Elements to Consider and Research before Creating a Strategic HRM Plan

Elements to Consider and Research before Creating a Strategic HRM Plan

Strategic HRM plans must have several elements to be successful plan. It is important to note that the HRM strategic plan is designed to focus and align the major objectives the organization wants to achieve, while the HR plan consists of the detailed plans to ensure the strategic plan objectives can be achieved. The following steps provide you with some basic elements to consider and research before writing any HRM plans:

Step 1: Conduct a Strategic Analysis

A strategic analysis looks at three aspects of the individual HRM department:
Understanding of the company mission and values. It is impossible to plan for HRM if one does not know the values and missions of the organization. It is imperative for the HR manager to align department objectives with organizational objectives. It is worthwhile to sit down with company executives, management, and supervisors to make sure you have a good understanding of the company mission and values.

Understanding of the organizational life cycle. You may have learned about the life cycle in marketing or other business classes, and this applies to HRM, too. An organizational life cycle refers to the introduction, growth, maturity, and decline of the organization, which can vary over time. For example, when the organization first begins, it is in the introduction phase, and a different staffing, compensation, training, and labor/employee relations strategy may be necessary to align HRM with the organization‘s goals. This might be opposed to an organization that is struggling to stay in business and is in the decline phase.

Understanding of the HRM department mission and values. HRM departments must develop their own departmental mission and values. These guiding principles for the department will change as the company‘s overall mission and values change. Often the mission statement is a list of what the department does, which is less of a strategic approach. Brainstorming about HR goals, values, and priorities is a good way to start. The mission statement should express how an organization‘s human resources help that organization meet the business goals.

A poor mission statement might read as follows: ―The human resource department at Techno, Inc. provides resources to hiring managers and develops compensation plans and other services to assist the employees of our company.‖

A strategic statement that expresses how human resources help the organization might read as follows: ―HR‘s responsibility is to ensure that our human resources are more talented and motivated than our competitors‘, giving us a competitive advantage. This will be achieved by monitoring our turnover rates, compensation, and company sales data and comparing that data to our competitors.‖ When the mission statement is written in this way, it is easier to take a strategic approach with the HR planning process.

Understanding of the challenges facing the department. HRM managers cannot deal with change quickly if they are not able to predict changes. As a result, the HRM manager should know what upcoming challenges may be faced to make plans to deal with those challenges better when they come along. This makes the strategic plan and HRM plan much more usable.

Step 2: Identify Strategic HR Issues

In this step, the HRM professionals will analyze any issues or challenges addressed in the first step. For example, the department may see that a task or job is not strategically aligned with the company‘s mission and values and opt to make changes to its departmental mission and values as a result of this information. Many organizations and departments will use a strategic planning tool that identifies strengths, weaknesses, opportunities, and threats (SWOT analysis) to determine some of the issues they are facing. SWOT analysis is a framework used to evaluate a company’s competitive position and to develop strategic planning. It assesses both the internal and external factors, as well as current and future potential. In SWOT analysis, strengths describe what an organization excels at and what separates it from the competition such as hiring talented people, a strong brand, unique technology, an excellent relationship between HRM and executives loyal customers and so on. Weaknesses refer to factors that stop an organization from performing as its optimum level. They are areas where the organization needs to improve to remain competitive, such as a weak brand, higher turnover of employees, no strategic HRM plan, high levels of debt, lack of compensation and so on. Opportunities refer to favorable external factors that could give a competitive change. For example, developing training programs for HRM, employees and managements, purchasing new technologies or software that enables business growth and so on. Threats refer to factors that have the potential to harm the organization, such as, change in economy, change in technology, change in demand and supply of goods and services, drought, rising cost of materials, e.t.c. Once this analysis is performed for the business, HR can develop its own SWOT analysis to determine the gaps between HR‘s strategic plan and the company‘s strategic plan.
For example, if the HR manager finds that a department‘s strength is its numerous training programs, this is something the organization should continue doing. If a weakness is the organization‘s lack of consistent compensation throughout all job titles, then the opportunity to review and revise the compensation policies presents itself. In other words, the company‘s SWOT analysis provides a basis to address some of the issues in the organization, but it can be whittled down to also address issues within the department.

Step 3: Prioritize Issues and Actions

Based on the data gathered in the last step, the HRM manager should prioritize the goals and then put action plans together to deal with these challenges. For example, if an organization identifies that they lack a comprehensive training program, plans should be developed that address this need. An important aspect of this step is the involvement of the management and executives in the organization. Once you have a list of issues you will address, discuss them with the management and executives, as they may see other issues or other priorities differently than you

Step 4: Draw Up an HRM Plan

Once the HRM manager has met with executives and management, and priorities have been agreed upon, the plans are ready to be developed. An HRM manager should always refer to the overall strategic plan before developing the HRM strategic plan and HR plans. By developing and monitoring these plans, the organization can ensure the right processes are implemented to meet the ever-changing needs of the organization. The strategic plan looks at the organization as a whole, the HRM strategic plan looks at the department as a whole, and the HR plan addresses specific issues in the human resource department.

The six parts of the HRM plan include the following:

  1. Determine human resource needs. This part is heavily involved with the strategic plan. What growth or decline is expected in the organization? How will this impact your workforce? What is the economic situation? What are your forecasted sales for next year?
  2. Determine recruiting strategy. Once you have a plan in place, it‘s necessary to write down a strategy addressing how you will recruit the right people at the right time.
  3. Select employees. The selection process consists of the interviewing and hiring process.
  4. Develop training. Based on the strategic plan, what training needs are arising? Is there new software that everyone must learn? Are there problems in handling conflict? Whatever the training topics are, the HR manager should address plans to offer training in the HRM plan.
  5. Determine compensation. In this aspect of the HRM plan, the manager must determine pay scales and other compensation such as health care, bonuses, and other perks.
  6. Appraise performance. Sets of standards need to be developed so you know how to rate the performance of your employees and continue with their development.

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