1. THE CONTRIBUTION AND FEASIBILITY OF HR PLANNING
A useful starting point is to consider the different contributions that strategy and planning make to the organisation. A common view has been that they are virtually one and the same – hence the term ‘strategic planning’. Henry Mintzberg (1994, p. 108) distinguished between strategic thinking, which is about synthesis, intuition and creativity to produce a not too precisely articulated vision of direction, and strategic planning, which is about collecting the relevant information to stimulate the visioning process and also programming the vision into what needs to be done to get there. It is helpful to look at human resource planning in the same way, and this is demonstrated in Figure 3.1. In more detail he suggests:
- Planning as strategic programming – planning cannot generate strategies, but it can make them operational by clarifying them; working out the consequences of them; and identifying what must be done to achieve each strategy.
- Planning as tools to communicate and control – planning can ensure coordination and encourage everyone to pull in the same direction; planners can assist in finding successful experimental strategies which may be operating in just a small part of the organisation.
- Planners as analysts – planners need to analyse hard data, both external and internal, which managers can then use in the strategy development process.
- Planners as catalysts – raising difficult questions and challenging the conventional wisdom which may stimulate managers into thinking in more creative ways.
Organisational and human resource planners make an essential contribution to strategic visioning. Sisson and Storey (2000) identify HR planning as ‘one of the basic building blocks of a more strategic approach’. Starting with some ideas of Lam and Schaubroeck (1998) we identify four specific ways in which HR planning is critical to strategy, as it can identify:
- gaps in capabilities – lack of sufficient skills, people or knowledge in the business which will prevent the strategy being implemented successfully;
- surpluses in capabilities – providing scope for efficiencies and new ventures to capitalise on the skills, people and knowledge that are currently underused, in order to influence or shape the strategy;
- poor utilisation of people – suggesting inappropriate human resource practices that need to be altered;
- developing a talent pool.
If you turn back to Chapter 2 and look again at the resource-based view of the firm you will see how these four aspects are crucial to sustaining competitive advantage through making the most of human resources.
Our environment of rapid and discontinuous change makes any planning difficult, and HR planning is especially difficult as people have free will, unlike other resources, such as finance or technology. The contribution and implementation of HR planning is likely to be enhanced if:
- plans are viewed as flexible and reviewed regularly, rather than being seen as an end point in the process;
- stakeholders, including all levels of manager and employee, are involved in the process. Surveys and focus groups are possible mechanisms, in addition to line manager representatives on the HR planning team;
- planning is owned and driven by senior managers rather than HR specialists, who need to facilitate the process;
- plans are linked to business and HR strategy;
- plans are user-friendly and not overly complex;
- it is recognised that while a comprehensive plan may be ideal, sometimes it may only be feasible to plan on an issue-by-issue basis.
2. THE SCOPE OF HUMAN RESOURCE PLANNING
Traditionally human resource planning, generally termed manpower planning, was concerned with the numbers of employees and the levels and types of skill in the organisation. A typical model of traditional manpower planning is shown in Figure 3.2. In this model the emphasis is on balancing the projected demand for and supply of labour, in order to have the right number of the right employees in the right place at the right time. The demand for manpower is influenced by corporate strategies and objectives, the environment and the way that staff are utilised within the business. The supply of manpower is projected from current employees (via calculations about expected leavers, retirements, promotions, etc.) and from the availability of the required skills in the labour market. Anticipated demand and supply are then reconciled by considering a range of options, and plans to achieve a feasible balance are designed.
As the world has moved on this model has been viewed as too narrow, being heavily reliant on calculations of employee numbers or potential employee numbers. It has also been criticised for giving insufficient attention to skills (Hendry 1994; Taylor 1998). In addition there has been an increasing recognition of the need to plan, not just for hard numbers, but for the softer issues of employee behaviour, organisation culture and systems; these issues have been identified as having a key impact on business success in the current environment.
Increasingly there is a need for organisations to integrate the process of planning for numbers and skills of employees; employee behaviour and organisational culture; organisation design and the make-up of individual jobs; and formal and informal systems. These aspects are all critical in terms of programming and achieving the vision. Each of these aspects interrelates with the others. However, reality has always been recognised as being a long way from identified best practice. Undoubtedly different organisations will place different emphases on each of these factors, and may well plan each separately or plan some and not others.
The framework we shall use in this chapter attempts to bring all aspects of HR planning together, incorporating the more traditional approach to ‘manpower planning’, but going beyond this to include behaviour, culture, systems and so on. Our framework identifies ‘where we want to be’, translated from responses to the strategic vision; ‘where we are now’; and ‘what we need to do to make the transition’ – all operating within the organisation’s environment. The framework is shown in diagrammatic form in Figure 3.3. An alternative framework to use may be the HR scorecard (see Becker et al. 2001). Chapter 33 provides more details.
We shall now look in more depth at each of these four areas. The steps are presented in a logical sequence. In practice, however, they may run in parallel, and/or in an informal fashion, and each area may well be revisited a number of times.
Source: Torrington Derek, Hall Laura, Taylor Stephen (2008), Human Resource Management, Ft Pr; 7th edition.