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Abstract
The study examines the relationship between human capital planning and organizational performance of Indorama Petrochemical Limited in Rivers State. The research design adopted in this study is the survey research design. The population of the study is made up of 120 senior staff and supervisors at Indorama Petrochemical Company Limited, Rivers State. The taro Yemens formula was used to determine the sample size of 96. Both the primary and secondary data were used. The method used to analyze the data was simple descriptive method stated in tables and expressed in percentage. The chi-square statistical test was employed. The hypotheses will be tested electronically with SPSS Version 22. The study revealed that Scenario planning, demand forecasting and supply forecast is associated with organizational performance in Indorama Petrochemical Limited in Rivers State. based on the findings, we recommend that planners and managers of human capital in both public and private sector in Nigeria should be educated and trained in scientific human capital planning with the aim of replacing the guest work and in function currently in use, managers and planners of human capital should make deliberate efforts to study the opportunities and threats imbedded incorporating such finding in their human capital plans and managers and planners should put effort on human capital planning for organizational purpose achievement.
CHAPTER 1
INTRODUCTION
1.1 Background of the Study
Increasing and intense competitiveness in the market has made performance the most important issue for profit and non-profit organizations for businesses. It comprises of three specific areas of firm outcome which includes financial performance, product market performance and shareholder return (Richard, Simon & Brut, 2009). It is very vital for managers to know which factors influence an organization’s performance in order for them to take appropriate steps to initiate them. Organizational performance guarantees the continuity of the organization to be competitive in a global market place. Organizational performance can be seen as a multi-dimensional construct consisting of more than simply financial performance (Baker & Sinkula, 2005). It describes the extent to which the organization is able to meet the needs of its stakeholders and its own needs for survival (Griffin, 2003). In this sense, organizational performance depicts that an organization is achieving its mission and goals. Kaplan and Norton (1992) defined organizational performance as a set of financial and nonfinancial indicators capable of assessing the degree to which organizational goals and objectives have been accomplished. The challenge for any organizational performance is generally indicated by the effectiveness of an organization to achieve its objectives and efficiency to use the resources properly, satisfaction of employees and customer innovation, quality products and services and thereby ability to maintain unique human resource pool (Dyer & Reeves,1995; Katou & Budwar, 2007).
Human capital planning has to do with forecasting demand for manpower based on its business needs and employing strategies required to meet these needs. The dimensions for the study include forecasting manpower demand and strategic action. Forecasting manpower demand involves the estimation of the number and type of human resource required at different levels in different departments in an organization (Pradeesh, 2011).
Schmidt, (2004) defines human capital as a form of intangible assets that creates future economic value, which include the competencies of front-line employees and the organizational capabilities.
Human capital concept believes that all personnel inputs and activities are not equal and that quality of employee can be improved by investing in them. Harbison (1962) also defines human capital development as the process of acquiring and increasing the number of persons who have the skills, education and experience which are critical for the economic growth of the country.
1.2 Statement of the Problem
Human capital planning encompasses the process that identifies the number of employees a company requires in terms of high quality and quantity; hence it seen as an ongoing process of regular and structured planning. This planning process confirms that employees are in the right number as required i.e. there is neither a surplus of manpower nor a shortage. Parker and Caine (2006) states that it is important for organizations to have the right number of manpower in order to avoid unwanted situation i.e. issue of shortage and excess of manpower. Hassan (2003) states that failure to properly articulate and implement the three fundamental functions of human capital planning which include labor forecast, managing demand for employees and available supply in market and keep a balance between labor supply and demand predictions will pose a great problem to oil firms in terms of cost and expertise (skilled personnel) thereby reducing their competitiveness. Gould (1984) holds that in order to gain competitive advantage over the competitors, different advantageous ways are found out using strategic human resource functions, thus showing that these functions play a critical role in making a company competitive. Human capital planning if not systematically carried out cannot bring to equilibrium demand and supply of manpower in organizations (Armstrong, 2006).
The general thrust of this work there, is to critically evaluate human capital planning in Indorama Petrochemical Limited in Rivers State therefore this work seek to assess the prospect of human capital planning in the achievement of organizational performance.
1.3 Objectives of the Study
The purpose of this study is the main ascertain the relationship human capital planning and organizational performance in Indorama Petrochemical Limited in Rivers State. The following objectives are to be achieved according.
1. To examine the relationship between scenario planning and organizational performance in Indorama Petrochemical Limited in Rivers State.
2. To ascertain the relationship between demands forecasting and organizational performance in Indorama Petrochemical Limited in Rivers State.
3. To examine the relationship between supply forecast and organizational performance in Indorama Petrochemical Limited in Rivers State.
1.4 Research Question
The following research questions are postulated to guide the study:
1. To what extent does scenario planning associated with organizational performance in Indorama Petrochemical Limited in Rivers State?
2. To what extent does Demand forecasting associated with organizational performance in Indorama Petrochemical Limited in Rivers State?
3. What extent does supply forecast associated with organizational performance in Indorama Petrochemical Limited in Rivers State?
1.5 Research Hypotheses
H0: There is no significant relationship between human capital planning and organizational performance in Indorama Petrochemical Limited in Rivers State.
HA: There is no significant relationship between human capital planning and organizational performance in Indorama Petrochemical Limited in Rivers State.
1.6 Significance of the Study
Arguably, it is used to acknowledge that a study of this nature is not basically carries out for it purpose but as a result of some associated benefits it can help to offer generally, it will help employers to ascertain the need for carrying out effective human capital planning in the respective organization.
The onions of this study will also open up future vents for young practicing managers to enhance human capital planning as a strategic and administrative tool for organizational effectiveness and continue process for business survival most importantly, this study will also provide useful informant to other scholars in the academic field in topical area under investigation and finally, this study will also proved useful guide and information to other students that will carry out their studies in the future. In the next segment definition of terms will be discussed.
1.7 Scope of the Study
The study is delimited under the following heading: content scope, geographical scope and unit of analysis.
Content Scope: The content scope of this study involves on investigation to ascertain the relationship between human capital planning and organizational performance. The dependent variable is organizational performance, measures by Innovation, Adaptability and market share. While independent variable is Human capital planning measure by scenario planning, demand forecast, supply forecast and Training.
Geographical Scope: This study is delimited in some selected commercial banks in Port Harcourt. Which include Zenith bank, Union Bank and UBA all in Trans-Amadi, Port Harcourt.
Unit of Analysis: The unit of analysis in this research is involves the individuals at the time of carrying out the study. The scope of this study is to ascertain the relationship between human capital planning and organizational performance. In the next segment Limitation of the study will discussed.
1.7 Limitation of the Study
In carrying out an investigation of this native the researcher must be faced the following constraint.
Firstly, the time constraint’s the time frame provision for this study was short.
Secondly, financial constraints. Usually, a study of this nature involved some level of expenditure therefore, finance was also a limiting factor.
Thirdly, poor response from the respondent and inability to access the entire population of the study. In the next segment significance of the study will be discussed. Lastly, poor measurement instrument.
1.8 Definition of Terms
DEMAND: This is the willingness of an organization to employ competent persons in the labour market.
EFFECTIVENESS: Doing the right thing.
EFFECTIVENESS: Doing the right tiling.
FORECASTING: Is the process of using past and current information about phenomenon to predict future condition.
MANPOWER: This is the number of workers available for industrial needs.
PLANNING: The process of setting goals and objectives and determining the process and strategies in achieving these goals.
PRODUCTIVITY: I the range at which a given company is able to cover with his product.
SUPPLY: it is the availability of competent person in the labour market.
TRAINING AND DEVELOPMENT: A process of acquiring knowledge for improvement.