Question: Based on the selected article answer the following questions: What is the basic theme of the article? Try to state it in just one or
Based on the selected article answer the following questions:
- What is the basic theme of the article? Try to state it in just one or two paragraphs.
- Did the article present a good support base? Theoretical framework? Explain.
- What additional questions are suggested by the articles conclusions?
INTRODUCTION
Many within the Human Resource Management (HRM) field have suggested
that Human Resource Planning (HRP) needs to be carried out to ensure that
organisations have the human resources required to put their corporate plans into action, to help satisfy employee desires for meaningful careers, and as a means bywhichthevariousHRMactivitiescan beintegratedandmadedirectlyrelevant
to corporate strategy.
In the USA, Burack (1986) suggested that HRP is fundamental for the new
beliefs about management that have been emerging. As Burack states it: &dquo;Much
ofrecent popularliterature on management, such as In Search of Excellence, Theory Z, The Change Masters, and Renewing American Industry, is really concerned with makingthemostofhumanresources or bringingabouta directrelationshipbetween
corporate performance and corporate human resources planning and development&dquo; (Burack, 1986:73).
In Australia, writers such as Collins (1988:35) have made the point that the HRM field has been characterised by over-concern with day-to-day operations
attheexpenseoflongertermplanning.Withouta longerrangeperspective,new approaches have been adopted mainly as short-lived fads (Palmer, 1988:160). Limitations such as these are seen as leading to HRM matters attracting low
priorities and to HRM practitioners facing an up-hill battle in gaining status and
recognition (Collins, 1985). Since HRP is usually interpreted as a long-range,
strategic approach, it can be seen as a key part of the solution to these problems. In the USA, a stream of articles on HRP have appeared over the past decade,
both in mainstream management journals and in HRM publications. The journal Human Resource Planning has been published since 1978 and various books on thesubjecthavebeenproduced.Thetopicseems tohaveattractedfarlessinterest in the UK, where the older term manpower planning still seems to be used and much of the focus has been on nation-wide labour shortages in certain fields
(Cowling and Walters, 1990). Even less has appeared on this topic in the Asia Pacific area.
5
Re
so
To begin to fill this gap, this paper first traces the development of HRP as a concept in North America and in the Asia Pacific region and reviews some of the key issues that have emerged in recent North American and British studies. The results of some unpublished studies of HRP in Australia are then reported, as is the evidence on HRP activity in other parts of the Asia Pacific area. The
paper concludes by outlining the circumstances in which a sophisticated, long range approach to HRP appears most likely to be successful, and the alternatives when such an approach is impractical.
THE EVOLUTION OF THE CONCEPT OF HUMAN RESOURCE PLANNING
Regardlessofthecountryinvolved,mostrecentwriterson HRPhavecommented on the evolution of ideas in the field. Nkomo (1980), for example, discussed the evolution of HRP in the USA at some length. She maintained that personnel
management or HRM had passed through three basic stages. Stage One Nkomo (1980:70) called the Defensive Stage, where personnel managers administered various low-level benefit programs in an attempt to reduce employee unrest and the likelihood of unionisation.
Stage Two was referred to as Manpower Planning as Derived Demand. Here
a top-down approach was used, with a major emphasis upon forecasting labour needs and upon recruitment, selection and training to ensure that manpower targets were met (Nkomo, 1980:71).
Nkomo (1980:74) suggested that the third Stage, labelled Strategic Human
Resources Management, had developed due to top management belief that HR
managers should be more proactive in the resolution of company management
problems and in directly contributing to greater organisational effectiveness. Another writer in the area, Mackey (1981), also noted that earlier writings
on manpower planning tended to portray a top-down approach. He suggested, however, that another approach had developed which used more of a bottom-
up strategy where the needs and wants of individuals are taken into consideration
in a more qualitativeway.
Mackey (1981:19) states: &dquo;Their programs are likely to centre on career
management issues that attempt to reconcile individual employee interests, values,
and aspirations with the organisations future needs for people.&dquo; Thus this approach is still concerned with getting the best out of the organisations employees. The
difference is that the bottom-up approach emphasises that this can be done most
effectively by having employees involved in, and committed to, the planning process
rather than by attempting to manipulate them from the top.
Miller and Burack (1981) also described three stages of evolution of thought
about HRP in the USA. They suggested that prior to about 1969, the focus was upon relatively short-range employment planning, while in the second stage, from 1970to 1975,interestdevelopedrapidlyinlonger-term,more comprehensive manpower planning.
The current HRP approach began to develop in 1976, and it now includes
career planning for individuals, largely as a result of equal opportunity legislation in the USA. It also attempts to integrate HRM functions so as to ensure that
maximum benefits are obtained for the least possible cost (Miller and Burack, 1981:35). Thus Miller and Buracks (1981) third stage to some extent combines Nkomos (1980) emphasis upon the involvement of HR staff in corporate strategy
with Mackeys (1981) emphasis upon the benefits of the bottom-up approach. MooreandBu(1990)haverecentlyreviewedthedevelopmentof HRPinCanada, and also observed three phases. The first, from 1965. to 1973, involved the
6
development and use of top-down models, whereas the second, from 1974 to 1980, began to see attempts to take into consideration less quantifiable concerns
such as equal opportunity and meaningful career paths for employees.
