Human Resource Planning (HRP): factors affecting labour supply
Category : Human Resource Management Topics
Human Resource Planning (HRP): factors affecting labour supply
Competition, globalisation, technological innovations, varying market and consumer trends, and other occurrences affect the labour supply. With these conditions, there is a need for intensive planning. Planning is very essential for future human resource needs and possibilities. The essence of human resource planning (HRP) is the presence of a concrete plan of getting the right people particularly the employees as well as coaches in the given right place and time (Gilley and Maycunich 2000). Cascio (1995, p. 142) provides a definition of HRP as an attempt to predict future business and environmental demands and needs on an organisation and to similarly provide competent people to carry out business needs and gratify demands. HRP is not simply a component of the HR function but it is perceived as a process that focuses on identifying an organisation's labour needs under varying conditions and at the same time developing the interventions and initiatives essential to satisfy those identified needs (Gilley and Maycunich 2000). Further, HRP is an essential aspect of human capital development (Budhwar and Debrah 2001, p. 11). Gilley and Maycunich (2000) aver that HRP includes "job analysis, career planning, and other activities designed to identify what is best for the organization as a whole" (p. 38). Thus, it is a very essential as aspect of HR function towards every organisational growth and achievement.
Kwak, McCarthy and Parker (1997) identify the focus of HRP, which is the achievement of the “appropriate quantity and quality of skilled people in specific positions at the time they are needed” (p. 173). The core value of HRP as well as other HR functions like recruitment and selection is the enhancement of organisational competitiveness and renewal of existing capabilities that serve as the motivating factors of the whole organisation (Gilley and Maycunuch 2000). Today's HR highly developed extensively in its sophistication and strategic planning processes (Gubman 2004). HRP is a method of systematically arranging the future. It also includes putting into place a plan designed to address upcoming performance problems or productivity and quality requirements. Thus, the advantage of such process is the reduction of risks and threats that create impact to the whole organisation and its productivity. By addressing unknown variables through HRP, organisations have the opportunity to support and configure their expectations to guarantee definite and positive outcomes. Failing to do so would lead to uncertainties that will eventually create another organisational difficulty. The failure to conduct HRP endangers the organisation's future success.
The challenges of HRP include the needs of the business, competitive pressures, and future HR trends and requirements (Gilley and Maycunich 2000, p. 184). These challenges affect the HRP process. It is presupposed that organisations have their individual business needs and requirements. These may refer to the needs of better business returns, productivity, quality, value, competence, safety, and customer satisfaction. These needs likewise create anxiety within the bounds of the organisation, hence contributing to the other pressures directly related to the employees. To address such, a smart organisation should learn to anticipate resurging occurrences and how the quality and quantity of human resources can provide the given business needs. In general, businesses are motivated to meet future organisational needs, for this is also a determinant of organisational growth. For the issue of competitive pressures, this is apparently connected to the emerging culture of competition among the various industries in the global marketplace. An organisation is given the option to fight such pressures or succumb to its effects. To solve this, it is important for organisations to immediately formulate business solutions that can adequately respond to their competitors and among these solutions are the sufficient and competent human resources. This is practically effective if incorporated with the benefits of employee training and development. Lastly, the HR function is facing future trends that basically affect and transform its conventional functions. It is necessary to forecast future HR requirements as a result of emerging trends for the reason that the organisation will be ready with whatever circumstance that will occur. Hence, it will condition itself by having increased workforce quality and quantity, project outcomes, and minimise potential organisational hazards especially in the HR activities.
In conclusion, HRP involves a lot of processes that is integrated to organisational strategies towards the achievement of goals. It is about the analysis of a firm’s needs for human resources (where and when), identification of the size of the firm in terms of the numbers of employees required to get the work done (how many), and planning the HR actions necessary to meet these needs (Gubman 2004). If an organisation is poor in its HRP process, it can lead to overstaffing or understaffing. There is no generic or “one-best-way” of doing HRP. It is a continuous and ongoing organisational activity rather than episodic or one-off annual event.
