ELEMENT 1: DEVELOP OPERATIONAL PLAN

Activity 1
Q1. Why is contingency plan planning important/How large do you feel a
company should be before it begins to plan for contingencies?
Contingency planning is a systematic approach which helps to identifying what can go wrong
in a situation in an organisation or company. Instead of hoping that everything will always be
as predicted, the company or organisation should identify contingency events and establish
strategies so that they can avoid or deal with them.
Contingency planning is important:
1) As it help us to generate ideas and solutions by asking the following questions:

What events may occur?

What disasters might happen during execution of the plan?

What is the worst case scenario of events for the situation?

What scenarios are possible for the situation?

What event would cause the greatest disruption of current activities and plans?

What happens if costs of the plan are excessive?

What happens if delays occur?

What if key people leave the organization?

What are the expected moves of competitors?

Who or what might delay implementation of the plan?

2) As it helps to assess risk which gives us a clear idea of:

The probability of the event happening Events that could happen should
have contingency plans to go with them.

The potential impact of the event - Events that have minimal impacts dont need a
contingency plan to deal with. However events that is likely to be very high in
damage, needs a contingency plan to reduce deficit.

3) It allows us to determine risk strategies

4) To prepare plan and identify

5) Test the plan and then implement the plan

Q2. What is the difference between an operational plan and a strategic

plan?
Strategic Plans
Strategic plans cover a three to five years time frame. Analysing the strength, weaknesses,
threats and opportunities provides a starting point. Strategic plan identifies the performance
measures used to monitor progress towards achieving the objectives. It is developed by senior
management.

Operational Plans
Operational plans can be in short term which last up to 12 months and medium term which
last between 1 to 3 years. It helps to identify resources needed, responsibilities and time
frames for action implementation. It outlines the actions required to implement each strategy
as well.
Particulars
Planning Horizon
Resources
Budget
Prepare by
Address what
Nature
Objectiveness

Operational Plans
Short term-12 months to
medium term 1 3 years
What resources are needed?
Is enough budget available
Middle management or
frontline manager
Specific department/ division
plans/team plans/individual
Very precise and specific
Short term and medium term
objective

Strategic plans
Long term 3 5 years
How to use the resources
efficiently
How to use budget efficiently
By top management
The whole organisation
General and broad
Long term objective

Activity 2
Q1. Highlight the importance of KPIs for an organisation, giving some
examples.
KPI are quantifiable measurement, agreed beforehand that reflect the critical success factors
of an organisation.

They should be:

Easy to understand
Easy to calculate
Should be shared

Importance of KPIs
It contributes towards the success of the operational plans
It helps to evaluate
Goal Measurement
Strategic goals are set by businesses in order to achieve what they desire. However they must
also measure the progress towards achieving these goals by the use of KPI. For example, a
company has a goal of augmenting the increase in sales of their product from 5% to 10%. So,
in order to know whether its achieving its goal, the company establishes a KPI called
Increase Sales. This particular KPI measures the number of sales before and after
implementing any process improvements. Without implementing the KPI, the company
would not have precise information to know if it has achieved its goal or not.
Vital Information
KPI helps business owners with an immediate overview of the overall performance of their
business. In other words is provides the necessary information needed to know if the business
is healthy and can keep up with the rude competitions. Business owners should measure and
track the KPI which is crucial to the success of the organization. These important KPIs
provides vital decision making information.
Continuity
KPIs promotes long term strategic goals and it becomes important to keep consistent
measurement overtime. Even though a company can alter its goals, the measurement of the
KPI in the organisation should remain consistent. For this reason KPIs becomes strategic to
the companys plan and vision

Activity 3
Q1. Discuss the statement that claims contingency planning makes your
strategy more resilient.

Resilient is defined as the ability to bounce back into shape or recovers quickly in a minimum
amount of time and costs from an unexpected change.
Examples of resilient:
-

If you lose your job, it will not be an option to return to it a different job
means different circumstances.

Contingency planning makes strategies more resilient as it prepares the organisation in

identifying what can go wrong in a situation and allows planning for an alternative plan
which will help to bounce back.

