The competitive organizational strategy of the firm as a whole becomes the basis for human resource (HR) planning, which is the process of analyzing and identifying the need for and availability of human resources so that the organization can meet its objectives. This section discusses HR planning responsibilities, the importance of HR planning in small and entrepreneurial organizations, and the HR planning process.
HR Planning Responsibilities
In most organizations that do HR planning, the top HR executive and subordinate staff specialists have most of the responsibilities for this planning. However, other managers must provide data for the HR specialists to analyze. In turn, those managers need to receive data from the HR unit. Because top managers are responsible for overall strategic planning, they usually ask the HR unit to project the human resources needed to implement overall organizational goals.
HR Planning in Evolving Small and Entrepreneurial Organizations
HR management and ultimately HR planning are critical in small and entrepreneurial organizations. “People problems” are among the most frustrating ones faced by small-business owners and entrepreneurs.
EVOLUTION OF HR ACTIVITIES
At the beginning of a small business’s existence, only very basic HR activities must be performed. Compensation and government mandated benefits must be paid. As the organization evolves, more employees must be recruited and selected. Also, some orientation and on-the-job training are necessary, though they are often done haphazardly. The evolution of the business proceeds through several stages. The focus of each stage reflects the needs of the organization at the time. In the initial stage, the organization first hires an HR clerk, then possibly an HR administrator. As the organization grows, it may add more HR professionals, often including an employment or benefits specialist. With further growth, other specialists, such as trainers, may be needed. From this point, additional clerical and specialist employees can be added, and separate functional departments (employment, compensation, benefits, and training) can evolve.
SMALL BUSINESS AND FAMILY ISSUES
One factor often affecting the planning of HR activities in small firms is family considerations. Particular difficulties arise when a growing business is passed on from one generation to another, resulting in a mix of family and non family employees. Some family members may use employees as “pawns” in disagreements with other family members in the firm. Also, non family employees may see different HR policies and rules being used for family members than for them. Key to the successful transition of a business from one generation to another is having a clearly identified HR plan. Crucial in small businesses is incorporating the role of key nonfamily members with HR planning efforts. Often, non family members have important capabilities and expertise that family members do not possess. Therefore, planning for the attraction and retention of these “outsiders” may be vital to the future success of smaller organizations. One survey of over 3,000 small businesses found that management succession was one of the top challenges faced by family-owned firms.
It even may be that the non family members will assume top management leadership roles, with some or all family members who are owners serving on the Board of Directors, but not being active managers in the firm. Additionally, non family executives may be the intermediaries who focus on the needs of the business when family member conflicts arise. Small businesses, depending on how small they are, may use the HR planning that follows, but in very small organizations the process is much more intuitive and often done entirely by the top executives, who often are family members.
HR Planning Process
Notice that the HR planning process begins with considering the organizational objectives and strategies. Then both external and internal assessments of HR needs and supply sources must be done and forecasts developed. Key to assessing internal human resources is having solid information, which is accessible through a human resource information system (HRIS). Once the assessments are complete, forecasts must be developed to identify the mismatch between HR supply and HR demand. HR strategies and plans to address the imbalance, both short and long term, must be developed. HR strategies are the means used to aid the organization in anticipating and managing the supply and demand for human resources. These HR strategies provide overall direction for how HR activities will be developed and managed. Finally, specific HR plans are developed to provide more specific direction for the management of HR activities.
DEVELOPING THE HR PLAN
The HR plan must be guided by longer-term plans. For example, in planning for human resources, an organization must consider the allocation of people to jobs over long periods of time—not just for the next month or even the next year. This allocation requires knowledge of any foreseen expansions or reductions in operations and any technological changes that may affect the organization. On the basis of such analyses, plans can be made for shifting employees within the organization, laying off or otherwise cutting back the number of employees, or retraining present employees. Factors to consider include the current level of employee knowledge, skills, and abilities in an organization and the expected vacancies resulting from retirement, promotion, transfer, sick leave, or discharge.
In summary, the HR plan provides a road map for the future, identifying where employees are likely to be obtained, when employees will be needed, and what training and development employees must have. Through succession planning, employee career paths can be tailored to individual needs that are consistent with organizational requirements. Further, the compensation system has to fit with the performance appraisal system, which must fit with HR development decisions, and so on. In summary, the different HR activities must be aligned with the general business strategy, as well as the overall HR strategy, in order to support business goals.
EVALUATING HR PLANNING
If HR planning is done well, the following benefits should result: l Upper management has a better view of the human resource dimensions of business decisions. l HR costs may be lower because management can anticipate imbalances before they become unmanageable and expensive. l More time is available to locate talent because needs are anticipated and identified before the actual staffing is required. l Better opportunities exist to include women and minority groups in future growth plans. l Development of managers can be better planned. To the extent that these results can be measured, they can form the basis for evaluating the success of HR planning. Another approach is to measure projected levels of demand against actual levels at some point in the future. But the most telling evidence of successful HR planning is an organization in which the human resources are consistently aligned with the needs of the business over a period of time.
