HUMAN RESOURCE MANAGEMENT
LEVEL 6
HUMAN RESOURCE MANAGEMENT 1A
Oswell S. Chidunka
HUMAN RESOURCE MANAGEMENT 1A
Copyright
TRIUMPHANT COLLEGE
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Acknowledgements
The TRIUMPHANT COLLEGE, School of Business Management Department of
Human Resource Management wishes to thank those below for their contribution
to this Study Guide:
Helvi Mwahala Amunyela,
(Teaching and Learning Support)
Rachel Ndatala Shiwayu,
(Librarian)
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Contents
1
UNIT 1: INTRODUCTION TO HUMAN RESOURCE MANAGEMENT ..................................7
1.1
Introduction.................................................................................................................................. 8
1.2
Human resource management defined .................................................................................. 8
1.2.1
Other definitions of HRM ................................................................................................... 8
1.2.2
The objectives of HRM ...................................................................................................... 9
1.2.3
The development of the concept of HRM ..................................................................... 10
1.3
The Origins of HRM ................................................................................................................. 11
1.4
The Recent Changes and Development in the Employment Field................................... 12
1.4.1
Change in the Labor Force ............................................................................................. 12
1.4.2
High-Performance Work Systems ................................................................................. 13
1.4.3
Focus on Strategy ............................................................................................................ 15
1.4.4
Expanding into Global Markets ...................................................................................... 15
1.4.5
Technological Change in HRM ...................................................................................... 16
1.4.6
Change in the Employment Relationship ..................................................................... 16
1.4.7
Flexibility ............................................................................................................................ 19
1.5
The Nature of HRM .................................................................................................................. 20
1.5.1
1.6
2
The diversity of HRM ....................................................................................................... 21
Perspectives of HRM ............................................................................................................... 22
1.6.1
The best practice approach ............................................................................................ 23
1.6.2
The best fit approach ....................................................................................................... 24
1.7
HRM as a system ..................................................................................................................... 28
1.8
The models of HRM ................................................................................................................. 29
1.8.1
The Harvard framework ................................................................................................... 30
1.8.2
The context of HRM ......................................................................................................... 30
UNIT 2: NEED FOR HUMAN RESOURCE MANAGEMENT ............................................... 35
2.1
Introduction................................................................................................................................ 36
2.1.1
The organization of the HR function .............................................................................. 36
2.1.2
Roles and Responsibilities .............................................................................................. 37
2.1.3
Evaluating the HR function ............................................................................................. 39
2.1.4
HR shared service centres.............................................................................................. 41
2.1.5
Outsourcing HR work....................................................................................................... 42
2.1.6
Marketing the HR function .............................................................................................. 42
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2.1.7
HR budgeting .................................................................................................................... 43
2.1.8
The HR role of front-line managers ............................................................................... 44
2.2
3
Changing Role of HRM and Growing Professionalism within the HR Function ............. 45
2.2.1
The basic role ................................................................................................................... 45
2.2.2
The four roles of HR professionals, Ulrich (1998) ....................................................... 46
2.2.3
Models of HR roles........................................................................................................... 49
2.2.4
HRM Challenges in the Twenty-First Century ............................................................. 54
2.2.5
Legal issues in HRM ........................................................................................................ 54
UNIT 3: MATCHING HR NEEDS AND PEOPLE .................................................................. 65
3.1
Introduction................................................................................................................................ 66
3.1.1
3.2
Definitions .......................................................................................................................... 66
Job Design................................................................................................................................. 69
3.2.1
The characteristics of jobs .............................................................................................. 70
3.2.2
Factors affecting job design ............................................................................................ 71
3.2.3
The job characteristics model ......................................................................................... 72
3.2.4
Approaches to job design................................................................................................ 73
3.3
Role development .................................................................................................................... 74
3.4
Work Flow in Organizations .................................................................................................... 75
3.5
Job Analysis .............................................................................................................................. 78
3.5.1
Job Descriptions ............................................................................................................... 79
3.5.2
Job Specifications ............................................................................................................ 81
3.5.3
Importance of Job Analysis ............................................................................................. 83
3.6
Job Evaluation .......................................................................................................................... 85
3.6.1
Market pricing ................................................................................................................... 94
3.6.2
Computer-aided job evaluation ...................................................................................... 95
3.7
Choice of approach .................................................................................................................. 96
3.8
The Process of Human Resource Planning ......................................................................... 97
3.9
Goal Setting and Strategic Planning ..................................................................................... 99
3.10
Understanding a Shifting Labour Market ............................................................................ 102
3.10.1
Organizational factors affecting work .......................................................................... 103
3.10.2
Changes in the pattern of employment ....................................................................... 105
3.11
Recruitment ............................................................................................................................. 107
3.11.1
The recruitment and selection process. ...................................................................... 107
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4
5
3.11.2
Recruitment planning ..................................................................................................... 108
3.11.3
Selection Process........................................................................................................... 119
UNIT 4: DEVELOPING PEOPLE ........................................................................................ 135
4.1
Introduction.............................................................................................................................. 136
4.2
Employee Orientation and Socialization ............................................................................. 136
4.3
Training and Development .................................................................................................... 141
4.3.1
Needs Assessment ........................................................................................................ 141
4.3.2
Readiness for Training .................................................................................................. 143
4.3.3
Planning the Training Program .................................................................................... 144
4.3.4
Training Methods ............................................................................................................ 146
4.3.5
Implementing the Training Program ............................................................................ 153
4.3.6
Evaluation Methods........................................................................................................ 154
4.4
Orientation and Onboarding of New Employees ............................................................... 156
4.5
Performance Management ................................................................................................... 157
4.5.1
Scope and Uses ............................................................................................................. 157
4.5.2
The Process of Performance Management ............................................................... 158
4.5.3
Methods for Measuring Performance .......................................................................... 160
4.6
HR's Role in Setting a Climate for People Development ................................................. 162
4.7
Approaches to Employee Development ............................................................................. 163
4.8
Development-Related Challenges ....................................................................................... 166
REFERENCES ..................................................................................................................... 189
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1
UNIT 1: INTRODUCTION TO HUMAN RESOURCE MANAGEMENT
Learning outcomes
✓ Define the concept of HRM
✓ Define the objectives of HRM
✓ Describe the characteristics of HRM
✓ Understand how HRM developed as a concept
✓ Understand the context in which HRM operates
✓ Understand the perrspectives of HRM
✓ Understand the models of HRM
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1.1 Introduction
The practice of human resource management (HRM) is concerned with all aspects of how
people are employed and managed in organizations. It covers activities such as strategic
HRM, human capital management, corporate social responsibility, knowledge
management, organization development, resourcing (human resource planning,
recruitment and selection, and talent management), performance management, learning
and development, reward management, employee relations, employee well-being and
health and safety and the provision of employee services.
HRM practice has a strong conceptual basis drawn from the behavioural sciences and
from strategic management, human capital and industrial relations theories. This
foundation has been built with the help of a multitude of research projects. The aim of this
chapter is to provide a general introduction to the practice and underpinning concepts of
HRM. It covers the definition of HRM, the objectives of HRM, HRM theory, the
characteristics of HRM, the components of HRM systems, the development of HRM as
an approach to managing people, the views expressed about HRM by key commentators,
the context within which HRM functions, and the ethical dimensions that affect HR policy
and practice.
1.2
Human resource management defined
Human resource management (HRM) is a strategic, integrated and coherent approach to
the employment, development and well-being of the people working in organizations.
1.2.1 Other definitions of HRM
Human resource management involves all management decisions and action that affect
the nature of the relationship between the organization and its employees – its human
resources. (Beer et al, 1984)
HRM comprises a set of policies designed to maximize organizational integration,
employee commitment, flexibility and quality of work. (Guest, 1987)
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HRM consists of the following propositions: That human resource policies should be
integrated with strategic business planning and used to reinforce an appropriate (or
change an inappropriate) organizational culture, that human resources are valuable and
a source of competitive advantage, that they may be tapped most effectively by mutually
consistent policies that promote commitment and which, as a consequence, foster a
willingness in employees to act flexibly in the interests of the ‘adaptive organization’s’
pursuit of excellence. (Legge, 1989)
Human resource management is a distinctive approach to employment management
which seeks to achieve competitive advantage through the strategic deployment of a
highly committed and capable workforce, using an integrated array of cultural, structural
and personnel techniques. (Storey, 1995)
HRM is: ‘The management of work and people towards desired ends.’ (Boxall et al, 2007)
HRM is concerned with how organizations manage their workforce (Grimshaw and
Rubery, 2007)
1.2.2 The objectives of HRM
The overall purpose of human resource management is to ensure that the organization
is able to achieve success through people. HRM aims to increase organizational
effectiveness and capability – the capacity of an organization to achieve its goals by
making the best use of the resources available to it. Ulrich and Lake (1990) remarked
that: ‘HRM systems can be the source of organizational capabilities that allow fi rms to
learn and capitalize on new opportunities.’ But HRM has an ethical dimension which
means that it must also be concerned with the rights and needs of people in organizations
through the exercise of social responsibility.
Dyer and Holder (1998) analysed management’s HR goals under the headings of
contribution (what kind of employee behaviour is expected?), composition (what
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headcount, staffing ratio and skill mix?), competence (what general level of ability is
desired?) and commitment (what level of employee attachment and identification?).
The policy goals for HRM identified by Caldwell (2004) included managing people as
assets that are fundamental to the competitive advantage of the organization, aligning
HRM policies with business policies and corporate strategy, and developing a close fi t of
HR policies, procedures and systems with one another.
1.2.3 The development of the concept of HRM
The terms ‘human resource management’ (HRM) and ‘human resources’ (HR) have
virtually replaced the term ‘personnel management’ as a description of the processes
involved in managing people in organizations, although what is now described as HRM
is in practice often synonymous with what used to be described as personnel
management. In the early days of HRM it was suggested by Armstrong (1987) that:
HRM is regarded by some personnel managers as just a set of initials or old wine
in new bottles. It could indeed be no more and no less than another name for
personnel management, but as usually perceived, at least it has the virtue of
emphasizing the virtue of treating people as a key resource, the management of
which is the direct concern of top management as part of the strategic planning
processes of the enterprise. Although there is nothing new in the idea, insufficient
attention has been paid to it in many organizations.
However, commentators such as Guest (1987) and Storey (1995) regard HRM as a
substantially different model built on unitarism (employees share the same interests as
employers), individualism, high commitment and strategic alignment (integrating HR
strategy with the business strategy). It is claimed that HRM is more holistic than traditional
personnel management. HRM has also emphasized the notion that people should be
regarded as assets rather than variable costs.
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1.3
The Origins of HRM
The concept of HRM was first defined by Bakke (1966) who wrote that:
The general type of activity in any function of management is to use resources
effectively for an organizational objective. The function which is related to the
understanding, maintenance, development, effective employment, and integration
of the potential in the resource of ‘people’ I shall call simply the human resources
function.
However, HRM did not emerge in a fully-fledged form until the 1980s in the ‘matching
model’ and the Harvard framework.
The term “human resource management” is of recent origin. In its modern connotation, it
came to be used mainly from the 1980s onwards. During ancient times and for a long
period in the medieval era, production of goods was done mainly by skilled artisans and
craftsmen. They themselves owned the tools and instruments, produced articles and sold
these in the market.
As such, the question of employer-employee or master-servant relationship did not arise
in their cases. They managed their affairs themselves and with the help of the family
members. However, many effluent craftsmen also employed apprentices and certain
categories of hired labourers. There existed a very close relationship between the master
craftsmen and the apprentices, and they themselves took care of the problems facing the
apprentices and their family members.
A sort of human approach was involved in their relationship. After a prolonged period of
training, many apprentices established their own enterprises, and many others remained
attached with their master craftsmen on lucrative terms. During the medieval period, the
skilled craftsmen also formed their guilds primarily with a view to protecting the interests
of their respective trades.
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These guilds also determined the price of their products, the wages of the journeymen
and hired labourers, and regulated the terms and conditions of their employment. The
ancient and a major part of the medieval period also witnessed prevalence of certain other
distinct types of labourers. These comprised slaves, serfs and indentured labourers.
1.4
The Recent Changes and Development in the Employment Field
1.4.1 Change in the Labor Force
The term labor force is a general way to refer to all the people willing and able to work.
For an organization, the internal labor force consists of the organization's workers-its
employees and the people who have contracts to work at the organization. This internal
labor force has been drawn from the organization's external labor market, that is,
individuals who are actively seeking employment. The number and kinds of people in the
external labor market determine the kinds of human resources available to an
organization (and their cost). Human resource professionals need to be aware of trends
in the composition of the external labor market because these trends affect the
organization's options for creating a well-skilled, motivated internal labor force.
1. An Aging Workforce
The 25- to 44-year-old group will increase its numbers only slightly, so its share of the
total workforce will fall. And young workers between the ages of 16 and 24 will actually
be fewer in number. This combination of trends will cause the overall workforce to age.
Therefore, many older workers want to be allowed to gradually move toward retirement
by working part-time or taking temporary assignments. Accommodating such preferences
of older workers may become an essential HR practice. Unless a significant share of
these older workers stays in the workforce, it could be difficult for some companies to fill
all their open positions.
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2. A Diverse Workforce
The greater diversity of the labor force challenges employers to create HRM practices
that ensure that they fully utilize the talents, skills, and values of all employees. As a
result, organizations cannot afford to ignore or discount the potential contributions of
women and minorities. Employers will have to ensure that employees and HRM systems
are free of bias and value the perspectives and experience that women and minorities
can contribute to organizational goals such as product quality and customer service.
These include creating an organizational culture that values diversity, ensuring that HRM
systems are bias-free, encouraging career development for women and minorities,
promoting knowledge and acceptance of cultural differences, ensuring involvement in
education both within and outside the organization, and dealing with employees'
resistance to diversity.
3. Skill Deficiencies of the Workforce
Today's employees must be able to handle a variety of responsibilities, interact with
customers, and think creatively. To find such employees, most organizations are looking
for educational achievements. A college degree is a basic requirement for many jobs
today. Competition for qualified college graduates in many fields is intense. More
employers are rewriting job requirements to accept candidates without a degree or even
without particular technical skills required for the job; then they offer training to correct
any skills gaps. Other companies team up with universities, community colleges, and high
schools to design and teach courses ranging from basic reading to design blueprint
reading.
1.4.2 High-Performance Work Systems
Human resource management is playing an important role in helping organizations gain
and keep an advantage over competitors by becoming high-performance work systems.
These are organizations that have the best possible fit between their social system
(people and how they interact) and technical system (equipment and processes).
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Among the trends that are occurring in today's high-performance work systems are
reliance on knowledge workers, empowerment of employees to make decisions, and use
of teamwork.
1. Knowledge Workers
To meet these human capital needs, companies are increasingly trying to attract, develop,
and retain knowledge workers. Knowledge workers are employees whose main
contribution to the organization is specialized knowledge, such as knowledge of
customers, a process, or a profession.
Knowledge workers are in a position of power because they own the knowledge that the
company needs in order to produce its products and services, and they must share their
knowledge and collaborate with others in order for their employer to succeed. An
employer cannot simply order these employees to perform tasks. Managers depend on
the employees' willingness to share information. Furthermore, skilled knowledge workers
have many job opportunities, even in a slow economy. If they choose, they can leave a
company and take their knowledge to another employer. Replacing them may be difficult
and time consuming.
2. Employee Empowerment
To completely benefit from employees' knowledge, organizations need a management
style that focuses on developing and empowering employees. Employee empowerment
means giving employees responsibility and authority to make decisions regarding all
aspects of product development or customer service. Employees are then held
accountable for products and services.
In return, they share the resulting losses and rewards. HRM practices such as
performance management, training, work design, and compensation are important for
ensuring the success of employee empowerment.
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3. Teamwork
Organizations need to set up work in a way that gives employees the authority and ability
to make those decisions. One of the most popular ways to increase employee
responsibility and control is to assign work to teams. Teamwork is the assignment of work
to groups of employees with various skills who interact to assemble a product or provide
a service. Work teams often assume many activities traditionally reserved for managers,
such as selecting new team members, scheduling work, and coordinating work with
customers and other units of the organization. Work teams also contribute to total quality
by performing inspection and quality-control activities while the product or service is being
completed.
1.4.3 Focus on Strategy
They are looking at HRM as a means to support a company's strategy-its plan for meeting
broad goals such as profitability, quality, and market share. This strategic role for HRM
has evolved gradually. At many organizations, managers still treat HR professionals
primarily as experts in designing and delivering HR systems. But at a growing number of
organizations, HR professionals are strategic partners with other managers.
This means they use their knowledge of the business and of human resources to help the
organization develop strategies and to align HRM policies and practices with those
strategies. To do this, human resource managers must focus on the future as well as the
present, and on company goals as well as human resource activities. They may, for
example, become experts at analyzing the business impact of HR decisions or at
developing and keeping the best talent to support business strategy.
1.4.4 Expanding into Global Markets
Companies are finding that to survive they must compete in international markets as well
as fend off foreign competitors' attempts to gain ground. To meet these challenges,
businesses must develop global markets, keep up with competition from overseas, hire
from an international labor pool, and prepare employees for global assignments.
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This global expansion can pose some challenges for human resource management as
HR employees learn about the cultural differences that shape the conduct of employees
in other parts of the world.
