HUMAN RESOURCE PLANNING ON ORGANIZATIONAL PERFORMANCE (A CASE STUDY OF MANUFACTURING FIRMS IN BENIN CTY, EDO STATE), Study Guides, Projects, Research of Human Resource Management

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HUMAN RESOURCE PLANNING ON ORGANIZATIONAL

PERFORMANCE (A CASE STUDY OF MANUFACTURING FIRMS

IN DELTA STATE)

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Increasing and intense competitiveness in the market has made performance the most important issue for profit and non-profit organizations for businesses. It comprises of three specific areas of firm outcome which includes financial performance, product market performance and shareholder return (Richard, Simon & Brut, 2009). It is very vital for managers to know which factors influence an organization’s performance in order for them to take appropriate steps to initiate them. Organizational performance guarantees the continuity of the organization to be competitive in a global market place. Organizational performance can be seen as a multi- dimensional construct consisting of more than simply financial performance (Baker & Sinkula, 2005). It describes the extent to which the organization is able to meet the needs of its stakeholders and its own needs for survival (Griffin, 2016). In this sense,

organizational performance depicts that an organization is achieving its mission and goals. Kaplan and Norton (1992) defined organizational performance as a set of financial and nonfinancial indicators capable of assessing the degree to which organizational goals and objectives have been accomplished. The challenge for any organizational performance is generally indicated by the effectiveness of an organization to achieve its objectives and efficiency to use the resources properly, satisfaction of employees and customer innovation, quality products and services and thereby ability to maintain unique human resource pool (Dyer & Reeves,2009; Katou & Budwar, 2007). Human resource planning has to do with forecasting demand for manpower based on its business needs and employing strategies required to meet these needs. The dimensions for the study include forecasting manpower demand and strategic action. Forecasting manpower demand involves the estimation of the number and type of human resource required at different levels in different departments in an organization (Pradeesh, 2011). Strategic actions for human resource entails staffing activities carried out in order to achieve organizational success in the long run. It is a disciplinary and creative process for

determining where the organization should be in the future and how to take to the future with the help of human resource staffing activities (Graf, Hemmasi & Strong, 2015). Organization has been collective in order to achieve group or individual objectives. They serve as the means by which goods and services are provided beyond the boundaries of an individual or small group’s capacity of self-sufficiency. Such provision, also acknowledged, may be made for profit through some other more controlled framework of commercial or social provision (Dawson 2015). However, Planning on the other hand, is regarded as the most basic of all the management functions. It involves the selecting from among alternative future course of action for the organization as a whole and every department or section within it. Furthermore, it requires selecting organizational objectives and departmental goals, determines and provides a rational approach to pre-selected objectives. It strongly implies managerial innovation and the ability to create something (koontz 1980). The problem which underscores the need to undertake this study is aptly described by Koontz et al (1980) with all the interest in planning and all the sense of urgency brought about by modern super competition, is the danger that planning can become merely a

costly fad, not very useful and even disillusioning. The implication of the above assertion is that not all organization that plan eventually reaps the desired benefits. Schermerhorn (1986) adds that most planning failures arise from their inability of managers to truly understand the planning and to implement it well. Problems have been identified in the planning process. For instance, insetting objectives, organizations find it difficult to involve employees, shareholders, customers etc. closely related to this is the issue associated with the likely environment different variables and events. There must be a proper utilization of human resources in organizations in order to achieve high performance standard (Lunenburg, 2012). Organizations may have adequate non- human resources like machines; materials and money but inadequate human resources cannot achieve high performance. Human resources are the main asset of an organization. 1.2 STATEMENT OF PROBLEM Human resource planning encompasses the process that identifies the number of employees a company requires in terms of high quality and quantity; hence it seen as an ongoing process of regular and structured planning. This planning process confirms that

employees are in the right number as required i.e. there is neither a surplus of manpower nor a shortage. Parker and Caine (2015) states that it is important for organizations to have the right number of manpower in order to avoid unwanted situation i.e. issue of shortage and excess of manpower. Hassan (2016) states that failure to properly articulate and implement the three fundamental functions of human resource planning which include labour forecast, managing demand for employees and available supply in market and keep a balance between labour supply and demand predictions will pose a great problem to oil firms in terms of cost and expertise (skilled personnel) thereby reducing their competitiveness. Gould (2011) holds that in order to gain competitive advantage over the competitors, different advantageous ways are found out using strategic human resource functions, thus showing that these functions play a critical role in making a company competitive. Human resource planning if not systematically carried out cannot bring to equilibrium demand and supply of manpower in organizations (Armstrong, 2015). Manufacturing firms are unable to meet their human resource needs. There is a problem of inadequate right number of people to carry out the essential duties in the firm.

