Nowadays it has become common knowledge that people are the most precious asset of any organization. Every company should ensure efficient management of qualitative personnel and its most optimal use. Human resource management becomes an integral part of the overall success of the organization. It is not only a set of pre-defined steps to calculate the employees’ performance and to minimize the company’s expenditures on salaries and another spending to sustain the workflow process. Human resource management is an elaborate philosophy developed on the thoughts of the prominent experts in this field and companies’ best practices. It has several sub-divisions, among which human resource planning is the crucial one. The well thought out strategic planning makes it for the smooth functioning of the company and eliminates risks connected to the employees’ dissatisfaction and blurry vision of themselves in the company’s structure.
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During the last decades, human resource management and human resource planning have become highly demanded and relatively well-developed fields of scientific research. The trends of the scientific thought in the field were determined by the changing principles and values of organizational management, the transition from solely numeric approach to the evaluation of the company’s quality performance and by increasing the importance of psychological and behavioural factors in the business environment. In general, human resource management can be understood as the system of activities and methods that enable ‘working people and the organization which uses their skills to agree about the objectives and nature of their working relationship and…ensures that the agreement is fulfilled’ (Torrington, Hall, & Taylor 2008, p. 25).
Human resource management may be divided into the following areas: search for and adaptation of personnel (recruiting), human resource planning, accounting and operational work with the staff including staff training and development, assessment, work organization, management of business communications, motivation and remuneration (Daft & Marcic 2004). Among the key purposes of the human resource management are the following: ensuring the presence of the required staff in accordance with the organization’s short- and long-term strategies of development, formation of the system of preparation of top management reserves, reduction of risk of employees’ loss, streamlining of the company’s staff to achievement of required workflow results. Moreover, HR management aims to constant professional development of the personnel and their successful promotion by the career ladder (Bach & Edwards 2012).
Focusing on HR planning as critical subsystem of the HR management system, one may refer to Bratton’s and Gold’s (2012, p. 176) definition of HR planning as of the set of activities aimed at the development and ensuring ‘of a framework that would allow an organization to integrate fundamental HR practices so that it could meet the needs of its employees, enhance their potential and meet the performance requirements of the business strategy’. Initially, this concept was seen solely within the framework of operational performance of the organization and was focused on the achievement of its numerical targets without putting an emphasis on the workers as the main asset.
Such a set of activities and corresponding management philosophy was called manpower planning. The principal goals of manpower planning were to ensure the balance of demand and supply of labour and to tailor the people’s skills to the needs of the organization (Torrington, Hall, & Taylor 2008). The priorities of personnel managers were to forecast and calculate the required equilibrium of labour supply and demand and to hire the staff in agreement with the company’s plans (Bratton & Gold 2012). Manpower planning saw employees mainly as a factor of production and not as a significant value of the enterprise (Storey 2015).
Some authors, however, distinguished different approaches within the concept of manpower or workforce planning. Walton yet in 1985 defined the traditional control-oriented strategy of workforce management based on strict control and hierarchy, precise calculations and employees as a changing and easily replaceable variable. In 1970-s, the leading companies from various fields came to the re-evaluation of the approach to workforce planning. The new “commitment” strategy emerged; it provided more flexibility and engagement of workers in the process of decision-making. Jobs were seen not only as means to exchange time and efforts for money to reach the key figures set by the company but also as a chance for workers to realize their potential and develop professionally (Walton 1985).
The modern concepts of HM planning see it as one of the essential elements to support the organization’s strategy. Elaborate HM planning provides for engagement of employees at all levels to the process of overall organization’s planning. The employees are to perceive the organization’s mission, vision, core values and objectives and to understand their personal contribution to the attainment of those objectives. The understanding that employees at any level participate in the noble deal of the company’s successful performance in the competitive environment becomes an important motivation factor apart from material reward (Hughes 2014). Purcell (2014) suggests that “behavioural” or employee engagement is much more efficient to stimulate personnel’s successful performance than “work” engagement oriented solely on material results.
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However, the spread of new individualized approach towards employees working commitment does not mean that mechanisms of employees control are now abandoned; they just become more flexible. Based on the prevalence of strict or liberal peculiarities HR planning may be either hard or soft. Hard HR planning focuses mainly on the benefits the company receives from a particular worker and on cost reduction by making the workforce more affordable for the company (Taylor 2005). Soft HR planning suggests that to reach success the organizations ‘need more than the right people in the right place and the right time’ but also an ‘appropriate outlook and set of attitudes’ of employees who will contribute to the corporate culture (Taylor 2005, p. 111). Hauff, Alewell and Hansen (2014) note than the prevalence of commitment-based HR planning approach nowadays does not guarantee the increased company’s performance. The researchers propose to distinguish two hybrid forms of HR planning combining the features of control and commitment strategies. Those are ‘long-term-oriented control system’ and ‘regulated commitment system’ (Hauff, Alewell, & Hansen 2014, p. 425).