1. The Global Workforce
For today's and tomorrow's employers, talent comes from a global workforce.
Organizations with international operations hire at least some of their employees in the
foreign countries where they operate. In fact, regardless of where their customers are
located, organizations are looking overseas to hire talented people willing to work for less
pay. Challenges, however, may include employees' lack of familiarity with technology and
corporate practices, as well as political and economic instability in the areas.
2. International Assignments
Besides hiring an international workforce, organizations must be prepared to send
employees to other countries. This requires HR expertise in selecting employees for
international assignments and preparing them for those assignments. Employees who
take assignments in other countries are called expatriate.
1.4.5 Technological Change in HRM
Advances in computer-related technology have had a major impact on the use of
information for managing human resources. Decision makers can easily obtain large
quantities of data and manipulate it with spreadsheets and statistical software. Two areas
of development have recently been transforming the work of HR departments: advances
in information systems and tools for analyzing data about human resources.
1.4.6 Change in the Employment Relationship
1. A Psychological Contract
We can think of that relationship in terms of a psychological contract, a description of
what an employee expects to contribute in an employment relationship and what the
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employer will provide the employee in exchange for those contributions. Instead, it
describes unspoken expectations that are widely held by employers and employees. In
the traditional version of this psychological contract, organizations expected their
employees to contribute time, effort, skills, abilities, and loyalty. In return, the
organizations would provide job security and opportunities for promotion.
A psychological contract is a set of unwritten expectations that exist between individual
employees and their employers. As Guest (2007) noted, it is concerned with: ‘The
perceptions of both parties to the employment relationship, organization and individual,
of the reciprocal promises and obligations implied in that relationship.’ A psychological
contract is a system of beliefs that encompasses the actions employees believe are
expected of them and what response they expect in return from their employer and,
reciprocally, the actions employers believe are expected of them and what response they
expect in return from their employees. The concept of the psychological contract is
commonly traced back to the early work of Argyris (1957) and to social exchange theory
(Blau, 1964). The latter explains social change and stability as a process of negotiated
exchanges between parties. However, the key developments leading to its current use as
an analytical framework were provided mainly by Schein (1965), who explained that: ‘The
notion of a psychological contract implies that there is an unwritten set of expectations
operating at all times between every member of an organization and the various
managers and others in that organization.’ This definition was amplified by Rousseau and
Wade-Benzoni (1994) as follows:
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Within organizations, as Katz and Kahn (1966) pointed out, every role is basically a set
of behavioural expectations. These expectations are often implicit – they are not defined
in the employment contract. Basic models of motivation such as expectancy theory
(Vroom, 1964) and operant conditioning (Skinner, 1974) maintain that employees behave
in ways they expect will produce positive outcomes. But they do not necessarily know
what to expect.
The psychological contract and the employment relationship
The psychological contract is best seen as a metaphor; a word or phrase borrowed from
another context that helps us make sense of our experience. The psychological contract
is a way of interpreting the state of the employment relationship. As described by Guest
et al (1996), the psychological contract may provide some indication of the answers to
the two fundamental employment relationship questions that individuals pose: ‘What can
I reasonably expect from the organization?’ and ‘What should I reasonably be expected
to contribute in return?’ But it is unlikely that the psychological contract and therefore the
employment relationship will ever be fully understood by either party.
The aspects of the employment relationship covered by the psychological contact will
include from the employee’s point of view:
•
how they are treated in terms of fairness, equity and consistency;
•
security of employment;
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•
scope to demonstrate competence;
•
career expectations and the opportunity to develop skills;
•
involvement and influence;
•
trust in the management of the organization to keep their promises.
From the employer’s point of view, the psychological contract covers such aspects of the
employment relationship as competence, effort, compliance, commitment and loyalty.
1.4.7 Flexibility
The psychological contract largely results from the HRM challenge of building a
committed, productive workforce in turbulent economic conditions-conditions that offer
opportunity for financial success but can also quickly turn sour, making every employee
expendable.
From the organization's perspective, the key to survival in a fast-changing environment is
flexibility. Organizations want to be able to change as fast as customer needs and
economic conditions change. Flexibility in human resource management includes flexible
staffing levels and flexible work schedules.
1. Flexible Staffing Levels
A flexible workforce is one the organization can quickly reshape and resize to meet its
changing needs. To be able to do this without massive hiring and firing campaigns,
organizations are using more alternative work arrangements.
i.
Alternative work arrangements are methods of staffing other than the
traditional hiring of full-time employees. There are a variety of methods, with
the following being most common:
ii.
•
Independent contractors are self-employed individuals with multiple clients.
On-call workers are persons who work for an organization only when they are needed.
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•
Temporary workers are employed by a temporary agency; client organizations pay the
agency for the services of these workers.
•
Contract workers are employed directly by a company for a specific time or on a
specific project as stipulated in a written contract.
2. Flexible Work Schedules
The globalization of the world economy and the development of e-commerce have made
the notion of a 40-hour workweek obsolete. As a result, companies need to be staffed 24
hours a day, seven days a week. Employees in manufacturing environments and service
call centers are being asked to work 12-hour days or to work afternoon or midnight shifts.
Similarly, professional employees face long hours and work demands that spill over into
their personal lives. E-mail, texts, and tweets bombard employees with information and
work demands. In the car, on vacation, on planes, and even in the bathroom, employees
can be interrupted by work demands. More demanding work results in greater employee
stress, less satisfied employees, loss of productivity, and higher turnover-all of which are
costly for companies.
1.5
The Nature of HRM
HRM was regarded by Storey (1989) as a ‘set of interrelated policies with an ideological
and philosophical underpinning’. He listed four aspects that constitute the meaningful
version of HRM:
1. A particular constellation of beliefs and assumptions;
2. A strategic thrust informing decisions about people management;
3. The central involvement of line managers; and
4. Reliance upon a set of ‘levers’ to shape the employment relationship.
As Boselie et al (2005) explained, HRM:
responds accurately and effectively to the organization’s environment and complements
other organizational systems (contingency theory) and delivers ‘added value’ through the
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strategic development of the organization’s rare, inimitable and non-substitutable
resources, embodied – literally – in its staff (the resource-based view).
The characteristics of HRM are that it is diverse, strategic and commitment-oriented,
adopts a unitary rather than pluralist viewpoint, is founded on the belief that people should
be treated as assets and is a management-driven activity. HRM tends to focus on
business values although there is a growing body of opinion (eg Guest, 2002) that it has
also to be concerned with employee-centred outcomes. In its fully developed form, HRM
functions as a system. As Schuler (1992) indicated, HRM links, integrates and coheres.
1.5.1 The diversity of HRM
There are no universal characteristics of HRM. Many models exist, and practices within
different organizations are diverse, often only corresponding to the conceptual version of
HRM in a few respects. Boxall et al (2007) remarked that: ‘Human resource management
covers a vast array of activities and shows a huge range of variations across occupations,
organizational levels, business units, firms, industries and societies.’
A distinction was made by Storey (1989) between the ‘hard’ and ‘soft’ versions of HRM.
The hard version emphasizes that people are important resources through which
organizations achieve competitive advantage. These resources have therefore to be
acquired, developed and deployed in ways that will benefit the organization. The focus is
on the quantitative, calculative and business-strategic aspects of managing human
resources in as ‘rational’ a way as for any other economic factor.
1.5.1.1 The soft version of HRM
Has its roots in humanism – an approach devoted to human interests that views people
as responsible and progressive beings. It also traces its origins to the human relations
school founded by Elton Mayo (1933), which believed that productivity was directly related
to job satisfaction and that the output of people will be high if they like their co-workers
and are given pleasant supervision. But this is a fairly remote connection. The soft version
of HRM as described by Storey (1989) involves ‘treating employees as valued assets, a
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source of competitive advantage through their commitment, adaptability and high quality
(of skills, performance and so on)’.
It therefore views employees, in the words of Guest (1999b), as means rather than
objects, but it does not go as far as following Kant’s (1781) advice: ‘Treat people as ends
unto themselves rather than as means to an end.’ The soft approach to HRM stresses
the need to gain the commitment (the ‘hearts and minds’) of employees through
involvement, communication, leadership and other methods of developing a highcommitment, high-trust organization. Attention is also drawn to the key role of
organizational culture.
1.5.1.2 The Hard version of HRM
In 1998, Karen Legge defined the ‘hard’ model of HRM as a process emphasizing ‘the
close integration of human resource policies with business strategy which regards
employees as a resource to be managed in the same rational way as any other resource
being exploited for maximum return’. In contrast, the soft version of HRM sees employees
as ‘valued assets and as a source of competitive advantage through their commitment,
adaptability and high level of skills and performance’.
It has, however, been observed by Truss (1999) that ‘even if the rhetoric of HRM is soft,
the reality is often hard, with the interests of the organization prevailing over those of the
individual’. Research carried out by Gratton et al (1999) found that in the eight
organizations they studied, a mixture of hard and soft HRM approaches was identified.
This suggested to the researchers that the distinction between hard and soft HRM was
not as precise as some commentators have implied.
1.6
Perspectives of HRM
Taking into account the concepts of the resource-based view and strategic fit, Delery and
Doty (1996) contended that ‘organizations adopting a particular strategy require HR
practices that are different from those required by organizations adopting different
strategies’ and that organizations with ‘greater congruence between their HR strategies
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and their (business) strategies should enjoy superior performance’. They identified the
three HRM perspectives set out below.
This typology provided the basis for what has become the most commonly used
classification of approaches as advocated by Richardson and Thompson (1999), which
was to adopt the terms ‘best practice’ and ‘best fit’ for the universalistic and contingency
perspectives, and ‘bundling’ as the third approach. This followed the classification made
by Guest (1997) of fit as an ideal set of practices, fit as contingency and fit as bundles.
1.6.1 The best practice approach
This approach is based on the assumption that there is a set of best HRM practices that
are universal in the sense that they are best in any situation, and that adopting them will
lead to superior organizational performance. A number of lists of ‘best practices’ have
been produced, the best known of which was produced by Pfeffer (1998a), namely:
1. employment security;
2. selective hiring;
3. self-managed teams;
4. high compensation contingent on performance;
5. training to provide a skilled and motivated workforce;
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6. reduction of status differentials;
7. sharing information.
1.6.2 The best fit approach
The best fit approach is in line with contingency theory. It emphasizes that HR strategies
should be congruent with the context and circumstances of the organization. ‘Best fi t’ can
be perceived in terms of vertical integration or alignment between the organization’s
business and HR strategies. There are three models, namely: lifecycle, competitive
strategy, and strategic configuration.
1.6.2.1 The lifecycle best fit model
The lifecycle model is based on the theory that the development of a firm takes place in
four stages: start-up, growth, maturity and decline. This is in line with product lifecycle
theory. The basic premise of this model was expressed by Baird and Meshoulam (1988)
as follows:
Human resource management’s effectiveness depends on its fit with the organization’s
stage of development. As the organization grows and develops, human resource
management programmes, practices and procedures must change to meet its needs.
Consistent with growth and development models it can be suggested that human
resource management develops through a series of stages as the organization becomes
more complex.
1.6.2.2 Best fit and competitive strategies
Three strategies aimed at achieving competitive advantage have been identified by
Porter (1985):
1. Innovation – being the unique producer.
2. Quality – delivering high quality goods and services to customers.
3. Cost leadership – the planned result of policies aimed at ‘managing away
expense’.
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It was contended by Schuler and Jackson (1987) that to achieve the maximum effect it is
necessary to match the role characteristics of people in an organization with the preferred
strategy. Accordingly, they produced the descriptions of appropriate role behaviours set
out in table below.
1.6.2.3 Strategic configuration
Another approach to best fit is the proposition that organizations will be more effective if
they adopt a policy of strategic configuration (Delery and Doty, 1996) by matching their
strategy to one of the ideal types defined by theories such as those produced by Miles
and Snow (1978). This increased effectiveness is attributed to the internal consistency or
fit between the patterns of relevant contextual, structural and strategic factors.
But as Dyer and Holder (1998) emphasized: ‘HRM goals vary according to competitive
choices, technologies or service tangibles, characteristics of their employees (eg could
be different for managers), the state of the labour market and the societal regulations
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and national culture.’ And Boxall et al (2007) noted that: ‘The general motives of HRM
are multiple.’
1.6.2.3.1 The strategic nature of HRM
Perhaps the most significant feature of HRM is the importance attached to strategic
integration. Legge (1989) argued that one of the common themes of the typical definitions
of HRM is that human resource policies should be integrated with strategic business
planning. Keith Sisson (1990) suggested that a feature increasingly associated with HRM
is the emphasis on the integration of HR policies both with one another and with business
planning more generally. John Storey (1989) believes that: ‘The concept locates HRM
policy formulation firmly at the strategic level and insists that a characteristic of HRM is
its internally coherent approach.’
1.6.2.3.2 The commitment-oriented nature of HRM
One of the aims of HRM is to promote commitment – the strength of an individual’s
identification with, and involvement in, a particular organization. It was noted by Karen
Legge (1995) that human resources ‘may be tapped most effectively by mutually
consistent policies that promote commitment and which, as a consequence, foster a
willingness in employees to act flexibly in the interests of the “adaptive organization’s”
pursuit of excellence’.
1.6.2.3.3 Focus on mutuality
The importance of mutuality (the belief that management and employees share the same
concerns and it is therefore in both their interests to work together) was emphasized by
Walton (1985a) as follows:
The new HRM model is composed of policies that promote mutuality – mutual goals,
mutual influence, mutual respect, mutual rewards, mutual responsibility. The theory is that
policies of mutuality will elicit commitment which in turn will yield both better economic
performance and greater human development.
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1.6.2.3.4 Unitary and pluralist employee relations
HRM is characterized by a unitarist rather than a pluralist view of employee relations with
the emphasis on individual contracts, not collective agreements. A unitarist view
expresses the belief that people in organizations share the same goals and work as
members of one team. The pluralist view recognizes that the interests of employees will
not necessarily coincide with their employers and suggests that the unitary view is naïve,
unrealistic and against the interest of employees
1.6.2.3.5 Treating people as assets or human capital
The notion that people should be regarded as assets rather than variable costs, in other
words, treated as human capital, was originally advanced by Beer et al (1984). HRM
philosophy, as mentioned by Legge (1995), holds that ‘human resources are valuable
and a source of competitive advantage’. Armstrong and Baron (2002) stated that:
People and their collective skills, abilities and experience, coupled with their ability
to deploy these in the interests of the employing organization, are now recognized
as making a significant contribution to organizational success and as constituting
a major source of competitive advantage.
1.6.2.3.6 Focus on business values
The concept of hard HRM is based on a management- and business-oriented philosophy.
It is concerned with the total interests of the organization – the interests of the members
of the organization are recognized but subordinated to those of the enterprise. Hence the
importance attached to strategic integration and strong cultures, which flow from top
management’s vision and leadership, and which require people who will be committed to
the strategy, who will be adaptable to change and who fit the culture.
In 1995 Legge noted that HRM policies are adapted to drive business values and are
modified in the light of changing business objectives and conditions. She suggested that
evidence indicated more support for the hard versions of HRM than the soft version.
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1.6.2.3.7 Organization- versus employee-centred outcomes
In line with labour process theory, Thompson and Harley (2007) asserted that; ‘What is
happening is a process of “capitalizing on humanity” rather than investing in human
capital.’ The emphasis may have been on the business orientation of HRM but there is a
growing body of opinion that there is more to HRM than that.
1.7
HRM as a system
An open systems view of HRM has been developed by Wright and Snell (1998). An open
system is dependent on the environment for inputs, which are transformed during
throughput to produce outputs that are exchanged in the environment. Wright and Snell
defined an open HRM system as a competence model of organizations. Skills and abilities
are treated as inputs from the environment; employee behaviours are treated as
throughput; and employee satisfaction and performance are treated as outputs.
In its traditional form, HRM, as pointed out by Boselie et al (2005), can be viewed as ‘a
collection of multiple discrete practices with no explicit or discernible link between them’.
In contrast ‘the more strategically minded systems approach views HRM as an integrated
and coherent bundle of mutually reinforcing practices’. As Kepes and Delery (2007)
comment, a defining characteristic of HRM is that HRM systems and not individual HRM
practices are the source of competitive advantage. ‘Coherent and internally aligned
systems form powerful connections that create positive synergistic effects on
organizational outcomes.’
As illustrated in the diagram below an HRM system brings together HR philosophies that
describe the overarching values and guiding principles adopted in managing people, HR
strategies that define the direction in which HRM intends to go, HR policies that provide
guidelines defining how these values, principles and the strategies should be applied and
implemented in specific areas of HRM, HR processes that comprise the formal
procedures and methods used to put HR strategic plans and policies into effect, linked
HR practices that consist of the approaches used in managing people, and HR
programmes that enable HR strategies, policies and practices to be implemented
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according to plan. Becker and Gerhart (1996) have classified these components into three
levels: the system architecture (guiding principles), policy alternatives, and processes and
practices.
1.8
The models of HRM
One of the first detailed statements of the HRM concept was made by the Michigan school
(Fombrun et al, 1984). They held that HR systems and the organization structure should
be managed in a way that is congruent with organizational strategy (hence the name
‘matching model’). They further explained that there is a human resource cycle that
consists of four generic processes or functions that are performed in all organizations:
selection, appraisal, rewards and development.