They lack sufficient employees in the organization for production and render delivery of services as demanded by the customers in terms of service delivery, industrial production, capacity utilization and operations which affect the performance of the firm negatively. Shortfall of human resource needs delay in the production process and reduces the profit of the organization. Shortfall of human resource needs in manufacturing firms might result to poor completion of task and assignment, extra workload, increase in fatigue, high stress intensity, and decrease in the firm’s ability to meet set goals (Flippo, 2011). By having the right number of human resources at a specific time to carry out organizational services, it will help the organization to increase in their performance and productivity which in turns helps to achieve the strategic objectives and goals of the organization very easily. 1.3 AIMS OF THE STUDY The major purpose of this study is to examine human resource planning on organizational performance. Other general objectives of the study are:

1. To examine the effective utilization and development of human resource planning.

2. To examine the benefits of human resource planning to an organization.
3. To examine the impact of human resource planning on organizational performance.
4. To examine the challenges hindering the implementation of human resource planning in the organization.
5. To examine the relationship between human resource planning and organizational performance.
6. To proffer solutions to the challenges hindering the implementation of human resource planning in the organization. 1.4 RESEARCH QUESTIONS
7. How is the effective utilization and development of human resource planning?
8. What are the benefits of human resource planning to an organization?
9. What are the impacts of human resource planning on organizational performance?
10. What are the challenges hindering the implementation of human resource planning in the organization?

5. What is the relationship between human resource planning and organizational performance?
6. What are the possible solutions to the challenges hindering the implementation of human resource planning in the organization? 1.5 RESEARCH HYPOTHESES Hypothesis 1 H 0 : There is no significant impact of human resource planning on organizational performance. H 1 : There is a significant impact of human resource planning on organizational performance Hypothesis 2 H 0 : There is no significant relationship between human resource planning and organizational performance. H 1 : There is a significant relationship between human resource planning and organizational performance. 1.6 SIGNIFICANCE OF THE STUDY Human resource planning has its real significance in the manufacturing firm as it is a key driver towards building and maintaining organizational performance. The performance of Human

Resource Practice in manufacturing firm in Nigeria has improved and with licensing to most of the MNC’s from developed countries introduced the modern practices in Nigeria. So this research will absolutely give a positive path towards making manufacturing firms Human Resource competitive as compared to other sectors, as we will check that the manufacturing firm sector has an effect on their organizational performance by following the modern practices of HR. This study is necessitated by the urge and the need for the research, reader and organizations in general to understand the advantages of implementation of human resources on performance stem that will serve as tool for achieving higher organization performance. The following are the significance of study to the researcher:  To serve as guide to corporate individuals, organization and student alike in furtherance to their research on the subject matter  To help government in the determination of how productive is both public and private sector of the economy  To serve as a reference materials for students who will wish to conduct similar studies on this topic. 1.7 SCOPE OF THE STUDY

The study is based on human resource planning on organizational performance, a case study of manufacturing firms in Delta State. 1.8 LIMITATION OF STUDY Financial constraint - Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview). Time constraint - The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work. 1.9 DEFINITION OF TERMS Human Resource : Are those inherent and special traits as skills, creative abilities, experience, talents, energy, knowledge competence, belief etc. that a person possesses which are needed and put to use by a person or a group of people to achieve set goals and objectives (Stewart, 2011). Planning: This is the process managers use to identify, select appropriate goals and courses of action in an organization. They resultant plans that come out of planning process details the goals of