The current phase, from 1981 to the present, is described as one of reflection
and anticipation, with a focus upon assessing what is being done in practice
and upon the need for HRP to be integrated with strategic business planning. A similar assessment of the current status in the UK is given by Cowling and
Walters (1990).
In Australia, the first serious consideration of organisational level manpower
planningcan beattributedtoLang(1976),whonotedthatmostpreviousAustralian
reports had been concerned with manpower planning at a macro level with a
focus on government policy in areas related to the nations labour supply. Lang
(1976:2) saw micro level manpower planning as a top-down approach by
organisations involving &dquo; ... the three aspects of monitoring of future supply of manpower for various positions, calculation of future requirements and
knowledge of the organisations internal manpower supply, movements and
productivity&dquo;.
The distinction between macro and micro levels discussed by Lang (1976)
isstilla usefulone (MooreandBu,1990).Thepossibilitythattheword manpower might be perceived as sexist, however, has led many to prefer the terms labour force planning at the macro level and human resource forecasting and human
resource planning at the organisational level (Greer and Armstrong, 1980:67; Moore and Bu, 1990).
Bowey, Jefferies, Porter and Green (1977:32) suggested that the typical top-down approach to HRP was unlikely to be realistic or optimal. Among other things, they called for an audit of employee attitudes, aspirations and aims to be a part ofan integratedapproachtocorporateandHRplanning.
Lansbury (1982) echoed this call for an integrated approach and discussed a number of trends in the Australian workforce that had. implications for
organisational planning. He suggested that: &dquo;The term human resource planning
represents, in part, an attempt to widen the concept of manpower planning to take into account the attitudes and wishes of employees and to seek a better
match between the needs of people and their employing organisations&dquo; (Lansbury, 1982:30).
Graham and Chyau (1988:21) also acknowledged this trend, noting. the emergenceofHRPasareflectionofgreaterconcernwiththeneedsofemployees.
They indicated, however, that the older term manpower planning was still used
by many firms in Hong Kong.
Thus current main stream thinking in the HRP field in all countries generally
recommends that both the top-down and the bottom-up approaches should be
used in an integrated manner. For example, Bengsston (1989:55), after discussing the results of research carried out by the OECD in a number of countries in
Europe concluded: &dquo;What all this points to is fairly clear. Investment in tangible capital,thatisinvestmentinnew technology,cantbekeptseparatefrominvestment
inintangiblecapital-humanresources. Inotherwords,humanresource development and personnel management cant in a future successful enterprise be limited or given a secondary role in corporate strategy. It has to be dealt with at the same level as matters of markets, finance and production and it has to be related to these other functions in an integrated way.&dquo;
Thus the integration that writers such as Lansbury (1982) and Bengsston (1989) have called for goes beyond first gathering HR input for the corporate plan and then specifying HR output from it. Golden and Ramanujam (1985) reviewed previous research concerned with the linkage between H R P and long range business
7
or corporate planning and suggested four general levels of linkage that appeared to exist:
. Administrativelinkage,wheretraditionalHRMactivitiesarecarriedout
independently of any strategic business plans or planning processes
One-way linkage, where HRP occurs only as a reaction to strategic plans Two-way linkage, where HR issues and activities serve as an input into
the strategic planning process and become outputs to achieve the strategic
objectives.
. Integrativelinkage,whereHRactivitiesaretotallyintegratedwithother
corporate and functional planning and decision making, and HRM staff
are accepted as full partners within the organisation.
In summary, HRP as a concept seems to include five factors that the earlier
concept of Manpower Planning did not necessarily recognise:
. A desire on the part of top management and HR managers for HRM
to becomemore pro-activelyinvolvedintheachievementoforganisational
objectives
. Anattempttointegrateemployeeneedsandwishesforcareerdevelopment
.
. .
with organisational objectives Recognitionoftheneedtoco-ordinateandintegratethevariousHRM
functional areas in light of organisational strategies and objectives
An attempt to emphasise that the contributions of females as well as males
are recognised
A concern with planning at the organisational level as opposed to planning
only for categories of industries or geographical regions.
EMPIRICAL STUDIES OF HUMAN RESOURCE PLANNING
North American and British Studies
Some twenty or more studies of various aspects of HRP process and usage appeared in North America during the late 1970s and the 1980s and a few have been carried out in the UK. Two major emphases in the most recent studies in both regions have been the relationship between HRP and strategic business planning and the benefits that organisations have gained from HRP.