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1.8.1 The Harvard framework
The pioneers of HRM in the 1980s were the Harvard school of Beer et al (1984) who
developed what Boxall (1992) calls the ‘Harvard framework’. This framework is based on
their belief that the problems of historical personnel management can only be solved:
“When managers develop a view point of how they wish to see employees involved in
and developed by the enterprise, and of what HRM policies and practices may achieve
those goals. Without either a central philosophy or a strategic vision – which can be
provided only by general managers – HRM is likely to remain a set of independent
activities, each guided by its own practice tradition”
Beer and his Harvard colleagues believed that ‘Today, many pressures are demanding a
broader, more comprehensive and more strategic perspective with regard to the
organization’s human resources.’ These pressures have created a need for: ‘A longerterm perspective in managing people and consideration of people as potential assets
rather than merely a variable cost.’
They were the first to underline the HRM tenet that it belongs to line managers. The
Harvard school suggested that HRM had two characteristic features:
1) Line managers accept more responsibility for ensuring the alignment of
competitive strategy and HR policies, and
2) HR has the mission of setting policies that govern how HR activities are developed
and implemented in ways that make them more mutually reinforcing.
1.8.2 The context of HRM
HRM processes take place within the context of the internal and external environment of
the organization. HR practitioners will gain credibility and make a greater strategic
contribution if they can analyse the impact of external events on company policies and
practices. They need to be aware of the fact that what the organization does and what
they need to do will depend to a large extent on its external and internal environments.
They need to understand contingency theory.
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1.8.2.1 Contingency theory
Contingency theory tells us that definitions of HR aims, policies and strategies, lists of
activities and analyses of the role of the HR department are valid only if they are related
to the situation of the organization. Legge (1978) in her influential book, Power, Innovation
and Problem Solving in Personnel Management was the first commentator to insist that
a contingent approach should be adopted to personnel management, i.e., ‘the design and
implementation of policy that matches, or is contingent upon specified organizational
requirements and circumstances’.
Contingency theory states that the relationship between the relevant independent
variables (e.g., HRM policies and practices) and the dependent variable (performance)
will vary according to the influences such as company size, age and technology, capital
intensity, degree of unionization, industry/sector ownership and location.
Contingency theory is associated with the concept of fit – the need to achieve congruence
between an organization’s HR strategies, policies and practices and its business
strategies within the context of its external and internal environment.
1.8.2.2 Contextual factors
The contextual factors that influence HR policies and practices are the external and
internal environments of the organization.
1.8.2.2.1 The external environment
The external environment consists of social, political, legal and economic developments
and competitive pressures. Global competition in mature production and service sectors
is increasing. This is assisted by easily transferable technology and reductions in
international trade barriers. Customers are demanding more as new standards are
reached through international competition. Organizations are reacting to this competition
by becoming ‘customer-focused’, speeding up response times, emphasizing quality and
continuous improvement, accelerating the introduction of new technology, operating more
flexibly and ‘losing cost’. The pressure has been for businesses to become ‘lean and
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mean’, downsizing and cutting out layers of management and supervision. They are
reducing permanent staff to a core of essential workers, increasing the use of peripheral
workers (sub-contractors, temporary staff) and ‘outsourcing’ work to external service
providers.
1.8.2.2.2 The internal environment
The following aspects of the internal environment will affect HR policy and practice:
•
the type of business or organization – private, public or voluntary sector;
manufacturing or service;
•
the size of the organization;
•
the age or maturity of the organization;
•
the technology or key activities of the business will determine how work is
organized, managed and carried out;
•
the type of people employed, eg professional staff, knowledge workers,
technicians, administrators, production workers, sales and customer service staff;
•
the organization’s culture – the established pattern of values, norms, beliefs,
attitudes and assumptions that shape the ways in which people behave and things
get done.
SUMMARY
The objectives of HRM
•
To ensure that the organization is able to achieve success through people.
•
To increase organizational effectiveness and capability.
•
To be concerned with the rights and needs of people in organizations through the
exercise of social responsibility.
The policy goals of HRM (Guest)
•
strategic integration;
•
high commitment;
•
high quality;
•
flexibility.
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The characteristics of HRM
•
diverse (hard and soft);
•
strategic;
•
commercial orientation;
•
focus on mutuality;
•
unitary view;
•
people treated as assets or human capital;
•
focus on business values;
•
organization-centred orientation.
How HRM developed as a concept Emerged in the 1980s in the form of the Harvard
framework and the matching model.
The context in which HRM operates HRM practice contingent on the circumstances in
which the organization operates, i.e., its internal and external environment.
Appreciate the ethical dimensions of HRM
HRM must exercise social responsibility – it must be concerned with the interests
(wellbeing) of employees and act ethically with regard to the needs of people in the
organization and the community.
Questions
1. You are head of human resources in a medium-sized manufacturing company.
Your new chief executive mentions to you that in her last organisation they had a
personnel manager and asks you to explain the difference, if any.
2. At a meeting of trustees the chief executive of a medium-sized charity proposed
that a director of human resources should be appointed. Two trustees protested
that the term ‘human resources’ implied that employees would just be treated as
factors of production not as people. How would you respond?
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3. John Storey wrote in 1995 that: ‘Human resource management is a distinctive
approach to employment management which seeks to achieve competitive
advantage through the strategic deployment of a highly committed and capable
workforce, using an integrated array of cultural, structural and personnel
techniques.’ Examine the approach to HRM in your own organization or any other
organization known to you and analyse the extent to which Storey’s description of
HRM applies.
4. Harley and Hardy (2004) wrote that ‘Managers can use the language of HRM to
establish the legitimacy of their practices, even if the latter bear little resemblance
to the former.’ What is the meaning and significance of this statement?
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2
UNIT 2: NEED FOR HUMAN RESOURCE MANAGEMENT
✓ Understand the roles and responsibilities of Human Resource Management.
✓ Analyse the organisation of the HR function.
✓ Evaluate the HR function.
✓ Understand Outsourcing of work.
✓ Discuss budgeting and marketing the HR function.
✓ Analyse the role of frontline managers.
✓ Discuss the changing role of HRM.
✓ Discuss HRM challenges.
✓ Legal issues involved in HRM
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2.1
Introduction
The role of the HR function is to take initiatives and provide guidance, support and
services on all matters relating to the organization’s employees. Essentially, the HR
function is in the delivery business – providing the advice and services that enable
organizations to get things done through people. The function ensures that HR strategies,
policies and practices are introduced and maintained that cater for everything concerning
the employment, development and well-being of people and the relationships that exist
between management and the workforce.
It plays a major part in the creation of an environment that enables people to make the
best use of their capacities, to realize their potential to the benefit of both the organization
and themselves and, by improving the quality of working life, to achieve satisfaction
through their work Increasingly the role of the HR function is seen to be business-oriented
– contributing to the achievement of sustained competitive advantage. But one of the
issues explored by Francis and Keegan (2006) is the tendency for a focus on business
performance outcomes to obscure the importance of employee well-being in its own right.
2.1.1 The organization of the HR function
The organization and staffing of the HR function clearly depends on the size of the
business, the extent to which operations are decentralized, the type of work carried out,
the kind of people employed and the role assigned to the HR function. Broadly, the larger
the organization, the higher the ratio of employees to practitioners.
The role of the HR function and the practice of human resource management vary
immensely in different organizations. As Sisson (1995) has commented, HR management
is not a single homogeneous occupation – it involves a variety of roles and activities that
differ from one organization to another and from one level to another in the same
organization. And Tyson (1987) has claimed that the HR function is often ‘balkanized’ –
not only is there a variety of roles and activities but these tend to be relatively self-centred,
with little passage between them. Hope-Hailey et al (1998) believe that HR could be
regarded as a ‘chameleon function’ in the sense that the diversity of practice established
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by their research suggests that ‘contextual variables dictate different roles for the function
and different practices of people management’.
2.1.2 Roles and Responsibilities
One way to define the responsibilities of HR departments is to think of HR as a business
within the company with three product lines:
1. Administrative services and transactions – Handling administrative tasks
(for example, hiring employees and answering questions about benefits)
efficiently and with a commitment to quality. This requires expertise in the
particular tasks.
2. Business partner services – Developing effective HR systems that help the
organization meet its goals for attracting, keeping, and developing people with
the skills it needs. For the systems to be effective, HR people must understand
the business so they can understand what the business needs.
3. Strategic partner – Contributing to the company's strategy through an
understanding of its existing and needed human resources and ways HR
practices can give the company a competitive advantage. For strategic ideas
to be effective, HR people must understand the business, its industry, and its
competitors.
Another way to think of HR responsibilities is in terms of specific activities. Table 1.1
details the responsibilities of human resource departments.
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The Ulrich three-legged stool model
The three-legged stool model for the organization of the HR function emerged from Dave
Ulrich’s work in the 1990s (Ulrich 1995, 1997a, 1997b, 1998). It divides the function into
the following three parts.
1. Centres of expertise
These specialize in the provision of high-level advice and services on key HR
activities.
2. Strategic business partners
These work with line managers to help them reach their goals through effective
strategy formulation and execution (Ulrich and Brockbank, 2005b). They are often
‘embedded’ in business units or departments.
3. Shared service centres
These handle all the routine ‘transactional’ services across the business. These
include such activities as recruitment, absence monitoring and advice on dealing
with employee issues such as discipline and absenteeism.
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2.1.3 Evaluating the HR function
It is necessary to evaluate the contribution of the HR function in order to ensure that it is
effective at both the strategic level and in terms of service delivery and support. The prime
criteria for evaluating the work of the function are its ability to operate strategically and its
capacity to deliver the levels of services required.
Research conducted by the Institute of Employment Studies (Hirsh, 2008) discovered that
the factors that correlated most strongly with line managers’ and employees’ satisfaction
with HR were:
•
being well supported in times of change;
•
HR giving good advice to employees;
•
being well supported when dealing with difficult people or situations;
•
HR getting the basics right.
The methods that can be used to evaluate these dimensions are described below.
a. Quantitative criteria
These consist of:
•
Organizational: added value per employee, profit per employee, sales value per
employee, costs per employee and added value per employment costs.
•
Employee behaviour: retention and turnover rates, absenteeism, sickness,
accident rates, grievances, disputes, references to employment tribunals,
successful suggestion scheme outcomes.
•
HR service levels and outcomes: time to fill vacancies, time to respond to
applicants, ratio of acceptances to offers made, cost of replies to advertisements,
training days per employee, time to respond to and settle grievances, measurable
improvements in organizational performance as a result of HR practices, ratio of
HR costs to total costs, ratio of HR staff to employees, the achievement of specified
goals.
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b. User reactions
The internal customers of HR (the users of HR services) can provide important feedback
on HR effectiveness. Users can be asked formally to assess the extent to which the
members of the HR function demonstrate their abilities in the following ways.
c. Service level agreements
A service level agreement (SLA) is an agreement between the provider of HR services
and the customers who use the service on the level of service that should be provided. It
sets out the nature of the service provided, the volume and quality to be achieved by the
service and the response times the provider must attain after receiving requests for help.
The agreement provides the basis for monitoring and evaluating the level of service.
d. Employee satisfaction measures
The degree to which employees are satisfied with HR policies and practices can be
measured by attitude surveys. These can obtain opinions on such matters as their work,
their pay, how they are treated, their views about the company and their managers, how
well they are kept informed, the opportunities for learning and career development and
their working environment and facilities.
e. Benchmarking
In addition to internal data, it desirable to benchmark HR services. This means comparing
what the HR function is doing with what is happening in similar organizations. This may
involve making direct comparisons using quantified performance data or exchanging
information on ‘good practice’ that can be used to indicate where changes are required
to existing HR practices or to provide guidance on HR innovations. Organizations such
as Saratoga provide benchmarking data under standardized and therefore comparable
headings for their clients.
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f. The HR scorecard
The HR scorecard developed by Beatty et al (2003) follows the same principle as the
balanced scorecard, i.e., it emphasizes the need for a balanced presentation and analysis
of data. The four headings of the HR scorecard are:
1. HR competencies – administrative expertise, employee advocacy, strategy
execution and change agency.
2. HR
practices
–
communication,
work
design,
selection,
development,
measurement and rewards.
3. HR systems – alignment, integration and differentiation.
4. HR deliverables – workforce mindset, technical knowledge, and workforce
behaviour.
These are all influenced by the factors that determine the strategic success of the
organization, i.e. operational excellence, product leadership and customer intimacy.
2.1.4 HR shared service centres
An HR shared service centre is an HR unit or an outsourced facility that provides HR
services that are available to a number of parties in the organization. The customer or
user defines the level of the service and decides which services to take up. Thus, ‘the
user is the chooser’ (Ulrich, 1995). A basic HR shared service centre carries out various
routine administrative activities such as recruitment administration, pensions and benefits
administration, payroll changes and absence monitoring. This can be extended to cover
advice on employment matters such as the handling of disciplinary issues and
grievances. A centre may use call – centre technology and/or provide self-service facilities
for line managers and employees though an intranet system.
The organizations covered by the research conducted by Reilly (2000) on behalf of the
Institute of Employment Studies identified one or more of the following reasons for
providing shared services:
•
HR will be consumer driven, more accessible, more professional;
•
The quality of HR services will be improved in terms of using better processes,
delivery to specification, time and budget, incorporation of good practice, the
achievement of greater consistency and accuracy;
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•
The process can help to achieve organizational flexibility – a common service will
support customers during business change;
•
It can support the repositioning of HR so that it moves from a purely operational to
a more strategic role.
The advantages of shared services include lower costs, better quality, more efficient
resourcing and better customer service. But there are disadvantages, which include loss
of face-to-face contact, deskilling administrative jobs and, potentially, remoteness from
the users.
2.1.5 Outsourcing HR work
Increasingly, HR services that would previously have been regarded as a business’s own
responsibility to manage are now routinely being purchased from external suppliers.
Managements are facing Tom Peters’ (1988) challenge: ‘prove it can’t be subcontracted’.
The formal policy of a major global corporation reads: ‘Manufacture only those items –
and internally source only those support services – that directly contribute to, or help to
maintain, our competitive advantage.’
The HR function is well positioned to outsource some of its activities to agencies or
organizations that act as service providers in such areas as training, recruitment,
executive search, occupational health and safety services, employee welfare and
counselling activities, childcare, payroll administration and legal advisory services. HR
functions that have been given responsibility for other miscellaneous activities such as
catering, car fleet management, facilities management and security (because there is
nowhere else to put them) may gladly outsource them to specialist firms.
2.1.6 Marketing the HR function
Top management and line managers are the internal customers whose wants and needs
the HR function must identify and meet. How can this be done?
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First, it is necessary to understand the needs of the business and its critical success
factors – where the business is going, how it intends to get there and what are the things
that are going to make the difference between success and failure. These data need to
be converted into what are in effect marketing plans for the development of products and
services to meet ascertained needs – of the business and its managers and employees.
The plan should establish the costs of introducing and maintaining these initiatives and
the benefits that will be obtained from them. Every effort must be made to quantify these
benefits in financial terms.
The next step in the marketing process is to persuade management that this is a product
or service the business needs. This means making out the business case – spelling out
its benefits in terms of added value and the impact it will make on the performance of the
business and indicating what financial and people resources will be required.
This approach is akin to ‘branding’ in product planning, which identifies the product or
service, spells out the benefits it provides and differentiates it from other services, thus
bringing it to the attention of customers and enhancing its image. Presentation is
important through logos and distinctive brochures. Some HR departments brand products
with an immediately identifiable name such as ‘Genome’ or ‘Gemini’. Others ‘brand’ their
intranet portal by means of a special design and use the same motif on other internal
written communications.
2.1.7 HR budgeting
HR budgets are prepared like any other functional department budget in the stages set
out below.
Stages in the preparation of HR budgets
1. Define functional objectives and plans.
2. Forecast the activity levels required to achieve objectives and plans in the light of
company budget guidelines and assumptions on future business activity levels and
any targets for reducing overheads or for maintaining them at the same level.
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3. Assess the resources (people and finance) required to enable the activity levels to
be achieved.
4. Cost each activity area – the sum of these costs will be the total budget
Budgets need to be justified and protected. Justification means ensuring in advance that
objectives and plans are generally agreed – there should be no surprises in a budget
submitted to top management. A cast-iron business case should then be prepared to
support the forecast levels of activity in each area and, on a cost/benefit basis, to justify
any special expenditure. Ideally, the benefit should be defined in terms of a return on
investment expressed in financial terms.
The best way to protect a budget it to provide in advance a rationale for each area of
expenditure that proves that it is necessary and will justify the costs involved. The worst
thing that can happen is to be forced onto the defensive. If service delivery standards
(service level agreements) are agreed and achieved, these will provide a further basis for
protecting the budget.
2.1.8 The HR role of front-line managers
HR can initiate new policies and practices but it is the line that has the main responsibility
for implementing them. In other words, ‘HR proposes but the line disposes.’ As Guest
(1991) says, ‘HRM is too important to be left to personnel managers.
If line managers are not inclined favourably towards what HR wants them to do, they won’t
do it, or if compelled to, they will be half-hearted about it. On the basis of their research,
Guest and King (2004) noted that ‘better HR depended not so much on better procedures
but better implementation and ownership of implementation by line managers’.
As pointed out by Purcell et al (2003) high levels of organizational performance are not
achieved simply by having a range of well-conceived HR policies and practices in place.