the organization and specifies how they are intended to be attained. Like people, organizations can not have it all done, so in a scale of preference, they need to determine their pro-rates and concentrate their time, energy, and other resource to release their aims (Stewart, 2011). Organization: According to Stewart (2011) “organizations are set up to achieve purposes that individuals to achieve on their own organization they provide a means of working with others to achieve goal….like to determine by whoever is in the best position to influence them… A key characteristic of organization is their complexity”. Individuals in organization, depend on each other’s effort through interactions and which enable them work to words the realization of common goal. Laid down structures however fashion out how 11 they relate to others. It can also be define as a group of people identified with shared interest or purposes, example business or school. Human Resource Planning : Is defined as a rational approach to the effective recruitment, retention, and deployment of people within an organization including, when necessary, arrangements for dismissing staff. It is therefore concerned with the flow of people

through and sometimes out of the organization. It is however not a mere numbers game but rather concerned with the optimum deployment of peoples knowledge, skill creative abilities, etc. and hence qualitative and quantitative. Human resource planning has been defined by Denisi and Griffin(2nd Edition) as „the process of forecasting the supply and demand for human resources within an organization and developing action plans for aligning the two‟.

CHAPTER TWO

LITERATURE REVIEW

2.1. INTRODUCTION

Organizations nowadays are looking forward to have a competitive advantage against the threats present in globalization. Due to the high competency requirements, most organization aim to generate the kind of performance that can bring more profit. In order to do that, the employees are required to perform well and improve. To comply with this, the organization needs to align organisational performance with human resource management practices, which would be shown by organisational output of financial variables (sales growth, goal achievement, good services, productivity) (Osman, Ho & Katou, 2011; Chand & Katou, 2007; ) and non-financial variables (management quality, long-term orientation, continuous improvement, workforce quality) (De Waal & Frijns, 2011; Dimba,

2010. and also other outcomes as commitment, quality and flexibility (Guest, 2012). Once a business entity has analyzed its mission, identified all its stakeholders, and defined its goals, it needs a way to measure progress toward those goals (Kaplan & Norton, 2015). The human resources planning is the strategic planning process at the level of the senior management. The humans resource planning is a process of guiding activities related to the human resources management (Mursi 2016). Human resources planning involve two steps proposed by Durah and Al-Sabag (1986): (1) Analysis of the organization's objectives: this step involves the studying and understanding the objectives of the organization. This is an integral part of the organizations strategic planning and to meet the strategic goals of the organization. The external and internal environment for the organization should be considered and evaluated. (2) Monitoring and evaluation: The monitoring and evaluation is an assessment to diagnose of the strength and the weaknesses. It is a planning process of human resources, and will determine the effectiveness of the human resources. The monitoring and the evaluation should focus on the following criteria: the size of employment, the

productivity achieve, the rates of flow of the human resources, and the organization strategic objectives (Hiti, 2013). 2.2 THEORETICAL REVIEW RESOURCE-BASED VIEW (RBV) THEORY The resource-based view theory (RBV) was put forward by Wernerfelt in 2011 and formalized/popularized by Barney in 2012. It suggests that organizations are heterogeneous (having varying parts) in nature as a result they possess diverse (human and non-human) resources. The resource-based view of the firm stresses distinctive and unique resources especially one that exists within the organization. Resource-based view (RBV) regards the organization as a bundle (or complete package) of resources (in various forms of man, money, material, machine, and measure), and proposes that their elements considerably affect the organization’s competitive advantage, and by inference, its increased performance (Barney, 2012;Wernerfelt, 2011). The most noticeable among these resources are those that are valuable, scarce, rare, and difficult for competitors to mimic; such as intellectual capabilities, organization-wide specific knowledge, experiences, skills and aptitudes, abilities, and

entrepreneurial and market orientation, etc. (Barney, 2012). In essence, organizations are able to accumulate core managerial resources, such as knowledge and experiences, entrepreneurial and market orientation and other intangible assets, and these resources could enable the operating, line, or hiring manager realize greater operational capability to serve its intended purpose if applied prolifically (Wernerfelt, 2011). 2.3 CONCEPTUAL FRAMEWORK 2.3.1 CONCEPT OF PLANNING The term planning is used in so many different ways that there is often confusion about what people actually mean when they talk about planning or when they use the words such plans and planner. Moreover, many of its uses are so broad that the basic elements of planning are difficult to identify, and it cannot easily be distinguished from related activities such as policy-making or plan implementation. It was partly this confusion which led one writer on the subject to title his article, “if planning is everything, maybe it’s nothing” (wildavsky, 1973). Conyers and Hill (2011) defined planning as a continuous process which involves decisions or choices about