Human Resource Planning and Strategic Business Planning
In a typical North American study, Burack (1986) found that only 60% of the American and Canadian corporations in his study related HRP and strategic business planning in some way, and that only about 20% had a high degree of interaction between the two. In a more recent study, Moore and Bu (1990) reportedthatthesophisticationofHRPusagewas stillveryuneven inCanada.
In the UK, Cowling and Walters (1990) summarised previous studies on HRP andreportedtheresultsofa surveycarriedouton behalfoftheInstituteofPersonnel
Management. They concluded: &dquo;Of comprehensive and systematic manpower planning fully integrated into strategic planning there exist few examples at the present time ... &dquo; (Cowling and Walters, 1990:8).
Since the above studies used random samples, it is possible that the better
managedorganisationsinthesesamplesare theones thatintegratehumanresource and business planning. To explore this possibility, Buller (1988) conducted case
studies of eight companies that had recently been recognised in the USA for excellent management. Using the Golden and Ramanujam (1985) typology of HRP and Strategic Business Planning relationships referred to earlier, he found
8
thatnone ofthesecompanieshadadministrativelinkage,threehadone-waylinkage, three had two-way linkage and only two had integrative linkage.
Thus it does not appear that best managed organisations are more likely to have integrated business and H R planning than is a random sample of organisations. VariablesthatBuller(1988)saw as influencingthelevelofintegrationincluded:
- The organisations environment, particularly increasing competition, technological change and changing labour market characteristics.
e Theextenttowhichtheorganisationshistoryandculturewerepeople-
oriented
- Thebusinessstrategyadopted,includingdiversificationandtakeovers
- ThelocationandleveloftheHRMfunctionwithintheorganisations
hierarchy
. ThevaluesandskillsoftopmanagementinregardtoHRareas
. The skills and values of the workforce .
. The existing management systems, including any Human Resource Information Systems (HRIS).
The Benefits of Human Resource Planning
.
In terms of the benefits of HRP, Burack (1986:79) indicated that: &dquo;Consistent
with other findings, the respondents felt that the corporations currently benefited most from HR Planningin management succession,but onlymoderatelyin effective human resources utilization, cost savings, employee job satisfaction, and
.
development.&dquo;
In a more thoroughlyreportedstudy,Nkomo (1988)surveyedtopHR managers
of Fortune 500 companies in the USA and classified the 264 responses into those with no formal HRP (46%), those with partial or incomplete HRP (39%) and
those with fully-integratedHRP ( 15%).Respondentsreportingat leastsome formal HRP activity were asked to rate its benefits to the organisation on a five-point scale in seven areas.
For all seven areas, respondents with fully-integrated HRP rated its benefits
more highly than did those with incomplete HRP, lending some support to the view that the former is more effective. It is interesting to note that essentially the same order of benefits were reported by both groups: both claimed greatest
benefits to Management Development (4.52 and 4.00, respectively) and second greatest benefits in terms of &dquo;Contribution to Organisation Performance&dquo; (3.92 and 3.30, respectively). At the other end of the scale, both groups rated benefits inthearea ofLabourCostSavingsas lowest(2.68and 1.93,respectively)followed by Employee Productivity (3.00 and 2.30) and Employee Satisfaction (3.32 and 2.80).
If mean ratings between 2.50 and 3.50 are interpreted as moderate benefits, then Nkomos (1988) results are quite consistent with the results found by Burack (1986) and earlier North American surveys of the benefits of HRP.
In their recent survey of HRP in the UK, Cowling and Walters (1990:6) also
had respondents indicate areas where a systematic approach to HRP had been
beneficial. Areas in which significant percentages of respondents indicated benefits were: improved identification of training (66%), more appropriate staffing levels (63%), improved management development (59%), increased employee productivity (47%) and savings in unit labour cost (46%). Lower percentages indicated improvements in employee relations (38%), increased job satisfaction/1 motivation (34%), reductions in skill shortages (30%) and reductions of labour
turnover (22%).
Since Cowling and Walters (1990) did not ask their respondents to rate the
9
-
.
extent of the benefits of HRP, their results are somewhat difficult to compare with those from North America. In general, however, it appears that Cowling and Walters (1990) results are roughly similar to those found in North America and that moderate levels of benefits have been a typical finding.
The studies of benefits cited so far have relied upon surveys of the opinions of HRP practitioners about their own organisations. While they are in a very good position to comment on what is actually done, they are potentially biased when reporting on the benefits of HRP. Nkomo (1987) attempted to avoid this problem by comparing the actual performance of organisations which had no formal HRP with that of organisations which had some HRP (either incomplete or fullyintegrated).
For both groups of organisations, data on the following aspects of performance were obtained for the same five year period:
sales growth
Earnings growth
Earningsas a percentageofsales Earnings as a percentage of total assets Earnings per employee
assets per employee
(Nkomo, 1987:389).
Nosignificantdifferencewas foundbetweentheperformanceofHRPandnon-
HRP organisations over the five year period. The performance of organisations which had introduced HRP was calculated over the five years before HRP was
introduced and over the five years after it was introduced. Any changes were compared with those occurring in organisations which had not introduced HRP.
