Strategic Human Resource Planning - Literature review Example

RUNNING HEAD: STRATEGIC HUMAN RESOURCE PLANNING Strategic Human Resource Planning [Name of the Writer] [Name of the Institution] Strategic Human Resource Planning Introduction Human resources include ‘the experience, intelligence, training, judgment and wisdom of individuals associated with the firm’ (Barney and Hesterly, 1996: 133), while organisational resources include teamwork, trust and friendship between individuals and the culture and reputation of the firm or its units (Barney, 1995: 485). Firms acquire capabilities that are hard to imitate because they are developed in path-dependent ways over a long time, and are often tacit, hard to discern, and socially complex, as they are embedded in a firm’s culture and supply-chain relations. Maximizing an organisation's effectiveness requires strategic planning of its financial, technological, and human resources. Although financial and technological resources arc important, Ulrich and Lake (1990) suggest that an organisation's human resources may be its most important and enduring asset. They therefore suggest that a great deal of attention must be placed on the management of this asset. The paper discusses the part Human Resource Planning plays in contributing to the success and the sustainability of an organisation. The skills and knowledge embedded in employees (the human capital of the organisation) are central to these core capabilities. Moreover, it is often argued that these aspects are becoming ever more important, since ‘the traditional sources of competitive advantage (quality, technology, economies of scale, etc.) have become easier to imitate’ (Becker and Huselid, 1998: 54). A premium is now placed on the skills, knowledge and aptitudes of a firm’s workforce as a source of inimitable assets. However, in many applications of resource based theory, it is not simply the human resource itself that can be a source of competitive advantage, but also the HRM system. As Lado and Wilson (1994: 699) explain: ‘human resource systems can contribute to sustained competitive advantage through facilitating the development of competencies that are firm specific, produce complex social relationships, are embedded in a firm’s history and culture, and generate tacit organisational knowledge.’ Thus, while work enrichment or role empowerment is concerned with autonomy in the job, voice or organisational empowerment is about employees having an influence over issues that go beyond the narrow requirements of task performance. The two aspects of involvement, however, may be linked. Consequently, both the system itself and its outputs (the employee behaviours) are potential sources of competitive advantage (Taylor et al., 1996: 963). In some accounts it simply involves innovative designs of practices or even tailoring practices at the margins (Huselid, 1995); in others (Becker and Gerhart, 1996; Becker and Huselid, 1998) tailoring covers the selection of the practices themselves (providing they are within the high involvement approach), the extreme being the achievement of unique combinations of these. An alternative route is to de-emphasize the creation of a unique HRM system as a source of competitive advantage, and rather to place stress on the human resource system as a creator of a valuable human capital pool that can create competitive advantages (Wright et al., 2001). Then the issue becomes the extent, to which this is simply a matter of skills, and hence whether this is the dominant mechanism linking human resource systems to organisational performance or if practices that guarantee the motivation to apply these skills is equally important and hence motivation and commitment are significant mechanisms. Moreover this brings us full circle to the issue of the role of work enrichment and voice, for even if primacy is given to skills, without the opportunity to exercise these skills and use one’s initiative, ability (and motivation) will not yield maximum or even telling performance effects. This argument was forcibly made by Peters and O’Connor (1980) and Blumberg and Pringle (1982), and no doubt influenced Bailey’s model of high performance working. In so far as the maximization of skill utilization implies giving employee’s responsibility to exercise their skills, the resource based theory could then be seen as consistent with the employee involvement model. Any divide between the two would revolve around whether employee involvement or employee development is the fulcrum of the human resource system, and correspondingly whether the prime mechanism linking practices to performance is intrinsic satisfaction or skill utilization and knowledge. Nonetheless an approach firmly centred on modern work enrichment theory would not limit its effect to an enhanced fulfillment of intrinsic motivation. Weight would be given to other mechanisms, which include improvements in the organisation of work and methods of working, proactivity and work orientations (Parker et al., 1997), norms of reciprocity and organisational citizenship behaviours (Evans and Davis, 2005), and learning, both collective and individual (Leach et al., 2003). The Role of Strategic Human Resource Planning Organisations want persons with new kinds of industrial information, skills, abilities and other characteristics (KSAOCs) -- group who are satisfied and ready to contract with fast and unstructured modifications. As a result, public and nonprofit organisations must think more strategically than ever before (Becker