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Human Resource Strategy making and HR planning often appear to be undertaken as separate activities within organisations. Why might this be the case and what can be done to ensure a closer relationship?
Human Resource Management has become the new tool of the millennium for businesses and organisations. Most companies now have HR departments within their organisation to increase their success. Hr branches into many different forms within the company and this essay will focus of two aspects Human resource strategy making and HR planning. The essay will also examine their lack of relationship and how to increase a more efficient working stream.
Human resource strategy is the process of collecting people plans and programmes of activity within an overall framework, designed to deliver against organisational objectives. Human resource management strategy compromises 'those decisions and actions which concern the management of employees at all levels in the business, and which are related to the implementation of strategies directed towards creating and sustaining competitive advantage.
Human resource strategies may be understood as objectives or as processes. Human resource objectives include the development of capability within a company in order to give the business a competitive edge or advantage. This can be described as strategic human resources aims. Usually most companies will approach human resource strategies either through a 'hard' approach or a 'soft' one. The hard can be seen as 'utilitarian instrumentalism' and the soft as 'developmental humanism.'
The hard approach stresses on the crucial importance of the close integration of human resource policies, systems and activities with business strategies. Systems are created to drive the strategic objectives of an organisation. In essence the approach emphasises the quantitative, calculative and business strategic aspects of managing the 'headcount' resource like any other economic factor.
In contrast to the views of the hard approach, the soft emphasises on the importance of incorporating human resource policies with business objectives. This approach regards employees as valued assets and a source of competitive advantage through their commitment, adaptability and skills. Employees are seen as active components within the production process.
Human resource strategy can bring many benefits to a company such as a strategy will put in place the appropriate employee mix to allow the organisation to achieve its aims and objectives. It allows the company to communicate the culture of the business to the workforce. Having a strategy allows employees to develop in a manner, which benefits both the individual and organisation. The strategy will provide targets by which the actions of the human resource function can be assessed.
The starting point for any human resource strategy begins with the organisation's strategic plan and values. But for a plan to take off the ground, it needs a workforce. A workforce must be in place that will allow the strategic plan of the business to be put into effect. This is where HR (human resource) planning comes in.
Human resources planning can be viewed as a company's attempt to predict w how many and what type of employees a company may need in the future. Planning is also used to gauge to what extent the demand is likely to be met. HR planning involves the comparison of an organisation's current human resources with likely future needs. Effective HR planning should result in 'the right people doing the right things in the right place at precisely the right time.'
Human resources planning can help management in making decisions in many of the company's areas. These include recruitment, avoidance of redundancies, training, management, development, estimates of labour cost, productivity bargaining, and accommodation requirements. HR planning is always in a state of continuous evolvement because goals of a company are always changing with an uncertain environment. Many variables such as invention, population changes, resistance to change, consumer demand, government intervention, and foreign and domestic competition make HR planning a complex concept.
Human resource planning is usually seen as an essential feature of the ideal model of human resource management. However, sometimes within human resource strategy making, planning isn't included. There are many reasons why it can be seen that HR planning and human resource strategy making are taken as independent parts of company.
One explanation is the extent of changing patterns of world trade and increasing competition, new forms of foreign and domestic government policies and regulations or through new technologies. E.g. there is no point in planning a large workforce within a strategy if new technology means hardly any employees are required. Also it is difficult to forecast social and economic changes accurately particularly in times of high unemployment All these factors can make planning very difficult and almost useless despite the growing need for it. The need for planning may be in inverse proportion to its feasibility, which would make it difficult to implement with the development and implementation of human resource strategy.
Related to the prior problem is the issue of the 'realities' facing an organisation and the continual shift and myriad policy priorities and strategies, which depend on the policies of the powerful interests groups, involved. HR planning needs to take account of these but by doing so, it may become overtaken in turn, or even be seen as nothing more than a presentational gloss on a totally different reality. Human resource planning can be very susceptible to this pressure. This can happen especially when there is an economic recession. E.g. when companies are losing money, they are more preoccupied with staying in business rather than worrying about recruitment and training planning. HR planning can also be overlooked within human resource strategy by virtue of the weaker power-base of the human resource function, which either precludes the allocation of adequate resources for HR planning or detracts from the ability to ensure the planning is incorporated within the strategy department.