What makes the difference is how these policies and practices are implemented. That is
where the role of line managers in people management is crucial: ‘The way line managers
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implement and enact policies, show leadership in dealing with employees and in
exercising control come through as a major issue’. Purcell et al noted that dealing with
people is perhaps the aspect of their work in which line managers can exercise the
greatest amount of discretion and they can use that discretion by not putting HR’s ideas
into practice. As they point out, it is line managers who bring HR policies to life.
A further factor affecting the role of line managers is their ability to do the HR tasks
assigned to them. People-centred activities such as defining roles, interviewing, reviewing
performance, providing feedback, coaching and identifying learning and development
needs all require special skills. Some managers have them: many don’t. Performancerelated pay schemes sometimes fail because of untrained line managers.
Hutchinson and Purcell (2003) made the following recommendations on how to improve
the quality of the contribution line managers make to people management. Improving the
quality of line managers as people managers, Hutchinson and Purcell (2003):
•
Provide them with time to carry out their people management duties, which are
often superseded by other management duties.
•
Select them carefully with much more attention being paid to the behavioural
competencies required.
•
Support them with strong organizational values concerning leadership and people
management.
•
Encourage the development of a good working relationship with their own
managers.
•
Ensure they receive sufficient skills training to enable them to perform their people
management activities such as performance management.
•
2.2
Changing Role of HRM and Growing Professionalism within the HR Function
2.2.1 The basic role
The roles of HR practitioners vary widely according to the extent to which they are
generalist (e.g., HR director, HR manager, business partner), or specialist (e.g., head of
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learning and development, head of talent management, head of reward), the level at
which they work (strategic, executive or administrative), the needs of the organization,
the context within which they work and their own capabilities.
Roles can be proactive, reactive or a mixture of both. At a strategic level, HR people take
on a proactive role. Research conducted by Hoque and Noon (2001) established that:
‘The growing number of specialists using the HR title are well qualified, are more likely to
be involved in strategic decision-making processes and are most likely to be found in
workplaces within which sophisticated methods and techniques have been adopted.’ As
such, they act as business partners, develop integrated HR strategies, intervene,
innovate, operate as internal consultants and volunteer guidance on matters concerning
upholding core values, ethical principles and the achievement of consistency. They focus
on business issues and working with line managers to deliver performance targets. They
contribute to improving organizational capability – the capacity of the organization to
perform effectively and thus reach its goals. They act as change agents and internal
consultants, as discussed later in this chapter.
In some situations, they play a mainly reactive role. They spend much of their time doing
what they are told or asked to do, responding to requests for services or advice. They
provide the administrative systems required by management. This is what Storey (1992a)
refers to as the non – interventionary role, in which HR people merely provide a service
to meet the demands of management and front-line managers. But many HR practitioners
are involved in service delivery and the importance of this aspect of their work should not
be underestimated. Service delivery includes transactional activities such as recruitment,
training and advisory services.
2.2.2 The four roles of HR professionals, Ulrich (1998)
1. Managing strategic human resources.
2. Managing employee contribution.
3. Managing transformation and change.
4. Managing HR infrastructures to support line managers.
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2.2.2.1 The business partner role
The concept of HR practitioners as business partners has become very popular. In
essence, the concept is that, as business partners, HR specialists share responsibility
with their line management colleagues for the success of the enterprise and get involved
with them in implementing business strategy and running the business. They are often
‘embedded’ in business units or departments.
This concept was first mooted in 1985 by Shaun Tyson. He used the term ‘business
manager’ rather than ‘business partner’ but it is much the same. He stated that personnel
specialists carrying out this role integrate their activities closely with management and
ensure that they serve a long-term strategic purpose. They have the capacity to identify
business opportunities, to see the broad picture and to understand how their role can help
to achieve the company’s business objectives. They anticipate needs, act flexibly and are
proactive. This is a clear case of a prophet not being honored in their own country. In
1998, 13 years later, Dave Ulrich seized the HR community’s imagination with his similar
concept of the HR executive as a ‘strategic partner’.
In describing his strategic partner model, Ulrich maintained that as champions of
competitiveness in creating value, HR executives can deliver excellence by becoming
partners with senior and line managers in strategy execution, helping to improve planning
from the conference room to the marketplace and impelling and guiding serious
discussion of how the company should be organized to carry out its strategy. He
suggested that HR should join forces with operating managers in systematically
assessing the importance of any new initiatives they propose and obtaining answers to
the following questions: Which ones are really aligned with strategy implementation?
Which ones should receive immediate attention and which can wait? Which ones, in short,
are truly linked to business results?
As business partners HR practitioners work closely with their line management
colleagues. They are aware of business strategies and the opportunities and threats
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facing the organization. They are capable of analysing organizational strengths and
weaknesses and diagnosing the issues facing the enterprise and their human resource
implications. They know about the critical success factors that will create competitive
advantage and they adopt a ‘value added’ approach when making a convincing business
case for innovations.
2.2.2.2 The strategic roles of HR specialists
•
To formulate and implement in conjunction with their management colleagues
forward-looking HR strategies that are aligned to business objectives and
integrated with one another.
•
To contribute to the development of business strategies. In doing so they adopt an
‘outside-in’ approach as described by Wright et al (2004) in which the starting point
is the business, including the customer, competitor and business issues it faces.
The HR strategy then derives directly from these challenges to create real
solutions and add real value.
•
They work alongside their line management colleagues to provide on an everyday
basis continuous support to the implementation of the business or operational
strategy of the organization, function or unit.
2.2.2.3 The change agent role
The implementation of strategy means that HR specialists have to act as change agents,
facilitating change by providing advice and support on its introduction and management.
Caldwell (2001) categorizes HR change agents in four dimensions.
HR specialists as change agents – the four dimensions, Caldwell (2001)
1. Transformational change – a major change that has a dramatic effect on HR policy
and practice across the whole organization.
2. Incremental change – gradual adjustments of HR policy and practices that affect
single activities or multiple functions.
3. HR vision – a set of values and beliefs that affirm the legitimacy of the HR function
as a strategic business partner.
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4. HR expertise – the knowledge and skills that defi ne the unique contribution the
HR professional can make to effective people management.
2.2.2.4 The internal consultancy role
As internal consultants, HR practitioners’ function like external management consultants,
working alongside their colleagues – their clients – in analysing problems, diagnosing
issues and proposing solutions. They will be involved in the development of HR processes
or systems and in ‘process consulting’. The latter deals with process areas such as
organization, team building and objective setting
2.2.2.5 The service delivery role
The basic role of HR specialists is to deliver services to internal customers. These include
management, line managers, team leaders and employees. The services may be general,
covering all aspects of HRM or services may only be provided in one or two areas by
specialists. The focus may be on the requirements of management (eg, resourcing), or it
may extend to all employees (eg, health and safety).
2.2.2.6 The guardian of values role
HR practitioners may act as the guardians of the organization’s values and ethical
standards concerning people. They point out when behaviour conflicts with those values
or where proposed actions will be inconsistent with them. In a sense, their roles require
them to act as the ‘conscience’ of management – a necessary role but not an easy one
to play. Ulrich (1998) called this the ‘employee champion’ role.
2.2.3 Models of HR roles
A number of models classifying the types of roles played by HR specialists have been
produced, as summarized below. These simplify the complex roles that HR professionals
often have to play which, in different contexts or times, may change considerably or may
mean adopting varied approaches to meet altering circumstances. They are therefore not
universal but they do provide some insight into the different ways in which HR specialists
operate.
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Dave Ulrich and Wayne Brockbank (2005a and 2005b)
In 1998 Dave Ulrich produced his model in which he suggested that as champions of
competitiveness in creating and delivering value, HR professionals carry out the roles of
strategic partners, administrative experts, employee champions and change agents. The
response to this formulation concentrated on the business partner role. Ulrich in
conjunction with Wayne Brockbank reformulated the 1998 model in 2005, listing the
following roles:
•
Employee advocate – focuses on the needs of today’s employees through
listening, understanding and empathizing.
•
Human capital developer – in the role of managing and developing human capital
(individuals and teams), focuses on preparing employees to be successful in the
future.
•
Functional expert – concerned with the HR practices that are central to HR value,
acting with insight on the basis of the body of knowledge they possess. Some are
delivered through administrative efficiency (such as technology or process design),
and others through policies, menus and interventions. Necessary to distinguish
between the foundation HR practices – recruitment, learning and development,
rewards, etc. – and the emerging HR practices such as communication, work
process and organization design, and executive leadership development.
•
Strategic partner – consists of multiple dimensions: business expert, change
agent, strategic HR planner, knowledge manager and consultant, combining them
to align HR systems to help accomplish the organization’s vision and mission,
helping managers to get things done, and disseminating learning across the
organization.
•
Leader – leading the HR function, collaborating with other functions and providing
leadership to them, setting and enhancing the standards for strategic thinking and
ensuring corporate governance.
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2.2.3.1 The qualities required by HR professionals
Effective HR practitioners:
•
Operate strategically – they have the ability to see the big picture and take, and
implement, a strategic and coherent view of the whole range of HR policies,
processes and practices in relation to the business as a whole; they ensure that
their innovations and services are aligned to business needs and priorities while
taking account of the needs of employees and other stakeholders.
•
Have the capability to facilitate change, initiating it when necessary and acting as
a stabilizing force in situations where change would be damaging.
•
Appreciate organizational and individual needs; against a background of their
knowledge of organizational behaviour, they understand how organizations
function and the factors affecting individual motivation and commitment, they are
capable of analysing and diagnosing the people requirements of the organization
and proposing and implementing appropriate action.
•
Are business – like – they have to demonstrate that they can make value-added
contributions.
•
Are persuasive – they present the proposals and recommendations emerging from
their interventions persuasively, making out a compelling business case;
innovations and ideas are sold to management on the basis of the practical and,
wherever possible, measurable benefits that will result from their implementation
(it is not the idea itself that is saleable but the result it can achieve).
•
Use an ‘evidence-based management’ approach (as defined by Rousseau, 2006:
‘Evidence-based management means translating principles based on best
evidence into organizational practices. Through evidence-based management,
practising managers develop into experts informed by social science and
organizational research’).
•
Deliver their services efficiently and effectively.
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2.2.3.2 Skills of HRM Professionals
The Society for Human Resource Management (SHRM) has defined sets of knowledge
and skills associated with success, grouping these into nine categories it calls HR
success competencies: HR expertise, relationship management, consultation, leadership
and navigation, communication, global and cultural effectiveness, ethical practice, critical
evaluation, and business acumen. As the diagram shows, these fall into four clusters of
competencies: technical, interpersonal, business, and leadership.
2.2.3.3 The ethical dimension
As Boxall et al (2007) point out: ‘While HRM does need to support commercial outcomes
(often called “the business case”), it also exists to serve organizational needs for social
legitimacy.’ This means exercising social responsibility, i.e. being concerned for the
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interests (wellbeing) of employees and acting ethically with regard to the needs of people
in the organization and the community
Within the organization the requirement is to:
•
treat people equally in terms of the opportunities for employment, learning and
development provided for them;
•
treat people according to the principle of procedural justice (Adams, 1965 and
Leventhal, 1980), i.e. the ways in which people are managed are fair, consistent,
transparent and properly consider the views and needs of employees;
•
treat people according to the principles of distributive justice (Adams, 1965 and
Leventhal, 1980), i.e. rewards are distributed to them according to their
contribution and they receive what was promised to them;
•
treat people according to the principles of natural justice, ie individuals should
know the standards they are expected to achieve and the rules to which they are
expected to conform, they should be given a clear indication of where they are
failing or what rules have been broken and, except in cases of gross misconduct,
they should be given a chance to improve before disciplinary action is taken;
•
avoid treating people as mere factors of production;
•
be concerned with the well-being of employees as well as the pursuit of
commercial gain;
•
offer as much security of employment as possible;
•
provide a working environment that protects the health and safety of employees
and minimizes stress;
•
act in the interests of providing a reasonable balance for employees between their
life and their work;
•
protect employees against harmful practices at work, eg bullying, harassment and
discrimination.
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2.2.4 HRM Challenges in the Twenty-First Century
Challenges in HR that requests new capabilities
•
Globalization
•
Competitive Pressure
•
Technology
•
Change
•
Eco-politics
2.2.5 Legal issues in HRM
2.2.5.1 Regulation of Human Resource Management
All three branches of the Namibian Government-legislative, executive, and judicial-play
an important role in creating the legal environment for human resource management. The
legislative branch has enacted a number of laws governing human resource activities.
Members of parliament generally develop these laws in response to perceived societal
needs.
2.2.5.1.1 Equal Employment Opportunity
Among the most significant efforts to regulate human resource management are those
aimed at achieving equal employment opportunity (EEO)-the condition in which all
individuals have an equal chance for employment, regardless of their race, color, religion,
sex, age, disability, or national origin.
2.2.5.1.2 Legislation
The periods following colonialism and during the civil rights movement there were times
when many voices in society pressed for equal rights for all without regard to a person's
race or sex. In response, government passed laws designed to provide for equal
opportunity. In later years, government has passed additional laws that have extended
EEO protection more broadly i.e., Labour Act.
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2.2.5.2 Businesses' Role in Providing for Equal Employment Opportunity
Rare is the business owner or manager who wants to wait for the government to discover
that the business has failed to provide for equal employment opportunity. Instead, out of
motives ranging from concern for fairness to the desire to avoid costly lawsuits and
settlements, most companies recognize the importance of complying with these laws.
Often management depends on the expertise of human resource professionals to help in
identifying how to comply. These professionals can help organizations take steps to avoid
discrimination and provide reasonable accommodation.
2.2.5.3 Avoiding Discrimination
How would you know if you had been discriminated against? Decisions about human
resources are so complex that discrimination is often difficult to identify and prove.
However, legal scholars and court rulings have arrived at some ways to show evidence
of discrimination.
2.2.5.3.1 Disparate Treatment
One potential sign of discrimination is disparate treatment – differing treatment of
individuals, where the differences are based on the individuals' race, color, religion, sex,
national origin, age, or disability status.
For example, disparate treatment would include hiring or promoting one person over an
equally qualified person because of the individual's race. Or suppose a company fails to
hire women with school-age children (claiming the women will be frequently absent) but
hires men with school-age children. In that situation, the women are victims of disparate
treatment, because they are being treated differently based on their sex. To sustain a
claim of discrimination based on disparate treatment, the women would have to prove
that the employer intended to discriminate.
2.2.5.3.2 Disparate Impact
Another way to assess potential discrimination is by identifying disparate impact-a
condition in which employment practices are seemingly neutral yet disproportionately
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exclude a protected group from employment opportunities. In other words, the company's
employment practices lack obvious discriminatory content, but they affect one group
differently than others. Examples of employment practices that might result in disparate
impact include pay, hiring, promotions, or training. In the area of hiring, for example, many
companies encourage their employees to refer friends and family members for open
positions. These referrals can produce a pool of well-qualified candidates who would be
a good fit with the organization's culture and highly motivated to work with people they
already know. However, given people's tendency to associate with others like
themselves, this practice also can have an unintentional disparate impact.
2.2.5.3.3 EEO Policy
Employers can also avoid discrimination and defend against claims of discrimination by
establishing and enforcing an EEO policy. The policy should define and prohibit unlawful
behaviors, as well as provide procedures for making and investigating complaints. The
policy also should require that employees at all levels engage in fair conduct and
respectful language. Derogatory language can support a court claim of discrimination.
2.2.5.3.4 Affirmative Action and Reverse Discrimination
In the search for ways to avoid discrimination, some organizations have used affirmativeaction programs, usually to increase the representation of minorities. In its original form,
affirmative action was meant as taking extra effort to attract and retain minority
employees. These efforts have included extensively recruiting minority candidates on
college campuses, advertising in minority – oriented publications, and providing
educational and training opportunities to minorities. Such efforts have helped to increase
diversity among entry-level employees.
2.2.5.3.5 Preventing Sexual Harassment
Sexual harassment refers to workplace conduct of a sexual nature, including sexual
advances, requests for sexual favors, and other contact of a sexual nature, whether
verbal (such as jokes) or physical (such as grabbing or kissing). The Labour Act defines
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this conduct as harassment when it is unwelcome and meets at least one of the following
conditions:
a) Submitting to the sexual conduct is explicitly or implicitly a term or condition of
employment-that is, necessary for getting or keeping a job.
b) Whether the person submits to or rejects the conduct becomes a basis for
employment decisions, such as a raise or a desirable assignment.
c) The unwanted sexual conduct unreasonably interferes with an employee's
work performance or creates a work environment that is intimidating, hostile,
or offensive.
2.2.5.4 Valuing Diversity
Managers differ in how they approach the challenges related to this diversity. Some define
a diverse workforce as a competitive advantage that brings them a wider pool of talent
and greater insight into the needs and behaviors of their diverse customers. This view
may reflect corporate values, and it is consistent with research showing greater
profitability at companies with more diverse executive teams. These organizations say
they have a policy of valuing diversity. To ensure they are reaping the benefits of diversity,
organizations that value diversity plan not just for numbers but for actual inclusion in
leadership and decision making.