and Huselid, 1998: 54) and they must translate their insights into effective strategies for meeting future challenges. Given the complexity of change in the workplace, human resource professionals, more than ever, need to be a part of the planning process. Strategic human resources management recognizes the role that employees play in contributing to an organisation's success. It becomes part of the strategic planning and policy development process guiding and supporting agency efforts as attempts are made to meet the demands imposed upon it from its external and internal environments. SHRM is driven by an organisation's strategy instead of its functional or administrative activities (Barney, 1995: 485). However, asserting HRM into the strategic planning process involves compromise. HRM professionals should be sensitive to the fact that an HRM seat at the planning table might mean new seats at the HRM table, which is okay (Evans and Davis, 2005). They should be partners in the design of staffing requirements, identifying employee development needs and career opportunities, developing benefit packages and evaluation instruments. HRM specialists need to be connected to and knowledgeable about organisational objectives and be perceived as credible by line managers. Public sector organisations often have a crisis orientation rather than a strategic focus. Public agencies often cope with changes rather than plan for them. Human resource planning is a way to develop a strategic approach to prevent problems. Agencies need to anticipate their personnel requirements so that they are ready to transaction with changing situations. Strategic human resource management forces managers to identify future organisational needs review the supply and demand of skills readily available in the organisation and workforce; and can assist in the development of programs. An immediate outcome in strategic human resource planning could be a shift from reactive to assertive organisations. A critical component of SHRM is human resource planning (Evans and Davis, 2005). Human resource planning is the method of study and recognising the need for and accessibility of the human resources required for the agency to meet its targets. Forecasting is used to evaluate pervious approaches, assess the present state and plan future events. Forecasting and planning complement one another because forecasts identify the best available expectations while plans establish future goals and objectives. Agencies must consider the allocation of people to jobs over long periods of time. Attempts must be made to anticipate any expansions or reductions in programs or changes that may affect the organisation. On the basis of evaluation, new employees can be recruited and selected, employees shifting to diverse course or elements, or maintaining serving employees. Estimating human resource needs to engage influential number and kinds of employees wanted by ability level (Taylor et al., 1996: 963). To be able to forecast the supply and demand of human resources, societies must have checking expertise of current workers and establish their potentials and flaws Positions must also be audited. In most associations there are probable to be professions that are open to, prepared to be restore by technology or reengineering. Job investigations must be taken to suggest information on available professions. The vital supplies of a job ought to be clear and rehabilitated to job riders that identify the least KSAOCs necessary for effective performance (Taylor et al., 1996: 963). The skill supplies of places do alter; any transformations that happen must be observed and reproduced in the job stipulations. Who Should Be Involved Though involving more people in strategy making has clear benefits, it can't yield high-quality results unless people have the necessary skills and perspectives to contribute effectively. Recognizing that, many companies are working to build the skills of new strategists at all levels, and to develop people's strategic thinking and influence skills. An effective strategic thinker is able to connect his or her daily actions with long-term goals of the business. Traditionally, that means making decisions that are consistent with the organisation's overall strategies (Becker and Huselid, 1998: 54) but it also means understanding when strategies should evolve in response to changes and potential shifts in the marketplace. Although strategic thinking has been a key focus in executive development programs for some time, people at other levels of an organisation usually haven't had the chance to develop their strategic-thinking skills through formal training. As they become more involved in strategy making, that imbalance will be corrected. At Xerox, for example, selected middle managers from across the company convene throughout each year for four one-week sessions. They Learn principles for strategic thinking and apply them to solve a key strategic issue facing the company. They also make recommendations directly to Myerscough, the senior VP of corporate strategy (Barney, 1995: 485). Increasingly, many training programs focus on helping people understand strategy making and how it affects their jobs and roles. Companies are also teaching people about the expanded strategic role that they're being invited to play. For example, front-line workers are learning how to serve as the voice of customers and as gatherers of competitive information -- two key inputs of strategic planning. Middle managers are learning the communication