Many factors that impact business usually are out of its control. There are however internal factors that a company can be able to control to serve the workforce and other fundamentals within a business. Human resource is supposed to look at the factors to be efficient and to make sure a business has the best talents when it comes to employees. Planning decisions should be aligned with goals that are strategic within a business to maintain the desired productivity (Armstrong " Taylor, 2014). Many are the times in which HR planning gets to react to external factors without an excellent consideration of the internal impacts. Below are some of the internal factors that can propel the HR agenda.
Company Mission
The mission of a company summarizes the values, vision, and purpose. The business can set a direction that is definitive by having goals that are clear and even well set out objectives. According to Akingbola (2010), the mission of a company gets to set the HR agenda when it comes to the recruitment of employees. In this case, the employees that are to be recruited should have the values that are outlined within the mission of a company. If a prospective employee is interviewed and lacks the desired values as stated with the mission of an organization, then they should not be hired. For instance, if an organization deals with training athletes, it should seek trainers that have a passion for sports and athletes to make the athletes feel comfortable. In another case, a company that desires to have sustainable business endeavors in the protection of the environment should go for individuals who have shared skills and are pro-environment. Through that, the HR agenda of an organization will have been set.
Corporate Culture
Organizational culture tries to explain how employees should interact with one another. Businesses that are small and have one location desire employees to work from an office. On the other hand, big companies in many cases may permit their employees to work from home. In instances where new employees are hired, they should be willing to attend the meeting through virtual means and even talking to other workers over the phone. The employees will have to align themselves to an organizational structure that has been set as Thunnisen (2016) puts it. This goes to explain that human resource planning should be able to consider the flexibility regarding the dress code, hours and formality that is tolerated by a company. HR should be able to monitor how employees are working out their duties in the stipulated working hours of a company as the operational policies say. For instance, if a company requires customer support to be there for 24 hours, human resource planning should ensure workers are there throughout the time.
Business Structure
Organizational structure has a lot of impacts when it comes to human resource planning. Divisional, functional or matrix structures need a different kind of staffing. Within a functional structure, employees have tasks that are specialized. Within a divisional structure, all the departments have representation in all the needed function, like sales, development and support and marketing. A matrix structure an employee is supposed to report to two different bosses where one represents a function, and the other manages a division (Armstrong " Taylor, 2014). In all the cases, HR planning should ensure that all the positions are filled to ensure that there is productivity and in keeping to the regulation of a company, state, local and federal regulations that call for security and safety.
Available Funding
HR planning should take place within the stipulated funding to ensure there is profitability. When there are seasonal demands, the hiring plans can be altered, and that goes to show that a small business should be prepared for that. In cases of specialized skills, planning may also be impacted. While aiming at meeting short-term needs, a company should be able to outsource the activities that are non-core. When it comes to meeting needs that are long-term, there should be the offering of development opportunities and training to a workforce. With the aim of maximizing on the productivity, loyalty, and morale from employees, employers should be able to come up with events (Zott " Amit, 2010). Through that, it then goes to show that funding impacts HR planning a lot. This is because progressive issues that should be conducted in an organization require resources and more so money. Without proper funds, it becomes difficult to deal with HR planning.
Compliance with Laws and Regulations
An organization is supposed to work with the stipulated insurance company, professional and employment experts with the aim of getting to know the type of cover that should be offered to an organization. According to Tooksoon (2010), the plight of workers should be put into consideration when offering an insurance cover. That calls for keeping up with federal and state labor regulations and laws, having a secure and safe office environment and at the same time making sure that all policies of a company are met. Through that, it gets to show that HR is heavily impacted by compliance with the laws and regulations of a country. Human resource planning has to consider the set rules as it continues to offer its services to an organization.
Workplace Productivity
This is the other factor that impacts human resource within an organization. To have the best from employees, it called for that an organization creates an environment that is positive. A company should be able to offer a wellness program, annual reviews, and activities that can be able to boost the morale of an organization. Employers should also be able to communicate pertinent issues that face employees and which make them not to perform as it should (Snell et al., 2015). Through that, an organization gets to be able to progress in the right direction as human resource functions will have been met by ensuring that all essential issues within an organization when it comes to productivity have been considered (Snell et al., 2015).
Skill Levels
This is the other thing that has a lot of impacts when it comes to HR planning. There comes a time when a company gets to grow, and for that reason, it requires operational and administrative needs to be boosted. This means that current employees may not be able to fulfill such obligations and it calls for the hiring of more employees, contractors or even offering training to staff (BAUM, 2015). There should be the addition of human resource planning like on-site training, reimbursement of tuition and even sending workers for workshops and seminars. All these activities are carried by human resource within an organization, showcasing that for skill levels within an organization to meet the required standards, the human resource should be affected in some way.
