MGMT 610MGMT 610Case # 15Case # 15

Does HR Planning Improve Does HR Planning Improve Business PerformanceBusiness Performance

Author: Bill Macaleer and Jones Author: Bill Macaleer and Jones ShannonShannon

ByBy

Manish K LalManish K Lal

Human Resource PlanningHuman Resource PlanningWords of Wisdom

‘Most chief executives acknowledge that there is a link between HR

practices and business performance.’

‘Retaining and motivating “knowledge workers” has become the primary aim … When they leave, the business loses

an essential element of intellectual capital.’

Human resource planning is theprocess of systematically

forecasting the future demand andsupply for employees and the

deployment of their skills within the

strategic objectives of theorganization.

Human Resource PlanningHuman Resource Planning

Human Resource Human Resource PlanningPlanning

Is there a link between good HRM and Is there a link between good HRM and business performance?business performance?

In the 2000s, there is growing evidence thatprogressive HR practices can enhance a

company’s sustainability and profitability if there

is integration with business purpose. There ishowever also evidence of a failure by many

senior managers to recognize this.

Critical Success Factors to HR Critical Success Factors to HR PlanningPlanning

Organizations integrate business and HR plansOrganizations integrate business and HR plans

Managers take ownership for HR planningManagers take ownership for HR planning

HR planners support managersHR planners support managers

Resources are allocated to build HR planning capacityResources are allocated to build HR planning capacity

Central agency support is provided to departments and Central agency support is provided to departments and agencies (e.g. ‘Centre of Excellence’)agencies (e.g. ‘Centre of Excellence’)

The genesis of HR PlanningManpower Planning

Manpower plans were designed to fit in with theoverall business strategy and plan.

It represents a response by the personnel function toensure that the necessary supply of people is

forthcoming to allow measurable financial, marketingand production targets to be met.

Manpower planning was defined by the Department ofEmployment in 1974 as ‘strategy for the acquisition,

utilization, improvement and preservation of an organization’s human resources.’

Manpower PlanningOrganization strategy and targetsOrganization strategy and targets

Organization practices and methodsOrganization practices and methods

Manpower Review and AnalysisManpower Review and Analysis

InternalInternal ExternalExternal

ForecastForecast

DemandDemand SupplySupply

Adjust to BalanceAdjust to Balance

RecruitRecruit RetainRetain ReduceReduce

MisconceptionMisconception

There is a common misconception There is a common misconception that human resources planning is the that human resources planning is the same as manpower or staff planning.same as manpower or staff planning.

Not so !Not so !

HR Strategy Leads to HR Strategy Leads to Improved Improved

Organizational Organizational Performance Performance

HR Strategies

Organizational Strategies

Organizational Characteristics

Organizational Capabilities

Environments

LEADERSHIPLEADERSHIPHow HR can be a Strategic How HR can be a Strategic

PartnerPartner

Understand styles of leadershipUnderstand styles of leadership

Display appropriate leadership Display appropriate leadership

Demonstrate leadership at all Demonstrate leadership at all levels of performance – team, levels of performance – team, individual, unit or organizationindividual, unit or organization

HR must understand…HR must understand… internal / external customersinternal / external customers

key business disciplineskey business disciplines

business structure, vision, values, business structure, vision, values, goals, strategies, financesgoals, strategies, finances

competitors, products, technology competitors, products, technology and sources of competitive advantageand sources of competitive advantage

KNOWLEDGE OF KNOWLEDGE OF BUSINESSBUSINESS

How HR can be a Strategic How HR can be a Strategic PartnerPartner

STRATEGIC THINKINGSTRATEGIC THINKINGHow HR can be a Strategic How HR can be a Strategic

PartnerPartner Understand strategic business planningUnderstand strategic business planning

Apply a systematic HR planning processApply a systematic HR planning process

Integrate HR systems to build capability Integrate HR systems to build capability and competitive advantage for the firmand competitive advantage for the firm

Develop and integrate department Develop and integrate department strategies within corporate framework strategies within corporate framework