Activity 4
Q1. Planning should include resource planning. Give your reasons.
Resource planning is a detailed summary of all types of resources required to complete a
specific task. It can be easily defined as summary of the level of resources needed to
complete a project. It specifies the exact quantities of labour, equipment and materials needed
to complete a project.
Reasons:
Labour
All business activity requires some labour input. The quality of the labour input will have a
significant impact on the operational success of a business. So, human resource department
can make implement new strategies to manage its employees. They can analyse whether new
employees need to be recruited or train existing employees to improve the specific skills
needed for the success of the project.
Capital
This may refer to tools, machinery, computers and other equipment that business use to
produce the goods and services they sell. Capital also means the amount the owners of a
business invest to set it up. Efficient operation often depend on capital equipment, and in
competitive markets, the more productive and advanced the capital, the greater the chance of
business success. So, with resource planning, the organization can analyze whether capital is
sufficient for the success of the project.

ELEMENT 2: PLAN AND MANAGE FOR RESOURCE

ACQUISITION
Activity 5
Q1. Discuss the importance of induction as part of your HRM strategy

Induction is the process used within many businesses to welcome new employees to the
company and prepare them for their new role.
Induction is importance as it helps to:

Build confidence about self and the organisation

Create a feeling of loyalty and belongings
Familiarize the new employee with the jobs and the job environment
Generate favourable attitudes within the new employee about peers, superiors,
subordinates and the organization
Assist the new employee to contribute to organizational success more quickly

Activity 6
Q1. Your HRM strategy should all the times support your business strategy.
Discuss.
Yes, HRM strategies should support business strategy as it relates the business strategy with
the effort to human resource to build a competitive and better organization. The HRM
strategies are there to develop the skills, behaviours and right attitudes among employees that
will allow the organization to achieve its objectives. It covers various areas of human
resources namely compensation, performance appraisal, training, recruitment and employee
relation.

Activity 7
Q1. Your purchasing strategy should support not only your business
objectives but also those of your supply chain. Explain and Justify.
Purchasing is the business function that is responsible for buying raw materials, parts,
machinery, supplies, and all other goods and services used in the production system from
paper clips to steel bar, industrial robots to computers.
Business objectives are the results one hopes to achieve and maintain as they run and grow
the business. As an entrepreneur, you are concerned with every aspect of your business and
need to have clear goals in mind for your company. Having a comprehensive list of business
objectives creates the guidelines that become the foundation for the business planning.
Some examples of business objectives are:
1)
2)
3)
4)
5)

Increase sales
Reducing costs
Increasing profit
Improving moral of the employees
Rates of growth

6) Amount of cash generated

A supply chain is a network of retailers, distributors, storage facilities, transporters and
suppliers that participate in the production, delivery, and sale of a product to the consumer. It
is typically made up of multiple companies who coordinate activities to set themselves apart
from the competition.

ELEMENT 3: MONITOR OPERATIONAL PERFORMANCE

Activity 8
Q1. Your budgets are planning as well as control tools.
(a) Explain what is budget.
(b) Explain how budgets are planning as well as control tools.

(a) A budget is a financial document representing quantitative expressions of a plan for a

defined period of time. It may include resources quantity, costs and expenses,
liabilities, assets and cash flows and income and expenses as well.
(b) Budgets are planning tools as it helps the organization analyzing and estimating the
amount needed for expenditures for the success of a project.
In this way organization has a:

Control over their finance

Ensure the continuation to fund the current commitments.
Enables confident financial decisions making and to meet objectives
It outlines on what the money will be spent and how that spending will be financed. A
budget is a planned outcome of the future - defined by the plan that the business wants
to achieve.

A budget serves as a control tool to provide standards for evaluating performance. It can
cover any of the following:
Profit planning forecast of revenues and expenses.
Cash Budgeting forecast of cash needs and sources
Balance sheet forecasting - anticipating future assets, liabilities and net worth position of the
business.

