HR Function with the Strategic Planning of the Organization
Introduction A very usual form to face the personnel decisions search is to hope that a vacancy takes place - HR Function with the Strategic Planning of the Organization introduction. This method, that can be effective for small companies, it will not be very useful in complex organizations that require personnel with very specific characteristics. Therefore in large and complex companies it is best to forecast future needs of employees (Smith, Boroski, & Davis, 1992). By Employment Planning, it will be understood all those activities of personnel that attempt to provide the human resources necessary to achieve the present and future organizational objectives.
It implies to consider the necessities, within different periods from time (one, three, five years), of the employees of different types and levels (for the different areas and for the strategic, managerial and operative levels) (Smith et al. , 1992). Once these necessities have been established, the company will have to compare them with the availabilities, that is to say, with the number of current employees. This will determine the number and type of employees that must be hired.
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On the contrary, if executives/managers/owners observe that in some areas or departments are surpluses, will the possibility of reassigning staff to other positions, previously made ?? the necessary training. If there are no possible reallocations, the final decision for those people will be the dismissal which should be considered as a last resort. If implemented, it must admit possibilities of technical assistance of the company to facilitate conditions of employability to those employees (Smith et al.
, 1992). The employment planning process in a company tries to balance the staffing needs over time taking into consideration the necessities that the company might have later. The challenge is to achieve this ‘scenario’, considering that the demand of human resources that correspond to the necessities and the supply that represent the availabilities, have, each one, their own dynamics (Smith et al. , 1992). The demand for human resources should be based on planning and budgets of the company.
Therefore, the human recourses plan must have a proper consideration of all strategic decisions that affect, in the period covered by the plan, the number and quality of staff required by strategic decisions. as examples of these: * General economic forecasts * Forecasts of technological changes * Plans for investment in plants, equipment, machinery, involving changes in the company structure. * Planned activities own of the company, sub-contracted activities, and their changes. The incidence of these and other relevant forecasts should be reflected in the staffing requirements of different types and levels.
It can be seen here a very important point that indicates the necessary relationship of the HR function with the strategic planning of the organization. It has been common practice in many companies the personnel function is located in a second or third level of the hierarchy and, therefore, does not have enough influence or participation in strategic processes to address their remarks to the achievement of the required personnel. As is easy to understand, this can have serious consequences, or at least not allow early detection of potential problems and their possible solutions.
“Through effective HR planning, HR professionals can play a significant role in executing business strategy and aligning HR practices to business needs” (Smith et al. , 1992, p. 1) . Personnel Planning Personnel planning is the process of anticipating and preventing the movement of people into the organization, within it and out. Its purpose is to use these resources as efficiently as possible, where and when needed, to achieve the goals of the organization. Strategic Human Resource Planning As organizations plan their future, human resource managers must worry about mixing human resource planning with strategic business planning.
A successful human resource planning helps increase organizational capacity, that is to say, the ability of the organization to act and change, looking for a sustainable competitive advantage. Human resource planning and strategic planning become effective when there is a relationship between both, reciprocal and interdependent. In this relationship, the senior management team recognizes that the decisions of strategic planning affect aspects of human resources and in turn affect them. Human Resource Planning and the Environment Exploration
The exploration of the environment is the systematic monitoring of the major external forces influencing the organization. In theory, the planning of human resources demands to integrate the environment to all the functions of the administration of human resources (Jackson, 2010). This process begins with the exploration of itself, since any strategy must be consistent with environmental trends and contemporary issues that could have impact in the organization. As well, the planning of human resource must anticipate the potential impact of these strategies in the administration of human resources.
Organizations can choose any number of environmental factors to explore, the following five are the most monitored (Jackson, 2010): 1. Economic factors, including general and regional conditions, as well as competitive trends. 2. Changes in technology, including robotics and office automation. 3. Political and legislative aspects, including administrative laws and dispositions. 4. Social issues, including child care (day care) and education priorities. 5. Demographic tendencies, including age, ethnic composition and illiteracy.
Besides exploring the external environment, companies must be careful to explore their internal environment. Because companies consider basic for their success, the culture oriented to the employees, organizations make cultural audits to examine the attitudes and activities of the labor force (Jackson, 2010). In essence, these audits include discussions among senior managers about how organizational culture is disseminated to employees and how to influence it or improve it. The audit may include questions, such as: 1. How employees use their time? 2. How do they interact? 3.
