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Human resource planning is the process of managing and administering the human resource assets of an organization. Human resource planning strives to ensure the most efficient use of human resources towards achieving the organizations goals and objectives. The three stages of human resource planning are:
- Forecasting labour demand – This is where managers determine the required amount of resources required to meet the organizations manpower needs.
- Analyzing present labour supply – This is where employee productivity and performance in managed and calibrated towards organizational goals.
- Balancing labour demand and supply- This is the process of scheduling and managing manpower needs with available resources.
The three stages cover strategy formulation, implementation and
In a nutshell, The formulation stage provides the ground for an effective Strategic HR Planning process. The organization recognizes the HR department as a business partner and provides it with avenues for being a proactive partner. In the first stage, the composition of the team formulating the business strategy is very important. The presence of head of the HR department in the steering team formulating the organisational strategy will strengthen the pro-active strategic linkage of theHRM systems.
The second stage is that of implementing various HRM systems based on the HR strategy. Various HR systems like recruitment and selection, performance management, compensation, training and development, career management, etc. need to bealigned with the HR strategy. This is the vertical linkage. Policies and practices of various HR systems are set or modified according to the strategy implementation needs. Based on theconcept of horizontal linkages, HR systems also need to be aligned to each other. The implementation stage also includes initiating interventions required for effectively managing change during processes like restructuring or mergers. The latter is an example of temporal linkages. Temporal linkages deal with the suddenchanges that are brought in due to strategic decisions.
The impact stage includes various surveys and evaluation processes. The impact metrics need to be carefully constructed. Evaluation of impact is difficult because most of the organizations are not very clear as to what they want to evaluate – the efficiency of the HR processes as well a the department, the services provided by HR, financial returns in terms of employee productivity, turnover, etc. or improved performance of employees of the organization. It is difficult to devise an appropriate impact evaluation methods unless expected outcomes are unambiguous. Defining and measuring goal achievements oroutcomes of various HR practices and activities is the first step. This may also include organizational outcomes like employee turnover, behavioral perspective of measuring the desired behavior of the employees or resource-based theory perspective of measuring the achievement of desired competencies for the organization. Performance reviews and associated actions are part of this stage. In order to determine the level of strategic integration, various HR systems are reviewed and analyzed for their alignment to the strategic objectives. The gaps in their vertical and horizontal linkages are identified. The evaluation metrics also include constraints in the implementation of HR systems, efficiency of HR processes and level of competency of the personnel (both HR and non-HR) involved in the implementation process. The information collected and analysed on the evaluation metrics provide feedback formaking necessary changes in the implementation process. This information is also important inthe organizational context of business strategy formulation.
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