Importance Of Human Resource Planning Business Essay

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Human Resource (HR) can be said to be the major department of an organization. HR department is the only department which alter every single activity of employees from top to bottom. This particular department is also responsible to manage the greatest expenditure of the organization (employee costs).

An HR department which is well-versed and experienced in planning can make an organization much more productive and cost-efficient. It can also increase employees' morale by letting them know that decisions regarding their careers are being made in accordance with thoughtful, proactive analysis instead of last minute reactive actions.

Another importance of Human Resource Planning is that it helps in forecasting future needs and expenses. Situations changes and so do human resource needs. Long-term forecasting helps an organization to make tactical plans to meet those needs. For example, an expansion of the organisation in four years might necessitate 100 additional employees. If in the region there is not the needed demography then, these new employees may have to be brought from elsewhere, thus, raising expenses and also taking much longer to accomplish.

For seasonal organization, like the tourism industry, every six months may make a significant difference in the number of employees needed. This may become a reoccurring problem if the HR department is not responsible for the planning.

Another importance may be the aspect of scheduling productivity that is meeting workload. Some organizations, like the Casuarina Resort & Spa, schedule more than one work shifts, therefore, employee levels may differ between each. This is a type of planning where the production department and the HR have to work together. If a big reservation has been done for next month, the need for overtime may be apparent to production but not to HR which may consider that period prime time for allowing vacations.

Interviewing and selecting new hires is, at best, an inexact science. It's never been known until weeks and perhaps months go by whether someone will work out. But the better the HR department has planned the organizational needs, the better it work and constant communications between management, HR and other departments creates an environment where planning becomes an everyday part of the timing process.

Finally, a foremost importance of Human Resource Planning is that the various activity of training is taken into consideration. HR may be heavily involved in the training process for employees. Effective training cannot be done without a plan that details what knowledge need to be communicated; who will provide the training and how the training will be done. The HR department that ensures employees are well trained and competent makes the difference in productivity, reliability and employee's safety.

2.4 Hard and soft human resource planning

There exists a difference between the hard and soft human resource planning. Hard human resource planning emphasizes on quantitative terms such as to ensure that the right number of the right sort of employees is available when need the hard model of strategic HRM emphasises the quantitative, calculative and strategic aspects of managing personnel numbers in as ``rational'' a way as for any other economic factors (Storey, in Legge, 1995, p. 66). This task focused view of HR strategy reflects Storey's (1995) ``utilitarian instrumentalism'' where human resources appear to be an ``expense of doing business'' (Tyson and Fell, 1986, p. 135). According to Legge (1995), the ``hard'' model of HRM ultimately focuses on HRM. The continual pressure to survive and gain competitive advantage in the market may lead a company treating labour as a variable input where it is a cost to be minimised. ``Tough love'' is used to mediate actions that appear to treat individuals as a cost, rather than a resource in the interests of business strategy (Legge, 1995). ed. On the other hand, soft human resource planning emphasizes on the availability of employees with the right type of attitudes and who are motivated and committed to the organisation performance and behaves accordingly. The exercise of soft human resource planning can be analyzed, by doing staff surveys, by performance appraisal and performance review and by the participation of focused groups. The ``soft'' model of HRM is based on a different concept of human resources. Employees are seen to be proactive, capable of development, and worthy of trust and collaboration. It emphasises communication, motivation, and leadership. The focus of this model of HRM is on resourceful humans (Morris and Burgoyne, in Legge, 1995, p. 67). An organizational culture that gives direction, sense of purpose and involvement will build long-term competitive advantage.

At Casuarina Resort &Spa these analysis and assessments are done in order to have a good working environment, providing a fair and equal opportunity for training and development and for the implementation of a good reward strategy whether in the form of financial or of non financial. These analysis and assessments can also lead to a highly committed management strategy which helps the organisation to implement functional flexibility, encouraging team work, decreasing hierarchical levels and differences in status, having a good provision for security at the work place and most importantly having a well motivated workforce.

2.5 Challenges of Human Resource Planning

'Modern employment conditions' are such that manpower planning is not currently - and is unlikely ever to become - 'easy': some of the problems with HRP will not go away, despite environmental changes. Clearly the more precise the information available, the greater the probability that Human Resource Plans will be accurate. But, in practice they are subject to many imponderable factors, some completely outside the organization's control….international trade, general technological advances, population movements, the human acceptance of or resistance to change, and the quality of leadership and its impact on morale. The environment, then, is uncertain, and so are the people whose activities are being planned.

