Human Resource Planning Theories

Theories of Human Resource (HR) planning stem from the basic theories of HR management. These types of theories are adjuncts, so to speak, of general HR approaches as the main theories of HR management imply planning approaches.

The standard textbook on HR Management was written in 1999 by John Bratton and Jeffrey Gold. They reduce the types of management (and hence planning) theories to five. In general, these major theories seek to decipher what HR policies affect business, and how the business environment and culture affects manpower planning issues. The Storey model, for example, stresses extra-contractual relations as the basis of planning. Hiring new workers and business plans all revolve around the building of trust, and this trust is built around general managers and floor managers as key HR players. Planning cannot function without those management inputs.

David Guest's theory stresses the distinction between compliance and commitment. Compliance concerns the basic “contractual” relations between employers and employees. In terms of planning, this is a simple manpower approach that seeks to fulfill the terms of the contract only. There is no stress on development plans. Yet with commitment, it is clear that planning is based around a struggle to build the firm around its employees and their specific talents. Most HR planning/management models revolve around this concept of worker development.

HR planning theory works in lockstep with the nature of the business plan. In the Harvard model, planning is based around the projected relations among employees and stakeholders. Few models of planning stress stakeholders, but the Harvard model is convinced that stakeholder satisfaction is just as important as worker development. Long-term planning is central here, but there is a constant feedback loop between HR and the stakeholders. Worker satisfaction is often put on hold in these models relative to stakeholder incomes.

The purpose here is to understand how HR models relate to business planning and vice versa. For example, in the Warwick model of HR management, the planning element is based around balancing two central ingredients: the business model as an internal affair, including business plans, the competence of current employees, the workplace culture, etc.; and the external environment, including the legal and market context of the firm. Once these two variables can be balanced, planning can rationally go forward.

As in the Fombrun, Tichy and Devanna model, all forms of planning theory revolve around the coherence of the business model. In other words, there can be no distinction between HR plans and the general context of the business, whether internal issues are involved or external. The basic selection-appraisal-development-reward theory of Fombrun is really at the basis of all planning theories. Later developments have sought to add more variables to the mix. But ultimately, planning theory is little other than what is implied in general HR management based around development and rewards over time. Only Harvard holds that development is optional relative to the profitability of the firm. In more modern times, from 1980-2010, employee development and trust have come to take center stage. Contracts are seen as just the beginning, not the very essence of HR.