Budhwar, PS & Debrah, YA Eds. (2001) Human Resource Management in Developing Countries, Routledge, London
Cascio, WF (1995) Managing human resources: Productivity, quality of work life, profits (4th edn), McGraw-Hill, New York
Gilley, JW & MAycunich, A (2000) Beyond the Learning Organization: Creating a Culture of Continuous Growth and Development through State-Of-The-Art Human Resource Practices, Perseus Books, Cambridge, MA
Gubman, E 2004, "HR Strategy and Planning: From Birth to Business Results", Human Resource Planning, 27, 113-123
Kwak, NK, McCarthy, KJ, & Parker, GE (1997) 'A Human Resource Planning Model for Hospital/Medical Technologists: An Analytic Hierarchy Process Approach', Journal of Medical Systems, 21: 3, 173-187
Human Resource Planning (HRP) Analysis: the case of Marks and Spencer (M&S)
Every organisation – profit or non-profit in nature – considers employees as its most fundamental asset. In order for such organisations to maximise their assets, they should manage the employees’ working conditions as well as its immediate environment in the most intelligent and efficient way possible (Ulrich 1998). As Delaney and Huselid (1996) suggest, human resource must be allowed to be involved in making work-related decisions to further improve the organisational structure. Furthermore, the proper way of structuring of tasks among the employees strengthens the organisational performance (Wilson, 1989). As various operating industries are aiming for competitive advantage and sustainable development among its management and operations, there are numerous actions that are being implemented and directed to the eventual success and growth of the company’s human assets. Similarly, globalisation issues increases the pressure among the industries and intensifies market competition. In competition, there is motivation in every business to improve and develop their objectives. For an enterprise to succeed in local or global competition, hence, there is a continuous plan to develop human resource management techniques such as planning.
Planning is commonly known as the process of formulating in advance as organized behaviour or action. While it is true that people do not always plan their actions, it is inherent for any organisations to plan. However, whether dealing with the context by which planning is occurring or whether on the individual or organisational level, the process takes shape according to the prevailing attitudes, beliefs and goals that are involved. Planning is absolutely important for future human resource needs and possibilities. The firm's objectives should reflect standards of success in financial and competitive performance, as well as acceptable levels of risk and rates of long-term growth (Roney 2004) in the process of planning.
This paper aims to present and analyse the Human Resources Management at Marks & Spencer and the competitive advantages of the retailing giant. Additionally, it provides an analysis of how the external and internal environment affects the planning, recruitment and selection processes of the organization. Recommendations for improvement of how Marks & Spencer handle their human resources by taking into consideration the environments will also form part of this paper. Over the recent years, one may have observed how organizations are realizing that their likelihood of sustained success is most dependent on learning to get the maximum out of their employees (Sims 2002). The management of human resources within an organization is an aspect of administration that is comparatively harder to imitate than such other aspects as technology, manufacturing processes, products, and strategy (Burke and Cooper 2004), therefore representing a unique competitive advantage (Pfeffer 1998) on the part of the firm exercising it effectively. With the increasing amount of academic literature focusing on the subject of managing people within the organization, there is the need to take an existing organization, scrutinize how it carries out the management of their human resources and arrive at a conclusion whether such management practices are effective or not and how it contributes to the overall growth of the firm. In this paper, the organization in focus is Marks & Spencer, included in the Forbes list of top 40 largest United Kingdom companies (DeCarlo 2005).
HUMAN RESOURCE PLANNING
Human resource planning (HRP) is the first step in effective human resource management (HRM). It particularly involves the process of forecasting the labour needs of the organization and planning certain useful and important steps that the organization must take in order to meet those human resource needs that will contribute a high percentage for its overall success as human-resource planning should be connected to the organization’s strategic objectives and mission (Butensky and Harari 1983). It can be said that human-resource planning is a challenge because the needs of the organization are constantly changing and sometimes do not converge and such challenge can be greater if the recruitment pool is limited or if the people in charge of human-resource management have not been trained to forecast the organization’s needs to maintain and achieve success in all areas of concern (Butensky and Harari 1983).
In determining a certain range of importance in regaining factual information regarding as to what extent does human resource planning contributes to the overall success of the organization then, it is important to take in consideration some of its planning issues that may affect positively and or negatively to the success of such organization thus, it is crucial to identify and determine these planning issues as it enumerated below (Craft 1980). It is believed that a better human resource planning will enhance the effectiveness of the organization’s success in dealing appropriately to the nature of its job and be able to provide a thorough channel for interaction and communication in which there is a degree to which it will move towards the attainment of its mission as well as the realization of its goals and parallels in analyzing effectiveness with substantiality that many organizations are successful in so far as human resource planning of a specific organization is concerned with evaluation of its analysis and function to the culture of the organization (Dyer 1985).