Particularly where there are long planning horizons for manpower requirements (for example in civil engineering or aviation, where projects have long lead times, and long training periods for specialist employees), or where the market for the organization's products/ services is volatile and sensitive to unpredictable pressures (for example in fashion items), manpower planning faces difficulties.

One of the main challenges that the HR manager at Casuarina Resort & Spa may face in the coming years is about training and development. Training and development are those activities which are going to support the changes in the near future and are very important for any organisation in order to be successful.

It is true that training and development is considered to be an expensive activity, but it has become nowadays very important as at present many organisation are referring to globalisation. Organisations are taking example of economies like Germany, Japan and Sweden, as these economies have gain a lot by investing on training and development.

The change in technology and development of an organisation have many managers (employers) realise that all their success is in the hands of their employees' skills, knowledge and attitudes.

It is also believed that training and development should be combined with efforts in order to improve employee efficiency and living standards. Nowadays, employees need to have a balance between work and their private life. Therefore another challenge of human resource planning that an organisation like Casuarina Resort & Spa will face in the next 3-5 years is efficiency and flexibility. According to Skinner (1999), the challenge of non-standard working pattern will continue to influence many organisations in the 21st century.

Another challenge of HRP is concerned about employee relations. Good employee relations involve providing fair and consistent treatment to all employees so that they will be committed to the organisation. Organisations with good employee relations are likely to have a human resource strategy that places high value on employees as organisational stakeholders. And additionally, organisations with strong employee relations gain because their staffs are highly motivated to give of their best effort.

Human resource specialists and managers must work together in order to develop and sustain such relations, employees must be informed about organisational policies and strategies. In addition, employers must give employees the chance to express themselves and listen to them and understand their problems.

The management styles of line managers also affect employee relation. As line managers are directly linked to the human resource function they are the one who must demonstrate the desired skills, experience, personalities and motivate the employees. Therefore, it is the duty of the line managers to facilitate the interactions that occur within work group.

2.6 Risks associated with human resource planning

According to Taylor (2007), the term "risk" refers to potential problems or issues that may arise and adversely impact the progress or outcome of a project. Risk is a part of every project and while usually associated with adverse or negative outcomes and is therefore perceived as a danger or hazard (March and Shapira, 1987; Poitras, 2006). For example, shortfalls in product performance, disruption of service to the customer, hidden costs, and loss of innovative capacity are all potential risks for projects (Aubert et al., 1998). For the purpose of this paper, risk is described as the product of probability of an event occurring and its consequences.

Planning directly affects all parts of the organisation from issues that are strategic to those that are operational. Failure to plan effectively leads to failure to effectively organise and control operations. For supervisors-managers on the front line, failure to plan means that every issue become a crisis that demands an immediate solution, which is usually not very well sort out and can create a crisis "mentally". As the old adage goes, "those who fail to plan, plan to fail." When management personnel at all levels, lack effective planning skills and fail to practice effective planning, bad outcomes are inevitable.

One of the major risks associated with HRP is its remoteness from decision makers because of the rigid formality and inflexible detail. Practice has been for formal plans, embodied in agreed documents, to be communicated widely to key decision makers. Such plans have historically enshrined comprehensive career structure and job security.

In contrast, informal planning has greater flexibility of response and is easier to enact, and may be preferable in a relatively smaller organisation. The risk associated with informal planning is that it may exist only in the mind of the chief executive, and hence its outcome may not be meaningful to all key decision makers. There is no simple answer to this issue of the degree of formality in terms of detailed documentation and degree of flexibility for adjustment. Much depends on the conditions facing the organisation including the rate at which technology and markets are changing and some large integrated organisation face conditions somewhat different from those of medium size decentralised or diversified organisations.

2.7 Human Resource Planning Process

As shown in Figure 2.2 below, human resource planning proces , as Hendry suggested (1995) , may not be necessary a linear one, that is, starting from the business strategy and moving through to resourcing, flexibility and retention plans but it may also be circular, that is, with a process starting anywhere in the cycle.

There is no guaranty that there will be a well articulated business plan for the basis or human resource plans. The strategy of the organisation may be evolutionary rather than deliberate. It may be fragmented and incremental. The decisions of resourcing may be based on scenario riddle with assumptions with may be incorrect or correct and it is rather difficult to be tested or simply impossible. The strategy of resourcing may also be vague or the beliefs about the future are unproven.

