Several studies emphasize the importance of linking business strategy with organizational HR practices. An organization’s combination of HR and talent is among the most valuable assets. Thus, the organization will gain a substantial competitive advantage through the clear and strong relationship between HR practices and the organization’s strategic plan.
A vital component of the relationship between HR practices and the strategic plan is a culture of effective communication. And trust within the organization. When employees are encouraged to participate in different aspects of the business strategy, this leads to higher levels of trust, respect, and appreciation among employees and the senior leadership team. This trust results from sharing knowledge that allows employees to participate in the vision and goals of the organization. Thus, the right strategic plan helps to retain talent and develop highly qualified employees. As such, it takes strong leadership and commitment to consistently maintain the relationship between HR practices and the strategic plan.
Strategic Plan
An organization’s strategic plan is a document to set priorities, focus energies and capabilities, build resources, strengthen operations. And ensure that stakeholders and employees work towards common goals. It also highlights the desired strategic outcomes and identifies strategic objectives, initiatives, and actions that will implement to achieve the objectives. It also describes the key performance indicators to measure the plan’s effectiveness and the organization’s performance. On the other hand, the strategic plan enhances strategic leadership and planning to ensure that the organization’s operations will align with the objectives. Thus, it reflects the goals and vision the organization aspires to achieve during a specific period.
The Role of HR Practices in Preparing the Strategic Plan
The strategic plan aims to find out why the organization is in business. And the long-term goals it wants to achieve by using its available resources. Note that HR is one of these resources, so there is a direct link between HR practices and the strategic plan – one cannot exist without the other.
HR practices can also help other groups in the organization define and clarify their mission, goals, and long-term tactics to achieve these goals. Unlike an external consultant, HR practices are integral to the organization.
Effective management leadership will not only gain the trust and respect of HR practices through business learning. But by helping to clarify long-term strategic goals and formulating a plan to achieve these goals. Which in turn will provide value to what they care about most. Therefore, HR practices increase their impact and effectiveness by getting to know the employer’s business.
The Relationship Between HR practices and the Strategic Plan
The relationship between HR practices and the strategic plan is integrative and symbiotic. They are closely related to each other and depend on each other. Here are some types of this relationship:
1. Impact Assessments
When leaders develop a strategic plan, they will coordinate with the various department heads to see how the proposed business strategies can affect them. HR practices will determine the financial impact of the initiative based on the recruitment, training, and retention strategies that may be necessary to support the plan.
2. Plan Implementation
Once an initiative receives strategic acceptance, HR practices will have a crucial role in preparing the organization’s staff for the changes that can occur. For example, this may include changing job descriptions, moving people between business units, making policy and motivation strategies, developing learning, and training programs, and identifying workforce shortages.
3. Feedback and Monitoring
Once the implementation of the strategic initiative starts, oversight of HR practices will determine whether policies are adequate, affordable, and sustainable to accommodate changes in the workforce. Since the strategic plan is a long-term one, the organization must continue monitoring its talent pipeline and human resources. And keep updating its demand forecasts to ensure that the organization always has the right employees to achieve its goals.
Unfortunately, all too often, HR practices need to improve during the implementation of their strategic plan because they make mistakes while preparing it. Among these errors are the following:
1) No Leadership Acceptance
Focus groups with leaders or one-on-one conversations about the current system and processes are essential in determining whether they will accept the proposed ideas. Therefore, the leadership must accept the new system for the success and implementation of the strategic plan.
2) Not demonstrating value
HR practices play an influential role in organizations, from expressing and enforcing values to selecting future business leaders to retain employees. Not showing the value and impact it has within the organization is one mistake that cannot overlook during the implementation of the plan.
3) Focus on Output
HR practices often focus more on output than the path of operations, which leads to the lack of corrective actions, if any.
4) Searching for Best Practices
Over-researching and relying on methods and metrics that work with other organizations that may be in different stages of development and have different needs. On the contrary, preparing a strategic plan must always receive the strategy and needs of the organization itself.
5) Non-Participation
HR practices must lead to a true partnership through exposure to the industry and the organization’s challenges. They must also have sufficient organizational agility to be helpful and participate effectively in preparing the strategic plan.
6) Non-Inclusion
HR practices must effectively integrate into the organization through multiple channels. Thus, their effective inclusion and participation enable them to articulate accurately the organization’s strengths, weaknesses, opportunities, and threats in each department.
Strong teamwork and collaboration among various stakeholders at the higher levels within the organization are critical to the success of any strategy. When leaders can demonstrate their willingness to participate in their organization’s common business strategy and HR practices and share this openly with their teams, it can be a potent and dynamic tool for gaining a competitive advantage.
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