Again,no significantdifferenceswere found,althoughitappearedthatorganisations which did introduce HRP had been performing at a lower level during the preceding five years than had those which did not introduce HRP. Nkomo (1987:391) concluded: &dquo;In summary, there is little evidence in this study to suggest that human
resource planning has yet begun to produce the payoffs posited by its advocates.&dquo;
Human Resource Planning in Australia
A number of surveys of HRM activities have been carried out in Australia. Stair ( 1981 ), for example, asked respondents in the Australian State of Tasmania to specify the presence or absence of fifteen HRM practices including manpower planning. Manpower planning activity was reported by 55% of the total private sector sample of 170 companies, making it the sixth most common practice. Sixty percent of her sample of 35 public sector organisations claimed to use
manpower planning, again making it the sixth most common practice (Stair, 1981:31).
In an unpublished study reported by Bosman (1984), responses were received from 91 of a sample of 200 chief executive officers of Australian organisations regarding their views on the HRM function. When asked to rank thirteen HRM
functions in terms of their importance, manpower planning emerged in fifth place, being ranked first or second in importance by 17% of the respondents (Bosman,
1984:34).
Bosman (1984:49) also asked the CEOs to rank the same HRM functions in
order of expected importance in ten years time. Manpower planning was ranked first or second in order of expected importance by 21 %, making it the fourth
most important function.
Asa partofa large,Australia-widesurveyofmanagementdevelopmentpractices,
10
-
Midgley(1990)receivedresponsesfroma sampleof270HRManagersregarding increases or decreases over the past three years in the emphasis upon a variety of
HRM practices. On a scale where 1 represented a significant decrease and 7
represented a significant increase, Workforce/HR Planning along with
Management Training and Development had the highest average increases of 5.2. Thus these Australian surveys of general HRM activities indicate that HRP
is of moderate and slightly increasing importance when compared to other HRM
practices.
A numberofotherreportshaveappearedinAustraliathatrelatemore specifically
to HRP. As noted earlier, Lang (1976) appears to have been the first Australian
writer to focus directly on HRP or micro level manpower planning as he called
it. His unpublished report summarised the results of a survey of Australias 1000
largest employers to which 400 replies were received. Lang (1976) found that
demandforecastingwas common,althoughusuallylimitedtotheannualbudgeting
process (p.5), that internal supply appeared to be monitored by a good proportion of organisations (p.7), and that the major source of information regarding the
external supply seemed to be gut feeling (p.10).
Another broad based survey of HRP activity in Australia was reported in an
unpublished study by Stanton (1986). She directed her questionnaire to the HR Managers in 181 of the Australian Business top 500 revenue earning organisations.
Responses were received from 96 organisations covering a wide variety of industries, mainly in the private sector.
Stanton(1986:79)definedHRPfortherespondentsas follows:&dquo;HumanResource
Planning is often seen as an attempt to forecast or plan for staffing needs within
an organisation.&dquo; Although any of the approaches to HRP discussed earlier would be included by this definition, a slight majority of respondents (57%) indicated that their organisation did not have a formal HR Plan, with only 45% indicating that a plan did exist.
In the major sections of her survey, Stanton (1986) asked a series of questions regarding HRP, Human Resource Information Systems (which were defined as
including data on employee skills, performance, future potential, etc.), the use of quantitative techniques in HRP (i.e. forecasting and modelling, demand and supply, human resource manpower projections), management succession planning and the degree to which the organisation integrated HRP with strategic business plans (i.e. is there HR input into the selection of company business strategies?).
For each of these major areas, Stanton (1986) asked about the extent of current
use, the organisations current and future level of interest, and the respondents
opinion regarding the extent to which the activity w a s needed by the organisation for its future success. Her major findings in these areas are summarised in the Table 1,below.
On the positive side, the results of Stantons (1986) survey indicated a
considerable amount of current interest and, once again, expectations of greater
future interest in all aspects of HRP that were covered. Particularly impressive
was thehighpercentagewhobelievedthatthebasicprocessesofHRP,including
managementsuccessionplanningandtheintegrationof HRPwithstrategicbusiness planning, were needed to a considerable or a very great extent for the future
success of their organisations.
On the other hand, organisations with little HRP activity may be less likely
to respond to a questionnaire on HRP, so the sample may represent organisations with an above average involvement. If this is true, the small percentage of
respondents whose organisations used the various aspects to a very great extent mightindicatethatrelativelylittlewas actuallybeingdoneinAustraliainregard to HRP.
11
12
uHl ca U)
0 y tii ki
Q m
z
a Z a
t>) g
UJ cc III I-
T-- Z
of
fi
3:
U.
0
N
f-
o iii W
-: cu -
3
SH 2 u +
E
a N a
< .9 cut
at n 0fl s
(X: a
x 0
W 0
m#
b
H M
x m#
x. ~5
.. +
N
M
ar
3~ N0
*
t9 C SS~g
3~.
