Human Resource Planning as a Strategic Function: Biases in Forecasting Judgement

Human Resource Planning as a Strategic Function: Biases in Forecasting Judgement

Jatinder Kumar Jha (XLRI-Xavier School of Management, Jamshedpur, India) and Manjari Singh (Indian Institute of Management Ahmedabad, Gujarat, India)
Copyright: © 2017 |Pages: 12
DOI: 10.4018/IJSDS.2017070106
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Abstract

This paper explores the strategic importance of human resource (HR) planning and the various techniques employed by organizations to attract talent and thus to gain a competitive edge. In this paper, the authors have tried to explore the various biases that come into play when supervisors forecast for human resources. Backed by research, the paper recommends the integration of line managers with HR managers and their participations in strategic planning to enable the HR managers to gain valuable insights for HR planning. The paper further suggests that though biases cannot be ruled out completely but they can be controlled by providing relevant training to the HR and line managers to forecast dynamics. Further, the judgement of the line managers could be complemented with other forecasting techniques to make the process more reliable.
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1. Introduction

Human resource planning is the process of aligning business strategy with HR practices (Miles & Snow, 1984). This is the first and foremost important function of the human resource department (HRD). HR planning addresses two questions, first, what kind of talent would be required to manage and operate the organization and second, which human resource policies need to be in place to achieve both the HR and the organizational goal (Devanna, Fombrum & Tichy, 1981; Dyer, 1982). HR planning is executed through succession planning, career development plans, forecasting plans or skills inventories (Butensky & Harari, 1984). HR planning provides competitive advantage only if its the techniques are simple and stated in straightforward business language (Ulrich, 1986). Barney (1991) coined the resource-based view (RBV) for gaining competitive advantage through human resources. He emphasised that a resource can give competitive advantage only if it is valuable, rare, inimitable and non-substitutable (VRIN). Human resources are valuable to the organization if they fulfil these traits. Thus, HR planning becomes very critical for sourcing the right talent. Given the stiff competition in the labour market, the case for HR planning gains further strength. HR planning ensures that the organization has the necessary capabilities to compete and sustain in the market over the period of time. These capabilities must align with strategic intent and customer requirement of the organization. There are eleven forecasting techniques discussed by Fiorito et al. (1984). These are: Markov analysis, computer simulation, delphi-method, regression, operation research, replacement charts, supervisor judgement, inventories, rule of thumb, succession planning, and TIME series. The HR department of a particular organization can choose from any of these techniques based on its unique requirement such as size of firm, executive support, availability of skilled people, internal and external availability of consult. In any dynamic environment, HR planning technique should include succession planning and a replacement chart. (Fiorito et al., 1985; Greer and Armstrong, 1980). In this changing technological environment, organizations need to focus on attracting skilled talent (Schein, 1977). Succession planning and supervisor’s judgements are widely used in the HR planning techniques. Srimannarayana (2010) in his study found that line managers in the HR department are actively involved in various functions such as planning, selection & placement, training needs assessment, performance evaluation, career planning, grievances handling, absenteeism, and discipline. As they are in direct contact of the shop floor employees they have a better idea about their performance level, skills efficiency, and other behavioural aspects. Line managers play a vital role in training need assessment of the employees, their nomination for training programs, performance counselling, and career planning. They also coordinate with HR managers to implement and execute various HR functions.

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