Human Resource Planning and Strategic Organizational Planning - Coursework Example

Human Resource Planning and Strategic Organizational Planning Introduction: The ment that, people are one of the most important resources critical to the success of an organization has been echoed by management experts over a period of time. There was a period when businesses were small and were usually managed by a single person or a family. Most the work would be done by family members themselves and very few of them needed many employees from outside. But the industrial revolution had changed the concept of business in a dramatic way. An organization could not longer be managed by a single individual and it required a large and diverse workforce for its effective functioning. Globalization and free trade resulted in an explosion of multinational companies employing people from different countries and cultures. All these developments gave rise to the concept of effectively managing a large and diverse workforce and a new field of study developed over the years, known as human resource management. Most medium and large organizations now have dedicated departments or managers to look after this function. This paper looks at the concept of human resource planning which forms the foundation for management of human resources and the importance of integrating it with corporate or organizational strategy. Human resource planning and related concepts: Organizations exist mainly for profit motive (or in broader terms, effective utilization of material and human resources) and the objective of the organization is achieved to a large extent through its employees. Hence a strategy for developing and managing the employees is essential. For this purpose the concepts of human resource development and human resource management have to be in place. Moreover, a strategic human resource planning has to take place in order to effectively implement the above two concepts. Before moving on to the topic, it is necessary to review in brief, an overview of human resource development (HRD) and human resource management (HRM) since they form an integral part in the planning process. It will also show how these two concepts make the whole process of managing employees a complex task, especially in medium and large organizations. It also shows the need for planning which is essential for effective implementation of HRD and HRM policies and practices. HRD is the responsibility of top management which is concerned with people at work and with the relationships within an organization. It basically means development of employees with regard to all aspects of employment and includes job skills, soft skills, and qualifications. HRD can be regarded as a continuous process which matches organizational needs for human resources and the individual needs for career development. It enables the individuals to gain their best human potential by attaining a total all round development. It promotes dignity of employment of every employee of an organization and provides opportunities for team work, personnel development and career development. From review of literature it can be seen theorists have disagreements over even a proper definition of the term. According to the book Human Resource Development the term HRD can be defined as “an integrated and holistic, conscious and proactive approach to changing work-related knowledge and behavior, using a range of learning strategies and techniques.” (Joy-Mathews, Megginson & Surtees 2004, p.6). Another related but bigger definition by Academy of Human Resources Development says about HRD in three steps. First is that it is a study of organizational development practices so that it may “achieve higher levels of individual and organizational effectiveness” (Lee 2003, p. 69). The second is that it trains individuals to for individual as well as skill development. The third is that it helps to manage change as well as maintain good relationships between different departments and groups in the organization. Bratton and Gold explains the two concepts of ‘human resources’ and ‘management’ after providing a comprehensive definition of its combination, which is human resources management. Employees have talent, qualification, skills, and other resources required in the work environment, and the term given to the combination of the above mentioned factors is referred to as HRM. The authors’ definition of the term is “that part of the management process that specializes in the management of people in work organizations, HRM emphasizes that employees are critical to achieving sustainable competitive advantage, that human resources practices need to be integrated with the corporate strategy, and that human resources specialists help organizational controllers to meet both efficiency and equity objectives” (Bratton & Gold 2001, p. 11). It should be noted here that the authors have stressed the integration of HRM and organizational strategy or strategic planning. In other words, apart from managing human resources to make them productive, efficient and satisfied, the management planning process should include integration with overall corporate strategy. Many other theorists also agree to this view. The book Strategic human resources management, states that “human resources management at any level is important to strategy implementation” (Schuler & Jackson 1999, p. 321). Human resource planning explained: The importance of integrating human resource management with corporate strategy has been established in the above section. This section will explore in detail the concept of human resource planning which is an important function of the HR department. Taylor, referring to Bramham defines the concept as follows – “Human resource planning is essentially a planned approach to the management of human resources, linking practice to an organization’s strategic objectives and planning responses to prevailing labor market conditions” (Taylor 2002, p. 45). Cole also states that human resource planning is a part of strategic activity. Quoting other sources, he defines the concept as “a strategy for acquisition, utilization, improvement and retention of an enterprise’s human resource” (Cole 2002, p. 138). The author adds that this 1974 definition is relevant even today, except for an additional element to be included, namely disengagement or laying-off of employees. Many companies engage in this practice in order to be more efficient (competitive) and sometimes even for sheer survival. But the both views of the two authors, Taylor and Cole, stress the importance of integrating organizational strategy with human resources. One area where they are not in complete agreement is the scope of HR planning. Cole views indicate a broader role for planning while Taylor is of the opinion that the field is restricted to certain areas only. According to Cole, planning should include employees that are currently working in the company, those that may be needed in the future, fresh recruits and those that may leave for various reasons. Areas like performance assessment, training, recruitment, motivation, anti-discrimination policies, work-life balance, compensation, other benefits, and redundancy pay should become a part of planning. Taylor sets the limits regarding the role of planning to only forecasting. This includes current and future requirements, outsourcing and external staffing, and finally providing a plan to meet the forecast requirements. It indicates that planning does not cover qualitative factors like