Do they have authority? 4. What is the predominant leadership style of managers? 5. How do the staff climb levels within the organization? Doing in-depth interviews and observations during certain period, managers can learn about the culture of the organization and employees attitudes. Elements of Effective Human Resource Planning When planning the human resources, managers follow a systematic process, or model. The three key elements of the process are to forecast the demand of human resources, to analyze the supply and balance the supply and demand considerations (Smith et al. , 1992).
A careful attention to each factor will help to the employees and supervisors to meet their staffing needs. Human Resource Demand Forecasting A fundamental component of human resource planning is the forecast of the number and type of staff required to meet the objectives of the organization. Several organizational factors can influence the demand of human resources as well as external factors such as economic cycles, that influence to a great extent (Meehan & Ahmed, 1990). Forecast is often more of an art than a science and provides inaccurate approximations rather than absolute results.
The ever-changing environment in which an organization operates contributes to this problem (Meehan & Ahmed, 1990). There are two approaches to human resource forecasting: qualitative and quantitative. Quantitative approach: This approach involves the use of statistical or mathematical techniques; they are the approaches that the professional theoreticians and planners use (Meehan & Ahmed, 1990). For example, in the tendency analysis the following steps are followed: 1. A suitable factor of businesses is chosen . 2. Draw a historical trend of business factor in relation to the number of employees.
3. Calculate the ratio of productivity in the last 5 years at least. 4. Demand is calculated by dividing the HR business factor between productivity ratio. Qualitative approach In contrast to quantitative approaches, qualitative approaches are less statistical forecasting. Quantitative approaches try to reconcile the interests, abilities and aspirations of individual employees with current and future needs of an organization’s staff. In large and small organizations, human resource planners may depend on experts to help them prepare forecasts to anticipate staffing requirements.
Executive forecasts are opinions of supervisors, department heads, experts and others regarding the future employment needs of the organization (Meehan& Ahmed, 1990). Employee Supply Forecasting Forecasts of supply of employees Once an organization has forecast future staffing requirements, then you must determine if you have enough time and the amount of people to fill the expected vacancies. It is possible to apply the analysis of the supply to the two recruitment sources: internal and external (Ward,1996). Internal Supply of Work
An analysis of domestic supply can begin preparing charts that are graphical representations of all positions in the organization, and the number of people who occupy them, and the future job requirements (Ward,1996). External Supply of Labor When an organization lacks internal supply of employees for promotions, or when covering entry level positions, managers of the company should consider the external supply of labor (Ward,1996). Organizational Cut When organizations have excess employees in certain areas, they must find ways to reduce head count (Ward,1996). Making the Decision to Lay Off Employees
Generally, the decisions to dismiss employees are based on the seniority, performance or both. Generally, decisions to fire employees based on seniority, performance or both. In some organizations, especially those with collective agreements, perhaps the key consideration is the seniority. In other, perhaps, factors as ability and aptitude prevail when determining layoffs (Ward,1996). Staffing Projections Factors in Predicting Staffing Requirements Most of the managers they consider several factors when they project the personnel requirements. Therefore, in the a manufacturing company, sales is the first thing that is projected.
Later, the required volume of production is determined to respond to these sales. Finally, the personnel necessary to maintain this production volume is projected (Ward,1996). However, besides this “basic requirement” of personnel, there are some other factors to consider: 1. The projected rotation (as the result of resignations or dismissals) 2. The quality of their employees nature (relative to what is seen, the changing needs). 3. The decisions to improve the quality of products or services, or venture into new markets. 4. Technological and administrative changes that produce greater productivity. 5.
The financial resources available for every department of the company Techniques to Determine Personnel Requirements Specific techniques to determine staffing requirements include trend analysis, margin analysis, correlation analysis and computer projections (Ward,1996). A. Trend Analysis A logical way to begin is by studying the employment trends of the company in the past 5 years or so, this to predict future needs. Trend analysis is valuable as an initial and exploratory exercise since employment levels rarely depend only on time. Rather, other factors also affect the future needs in terms of plant personnel.