Ut
b~ E
a~ o
o-d 5l &dquo;~ Og M -~ M *2
o
0
C
As a part of on-going research into the area of training and staff development
in Australia, Kane, Abraham and Crawford (1990) received survey responses
from 53 organisations ranging in size from 13 to 35,000 employees, with an
average size of approximately 3,000. While a wide variety of industry
categorisations were reported, the majority were either private companies (36%),
public companies (30%) or government authorities (19%). Of the 83% of these
organisations which had a formal corporate plan, 32% reported that there had been a great deal of formal HR input and 43% that there had been some formal
and some informal HR input.
Fifty three percent reported having a formal HRP, which is roughly comparable with the level reported in the earlier Australian study by Stanton (1986) and
in the USA by Nkomo (1988). The HRP horizon ranged from one to five years,
with an average of slightly less than three years, and nearly all covered middle
management, first level management and professionally qualified staff, while two- thirds covered all staff including the unskilled.
Thirty-six percent of those with an HR Plan indicated that there was a great deal of two way interaction between the corporate and the HR Plan, 18% reported a one way, top down interaction and a further 39% saw only some non-specific linkage between the two. This is a somewhat higher level of two way linkage than reported by Stanton (1986), Burack (1986), Buller (1988) or Nkomo (1988).
The aim of the HRP was to make major changes in the organisations staffing
patterns (79%) or to replace existing staff who leave the organisation (21%). Most respondents saw the aims of the HR Plans as either very suitable (24%)
or generally suitable (62%), and believed that the targets of the HRP would be
met either completely (14%) or mainly (76%).
Some evidence was found of the influence of HRP thinking upon organisational
attitudes towards career development, with the most c o m m o n response being that career development should be in line with future staffing needs (47%) rather than simply left to the individual or their supervisor.
The use of staff appraisal schemes to monitor achievement of the HR Plan
was, however, least often selected out of six possible purposes for staff appraisal,
withonly14%ofrespondentscitingthisas a majorpurposeand41 %maintaining that this was not at all a purpose of the scheme. Other recent Australian surveys
of staff appraisal practices have also found HRP related purposes less common
than shorter term concerns (Collins and Wood, 1990; Midgley, 1990). HRPdidnotappeartobea drivingforcebehindtrainingandstaffdevelopment (T/SD) activities either. While 43% claimed that top management believed that T/SD should aim to help individuals reach their full potential and 32% believed thatT/SDactivitieswere viewedstrictlyincost/benefitterms,only19%indicated top management belief that T/SD should be used as a tool to meet planned future staffing needs. Only 13% reported that the T/SD budget was determined on the
basis of needs spelled out in the HR Plan.
When asked how it was most commonly decided who would participate in
a given T/SD activity, 36% reported that the nature of the activity determined
this, 23% that staff nominated themselves, 19% used the staff .appraisal process, 13% a formal needs analysis and only 9% relied upon the HR Plan. This nine percent included only four of the 28 organisations with HR Plans and none of those organisations in which top management was seen to believe that T/SD should be used as a tool to meet planned future staffing needs.
In general, Kane, Abraham and Crawfords (1990) results indicate that HRP
in Australian organisations is at least as sophisticated in terms of integration with business planning as in North American organisations. Since other reports
13
appear not to have specifically studied the relationship between HR Plans and other HRM functions in any detail, comparisons cannot be made in this area.
The low level of influence of HRP on seemingly relevant activities such as training and staff development and staff appraisal found by Kane, Abraham and Crawford (1990) does, however, add support to the comments made by reviewers
such as Craft (1980), who suggested that lack of knowledge and experience in developingintegratedHRMprogramswas a majorproblemforHRplanners.
&dquo;
Human Resource Planning in other Asia Pacific Countries
Only a few reports relevant to HRP in other Asia Pacific countries could be
located, although, as is the case with Australia, there may be additional studies
which have not been formally published.
Two recent articles discussed HRP in Hong Kong. In one, Kirkbride and Tang
(1989)reportedon a questionnairerespondedto by361 out of 2973 organisations surveyed. While 68% of the total sample reported carrying out manpower planning, this activity was significantly correlated with company size and the presence of specialist personnel departments. Out of a list of 14 HRM activities, manpower planning ranked third in terms of time spent, fifth in terms of importance, and fourth in terms of how much it had increased in importance over the past three
years.
In a study more directly focused on HRP, Graham and Chyau (1988) received
34 complete responses from a survey of 160 companies in Hong Kong. The respondentswere equallydividedbetweenChineseownedandnon-Chineseowned
organisations, with 29% involved in manufacturing and 71 % in the service sector.
. Thirty-eightpercentreportedhavinga manpowerinventory,andthepercentages reporting manpower plans in the areas of staff utilisation, training and internal staff supply were 41 %, 62% and 50%, respectively.