Activity 9
Q1. Distinguish between coaching and mentoring. Highlight their
importance in your HRM strategy.
Mentoring
Ongoing relationship that can last for a long
period of time
Can be more informal and meetings can take
place as and when the employee needs some
advice, guidance or support
More long-term and takes a broader view of
the person
Mentor is usually more experienced and
qualified than the employee. Often a senior
person in the organisation who can pass on
knowledge, experience and open doors to
otherwise out-of-reach opportunities
Focus is on career and personal development

Coaching
Relationship generally has a set duration
Generally more structured in nature and meetings
are scheduled on a regular basis
Short-term and focused on specific development
areas/issues
Coaching is generally not performed on the basis
that the coach needs to have direct experience of
their clients formal occupational role, unless the
coaching is specific and skills-focused
Focus is generally on development/issues at work

Company Culture
A coach or a mentor can help a new employee adjust to the culture in an organisation. New
young professionals may not be accustomed to the organizations practices and acceptable
behaviours. The coach can provide the new worker with information on the culture,
organizational structure and procedures that will help the younger professional to settle into
his/her role in the organization.
Employee Growth and Development
Coaching and mentoring programs provide the employee with real-world knowledge that
minimizes the gap between educational theory and actual business practices. Mentors also
grow in a mentoring position by improving leadership skills and remaining in touch with
other professionals. In an ideal coaching relationship, both parties learn from one another.
Professional Satisfaction

Mentoring programs help new employees adjust to the organizational structure and culture,
which helps the business by bringing new hires up to the right pace. Those serving as coaches
and mentors within an organization gain personal and professional satisfaction by sharing
their expertise with other employees.
Organizational Goals
Companies can align the goals of the business with a mentoring program to gain a
competitive edge. For example, the mentoring program can target new employees in product
development when the goal of the organization is to bring new products to the market.
Developing employees in weak areas of the company can also benefit the businesss
organizational goals.

Activity 10
Johns wages are tied to his productivity. His base wages is $10 an hour.
This week he worked 42 hours and his performance was found to be 105%
of the expected performance for a week. What should his pay be? Do you
think this form of incentive will improve workplace performance in your
workplace?

Performance = $10 x 105/100 = 10, 5

Actual hourly pay = 42 x 10, 5 = 441
His pay is $ 441
This form of incentive will improve workplace performance in the workplace as it:

Improves the performance of the employee

Motivates the workers

Meets organizational goals

Maintain a good working atmosphere

Assessment 2: True or False Quiz Questions / Statements

Element 1: Develop Operational Plan

1. An operational plan can be presented in any format. FALSE

It must be presented in a clearly recognisable type of document that the audience will
have some expectations with respect to style and contents.
2. Appendices are used to provide additional information. TRUE
This is the place to present supporting documents, statistical analysis, product
marketing materials, resumes of key employees.
3. If your business relies on specialist labour, this should be outlined carefully in your
plan. TRUE
If a problem arises, they can review their plan from the beginning. Thus, they can
identify the problem, solve it and carry on according to the plan.
4. Questions raised by a plan should be answered in the mind of the reader.
TRUE
This determines that the reader has understood the operational plan. If so, then he
should be able to answer the questions in the mind.
5. Businesses should be looked at as if they are linear in nature. TRUE

6. The planning process begins with identifying the organizational mission.

TRUE
By identifying organisational mission, it helps to set objectives which in turn are
achieved through a planning process.

7. People are an example of physical resource. FALSE

People are Human Resources. Physical Resources consists of Premises, Equipment,
vehicles and raw materials.
8. Its important to be as accurate as possible in your costings. TRUE
So as not to run out of cash. Being accurate as possible in your costing helps to know
the exact amount being spend which can prevent from saddling in unnecessary debts.
9. Fixed capital is the money you will need on a regular basis to pay for your expenses.
FALSE
Fixed capital is One off payment to purchase physical resources such as vehicles,
furniture, equipments, telephone systems, vehicles, buildings and computers.
10. It is critical to limit your Key Performance Indicators to those factors that are essential
to the organization reaching it goals. TRUE
KPI defines and measure progress towards organisational goals. They are quantifiable
measurements, agreed to beforehand, that reflect the critical success of the
organisation. It helps to measure profit and loss and related fiscal measures.

