Understand the use of competency-based approaches to planning individual development

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Image Introduction

In Chapter 3, we argued that external conditions and pressures for change are having a considerable and continuing impact on the way that an organization manages its human resources. The nature of the changes has led to the recognition of people as the source of competitive advantage. If identical non-people resources, in the form of raw materials, plant, technology, hardware and software are available to competing organizations, then differences in economic performance between organizations must be attributed to

differences in the performance of people.

For senior managers in an organization, whose task it is to plan a response to such

pressures, the attraction, recruitment, utilization, development and retention of people of the required quantity and quality for the present and the future ought now to rival finance, marketing and production in the construction of strategic plans. Either explicitly or implicitly, all organization strategies will contain HR aspects. However it has been a long-running issue as to whether HR managers have an input into the process of strategy making, and the nature of the influence of such inputs.

Becoming more strategic represents something of a dilemma for the HR function. On the one hand, HR inputs might emphasize the importance of integrating policies and procedures with business strategy, where people are seen as a factor of production who are required to make sure the business plan is implemented. The more that business plans were based on figures and mathematical models, the greater the need for information about people to be expressed in a similar fashion; the plan for people should 'fit' the plan for the business. The growth of manpower planning techniques through the 1960s, which provided such

information, and their incorporation into comprehensive computer models, was a key factor in the personnel function's development.

This 'hard' version of HRM (Legge, 1995, p. 66) was part of a push in the 1980s to address the traditional weakness of personnel managers in making themselves more strategic. It can be contrasted with a 'soft' version which emphasizes people as assets who can be developed and through whose commitment and learning an organization might achieve competitive advantage. It is interesting that the two different orientations, while

representing a contrast, are not always incompatible. Indeed, living with ambiguities and conflicting pressures is a common experience for many HR practitioners (Gold, 1997, p.

138). Tamkin et al. (1997, p. 26) in a study of UK organizations showed that while there were many challenges to HR in becoming strategic, HR functions were adopting a variety of approaches to find a strategic role, both 'soft' and 'hard'. In some cases, this involves

supporting business strategy by developing appropriate policies and procedures. However, not all organizations are so effective in developing strategy and the HR function could develop policy to move the organization in an appropriate direction. In some cases, the HR function is able to be proactive and play a leading role in driving strategy. There are a

The uncertainty and complexity of organization and business conditions in the 1990s has resulted in the employment of both 'hard' and 'soft' versions of HRM with concomitant approaches and methods relating to planning. Over the years, theoretical developments increased the number and sophistication of manpower planning techniques but the activity slid in and out of favour at strategic levels. This was partly because the data and the

computer models failed to live up to expectations, possibly, that personnel departments were unable to make use of the theoretical advances.

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tion applications in operational areas such as employee records, payroll and absence control. There was however less use in expert systems and decision support applications which represent more advanced uses of HRIS. Part of the explanation for the relatively unambiguous use of HRIS lies with the way HR departments prove their worth in

organizations. Concentrating on transaction applications provides vital flows of data for others to make decisions. However, the use of HRIS for expert systems and decision support applications, which reduce people to numbers, might be resisted by many HR

practitioners as representing too much of a clash with people-orientated values (Kinnie and Arthurs, 1996, p. 13). Therefore, it is argued, a 'half-way position' has been adopted which emphasizes the value of a limited use of HRIS but which adds cost effectiveness combined with the professional performance of HR tasks which cannot be performed by IT.

External and internal labour

The rationalized approach to manpower planning is based on a neutral view of the sources of supply for forecasted demands for labour. Based on an assumption of the

interchangeability of workers, the main consideration relates to costs. Thus it may be cheaper on balance to recruit workers from outside the organization and save on the costs of training those workers already employed. Similarly, the aim of minimizing costs was a key factor for many years in the process of deskilling work so that workers who left, 'wastage', could be easily substituted by new recruits. In traditional manufacturing

organizations, the restrictive practices of craft-based trades unions based on time-served apprenticeships and demarcation was seen by management as justification to seek

opportunities over the years to deskill the work where possible. A deskilling strategy was not always possible or desirable (see Chapter 3) and in the face of 'tight' labour markets for workers with appropriate skills, managers began to pay more attention to keeping scarce workers, using a diagnostic approach to manpower planning.

The HRP approach takes this process several stages further. Accepting that vital skills may not be available in the required quantities in the external labour market, the focus shifts to workers already employed and their potential for further development allied to the need for flexibility. Previous attention to the right number of people is superseded by attention to the right kind of people. This of course requires further explanation.

Academics working in the fields of sociology and labour economics have developed a theoretical framework, referred to as labour market segmentation, to classify and explain the ways in which organizations seek to employ different kinds of labour. Loveridge (1983, p. 155) developed a classification based on the following factors:

1. the degree to which workers have flexible skills which are specific to an organization