Business plans: Few staff understand the business plan, while HR planning is less formal with little link to individual targets

While nine out of 10 organisations have some form of strategic plan, very few can claim that all employees understand it, according to research by Personnel Today’s sister publication, Employment Review.

Perhaps more worryingly, a substantial minority of the organisations surveyed admit that many managers – sometimes even senior managers – have a poor understanding of the strategy.

The survey of 112 organisations, which together employ one million people, found that 91% had a formal strategic plan in place. But more than one in four (27%) conceded they were bad at communicating the plan to employees.

The research shows that, while the strategic plan is thought to be well understood by senior managers, those at lower levels of the organisation have successively lower levels of understanding.

With four out of 10 organisations (41%) admitting that first-line managers had a poor or very poor understanding of the strategy, it is little wonder that six out of 10 (60%) said non-managerial employees did not understand the plan.

The study also shows that a strategic plan is more likely to be well communicated if it is developed by the board (83%) than if senior managers alone take the job on without board involvement (57%).

…and HR planning is less formal

Strategic planning often follows a less formal process within HR than for the business as a whole, the Employment Review survey reveals.

While for the organisation as a whole, business planning is almost invariably either a formal (45%) or broadly formal (50%) process, the development of the HR plan is less likely to be fully (23%) or broadly formal (52%). HR planning is more likely to follow either a broadly informal process (18%), or simply not to exist at all (7%).

The survey shows that where HR strategies are developed, this most commonly happens once the broader organisational plan is agreed (32%). Relatively few organisations develop an HR plan as an integral part of the organisational strategy (14%).

One respondent in six (17%) said they usually rolled forward an existing HR plan for another year, presumably with some amendments. But very few (2%) sat down and reassessed their approach each time.

However, a substantial minority of practitioners appear to want no part of HR strategy: 17% said HR was an operational issue, not a strategic one, and that they had no need for plans.

…with little link to individual targets

While appraisals and performance-related pay or bonuses are in widespread use, not all of them link individual goals to those of the organisation. Links between individual goals and the HR strategy are still more tenuous.

The Employment Review survey found that even at the highest level, just two-thirds of senior managers had individual goals that were very or quite well linked to the HR strategies of their organisations.

Although this link was much stronger among HR practitioners, one in seven reported that their individual goals and the strategy they were supposed to implement were at best poorly linked, and at worst, not linked at all. The individual goals set for non-managerial staff bore little relation to the HR plan in two-thirds of organisations.

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