Element 2: Plan and Manage Resource Acquisition

1. Hiring an employee should be considered an investment by your business. TRUE

When you hire an employee to work for you, you will invest time, money, training
and trust.
2. When looking to hire staff, you need to carefully consider if you need any additional
help to achieve your goals. TRUE
If you dont need one, it can cause tension between how much the employee salary
and benefits will drain the businesss budget and how much extra money the
employees presence will bring in if you need one.
3. The hiring decision should be based solely on how much extra revenue a new staff
member would allow you to bring in. FALSE
We need to consider whether bringing the employee will allow the chance to produce
more products or serve more clients. Also, we need to take into consideration if an
extra employee allows you to give your customers more efficient service or quicker
delivery which in turn would lead to more customers.

4. After deciding to hire someone, you need to determine exactly what you want the
person to do for your business. TRUE
It allows us to figure what we want and narrow down the task that you want to take
off your hands- its the best way to make sure that you get the right person for the
right job.

5. Interviews should be conducted off the cuff FALSE

Interview should be well planned, by deciding where to have the interview and
choosing an interview format.
Know how to conduct the interview, by understanding your role as an interviewer, and
knowing what to ask and what not to ask.
6. Purchasing is a business function that is responsible for buying raw materials, parts,
machinery, supplies and all other goods and services used in the production system
TRUE
Its the purchasing department which is responsible to acquire the materials and
equipments needed for the success of the business and to ensure that material shortage
does not impact productivity.
7. Purchasing strategy must be linked to organizational objectives. TRUE
To be able to identify specific steps, such as market analysis, milestones and
deliverables. To know what the raw materials, parts, are machinery and supplies
needed.
8. Purchasing strategies do not need to be communicated. FALSE
The Purchasing strategies need to be communicated with the stakeholders, public and
employees. They serve as a scheme for communicating. In order to make cost
effective purchasing decisions from a group of efficient vendors who will deliver
quality goods on time.
9. Small purchases are often made from Petty Cash. TRUE
Small purchases are generally a purchase less than $100 which is made within a
department.
10. Mainframe computer would be considered a regular purchase. FALSE

Mainframe computers are expensive devices mainly for super calculation and
considered as a large unique purchase.

Element 3: Monitor & Review Operational Performance

1. Productivity = Amount of resources used / Quantity produced. FALSE

Productivity = Output/Inputs
2. Productivity can be used to measure performance in a range of areas. TRUE
Productivity is an overall measure of the ability to produce a good or service. More
specifically, productivity is the measure of how resources are managed to accomplish
objectives as stated in terms of time, quantity and quality.
3. Productivity measures are not perfect. TRUE
It gives an indication whats going wrong or not in the company.
4. The trouble with measuring productivity by output direct labour hours only is that the
productivity of one factor can be increased simply by replacing it with another factor.
TRUE
Labor productivity measures output produced per unit of labor, usually reported as
output per hour worked or output per employed person.
5. Only negative variances need to be investigated. FALSE
All variances should be investigated should it be negative variances in order to take
corrective measures and positive variances in order to improve even better.
6. Productivity within your organization is dependent on both the machinery that you
utilize and the staff within the organization. TRUE

The machineries must be up to date and well operated by the staffs which in turn
increases productivity. If productivity is not as predicted we can reward the
employees by paying them based upon their work performance. We can offer then
bonuses.

7. Worker pay = Number of hours worked*Actual hourly pay. TRUE

Enter the employee's hourly wage, along with the number of hours worked for the
time period and enter a formula to multiply the number of hours worked by the
worker's hourly wage. This will result in Worker Pay.
8. Piece rates pay people based on their hours worked. FALSE
Operation Piece rate = (Hourly base rate * operation labor standard) / 60 minutes
The term piece rate is a system of paying employees per unit of work completed,
rather than by the hour.

9. Work measurement involves using various techniques to obtain direct measurement of

the work. TRUE
To discover and eliminate loss of ineffective time
To establish standard times for performance measurements
To set operating goals and objectives
To measure performance against realistic expectations
10. Where performance gaps exist, it is important to attempt to establish a cause.
TRUE
It is importance because it shows that something is wrong which is causing the
productivity of the employees to diminish which is in turn increasing the gap in
performance. As soon as the problem is detected, they should analyze the source of
the problem in order to take corrective actions in order to reduce the gap which can
improve performance.