Similarly, HRP is incorporated with the organisation's strategic plan that mainly involves development as well as other organisation-wide initiatives, which reveals a strong interdependency among other HR activities such as employee recruitment, selection, orientation, appointment, performance management, the learning and change process, career development, and compensation and rewards (Gilley and Maycunich 2000, p. 182). If the process is not integrated in approach, it cannot optimistically create and develop the type and quality of labour forces needed to guarantee developmental organisational regeneration and competitive inclination. The consequences of poor HRP is overstaffing and understaffing. In overstaffing, there is reduced labour efficiency due to increased labour costs, poorer productivity as a result of too many employees with too little work to do, increased inventory levels due to over production, and a need for downsizing. Meanwhile, understaffing is manifested on skills shortages; increased lost opportunity costs; poorer service or product quality; missed deadlines and targets; increased labour costs due to overtime; and role overload leading to increased staff stress, higher employee turnover, poor morale, and higher accident rates.
Treating the employees as champions and as significant aspect of the organisation naturally results to other positive outcomes. Positive outcomes may come in form of a very constructive suggestion from an experienced member of the workforce. Gilley and Maycunich (2000) welcome the input and recommendations of employees, particularly those who show a high level of mastery in his/her given area of expertise. For the given case, the employees of the designer restaurant must freely air their comments, suggestions, and feedbacks. It is identified that upper members of the organisation are responsible for the major decision making and taking mechanisms but the important contribution of employee’s suggestions is also given of sufficient value. A good suggestion from the labour force may result to the improvement of the overall organisational performance (Brewer and Selden 2000). A number of empirical studies have concluded that understanding people and organisational practices have a significant effect on the organisation, which leads to high performance and productivity (Haltiwanger, Lane and Spletzer 1999). One good example that identifies this relationship was the study conducted by Delaney and Huselid (1996). Utilizing 590 profit and non-profit-oriented firms, the researchers concluded that HRM practices like staffing, selection, and training are positively associated with organisational performance. At the organisational level, HR professionals engage in human resource planning, as well as recruitment and selection, redesigning the organisational system (including culture, structure, managerial practices, and work environment), and compensation and remuneration program (Gilley and Maycunich 2000, p. 169).
Employees’ suggestions must be acknowledged properly by the management. As organisational performance is achieved through HRM functions, they mould the employees as significant contributors to the firm (Sims 2002). In return, the learning that is experienced by the employee in the working environment particularly in the designer restaurant is applied. Having the appropriate skills that are honed to the maximum level, people and organisational management practices will subsequently lead to the attainment of various goals of the organisation. From this relationship, it is then appropriate to conclude that the understanding of people and organisational management directly connects to the success or failure of the organisation. And the recognition of valuable suggestions counts a lot.
According to the company website, it was in 1894 when Michael Marks created a joint venture with Tom Spencer to enter the retailing business. The first shop opened in 1904 at Cross Arcade in Leeds, West Yorkshire. In 2004, the organization celebrates their 120th anniversary, appoints Stuart Rose as the Chief Executive of Marks & Spencer (M&S) and the head office staff started to move into their new registered office at Waterside House, Paddington, originally headquartered in Baker Street, London for many years. At present, they have over 600 stores worldwide, 450 of which are located in UK and the remaining 150 outlets operating in 30 countries around the globe, with sales amounting to U.S.$ 14.6 billion and a market value of U.S.$ 11.6 billion and profits posted at U.S.$ 1.1 billion and assets totalling to U.S.$ 8.1 billion (DeCarlo 2005).
Being in retailing for over a hundred years, one of Marks & Spencer’s competitive advantages over their counterparts in the business is the reputation that they have established with their customers, employees and suppliers. Their customers have long associated the company with total dependability and value for money; the internal architecture of the company was cantered round permanent employment relationships, strong organizational routines, and a shared sense that there was a Marks and Spencer way of doing things, which the employees benefit from; and the suppliers relationship with the firm in that the external architecture of Marks and Spencer’s organisation was built around an almost Japanese relationship with suppliers – detailed influence on product specification and design as part of relationships sustained over many years (Kay 1999). They also have strong environmental and community responsibilities, (as cited in Kacker and Sternquist 1994) part of their corporate responsibility. As stated by Tse (1985), “Marks and Spencer have pioneered and excelled themselves in a whole range of 'modern' management methods, notably strategic marketing, consumer research, product innovation and development, personnel management, staff training and management development, quality assurance and technological-oriented purchasing”. Overall, the strong and identifiable corporate culture of Marks & Spencer that operates to get the best out of relatively ordinary employees have continued to produce exceptional corporate results over many years and through many changes in the economic environment (Kay 1995). Although there have been downfalls for the hardy retailing perennial over the years largely due to economic crises, they have managed to surmount all the stumbling blocks through an resilience that their competitors view as unnerving. With Stuart Rose taking over the Marks & Spencer helm, he is unveiling sales figures for the quarter to 1 April of more than double analysts' expectations, predicting full-year profits ahead of City projections and paying a bonus to shop floor staff, on top of an incentive already announced, in less than two years when he first took charge (Blackhurst 2006).