skills they need to serve as "ambassadors." In that role, they communicate strategies to their units and represent the strategies developed in those units to senior management. Other approaches to developing strategic-thinking skills include on-the-job development aimed at broadening people's perspectives and experience through job rotation, mentoring programs, task force assignments, and visits to customer sites. Yet, cognitive skills and a clear sense of their strategic role are not sufficient to turn people into effective strategists. The new breed must know how to devise sound strategies and persuade others to implement them. The ability to enlist people's cooperation and arouse their enthusiasm for one's proposals can be addressed in training programs, particularly ones that focus on the skillful use of influence. Hr Planning Issues Many states have measured HR planning to be a less valued process with a different start and finish, slightly than a recurring one where every scheduling stage nourishes into the next. Therefore, planning, after all, has been a key attempt, more worried with the development of the plan than with its implementation. Such plans often set unrealistic or rigid standards or ignore the strategy of the system to disburse for the intended boosts in staff. As a method, this type of planning is expensive and therefore often shaky because it engages great figures of persons over a determined era of time. It also provides inadequate concentration to checking and assessing the plan and to device that permit for midterm improvement. Hornby et al. (1980) focused out that HR planning has too usually undergone from being troubled simply with facts of diverse kinds of staff, while overlooking qualitative features. suitable planning needs a broader viewpoint that involves such qualitative problems as significance of instruction to service needs, allotment of duties and purposes, efficiency, inspiration, etc. Conclusion Interestingly enough, two trends are at play with the human resource departments. The departments themselves are becoming smaller. Yet at the same time, the organisation wide influence of the department is definitely increasing. Interestingly enough, two trends are at play with the human resource departments. The departments themselves are becoming smaller. Yet at the same time, the organisation wide influence of the department is definitely increasing. The HR departments today are emphasizing "higher-value activities" with companywide benefits that add value to the organisation. This shift has been described as one from a "micro view" to one of a "macro view" of the department's role in the organisation. Dave Ulrich stated that "achieving organisational excellence must be the work of HR." The work of HR cannot be disconnected from the real work of the firm, but rather must be clearly integrated with the work of the business. References Evans, W.R. and Davis, W.D. (2005) ‘High-Performance Work-Systems and Organisational Performance: The Mediating Role of Internal Social Structure’, Journal of Management, 31: 758–75. Leach, D.J., Wall, T.D. and Jackson, P.R. (2003) ‘The Effect of Empowerment on Job Knowledge: An Empirical Test Involving Operators of Complex Technology’, Journal of Occupational and Organisational Psychology, 76: 27–52. Parker, S., Wall, T. and Jackson, P. (1997) ‘That’s Not My Job: Developing Flexible Employee Work Orientations’, Academy of Management Journal, 40: 899–929. Peters, L. and O’Connor, E. (1980) ‘Situational Constraints and Work Outcomes: The Influences of an Often Overlooked Construct’, Academy of Management Review, 5: 391–7. Blumberg, M. and Pringle, C. (1982) ‘The Missing Opportunity in Organisational Research: Some Implications for a Theory of Work Performance’, Academy of Management Review, 7: 360–9. Becker, B.E. and Gerhart, B. (1996) ‘The Impact of Human Resource Management on Organisational Performance: Progress and Prospects’, Academy of Management Journal, 39: 779–801. Becker, B.E. and Huselid, M.A. (1998) ‘High Performance Work Systems and Firm Performance: A Synthesis of Research and Managerial Implications’. In Ferris, G.R. (ed.) Research in Personnel and Human Resource Management, 16, Stamford, CT: JAI Press, pp. 53–101. Huselid, M.A. (1995) ‘The Impact of Human Resource Management Practices on Turnover, Productivity, and Corporate Financial Performance’, Academy of Management Journal, 38: 635–72. Wright, P.M., McCormick, B., Sherman, W.S. and McMahan, G.C. (1999) ‘The Role of Human Resource Practices in Petro-Chemical Refinery Performance’, International Journal of Human Resource Management, 10: 551–71. Taylor, S., Beechler, S. and Napier, N. (1996) ‘Toward an Integrative Model of Strategic International Human Resource Management’, Academy of Management Review, 21: 959–85. Lado, A. and Wilson, M. (1994) ‘Human Resource Systems and Sustained Competitive Advantage: A Competency Based Perspective’, Academy of Management Review, 19: 699–727. Barney, J. (1995) ‘Resource Based Theory’. In Nicholson, N. (ed.) Encyclopedic Dictionary of Organisational Behaviour. Cambridge, MA: Blackwell Publishers, pp. 485–6. Barney, J. and Hesterly, W. (1996) ‘Organisational Economics: Understanding the Relationship between Organisations and Economic Analysis’. In Clegg, S.R., Hardy, C. and Nord, W.R. (eds) Handbook of Organisation Studies. London, Thousand Oaks, CA and New Delhi: Sage, pp. 115–47. Hornby, P., Ray, D.K., Shipp, P.J., Hall, T.L. 1980. Guidelines for health manpower planning. Geneva: World Health Organisation. Read More