External Factors that Impact an Organization’s Performance
External factors are those that are not within the control of an organization. These factors dictate a lot how an organization carries its work, and without them, an organization may relax. This section will look at those factors that affect an organization impacting on its performance and how the HR functions get to be affected.
Technological Factors
Technologies in business
The world of business today is dominated by new technologies that are coming up daily. Companies have embraced the new technologies so that they can be able to work effectively and efficiently. Companies have now embraced the internet in serving their customers. A good look is Dell Company that uses the internet to earn profits as it helps its customer base. Companies are using the use of social media platforms like Twitter and Instagram in communicating with customers. As a result, it gets to be easy for organizations to be able to improve the services instantly like when responding to the issues that have been raised by customers on the internet. Companies have also resulted in the use of smart technologies like smart cards that are used by customers in shopping (Trieu, 2017). Through such cards, customers get to receive reward points that can accumulate and be used for shopping too. Through the use of technology in business, the HR performance is affected in that it has to be modernized. For instance, employees have to check in their offices by use of a biometric system.
Technologies in Nations
According to David (2011), economies that are doing well in the field of business are urged to put their efforts on basic research for them to remain ahead when it comes to other economies as they come up with new businesses by having new technologies. That is the only way that they will be able to remain ahead of the game when it comes to business. Developed nations that have advanced in technology should be able to get out of businesses that they are excelling in for them to remain relevant (David, 2011). In cases where these developed nations stick to their regular businesses, they will not be able to get premium prices for the services and products that they sell. This then implies that organizations that are well off concerning technology perform better. At the same time, they can let their workers use smart technologies in attending to customers making such moves to affect human resource activities.
Technologies for Services and Products
New services and products are possible due to the effect of new technologies. For that reason, companies can get the desired revenues from the sale of modern services and products. Many are the times that there have been new technologies coming up in the world of business. Computers, railway lines, and even automobiles have been developed which have led to companies being able to make companies maximize on what they are offering to their customers (Armstrong " Taylor, 2014). According to Armstrong " Taylor (2014), new technologies have had a significant effect when it comes to how human resource activities are conducted within an organization. A customer care personnel can attend to a client that is calling on the phone, and at the same time, the said customer care personnel may be keying in data in a computer.
Economic Forces
Exchange Rate
The exchange rate is an important driver when it comes to driving the performance of an organization. This happens when a company exports the products that it has and importing components and materials for making the things that our desires. It becomes profitable to export when a currency of a country of the exporting country is weak as compared to the currency of an importing country. This shows that the exchange rate can have a significant impact when it comes to how an organization can perform financially. The advantage of a country when it comes to making profit gets nullified when components and materials get imported from a country that has a stable currency (Zott " Amit, 2010). A company gets profits when it exports to a country that has a stable currency and imports from a country with a weak currency.
Income
According to David (2011), income is the indicator of a customer to spend on a product that is sold by a marketer. The rise of families that are income dual in parts of the world like in the urban world has made incomes for such families to go up. As a result, there has been a demand that is high when it comes to luxury products and lifestyle. Families are spending a lot to make their lives better. Unlike in traditional times, today’s families are going for products that suit them. For these families to afford the life that they desire, they are looking for many forms of incomes to supplement their livelihood. Due to that organizations will tend to perform better when they get money from products that they manufacture. According to David (2011), marketers should, however, be wary and make sure they do not generalize when it comes to services and products that they sell.HR comes in here in that organizations should employee personnel that know how to deal with special needs of customers.
Recession
According to Akingbola (2015), recession is a period of economic activity dealings when production, income, and even employment tend to go down. The demand for services and products tends to go down. During these difficult times, companies are advised to improve on the products that they have as they introduce new products to the market. The main idea here is to reduce the production hours, waste and even on the cost of raw materials for companies to be able to sell products at services that are low. The best way that a recession cycle can be put to an end is by making customers purchase more (Akingbola, 2015). During recession, a company may not perform as it should and during such periods employees may lose their jobs.
Social Customer Factors
Values
A value is an enduring belief that is firmly held by an individual (Tooksoon, 2011). People living in a given society tend to subscribe to the values of a given society. Values then become a determinant factor when it comes to how a person will react to a given situation and what they will prefer to buy. For instance, some religions may not allow their followers to consume pork. Customers have also become aware of what they want, and they cannot go for goods or services that do not fulfill the standards that they wish to have. That, therefore, explains why some organizations are rated as best performing while other organizations are rated as underperforming (Tooksoon, 2011). An organization that keeps to the values of customers like having quality products will undoubtedly perform better as there is money. Customers also believe that workers should be courteous. An organization with rude employees cannot be visited and due to that HR office should work to solve such.