alternative ways of using available resources, with the aim of achieving particular goals at some time in the future. According to Nyerere (1969), planning involves making decisions about which of a number of courses of action to adopt in order words, making choices. He further emphasized that, it is not possible to provide everything for everybody at once and that the plan represented the result of process of choosing which thing should be given priority attention. Planning, he said; means choosing between many desirable activities because not everything can be done at once (Nyerere 1969). Planning involves deciding what should be done, how it should be done and when it should be done in determining organizational goals and the means of achieving those goals of the organization (Williams, 2013). Planning therefore helps to ensures that individuals working together in an organization understand the purpose of their organized effort and the task ahead of them. Thus, it helps people within the organization to know what is expected of them. “Unless there is planning events are left to chance; its core importance resides in its ability to minimize risk while taking advantage of business opportunities” (Koontz et al, 1981). As regards manpower, planning entails taking care of current and future manpower needs of

the organization (Frantzeh, 1981). There is a close link between manpower planning and strategic organizational planning. This is because for effective manpower plan, there must be a reliable input or information as regards the future direction of the organization in respect of the type of activities it would be involved in the future, the type of skills required. Thus, human resource planning is sometime called manpower planning. Other term used are personnel planning and employment planning (Koontz et al, 1981). Therefore, human resource planning is the process for determining and assuring that the organization will have an adequate number of qualified persons available at the proper time, performing jobs which meet the needs of the organization and which provide satisfaction for the individual involved. 2.3.2 CONCEPT OF HUMAN RESOURCE PLANNING (HRP) Organizations need to know how many and what kind of individuals they require to meet present and future business necessities in line with complexities resulting from externalities. This is where HRP comes in; as HRP determines the right numerical strength of individuals with the right skills, in the right places at the right time that are needed in the organization (Ayer & Reeves, 2009; Wright &

McMahan, 2011). As stated earlier, HRM undertakes certain specific activities which includes but not restricted to recruitment, selection, placement, induction and/or orientation (indoctrination), motivation, appraisal, coaching, leadership, supervision, communication, career development, empowerment and evaluation that will aid the organization in forecasting, recruiting and retaining competent manpower in an attempt to achieve predetermined objectives (Ama, 2015; Armstrong, 2015; Lunenburg, 2012; Newstrom & Davis, 2011; Noe, 2012). Armstrong (2015) described HRP as a sequence of action in which attempts are made to estimate the demand for labour and evaluate the size, nature and sources of supply required to meet estimated demand; considering the task, responsibilities, and/or duties to be carried out. This is linked to Cole’s (2012) assertion that HR, plans are associated with identifying the organization’s demand for HR and devising means to ensure a sufficient supply of labour is available to meet that demands in relation to the required knowledge, experiences, abilities, and skills. Also, Huselid (2009) defines HRP as analyzing human element needs under varying conditions and working out elaborate strategic actions essential to fulfilling these needs.“It is the practice in which human resource

managers (HRMs, operating, line or hiring managers)determine how the organization strategically moves from a lower to a higher rung of the performance ladder of the firm; giving careful considerations to: (a)job description (accounting for job content and competencies required), (b)job specification (stipulating minimum training required to perform a particular job), (c)job design (job enrichment, job enlargement, reengineering or restructuring, job rotation, flexi time, homework, work-sharing, shorter workweek, etc.), and(d) job analysis (knowing the right qualifications, experience, and knowledge required for each job category, training and development needs, compensation and benefits needs, employee and labour relations activities, and necessary legal considerations)”. A process that is not static involving many interrelated activities which must be modified and updated as conditions required because HRP encompasses identifying staffing needs (or requirements), forecasting available manpower and determining what add-ons or proxies are required to retain and sustain a staff of the desired competence that are worth realizing competitive advantage (Barney, 2012). In a similar thinking, Ama (2015) noted that “HRP process encompasses sequence of activities which includes; defining the

