Limitations of Human Resource Planning

Human resource planning is said to consist of three clear steps:

● Forecasting future people needs (demand forecasting). 

● Forecasting the future availability of people (supply forecasting). 

● Drawing up plans to match supply to demand.

But as Casson (1978) pointed out, this conventional wisdom represents human resource planning as an ‘all-embracing, policy-making activity producing, on a rolling basis, precise forecasts using technically sophisticated and highly integrated planning systems’. He suggests that it is better regarded as, first, a regular monitoring activity, through which human resource stocks and flows and their relationship to business needs can be better understood, assessed and controlled, problems highlighted and a base established from which to respond to unforeseen events; and second, an investigatory activity by which the human resource implications of particular problems and change situations can be explored and the effects of alternative policies and actions investigated.

He points out that the spurious precision of quantified staffing level plans ‘has little value when reconciled with the complex and frequently changing nature of manpower, the business and the external environment’. The typical concept of human resource planning as a matter of forecasting the long term demand and supply of people fails because the ability to make these estimates must be severely limited by the difficulty of predicting the influence of external events. There is a risk, in the words of Heller (1972), that ‘Sensible anticipation gets converted into foolish numbers, and their validity depends on large, loose assumptions.’ 

Human resource planning today is more likely to concentrate on what skills will be needed in the future, and may do no more than provide a broad indication of the numbers required in the longer term, although in some circumstances it might involve making short term forecasts when it is possible to predict activity levels and skills requirements with a reasonable degree of accuracy. Such predictions will often be based on broad scenarios rather than on specific supply and demand forecasts.

Hard and Soft Human Resource Planning

A distinction can be made between ‘hard’ and ‘soft’ human resource planning. The former is based on quantitative analysis in order to ensure that the right number of the right sort of people are available when needed. Soft human resource planning is concerned with ensuring the availability of people with the right type of attitudes and motivation who are committed to the organization and engaged in their work, and behave accordingly. It is based on assessments of the requirement for these qualities, and measurements of the extent to which they exist, by the use of staff surveys, the analysis of the outcomes of performance management reviews and opinions generated by focus groups.

These assessments and analyses can result in plans for improving the work environment, providing opportunities to develop skills and careers and adopting a ‘total reward’ approach which focuses on non-financial ‘relational’ rewards as well as the financial ‘transactional’ rewards. They can also lead to the creation of a high commitment management strategy which incorporates such approaches as creating functional flexibility, designing jobs to provide intrinsic motivation, emphasizing team working, de-emphasizing hierarchies and status differentials, increasing employment security, rewarding people on the basis of organizational performance, and enacting organization-specific values and a culture that bind the organization together and give it focus. As described by Marchington and Wilkinson (1996), soft human resource planning ‘is more explicitly focused on creating and shaping the culture of the organization so that there is a clear integration between corporate goals and employee values, beliefs and behaviours’. But as they point out, the soft version becomes virtually synonymous with the whole subject of human resource management.

THE ROLE OF HUMAN RESOURCE PLANNING

Definition

Human resource planning determines the human resources required by the organization to achieve its strategic goals. As defined by Bulla and Scott (1994) it is ‘the process for ensuring that the human resource requirements of an organization are identified and plans are made for satisfying those requirements’. Human resource planning is based on the belief that people are an organization’s most important strategic resource. It is generally concerned with matching resources to business needs in the longer term, although it will sometimes address shorter term requirements. It addresses human resource needs both in quantitative and qualitative terms, which means answering two basic questions: first, how many people, and second, what sort of people? Human resource planning also looks at broader issues relating to the ways in which people are employed and developed in order to improve organizational effectiveness. It can therefore play an important part in strategic human resource management.

Human resource planning and business planning 

Conceptually, human resource planning should be an integral part of business planning. The strategic planning process should define projected changes in the scale and types of activities carried out by the organization. It should identify the core competences the organization needs to achieve its goals and therefore its skill requirements. But there are often limitations to the extent to which such plans are made, and indeed the clarity of the plans, and these may restrict the feasibility of developing integrated human resource plans that flow from them. 

In so far as there are articulated strategic business plans, human resource planning interprets them in terms of people requirements. But it may influence the business strategy by drawing attention to ways in which people could be developed and deployed more effectively to further the achievement of business goals as well as focusing on any problems that might have to be resolved in order to ensure that the people required will be available and will be capable of making the necessary contribution. As Quinn Mills (1983) indicates, human resource planning is ‘a decisionmaking process that combines three important activities: (1) identifying and acquiring the right number of people with the proper skills, (2) motivating them to achieve high performance, and (3) creating interactive links between business objectives and people-planning activities’. In situations where a clear business strategy does not exist, human resource planning may have to rely more on making broad assumptions about the need for people in the future, based on some form of scenario planning. Alternatively, the planning process could focus on specific areas of activity within the organization where it is possible to forecast likely future people requirements in terms of numbers and skills; for example, scientists in a product development division.

Integrating Business and Resourcing Strategies

The philosophy behind the HRM approach to resourcing is that it is people who implement the strategic plan. As Quinn Mills (1983) has put it, the process is one of ‘planning with people in mind’.

