HRP, in both its traditional and more contemporary forms, can be perceived to have a number of distinct advantages. Firstly, it is argued that planning can help to reduce uncertainty as long as plans are adaptable. Although unpredictable events do occur, the majority of organisational change does not happen overnight so the planning process can provide an element of control, even if it is relatively short term. Taylor (2002: 73–74) suggests that in the HR field there is potentially more scope for change and adaptation in six months than there is in relation to capital investment in new plant and machinery. Thus he argues that many of the assumptions about the difficulties of planning generally are less relevant to HR.
Other advantages relate to the contribution of planning to organisational performance. For example, the planning process can make a significant contribution to the integration of HR policies and practices with each other and with the business strategy, i.e. horizontal and vertical integration. Marchington and Wilkinson (2002: 280) suggest that HR plans can be developed to ‘fit’ with strategic goals or they can contribute to the development of the business strategy, but conclude that ‘either way, HRP is perceived as a major facilitator of competitive advantage’.
Another way that HRP can contribute is by helping to build flexibility into the organisation, either through the use of more flexible forms of work or through identification of the skills and qualities required in employees. IRS (2002c) report that a number of organisations have predicted that jobs are likely to change radically over the next few years and so are using selection techniques to assess core values rather than job-specific skills. One of the key problems with planning relates to the difficulties of developing accurate forecasts in a turbulent environment but this does not reduce the need for it.
Rothwell (1995: 178) suggests that ‘the need for planning may be in inverse proportion to its feasibility’, while Liff (2000: 96) argues that ‘the more rapidly changing environment … makes the planning process more complex and less certain, but does not make it less important or significant’. Bramham (1988, 1989) states that the process is more important in a complex environment and uses a navigation metaphor to emphasise the point:
The good navigator uses scientific methods in applying his [sic] knowledge and skills, within the limits of the equipment available, in order to establish first his position and then his best possible course and speed, with a view to arriving at the chosen destination by the most suitable route. From time to time during the voyage he will take fresh readings; calculate what action is necessary to compensate for hitherto unforeseen changes in wind, current and weather; and adjust his course accordingly. If the wind changes dramatically the navigator is not likely to abandon compass and sextant, go below and pray to God to get him to port.
He is more likely to apply his knowledge and skills to a reassessment of his position and course as soon as it is practicable. (Smith, 1976 cited in Bramham, 1988: 6) This metaphor suggests that HRP can make a significant contribution to the achievement of strategic goals but does imply that the destination remains constant even if other factors change. It also suggests that the person responsible for planning has sufficient information on which to make accurate judgements.
Sisson and Storey (2000) argue that the planning process is based on two, highly questionable assumptions: firstly, that the organisation has the necessary personnel information to engage in meaningful HR and succession planning; and secondly, that there are clear operational plans flowing from the business strategy. Furthermore, they suggest that business planning is incremental rather than linear and therefore ‘the implication is that the would-be planner will never have the neat and tidy business plan that much of the prescriptive literature takes for granted’.
Other key criticisms of the process relate particularly to the difficulties of forecasting accurately. Mintzberg (1994) highlights problems in predicting not only the changes to come but also the type of changes, i.e. whether they are likely to be repeated or are a one-off event. Incorrect forecasts can be expensive but accurate forecasts might provide only limited competitive advantage if other organisations also adopt them: Furthermore, Mintzberg (1994) argues that the reliability of forecasts diminishes as the time-scale of projections increases: two or three months may be ‘reasonable’ but three or four years is ‘hazardous’.
This is because predictions are frequently based on extrapolations from the past, adjusted by assumptions about the future so there is considerable room for error in both. The relevance of HRP to contemporary organisations can also be questioned. Taylor (2002) argues that the traditional systematic approach is still appropriate for large organisations operating in relatively stable product and labour markets but other conditions might be less compatible. For example, moves towards decentralisation and the devolution of HR matters to managers at business unit level can make detailed planning impractical.
At the same time, the increased fluidity in some organisational structures (e.g. the emphasis on flatter structures, the absence of clearly delineated jobs and the variety of contractual arrangements) can be incompatible with some objective methods of forecasting. Finally, the short-term focus evident in many UK organisations means that long-term planning is just not given high priority.
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