The fundamental concept, which lies within the effective HR planning, is flexibility. In the modern changing and highly competitive environment, it is crucial for the organization to be shrewd and adaptive to unstable economic conditions. The process of globalization leads to increased international labour migration, creates more job opportunities but at the same time sets more requirements to the skills of employees (Bratton & Gold 2012). Companies can now hire part-time and remote workers or offer flexible working hours for full-time workers. Reward system also becomes more flexible, taking into account the level of contribution of an employee to the success of a particular deal or project. Torrington, Hall, and Taylor (2008) define four types of flexibility in HR management: numerical (concerning the number of people employed and required), temporal (possibility to establish flexible working hours), functional (modern employees can receive various skill and not focus on only one function within the organization) and financial (employees may receive extra reward for excellent performance and their initiatives).
HR planning may be effective only if it is conducted in conformity with the general strategy of the company. HR planning can be developed only if the company already has a strategic plan for its activities. As Bohlander and Snell (2010, p. 51) aptly note, ‘the integration of HRP and strategic planning tends to be most effective when there is a reciprocal relationship between the two processes.’ HR planning should be realized according to the general strategic planning steps such as mission, vision and values definition, external and internal analysis (SWOT analysis), strategy formulation, strategy implementation and evaluation (Bohlander & Snell 2010). HR planning methods include economic methods (evaluating the salaries and other forms of material stimulation), organizational methods (establishing guidelines and rules for the employees) and psychological methods (motivation and moral encouragement) (Bohlander & Snell 2010).
Strategic HR planning requires system approach. It is important for the top managers to look into the future to forecast changes in the labour market, to assess the likely demand for new talents and understand how to attract, recruit and retain people (Storey 2015). Companies need to know exactly how many workers they need now and how many of will be required in the future. Companies should develop working scenarios of possible human resource needs in different categories of job types (Torrington, Hall, & Taylor 2008). With this data in their hands, companies will find themselves in a better position than others as they will be able to make decisions based on accurate information.
While conducting planning, HR department should consider both manpower planning part and employees development part of the HR planning. The main steps of manpower planning include demand forecast, supply projection, assessing competencies, gap analysis and final strategy development (Bhattacharyya 2006, p. 53-56). As to the second and no less important part of the HR planning, HR managers should evaluate the expertise of employees, define the crucial skills to be developed for a particular position, work out a plan of possible further educational activities and develop an individual career plan for every employee. Moreover, it is crucial for HR managers to contribute to the development of overall team spirit within the company. Excellent team-building results can be reached by various team-building extracurricular activities and training (Storey 2015).
Overall, it can be seen that modern human resource planning is both the result and the driving factor of positive changes in the organizational management. Being an inalienable part of the global management strategy, thorough HR planning helps the company to reach the highest performance results that are expressed both in material indicators of cost-effectiveness and immaterial employees’ satisfaction. HM planning, thus, can be named not only “good practice” of the company’s system of management but also a rule of good tone in the modern working environment. Recent HR management developments bring together the most valuable experience or the practitioners and give the top managers hints to successful company’s development in the competitive environment.
Bach, S & Edwards, M 2012, Managing human resources: human resource management in transition, John Wiley & Sons, New York.
Bhattacharyya, D 2006, Human resource planning, Excel Books India, New Delhi.
Bohlander, G & Snell, S 2010, Managing human resources, Cengage Learning, New York.
Bratton, J & Gold, J 2014, Human resource management: theory and practice, Palgrave Macmillan, London.
Daft, R & Marcic, D 2004, Understanding management, Thomson/South-Western, Mason.
Hauff, S, Alewell, D & Hansen, N 2014, ‘HRM systems between control and commitment: occurrence, characteristics and effects on HRM outcomes and firm performance’, Human Resource Management Journal, vol. 24, no. 4, pp. 424-441.
Hughes, C 2014, Impact of diversity on organization and career development, IGI Global, Hershey.
Purcell, J 2014, ‘Disengaging from engagement’, Human Resource Management Journal, vol. 24, no. 3, pp. 241-254.
Storey, J 2015, New perspectives on human resource management, Routledge, London.
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Taylor, S 2005, People resourcing, CIPD Publishing, London.
Torrington, D, Hall, L & Taylor, S 2008, Human resource management, Pearson Education, Harlow.
Walton, R 1985, ‘From control to commitment in the workplace’, Harvard Business Review, vol. 63, no. 3, pp. 77-84.