THE IMPACT OF HUMAN RESOURCE PLANNING ON ORGANIZATIONAL PERFORMANCE (A CASE STUDY OF MANUFACTURING FIRMS IN LAGOS STATE)

CHAPTER ONE

INTRODUCTION

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 non financial 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 the impact of 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

1. How is the effective utilization and development of human resource planning?

2. What are the benefits of human resource planning to an organization?

3. What are the impacts of human resource planning on organizational performance?

4. 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

H₀:  There is no significant impact of human resource planning on organizational performance.

H₁: There is a significant impact of human resource planning on organizational performance

Hypothesis 2

H₀: There is no significant relationship between human resource planning and organizational performance.

H₁: 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 impact of human resource planning on organizational performance, a case study of manufacturing firms in Lagos 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‟.