomes like employee turnover, measuring the desired behaviour of the employees and the desired competencies of the organization. Performance reviews form a part of this stage. The analysis of the evaluation provides information on what changes should be made in the implementation process. The barriers to strategic HR include poor coordination and teamwork, unclear strategy and priorities, an ineffective top team, top-down management, poor vertical communication, inadequate management and management development through out the organization (Beer, 1997). Industry example of Strategic HR IBM has 350,000 staff worldwide across different disciplines ranging from technical IT areas to the non-technical disciplines of Sales, Finance, HR and Legal (Monster, 2008). They are responsive to the market requirements and the reputation of being the most progressive employer because they encourage contribution and reward talent. IBM has aligned its human resources with its business strategy and is the employer of choice as they provide their employees with the right capability, climate and culture. The strategic HRM process includes the diversity policy and the disability policy where equal opportunities are provided to all (IBM, 2007). IBM fosters a spirit of innovation, culture and collaboration (Graduate Jobs, 2008). Their corporate mission is to maintain diversity and this is communicated to all through various channels including the electronic media, meetings and training programs. IBM sees diversity as a part of the vision that they want to build. They use diversity as a resource both for individual learning and development and for business performance and effectiveness (Thomas, 2004). In alignment with their goals they are building up a diverse workforce, which helps them to serve the customers better and to capture a greater share of the market. Based on their strategy of maintaining diversity and providing equal opportunities to the disabled, they implement their strategy to meet these requirements and achieve their mission. Traditionally IBM’s employee search process differed for the senior executives and the middle managers. The process has now evolved and they too post job openings on websites such as websites like Monster.com, careerpath.com and careerbuilder.com (Kumar, 2003). This has not replaced the traditional mode of recruitment. It only complements and supplements the process. Emails have replaced the paper based process and they now receive 70% of their applications via email or online. This method has proven to be cost-effective, which is one of the purposes of strategic HRM. Online recruitment process has reduced the time spent on the recruitment and selection process by as much as 25 percent. To maintain their diversity policy, they have Diversity Councils locate worldwide. IBM has an award-winning recruitment program called the Project View where selection is based on experience, skills and overall academic achievements. While their strategic mission is equal opportunities for the disabled, they also ensure that they respect the principle of non-discrimination in their search process. They omit any requirements that are not job specific in the description of the ideal candidate (ASPHI ONLUS, 2007). Advertisements are placed in way that is accessible to all. Codes of conducts have been laid down for the interviewers which have to be maintained when interviewing the disabled. Their personal attention and initiative is also in alignment with their strategy to maintain corporate social responsibility. To employ more women IBM has started the EXITE (Exploring Interests in Technology and Engineering) camp where they recruit women and disabled youth (Ability Magazine, n.d.). Conclusion It can thus be seen that companies like IBM formulate their strategy and then also successfully implement it. It is essential to align the business goals with the human resource management. This alone can being about success in today’s turbulent environment. HR planning differs from strategic HR because today companies align their mission with the HR policies. Thus strategic human resources management is a three-stage process involving strategy formulation, implementation and evaluation. Strategic HRM involves looking into all aspects of the HRM rather than the traditional roles of recruitment and payrolls. In fact, even the recruitment procedure has undergone change as in the case of IBM where it has been altered to meet the corporate mission. Functions of HR are even outsourced because it is believed that it can be cost effective and expert help can be sourced. Line managers play a vital role in the success of strategic HRM. However, not all companies are as successful as IBM as poor communication, lack of cooperation, top-down management and inadequate management undermine the entire process. Even after implementation of the strategy, companies are not sure what exactly they need to evaluate or want to evaluate. Strategic HRM requires coordination across different functions, employee commitment towards continuous improvement, open communication, competency in leadership and management. These actions have become essential if the firm has to sustain competitive advantage. References Ability Magazine. (n.d.). Youth Tech Camps: An IBM Initiative. Retrieved online 13 December 2009 from http://www.abilitymagazine.com/Youth_Tech_Camps.html ASPHI ONLUS. (2007). Guidelines for integrating people with disabilities into workplace. IBM ITALIA FOUNDATION. Retrieved online 13 December 2009 from http://www.asphi.it/DisabilitaOggi/Guidelines_2007.pdf Beer, M. (1997). THE TRANSFORMATION OF THE HUMAN RESOURCE FUNCTION: RESOLVING THE TENSION BETWEEN A TRADITIONAL ADMINISTRATIVE AND A NEW STRATEGIC ROLE. Human Resource Management, 36 (1), 49-56 Budhwar, P. S. (2000). 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American Psychologist, 45 (2), 223-239 Koch, M J., & McGrath, R. G. (1996). Improving Labor Productivity: Human Resource Management Policies do Matter. Strategic Management Journal. 17 (5), 335-354 Kumar, S. (2003). Managing Human Capital Supply Chain in the Internet Era. Industrial Management and Data Systems. 103 (4), 227-237 Krishnan, S., & Singh, M. (2004). STRATEGIC HUMAN RESOURCE MANAGEMENT: THREE-STAGE PROCESS AND INFLUENCING ORGANISATIONAL FACTORS. Retrieved online 13 December 2009 from http://www.iimahd.ernet.in/publications/data/2004-06-04manjari.pdf Lengnick-Hall, C. A., & Lengnick-Hall, M. L. (1988). Strategic Human Resources Management: A Review of the Literature and a Proposed Typology. The Academy of Management Review. 13 (3), 454-470 Mills, E. (2002). Virtual Recruitment. Retrieved online 13 December 2009 from http://www.nature.com/nbt/journal/v20/n8/pdf/nbt0802-853.pdf Monster. (2008). Monster Case Studies, IBM. Retrieved online 13 December 2009 from http://www.monster.ie/casestudy/ibm/ Thomas, D. (2004). Diversity as strategy. Retrieved online 13 December 2009 from http://www-03.ibm.com/employment/us/diverse/feature_thomas.shtml Thornhill, A., & Saunders, M. N. K. (1998), What if line managers don’t realize they’re responsible for HR? Personnel Review, 27 (6), 460-476 USOPM. (1999). Strategic Human Resource Management. Retrieved online 13 December 2009 from www.opm.gov/studies/alignnet.pdf Read More