Interview: Shaun Tyson
Essentials of Human Resource Management
SM:
Hello, this is Steve Macaulay. This is one of a series from Cranfield
School of Management where we interview faculty about their
books. Today I am interviewing Professor Shaun Tyson about
Essentials of Human Resource Management and the issues that
arise from that. Now Shaun, you have had a wealth of experience
in human resources issues and in many ways you have been a
pioneer, particularly in the area of strategic human resources.
Would you care to give us some insights – this is now in its fifth
edition, it has gone through an enormous number of editions over
the years, how has HR developed during that time?
ST
Yes, this began as a book about personnel management it’s so old,
as you can gather from that title, but in practice what it was always
about was bringing together three elements. One is the study of
industrial relations, the other is the area of HR or personnel
management and the third area is the relevant part of organisational
behaviour. So that was the idea that was behind the book that it
would encapsulate those key issues within those three areas which
feed into what we now call human resource management. The
term human resource management wasn’t really used very much
until, especially in the UK, until about 1990. Gradually it became
more and more common, when there were a few individual
personnel directors who held out with their title, because they didn’t
like this Americanisation.
The big debate then, really was, is this different from personnel
management? Does it somehow bring a new focus to what we do
in this field and there is a conclusion, I think, which was drawn from
the various studies at the time, and from the people who looked at
this, people like David Guest and to some extent myself, Karen
Legge and others, was essentially that human resource
management, although it could be seen as a more managerial
approach to the management of people, in practice was really a
more strategic approach, which whether you talk that as being
managerial or encompassing a unitary frame of reference or
whether you realised there were pluralistic elements in the strategic
approach, was really irrelevant.
The question was, were you looking at how people are management
in terms of the needs and the objectives of the business. So that is
really how the idea of strategic HR started to become more and
more common and to become more and more of interest. This
reflected, I think, a number of things. First of all it reflected the way
that labour costs were becoming a significant part of total costs.
When it was difficult to find capital and labour was cheap, then there
Professor Shaun Tyson
was less interest in how you make the best use of labour, as labour
became more expensive and industries became less capital
intensive because they were more service sector based, so there
became a greater interest in how you manage the people in a
business.
So I think those were some of the features which developed into
what we now call human resource management: a strategic focus,
an interest in how you manage especially the costs and the
efficiency of the people side of the business, and a way of bringing
in factors – we had in our book originally the issues around
organisational behaviour, change management for example,
organisational development and the industrial relations issues
around employee engagement, communications and so on, into a
broader view of how to manage people.
SM
Now I notice these days, almost everybody in HR calls themselves
the Dave Ulrich term, business partner, which I guess is a reflection
of that. Recently there has been some debate, I think sparked by
Luke Johnson in the Financial Times, that said really you can forget
a lot of this because it doesn’t actually work in practice.
ST
Well the business partner model, as you say quite rightly, was one
that Dave Ulrich produced and I am never sure whether it is a case
of life imitating art or what is actually here, because I think he
produced his idea from a relatively small research base and his idea
was that there are four major areas in which people need to
concentrate to become true partners – HR partners to the business
– and that included the areas of, the transaction areas in fact, of
administration and looking after employee relations, employee
engagement, but also the more strategic areas of change
management and actually the link between business strategy and
HR strategy and the implementation therefore of the business
strategy with the HR strategy, and he claimed and argued that it
was the capacity to work with all four of these quadrants that made
you a good business partner.
Now, at that time people probably saw business partners as being
nothing different from being HR directors or senior HR managers
because after all, that was what they were trying to do anyway. But
gradually the concept had developed to the point where there is a
notion that the business partner is a senior consultant type who
works with the business, but there is an addition an HR director or
senior team, to whom this individual or this group of people called
business partners report and that below them or somewhere else in
the HR function, there are people who are carrying out transactional
work – that is, they are running the system, delivering the day to day
work of HR, much of which is concerned with recruitment, selection,
development, reward and the administration of all of that.
What I think has also influenced this is the introduction of new
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Professor Shaun Tyson
technology into HR, so we now have not just e-learning and erecruitment and so on, but we have HR information systems and we
have the capacity for individuals to carry out, as individual
employees, to carry much of the HR administration themselves. So
when a person gets married and changes their name or when
somebody leaves one house and moves to another, or whatever it
is, or their salary has changed – all this information can be handled
either by the line manager or by the person themselves by entry
onto a keyboard with a distributed network.
So, all of that routine stuff, gradually started to be by the technology
and then of course, it has gone to the next stage of technology,
where we can devolve to line managers a budget for the salary and
they can determine pay increases and administer them – that is
enter them into the payroll themselves, so you don’t need HR to get
involved in any of that.
We can also get to the point, which some companies have, such as
Nationwide and some other organisations, where the individual
employee can be told what their pot of money is, their total reward,
total compensation costs are – and then they can, within certain
parameters, decide which parts of the package they want for
themselves and which parts they would like to sacrifice some of
their salary for and so on – it’s a flexible benefits system.