The practice of valuing diversity has no single form; it is not written into law or business
theory. Organizations that value diversity may practice some form of affirmative action,
discussed earlier. They may have policies stating their value of understanding and
respecting differences. Organizations may try to hire, reward, and promote employees
who demonstrate respect for others. They may sponsor training programs designed to
teach employees about differences among groups. Whatever their form, these efforts are
intended to make each individual feel respected. Also, these actions can support equal
employment opportunity by cultivating an environment in which individuals feel welcome
and able to do their best.
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SUMMARY
Describe trends in labor force composition and how they affect human resource
management.
•
An organization's internal labor force comes from its external labor marketindividuals actively seeking employment.
•
In the United States, the labor market is aging and becoming more racially and
ethnically diverse, with women constituting roughly half of the total.
•
To compete for talent, organizations must be flexible enough to meet the needs of
older workers and must recruit from a diverse population; establish bias-free HR
systems; and help employees understand and appreciate cultural differences.
•
Organizations need employees with skills that may be hard to find: decision
making, customer service, and teamwork, as well as technical skills.
•
To meet this challenge, organizations may hire employees who lack certain skills,
then train them for their jobs.
Summarize areas in which human resource management can support the goal of creating
a high - performance work system.
•
To find and keep the best possible fit between their social system and technical
system, HRM recruits and selects employees with broad skills and strong
motivation, especially in organizations that rely on knowledge workers.
•
Job design and appropriate systems for assessment and rewards have a central
role in supporting employee empowerment and teamwork.
Identify ways HR professionals can support organizational strategies for growth, quality,
and efficiency.
•
HR professionals should be familiar with the organization's strategy and may even
play a role in developing the strategy.
•
In a merger or acquisition, HRM must lead efforts to manage change with skillful
employee relations and meaningful rewards. HR professionals can bring "people
issues" to the attention of the managers leading change, provide training in conflict58
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resolution skills, and apply knowledge of the other organization's culture. HR
professionals also must resolve differences between the companies' HR systems,
such as benefits packages and performance appraisals.
•
For empowering employees to practice total quality management, job design is
essential.
•
Cost control may focus on a specific issue, such as managing health benefits, or
on support for a strategic move such as downsizing, reengineering, or outsourcing.
•
To support cost control through downsizing, the HR department can develop
voluntary programs to reduce the workforce or can help identify the least valuable
employees to lay off. Employee relations can help maintain the morale of
employees who remain after a downsizing.
•
In reengineering, the HR department can lead in communicating with employees
and providing training. It will also have to prepare new approaches for recruiting
and appraising employees that are better suited to the reengineered jobs.
•
Outsourcing presents similar issues related to job design and employee selection.
Summarize ways in which human resource management can support organizations
expanding internationally.
•
Organizations with international operations hire employees in foreign countries
where they operate, so they need knowledge of differences in culture and business
practices.
•
At home, qualified candidates include immigrants, so HRM needs to understand
and train employees to deal with differences in cultures, as well as to ensure laws
are followed.
•
HRM helps organizations select and prepare employees for overseas
assignments.
•
To support efficiency and growth, HR staff can prepare companies for offshoring,
in which operations are moved to countries where wages are lower or demand is
growing. HR experts can help organizations determine whether workers in offshore
locations can provide the same or better skills, how offshoring will affect motivation
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and recruitment of employees needed in the United States, and whether managers
are prepared to manage offshore employees.
Discuss how technological developments are affecting human resource management.
•
Information systems for HRM are widely used and often are provided through the
Internet.
•
Internet applications include searching for talent globally, using online job postings,
screening candidates online, providing career-related information on the
organization's website, and delivering training online.
•
Online information sharing enables employee self-service for many HR needs,
from application forms to training modules to information about the details of
company policies and benefits.
•
Using computers to analyze large amounts of data is often called people analytics.
Some of the most powerful applications of people analytics apply artificial
intelligence (Al), which simulates human thinking. Al applications can improve
decision making or smooth processes in many areas of HRM.
Explain how the nature of the employment relationship is changing.
•
The employment relationship takes the form of a "psychological contract" that
describes what employees and employers expect from the employment
relationship, including unspoken expectations that are widely held.
•
In the traditional version, organizations expected their employees to contribute
time, effort, skills, abilities, and loyalty in exchange for job security and
opportunities for promotion.
•
Modern organizations' needs are constantly changing, so organizations require top
performance and longer work hours but cannot provide job security. Instead,
employees seek flexible work schedules, comfortable working conditions, greater
autonomy, opportunities for training and development, and performance-related
financial incentives.
•
For HRM, the changes require planning for flexible staffing levels.
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•
For employees, the changes may make job hopping look attractive, but this career
strategy often backfires.
•
Union membership has been declining, which is consistent with the idea of taking
personal responsibility for one's career.
Discuss how the need for flexibility affects human resource management.
•
Organizations seek flexibility in staffing levels through alternatives to the traditional
employment relationship-outsourcing and temporary and contract workers who
might be hired on a project basis as part of the new "gig economy." The use of
such workers can affect job design and also the motivation of the organization's
permanent employees.
•
Organizations also may seek flexible work schedules, including shortened
workweeks, which can be a way for employees to adjust work hours to meet
personal and family needs.
•
Organizations also may move employees to different jobs to meet changes in
demand.
REVIEW AND DISCUSSION QUESTIONS
1. How does each of the following labor force trends affect HRM?
a. Aging of the labor force.
b. Diversity of the labor force.
c. Skill deficiencies of the labor force.
2. At many organizations, goals include improving people's performance by relying
on knowledge workers, empowering employees, and assigning work to teams.
3. How can HRM support these efforts?
4. How do HRM practices such as performance management and work design
encourage employee empowerment?
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5. Merging, downsizing, and reengineering all can radically change the structure of
an organization. Choose one of these changes, and describe HRM's role in making
the change succeed. If possible, apply your discussion to an actual merger,
downsizing, or reengineering effort that has recently occurred.
6. When an organization decides to operate facilities in other countries, how can
HRM practices support this change?
7. Why do organizations outsource HRM functions? How does outsourcing affect the
role of human resource professionals? Would you be more attracted to the role of
the HR professional in an organization that outsources many HR activities or in the
outside firm that has the contract to provide the HR services? Why?
8. What HRM functions could an organization provide through self-service? What are
some advantages and disadvantages of using self-service for these functions?
9. How is the employment relationship that is typical of modern organizations different
from the relationship of a generation ago?
10. Discuss several advantages of flexible work schedules.
11. What are some disadvantages of flexible work schedules?
CASE IN-POINT
TAKING RESPONSIBILITY: Paychex Keeps People by Helping Them Retire
Most full-time employees expect to receive some benefits, such as vacation time and
health insurance, and most employers try to provide those benefits. What sets Paychex
apart is the way it thinks about its employees' actual needs. Paychex, which offers HR
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services to small and medium-size businesses, offers its employees a retirement savings
plan. It also offers them help in making the most of that benefit.
Employees who have been with the company for a year or worked at least 1,000 hours
are eligible to contribute to a retirement savings account called a 401(k) plan. For every
two dollars they contribute, Paychex puts in a dollar, up to 8% of the employee's pay. This
type of saving for retirement offers important advantages to employees, but not all of them
sign up. Furthermore, most employees are younger than 50, so retirement typically feels
far away. Many lack a sense of what they need to do in order to have saved enough by
the time they are ready to retire. With this information in mind, Ron Shaw, manager of the
company's retirement program, decided that this employee benefit would be much more
valuable if employees had guidance in using it.
The company made available an online tool called Alex from Jelly vision, which interacts
with employees who have questions about the 401(k) and how their contributions would
help them save for retirement. Paychex also offered online tutorials and set up seminars
to teach employees about investing and preparing for retirement. The company extended
its effort beyond simply saving for retirement. It launched a financial-fitness challenge to
help employees manage their money better. Data collected after the financial-fitness
challenge showed that employees were reporting less stress related to their finances, a
problem that has been associated with absenteeism and employee turnover. Many
employees said they had made or planned to make changes in their financial behavior.
Over half of employees began saving more for retirement, and employee participation in
the 401(k) plan reached its highest level.
Paychex's director of benefits notes that addressing employees' financial well-being,
rather than merely making benefits available, promotes more two-way interaction
between Paychex and its employees. It also demonstrates a level of concern for the
company's people that is consistent with Paychex's place on the Ethisphere Institute's list
of the world's most ethical companies and its commitment to employee empowerment.
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Questions
1. What business benefits might result from Paychex's efforts to make its benefits
more valuable by helping employees get the most out of using them?
2. How do the principles of a new psychological contract apply to the situation
described in this case?
Sources.- "Collaborative Culture," Paychex careers page, https://www.paychex.
com/careers, accessed March 14, 2018; "Paychex Named One of the World's
Most Ethical Companies by the Ethisphere Institute for the 10th Time," news
release, February 19, 201 8, http://media.paychex.com; Kelli B. Grant, "Your
New Office Workout: Financial Fitness," CNBC, April 23, 2016, https://www.
cnbc.com; Paula Aven Gladych,
"Focusing on Financial Fitness," Employee
Benefit News, September 15, 201 5, http://www.benefitnews.com.
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3
UNIT 3: MATCHING HR NEEDS AND PEOPLE
On completing this chapter, you should be able to discuss these key concepts. You should
also know about:
✓ Job analysis methodology and techniques
✓ Role analysis methodology
✓ Analysing technical competencies
✓ Job descriptions
✓ Behavioural competency modelling
✓ Skills analysis
✓ The factors affecting job design
✓ Task structure
✓ Role development
✓ The characteristics of jobs
✓ Approaches to job design
✓ The aims of job evaluation
✓ Analytical job evaluation schemes
✓ Market pricing • Comparison of schemes
✓ Designing analytical schemes
✓ Equal pay considerations
✓ Approaches to job evaluation
✓ Non-analytical job evaluation schemes
✓ Design programme
✓ Defining requirements
✓ Analysing recruitment strengths and weaknesses
✓ Identifying sources of candidates
✓ Recruitment planning
✓ Analysing the requirement
✓ Advertising
✓ Using agencies and job centres
✓ Selection methods
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3.1
Introduction
The analysis of jobs, roles, skills and competencies is one of the most important
techniques in human resource management. It provides the information required to
produce job descriptions, role profiles and person and learning specifications. It is of
fundamental importance in organization and job design, recruitment and selection,
performance management, learning and development, management development,
career management, job evaluation and the design of grade and pay structures. These
constitute most of the key HRM activities. This chapter starts with definitions of the terms
used in job and role analysis and then deals with job analysis, role analysis, competency
analysis, skills analysis, job descriptions and role profiles.
3.1.1 Definitions
The terms ‘job’ and ‘role’ are often used interchangeably. But they are different as defined
below.
Job
A job is an organizational unit which consists of a group of defined tasks or activities to
be carried out or duties to be performed.
Job description
A job description defines what job holders are required to do in terms of activities, duties
or tasks. They are prescriptive and inflexible, giving people the opportunity to say: ‘It’s not
in my job description’, meaning that they only need to do the tasks listed there. They are
more concerned with tasks than outcomes and with the duties to be performed rather
than the competencies required to perform them (technical competencies covering
knowledge and skills and behavioural competencies).
Role
A role has been defined by Ivancevich et al as ‘an organized set of behaviours’. It is the
part people play in their work – the emphasis is on the patterns of behaviour expected of
them in order to achieve agreed outcomes. The term ‘role’ is sometimes used
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interchangeably with ‘job’. But they are different. Roles are about people. Jobs are about
tasks and duties. It is recognized more generally that organizations consist of people
using their knowledge and skills to achieve results and working cooperatively together
rather than impersonal jobs contained in the boxes of an organization chart. References
are therefore nowadays made more frequently to roles, although use is still made of the
terms job analysis, job design and job evaluation.
Role profile
A role profile defines outcomes, accountabilities, and competencies for an individual role.
It concentrates on outcomes rather than duties and therefore provides better guidance
than a job description on expectations and does not constrain people to carrying out a
prescribed set of tasks. Outcomes may be expressed as key result areas – elements of
the role for which clear outputs and standards can be defined, each of which makes a
significant contribution to achieving its overall purpose. Alternatively, they may be termed
accountabilities – areas of the role for which role holders are responsible in the form of
being held to account for what they do and what they achieve.
A role profile does not prescribe in detail what has to be done to achieve the required
outcomes. It therefore allows for greater flexibility than a job description and is more easily
updated to reflect changing demands. Role profiles are person-orientated. A role can be
described in behavioural terms – given certain expectations, this is how the person needs
to behave to meet them. Because it identifies knowledge, skill and competency
requirements it also provides a better basis for recruitment and selection, performance
management and learning and development purposes.
Accountability profile
An accountability profile is a type of role profile that focuses on what role holders will be
held to account for in terms of what they do and what they achieve. It may be set out as
a list of main accountabilities.
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Generic role
A generic role is a role in which essentially similar activities are carried out by a number
of people, for example a team leader or a call centre agent. In effect, it covers an
occupation rather than a single role. It is described in a generic role profile.
Role analysis
Role analysis finds out what people are expected to achieve when carrying out their work
and the competencies and skills required to meet those expectations. Role analysis uses
similar techniques to job analysis although the objective of the analysis will be somewhat
different.
Competency analysis
Competency analysis is concerned with functional analysis to determine work-based
competences and behavioural analysis to establish the behavioural dimensions that affect
job performance. Work-based or occupational competences refer to expectations of
workplace performance and the standards and outputs that people carrying out specified
roles are expected to attain. Behavioural or personal competences are the personal
characteristics of individuals which they bring to their work roles. Skills analysis Skills
analysis determines the skills required to achieve an acceptable level of performance.
Person specification
A person specification, also known as a job or role specification, sets out the education,
qualifications, training, experience, personal attributes and competences a job holder
requires to perform her or his job satisfactorily.
Learning specification
A learning specification defines the knowledge and skills needed to achieve an
acceptable level of performance. It is used as the basis for devising learning and
development programmes. Learning specifications may be drawn up on the basis of
competency and skills analysis.
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3.2
Job Design
Job design specifies the contents, methods and relationships of jobs in order to satisfy
work requirements for productivity, efficiency and quality, meet the personal needs of the
job holder and thus increase levels of employee engagement. The process of job design
is based on an analysis of the way in which work needs to be organized and what work
therefore needs to be done – the tasks that have to be carried out if the purpose of the
organization or an organizational unit is to be achieved. This is where the techniques of
process planning and systems analysis are used to achieve improvement in
organizational performance. They concentrate on the work to be done, not the worker.
They may lead to a high degree of task specialization and assembly line processing; of
paper work as well as physical products. More desirably, it can also lead to the
maximization of individual responsibility and the opportunity to use personal skills.
It is necessary, however, to distinguish between efficiency and effectiveness. The most
efficient method may maximize outputs in relation to inputs in the short run, but it may not
be effective in the longer term in that it fails to achieve the overall objectives of the activity.
The pursuit of short-term efficiency by imposing the maximum degree of task
specialization may reduce longer-term effectiveness by demotivating job holders and
increasing employee turnover and absenteeism.
Job design has to start from work requirements because that is why the job exists. When
the tasks to be done have been determined it should then be the function of the job
designer to consider how the jobs can be set up to provide the maximum degree of
intrinsic motivation for those who have to carry them out, with a view to improving
performance and productivity. Consideration has also to be given to another important
aim of job design: to fulfil the social responsibilities of the organization to the people who
work in it by improving the quality of working life, an aim which, as stated in Wilson’s
(1973) report on this subject, ‘depends upon both efficiency of performance and
satisfaction of the worker’.
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Factors affecting job design
•
The characteristics of jobs.
•
The characteristics of task structure.
•
The process of intrinsic motivation.
•
The job characteristics model.
•
The implications of group activities.
3.2.1 The characteristics of jobs
There are three fundamental characteristics shared by all jobs:
1. Job range – the number of operations a job holder performs to complete a task.
2. Job depth – the amount of discretion a job holder has to decide job activities and
job outcomes.
3. Job relationships – the interpersonal relationships between job holders and their
managers and co-workers.
Task structure
Job design requires the assembly of a number of tasks into a job or a group of jobs. An
individual may carry out one main task that consists of a number of interrelated elements
or functions. Alternatively, task functions may be allocated to a team working closely
together in a manufacturing ‘cell’ or customer service unit, or strung along an assembly
line. In more complex jobs, individuals may carry out a variety of connected tasks (multitasking), each with a number of functions, or these tasks may be allocated to a team of
workers or divided between them. In the latter case, the tasks may require a variety of
skills that have to be possessed by all members of the team (multi-skilling) in order to
work flexibly. Complexity in a job may be a reflection of the number and variety of tasks
to be carried out, the different skills or competencies to be used, the range and scope of
the decisions that have to be made, or the difficulty of predicting the outcome of decisions.
The internal structure of each task consists of three elements: planning (deciding on the
course of action, its timing and the resources required), executing (carrying out the plan),
and controlling (monitoring performance and progress and taking corrective action when
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required). A completely integrated job includes all these elements for each of the tasks
involved. The worker, or group of workers, having been given objectives in terms of
output, quality and cost targets, decides on how the work is to be done, assembles the
resources, performs the work, and monitors output, quality and cost standards.
Responsibility in a job is measured by the amount of authority someone has to do all
these things.
The ideal arrangement from the point of view of motivation and engagement is to provide
for fully integrated jobs containing all three task elements. In practice, management and
team leaders are often entirely responsible for planning and control, leaving the worker
responsible for execution. To a degree this is inevitable, but one of the aims of job design
is often to extend the responsibility of workers into the functions of planning and control.