HR Planning Responsibilities
In most organizations that do HR planning, the top HR executive and subordinate staff specialists have most of the responsibilities for this planning. However, other managers must provide data for the HR specialists to analyze. In turn, those managers need to receive data from the HR unit. Because top managers are responsible for overall strategic planning, they usually ask the HR unit to project the human resources needed to implement overall organizational goals.
HR Planning in Evolving Small and Entrepreneurial Organizations
HR management and ultimately HR planning are critical in small and entrepreneurial organizations. “People problems” are among the most frustrating ones faced by small-business owners and entrepreneurs.
EVOLUTION OF HR ACTIVITIES
At the beginning of a small business’s existence, only very basic HR activities must be performed. Compensation and government mandated benefits must be paid. As the organization evolves, more employees must be recruited and selected. Also, some orientation and on-the-job training are necessary, though they are often done haphazardly. The evolution of the business proceeds through several stages. The focus of each stage reflects the needs of the organization at the time. In the initial stage, the organization first hires an HR clerk, then possibly an HR administrator. As the organization grows, it may add more HR professionals, often including an employment or benefits specialist. With further growth, other specialists, such as trainers, may be needed. From this point, additional clerical and specialist employees can be added, and separate functional departments (employment, compensation, benefits, and training) can evolve.
SMALL BUSINESS AND FAMILY ISSUES
One factor often affecting the planning of HR activities in small firms is family considerations. Particular difficulties arise when a growing business is passed on from one generation to another, resulting in a mix of family and non family employees. Some family members may use employees as “pawns” in disagreements with other family members in the firm. Also, non family employees may see different HR policies and rules being used for family members than for them. Key to the successful transition of a business from one generation to another is having a clearly identified HR plan. Crucial in small businesses is incorporating the role of key nonfamily members with HR planning efforts. Often, non family members have important capabilities and expertise that family members do not possess. Therefore, planning for the attraction and retention of these “outsiders” may be vital to the future success of smaller organizations. One survey of over 3,000 small businesses found that management succession was one of the top challenges faced by family-owned firms.
It even may be that the non family members will assume top management leadership roles, with some or all family members who are owners serving on the Board of Directors, but not being active managers in the firm. Additionally, non family executives may be the intermediaries who focus on the needs of the business when family member conflicts arise. Small businesses, depending on how small they are, may use the HR planning that follows, but in very small organizations the process is much more intuitive and often done entirely by the top executives, who often are family members.
HR Planning Process
Notice that the HR planning process begins with considering the organizational objectives and strategies. Then both external and internal assessments of HR needs and supply sources must be done and forecasts developed. Key to assessing internal human resources is having solid information, which is accessible through a human resource information system (HRIS). Once the assessments are complete, forecasts must be developed to identify the mismatch between HR supply and HR demand. HR strategies and plans to address the imbalance, both short and long term, must be developed. HR strategies are the means used to aid the organization in anticipating and managing the supply and demand for human resources. These HR strategies provide overall direction for how HR activities will be developed and managed. Finally, specific HR plans are developed to provide more specific direction for the management of HR activities.
DEVELOPING THE HR PLAN
The HR plan must be guided by longer-term plans. For example, in planning for human resources, an organization must consider the allocation of people to jobs over long periods of time—not just for the next month or even the next year. This allocation requires knowledge of any foreseen expansions or reductions in operations and any technological changes that may affect the organization. On the basis of such analyses, plans can be made for shifting employees within the organization, laying off or otherwise cutting back the number of employees, or retraining present employees. Factors to consider include the current level of employee knowledge, skills, and abilities in an organization and the expected vacancies resulting from retirement, promotion, transfer, sick leave, or discharge.
In summary, the HR plan provides a road map for the future, identifying where employees are likely to be obtained, when employees will be needed, and what training and development employees must have. Through succession planning, employee career paths can be tailored to individual needs that are consistent with organizational requirements. Further, the compensation system has to fit with the performance appraisal system, which must fit with HR development decisions, and so on. In summary, the different HR activities must be aligned with the general business strategy, as well as the overall HR strategy, in order to support business goals.
EVALUATING HR PLANNING
If HR planning is done well, the following benefits should result: l Upper management has a better view of the human resource dimensions of business decisions. l HR costs may be lower because management can anticipate imbalances before they become unmanageable and expensive. l More time is available to locate talent because needs are anticipated and identified before the actual staffing is required. l Better opportunities exist to include women and minority groups in future growth plans. l Development of managers can be better planned. To the extent that these results can be measured, they can form the basis for evaluating the success of HR planning. Another approach is to measure projected levels of demand against actual levels at some point in the future. But the most telling evidence of successful HR planning is an organization in which the human resources are consistently aligned with the needs of the business over a period of time.
source by Human Resource Management 9th Edition Robert L. Mathis John H
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