Strategic Human Resource Management and Human Resource Planning - Literature review Example

Strategic human resource management and human resource planning Student Name: Institutional Affiliation: Date: For a business to remain competitive and profitable, it has to develop and refine its strategic orientation both internally and externally. Internally, a business should consider issues such as employee skills, organizational culture, production systems and managerial effectiveness. Externally, a business should position itself appropriately to take advantage of opportunities and overcome threats (Ireland & Hitt, 2001). Strategy development involves analysis of the present situation facing a business and the possible future situation to come up with an action plan (Deb, 2006). Success in managing human resource will most likely translate into profitability and competitiveness for a business (Bhattacharyya, 2009). It is crucial, that managers and human resource practitioners consider human resource management as a strategic business concern. Of even greater importance, is human resource planning, which helps the business assess present and future human resource needs and come up with an appropriate strategy to address the needs (Rumbles & Rees, 2013). The scope of this paper will be limited to analysis of key practices that align with strategic planning function of human resource managers today. Some literature sources reviewed in this paper are limited in terms addressing strategic management in human resource planning. However, clear assumption on strategic value maybe drawn from human resource planning practices reviewed in this paper. Human Resource Planning involves analysing present and future human resource needs in full consideration of the internal and external factors facing a business (Deb, 2006). Human Resource Planning, therefore, holds the key in deciding the skills and competencies that are lacking in a business or the skills that need to be reinforced as part of supporting the strategic orientation of the business (Rowley & Jackson, 2010). According to Bhattacharyya (2009), it is imperative that human resource managers work closely with the senior management and strategy development teams to highlight human resource considerations in deciding the appropriate strategy for a business. Essentially, human resource management has to be part of any strategy formulation team in an organization to address the human resource dimension of strategy development and implementation. It is worthy noting that, human resource is an important production factor in organizations, without which all the other production factors cannot achieve the business goals (Marescaux, Winne, & Sels, 2013). For a strategy to be successful, the business must involve the human resource function in development and implementation processes. Human Resource Planning, however, cannot be effective if there is a lack of proper system to gather and analyse information regarding supply and demand for labour and skills in the organisation (Pablos, 2008). It is the responsibility of Human Resource Management to devise a plan of retaining and attracting skilled and talented workforce particularly in times when there is a low supply in the market of individuals with such attributes (Lewis, Thornhill, & Saunders, 2003). According to a research by Rynes, Gerhart, & Minette, Winter (2004) companies that invest resources and time in rewcruiting best talents in te market, have a higher degree of succeeding in achieving strategic goals and objectives. Rynes (2004) further noted that successful Companies such as Johnson & Johnson and Coca-Cola have integrated their human resource functions with future strategic focus of the business. This is reflected in competitive but rewarding appraisal systems, Diversity programs, work-life balance policy, training & development of employees. Armstrong & Baron (2005) believe that employee performance can be analysed from their overall contribution to the organisation in attaining its goals and objectives. Clearly, there should be strategic linkage between recruitment and retention policies to the vision and mission of the organisation. The strategic linkage should in turn guide human resource planning by Human resource managers. Human resource managers must come up with a fair and effective rewards and promotion scheme. The scheme must not be unfair to the employees particularly in situations where skills and labour are in low supply. It should encourage the existing employees to stay by making them happy and satisfied working for the business (Rynes et al, 2004). Deb (2006) contends that employee high employee turnover derails achievement of strategic goals through loss of key implementors in the organisation. According to Deb (2006), reducing the rate of employee turnover through fair rewards and compensation schemes safeguards the success of strategic plans, goals and objectives of an organisation. Intrinsic rewards such as flexible working and family friendly job designs attract talented and skilful employees who desire jobs where they can grow and develop their knowledge and expertise (Marescaux et al, 2013). Human resource managers should therefore, consider planning effectively for employee-focused rewards and compensation schemes as a strategic human resource function. Research by Rynes et al (2004) cautiously recomend use of regular pay rise to motivate and retain key employees. However, future research in this area should address the effectiveness of using monetary rewards such as bonuses and pay rise, as a strategic tool in human resource management. According to Longenecker (2013), skilled employees in the 21st century have more bargaining power and awareness than it was a few decades ago. The implicating of this is that, employees now prefer working for organisations that value their contributions to organisational success but also their lives (Longenecker, 2013). Research by Marescaux et al, (2013) strongly supported the contention that organisations that plan effectively for employee leaves, flexible working hours attract and retain highly talented and dynamic workers. Bhattacharyya (2009) notes that women employees in india are more likely to prefer working in organisations that provide baby care facilities and flexible work plans for parenting workers. Attracting talented and resourceful workers is a strategic human resource objective which should influence planning for attraction and retention of workers through flexible working (Bhattacharyya, 2009). However, future research should shed more light on the implication of flexible plans on organisational effectiveness and employee performance. Human Resource Management should also consider training and development as critical in helping the business achieve its growth and development objectives. With skilled and well informed employees, an organisation is able to improve its internal competencies and respond well to external opportunities and threats (Pablos, 2008). It is part of the planning function of human resource to come up with information relating to skills gap in an organisation and formulation of a training and development plan based on such information. The study by Marescaux, et al (2013) revealed the need for training and development of employees as part of strategic goals implementation. Marescaux, et al (2013) note that employees are used by management to implement strategic action plans. this necessitates te need to train and develop employees to ensure succesful implementation of strategoic plans. Rumbles & Rees, (2013) study suggests human resource managers should always be prepared to respond to changes positvely with skilled and informed employees. clearly, training and development planning prepares employees for change and unexpected hurdles in their work. without the training and development of employees, an organisation will not be succesful in attainment of strategic goals and objectives. More research needs to be done to establish the critical role of Human Resource Management in responding to external changes such as development new technologies in industries and markets. Planning for succession is a critical function of Human Resource Management in organisations (Deb, 2006). Businesses must be always prepared to handle management and leadership transitions with minimal disruptions to normal functions. Human resource management of a business should put in place a system that identifies management and leadership potential in individuals in the internal and external talent pools (Lengnick-Hall, Andrade & Drake, 2009). The system should further facilitate training of employees that show leadership potential on decision-making and leadership skills critical in leading successful organisations (Pablos, 2008). It should be of strategic concern to any business that visionary leadership and prudent management outlives the existing leaders of the business. To achieve long term leadership success in business, succession planning is inevitable as a human resource management function (Iqbal, 2011). Businesses that fail to plan for succession often result in management and strategy crisis when influential leaders quit the organisation (Rowley & Jackson, 2010). Strategic Human Resource planning should consider succession as a critical issue to the vision of an organisation. This contention is supported by Chen & Huang (2009) observations that the vision and management style of the new leadership may not necessarily be in harmony with the organisational culture and strategic orientation of the business thus creating a conflict (Chen & Huang, 2009). Human Resource Management should prepare through training and mentorship, a set of possible leaders within the company who understand the vision and mission of the organisation to prevent leadership crisis. Succession planning also guarantees success of long-term strategies of the business. Research in this area has not adequately addressed the issue of succession planning that considers possible replacements from outside organisations. the general assumption is that external sources of replacement to top leadership always alters vision and mission of organisations which may not necessarily be the case always. Succession planning should also consider replacement of aging workers who posses a lot of knowledge and expertise in their respective specialisation. The aging employees can pass the knowledge and expertise to young workers if the right systems and methodologies of learning are put in place (Rumbles & Rees, 2013). Human resource planning in future will have to address the issue of an aging workforce as life expectancy in developed economies improves. Population growth in such economies is expected to slow, thus reducing the population of young people in the work force (Hodgkin, 2013). The result will be a situation where businesses struggle with skill shortages. Key decisions regarding sourcing for skills where they are readily available and economical will have to be made to actualize the growth objectives laid out by organisations (Bhattacharyya, 2009). Strategic Human Resource Management plans on how to handle aged workers will be very critical in maintaining skilled but aging employees in the organisation in order to pass the critical skills to a younger workforce. At times businesses go through rough economic times marked with low sales and poor internal competencies. Due to the losses, a business may choose to downsize its workforce to absorb the losses and manage sustainable size of the workforce. Downsizing is not always a popular decision for management to take but it has the potential of increasing efficiency by reducing operating costs and focusing on key skills and productivity of employees (Bhattacharyya, 2009). according to Deb (2006), human resource planners in organisations must be involved in downsizing decisions such as layoffs, pay cuts, training and development program suspension and more. Lewis et al (2003) also contend that human resource planning is an integral part of strategy development in organisations and should be considered whenever downsizing decisions that will definitely affect the human resource of a business are made. Human resource managers must be involved in making decision on which employees to be laid off and those to be retained (Marescaux et al, 2013). Prior planning particularly on imparting employees with multiple skills can reduce the effect of downsizing to organisations. Future research on this area should be devoted on how human resource management contribution can be strategically incorporated in measures to reduce the negative effect of downsizing on the organisational momentum to goals and objectives attainment. It is clear from the analysis presented in this paper that human resource planning influences strategic human resource management in organisations. Better planning results in development and implementation of effective human resource management programs and policies. The policies and programs in employee management ultimately determine the success or failure of a business in its effort to achieve goals and objectives. Recruiting and retaining skilled and talented employees cannot be possible for any business if there are plans in place to ensure the employees feel motivated and happy to work for an organisation. Setting up reward schemes and employee welfare programs goes a long way in attracting and retaining productive employees. Human resource functions should as well plan for successions, promotions and retirements to avoid a situation where there is leadership crisis and skills shortage when leaders and experienced employee leave the organisation. Succession planning must involve training and development of employees who show the potential to learn and lead the organisation. Human resource planning is at the core of strategic human resource management since strategy is all about coming up with an effective and efficient action plan that can lead a business to success. References Armstrong, M., & Baron, A. (2005). Managing Performance: Performance Management in Action. CIPD Publishing. Bhattacharyya, D. (2009). Human Resource Planning India. Excel Books India. Chen, C. J., & Huang, J. W. (2009). Strategic human resource practices and innovation performance—The mediating role of knowledge management capacity. Journal of Business Research, 62(1), 104-114. Deb, T. (2006). 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