Multiple Lifestyle
According to Zott " Amit (2010), people have varied lifestyles in the modern society. Customers have turned into choosing services and products that meet their diverse interests and needs as compared to conforming to traditional ways of living. In the past, the lifestyle of a person was determined by their profession. In the life that people are living today, a person can be a journalist, and at the same time, they teach at a downtown college. The two lifestyles are associated with different services and products, and such a person happens to be a potential customer to more than two companies (Zott " Amit, 2010). Due to that companies tend to perform better when they have diverse customers who visit their stores. This different lifestyles also call for the HR department to be diverse to handle the changing customer of today.
SWOT and PESTLE Tools in Environment Analysis
The table below compares the Porter’s forces and Pestle as environmental analytical tools
Porter’s forces
Pestle
Deals with a competitive situation in an organization. An industry with high profits is difficult for new competitors to enter.
Identifies how macro environmental factors might affect a business or organization. Easy for a new competitor to enter as long as the six forces are adhered to.
Designed in a way that it helps professionals and managers on how to explore the five forces to determine how power is balanced in a situation: supply power, buyer power, competitive rivalry, threat of submission and new entry.
Determines how an organization is affected by the forces which are: legal, environmental, sociocultural, technological, economic and political.
In examining the porter’s forces in an organization, the manager and people involved brainstorm on various factors that are in relation to each of the five forces. For example for supply power, examples of its factor are number of supplier, use of suppliers, uniqueness of service and cost of changing suppliers.
Looks at the factors taking place in a country or market and examines how the factors affect the consumer. For example managers using this analysis mainly focus on the social aspects of the company’s customer.
Managers apply each of the forces to specific situation. For example, a business that operates in different areas would need to study the state, local and county laws in all those states regarding their competition, taxation and many other factors.
Enables marketing and experts in finance to identify more factors apart from money when making decisions about the goods and services of the company.
Have five forces namely supply power, buyer power, competitive rivalry, threat of submission, and lastly threat of new entry.
Have six forces namely legal, environmental, sociocultural, technological, economic and political.
(Noe at al, 2006)
Key Stages of Strategy Formulation and Implementation
Clarifying Vision
The main aim of goal setting is to clarify the vision for the business. This stage is made up of defining long-term and short-term objectives. The second is getting to identify how to accomplish an objective. The final step is getting to customize the whole process for staff and accommodating each staff a task that they can do. At this stage, the goals should be realistic, and they should be detailed to match the values of the vision. The ultimate step in this stage is coming up with a mission statement that s able to communicate the goals of an organization to staff and even stakeholders (Tooksoon 2011).
In this stage, the role of HR will be to accommodate specific tasks to employees. This goes to explain that each employee should have a part to play so that they can be able to help in setting the vision for an organization. Regarding ethics, the HR should ensure that all staff within the organization are in line with the set code of ethics to avoid issues of undermining the organization. The HR should also, ensure that each employee is keeping up to the laid down ground rules as they come up with the goals that are needed within an organization. When it comes to accountability, the HR should ensure that it has put in measures that can prevent an organization from misappropriating funds and other resources (Tooksoon 2011).
Gathering and analysis of information
Analysis is a vital factor in this stage as it demands information to be in plenty. Through that, it becomes to make the stage set for everything. Information should be gathered as much as it is possible so that it can be in line with the vision of an organization. The main reason for having information at this stage is with the purpose of getting to know how a business can be sustained in the market. At the same time getting to know the strategies that can be used in making business to grow. According to Tooksoon (2011), internal and external factors should be examined to get to know how they can affect the objectives and goals of an organization. When it comes to the HR, it gets an important role that it can play in this sector, and that calls for making employees active when it comes to the collection of information that is vital (Tooksoon, 2011).
HR is also crucial in the line of accountability. That explains that all people within this part should be able to take the work of the organization seriously without playing around. The role of HR in business ethics at this point is to ensure that there is no lateness in conducting any assignment. A team that is dedicated to perform all the functions as stipulated is key at this stage (Akingbola, 2015).