Businesses do not exist in a vacuum; they exist within an external environment consisting of the actions of other players who are outside the business, some of which are the competitors, the economy, the social system and the environmental system (‘The External Environment’ n.d.). The primary competitors of the company are department store industry. Marks & Spencer also competes in the apparel and accessories retail, grocery retail, and home furnishings and house wares retail sectors (‘Marks & Spencer Group’ 2006). Worth mentioning are the Associated Dairies (ASDA) Group Limited, British Home Stores (Bhs) Next, Tesco, Sainsbury and Arcadia. A slowing economy, rising unemployment and hefty personal debt that eats into the consumer purse in a system within which the firm operates contributes to the slowing down of retail sales across the United Kingdom (Louth 2005). This affects not only the company in discussion but also the retailing industry as a whole.
The social system is the ‘fabric of ideas, attitudes and behaviour patterns that are involved in human relationships. In particular, businesses are influenced by consumer attitudes and behaviours that depend on such factors as the age structure of the population, and the nature of work and leisure’ (‘The External Environment’ n.d.). In order to meet the changing lifestyles of their customers, Marks operates different store formats located where the customers are most convenient, have a central customer services team, commissions a monthly monitoring of opinions and starting in 2003 conducts extensive research into what the customers expect from them on corporate social responsibility. They have found out that their customers deem the following important: meeting customer needs, being a good employer, being fair to suppliers and their workforces, selling responsible products and operating in a considerate manner.
With respect to the environmental system, an environmental policy was formulated as a guide for the whole company to follow in the conduct of business that takes the natural environment in consideration. Mike Barry, head of Corporate Social Responsibility, was quoted as saying, ‘Climate change is still a relatively new issue in our sector. Our contention is that, for retailers, the footprint of stores and lorries probably accounts for less than 10% of your actual carbon footprint. The true impact lies in your supply chain, and in the use and disposal of products. Although I am cautious about positioning Marks & Spencer as a ‘leader’ we are certainly taking the initiative in considering these wider implications’ (as cited in Parker n.d.).
In the 2005 count, there were 70,500 Marks employees around the globe (‘Marks & Spencer Group’ 2006). The firm wanted the employee composition to be diverse in order to reflect the nature of the people that patronize them, exactly as diverse. They have written commitments to equal opportunities covering age, disability, race, marital status, political opinions, colour, gender, hours of work, national origin and religious beliefs. They also provide a mix of flexible working arrangements including leave for paternity, adoption and IVF treatment, as well as child breaks and career breaks that help encourage workforce diversity. They operate employee representation forums called Business Involvement Groups (BIGs) in every store and office area that encourage employees to share knowledge and promote debate about the business. Regarding the pay and benefits, the firm has reward packages that include elements of fixed pay, a wide range of benefits and variable performance related pay. As for the training and development of their employees, the trainings they offer are designed to develop individual talent and capability. In 2005/06, Marks provided over 102,000 days of training. The company also claims to operate a system to ensure workplace health and safety is safeguarded and we provide a range of occupational health services. To provide guidance on the behaviour of the members of the organization, they have developed a new consolidated Marks & Spencer Code of Ethics that sets out values and the responsibilities they have to their customers, employees, shareholders, suppliers, government, communities and the environment.
The various departments within the organization are driven to perform their individual responsibilities in contribution to the overall growth of the company. Marks & Spencer works closely with various external partners to ensure that the environment within the confines of the organization is at the optimum level conducive to high performance and harmonious working relationships. ‘Each business unit develops its own corporate social responsibility strategy based around the brand value of trust. The issues tackled in the strategies are identified from a combination of customer research, understanding within the business and by talking with other key stakeholders, NGOs, government etc. For each issue an action plan is developed which balances customer and stakeholder expectations and other commercial pressures’ (‘Marks & Spencer’ 2005). To this end, it is evident that the organization places high value on their corporate social responsibility and takes it seriously. The corporate culture of Marks revolves on how they respond to the environment, the customers and their own employees.
SAMPLE SCENARIO: ON COMPENSATION STRATEGY
Human resource management literatures proved that employee performance and productivity – individual or team, is likely interconnected with an agreeable remuneration system. Hence, managing remuneration, reward, or compensation is an important HR function. Given the existing circumstances regarding compensation present in the case of designer restaurant, a compensation strategy is a good action to solve such issues. Primarily, compensation serves as a very persuasive motivational factor in any working environment.
