HUMAN RESOURCE PLANNING PRACTICES AND ORGANIZATION PERFORMANCE: AN EXPLORATORY INVESTIGATION
This study provides current, comprehensive information about the formal human resource strategic planning practices of major U.S. corporations and examines the impact of this planning on organization performance.
The research in this study was carried out in two phases. Phase one consisted of a mail survey to identify firms using formal human resource strategic planning processes. Questionnaires were mailed to the Vice President of Personnel/Human Resources in each firm listed in the 1981 Fortune 500 Directory.
The second part of this study consisted of a comparison between the performance of the sample firms using formal human resource strategic planning processes and non-users of such systems. The performance measures used in the study were sales growth, earnings growth, earnings/sales ratio, return on investment, earnings/employee, assets/employees, earnings/labor costs, and labor costs/employees. Data from the Standard and Poor's 1981 Compustat Tapes were used to calculate these measures.
Two approaches to data analysis were undertaken. The first analysis consisted of a two-way multivariate analysis of variance, using industry groupings and formal human resource strategic planners versus non-human resource strategic planners as the independent variables, and five-year average on the eight performance measures as the dependent variables. The second analysis consisted of a comparison of five-year performance prior to the introduction of formal human resource strategic planning with both five-year and ten-year post human resource strategic planning performance. The results of these two analyses indicated no significant differences between the performance of firms using formal human resource strategic planning and firms that do not.
Formal human resource strategic planning is still in its infancy. Few firms have developed the fully-integrated processes outlined in the literature. Fifty-five percent of the respondent firms initiated human resource strategic planning after 1976. The results show that larger firms are more likely to engage in formal human resource strategic planning. While the trend appears to be toward greater adoption of formal processes, the results presented in this study suggest that organizations have yet to reap the benefits of such planning.