PROCESS SKILLSPROCESS SKILLSHow HR can be a Strategic How HR can be a Strategic

PartnerPartner Know management processesKnow management processes

Know process skills: consulting, problem Know process skills: consulting, problem solving, evaluation and communicationsolving, evaluation and communication

Understand organizational development Understand organizational development

Facilitate and manage changeFacilitate and manage change

Manage under uncertainty and instabilityManage under uncertainty and instability

TECHNOLOGYTECHNOLOGYHow HR can be a Strategic How HR can be a Strategic

PartnerPartner Maintain HR documentation Maintain HR documentation

using knowledge management using knowledge management and technologyand technology

Build firm’s capability using info Build firm’s capability using info systemssystems

Provide training in use of Provide training in use of technology technology

RoadblocksRoadblocks

Most human resources and business Most human resources and business professionals understand this professionals understand this concept, but it is alarming how few concept, but it is alarming how few are able to implement it. Why is are able to implement it. Why is this?this?

How does it work ?How does it work ?

• Business Design ModelBusiness Design Model

• Liberating the Potential of PeopleLiberating the Potential of People

• Role of HR CouncilRole of HR Council

SummarySummary

For exceptional business For exceptional business performance, it’s important that performance, it’s important that human resources becomes a human resources becomes a strategic partner in the business.strategic partner in the business.

Summary (contd)Summary (contd)

HR planning does enhance business HR planning does enhance business performance whenperformance when::

The HR plan is strategy-basedThe HR plan is strategy-based HR is a credible strategic partnerHR is a credible strategic partner The HR function is driven by the strategic The HR function is driven by the strategic

rather than the technicalrather than the technical HR comprises professionals who have strategic HR comprises professionals who have strategic

competenciescompetencies HR sees its role as a key player in HR sees its role as a key player in

implementing the business strategyimplementing the business strategy HR has designed and uses a measurement HR has designed and uses a measurement

system to display its influence in the system to display its influence in the achievement of the business strategyachievement of the business strategy

DiscussionsDiscussions

Questions / Comments

Extra SlidesExtra Slides

Business design modelBusiness design model

Business and environmental context

Performance monitoring and renewal

Businessstrategy

Human capitalstrategy

How will we deliver expected value and contribution tothe organization?

SourcingWhat activities will we do ourselves/have others do?InfrastructureWhat capabilities are needed to fulfill HR’s strategy?

HR operating model

GovernanceHow will we lead the function and manage related investments?

How will we secure, manage, and motivate a workforce that can execute the business strategy?

HR functionstrategy

A Business Design for HR

HRValue

Proposition

Liberating the Potential of PeopleLiberating the Potential of People

A system-wide initiative to design and deploy excellent A system-wide initiative to design and deploy excellent HR strategies and services which will:HR strategies and services which will:

FULFILLMISSION

ACHIEVE OPERATIONALEXCELLENCE

RECRUIT

RETAIN

DEVELOP

Liberating the Potential of People

Recruit, retain and develop the right

talent

Help us achieve operational excellence

Assure our success in fulfilling our Mission

The Role of The HR The Role of The HR CouncilCouncil

MissionMission

• Share accountability for aligning Share accountability for aligning HR strategies with business and HR strategies with business and mission goalsmission goals

• Guide the direction, design, Guide the direction, design, oversight and implementation of oversight and implementation of HR strategiesHR strategies

• Champion and advocate service, Champion and advocate service, quality, value and ongoing quality, value and ongoing continuous improvementcontinuous improvement

Key responsibilitiesKey responsibilities

• Identify and monitor performance Identify and monitor performance metricsmetrics

• Set performance standardsSet performance standards

• Represent the interests of Local Represent the interests of Local Systems and encourage two way Systems and encourage two way communicationcommunication

• Manage HR leadership Manage HR leadership development & successiondevelopment & succession

• Leverage Best Practices Leverage Best Practices

• Champion process improvementChampion process improvement