B. Margin Analysis It is possible to use margin analysis to project future staffing requirements using the margins between sales revenue and net employees needed. C. Correlation Analysis It is the determination of statistical reactions between two variables. In the case of the staffing requirement projections, it would require to determine if two factors are related. Correlation analysis can provide a more accurate base than the one trend analysis or margin analysis offer. This is to say that the results obtained with the correlation analysis can be used to project staffing needs. D.
Computer Projections Some organizations use computerized systems to develop projections of staffing requirements. The computed projection determines future staffing needs by projecting sales, production volumes and personnel required for the company to maintain production volumes. The Human Resource Planning Process It is defined as: “The flow of interrelated and identified events moving to a target. ” In a sense, the process of human resource planning is the flow of events by which top management ensures a sufficient number of qualified personnel in the right place at the right time.
The planning of personnel translates the objectives based on the workers who are needed to obtain it The human resource planning is the process of anticipating and preventing the movement of people into the organization, and from the inside out. Its purpose is to use these resources as efficiently as possible; where and when they are needed to achieve the goals of the organization (“Human resources,” n. d. ). Other more specific purposes of HR planning include anticipate periods of oversupply and shortage of labor, which will cause greater opportunities to select to the best existing candidates in the market (“Human resources,” n. d. ).
The dramatic changes that have arisen in the globalized world require managers to be more involved in HR planning, since such changes affect not only the recruitment of employees, but also the methods of selection, training, compensation and motivation of these. While planning has always been a key management process, the increasing emphasis on HR planning becomes especially critical when organizations plan to conduct mergers, locate plants, cut staff or close facilities operation (“Human resources,” n. d. ). Finally, the lack of HR planning makes difficult to the employees to plan with effectiveness its professional or personal development.
As a result, some of the most competent and ambitious could find another job where they feel they have better development opportunities(“Human resources,” n. d. ). Balancing Supply and Demand Factors The human resource planning will have to make an effort to obtain an suitable balance, not only in forecasting techniques and their application, but also between the emphasis given to demand factors besides offer. Demand factors are based on forecasted trends in business; the supply factors include the determination of the place and the form to find the candidates with the required abilities to fill the vacancies.
Due to the difficulty of locating candidates for many jobs that require advanced training, this aspect of planning is receiving increasing attention (Meehan & Ahmed, 1990). When internal supply of employment exceeds the demand of the company, an excess in the internal supply exists. Most of the companies responds to a situation of this type by the hiring freeze; in terms of a policy of this type, the department of personnel stops hiring external staff to fill the available vacancies and chooses to start a policy of relocations.
Over time, the normal process of rotation of personnel and abandonment of the organization, correct the situation slowly (Meehan & Ahmed, 1990). Conclusion Based on the information that has been provided about the problem of the company , and since the third division has significantly more personnel; however, the number is not proportionate with the second division, nor with the workload required. Besides, more personnel are needed in the third division, due to the growth it is experiencing. Fewer are consequently needed in the second division.
Not everyone in the second division can perform the duties necessary in the third division. Everyone in the third division can perform the duties of those in the second division. It might be a good solution, previous analysis of the situation using the methods mentioned above, to transfer some employees from the second to the third division. It must be taken into consideration which employees from the third division are able to perform the duties of the third division, and which employees will fit in the culture of second division without affecting their performance.
Since there is not a profit sharing plan, the matching funds to a 401k (Munnell, Sunden & Taylor, 2002), as well as health benefits, should keep the same regulations for the employees that will be transferred from the second to third division and vice versa. References Human resources management. (n. d. ). Business Management Club. Retrieved from http://www. bestbusinessinfo. com/1_2/tutorials/11205. html Jackson, L. A. (2010). Enterprise resource planning systems: Revolutionizing lodging human resources management.
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64 No. 3 Retrieved from http://www. ssa. gov/policy/docs/ssb/v64n3/v64n3p64. html Smith, B. J. , Boroski, J. W. , & Davis, G. E. (1992). Human resource planning. Human Resource Management, 31(1), 81-81. Retrieved from http://search. proquest. com/docview/222125776? accountid=12085 Ward, D. (1996). Workforce demand forecasting techniques. HR. Human Resource Planning, 19(1), 54-54. Retrieved from http://search. proquest. com/docview/224585822? accountid=12085