Critically analyze the extent to which strategic human resource planning represents the vital connecting link between organisational strategy and SHRM practice

Critically analyze the extent to which strategic human resource planning represents the vital connecting link between organisational strategy and SHRM practice

7 STRATEGIC HUMAN RESOURCE PLANNING: THE WEAKEST LINK?

Learning Outcomes

By the end of this chapter you should be able to:

identify and discuss the core principles that underpin the concept of
strategic human resource planning;

critically evaluate the extent to which strategic human resource planning represents the vital connecting link between organisational strategy and SHRM practice;
analyse the conceptual and operational difficulties surrounding the practice of strategic human resource planning;
assess the relevance of strategic human resource planning to organisations facing an increasingly changing business environment;
review potential avenues for addressing the difficulties associated with human resource planning in order to enhance its operational viability.
Figure 7.1 Mapping the SHRP territory: a summary diagram of the chapter content

Definition

‘Human resource planning is the process of systematically forecasting the future demand and supply for employees and the deployment of their skills within the strategic objectives of the organization’(Bratton and Gold, 2003: 191).

‘HRP is the process for identifying an organization’s current and future human resource requirements, developing and implementing plans to meet these requirements and monitoring their overall effectiveness’

(Beardwell, 2004: 159).

KEY FEATURES OF HRP

HRP is viewed as a process
There is a temporal perspective such that HRP is directed at meeting both current and future needs
HRP is seen to progress through distinct phases primarily involving forecasting the demand for and supply of human resources and then developing plans to address any mismatches arising
KEY FEATURES OF HRP

Monitoring and evaluating outcomes and feeding back results are viewed as integral parts of the process
The process should be driven by the strategic objectives of the organization and its purpose is to help achieve their fulfillment
To what extent can the hard and soft variants of HRP be regarded as mutually exclusive?
Hard and soft HRP are presented as either/or alternatives
Mergers and acquisitions are used as a linking theme to illustrate facets of HRP practice. Here hard HRP will often involve.
Soft HRP: The organization may be trying to manage the cultural integration of surviving employees or setting aside the cultural inheritance to re-align the organization culture
The hard, quantitative manifestation of HRP arising from redundancy may
simultaneously exhibit a soft edge
Case Study

Work in groups and watch the video to analyze how the HRP works
Find the process mentioned and what are missing to make the HRP more effective.
Analyze the case study:
Bronze is a restaurant that has 150 seats in the financial district of a metropolitan city.
Based on market study:
The restaurant anticipates reaching full capacity in one whole year.
At full capacity there would be 900 patrons per day, 6300 per week and 25200 per month
As per the planned marketing effort, the restaurant anticipates a 10% increase in clientele each month.
With these marketing insights, the restaurant manager creates a staff augmentation plan.
HRP Process mentioned:
Strategic planning since it depends on market study and environmental scanning
Forecasting (Forecasting future HR requirements to meet business objectives)
Developing plans ( a staff augmentation plan: The restaurant manager now knows how many staff members will need to be added each month.The restaurant can conserve funds by not hiring all the staff all at once. It can instead divert those funds into other activities to grow the business
What are missing to make the HRP more effective:

Monitoring and evaluating outcomes and feeding back results are important HRP process that are not mentioned and are critical to have effective HRP.
ELEMENTS OF HRP

Strategic planning

Environmental scanning
Identification of key business issues
Strategy formulation
Demand forecasting

Determining HR implications of strategy
Forecasting future HR requirements to meet
business objectives

ELEMENTS OF HRP

Auditing current HR capability

Analyzing current labor resources
Auditing internal labor supply
Reviewing labor utilization
Supply forecasting

Forecasting internal labor supply
Forecasting external labor supply
Internal supply of human resource available by way of transfers, promotions, retired employees & recall of laid-off employees, etc. Source of external supply of human resource is availability of labour force in the market and new recruitment.

ELEMENTS OF HRP

Gap analysis

Comparing demand and supply forecasts
Identifying gaps between needs (demand) and
availability (supply)
Planning

Developing HR objectives and goals to address identified labor shortages and surpluses
Designing HR strategies, policies, programs and practices (action planning) to deliver objectives and goals
ELEMENTS OF HRP

Implementation and evaluation

Implementing action plan
Monitoring and evaluating outcomes
Feedback results
Revising and refocusing HR objectives and plans
PROCESS OF HRP

SYSTEMS PERSPECTIVE

systems approach to HRP equates to rational planning models where management exercise

decision-making prerogative ‘through deliberate calculation and analysis’.

PROCESS OF HRP

PROCESSUAL PERSPECTIVE

According to the processual view the HRP process can be viewed as being based on continual interactions between those responsible for HR strategy and those responsible for business strategy (Liff, 2000

Figure 7.4 A systems perspective of the HRP process

Source: Adapted from Tansley (1999: 51)

Figure 7.5 A processual perspective of the HRP process

Source: Adapted from Tansley (1999: 52)

Benefits of SHRP

HR plans are aligned with corporate strategies to further their accomplishment in a downstream relationship;
HRP can reveal HR issues that threaten the viability of corporate strategies and thereby lead to their reformulation
It builds a reciprocal relationship means that HR issues can represent an important input into the strategy formulation process from the outset in an upstream relationship.
Potential strategies to make HRP more effective

Elevating the credibility of HR and its specialist practitioners

Become fully acquainted with corporate objectives and how the organization’s board of directors operates in order to provide the information necessary to plan strategies for securing a higher profile for HR issues.
Ask the board to sign off specific HR issues to raise their profile and secure greater organizational commitment.
Endeavour to get regular presentations on HR included on the agenda of board meetings and include annual performance evaluations of the HR function.
Lobby the chief executive to represent HR initiatives at board meetings.
Lobby other board members to champion and/or support HR initiatives.
Become technically proficient on complex and critical HR matters and seek acknowledgement of this expertise as a way of gaining credibility and extending the sphere of
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Potential strategies to make HRP more effective

-Flexible forecasting

The second potential avenue focuses on confronting the problematic nature of forecasting

in an increasingly uncertain and unpredictable world through contingency and scenario planning.

Potential strategies to make HRP more effective

Human resource flexibility

The third potential avenue approaches the problem of uncertainty and unpredictability

from a different direction in a way consistent with the resource-based view of the firm

by creating an adaptable and flexible workforce.

Potential strategies to make HRP more effective

HRP as continuous process

The argument here is that there is a need to develop HRP processes that are continuous, not static, so that they have the capacity to inform strategy formulation and provide an early warning system for when events begin to deviate from plans. This enables contingency plans to be brought into effect or, in their absence, adjustments made to HR plans to reflect the new reality.

Figure 7.6 The ‘people process map’

Source: After Gratton (1999)

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