Human Resource PlanningIntroductionHuman resources have been proposed as one of the most important sources of competitive advantage in this global environment (Bartlett and Ghoshal, 1987). In Western nations, researchers have increasingly studied how HRM can be used to achieve and sustain competitive advantage (Becker and Huselid, 1998; Walker, 1994). Within the literature, this field of study is commonly known as 'strategic human resource management' (e. g. Wright and McMahan, 1992; Wright et al, 1999). An HRM system increases organisational performance, develops and maximizes an organisation's abilities (Huselid, 1995) and contributes to its continuous competitive advantage.
The individuals working in the company become the source and basis for utilization of other resources. Thus, through an efficient HRM system, an organisation's employees become essentially a strategic asset. They form a system of resources and rare abilities that cannot easily be copied or replaced, and that provides the company with its competitive edge (Harel and Tzafrir, 1999). The paper discusses how external factors affect the human resource planning and make recommendations as to how the organisation can offset the impacts. The elements of a sound IR system are also closely linked to a progressive HRM system (Erickson et al, 2003) The adoption of strategic HRM has been the subject of many recent studies.
Wright and McMahan defined strategic HRM as 'the pattern of planned human resource deployments and activities intended to enable a firm to achieve its goals' (1992; 298). A characteristic of a strategic approach to HRM, compared with personnel management, is the linkage between HR and business strategies (Schuler, 1992; Ulrich, 1997) and its positive relationship with firm performance (Becker and Huselid, 1998; Delery and Shaw, 2001).
Evidence of the economic impact of strategic HRM has been accumulating (e. g. Becker and Huselid, 1998; Huselid, 1995; Wright etal, 2001a). Strategic HRM is about integration and adaptation and its main concern is to ensure that HRM is fully integrated with the strategy and strategic needs of the firm (e. g. Golden and Ramanujam, 1985; Schuler, 1992; Wright et al, 1999). Its purpose is to utilize human resources more effectively vis-a-vis the strategic needs of the organisation (Pfeffer, 1995; Schuler, 1992; Wright e/a/. , 1999). Drawing from the human capital and resource-based view perspectives, HR practices can be used to ensure that the skills, knowledge and abilities of core employees can be transformed into a source of competitive advantage (e. g.
Arthur, 1994; Huselid, 1995; Wright et al, 1999). Past conceptual and empirical research generally agrees on the importance of certain HRM practices in the determination of employee and organisation level performance. Arthur (1994) found that HR practices were related to scrap rates, productivity and employee turnover. Huselid (1995) found a substantial relationship with both employee turnover and firm profitability. Wright and his colleagues (1999) reviewed the relationships between various HR practices and firm performance.
They found that there was substantial support for the relationship between HR practices and firm performance. Specifically, they found that appraisal and training were significantly related to workforce skills. External FactorsAccording to Fisher (1989), there were three main external factors, apart from attempting to align HRM practices with the strategic orientation of the organisation. First, with the ever-growing trend toward globalization, HR executives must be able to address transnational issues, such as expatriation and the utility of applying HRM practices across nations.
Second, because the number of mergers and acquisitions has risen substantially, HR executives must reflect the ability to facilitate the post merger/ aequisition process. Third, Fisher argued that as a result of foreign competition or acquisition, U.S. organisations have been forced to become "lean and mean. " As such, these organisations have turned to downsizing and other alternative employment relationships. Consequently, HR executives must become more expert in addressing such issues as staff reductions and the management of contingent workers.