Graham and Chyau (1988:26) concluded that manpower planning was not as well developed in practice as it was in the literature, and that there appeared to be little awareness of the need to co-ordinate manpower strategy with other
organisational strategies.
In another Asia Pacific survey, Yuen and Lian ( 1989) contacted the H R managers
of 123 banks in Singapore. Forty HR managers, 43 line managers and 8 senior
bank managers to whom HR managers reported were willing to cooperate in rankingtheimportanceof36HRMactivities.HRPwas rankedninthinimportance
by the H R managers, eighth by line managers and fifteenth by the senior managers. This was not, however, cited as a major difference because line managers did not differentiate greatly between activities and senior managers tended to adopt a very traditional view of HRM (Yuen and Lian, 1989:21 ).
Although the data is limited, the status of HRP in Asia Pacific countries and
particularly in Australia appears to closely parallel the situation in North America.
Most of the organisations in the countries covered in the above review reported
that HRP was at least a moderately important HRM activity now and was likely tobeofincreasedimportanceinthefuture.AlldiscussionsofHRPseem toaccept
the view that ideally HRP should be fully integrated into the long range business planning process, and recent Australian data would seem to indicate that this is the case in over a third of organisations in that country.
On the other hand, around half of the organisations studied in all countries were found to have little or no involvement in HRP, and it is still only a minority that have fully integrated HRP with long range business planning or with other HRM activities. No studies of the benefits of HRP seem to have yet appeared in the Asia Pacific area.
14
BARRIERS TO HUMAN RESOURCE PLANNING
In an effort to explain why so many organisations still have limited or no HRP, some North American and British writers have focused on barriers to HRP implementation, either as a result of reviewing the literature or through their own surveys of practitioners. The barriers noted do not seem to have changed greatly over the past decade.
To summarise this literature, it has been suggested that top managers tend to adopt a short-term orientation, in some cases because the future appears hard to predict (Burack and Gutteridge, 1978; Cowling and Walters, 1990; Kahalas,
Pazer, Hoagland and Levitt, 1980; Moore and Bu, 1990; Schuler and Walker, 1990; Schwartz, 1985). There may also be general resistance both to centralised planning and to changing what seems to have worked in the past (Burack and Gutteridge, 1978; Kahalas, et al., 1980; Schwartz, 1985). As a result of these attitudes, a need for long range planning may not be identified.
Even if a need for long range planning is accepted, however, top managers often give HRM issues and staff relatively low priority (Cowling and Walters, 1990; Craft, 1980), and the impact of HRP programs can be difficult to quantify (Schwartz, 1985). As a result, support for HRP planning may still be absent, andresources includingknowledgablestaff(BurackandGutteridge,1978;Kahalas, et al., 1980; Schwartz, 1985) and suitable data/methods for forecasting (Cowling and Walters, 1990; Craft, 1980; Kahalas, et al., 1980; Moore and Bu, 1990;
Schwartz, 1985) may not be available. Inaddition,itisnotalwaysclearhowthevariousHRM functionscan beintegrated
and used to achieve the objectives of an HR Plan, once such a plan is developed (Craft, 1980; English, 1984; Gatewood and Rockmore, 1986; Kane, Abraham and Crawford, 1990).
CONCLUSIONS
Regardless of whether North America, Britain or the Asia Pacific area is being
considered, the theory of HRP has evolved fairly rapidly towards seeing a long
range HRP process which is fully-integrated with the long-range strategic business planning process and which integrates the various HRM functions as the ideal. Studies of HRP in practice have found that about half of the organisations in allcountriesengageinsome HRP-relatedactivity.Becauseofa numberofproblems or barriers, however, these studies have also shown that complete, fully-integrated approaches are used by only a minority.
This finding has led to suggestions that more attention should be paid to the
situation the organisation is in before prescribing such a sophisticated approach. For example, Craft (1980:42) and Nkomo (1987:391) have both called for research
to determine the situations in which formal HRP is most useful.
GrahamandChyau(1988:21)suggestedthattherewas no singlebestapproach and that HRP should be tailored to the objectives of the organisation. Ulrich (1988:60) went further to assert that complete, sophisticatedHR Plans have tended to become an end in themselves. He recommended the development of simple, straight-forward HR Plans which directly contributed to organisational performance.
English (1984) also emphasised the need to concentrate o n operationally relevant
areas likely to have a major impact on the achievement of corporate objectives; and Schuler and Walker (1990) have suggested that HRP needs to develop an added focus upon immediate issues that lead to action. Rhodes (1988:64) asserted that the related area of succession planning has too often involved a cumbersome
15
process when what is needed is planning that is &dquo;... flexible, lean, decisive and results-oriented ... &dquo; in order to ensure that it helps the organisation to
gain a competitive advantage through its human resources.
Cowling and Walters (1990:3) similarily suggested that HRP had become
associated with five year plans, bureacuracy and paralysis by analysis, at a time
when organisations in the UK were seeking flexibility and adopting a shorter
term perspective.