Therefore, the degree to which human resource planning can be carried out will depend systematically on the nature of the organisation, that is, if the future is predictable, then formal planning may be carried out. On the other hand, if it is not, the approach will have to rely on broad scenarios rather than precise forecasts.

2.8 SHRM and Strategy

The concept of SHRM integrates traditional human resource management with a firm's strategic planning and implementation, by incorporating human resources with other resources such as financial, physical and technological resources, for the setting of goals and objectives and dealing with complex organizational problems.

SHRM also takes into consideration the implementation of practices and policies that will help to increase employees pool of skills, knowledge and attitude, which are necessary to meet strategic goals. Thus a more powerful and dynamic workforce is available to deal with the various complex problems of the organisation and hence, the probability that the organisations goals and objectives will be attained are maximized.

In order to maximise organizational benefits, SHRM must be effective. That is, the dimensions of human resources must be effectively integrated with all the steps of the strategic planning process. SHRM consist both of higher level organizational dimension as well as operational action dimension. SHRM consist of items such as appointment of an officer and a commitment to full-time employees. Looking at these practices it can be seen that, unlike traditional HRM, SHRM view employees as strategic assets that directly result on strategic effectiveness and performance, than as only remote mediated effects.

The strategic goals of the organisation can more successfully be altered by those human resource manages whose perspectives have been incorporated into strategic planning. That is, strategic human resource managers can more easily and carefully seek upon the various problems of incentives, employee grievances and the necessary contribution to fit the business strategy. Finally due to hostility and increasing market competition, SHRM are focusing on international human resource understanding as well as domestic comprehension.

2.8.1 A study carried out on SHRM

There are three dominant modes of theorising SHRM. One stream of researchers have adopted the "universalistic perspective" and identified some practices which are universally valid and yield results and improve performance (Delaney et al., 1989; Terpstra and Rozell, 1993; Huselid, 1993, 1995; Osterman, 1994; Pfeffer, 1994).Meanwhile, the "contingency perspective" theorists attempted to show that many HR practices are consistent with different strategic positions and how these practices relate to firm performance (Balkin andGomez-Mejia, 1987; Schuler and Jackson, 1987;Gomez-Mejia and Balkin, 1992; Begin, 1993). The third perspective is the "configurational perspective" which argued that in order to be effective, an HR system must be both horizontally and vertically fit, where horizontal fit refers to the internal consistency of the organizational HR policies and practices, and vertical fit refers to the congruence of the HR system with other organizational characteristics namely, firm strategy, etc. The ideal configuration would be one with the highest degree of horizontal fit.

Delery and Doty (1996) have tested the three dominant modes of SHRM theories as mentioned above. Results strongly supported universalistic perspective and showed some support for both the contingency and configurational perspectives. But it should be noted that such researches were conducted in the western context. Its universality is yet to be tested and established in different cultures, including India. However, some researchers have focused on the Indian context and tried to see the applicability of emerging theories of HRM in India (Balasubramanian, 1995; Budhwar and Sparrow, 1997; Sparrow and Budhwar, 1997; Ramaswamy and Schiphorst, 2000). Budhwar and Khatri (2001) found that a shift is taking place in the pattern of HRM practices in Indian organizations from traditional administrative type to a more strategic and proactive type. In this aspect, the need of evaluating various models and approaches becomes more significant. Even in recent works (Som, 2007; Budhwar and Varma, 2010), it has been suggested that there is a paucity of research in this area.

2.9 Strategic planning

Nowadays strategy is considered as a term which almost all organisations believe they know and understand well. Today, the concept of strategic planning comprises of terms such as strategic intent, corporate focus and strategic trust. Frequently the aspect of strategic planning are engaged in with the long term direction of the organisation and looking at what kind of businesses the organisation should be engaged in. It also helps the organisation to minimize threats and maximise opportunities by matching the activities of the organisation to the environment and most importantly matching the organisation' activities with the available resources.

Therefore, strategic planning is concerned with decisions that have enduring effects that are difficult to reverse. Strategic planning is long-range planning. In general strategic planning is concerned with the longest period of time (Ackoff, 1970). Strategic planning deals with the futurity of current decisions. It also looks at the alternative courses of action that are open in the future; and when choices are made among the alternatives they become the basis for making current decisions (Steiner, 1979). Strategic planning is a process of deciding in advance what kind of planning effort is to be undertaken, when it is to be done, who is going to do it, and what will be done with the results (Steiner, 1979).