This can involve empowerment – giving individuals and teams more responsibility for
decision making and ensuring that they have the training, support and guidance to
exercise that responsibility properly.
3.2.2 Factors affecting job design
Job design is fundamentally affected by the technology of the organization, the changes
that are taking place in that technology and the environment in which the organization
operates. Job design has therefore to be considered within the context of organization
design, but it must also take into account the following factors.
Intrinsic motivation
The case for using job design techniques is based on the premise that effective
performance and genuine satisfaction in work follow mainly from the intrinsic content of
the job. This is related to the fundamental concept that people are motivated when they
are provided with the means to achieve their goals. Work provides the means to earn
money, which as an extrinsic reward satisfies basic needs and is instrumental in providing
ways of satisfying higher-level needs. But work also provides intrinsic rewards related to
achievement, responsibility and the opportunity to use and develop skills that are more
under the control of the worker.
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Three characteristics have been distinguished by Lawler (1969) as being required in jobs
if they are to be intrinsically motivating.
Intrinsic motivating characteristics of jobs, Lawler (1969)
1. Feedback – individuals must receive meaningful feedback about their
performance, preferably by evaluating their own performance and defining the
feedback. This implies that they should ideally work on a complete product, or a
significant part of it that can be seen as a whole.
2. Use of abilities – the job must be perceived by individuals as requiring them to use
abilities they value in order to perform the job effectively.
3. Self-control – individuals must feel that they have a high degree of self-control over
setting their own goals and over defining the paths to these goals.
3.2.3 The job characteristics model
A useful perspective on the factors affecting job design and motivation is provided by
Hackman and Oldham’s (1974) job characteristics model. They suggest that the ‘critical
psychological states’ of ‘experienced meaningfulness of work, experienced responsibility
for outcomes of work and knowledge of the actual outcomes of work’ strongly influence
motivation, job satisfaction and performance. They identified the following characteristics
of jobs that need to be taken into account in job design.
Job characteristics, Hackman and Oldman (1974)
1. Variety.
2. Autonomy.
3. Required interaction.
4. Optional interaction.
5. Knowledge and skill required.
6. Responsibility.
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3.2.4 Approaches to job design
Job design starts with an analysis of task requirements, using the job analysis techniques.
These requirements will be a function of the purpose of the organization, its technology
and its structure. The analysis has also to take into account the decision-making process
– where and how decisions are made and the extent to which responsibility is devolved
to individuals and work teams.
Approaches to job design, Robertson and Smith (1985)
1. Influence skill variety by providing opportunities for people to do several tasks and
by combining tasks.
2. Influence task identity by combining tasks and forming natural work units.
3. Influence task significance by forming natural work units and informing people of
the importance of their work.
4. Influence autonomy by giving people responsibility for determining their own
working systems.
5. Influence feedback by establishing good relationships and opening feedback
channels.
These approaches are used as the basis for the methods of job design described below.
1. Job rotation: This is the movement of employees from one task to another to
reduce monotony by increasing variety.
2. Job enlargement: This means combining previously fragmented tasks into one job,
again to increase the variety and meaning of repetitive work.
3. Job enrichment: This goes beyond job enlargement to add greater autonomy and
responsibility to a job and is based on the job characteristics approach.
4. Job enrichment: Aims to maximize the interest and challenge of work by providing
the employee with a job that has these characteristics:
o it is a complete piece of work in the sense that the worker can identify a
series of tasks or activities that end in a recognizable and definable product;
o it affords the employee as much variety, decision-making responsibility and
control as possible in carrying out the work;
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o it provides direct feedback through the work itself on how well the employee
is doing his or her job.
5. Self-managing teams (autonomous work groups)
These are self-regulating teams who work largely without direct supervision. The
philosophy on which this technique is based is a logical extension of job
enrichment but is strongly influenced by socio-technical systems theory. A selfmanaging team enlarges individual jobs to include a wider range of operative skills
(multi-skilling), decides on methods of work and the planning, scheduling and
control of work, distributes tasks itself among its members and monitors its own
performance, taking corrective action when required.
The advocates of self-managing teams or autonomous work groups claim that this
approach offers a more comprehensive view of organizations than the rather
simplistic individual motivation theories that underpin job rotation, enlargement and
enrichment. Be that as it may, the strength of this system is that it does take
account of the social or group factors and the technology as well as the individual
motivators.
6. High-performance work design
This concentrates on setting up working groups in environments where high levels
of performance can be achieved. As described by Buchanan (1987), this requires
management to explain what it needs in the form of methods of production and the
results expected from its introduction. It involves multi-skilling – job demarcation
lines are eliminated as far as possible and encouragement and training are
provided for employees to acquire new skills. Self-managed teams are set up with
full responsibility for planning, controlling and monitoring the work.
3.3
Role development
Role development is the continuous process through which roles are defined or modified
as work proceeds and evolves. Job design as described above takes place when a new
job is created or an existing job is substantially changed, often following a reorganization.
But the part people play in carrying out their roles can evolve over time as people grow
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into them and grow with them, and as incremental changes take place in the scope of the
work and the degree to which individuals have freedom to act (their autonomy). Roles will
be developed as people develop in them – responding to opportunities and changing
demands, acquiring new skills and developing competencies.
Role development is a continuous process that takes place in the context of day-to-day
work and is therefore a matter between managers and the members of their teams. It
involves agreeing definitions of accountabilities, objectives and competency requirements
as they evolve. When these change – as they probably will in all except the most routine
jobs – it is desirable to achieve mutual understanding of new expectations.
The process of understanding how roles are developing and agreeing the implications
can take place within the framework of performance management, where the
performance agreement, which is updated regularly, spells out the outcomes (key result
areas) and the competency requirements. It is necessary to ensure that managers, team
leaders and employees generally acquire the skills necessary to define roles within the
performance management framework, taking into account the principles of job design set
out earlier in this chapter.
3.4
Work Flow in Organizations
Informed decisions about jobs take place in the context of the organization's overall work
flow. Through the process of work flow design, managers analyze the tasks needed to
produce a product or service. With this information, they assign these tasks to specific
jobs and positions. (A job is a set of related duties. A position is the set of duties
performed by one person. A school has many teaching positions; the person filling each
of those positions is performing the job of teacher.) Basing these decisions on work flow
design can lead to better results than the more traditional practice of looking at jobs
individually.
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Work Flow Analysis
Before designing its work flow, the organization's planners need to analyze what work
needs to be done. Figure 4.1 shows the elements of a work flow analysis. For each type
of work, such as producing a product line or providing a support service (accounting, legal
support, and so on), the analysis identifies the output of the process, the activities
involved, and the three categories of inputs (materials and information, equipment, and
human resources).
Outputs are the products of any work unit, say, a department or team. Outputs may be
tangible, as in the case of a restaurant meal or finished part. They may be intangible,
such as building security or an answered question about employee benefits. In identifying
the outputs of particular work units, work flow analysis considers both quantity and quality.
Thinking in terms of these outputs gives HRM professionals a clearer view of how to
increase each work unit's effectiveness.
Work flow analysis next considers the work processes used to generate the outputs
identified. Work processes are the activities that a work unit's members engage in to
produce a given output. They are described in terms of operating procedures for every
task performed by each employee at each stage of the process. Specifying the processes
helps HRM professionals design efficient work systems by clarifying which tasks are
necessary. Knowledge of work processes also can guide staffing changes when work is
automated, outsourced, or restructured.
Finally, work flow analysis identifies the inputs required to carry out the work processes.
As shown in the diagram below, inputs fall into three categories: raw inputs (materials
and information), equipment, and human resources (knowledge, skills, and abilities). In
an Amazon warehouse, inputs include the items held in inventory to fill orders, a variety
of automated equipment to move and track items, and workers to fill boxes, dispatch
robots, and ensure orders are filled accurately. Automation has taken over tasks such as
heavy lifting, memorization of warehouse locations, and even efficient use of packaging
tape, but it has not reduced the quantity of human resources needed in the warehouses.
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Rather, the ability to move more products efficiently through each warehouse has
contributed to growing demand for Amazon's services. Another way to understand the
importance of identifying inputs is to consider what can go wrong.
Work Flow Design and an Organization's Structure
Work flow takes place in the context of an organization's structure. It requires the
cooperation of individuals and groups. Ideally, the organization's structure brings together
the people who must collaborate to create the desired outputs efficiently. The structure
may do this in a way that is highly centralized (that is, with authority concentrated in a few
people at the top of the organization) or decentralized (with authority spread among many
people). The organization may group jobs according to functions (for example, welding,
painting, packaging), or it may set up divisions to focus on products or customer groups.
Although there are an infinite number of ways to combine the elements of an
organization's structure, we can make some general observations about structure and
work design. If the structure is strongly based on function, workers tend to have low
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authority and to work alone at highly specialized jobs. Jobs that involve teamwork or broad
responsibility tend to require a structure based on divisions other than functions.
When the goal is to empower employees, companies need to set up structures and jobs
that enable broad responsibility, such as jobs that involve employees in serving a
particular group of customers or producing a particular product, rather than performing a
narrowly defined function. The organization's structure also affects managers' jobs.
Managing a division responsible for a product or customer group tends to require more
experience and cognitive (thinking) ability than managing a department that handles a
particular function. In contrast, managing a functional department requires skill in
managing conflicts and aligning employees' efforts with higher-level goals, because these
employees tend to identify heavily with their department or profession.
Work design often emphasizes the analysis and design of jobs, as described in the
remainder of this chapter. Although all of these approaches can succeed, each focuses
on one isolated job at a time. These approaches do not necessarily consider how that
single job fits into the overall work flow or structure of the organization. To use these
techniques effectively, human resource personnel should also understand their
organization as a whole.
3.5
Job Analysis
Job analysis is the process of collecting, analysing and setting out information about the
content of jobs in order to provide the basis for a job description and data for recruitment,
training, job evaluation and performance management. Job analysis concentrates on
what job holders are expected to do.
The analysis and design of work and, in doing so, lays out some considerations that go
into making informed decisions about how to create and link jobs. The chapter begins
with a look at the big-picture issues related to analyzing work flow and organizational
structure. The discussion then turns to the more specific issues of analyzing and
designing jobs. Traditionally, job analysis has emphasized the study of existing jobs in
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order to make decisions such as employee selection, training, and compensation. In
contrast, job design has emphasized making jobs more efficient or more motivating.
However, as this chapter shows, the two activities are interrelated.
To achieve high-quality performance, organizations have to understand and match job
requirements and people. This understanding requires job analysis, the process of getting
detailed information about jobs. Analyzing jobs and understanding what is required to
carry out a job provide essential knowledge for staffing, training, performance appraisal,
and many other HR activities. For instance, a supervisor's evaluation of an employee's
work should be based on performance relative to job requirements. In very small
organizations, line managers may perform a job analysis, but usually the work is done by
a human resource professional. A large company may have a compensation
management department that includes job analysts (also called personnel analysts).
Organizations may also contract with firms that provide this service.
3.5.1 Job Descriptions
An essential part of job analysis is the creation of job descriptions. A job description is a
list of the tasks, duties, and responsibilities (TDRs) that a job entails. TDRs are observable
actions. For example, a news photographer's job requires the jobholder to use a camera
to take photographs. If you were to observe someone in that position for a day, you would
almost certainly see some pictures being taken. When a manager attempts to evaluate
job performance, it is most important to have detailed information about the work
performed in the job (that is, the TDRs). This information makes it possible to determine
how well an individual is meeting each job requirement.
A job description typically has the format shown in the diagram below. It includes the job
title, a brief description of the TDRs, and a list of the essential duties with detailed
specifications of the tasks involved in carrying out each duty. Although organizations may
modify this format according to their particular needs, all job descriptions within an
organization should follow the same format. This helps the organization make consistent
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decisions about such matters as pay and promotions. It also helps the organization show
that it makes human resource decisions fairly.
Whenever the organization creates a new job, it needs a new job description. Preparation
of a job description begins with gathering information about the job from people already
performing the task, the position's supervisor, or the managers creating the position.
Based on that information, the writer of the job description identifies the essential duties
of the job, including mental and physical tasks and any methods and resources required.
Job descriptions should then be reviewed periodically (say, once a year) and updated if
necessary. Performance appraisals can provide a good opportunity for updating job
descriptions, as the employee and supervisor compare what the employee has been
doing against the details of the job description.
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3.5.2 Job Specifications
Whereas the job description focuses on the activities involved in carrying out a job, a job
specification looks at the qualities or requirements the person performing the job must
possess. It is a list of the knowledge, skills, abilities, and other characteristics (KSAOs)
that an individual must have to perform the job. Knowledge refers to factual or procedural
information that is necessary for successfully performing a task. For example, this course
is providing you with knowledge in how to manage human resources.
A skill is an individual's level of proficiency at performing a particular task-that is, the
capability to perform it well. With knowledge and experience, you could acquire skill in the
task of preparing job specifications. Ability, in contrast to skill, refers to a more general
enduring capability that an individual possesses. A person might have the ability to
cooperate with others or to write clearly and precisely. Finally, other characteristics might
be personality traits such as someone's persistence or motivation to achieve. Some jobs
also have legal requirements, such as licensing or certification.
In developing job specifications, it is important to consider all of the elements of KSAOs.
As with writing a job description, the information can come from a combination of people
performing the job, people supervising or planning for the job, and trained job analysts.
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Accurate information about KSAOs is especially important for making decisions about
who will fill a job. A manager attempting to fill a position needs information about the
characteristics required and about the characteristics of each applicant. Interviews and
selection decisions should therefore focus on KSAOs.
Sources of Job Information
Information for analyzing an existing job often comes from incumbents, that is, people
who currently hold that position in the organization.
They are a logical source of information because they are most acquainted with the details
of the job. Incumbents should be able to provide very accurate information.
Position Analysis Questionnaire
After gathering information, the job analyst uses the information to analyze the job. One
of the broadest and best-researched instruments for analyzing jobs is the Position
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Analysis Questionnaire (PAQ). This is a standardized job analysis questionnaire
containing 194 items that represent work behaviors, work conditions, and job
characteristics that apply to a wide variety of jobs.
The questionnaire organizes these items into six sections concerning different aspects of
the job:
1. Information input – Where and how a worker gets information needed to perform
the job.
2. Mental processes – The reasoning, decision making, planning, and informationprocessing activities involved in performing the job.
3. Work output – The physical activities, tools, and devices used by the worker to
perform the job.
4. Relationships with other persons – The relationships with other people required in
performing the job.
5. Job context – The physical and social contexts where the work is performed.
6. Other characteristics – The activities, conditions, and characteristics other than
those previously described that are relevant to the job.
Using the PAQ provides an organization with information that helps in comparing jobs,
even when they are dissimilar. The PAQ also has the advantage that it considers the
whole work process, from inputs through outputs. However, the person who fills out the
questionnaire must have college-level reading skills, and the PAQ is meant to be
completed only by job analysts trained in this method. In fact, the ratings of job
incumbents tend to be less reliable than ratings by supervisors and trained analysts. Also,
the descriptions in the PAQ reports are rather abstract, so the reports may not be useful
for writing job descriptions or redesigning jobs.
3.5.3 Importance of Job Analysis
Job analysis is so important to HR managers that it has been called the building block of
everything that personnel does. The fact is that almost every human resource
management program requires some type of information that is gleaned from job analysis:
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1. Work redesign – Often an organization seeks to redesign work to make it more
efficient or to improve quality. The redesign requires detailed information about the
existing job(s). In addition, preparing the redesign is similar to analyzing a job that
does not yet exist.
2. Human resource planning – As planners analyze human resource needs and how
to meet those needs, they must have accurate information about the levels of skill
required in various jobs, so that they can tell what kinds of human resources will
be needed.
3. Selection – T identify the most qualified applicants for various positions, decision
makers need to know what tasks the individuals must perform, as well as the
necessary knowledge, skills, and abilities.
4. Training – Almost every employee hired by an organization will require training.
Any training program requires knowledge of the tasks performed in a job so that
the training is related to the necessary knowledge and skills.
5. Performance appraisal – An accurate performance appraisal requires information
about how well each employee is performing in order to reward employees who
perform well and to improve their performance if it is below standard. Job analysis
helps in identifying the behaviors and the results associated with effective
performance.
6. Career planning – Matching an individual's skills and aspirations with career
opportunities requires that those in charge of career planning know the skill
requirements of the various jobs. This allows them to guide individuals into jobs in
which they will succeed and be satisfied.
7. Job evaluation – The process of job evaluation involves assessing the relative
dollar value of each job to the organization in order to set up fair pay structures. If
employees do not believe pay structures are fair, they will become dissatisfied and
may quit, or they will not see much benefit in striving for promotions. To put dollar
values on jobs, it is necessary to get information about different jobs and compare
them.
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3.6
Job Evaluation
Decisions about what jobs are worth take place all the time. The decisions may be made
informally, based on assumptions about the value of a job in the marketplace or in
comparison with other jobs in the organization. Or it may be a formal approach, either
some type of job evaluation, as described in this chapter, or a systematic comparison with
market rates. It has been asserted by Gupta and Jenkins (1991) that the basic premise
of job evaluation is that certain jobs ‘contribute more to organizational effectiveness and
success than others, are worth more than others and should be paid more than others’.