corporate philosophy; (outlining predetermined objectives linked to production and marketing), forecast HR needs (determination of future human resource demands for the organization), accessing HR supply (auditing existing personnel internally and potential manpower externally), develop objectives and predetermined objectives (focusing attention on the challenges to be surmounted and providing a benchmark that will form a source for evaluating results), continually developing strategies and applying it to maintain a balance (the programmes chosen strategically by management are put to use at the implementation stage), and evaluate (frequently assessing the levels of success made and taking necessary actions where necessary)”; as it specifically allow for the practice of recruitment (enlisting individuals via internal and/or external sources), selection (review of application, selection tests, employment interview, reference and background checks, selection decision and physical examination), placement (proper placement, and follow up), and induction (orientation through introduction to job situation, introduction to associates in the job, and introduction to organizational policies, practices, and shared values). When these have been established, policies are then worked out to occupy the

space(s) that is needed to be occupied by the required manpower; this may encompass recruitment, enrolment, development and training, contracting and partnering, with regards to undertakings relating to rightsizing (Delaney & Huselid, 2015). In explaining the postulations above, Huselid (2009) also asserts that HRP aid in reducing uncertainties, develops HR, improves labor relations, utilizes and control HR as it helps organizations realize its strategic intent. Robbins and Judge (2011) also noted that the capability of organizations to realize its strategic intent is influenced by HR in relation to cost of acquiring it, and capacity for it to operate proficiently and undertake new profitable actions. Noting that it influences the approaches (or methods) the organization adopts by dissecting ways in which manpower could be developed, deployed, and utilized to realize organization’s predetermined objectives by fixing any problem that needs to be fixed in order to certify that the right blend of manpower requirements are available and are proficient at making essential contributions in conducting a gap inquiry vis-à-vis HR supply and its future demands for the organization (Armstrong, 2015). 2.3.3 IMPORTANCE OF HUMAN RESOURCE PLANNING

Nyamupachari conducted a research suggesting a number of important of Human Resource Planning and these are as follows: Planning is not as easy as one might think because it requires a concerted effort to come out with a programme that would easy your work. Commencing is complicated, but once you start and finish it you have a smile because everything moves smoothly. Planning is a process that has to be commenced form somewhere and completed for a purpose. It involves gathering information that would enable managers and supervisors make sound decisions. The information obtained is also utilized to make better actions for achieving the objectives of the Organization. HR Planning involves gathering of information, making objectives, and making decisions to enable the organization achieve its objectives. Surprisingly, this aspect of HR is one of the most neglected in the HR field. When HR Planning is applied properly in the field of HR Management, it would assist to address the following questions:  How many staff does the Organization have?

 What type of employees as far as skills and abilities are involve does the Company have?  How should the Organization best utilize the available resources?  How can the Company keep its employees? HR planning makes the organization move and succeeds in the 21st Century that we are in. Human Resources Practitioners who prepare the HR Planning programme would assist the Organization to manage its staff strategically. The programme does not assist the Organization only, but it will also facilitate the career planning of the employees and assist them to achieve the objectives as well. This augment motivation and the Organization would become a good place to work. HR Planning forms an important part of Management information system. HR have an enormous task keeping pace with the all the changes and ensuring that the right people are available to the Organization at the right time. It is changes to the composition of the workforce that force managers to pay attention to HR planning. The changes in composition of workforce not only influence the appointment of staff,

but also the methods of selection, training, compensation and motivation (Nyamupachari (n.d). 2.3.4 THE ESSENCE OF HUMAN RESOURCES PLANNING IN AN ORGANIZATION Human resource planning is the entry point of human resource management concerned with the determination of human resource requirements, job analysis, recruitment, selection and socialization (Mondy and Noe, 2015). Human resource planning is also called ‘Personnel planning’, ‘Employment planning’, and ‘Manpower planning’. Human resource planning is the process of determining an organization's human resource needs. It is important factor in human resource management programs because it ensures the right person at right place, at right time. It helps the organization to achieve overall strategic objective. According to Goetz (1989), human resource planning is the process of assessing the organization's human resource needs in light of organizational goals and making plans to ensure that a competent, stable work force is employed. It systematically forecasts an organization's future supply of, and demand for, employees. Human resource planning is the process by which an organization ensures that it has right number and kinds of