It is also very important for the concept of strategic planning to maintain a balance of fit with the external environment. That is, as the environment is continuously changing it is also very important for strategic planning to change accordingly. Strategic planning therefore implies an attempt to alter an organization's strength compare to that of its competitors in the most efficient and effective way.

Thus it can be said that strategic planning is a process by which organisations seek out a way to enable them to anticipate and respond to the continuously changing environment in which they are operating. Thus to improve the performance of an organisation it is important for strategic planning to go towards the direction of the particular organisation.

2.10 Organisational strategy to assist retention and training

Collins (2007), Dermody et al. (2004) Reynolds et al. (2004) and Martin et al. (2006) focus on the important role that appropriate recruitment plays in retaining good staff. Improving the quality and quantity of tourism staff appears to be dependent on improving the image of the industry, together with more strategic ways of managing work rosters and workloads. Demody et al. argue that hourly paid staff are best motivated and attracted to the industry through incentive pay programs and innovative benefits such as cash bonuses, flexible work schedules and mentoring programs. Tourism recruiters need to be more aware of the skills and attributes such as computing and language skills required by the hotel during the recruiting phase - basic allowance for sustenance rates argues that many recruiters are not sufficiently strategic in this area.

Another HR function, and therefore a potential retention strategy, that receives attention in the literature are training. Research by Chiang et al. (2005) examined the relationship between training, job satisfaction and the intention to stay in the tourism industry. The findings suggest that training quality was positively related to training satisfaction, job satisfaction and intention to stay. Related to the concept of training is that of education and the type of training given by training providers such as universities and vocational institutions.

2.10.1 A study done on training and retention

A study by Hjalager and Andersen (2001) explores the difficult question of whether tourism employment is merely contingent, temporary work or whether it is actually a career. These authors address this question through examining research sites in restaurant and catering, accommodation and travel services. They conclude by stating that:

Due to its structure, rapid shifts and the social character of its jobs, tourism seems to be an industry that, more than any other industry in the economy, attracts the ultra-mobile, the virtual, and the boundary-less

They also suggest, however, that due to the lack of research into the ways that careers and professions develop, it is possible that the industry may develop into what we would now consider to be a profession. Such findings are most informative and perhaps suggest that vocational training and on-the-job training would be more appropriate for the industry. Such findings also have ramifications for the way we view the turnover rates in the industry. The work by O'Leary and Deegan (2005), examining the career progression of Irish tourism and hospitality management graduates, in many ways confirms the findings of Hjalager and Andersen as does that by Pratten and O'Leary (2007) who argue that hospitality and tourism students need to be encouraged to look further afield than those promoted by their training institutions.

The approach taken by Wildes and Parks in their research on food servers looks at the influence that internal marketing has on employee retention. They argue that building strong relationships within the organisation reduces turnover and, furthermore, promotes recommending behaviour of employees of the hotel to friends. Interestingly, and contrary to the work by Hjalager and Andersen (2001), a third of the food servers saw their jobs as professions and as having a career.

The area that has most recently been a focus for examination regarding the retention of staff is that of the role that balancing working and family life has in turnover decisions. The research by Doherty (2004) and Maxwell (2005) provide insights into the link between the work-life conflict and employee turnover. Maxwell suggests that managers are key to the initiation and implementation of WLB policies with some of those policies being the introduction of flexible working hours and arrangements, providing better training, breaks from work and better work support.

All these strategies not only address WLB issues but also enhance employee retention.

Doherty also examines WLB strategies, especially as they relate to women, and notes that such strategies may only assist women hen the labour market is tight. She argues, too, that a stronger equal opportunities approach is problematic in that it draws attention to the difference between men and women's working preferences and needs. She suggests that there be a greater and clearer set of rights as well as assisting male managers to provide more balanced lives for both male and female workers

2.11 Human Resource Planning in the tourism industry

Small- and medium-sized tourism industries often face strong gaps of qualification as their owners have to manage every functional part of the business on their own. Furthermore, due to seasonality, small-sized organisational structures and the large amount of family businesses, the tourism industry can only provide insufficient conditions to attract labour, particularly in terms of fast career paths and promotion ladders. Hence, employee turnover rates tend to be very high and market entry barriers for non-tourism trained employees are low. Wages, the location of the hotel, working conditions, the prestige of the job in the wider social environment, working hours, and atmosphere or the degree of autonomy are variables which have a strong influence of attractiveness of jobs (Tschurtschenthaler, 1996). Very few contributions have focused on the perceptions of employees regarding entrepreneurial leaders' skills to effectively manage human resources of his/her enterprise. However, the entrepreneurial leader has a strong influence on the way employees evaluate job attractiveness as finally only they are responsible to motivate employees and to introduce young tourism trainees into their working life including the internal communication and working atmosphere of the organisation.