Evaluating ‘worth’ leads directly or indirectly to where a job is placed in a level or grade
within a hierarchy and can therefore determine how much someone is paid. The
performance of individuals also affects their pay, but this is not a matter for job evaluation,
which is concerned with valuing the jobs people carry out, not how well they perform their
jobs.
This topic covers a definition of job evaluation, formal and informal approaches, analytical
and non-analytical formal schemes, market pricing, computer-aided job evaluation,
making the choice between approaches, introducing a new or substantially revised
scheme and equal pay considerations.
Job evaluation defined
Job evaluation is a systematic process for defining the relative worth or size of jobs within
an organization in order to establish internal relativities.
Aims of job evaluation
•
Establish the relative value or size of jobs (internal relativities) based on fair, sound
and consistent judgements.
•
Produce the information required to design and maintain equitable and defensible
grade and pay structures.
•
Provide as objective as possible a basis for grading jobs within a grade structure,
thus enabling consistent decisions to be made about job grading.
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•
Enable sound market comparisons with jobs or roles of equivalent complexity and
size.
•
Be transparent – the basis upon which grades are defined and jobs graded should
be clear.
•
Ensure that the organization meets equal pay for work of equal value obligations.
Approaches
Approaches to establishing the worth of jobs fall broadly into two categories: formal and
informal.
Formal job valuation Formal approaches use standardized methods to evaluate jobs that
can be analytical or non-analytical. Such schemes deal with internal relativities and the
associated process of establishing and defining job grades or levels in an organization.
An alternative approach is ‘extreme market pricing’ in which formal pay structures and
individual rates of pay are entirely based on systematically collected and analysed
information on market rates and no use is made of job evaluation to establish internal
relativities. Extreme market pricing should be distinguished from the process of collecting
and analysing market rate data used to establish external relativities, having already
determined internal relativities through formal job evaluation
In the 1980s and 1990s formal job evaluation fell into disrepute because it was alleged to
be bureaucratic, time-consuming and irrelevant in a market economy where market rates
dictate internal rates of pay and relativities. However, job evaluation is still practised
widely (60 per cent of the respondents to the 2007 e-reward job evaluation survey had a
formal scheme) and, indeed, its use is extending, not least because of the pressures to
achieve equal pay. Although formal job evaluation may work systematically it should not
be treated as a rigid, monolithic and bureaucratic system. It should instead be regarded
as an approach that may be applied flexibly. Process – how job evaluation is used – can
be more important than the system itself when it comes to producing reliable and valid
results.
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Informal job evaluation
Informal approaches price jobs either on the basis of assumptions about internal and
external relativities or simply by reference to going or market rates when recruiting people,
unsupported by any systematic analysis. There are, however, degrees of informality.
A semi-formal approach might require some fi rm evidence to support a market pricing
decision and the use of role profiles to provide greater accuracy to the matching process.
Analytical job evaluation schemes
Analytical job evaluation is based on a process of breaking whole jobs down into a number
of defined elements or factors such as responsibility, decisions and the knowledge and
skill required. These are assumed to be present in all the jobs to be evaluated. In pointfactor and fully analytical matching schemes, jobs are then compared factor by factor
either with a graduated scale of points attached to a set of factors or with grade or role
profiles analysed under the same factor headings.
The advantages of an analytical approach are that first, evaluators have to consider each
of the characteristics of the job separately before forming a conclusion about its relative
value, and second, they are provided with defined yardsticks or guidelines that help to
increase the objectivity and consistency of judgements. It can also provide a defence in
the UK against an equal pay claim. The main analytical schemes as described below are
point-factor rating, analytical matching and factor comparison.
Point-factor rating
Point-factor schemes are the most common forms of analytical job evaluation. They were
used by 70 per cent of the respondents to the e-reward 2007 job evaluation survey who
had job evaluation schemes. The basic methodology is to break down jobs into factors.
These are the elements in a job such as the level of responsibility, knowledge and skill or
decision making that represent the demands made by the job-on-job holders. For job
evaluation purposes it is assumed that each of the factors will contribute to the value of
the job and is an aspect of all the jobs to be evaluated but to different degrees.
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Each factor is divided into a hierarchy of levels. Definitions of these levels are produced
to provide guidance on deciding the degree to which the factor applies in the job to be
evaluated. Evaluators consult the role profile or job description, which should ideally
analyse the role in terms of the scheme’s factors. They then refer to the level definitions
for each factor and decide which one best fits the job.
A maximum points score is allocated to each factor. The scores available may vary
between different factors in accordance with beliefs about their relative significance. This
is termed ‘explicit weighting’. If the number of levels varies between factors this means
that they are implicitly weighted because the range of scores available will be greater in
the factors with more levels. The total score for a factor is divided between the levels to
produce the numerical factor scale. Progression may be arithmetic, e.g. 50, 100, 150, 200
and so on, or geometric, e.g. 50, 100, 175, 275. In the latter case, more scope is given to
recognize senior jobs with higher scores.
The complete scheme consists of the factor and level definitions and the scoring system
(the total score available for each factor and distributed to the factor levels). This
comprises the ‘factor plan’.
Jobs are ‘scored’ (i.e. allocated points) under each factor heading on the basis of the level
of the factor in the job. This is done by comparing the features of the job with regard to
that factor with the factor level definitions to find out which definition provides the best fit.
The separate factor scores are then added together to give a total score that indicates
the relative value of each job and can be used to place the jobs in rank order. An
unweighted factor plan is illustrated in Table below. In this example, the evaluations are
asterisked and the total score would be 400 points.
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A point-factor scheme can be operated manually – a ‘paper’ scheme – or computers can
be used to aid the evaluation process.
Analytical job matching
Like point-factor job evaluation, analytical job matching is based on the analysis of a
number of defined factors. There are two forms of analytical matching. One is role profile
to grade/ level profile matching; the other is role profile to benchmark role profile.
In role to grade analytical matching, profiles of roles to be evaluated are matched to grade,
band or level profiles. Reference is made to a grade structure incorporating the jobs
covered by the evaluation scheme. This consists of a sequence or hierarchy of grades,
bands or levels that have been defined analytically in terms of a set of factors that may
correspond to the job evaluation factors in a point-factor scheme or a selection of them.
They may also or alternatively refer to levels of competency and responsibility, especially
in job and career family structures. Information on roles is obtained by questionnaires or
interviews and role profiles are produced for the jobs to be evaluated under the same
headings as the grade or level profiles. The role profiles are then ‘matched’ with the range
of grade or level profiles to establish the best fi t and thus grade the job.
In role-to-role analytical matching, role profiles for jobs to be evaluated are matched
analytically with benchmark role profiles. A benchmark job is one that has already been
graded as a result of an initial job evaluation exercise. It is used as a point of reference
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with which other roles or jobs can be compared and valued. Thus, if role A has been
evaluated and placed in grade 3 and there is a good fi t between the factor profile of role
B and that of role A, then role B will also be placed in grade 3. Roles are analysed against
a common set of factors or elements. Generic role profiles, i.e., those covering a number
of like roles, will be used for any class or cluster of roles with essentially the same range
of responsibilities such as team leaders or personal assistants. Role to role matching may
be combined with role to grade matching.
Analytical matching can be used to grade jobs or place them in levels following the initial
evaluation of a sufficiently large sample of benchmark jobs, i.e. representative jobs that
can provide a valid basis for comparisons. This can happen in big organizations when it
is believed that it is not necessary to go through the whole process of point-factor
evaluation for every job, especially where ‘generic’ roles are concerned.
Factor comparison
The original factor comparison method compared jobs factor by factor using a scale of
money values to provide a direct indication of the rate for the job. It was developed in the
United States but is not used in the UK. The Hay Guide Chart Profile method (a
‘proprietary brand’ of job evaluation) is described by the Hay Group as a factor
comparison scheme but, apart from this, the only form of factor comparison now in use is
graduated factor comparison, which compares jobs factor by factor with a graduated
scale. The scale may have only three value levels – for example lower, equal, higher –
and no factor scores are used. This is a method often used by the independent experts
engaged by employment tribunals to advise on an equal pay claim. Their job is simply to
compare one job with one or two others, not to review internal relativities over the whole
spectrum of jobs in order to produce a rank order.
Non-analytical schemes
Non-analytical job evaluation schemes enable whole jobs to be compared in order to
place them in a grade or a rank order – they are not analysed by reference to their
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elements or factors. They can stand alone or be used to help in the development of an
analytical scheme.
For example, the paired comparison technique described later can produce a rank order
of jobs that can be used to test the outcomes of an evaluation using an analytical scheme.
It is therefore helpful to know how non-analytical schemes function even if they are not
used as the main scheme.
Non-analytical schemes operate on a job-to-job basis in which a job is compared with
another job to decide whether it should be valued more, less, or the same (ranking and
‘internal benchmarking’ processes). Alternatively, they may function on a job to grade
basis in which there are four main types of non-analytical schemes: job classification, job
ranking, paired comparison (a statistical version of ranking), and internal benchmarking.
1. Job classification
This approach is based on a definition of the number and characteristics of the
levels or grades in a grade and pay structure into which jobs will be placed. The
grade definitions may refer to such job characteristics as skill, decision making and
responsibility but these are not analysed separately. Evaluation takes place by a
process of non-analytical matching or ‘job slotting’. This involves comparing a
‘whole’ job description, i.e. one not analysed into factors, with the grade definitions
to establish the grade with which the job most closely corresponds. The difference
between job classification and role to grade analytical matching as described
above is that in the latter case, the grade profiles are defined analytically, i.e. in
terms of job evaluation factors, and analytically defined role profiles are matched
with them factor by factor.
However, the distinction between analytical and non-analytical matching can be
blurred when the comparison is made between formal job descriptions or role
profiles that have been prepared in a standard format, which includes common
headings for such aspects of jobs as levels of responsibility or knowledge and skill
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requirements. These ‘factors’ may not be compared specifically but will be taken
into account when forming a judgement.
2. Job ranking
Whole-job ranking is the most primitive form of job evaluation. The process
involves comparing whole jobs with one another and arranging them in order of
their perceived value to the organization. In a sense, all evaluation schemes are
ranking exercises because they place jobs in a hierarchy. The difference between
simple ranking and analytical methods such as point-factor rating is that job
ranking does not attempt to quantify judgements. Instead, whole jobs are
compared – they are not broken down into factors or elements although, explicitly
or implicitly, the comparison may be based on some generalized concept such as
the level of responsibility. Job ranking or paired comparison ranking as described
below is sometimes used as a check on the rank order obtained by point-factor
rating.
3. Paired comparison ranking
Paired comparison ranking is a statistical technique used to provide a more
sophisticated method of whole-job ranking. It is based on the assumption that it is
always easier to compare one job with another than to consider a number of jobs
and attempt to build up a rank order by multiple comparisons.
The technique requires the comparison of each job as a whole, separately, with
every other job. If a job is considered to be of a higher value than the one with
which it is being compared it receives two points; if it is thought to be equally
important, it receives one point; if it is regarded as less important, no points are
awarded. The scores are added for each job and a rank order is obtained.
Paired comparisons can be done factor by factor and in this case can be classified as
analytical. A simplified example of a paired comparison ranking is shown in the table
below:
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The advantage of paired comparison ranking over normal ranking is that it is easier to
compare one job with another rather than having to make multiple comparisons. But it
cannot overcome the fundamental objections to any form of whole-job ranking – that no
defined standards for judging relative worth are provided and it is not an acceptable
method of assessing equal value or comparable worth. There is also a limit to the number
of jobs that can be compared using this method – to evaluate 50 jobs requires 1,225
comparisons. Paired comparisons are occasionally used analytically to compare jobs on
a factor-by-factor basis.
4. Internal benchmarking
Internal benchmarking means comparing the job under review with any internal job
that is believed to be properly graded and paid (an internal benchmark) and placing
the job under consideration into the same grade as that job. It is what people often
do intuitively when they are deciding on the value of jobs, although it is not usually
dignified in job evaluation circles as a formal method of job evaluation. The
comparison is made on a whole-job basis without analysing the jobs factor by
factor. It can be classified as a formal method if there are specific procedures for
preparing and setting out role profiles and for comparing profiles for the role to be
evaluated with standard benchmark role profiles.
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3.6.1 Market pricing
Market pricing is the process of obtaining information on market rates (market rate
analysis) to inform decisions on pay structures and individual rates of pay. It is called
‘extreme market pricing’ when market rates are the sole means of deciding on internal
rates of pay and relativities, and conventional job evaluation is not used. An organization
that adopts this method is said to be ‘market driven’. This approach has been widely
adopted in the United States. It is associated with a belief that ‘the market rules, ok’,
disillusionment with what was regarded as bureaucratic job evaluation, and the
enthusiasm for broad-banded pay structures. It is a method that often has appeal at board
level because of the focus on the need to compete in the marketplace for talent.
Market rate analysis as distinct from extreme market pricing may be associated with
formal job evaluation. The latter establishes internal relativities and the grade structure,
and market pricing is used to develop the pay structure – the pay ranges attached to
grades. Information on market rates may lead to the introduction of market supplements
for individual jobs or the creation of separate pay structures (market groups) to cater for
particular market rate pressures.
The acceptability of either form of market pricing is dependent on the availability of robust
market data and, when looking at external rates, the quality of the job-to-job matching
process, i.e. comparing like with like. It can therefore vary from analysis of data by job
titles to detailed matched analysis collected through bespoke surveys focused on real
market equivalence. Extreme market pricing can provide guidance on internal relativities
even if these are market driven. But it can lead to pay discrimination against women where
the market has traditionally been discriminatory and it does not satisfy UK equal pay
legislation. To avoid a successful equal pay claim in the UK, any difference in pay
between men and women carrying out work of equal value based on market rate
considerations has to be ‘objectively justified’, i.e. the employment tribunal will need to be
convinced that this was not simply a matter of opinion and that adequate evidence from
a number of sources was available.
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In such cases, the tribunal will also require proof that there is a business case for the
market premium to the effect that the recruitment and retention of essential people for the
organization was difficult because pay levels were uncompetitive.
3.6.2 Computer-aided job evaluation
Computer-aided job evaluation uses computer software to convert information about jobs
into a job evaluation score or grade. It is generally underpinned by a conventional pointfactor scheme. The ‘proprietary brands’ offered by consultants are often computer-aided.
Computers may be used simply to maintain a database recording evaluation and their
rationale. In the design stage they can provide guidance on weighting factors through
multiple regression analysis, although this technique has been largely discredited and is
little used now.
Methodology
The software used in a fully computer-aided scheme essentially replicates in digital form
the thought processes followed by evaluators when conducting a ‘manual’ evaluation. It
is based on defined evaluation decision rules built into the system shell. The software
typically provides a facility for consistency checks by, for example, highlighting scoring
differences between the job being evaluated and other benchmark jobs.
The two types of computer-aided evaluation are:
1. Schemes in which the job analysis data is either entered direct into the computer
or transferred to it from a paper questionnaire. The computer software applies
predetermined rules to convert the data into scores for each factor and produce a
total score. This is the most common approach.
2. Interactive computer-aided schemes in which the job holder and his or her
manager sit in front of a PC and are presented with a series of logically interrelated
questions, the answers to which lead to a score for each of the built-in factors in
turn and a total score.
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The case for computer-aided job evaluation
A computer-aided scheme can achieve greater consistency than when a panel of
evaluators uses a paper scheme – with the help of the computer the same input
information gives the same output result. It can also increase the speed of evaluations,
reduce the resources required and provide facilities for sorting, analysing, reporting on
the input information and system outputs and record keeping (database).
The case against computer-aided job evaluation
For some organizations the full approach is too expensive and elaborate for them to be
bothered with it. Others do not want to abandon the involvement of employees and their
representatives in the traditional panel approach.
There is also the problem of transparency in some applications. This is sometimes called
‘the black box effect’ – those concerned have difficulty in understanding the logic that
converts the input information to a factor level score. Interactive systems such as those
offered by Pilat Consultants (Gauge) and Watson Wyatt aim to overcome this difficulty. It
is perhaps for these reasons that less than half the respondents to the 2007 e-reward
survey had computer-aided schemes and over half of those used computers simply to
maintain job evaluation records.
3.7
Choice of approach
The fundamental choice is between using formal or informal methods of valuing roles.
This may not be a conscious decision. A company may use informal methods simply
because that’s what it has always done and because it never occurs to its management
that there is an alternative. But it may decide deliberately that an informal or semi-formal
approach fits its circumstances best.
Equal pay considerations
Job evaluation has particular significance when it refers to the achievement of equal pay
for work of equal value between women and men. Its role in achieving equal pay is carried
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out in many countries within the framework of equal pay legislation. Article 2 of the 1951
ILO’s Equal Remuneration Convention states that:
Each member shall, by means appropriate to the methods in operation for
determining rates of remuneration, promote and, in so far as is consistent
with such methods, ensure the application to all workers of the principle of
equal remuneration for men and women workers for work of equal value.
One hundred and sixty-three countries have ratified this convention including Albania,
Kazakhstan and the United Kingdom but not the United States.