To help HR Managers avoid the problems cited above, the material that has
been reviewed will be used to (1) outline the situations in which a complete, fully-integrated long range HRP approach is likely to be useful and (2) discuss the options if such an approach is either inappropriate or not supported by top management.
Requirements for Fully-Integrated Human Resource Planning
Given the problems discussed earlier, there appear to be several requirements that need to be met before a sophisticated, fully-integrated long range approach
to HRP is both feasible and practical.
,
1. Firstandforemost,theorganisationsexternalenvironmentandoverallstrategy
needs to be analysed to determine if relatively long-range and centralised strategic
planning is both possible and desirable for the organisation.
In terms of the environment, Rhodes (1988:62) asserted that &dquo;Predicting
succession(over,say,a three-to-five-yeartimeframe)inan era ofconstantchange
is fast becoming an impossibility&dquo;. Schuler and Walker (1990) also emphasised the importance of the rapidly changing environment business now faces. &dquo;In the
new environment,strategicbusinessplanningisbecomingmore tentative,short term, and issue focused. Planning is now considered useful more as a tool for
provoking thought and discussion than as a process of determining long-term objectives and courses of action&dquo; (Schuler and Walker, 1990:6).
Since the long range HRP approach emphasises integration with business planning and is never cited as a short-term fix for immediate problems, it is
unlikely to be suitable in situations where long-range business planning is not
appropriate.
Jackson and Schuler (1990) pointed out that HRP can be short term (up to
one year), intermediate term (2 to 3 years) or long term (more than 3 years),
and suggested that all of these planning horizons may be necessary, depending upon the kinds of planning objectives that are needed. More specifically, they suggested that &dquo; ... whereas short-term objectives include attracting, assessing, and assigning employees to jobs, intermediate-term objectives are more likely to include readjusting employees skills, attitudes, and behaviours to fit major changes in the needs of the business, as well as adjusting human resource practices to fit changes in the needs of employees&dquo; (Jackson and Schuler, 1990:23 0). Longer term HRP is needed for changes requiring a long lead time, such as changing the type of leadership style or changing competitive strategy.
2. Iflong-rangestrategicplanningisanappropriateresponsetotheorganisations environment and objectives, then top managers need to be willing to understand
and accept this and to make a commitment to the development of such plans, in order for the complete HRP approach to be used. Mills (1985), for example, found in his survey that neither environmental characteristics nor corporate size and strategy differentiated organisations with HR Plans from those without such plans. The difference lay in how managers viewed planning, with some seeing itas essentialtogaincompetitiveadvantagewhileotherssaw itas costly,ineffective and bureaucratic (Mills, 1985:99).
16
3. TopmanagementalsoneedtorecognisethatHRmattersdeserveequalpriority tothemore traditionalconcernsofcapital,equipment,etc.beforea fully-integrated approach will be accepted. While earlier writers such as Craft (1980) suggested that this recognition was not widespread, Schuler and Walker (1990:18) reported that a number of fundamental changes in the business environment were causing human resource concerns to receive more attention in many, though not all, of
the organisations that they surveyed.
4. Theorganisationmustbewillingtoprovideconsiderablestafftimeandother resources to establish, implement and monitor an HR Plan. This will include suitably trained staff to develop and co-ordinate the HRP function, either as a
separate unit, as part of a corporate planning unit, or as a part of the personnel or HRM unit. While HRP may be justifiable as a long term investment, there
has been no suggestion that it is inexpensive.
5. A related requirement is the development of a relatively sophisticated information system, often known as a Human Resource Information System or
HRIS. Writers such as Burack and Gutteridge (1978:19) and Kahalas et al. (1980:55) have noted the high data needs for successful HRP. An effective HRIS must be user friendly and include data on the personal, professional, educational and job-related characteristics of staff. It should be able to profile staffing strengths and weaknesses in various ways and should be capable of developing forecasts of staffing patterns and needs given a variety of scenarios.
6. WherevertheHRPfunctionislocated,itwillneedtoworkcloselywiththe corporateplanningfunction.Itshouldprovideongoinginputon staffdistribution, performance and potential, and develop, implement and monitor the results of H R Plans designed to achieve the organisations goals.
7. TheHRPfunctionwillalsoneedtomaintaincloseliaisonwithotheraspects
of the HRM function so that policies and activities in areas such as recruitment,
selection, staff appraisal, training and development, career development, pay and benefits support the achievement of the HR Plans objectives.
The Alternatives to a Fully-Integrated System
Basedon theaboverequirements,completeHRPmaynotbeappropriatebecause of environmental uncertainty, desire for flexibility, decentralisation o r other factors
which severely limit realistic planning horizons. Alternatively, long range business planning may be feasible and potentially profitable, but because some or all of
requirements 2-7 above are not met, HRP is unlikely to be implemented.
