Interaction between Strategic Planning and HRP

08/12/2020 1 By indiafreenotes

Strategic planning is a step-by-step process of determining how to pursue the organization’s long-term goals with the resources expected to be available. It is a systematic approach of analyzing the opportunities and threats in the environment to enhance the efficiency and organizational productivity. It is the name given to the sense making activity which includes the function of goal setting and strategy formulation.

HR planning is about staffing the organisation. A reading of Mckenzy 7S would help. It looks at structuring, recruiting, training them and keeping them motivated and committed to deliver.

Strategic planning is about bringing clarity to your plan to reach an objective in different layers (strata). It helps to bring together all the specialists needed to accomplish a mission. Component wise correction is possible or upgradation is possible. When you can illustrate the plan in strata, all experts come on the same page.

SP involves all functions and also people from inside and outside.

On the other hand, Human resource planning is the estimation of future demand for and supply of human resources for the accomplishment of stated organizational goals. HR planning consists all the activities of human resource management such as forecasting of HR, collecting information, policy making, recruitment, training and development, motivation and development of human resource in the organization. These activities help prepare and HR plan whereby right number and kind of people are being forecasted.

These terms establish a close relationship as one cannot be separated from another. They are correlated with each other because HR planning is an integral part of the overall corporate plan. Hence, the relationship between HR planning and strategic planning can be depicted under the following aspects:

  1. Follower relationship of HR plan

This relationship depicts that an HR plan is an integral part of the overall corporate plan of the organization. HR plan is based upon the overall objectives and strategies of the company. It is prepared by following the guidelines by the overall corporate plan of the organization. Hence, it is tailored to meet the needs of the overall mission, vision and objective of the company. Moreover, this relationship explains that HR plan is derived from the overall corporate plan of the organization.

  1. Partner relationship of HR plan

When the HR plan and strategic plan are formulated simultaneously, it is supposed that they have partner relationship. Under it, it is assumed that HR and HR manager are considered as a valuable resource in the organization. And it ensures that the employees are fully participated in strategy implementation. Moreover, implications of HR are considered in the formulation stage of strategic plan. The primary purpose of this relationship is to link HR activities with strategic plan in order to achieve organizational goals. It also ensures that Human Resource Management (HRM) activities are considered before formulating the corporate plan.

Corporations formulate plans to fit four-time spans:

  1. Strategic plans that establish company’s vision, mission and major long-range objectives. The time span for strategic plans is usually considered to be five or more years.
  2. Intermediate: Range plans covering about a three-year period. These are more specific plans in support of strategic plan.
  3. Operating plans cover about one year. Plans are prepared month by month in sufficient detail for profit, human resources, budget and cost control.
  4. Activity plans are the day-by-day and week-by-week plans. These plans may not be documented presents the link between strategic plan and human resource plan.

Strategic Plan Vis-a-Vis Human Resource Plan- Corporate Level Plan:

Top management formulates corporate-level plan based on corporate philosophy, policy, vision and mission. The HRM role is to raise the broad and policy issues relating to human resources. The HR issues are related to employment policy, HRD policies, remuneration policies, etc. The HR department prepares HR strategies, objectives and policies consistent with company strategy.

  • Intermediate: Level Plan:

Large-scale and diversified companies organise Strategic Business Units (SBU) for the related activities. SBUs prepare intermediate plans and implement them. HR managers prepare specific plans for acquiring future managers, key personnel and total number of employees in support of company requirements over the next three years.

  • Operation Plan:

Operation plans are prepared at the lowest business profit centre level. These plans are supported by the HR plans relating to recruitment of skilled personnel, developing compensation structure, designing new jobs, developing leadership, improving work-life, etc.

Short-Term Activities Plan:

Day-to-day business plans are formulated by the lowest level strategists. Day-to-day HR plans relating to handling employee benefits, grievances, disciplinary cases, accident reports, etc., are formulated by the HR managers.