Importance of Human Resource Planning - Coursework Example

Strategic HRP in Context Student’s Name: Course: Tutor’s Name: Date: Planning for the use of human capital is an essential aspect of creating successful for-profit (business) and not-for-profit (government) organisations, as human resources planning (HRP) is the fundamental process of determining and forecasting human capital needs of an organisation for the present and the future. A critical look at the above statement reveals just how important Human Resource Planning (HRP) or workforce planning, as it is commonly referred to in literature, is to organisations. The statement alludes to the fact that without HRP, organisations would have a hard time placing the right human capital, at the right place, for the right work, and at the right time. Notably, HRP has four critical factors that it must address. They include the number of employees needed in an organisation at any one time; the abilities, skills and knowledge needed; the departments or function areas where the employees are needed most; and the time and length when such employees will benefit the organisation most (Rump, 2004). Without proper HRP, it would be difficult for organisations to initiate strategic plans since, as is often noted in literature, the employees are the most valuable asset in any organisation. HRP on the other hand is that aspect of strategic planning that ensures that the organisation has a clear perspective of what its current and future HR needs are and how to cater for any deficits in HR. The latter is done by first comparing human resource availability versus an organisation’s needs, and forecasting HR availability in the future (Rump, 2004). This paper discusses the logic of HRP as part of strategic planning in organisations. ScottishPower, a UK-based power company is used as a case in context, revealing how the organisation has used HRP to advance its overall strategic plans. Organisational planning and HRP WebFinance (2012) describes organisational planning as the process that organisations use to identify their short-term and long-term objectives, formulate strategies and monitor them. Additionally, organisational planning entails resource allocation to the different aspects of the organisation. Notably, HRP is a vital component in determining how the human resource component of any organisation should be allocated or even handled. Considering this definition, and in order to answer the question on whether organisational planning should precede HRP, run concurrently, or come before HRP, one needs to consider just what goes into organisational planning. Schein (1974) states that several components go into the organisational planning process; they include strategic business planning, which determines the desirable future of an organisation. Second is job/role planning which is based on strategic planning and focuses on the “the types of skills needed and how existing jobs will evolve and change” (Schein, 1974, p. 6). Third on the list of components is manpower planning, which is in this essay’s case is referred to as HRP and is closely tied to strategic business planning and job/role planning. Following Schein’s (1974) components, it is apparent that HRP is part of organisational planning, thus meaning that the two functions need to be conducted concurrently. If indeed Schein’s components proposition is true, it is apparent that organisational planning would be incomplete without HRP. Taking ScottishPower’s case for example, the organisation’s vision to become the "UK’s best integrated energy supplier and a world leader in renewables" (Scottish Power, n.d. p. 85) would in reality be unattainable without proper HRP which would ensure that the organisation has the right people, providing it with the rights skills, for specific job roles, at the right time. It is also worth noting that organisational planning is often based on the objectives that a firm wants to attain both in the short- and long- terms. Notably, the attainment of such objectives relies heavily on the human resources component; meaning that a firm needs to anticipate its staffing needs, and make a plan on how to fulfil such needs when developing its overall business objectives. Advantages/disadvantages of HRP Like anything else in the world, HRP has its good and bad qualities. Realising the benefits of HRP is however not a straightforward undertaking and often times, organisations end up missing the point, resulting in shortcomings brought about the HRP process. For organisations that are able to craft good HR plans and execute them, advantages are often realised. Such include the fact that HRP makes executing the corporate plan of an organisation much easier since it defines and separates different human resource functions and allocates the responsibility to oversee them on specific individuals. Consequently, any vagueness or confusion in job-related tasks is diminished by the systematic approach that HRP uses to ensure that the human capital needs in the organisation are met. Additionally, organisations are able to avoid the uncertainties that come with change, since the forecasting component of HRP may have anticipated the change before its occurrence. Organisations that have a sound and well executed HR plan also hire the right talent for the right job and at the right time, meaning that they do not suffer the skills gap that could jeopardise their competitiveness. As such, HR-related inefficiencies are minimised. Finally, HRP provides a scope for advancing employees in their careers through training and development. As observed in the employee case study highlighted by ScottishPower (n.d, p. 88), training and development programmes play a vital role in ensuring that not only do employees enhance their human capital potential, but also that they are satisfied with their jobs and employers, and this affects their willingness to stay on in any particular job. By creating satisfying