The integration of business and resourcing strategies is based on an understanding of the direction in which the organization is going and of the resulting human resource needs in terms of:

● numbers required in relation to projected activity levels; 

● skills required on the basis of technological and product/market developments and strategies to enhance quality or reduce costs; 

● the impact of organizational restructuring as a result of rationalization, decentralization, delayering, mergers, product or market development, or the introduction of new technology – for example, cellular manufacturing; 

● plans for changing the culture of the organization in such areas as ability to deliver, performance standards, quality, customer service, team working and flexibility which indicate the need for people with different attitudes, beliefs and personal characteristics.

These factors will be strongly influenced by the type of business strategies adopted by the organization and the sort of business it is in. These may be expressed in such terms as the Boston Consulting Group’s classification of businesses as wild cat, star, cash cow or dog; or Miles and Snow’s (1978) typology of defender, prospector and analyser organizations. 

Resourcing strategies exist to provide the people and skills required to support the business strategy, but they should also contribute to the formulation of that strategy. HR directors have an obligation to point out to their colleagues the human resource opportunities and constraints that will affect the achievement of strategic plans. In mergers or acquisitions, for example, the ability of management within the company to handle the new situation and the quality of management in the new business will be important considerations.

PEOPLE RESOURCING AND HRM

HRM is fundamentally about matching human resources to the strategic and operational needs of the organization and ensuring the full utilization of those resources. It is concerned not only with obtaining and keeping the number and quality of staff required but also with selecting and promoting people who ‘fit’the culture and the strategic requirements of the organization.

HRM places more emphasis than traditional personnel management on finding people whose attitudes and behaviour are likely to be congruent with what management believes to be appropriate and conducive to success. In the words of Townley (1989), organizations are concentrating more on ‘the attitudinal and behavioural characteristics of employees’. This tendency has its dangers. Innovative and adaptive organizations need non-conformists, even mavericks, who can ‘buck the system’. If managers recruit people ‘in their own image’there is the risk of staffing the organization with conformist clones and of perpetuating a dysfunctional culture – one that may have been successful in the past but is no longer appropriate (nothing fails like success).


The HRM approach to resourcing therefore emphasizes that matching resources to organizational requirements does not simply mean maintaining the status quo and perpetuating a moribund culture. It can and often does mean radical changes in thinking about the competencies required in the future to achieve sustainable growth and to achieve cultural change. 

DEVELOPMENT AND CHANGE PROCESSES

Team building

Team-building activities aim to improve and develop the effectiveness of a group of people who work (permanently or temporarily) together. This improvement may be defined in terms of outputs, for example the speed and quality of the decisions and actions produced by the team. It may also be defined in more nebulous terms, such as the quality of relationships or greater cooperation. The activities in team-building programmes can.


● increase awareness of the social processes that take place within teams;


● develop the interactive or interpersonal skills that enable individuals to function effectively as team members;


● increase the overall effectiveness with which teams operate in the organization.


To be effective, team-building programmes should be directly relevant to the responsibilities of the participants and be seen as relevant by all participants. They need to support business objectives, fit in with practical working arrangements and reflect the values the organization wishes to promote. Approaches such as action learning, group dynamics, group exercises, interactive skills training, interactive video, roleplaying and simulation can be used. Team-building training is often based on either Belbin or Margerison and McCann classifications of team roles as listed in Chapter 20.


Outdoor learning (outdoor-based development) is another good method of providing team-building training. It can offer a closer approximation to reality than other forms of training. Participants tend to behave more normally and, paradoxically, it is precisely because the tasks are unrelated to work activities and are relatively simple that they highlight the processes involved in teamwork and provide a good basis for identifying how these processes can be improved.

Transformation through Leadership

Transformation programmes are led from the top within the organization. They do not rely on an external ‘change agent’ as did traditional OD interventions, although specialist external advice might be obtained on aspects of the transformation such as strategic planning, reorganization or developing new reward processes.

The prerequisite for a successful programme is the presence of a transformational leader who, as defined by Burns (1978), motivates others to strive for higher-order goals rather than merely short-term interest. Transformational leaders go beyond dealing with day-to-day management problems; they commit people to action and focus on the development of new levels of awareness of where the futur lies, and commitment to achieving that future. Burns contrasts transformational leaders with transactional leaders who operate by building up a network of interpersonal transactions in a stable situation and who enlist compliance rather than commitment through the reward system and the exercise of authority and power. Transactional leaders may be good at dealing with here-and-now problems but they will not provide the vision required to transform the future.


Managing the transition


The transition from where the organization is to where the organization wants to be is the critical part of a transformation programme. It is during the transition period of getting from here to there that change takes place. Transition management starts from a definition of the future state and a diagnosis of the present state. It is then necessary to define what has to be done to achieve the transformation. This means deciding on the new processes, systems, procedures, structures, products and markets to be developed. Having defined these, the work can be programmed and the resources required (people, money, equipment and time) can be defined. The plan for managing the transition should include provisions for involving people in the process and for communicating to them about what is happening, why it is happening and how it will affect them. Clearly the aims are to get as many people as possible committed to the change.