One alternative to long range HRP is the &dquo;HR Strategy&dquo; approach discussed by Schuler and Walker (1990). HR Strategy adopts a shorter term focus, and emphasises the need to involve managers in the consideration of human resource
issues which are crucial to the competitiveness and survival of the organisation. Another alternative is to use the bottom-up approach discussed by Mackey (1981). This strategy is similar to what Kane (1986) referred to as the &dquo;Individual
Development&dquo; approach to staff training and development, where the aim is to increase the levels of motivation, commitment and flexibility in the workforce.
The Australian data gathered by Kane, Abraham and Crawford (1990) can
be seen as indicating that top management is more amenable to using training and staff development activities to foster individual development than to achieve
planned future staffing needs. Hurst (1986) also saw this bottom-up approach
as more suitable in situations where the future was uncertain or where the
organisation needed to be revitalised.
Where planning is feasible and appears desirable, but a lack of top management
17
support, a lack of resources, or resistance to change is a problem, HR managers may still be able to mount demonstration projects. These projects will increase their skills in the HRP area and, if successful, enhance their credibility in the
corporate planning arena.
To do this, HR managers should identify areas where staffing is seen to be
of high priority and can be shown to be a current or future problem (English
1984; Ulrich, 1988; Rhodes, 1988). Schuler and Walker (1990:18) asserted that &dquo;There is little doubt that HR concerns become business concerns and are dealt
with by the line only when there is major pain&dquo;. Mackey (1981:18) referred to this as a sore spot approach, and suggested that limited HR Plans that focus
on the filling of top management posts, or the control of excessive staff turnover, have often been visibly successful and led to the launch of broader, long-term
planning.
Mackeys (1981) suggestion of beginning with management succession planning
is supported by surveys of activity in the USA, which have consistently shown that HRP is most commonly carried out for management level staff (Alpander, 1980; Burack, 1986). Stanton (1986) found a high level of current and future interest in management succession planning in Australia, and Schuler and Walker (1990) reported that line managers in the USA saw this as a very important issue. This was especially true when these managers saw the future as uncertain and believed that a different type of manager would be needed. As noted earlier, Burack (1986) and Nkomo (1988) found management succession planning to be the area reported as most beneficial to organisations in the USA, whether
or not they had a complete HRP process.
While management succession planning may be a useful starting point, both
in terms of attracting interest and resources and in terms of its potential benefit, Rhodes (1988:62) warned that the elaborate succession planning programs developed during the 1980s &dquo;... cover too many people, rely on too much data, focus on too many objectives and rarely produce adequate results for the time and effort expended&dquo;.
Alternatively, as Mackey (1981) suggested, there may be other areas in the organisation where future staffing can be seen as a problematic, such as where
scarce professionals or technicians are involved (Bengsston, 1989). A planned expansion or contraction of the organisation may also establish a need for some
form of HRP (McIver, 1984).
In large organisations, managers of some divisions or functional areas may
see a problem and be amenable to HRP, while others may not have a significant
problem or at least not recognise it. Alpander (1980:26), for example, noted that 20% of the large organisations he surveyed in the USA had HRP at the divisional
level only.
The group or situation chosen will need to have visibilityand be seen as important
to the organisations future. The focus, as English (1984), Rhodes (1988) and
Ulrich (1988) have emphasised, should be on a simple, readily understood and
achievable plan. In many cases the older top-down approach where HR Plans
are designed to achieve already set corporate goals may need to be used. While
Nkomo (1988) found that complete, fully-integrated HR Plans produced the best
results,significantbenefitswere stillreportedforincompleteapproachesforwhich it may be easier to gain the necessary support and resources.
Once some measure of success has been achieved, any weakness in the plan
or the planning process or any longer term problems that have arisen can be pointedout.Dependinguponwhereproblemsorinefficiencieshavecome tolight,
it may now be possible to demonstrate a need for greater liaison with corporate planners,inputregardingstaffwants and needs,or a longerterm planningprocess.
18
Schuler and Walker (1990) suggested that the shorter term focus, characteristic of what they refer to as HR Strategy, is needed even where a long range HR
Planningprocessalreadyexists.Theysaw HumanResourceStrategyas involving the organisation in defining desired states, identifying gaps or sources of pain,
focusingon a few,important,actionableconcerns anddevelopinga sense ofurgency and commitment to action (Schuler and Walker, 1990:15). While the aim is to provoke thought and action in the short term, the issues that arise may be fed into, or establish the need for, longer term HRP processes.
Perhaps the most important point to arise from this discussion is that a long
range HR Plan which is fully-integrated with long-range business plans is not likely to be appropriate or practically achievable in all situations and may, in any case, not eliminate the need for a shorter range focus on HR Strategy. Instead of holding this approach up as the ideal, various approaches to HRP should be considered as possible solutions once problems have been identified. While this latter point may appear obvious, writers sometimes give the impression that HRP can become a solution looking for a problem rather than the other way around
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
Study Help