job environments through activities such as training and development, organisations such as ScottishPower register high staff retention rates, and this saves them costs that would have otherwise been used in recruitment, hiring, job orientation and on-the-job training offered to new employees. One of the major disadvantages of HRP is found in what Idris and Eldridge (1998, p. 352) term as “its remoteness from decision-makers because of rigid formality and flexible detail.” Accordingly, the resulting HRP are too inflexible to the extent that if something in the immediate environment requires immediate action not contained in the HR plan, it would take the planners another process entailing drafting a proposal for the plan and getting approval from the decision-makers before executing it. Consequently, HRP has been criticised for causing inflexible and slow responses (Idris and Eldridge, 1998). Another equally relevant disadvantage is contained in the inaccuracies that may come from the forecasting aspect of HRP (Ritcher and International Labour Office, 1986). Generally, forecasting is the art of making an intelligent guess about a future occurrence. Drucker (cited by Kumar and Sharma, 2000, p. 232) aptly state that “predictions, concerning five, ten or fifteen years ahead are always guesses...” Hence, forecasting is not based on any scientific truths but on estimates of what may happen in future. Sometimes, the forecasts happen as anticipated, but on other occasions, a different scenario occurs in which case the HR planners may be caught off guard. A point in case is the 2008 recession as highlighted by ScottishPower, where energy consumption dipped, implying that there was a decline in the demand for manpower. In its narrative ScottishPower states that it needs to have enough manpower for the non-recessionary times. However, there is no knowing how long the non-recessionary period will last, and just as the 2008 recession had not been forecasted, a future recession may hit sooner or later, hence disrupting HR plans that ScottishPower and other organisations may have. Who should be involved in HRP? Human Resource Planning is not a HR programme as most people would think; rather, Boyd (2008, p. 3) defines it as a “necessary business activity” that should be embraced by an entire organisation as a way of gaining competitive advantage. Owing to the fact that HRP is a component of organisational planning as stipulated in Schein (1979), there is no doubt that the top-most office in an organisation needs to be involved. In some cases, that would have to be the Chief Executive Officer, while in other cases, it would have to be the Managing Director. As Van Clieaf (1992) observes, executives determine the kind of strategy that the organisations they lead follow. Van Clieaf (1992, p. 2) states that “strategy and structure follow people”, meaning that the executives play a major role in determining the types of plans or strategies that their organisations take. The involvement of the Personnel Manager is also vital since job/role planning, and HRP itself are most likely to be subsections within the personnel department. In ScottishPower’s context, workforce planning includes attraction, recruitment, selection, skills profiling and workforce programmes. While most of the listed components of workforce planning fall within the personnel department, support from the management is obviously needed if any of them is to be accomplished, hence the involvement of the MD or CEO or any other person sitting in a management position. Overall and depending on the prevailing culture in an organisation, more people across departments may be involved in HRP especially if consultations usually take place before any decisions are made. Departmental heads or line supervisors for example may need to be consulted as a way of the identifying skills gap in their respective departments. Employees may also need to be consulted or evaluated in order to identify their training and development needs. Schein (1979) particularly stresses the importance of involving employees in HRP by arguing that failing to involve them in programmes that are ostensibly meant to develop them or develop the overall human capacity in an organisation is self-defeatist. Schein categorically states that HR planners need to align the current and future needs of both the organisation and the individuals. References Boyd, H M 2008, ‘Human resources planning- the long and short of it’, Boyd Associates, pp. 1-16, viewed 06 February 2012, http://www.boydassociates.net/Publishing/PUBS/HR%20Planning-ls.pdf. Idris, A R & Eldridge, D 1998, ‘Reconceptualising human resource planning in response to institutional change’, International Journal of Manpower, Vol. 19, no. 5, pp. 343 – 357. Kumar, A & Sharma, R 2000, Principles of business management, Atlantic Publishers and distributors, New Delhi, India. Ritcher, L & International Labour Office 1986, Training needs: assessment and monitoring, volume 68, International Labour Organization, Geneva, Switzerland. Rump, J 2004, ‘Human Resource Planning’, Fachhlochschule Ludwigshafen am Rhein, viewed 06 February 2012, http://web.fh-ludwigshafen.de/rump/home.nsf/Files/4F56A124B3A901F9C1256F07003511B4/$FILE/Skript%20Human%20Resource%20Management.pdf Schein, E. H 1976, ‘Increasing organisational effectiveness through better human resources planning and development’, WP 889-76, pp. 1-13, viewed 06 January 2012, http://dspace.mit.edu/bitstream/handle/1721.1/1917/SWP-0889-02815430.pdf. Scottishpower (n.d.), ‘Managing workforce requirements’, The Times 100 Business Case Studies, pp. 85-88. Van Clieaf, M. S 1992, ‘Strategy and structure follow people: improving organisational performance through effective executive search’, Human Resource Planning, vol. 15, no. 1, pp. 1-13. WebFinance 2012, Organizational Planning. Business Dictionary, Viewed 06 Jan 2012, http://www.businessdictionary.com/definition/organizational-planning.html. Read More