Human Resource planning has been criticized as speculative and over-mathematical. Nevertheless, proponents argue that rather than attempting to predict the future, the value lies in challenging assumptions and stimulating thinking.
Human resource planning has been recognized as an undeniably important process in organization from the past. To mention about the statement above, it represents that human resource planning has focused more on quantitative and missed the qualitative part. In other words, most managers in organizations relay on theories and statistics over their own opinions and observations.
In the introduction, there are 3 main parts which consist of the original development of the plan, about the nature of the hospitality business and how this distinctive industry affects human resource planning.
Afterwards in the main body, there are the analysis of forecast demand and supply which are the most important steps in human resource planning.
As soon as employees are considered as human capitals to an organization, human resource management started to develop. Despite the word “human capital” is used, people are still tcomplex objects that have feelings and psychological needs that are unlike tools. And those needs and feelings can be analyzed and fulfilled through psychologies and theories. In order to utilize this capital in the organization, first and foremost, it is important to have better understandings about them.
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The whole Human Resource planning is an evolving process as it is a part of Human Resource management; it is an evolution from scientific management developed in the late 19th century by Frederick Winslow Taylor and the System Theory by Niklas Luhmann. The concept of HRP was drawn upon from these classical approaches, thus the core consideration while developing a HRP is theory-based, as the guidelines and the framework are set. These approaches were sufficient and commonly used in the late 19th and early 20th century as the majority of the workforce was engaged in productions and factories.
And yet the contemporary human resource planning is facing a lot of challenges and instabilities such as demographic and political changes, intense international competitions, expensive and rapid development of technologies, and rising demand of customers. Because of all of these changes and development, they have shifted the nature of Human resource planning from being just plain predictions to including personal assumptions and thoughts in order to prolong the ‘life’ of HR planning.
The relationship between profitability and employee engagement
According to a workplace research done by the Gallop Organization, they conducted a survey in 2003 showing the relationship between profitability, guest satisfactions and employees recognitions within a corporation. The result of the research showed that corporations have more opportunities of achieving their goals by recognizing the employees when they met the goals that set with the supervisors or managers. Moreover, guest loyalty and engagements are also increased when employees are more committed to their work and corporations. The research also found that the commonness between successful organizations from the rest is that they had great managers who did a good job at selecting employees with the right skills and abilities to fulfill the role, developing employees’ strengths and skills, and creating the motivational environment.(Macaleer, Bill; Shannon, Jone, 2003)
Furthermore, as one of the characteristics of hospitality industry, the quality of services is perceived by guests at the point that the service is delivered, so the moment of truth lies largely on the commitment and involvement of the staff. (S.E Jackson, R.S.Schuler, 1990)
In other words, in order to meet organization’s goals, a comprehensive and effective Human Resource planning is a potent element. Hospitality industry is an extremely competitive industry in terms of revenue and market share, and by seeing the potential of increasing revenue by employees engagements, managers have to come up with more complex and non-traditional planning in order to survive from the fierce competition and to be able to retain the key individuals. To add, being traditional here means being too rigid, quantitative, and statistics-oriented.
Therefore, the traditional bureaucratic, task-driven, and over theoretical planning is not efficient anymore. Managers tend to be more dynamic during the planning process since they are required to be proactive and sensitive towards environment changes so as to make adventurous assumptions to keep up with the uncertainties.
Moreover, a well-planned human resource planning can also be the competitive advantage for the organizations in the sense that the Human Resource plan has fully done its job by generating revenue with the most important assets of companies or organization, the labor. Like the usage of Delphi method in forecasting demand and replacement chart in forecasting supply that will be mentioned later in the paper.
Balance of methods in forecasting Demand
In Human resource planning, there are two critical factors to be forecasted which are the demand for employees and the supply of employees.
The first sketch to draw is to forecast the demand. In order to do so, there are two different methods, and these are objective statistics method and subjective judgmental method. Although forecasting demand involves two completely different methods to look into, both methods are inevitably interrelated during demand forecasting and more importantly both should be balanced in order to determine the most accurate amount of people needed in the organization. A combine of forecasting methods can maximize accuracy and minimize errors. (J.Scott Armstrong, Kesten C. Green, 2009)
The two general types of forecasting are called Top-down forecasting and bottoms-up forecasting. General speaking, these two methods are to gather the relevant information to forecast the demand for employees.
According to Robert H. Woods(2006), top-down forecasting depends on quantitative or statistical approaches, while bottom-up forecasting is based on the experience of the managers. In another words, it can be described as an objective method and subjective method.
The word demand refers to rather characteristics of the particular job such as responsibilities, skills, and abilities. In spite of the fact that forecasting demand involves more towards soft factor, however, it does not necessarily mean that forecast demand should be based only on qualitative assumptions.
For example, if there is a hotel organization that starts at the very beginning, then it is impossible for the manager in the new company to forecast the demand since he or she has no experience and there is no history of the company to review. Therefore, during human resource planning, and when it comes to the first step to forecast the demand, it is crucial to have the same amount of importance on the core of organization, hard factor, and as well as the behavioral culture of organization, soft factor, in order to find the suitable employees for the particular job positions.
Without knowing the statistics and history of the organizations, it is hard to forecast demand correctly. Otherwise, the forecasting will turn out to be only subjective guesses, whereas the forecast isn’t accurate and reliable, and vice versa.
