Personnel strategy

Personnel strategy
See also
Functional strategy Change management model Organizational culture and project management Tactical management Outsourcing Hersey and Blanchard model Implementation of strategy Management functions Development and organizational balance

Personnel strategy specifies the direction, objectives and principles for the management of human resources in the enterprise. Well developed personal strategy should include a plan for matching existing potential of employees to the achievement of the long-term objectives of the company. Such actions require an evaluation of human potential, answering to the following questions:

• Who do company employ?
• Whether staff implement the values, goals and objectives of the company, if so, to what extent?
• What skills and qualifications of the personnel company requires and will require in future?
• Extent to which it is possible to develop qualifications of employees?
• Extent to which company is capable to develop qualifications of employees?
• What changes in the level of employment are necessary?

Functions of personnel strategy

Only with specific knowledge, managers can proceed with the formulation of the various elements of the personnel strategy. Strategy must specify main objectives of personnel development. Should include the company values, which shape the personnel activities, determine the various actions within its framework, operational plans and decisions.

Main HR management functions include:

• planning - determining the type and number of future workers, admissions, dismissals, transfers,
• recruitment - determine the sources of acquiring the necessary staff, develop appropriate procedures for the selection, training, selecting workers responsible for implementing of these processes,
• adaptation - introducing of a new employee to a company, making him acquainted with the company, department, team and scope of responsibilities,
• development - creating development policy, linking it to the goals and objectives of personnel strategy, developing means of acquiring information about employees needs in terms of development, developing procedures for provision of training, monitoring of training effects
• assessment - links employee results with the objectives and goals arising from the strategy, development and implementation of a formalized system of assessments, the preparation of staff making the assessment, familiarize them with the assessment system,
• motivating - developing ways to engage employees in the affairs of the company, rewarding and encouraging, creating non financial means of motivation.

Personnel strategy should include specific, practical solutions within the framework of the aforementioned. range of management functions. It should indicate how the company recruits, how it makes periodic assessments, how it trains employees, etc. There must be a clear relationship between these functions (e.g. between assessment, development and motivation). Preparing procedures necessary to perform these tasks requires cooperation and consultation of all departments in organization (not only HR Department).

Procedure of personnel strategy formulation

Process of creating a personal strategy consists of:

• determination of the eligibility requirements for workstations, determination of the structure of staff (allows the identification of the sources of recruitment, training, course planning, etc.)
• analysis of the structure of employment by sex, age. Certain proportions in female employment designate the scope of development and maintenance of social facilities, health care activities, security in the event of maternity leave, layoffs due to custody, etc.
• determination of the demand for staff - focused on the number of employees necessary for the implementation of the strategic activities of the enterprise,
• forecasting of personnel supply - predicting future changes in the structure of labor market. Takes into consideration two sources of supply of workers: internal (number and structure of present employees) and external (unemployed persons willing to take a job, graduates of high schools and colleges, people changing jobs).
• planning of development and staff training - involves internal training and external seminars, distance courses, conferences, group training,
• development of efficient incentive system - such system assists in decision-making, planning and control. It consists of motivational factors, task system, labor costs and the employee participation,
• determining the costs incurred in the area of human resource management - mainly expenditure on recruitment, training, rewards and bonuses,
• implementation of an effective system of control - in order to detect errors and improve the system.

Types of personnel strategy

According to Fisher

C. Fisher (1989) indicates offensive and defensive strategy.

• Offensive strategy is used by companies with high growth rate, employing creative and innovative workers, ready to take risk. From the labor market company recruits many candidates with the skills needed to meet growth requirements. Assessment is based more on results than on personal characteristics. Among the employees' attitude of success over a long period is common. Commonly used are gratuities base on profit, options, rewards, rather than basic wages.
• Defensive strategy involves different management activities. Recruitment and promotions are made rather from among the employees from within the organization. Companies are focused on current, measurable (quantitative) results of staff evaluation. However, most valued are seniority and loyalty, rather than labor productivity. Remuneration is based on the hierarchical structure of wages, as determined by job evaluation.

According to Brunstein

Next classification (by Brunstein 1995) includes quantitative strategy and qualitative strategy.

• Quantitative strategy focuses primarily on staffing and includes the company's personnel needs necessary to adapt to the changing market. It is expressed mainly in the planning of personnel and coordinating it with the business plan. This strategy considers human resources primarily as a cost, which is lowered by reducing the activity of the company and the substitution of labor by capital.
• Qualitative strategy seeks the optimal interaction of incentive and motivation of human resources to achieve the best result. It operates in the perspective based on good quality characteristics.

Open system personnel strategy

Classification of personnel strategy, is based on the recognition of the organization as an open system, in interaction with the environment and the entities constituting the environment:

• Input-oriented strategy,
• Strategy focused on development and activating, namely the transition strategy,
• Output-oriented strategy

The strategy includes input-oriented measures to attract the desired group of employees with appropriate qualifications. Here are mainly personnel marketing activities and staff selection.

The strategy focused on the development and activation or transition, takes the form of a number of activities that are directed to individual improvement and development of employees and increase of their efficiency. It seeks to shape the work teams. An extremely important and integral component of this strategy is to develop an incentive system.

Output-oriented strategy involve dismissal of employees, limiting the number of persons employed. Should be related to the evaluation of the entire HR function and resolve possible conflicting personnel decisions.

Personnel strategy based on formulas

Personal strategies based on:

• formula of the sieve,
• formula of human capital.

Sieve formula is based on the premise on unchanging employee and treats the selection as a main activity of HR divisions. Subject to selection are all the candidates encouraged in recruitment and presently employed workers. This formula assumes openness to external labor market and competition, it is a mechanism for the selection and allocation of staff. However, this model is not conducive to a sense of job security, and integration with the company. This formula is implemented primarily as a cost reduction strategy.

Human capital formula is based on the assumption of human capacity for learning and for his emotional attachment to own place of work and his loyalty. This formula assumes significantly less dependence on the external labor market. Recruitment is carried out at the beginning of a career, and the employer puts emphasis on long-term employment and treats the staff as a resource in which company should invest. This formula is an expression of the qualitative aspect of human resource management.

See also:

• Models of strategic personnel management
• Functional strategy

References

• Armstrong, M. (2006). Strategic human resource management: a guide to action.
• Čiarnienė, R., Sakalas, A., & Vienažindienė, M. (2015). Strategic Personnel Management in Public Sector: the Case Study of Kaunas Municipality. Engineering Economics, 47(2), 62-69.
• Guest, D. E. (1991). Personnel management: the end of orthodoxy?. British journal of industrial relations, 29(2), 149-175.
• Kesler, G. (2000). Four steps to building an HR agenda for growth: HR strategy revisited. People and Strategy, 23(3), 24.
• Pattenaude, R. L. (1975). Increasing Importance of Personnel Strategy, Personnel Journal, 54(8), 451-453.
• Schuler, R. S. (1987). Personnel and human resource management choices and organizational strategy. Human Resource Planning, 10(1), 1-17.
• Wright, P. M., Snell, S. A., & Jacobsen, P. H. (2004). Current approaches to HR strategies: inside-out versus outside-in. People and Strategy, 27(4), 36.