training, compensation, benefits etc. But both authors indicate that HR planning does not take into account the day-to-day activities of HRM even though it has a say in many of the diverse HR activities. Cole, referring to the Institute of Personnel Management states that the planning department should be able to inculcate the following habits or practices within the management. Managers should be made aware about the importance of planning and should encourage close working with the planning and implementation departments. It should also stress the importance of proper allocation of planned resources and should not deviate from it unless absolutely necessary. There are other views regarding the scope of HR planning, as a result of which the views put forth by Taylor and Cole can be classified accordingly. HR planning can be divided into hard and soft planning as characterized by its functions and scope. Hard planning focuses on the quantitative aspects while soft planning focuses more on the qualitative aspects (Armstrong, 2000, p. 203). In this instance the forecasting focus as mentioned by Taylor can be considered to be a hard approach while the view provided by Cole can include both hard and soft approaches. Armstrong referring to Quinn also state that planning should be integrated into the overall strategic planning process. He goes on to say the HR planning should take into account diverse HR areas and hence, both soft and hard approaches should be incorporated into the planning process. HR planning and strategic planning: It is seen that most literature on HR states the important of linking HRM and planning to organizational strategic planning. The relationship between HRM and planning has also been illustrated. Strategic planning is defined as a “process to determine or re-assess the vision, mission, and goals of an organization and then map out objective (measurable) ways to accomplish the identified goals.  Strategic planning typically focuses on results to be achieved in a 3, 5, 7, or 10 year time span as contrasted with tactical or operational planning which typically focuses on results to be achieved in a one year or less” (New Mexico State University 2008). The relationship of HR planning and strategic planning has been stressed by other experts also. As Ivancevich states, “HR planning goes hand in hand with an organization’s strategic planning” (Ivancevich 2008, p. 130). Armstrong brings out the relation between the two by stating that HR planning is directed towards satisfying the people aspect/angle in an organizational strategic planning process. It appears that there are no hard and fast rules that can be applied in a HR planning process. An example of a hard approach is given here for providing illustrative purposes. If the organizational strategy is one of expansion, it will definitely require additional employees. In such a situation the steps to be followed are, assessing requirements, identifying qualified personnel and creating an action plan that will provide the required number of eligible employees at the right time and at the right place (Caruth & Handlogten 1997, p. 123). The authors states that each of the three phases require careful study and a close cooperation between the management and the planning team. There are many external and internal factors that will influence the implementation of a successful plan. It might be relatively easy to assess the required number of personnel. But other factors could become a problem. For example, some employees may leave the organization for various reasons. This could be difficult to estimate, but is possible through interaction with employees and finding a rough estimate. Some tasks may have to be scrapped altogether while new ones may be created. New technology may be introduced and employees have to be qualified to use it. Those identified as potential candidates may not be available when the time comes to recruit them. They may not be ready to wait and could take up other job offers. Government polices and statutes may change which may entail a related change in expansion plans. Again, some employees may be promoted or transferred to new tasks or locations. The vacancies that come about through have to be filled either from existing employees or through new recruits. If the company is planning to downsize its workforce, plans on how to lay-off employees without creating problems have to be made. Discussions with unions (if they exist) may have to be planned and retrenchment packages planned. The planning department will have to identify qualified personnel once the lay-off policy is scrapped. They could either recall old employees or look for new ones. As one can see, it is a complicated process depending on the scale and scope of the organizational strategy. Conclusion and recommendations: A discussion regarding the relation between organizational strategy and HR planning has been done in this paper. It can be seen that the latter is an important part of HRM, HRD as well as strategic planning. It has also been established that both HRM and HR planning should be integrated into the overall strategies of the organization. The complexity of an HR planning process will depend on the scope and scale of the strategic plans developed by an organization. If the scope is large, then many external and internal factors will affect the planning process and its effectiveness. Each plan will depend on whether the organization is planning to expand, to diversify, or to cut back on expenditure and resources. In short, many external and internal factors influence the effectiveness of HR planning. They include availability of qualified employees at the right time and place, government policies, unexpected employee turnover, promotions, job rotation, addition or deletion of tasks and jobs etc. Almost all management experts agree that HR planning should be an essential part in the success and effectiveness of the strategic business planning process. Taking into consideration what has been mentioned in this paper, the management should take both soft and hard approaches to HR planning. Such an approach will take into account qualitative and quantitative factors, both of which are an essential part of HRD and HRM practices. Moreover, the planning should be done with close cooperation between different departments and the HR planning section/department. The top management should not take the recommendations and action plans of the planning department lightly. If these factors are taken into consideration, an effective and practical plan can be put into action. It will also help in bringing in an element of flexibility in today’s highly competitive and dynamic environment. References Armstrong, M 2000, Strategic human resource management: a guide to action, 2nd edn, Kogan Page. Bratton, J & Gold, J 2001, Human resource management: Theory and practice, 2nd edn, Routledge. Caruth, DL & Handlogten GD 1997, Staffing the contemporary organization, 2nd edn, Greenwood Publishing Group. Cole, GA 2002, Personnel and human resource management, 5th edn, Cengage Learning. Ivancevich, JM 2008, Human resource management, 10th edn, Tata McGraw-Hill Joy-Mathews, J, Megginson, D & Surtees 2004, M, Human resource development, 3rd edn, Kogan Page Lee, M 2003, HRD in a complex world, Routledge   New Mexico State University 2008, Glossary, New Mexico State University, viewed 20 December 2009, Schuler, RS & Jackson, SE 1999, Strategic human resource management, Wiley-Blackwell. Taylor, S 2002, People resourcing, 2nd edn, CIPD Publishing Read More