The nature of management and the skills and abilities of managers also contributes to the lack of unity in HR planning and strategy making. In the UK particularly, there is a preference for 'pragmatic adaptation over conceptualisation.' There is also distrust in the theory of planning. In an IPM survey, lack of data, lack of line management understanding, and lack of corporate plan were the main reasons given by personal managers for lack of HR planning and human resource strategy implementation. This of course may vary between the different values, culture or strategy of different divisions, companies or industries. There are also the issues of the multiple and often conflicting nature of an organisation's goals. These can range with pressures for consistency and for flexibility, for prediction and for planning, but also speed and for response. The HR planning and strategy making of a particular company may have different agendas and no fit smoothly so they would have to be undertaken separately.
Also the type of industry may have an affect on HR Planning and human resource strategy. Some companies depend on new product development in an extremely competitive environment. E.g. In the video game industry the goal is to be the first with the latest software before rival competitors. Because its core goals is highly competitive and leans heavily on product, HR planning wouldn't be undertaken together with human resource management. A company may only need a few specialised employees so planning and human resource strategy wouldn't be time or cost effective.
If a company is using a hard approach to its human resource strategy, then it may not be as employee driven as other companies may be. Employees may be seen as commodity rather than integral aspect of the success of the company. In this type of scenario HR planning wouldn't be generally regarded within the making of the strategies, as the focus would be on economic success. HR planning needs to be seen as a 'line' responsibility and line managers using the hard approach are less likely to undertake planning activities than personnel managers; particularly in small decentralised units where the emphasis on achieving financial targets are likely to predominate. HR planning would only be seen as a method of maintaining employee balance rather than a way of utilising the employee potential.
Another factor that can make it seem that HR planning and HRS are undertaken differently could be because of the nature of their purposes. HR planning is one section of an organisation where human resource management looks at the whole of the company. Each section of a company such as marketing, finance and HR planning are busy running their own particularly allotment of the company so their policies make not be taken up with the human resource strategy making as it would look at the entire company rather than one section.
Organisational structure is also a deciding factor in the influence of the HR planning over strategic issues. Highly divided structures result in strong divisional HR functions, sometimes at the expense of the corporate HR role. The devolution of responsibility for profit or cost control to divisional managers can only be successful if they have control over HR policies. This can lead to tension between corporate head offices and hr managers which could lead to HR planning and strategy making to be undertaken separately.
As shown above, there can be copious reasons why HR planning can be left out of human resource strategy making. However, not incorporating HR planning into strategic decision-making can create a paradox. There cant be a human resource strategy if there is no employees and HR planning deals with recruitment and training. However, there are ways in which the two can ensure a closer relationship.
One of these is delegation of power and change of organisational structure. As mentioned before, planning should also incorporate line managers as well as personnel. By sharing the responsibility of the HR role, cohesion of ideas and formulations have a much better chance of happening rather than if they were isolated. Also managers need freedom to be able to put these policies and strategies in action, which means the heads of office, would need to relinquish their hold over strategy approval and disapproval.
Another way to ensure a closer relationship would be to keep the whole company up to date with information and technology. As mentioned before, one crucial aspect of why HR planning and HRS didn't mix was due to lack of data and training. If every department had sufficient information, understood the goals and objectives and was capable of training others, than incorporating planning with strategy would be faster and easier.
Using a soft approach to human resource strategy would ensure a tighter bond between both roles. Under the soft view, employees would have more significance and importance within the running and success of the organisation. This would mean a higher chance of HR planning being involved within strategy making for the company.
Increasing the importance and size of the HR planning function within a company would increase the bond in strategy making. Companies who have little or no human resource departments are less likely to intertwine planning and strategy making. By increasing the Hr department, more value is placed on the role of HR, especially planning and then would therefore provide a closer link.
If organisations were to become more flexible with resistant to change and environment policies than HR planning would be more closely attuned with strategy formulation. The problem with HR is that when economic crisis hits, it takes a back seat to organisational policies but if their goals were flexible to begin with, then all aspect of Hr, including planning would still be considered during a recession or problem.
These are just a few example of how organisations can utilise their resources to ensure a closer relationship between HR planning and HRS making. For any strategic plan to work, all aspects of HR need to be included because they are all interlinked with each other. If certain links are left out, the plan may have weakness that may cause it to fail or stop it being successfully implemented. As business moves into the 1st century, businesses needed to recognise the importance of Hr planning within Human Resource Strategy to fully comprehend and implement its most valuable and almost inexhaustible asset its employees.
Bibliography
Tyson, S., York, A. (000) Essentials of HRM, 4th ed., Butterworth-Heinemann, Oxford
Graham, H., Bennett, R. (18) Human resource management, th ed., Guildhall University, London
Storey, J. (15) Human resource management; a critical text, International Thomson Business Press, London
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