According to Burke and Cooper (2004, p. 26), employees become committed to perform well if organisations value and reward them especially in their set jobs. As a result, the organisation accomplishes more and it can then reward employees more and attracts and retain more talented employees. This leads to even higher organisational performance. It also involves developing a variety of HRM practices that motivate people to peak performance with accompanying rewards. Staffs, in turn, are more committed to the organisation and more responsible for their own behaviours (contribution, learning, development, etc.).
Further, HRM practices can also influence levels of motivation through the use of performance appraisals, pay-for-performance incentives, and internal promotions systems based on merit (Brown, Sturman, and Simmering 2003, p. 752-762). HRM practices can also influence the design of work so that highly motivated and skilled employees can use what they know in performing their jobs (Wright and Boswell 2002, p. 247-276). Giving incentives on a favourable performance appraisal is an example of a positive reinforcement that will impact the attitudes and behaviour of employees particularly those who show efficiency and mastery of the job. This mechanism falls under performance management functions handled by HR managers.
However, there are some positive and negative consequences in giving incentives as compensation strategy. Incentives work as a positive reinforcement when used as a motivational factor and reward system (Champion-Hughes 2001, p. 287). It motivates employee to work for a common goal. On the other hand, rewards and incentives insinuate competition among employees, thus, breaking the perspective of teamwork (Burke and Cooper 2004, p. 26). A compensation system that only rewards individual performance is not consistent with sustaining teamwork (Lublin 1995, p. R4) because the compensation system tells employees which behaviours will be rewarded and which will be punished (Salas et al. 2004, p. 95-120). If the system strictly reinforces individualistic behaviour, without any consideration for collaboration or collective goals, then teamwork behaviours will be inhibited.
In relation to the traditional system of incentives and incentives based on customer satisfaction in a variety of industry, the both possess similar operations. There is no significant difference in performance management except to the fact that they involve two different workforces but still working on one objective –growth in the case of designer restaurant operations. The potential solution to a balance incentives or rewards management lies in the hand of an effective HR manager and efficient HR function.
In general, HR experts and organisational leaders are involved in performing related series of tasks that ensure suitable human resources particularly on its identification, recruitment, selection, and development. They do so to improve business results and to remain at full alert, poised to do battle at a moment's notice. The knowledge and management of an organisation's human resources is pivotal to its responsiveness. In order to achieve organisational optimum performance, the role of people and organisational management needs to change from reactive to proactive. If it is to be used to an organisation's competitive advantage, it needs to go beyond merely attracting and retaining good people who will work in specified jobs.
The Marks & Spencer organization is dedicated to providing products in ways that help protect the environment, their employees and the people who use them. The competitive advantages, the external and internal environment in which they operate show evidence that the firm is striving to maintain their dedication. Granted that there are critics to the company, as there is always the presence of groups who are not very satisfied with the business’ performance, available figures and statements from business experts give evidence to Marks & Spencer’s continuing commitment in making sure that they are will be the standard against which others are measured, which is the company’s stated vision. One of their greatest competitive advantages lies in their ability to maintain a high performance workforce that contributes to the overall development of the company. The company’s strategy in providing their employees with an internal environment favourable to maximizing the individual’s potential and growth is one of the key factors why they are able to keep the types of people who are willing to do most anything to help the organization grow. ‘Marks & Spencer placed ergonomics at the heart of a major design program for new retail equipment, resulting in an innovative design which not only ensures the safety and comfort of customers and staff but also meets exacting business requirements (‘Marks & Spencer puts ergonomics on the case in design challenge 2003). Overall, the company displayed a keen interest in getting the most out their human resources through designing a management system in which the employees could, as a result, give impetus to Marks & Spencer’s progress.
The human resource planning, recruitment and selection practices of Marks & Spencer is affected by the internal and the external environments in which they operate in that all factors involved in that the two environments need to be taken into consideration in the process of formulating the strategies. For instance, in the context of the economy, practices which cuts cost and at the same time brings the most out of the human resources such as outsourcing is currently being applied in Marks & Spencer. However, there is the need to constantly review such practices, as changing times may indicate a need to improve current business practices to adapt to such changes. The extensive use of the information technology (IT) is being utilized by most retail competitors in the United Kingdom, and it would do the business well if they, too, capitalize on the benefits gained from the use of IT. As stated by Lawler et al., IT can help the company in its human resource management through record keeping, human resource transactions, deliver expert advice to managers and employees in areas such as selection, career development, and compensation and many other tasks, thus enabling HR managers to spend more time on strategic business support (2003). As a whole, the human resource practices of the company is admirable, as there are only few other transnational corporations who can compare with how they take care of their employees in line with the realization of their ultimate goal, which is business growth.
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