So, these developments in technology are driving the notion that we
don’t really need HR people to do the routine administration any
more. Well, theoretically – I say this theoretically – this should
release people who are HR administrators to do more strategic
work. In practice it doesn’t often do that, first of all because they
are not the right people because they don’t really know anything
about business strategy, they have never been used to working at a
senior level with business directors.
Secondly, the way that the technology is operating doesn’t
necessarily mean that the HR person is completely released from
some of that transactional work because line managers often need
an extra pair of hands, some advice and of course employment law
itself, for example, is quite complex and they don’t always
understand what they are doing when they are forming contracts,
changing contracts or how to do this without falling foul of the law.
So there are all those sorts of issues which have made it less and
less likely that they can completely relinquish the transactional work,
but I suppose the other point is that very often new technology has
been introduced, not just to enhance the role of HR, to allow it
become more strategic, but actually it has been introduced to save
money. So, part of the cost saving of course, is to reduce the size
of the HR function, so we are not going to make these people more
strategic, we are actually going to get rid of them is probably the
answer in many cases.
In addition to that, there are shared service centres now and the
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Professor Shaun Tyson
opportunity for people to telephone in with their issues or queries,
whether they are line managers or employees.
A good example would be IBM, which used to have its call centre for
Europe I think in the south of the UK, I think it is now somewhere
like Prague where they have small group of experts who are
contactable on one common telephone number from across Europe
and those experts will be able to communicate to the individual or to
the manager through whatever language they want – they have a
language facility there and they will deal with whatever the query is.
So, if it’s a query about whether that person has a right to an
increase, for example, in pay or whether there is an issue around
career development which hasn’t been resolved, all those sorts of
issues they can telephone into this one centre. So, it’s kind of also
moving HR almost into a similar position with its employees as
many companies already have with their customers.
SM
So, in a way what you have usefully described is the current
situation – have you any views about what should HR people be
doing?
ST
Well, HR is a very context specific activity – it all depends on which
industry, where you are and what kind of activity that business or
organisation is engaged in. So there are big differences in the
public sector and the private sector; there are differences between
different industry sectors themselves. Many of these differences
are driven by the economic circumstances of the time – clearly, at
the moment the financial services industry, we are not talking much
about expansion, whereas in other parts of an operation, if it was
gas or oil exploration we might be talking about expansion. So
people do different things in different industries and the emphasis
starts to change as a consequence in what the HR function does.
So, I think, in my opinion there is a strategic role for HR and I think
that role is discharged slightly differently in different industry sectors.
In many cases, I find when I am running programmes for HR
directors, they all feel that there is something special about HR
strategy which they need to acquire – this special knowledge of.
And really what it comes down to is understanding how to relate the
business strategy to the people strategy or to create a people
strategy which will help to deliver the business strategy.
There seem to be three different ways in which that can happen
irrespective of the industry context.
One of these is the idea of just making a direct fit between the HR
and the business strategy, taking the business strategy as the
keystone and then trying to relate an HR strategy to it – its medium
to short term typically and also has to be very reactive.
The second approach is what is sometimes called resource based
view, which is this view from a series of economists who are looking
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Professor Shaun Tyson
at how it was that companies are able to compete and what made
some firms more competitive than others and the view that they took
that the approach they developed was this concept that we are
competitive or not in firms according to the way in which we use our
resources, especially if we can create resources which are rare,
inimitable, non substitutable and valued and this concept has got
itself in to the HR field because HR people realise – indeed, as do
senior managers – that one of their main resources are the staff, the
people they employ and the question of how you manage that
capability inside the organisation is seen as a source of competitive
advantage. So, that is one aspect of the resource based view, it
obviously placed the idea of HR being strategically important
because by developing and adding value to these resources
hopefully we are adding value to the business.
The third area which I think is strategically interesting from the point
of view of HR, where they can make a big HR contribution to the
strategy, is through the development of capability of the organisation
as a whole to be agile or responsive to its environment to the point
where what used to be called big change programmes are
unnecessary because the organisation has the dynamic capability to
change as it goes along. So people become naturally attuned to
change, and indeed make adjustments all the time to the market
place. This requires the company to have a very strong market
focus, a very strong brand focus, very often as it happened, but
certainly to have a very strong understanding of the market place,
but also it requires the company to have a powerful culture which
enables people to go off and do different things, but always to come
back to be doing it in the same way.
I suppose a good example of a company which I know that Cranfield
has worked with, and certainly I have worked with and done quite a
lot of development work with, is L’Oreal which has a lot of these
characteristics of the agile organisation.
So we can find good examples, I think, of companies which have
focused their HR strategy either on just making a straightforward fit
to the business strategy, or of developing the capability of the
organisation in a general way, especially through management
development, leadership and so on, and expecting that to make the
company more competitive or have focused on agility and change
management and the capability to change and be responsive to the
marketplace.
SM
Interesting, I feel as though we have covered a lot of ground during
this short discussion, so thank you very much for giving us the
benefit of your time and expertise.
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