Strategic Human Resource Management

Section Three

Adding Value

The literature often states that human resource planning is
becoming more important to organizations. While some
observers have noted the difficulties of planning during
turbulent periods and have downplayed the current role of
human resource planning, there is some indication that other
organizations are placing major emphasis on succession
planning for top-level executives, as well as other forms of
planning. Reasons cited for human resource planning include
shifting demo-graphics, the proportion of total costs accounted
for by labor costs, and the competitive pressures of the global
economy.^2

In addition, a large study of 968 organizations by
Mark Huselid found human resource planning to be positively
related to the intensity of the organizations’ research and
development efforts.^3 There also is some empirical evidence
that strategic planning is positively related to financial
performance. Although various studies provide mixed evidence
on this relationship, methodological problems appear to be
responsible for some inconsistencies in results.^4 More
specifically, it also has been hypothesized that human resource
planning is related to profitability. Although there is good
reason to expect such planning efforts to increase profitability,
methodological limitations also have prevented the empirical