CHAPTER 12
Plan Section 7: Human Resources MANKIND
ARE ANIMALS THAT MAKE BARGAINS, NO OTHER
ANIMAL DOES THIS.
ALL
– ADAM SMITH
E N G A G E I N H U M A N R E S O U R C E M A N A G E M E N T . Human resource (commonly referred to as HR) management includes such tasks as employee recruitment and selection, training, compensation, review and promotion and termination of the employment relationship. Management of human resources is a key function at any business level. Global human resource management has been cited as one of the critical planning and success factors for companies embarking on any strategy of foreign expansion. Given the cultural and legal differences that exist among countries, this is an area where conflicts can easily arise. In fact, poorly managed global human resources have often contributed to the failure of international operations. This issue should be addressed well before a company launches its overseas expansion activities and is seen as a critical factor in an international business plan.
COMPANIES
General Information The business plan should give the reader a good understanding of the human resources of the company, including: ■ ■ ■ ■ ■ ■
The number of employees involved in major functional areas Compensation methodology Job descriptions Terms of key employment contracts or agreements Structure of the work force, including union relationships and relative level of employee skills and morale Employee benefit plans In many international business plans, the discussion of human resources is little more than a recital of statistics, including the number of employees in each functional area. A better practice is to describe how the company intends to recruit, assess and reward a strong team of dedicated and talented managers and employees. This is particularly important if the company is in an industry experiencing tremendous competitive pressures or fast growth. Employees with specialized talents in such companies will be targets for other companies’ recruitment efforts. If possible, an attempt should be made to compare the personnel practices of the company to those of its competitors. If the company has only a few employees, the business plan should generally focus on how it intends to find and employ qualified personnel as the company continues to grow. One of the key considerations in this area is a compensation and incentive program that the company is offering or intends to offer to its employees. This includes:
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