Recent research could underline a positive relationship between the quality of the leaders' human resource management skills as perceived by the employee and the employees' overall evaluation of job attractiveness (Peters et al., 2004). The attitudes and perceptions towards working in the tourism industry are influenced by a number of characteristics specific to the industry - working hours are often not compatible with everyday life and career planning is limited due to high employee turnover and the size configuration of family. On the other hand, the tourism industry can offer communication oriented and diversified job profiles where employees have the possibility to easily gain working experience throughout the world. Nevertheless, the attractiveness of tourism industry jobs is controversial as compared to other industries of economic activity (Tschurtschenthaler, 1998). Thus, a number of studies have tried to investigate images of the tourism industry among tourism. Several studies have found that direct experience with the tourism industry leads to a more positive evaluation of tourism careers (Murphy, 1985; Ross, 1992; Ross, 1997).

Other research findings come to the opposite conclusion and point out that direct employment experience with tourism can lead to negative attitudes towards tourism jobs (Barron and Maxwell, 1993; Getz, 1994; Kusluvan and Kusluvan, 2000). The first part of the study investigates the main characteristics of small business entrepreneurs in tourism and reports associated skills in the management of human resources. The second part of the study presents a survey that was carried out in summer 2003 in South-Tyrol/Italy to assess the evaluation of trainees of leadership behaviour in SMTEs. Within the survey, employees for example evaluated motivation and communication structures, as well as human resource management skills of the leader or owner manager within the industry.

Small business cannot be characterised as only scaled down versions of large businesses since they show a number of fundamental differences (Burns, 2001, p. 9).

However, many of these differences can be explained by lacking economies of scale and scope - the consequences are lower marketing/advertising expenses and less provision for human resource training and entrepreneurial qualification (Fitzsimmons and Fitzsimmons, 2003). Some of these differences also strongly correlate with the quality of entrepreneurial leadership. Especially in small businesses, owner managers or entrepreneurs have enormous influence on enterprise growth (Gagnon et al., 2000; Weiermair and Peters, 1998) and thus entrepreneurship and entrepreneurial processes should constitute a major field of research in tourism. Departing from the innovative, creative, and risk taking Schumpeterian entrepreneur (Schumpeter, 1926), the term "entrepreneurship" has evolved into a multitude of meanings which include attributes such as (Hatten, 1997, p. 31) - entrepreneurs are creative, seek and discover niches for market innovations, bear risks, are growth oriented and driven by the maximisation of profit or investors' returns (Wickham, 2001).

Other definitions have included the entrepreneurs' ability to lead the business and to be able to allocate business' resources. The latter characteristic demonstrates as to how the term "entrepreneurship" correlates with "leadership" which includes many activities and entrepreneurial values needed in small business management processes (Hinterhuber, 2004, p. 272). In a more limited sense, the typical entrepreneurship process is terminated once the business has become established. Below, especially in the empirical part of the paper, we refer to the "entrepreneurial leaders" in the small business that in many cases also constitute the entrepreneurs, founder or owner-manager.

Thus, we should have a closer look on leaders in small-sized enterprises - leadership activities in small businesses are different because ownership managers are strongly involved in everyday business to overcome negative scale effects. In the tourism industry, there is still a need to motivate owner managers to conceptualise products/services, to strategically plan growth and to carefully consider non-delegable tasks of leaders. Entrepreneurs - initially simply interpreted as owners of tourist businesses - have to perceive different tasks that require different entrepreneurial abilities or imply certain entrepreneurial qualities.).

Employees in the hotel industry have often left the sector for reasons of missing human resource management. Mainly bad manners in the organisation, not much praise, non-compliance with agreements, and harassment by superiors or generally bad working atmosphere are important grounds for giving notice or leaving the sector (Langer, 1988).