If the manager only depends on the hard factor without managerial judgment, then it will also bring about the case when the business miss the key impact on success since recognition on softer issues have been increasingly important. As far the softer issues, there are included with employee behavior, employee attitude, motivational of employee, business objective, and organization culture.
Apart from bottoms up and top down forecasting, there is also a method called Delphi technique that has been used more recently. It is a forecasting method that combined the quantitative and qualitative aspects to analyze the current demand of business with historical statistic data to determine on the future trends. It is a way to decide the demand forecasted by various number of experts’ judgments. It is true that a decision based on a number of people is a lot more unbiased and fair than only one person’s personal assumption. Therefore, the Delphi technique can be described as a combination group communication that lies on the real value of forecasting demand and that meets the purpose of human resource planning which is to hire the right qualified people the most. Talking about the evolution of human resource planning, the amount of importance has been getting more recognized on soft factors, as the human resource function has also evolved from the scientific management, personnel management and into human resource management eventually.
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However, it shows that not only the speculative forecast based on quantitative soft factor is needed to take consideration, but also the qualitative assumptions and stimulus thinking from managers as well in order to have the balance to forecast demand accurately. Judgmental data should collect in a systematic manner and act as inputs to the quantitative models, instead of solely used as adjustments to the output, and that are proved to be the most effective by Armstrong and Collopy (1998).
After the forecasting demand, the next step is to forecast the supply. Since it is deeply interrelated with forecasting demand, it is inevitably important to follow the step one by one. During the human resource planning, if the demand is forecasted without the consideration of both objective and subjective aspects, then there will be nor right supply for the organization, which means that the company will not able to predict the right number of employees they need.
Forecasting the supply
As soon as the decision for demand is forecasted, the organization has already a clear and basic number to follow of how many people do they need and at what skill level. (L.S. Kleiman, 2004). The crucial challenge for forecasting supply is whether the result of demand forecasting is accurate, as the demand forecast is the base of the pyramid, if it was not build correctly, the pyramid is very likely to fall.
The supply refers to the number and typical of people available for the specific jobs. There are two sources generally when it comes to forecast supply, and that is to forecast internally and externally. Internal resource is used primarily and considered to be the most crucial and most available. (Bechet & Maki. 1987;Miller, 1980)
Both quantitative and qualitative techniques are available for supporting the forecast of supply.
Internal supply forecasting: Judgmental techniques
Internal supply forecasting starts with the judgmental technique by creating employee’s skill inventories and replacement chart to look for the suitable personnel for the specific job and while the statistical technique is used mostly in large organization is Markov analysis. (Dyer, 1982; Piskor & Dudding, 1978)
The latter is less commonly used in small organization because this technique requires the organization to have an extensive record keeping procedure and system. Whereas, the judgmental techniques has been developing rapidly into a more computerized system called Human resource information system. Proven that judgmental technique is more useful here.
External supply forecasting: Statistical Technique
External supply is a challenging criterion as it involves a lot of instabilities and uncertainties that is outside the organization environment. There are so many details to pay attentions to; therefore quantitative analyses are essential components in this step.
Higher education in Taiwan is divided into 3 levels, junior college, college and graduate school; each of the colleges has different numbers of academic years of 2 years, 4 years and 3 years respectively, thus, there will be three different figures of manpower supply from collages in Taiwan every year. Moreover, not all the graduates are joining the labor market right after graduation. Junior college graduates go to collage continuing their study or study aboard; female graduate may stay at home and become housewives. If the organization is planning to fill up the vacant with fresh graduates, they then need to look at the percentage that the Department of Statistics of Taiwan and calculate the exact amount of supply available in the market.
Furthermore, the correct quality of supply is also another consideration that is taken into account, so the courses of that the colleges are given are adopted as criteria as well. (C. Kao, L.H Chen, T.Y. Wang, H.T. Lee, 1997). A huge amount of numbers and statistics are collected for further analyses. The quantitative technique is emphasis greatly during external supply forecasting.
Same as in demand forecasting, the emphasis is on the balance between 2 methods of quantitative and qualitative. The same applies to supply forecasting, as using qualitative method to be the primary internal supply forecast method and using quantitative method in external supply forecast. The final result is the integration of both methods.
Does the industry need it?
Human Resource planning is definitely needed in hospitality industry; in fact, it is needed in all types of business and industry if their primary concern is being successful and profitable. HR planning is the process to bring the organization to where they want to be from where they are.
Human Resource is an important department in hotel business, develop a HR plan is one of their major responsibilities. Labor cost is the number one expenses in hotels, because there are so many items and activities related to labor, for examples, training programs, orientations, evaluations and appraisals, a carefully planned HR planning can as well reduce the unnecessary labor cost. (G. Kumar, 2010)
Human resource planning is a relentless process as the business is going.
Planning won’t be effective without creativities and boldness to make adventurous assumption as we have mentioned in the text. Since human resource planning is mainly all about people, it should be included human factors as well.
The ideal planning is the balance between quantitative and qualitative while forecast demand and supply. Although the discussion is continuously going on the issue about the two different ways to organize the human resource planning, both are deeply interrelated with each other proven by the research that is written in the text.
Therefore, it can not fulfill the main objective of organization if there is no balanced amount of recognition on both methods to organize the human resource plan.
To conclude, during human resource planning, both hard and soft factors are equally important and essential in order to meet the main purpose of human resource which is to hire the right people to the right position at the right time.
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