Formulating a strategy
The first step in strategy formulation is getting to review information that has been gleaned from the analysis that has been collected. This is the point to look at the resources that the business has to be able to get to the goals that are desired. The areas in which a business should look for external resources should also be addressed. Issues that are being faced by the company should be looked in totality, and that will help in making business to be able to get successful. The HR has an important role when it comes to this step whereby it plays the role of advising on issues that seem not to work well within an organization (Akingbola, 2015). In situations where a business is not performing as it should, the HR is the one to know that to help in the formulation of a strategy that can be helpful.
Business ethics come into play at this stage. HR has to be aware of all the things that are happening with the formulation of a strategy. At this point, it is good to make sure that all workers can follow on the guidelines that were set from the earliest stage.
Implementing a Strategy
According to Zott " Amit, 2010), the way a strategy is implemented will explain if a business will get to be a success or not. At this stage is where real actions take place. In cases where there was a failure of earlier strategies, at this point there is a need to have a strategy that has been proven can work. Every worker within an organization should be made aware of their role and the responsibilities that they are to play. Resources like funding are supposed to be secured at this point. With the preparation of employees and the availability of funds, then it becomes ideal to have a plan executed (Zott " Amit, 2010). The HR should play a crucial role at this point by rallying all employees to take their responsibilities seriously so that they can be able to make an organization get to have a new plan. The HR should also be ready to make sure that money that is released for the execution of a plan is safely used. On accountability, all employees should be able to fit in the roles that they have been given and perform them as it should be.
Evaluation and Control
Strategy control and evaluation will include factors like a consistent review of external and internal issues and review. According to David (2011), there should be a strategy for defining the parameters that have been set. All the parameters should be in reflection of goals that have been set in stage one. At this stage, it is advised that every data should be stored so that it can be reviewed in future times. The role of HR at this point is to make sure that all employees perform their responsibilities excellently. The HR will monitor accountability and ethics by making sure that there is transparency in reporting and utilization of resources.
Approaches to Measurement of Business Performance
Method of Measuring Business Performance
Application
Looking at the business’s financial statement
One of the ways to measure the business performance in that how much money the business generates in a specified period and also the amount of money going in, going out and what remains in the business. There are three main financial statements namely income statement, balance sheet and cash flow statement.
Average of new customers in the business
Provides evidence that the business is successful and also growing, if the business customers are stagnant it is an alarm for one to improve their market strategy. To improve this business owner should track down the customers and indicate the number of new customers got after a new action plan.
Current position in the market
The business owner may need to know the market so as to measure the success of one’s business. If both a business and its competitors are not doing well it might be due to the lull in the market. However, the business may also be down due to national market or out of control.
Assessing own expectations
The business management or individual may assess whether the business has reached the expectations of the business owners. The management may also decide to check its objectives from the start.
Checking customer satisfaction
If the customers are satisfied with the goods and services from the business they will definitely come daily. One of the methods to measure the success of a business is checking the satisfaction as it will improve the business.
(Najam-ul-Arifeen et al)
Role of HR in Business Planning and Changing Management
Finding team players
It is one of the roles of human resource to find team players in the organization. The HR is able to determine whether it is appropriate for other people to be hired or whether the new employees are in connection with the old ones. Due to this, the human resource is in charge of the hiring process such that when they want to change the management it is possible (Najam-ul-Arifeen, et al 2014).
Assuring adequate staff levels
One of the main functions of the human resource is to ensure that various departments in a company have sufficient staff to meet the goals and objectives of the organization. Also the human resource ensures that all departments are equal such that one department is not overloaded with some work. However, if an organization has less workers the human resource may decide to change the management while hiring more.
Matching skills to current organizational needs
During hiring of employees, the human resource already knows that vacancy level and what they need. However, the HR employs employees with the skills that will have an added advantage to the company or organization.
Using Business Sources in Planning
Business sources are useful in planning on how a business should operate or how a project should be conducted. Competition information, is useful in making an organization to stay ahead of the game. Information that has been collected from competitors should be used to plan on how there can be proper ways to eliminate business rivalry by an origination being able to come up with the right marketing techniques that can be used to promote a business (Tooksoon, 2011). Trends in HR should be used to guide an organization to have the best mechanisms that can be used in getting able employees who can perform their duties as assigned. An organization should put its focus on getting the best employees in the market by getting to know the trends that other organizations are using in the hiring and recruitment process (Tooksoon, 2011).
Moreover, government information is also very crucial when it comes to policies. Government agencies design and implement the rules and regulations that should be followed within an organization. Also, the government puts in place tax policies that businesses adhere to in their daily running (Baum, 2015). Thus, an organization should utilize information from the government in carrying out its policy formulation. Organizational policies should be in line with the regulations that are set by the government.
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