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PART B: BUSINESS ORGANISATION STRUCTURE, FUNCTIONS AND GOVERNANCE 
 
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Human resource cycle 
Selection 
is important to ensure the organisation obtains people with the qualities and skills required. 
Appraisal 
enables targets to be set that contribute to the achievement of the overall strategic objectives 
of the organisation. It also identifies skills and performance gaps, and provides information relevant to 
reward levels. 
Training and development 
ensure skills remain up to date, relevant, and comparable with (or better 
than) the best in the industry. 
The 
reward system 
should motivate and ensure valued staff are retained. 
Performance 
depends on each of the four components and how they are co-ordinated. 
These topics are all covered in Part D of the Interactive Text. 
1.8.4 The HR plan 
HRM planning 
should be based on the 
organisation's strategic planning processes
, in relation to 
analysis of the labour market, forecasting of the external supply and internal demand for labour, job 
analysis and plan implementation. 
Human resource planning concerns the acquisition, utilisation, improvement and return of an 
enterprise's human resources. Human resource planning deals with: 

Recruitment 

Retention (company loyalty, to retain skills and reduce staff turnover) 

Downsizing (reducing staff numbers) 

Training and retraining to enhance the skills base 
The process of human resources planning 
1. STRATEGIC ANALYSIS 

Of the environment 

Of the organisation's manpower strengths and 
weaknesses, opportunities and threats 

Of the organisation's use of employees 

Of the organisation's objectives 

2. FORECASTING 

Of internal demand and supply 

Of external supply 
1.8.5 Control over the HR plan 
Once the HR plan has been established, regular