3.8
The Process of Human Resource Planning
In order to meet business objectives and gain an advantage over competitors,
organizations should carry out human resource planning. To do this, organizations need
a clear idea of the strengths and weaknesses of their existing internal labor force. They
also must know what they want to be doing in the future-what size they want the
organization to be, what products and services it should be producing, and so on. This
knowledge helps them define the number and kinds of employees they will need. Human
resource planning compares the present state of the organization with its goals for the
future, then identifies what changes it must make in its human resources to meet those
goals. The changes may include downsizing, training existing employees in new skills, or
hiring new employees.
These activities give a general view of HR planning. They take place in the human
resource planning process shown in figure below. The process consists of three stages:
forecasting, goal setting and strategic planning, and program implementation and
evaluation.
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Forecasting
The first step in human resource planning is forecasting, as shown in the top portion of
the diagram above. In personnel forecasting, the HR professional tries to determine the
supply of and demand for various types of human resources. The primary goal is to predict
which areas of the organization will experience labor shortages or surpluses. Forecasting
supply and demand can use statistical methods or judgment. Statistical methods capture
historic trends in a company's demand for labor. Under the right conditions, these
methods predict demand and supply more precisely than a human forecaster can using
subjective judgment. But many important events in the labor market have no precedent.
When such events occur, statistical methods are of little use. To prepare for these
situations, the organization must rely on the subjective judgments of experts. Pooling their
"best guesses" is an important source of ideas about the future.
Forecasting the Demand for Labor
Usually, an organization forecasts demand for specific job categories or skill areas. After
identifying the relevant job categories or skills, the planner investigates the likely demand
for each. The planner must forecast whether the need for people with the necessary skills
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and experience will increase or decrease. There are several ways of making such
forecasts.
At the most sophisticated level, an organization might use trend analysis, constructing
and applying statistical models that predict labor demand for the next year, given relatively
objective statistics from the previous year.
These statistics are called leading indicators objective measures that accurately predict
future labor demand. They might include measures of the economy (such as sales or
inventory levels), actions of competitors, changes in technology, and trends in the
composition of the workforce and overall population. Trends affecting labor demand today
include years of economic growth, causing businesses and consumers to have more
money to spend on machinery, vehicles, houses, and other purchases.
Determining Labor Supply
Once a company has forecast the demand for labor, it needs an indication of the firm's
labor supply. Determining the internal labor supply calls for a detailed analysis of how
many people are currently in various job categories or have specific skills within the
organization. The planner then modifies this analysis to reflect changes expected in the
near future as a result of retirements, promotions, transfers, voluntary turnover, and
terminations.
Determining Labor Surplus or Shortage
Based on the forecasts for labor demand and supply, the planner can compare the figures
to determine whether there will be a shortage or surplus of labor for each job category.
Determining expected shortages and surpluses allows the organization to plan how to
address these challenges.
3.9
Goal Setting and Strategic Planning
The second step in human resource planning is goal setting and strategic planning, as
shown in the middle of the table above. The purpose of setting specific numerical goals
is to focus attention on the problem and provide a basis for measuring the organization's
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success in addressing labor shortages and surpluses. The goals should come directly
from the analysis of labor supply and demand. They should include a specific figure
indicating what should happen with the job category or skill area and a specific timetable
for when the results should be achieved.
Another consideration in choosing an HR strategy is whether the employees needed will
contribute directly to the organization's success. Organizations are most likely to benefit
from hiring and retaining employees who provide a core competency-that is, a set of
knowledge and skills that make the organization superior to competitors and create value
for customers. At a store, for example, core competencies include choosing merchandise
that shopper’s want and providing shoppers with excellent service. For other work that is
not a core competency-say, cleaning the store and providing security-the organization
may benefit from using HR strategies other than hiring full-time employees.
Organizations try to anticipate labor surpluses far enough ahead that they can freeze
hiring and let natural attrition (people leaving on their own) reduce the labor force.
Unfortunately for many workers, organizations often stay competitive in a fast-changing
environment by responding to a labor surplus with downsizing, which delivers fast results.
The impact is painful for those who lose jobs, as well as those left behind to carry on
without them. To handle a labor shortage, organizations typically hire temporary
employees or use outsourcing. Because downsizing, using temporary employees, and
outsourcing are most common, we will look at each of these in greater detail in the
following sections.
Downsizing
Downsizing is the planned elimination of large numbers of personnel with the goal of
enhancing the organization's competitiveness. The primary reason organizations engage
in downsizing is to promote future competitiveness. According to surveys, they do this by
meeting four objectives:
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•
Reducing costs – Labor is a large part of a company's total costs, so downsizing
is an attractive place to start cutting costs.
•
Replacing labor with technology – Closing outdated factories, automating, or
introducing other technological changes reduces the need for labor. Often, the
labor savings outweigh the cost of the new technology.
•
Mergers and acquisitions – When organizations combine, they often need less
bureaucratic overhead, so they lay off managers and some professional staff
members.
•
Moving to more economical locations – Some organizations move from one area
of the Namibia market to another. Other moves have shifted jobs to other
countries, including Mexico, India, and China, where wages are lower.
Early-Retirement Programs
Another popular way to reduce a labor surplus is with an early-retirement program. As we
discussed in Chapter 2, the average age of the Namibian workforce is increasing. But
even though many baby boomers are reaching traditional retirement age, indications are
that this group (especially women) has no intention of leaving the workforce soon.
Reasons include improved health of older people, jobs becoming less physically
demanding, insufficient savings, high levels of debt, lack of pensions, enjoyment of work
(especially in the higher-paying occupations), and laws against age discrimination. Under
the pressures associated with an aging labor force, many employers try to encourage
older workers to leave voluntarily by offering a variety of early-retirement incentives.
Employing Temporary and Contract Workers
While downsizing has been a popular way to reduce a labor surplus, the most widespread
method for eliminating a labor shortage is hiring temporary and contract workers.
Outsourcing
Instead of using a temporary or contract employee to fill a single job, an organization
might want a broader set of services. Contracting with another organization to perform a
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broad set of services is called outsourcing. Organizations use outsourcing as a way to
operate more efficiently and save money.
Overtime and Expanded Hours
Organizations facing a labor shortage may be reluctant to hire employees, even
temporary workers, or to commit to an outsourcing arrangement. Under some conditions,
these organizations may try to garner more hours from the existing labor force, asking
them to go from part-time to full-time status or to work overtime.
3.10 Understanding a Shifting Labour Market
Introduction
The nature and meaning of work need to be taken into account when developing
employment policies and practices. The aim of this chapter is to provide the basic
information required to do this. This comprises the nature and significance of work for
people, the factors that affect how work takes place within organizations, changes in the
pattern of employment and the future of work.
The nature of work
Work is the exertion of effort and the application of knowledge and skills to achieve a
purpose. Most people work to earn a living – to make money. But they also work because
of the other satisfactions it brings, such as doing something worthwhile, a sense of
achievement, prestige, recognition, the opportunity to use and develop abilities, the scope
to exercise power, and companionship. Gallie et al (1994), quoting research conducted
by the Social Change and Economic Life Initiative, found that 67 per cent of the people
questioned worked for money but a surprisingly high proportion (27 per cent) said they
worked for the intrinsic rewards money provides (‘expressive reasons’).
Within organizations, the nature of the work carried out by individuals and what they feel
about it is governed by the employment relationship and the psychological contract.
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The meaning of work
Research conducted by the Roffey Park Institute found that 70 per cent of employees
were looking for ‘more meaning in the workplace’. As the authors of the report, Holbeche
and Springett (2004) commented:
The search for meaning appears to be part of a fundamental human need to feel of value
and to make a difference… People need and want to belong to communities in which they
can make meaningful contributions. Work, for many people, provides a source of identity
and a feeling of togetherness. It gives us a sense of our status in society.
Feelings about work
Research into employee motivation and the psychological contract by Guest et al (1996)
and Guest and Conway (1997) obtained the following responses from the people they
surveyed:
•
work remains a central interest in the lives of most people;
•
if they won the Lottery, 39 per cent would quit work and most of the others would
continue working;
•
asked to select the three most important things they look for in a job, 70 per cent
of respondents cited pay, 62 per cent wanted interesting and varied work and only
22 per cent were looking for job security;
•
35 per cent claimed that they were putting in so much effort that they could not
work any harder and a further 34 per cent claimed they were working very hard.
3.10.1 Organizational factors affecting work
The nature of work alters as organizations change in response to new demands and
environmental pressures. The notions of the flexible firm and the ‘lean’ organization are
particularly significant.
The flexible firm
The flexible fi rm is one in which there is structural and operational flexibility. The concept
originated in the work of Doeringer and Priore (1971) and Loveridge and Mok (1979) but
was popularized by Atkinson (1984).
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Structural flexibility is present when the core of permanent employees is supplemented
by a peripheral group of part-time employees, employees on short- or fixed-term contracts
or subcontracted workers. The forms of operational flexibility are set out below:
Forms of operational flexibility
1. Functional flexibility, which is sought so that employees can be redeployed quickly
and smoothly between activities and tasks. Functional flexibility may require
multiskilling – workers who possess and can apply a number of skills, for example,
both mechanical and electrical engineering, or multitasking – workers who carry
out a number of different tasks, for example in a work team.
2. Numerical flexibility, which is sought so that the number of employees can be
quickly and easily increased or decreased in line with even short-term changes in
the level of demand for labour.
3. Financial flexibility, which provides for pay levels to reflect the state of supply and
demand in the external labour market and also means the use of flexible pay
systems that facilitate either functional or numerical flexibility.
Atkinson (1984) suggested that the growth of the flexible fi rm has involved the break-up
of the labour force into increasingly peripheral, and therefore numerically flexible, groups
of workers clustered around a numerically stable core group that will conduct the
organization’s key, firm-specific activities. This is usually called the ‘core-periphery’ view
of the firm.
At the core, the focus is on functional flexibility. Shifting to the periphery, numerical
flexibility becomes more important. As the market grows, the periphery expands to take
up slack; as growth slows, the periphery contracts. In the core, only tasks and
responsibilities change; the workers here are insulated from medium-term fluctuations in
the market and can therefore enjoy a measure of job security, whereas those in the
periphery are exposed to them.
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The lean organization
The term ‘lean production’ was popularized by Womack and Jones (1970) in The Machine
that Changed the World. But the drive for leaner methods of working was confined initially
to the car industry, as in Toyota, one of the pioneers of lean production, or more loosely,
‘world class manufacturing’.
Lean production aims to add value by minimizing waste in terms of materials, time, space
and people. Production systems associated with leanness include just-in-time, supply
chain management, material resources planning and zero defects/right first time.
The concept of ‘leanness’ has since been extended to non-manufacturing organizations.
This can often be number-driven and is implemented by means of a reduction in
headcounts (downsizing) and a reduction in the number of levels of management and
supervision (delayering). But there is no standard model of what a lean organization looks
like. According to research conducted by Kinnie et al (1996) firms select from a menu the
methods that meet their business needs. These include, other than delayering or the
negative approach of downsizing, positive steps such as team-based work organizations,
cross-functional management and development teams, emphasis on horizontal business
processes rather than vertical structures, and HRM policies aimed at high performance
and commitment and including communication programmes and participation in decision
making.
3.10.2 Changes in the pattern of employment
Changes in the pattern of employment include the shift to a service-sector economy, the
increasing number of female and part-time employees, greater employment flexibility, the
changing size and distribution of the public sector, growth in the numbers of knowledge
workers, growth in self-employment and the changing age structure.
The following analysis of the pattern of employment was made by labour survey index
(2008):
•
Government intervention to promote business in Namibia.
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•
Financial and business services account for about one in five jobs in the UK
compared with none at independence.
•
In 1986 more than one in four jobs held by men were in manufacturing. By 2006
this had fallen to less than one in seven.
•
The number of people in the Namibia normally working over 45 hours per week
generally rose from 1992/93 until it peaked in 1997. Since then, it has been steadily
in decline: now only one in five workers puts in a 45-plus hour week.
Career expectations
It is often said that the days of the lifelong career are over, especially for white-collar
workers, and that the job security they previously enjoyed no longer exists. The evidence
from the ESRC (2000) survey showed that this was not the case. Job tenure has not fallen
but has in fact increased on average from six years and two months to seven years and
four months. For men there has been a small decrease but for women there has been a
significant increase.
The future of work Futurologists, as noted by Nolan and Wood (2003), have been busy
forecasting what is going to happen to work. Charles Handy (1984) was one of the first.
He offered the notions of ‘portfolio workers’ who frequently changed their careers, a new
‘knowledge economy’ and the collapse of work in traditional industries. The full
employment society, he claimed, was becoming the part-employment society. ‘Labour
and manual skills were yielding to knowledge as the basis for new business and new
work. Hierarchies and bureaucracies were being supported by emerging networks and
partnership and the one-organization career was becoming rarer.’
Pessimists such as Bridges (1995) and Rifkin (1995) have argued that growing insecurity,
widening social divisions and higher levels of unemployment are the inevitable
consequences of structural change, new information and communication technologies.
Alternatively, optimists such as Leadbeater (2000) have held out the prospect of a world
with limitless possibilities for creative, cooperative and socially useful work.
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3.11 Recruitment
Definition
Recruitment is the process of finding and engaging the people the organization needs.
Selection is that part of the recruitment process concerned with deciding which applicants
or candidates should be appointed to jobs.
3.11.1 The recruitment and selection process.
The four stages of recruitment and selection are as follows.
1. Defining requirements – preparing role profiles and person specifications; deciding
terms and conditions of employment.
2. Planning recruitment campaigns.
3. Attracting candidates – reviewing and evaluating alternative sources of applicants,
inside and outside the company: advertising, e-recruiting, agencies and
consultants.
4. Selecting candidates – sifting applications, interviewing, testing, assessing
candidates, assessment centres, offering employment, obtaining references;
preparing contracts of employment.
Defining requirements
Requirements are set out in the form of job descriptions or role profiles and person
specifications. These provide the information required to draft advertisements, post
vacancies on the internet, brief agencies or recruitment consultants, and assess
candidates by means of interviews and selection tests.
Role profiles for recruitment purposes
Role profiles, define the overall purpose of the role, its reporting relationships and the key
result areas. They may also include a list of the competencies required. These will be
technical competencies (knowledge and skills) and any specific behavioural
competencies attached to the role. The latter would be selected from the organization’s
competency framework and modified as required to fit the demands made on role holders.
For recruiting purposes, the profile is extended to include information on terms and
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conditions (pay, benefits and hours of work), special requirements such as mobility,
travelling or unsocial hours, and learning, development and career opportunities. The
recruitment role profile provides the basis for a person specification.
3.11.2 Recruitment planning
A recruitment plan will cover:
•
the number and types of employees required to cater for expansion or new
developments and make up for any deficits;
•
the likely sources of candidates;
•
plans for tapping alternative sources;
•
how the recruitment programme will be conducted.
Attracting candidates
The first step in attracting candidates is to analyse recruitment strengths and
weaknesses. The outcome of this analysis can be used to develop an employee value
proposition and employer brand.
Analyse recruitment strengths and weaknesses
Attracting candidates is primarily a matter of identifying, evaluating and using the most
appropriate sources of applicants. However, in cases where difficulties in attracting or
retaining candidates are being met or anticipated, it may be necessary to carry out a
preliminary study of the factors that are likely to attract or repel candidates – the strengths
and weakness of the organization as an employer. The study could make use of an
attitude survey to obtain the views of existing employees.
The analysis of strengths and weaknesses should cover such matters as the national or
local reputation of the organization, pay, employee benefits and working conditions, the
intrinsic interest of the job, security of employment, opportunities for education and
training, career prospects, and the location of the office or plant. These need to be
compared with the competition so that a list of what are, in effect, selling points, can be
drawn up as in a marketing exercise, in which the preferences of potential customers are
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compared with the features of the product so that those aspects that are likely to provide
the most appeal to the customers can be emphasized. The analysis can show where the
organization needs to improve as an employer if it is to attract more or better candidates
and to retain those selected.
Candidates are, in a sense, selling themselves, but they are also buying what the
organization has to offer. If, in the latter sense, the labour market is a buyer’s market,
then the company that is selling itself to candidates must study their wants and needs in
relation to what it can provide. The study can be used to develop an employee value
proposition and an employee brand. They can help in the preparation of a better image
of the organization for use on corporate websites and in advertisements, brochures or
interviews.
Analyse the requirement
First it is necessary to establish how many jobs have to be filled and by when. Then turn
to an existing role profile and person specification or, if not available or out of date, draw
up new ones that set out information on responsibilities and competency requirements.
This information can be analysed to determine the required education, qualifications and
experience. The next step is to consider where suitable candidates are likely to come
from; the companies, jobs or education establishments they are in; and the parts of the
country where they can be found. Next, define the terms and conditions of the job (pay
and benefits).
Finally, refer to the analysis of strengths and weaknesses to assess what is likely to attract
good candidates to the job or the organization so the most can be made of these factors
when advertising the vacancy or reaching potential applicants in other ways. Consider
also what might put them off, for example the location of the job, so that objections can
be anticipated. Analyse previous successes or failures to establish what does or does not
work.
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Identify sources of candidates
First, consideration should be given to internal candidates. It may also be worth trying to
persuade former employees to return to the organization or obtain suggestions from
existing employees (referrals). If these approaches do not work the main sources of
candidates are advertising, online recruiting, agencies and job centres, consultants,
recruitment process outsourcing providers and direct approaches to educational
establishments.
Advertising
Advertising has traditionally been the most obvious method of attracting candidates and
it is still important, although many organizations are outsourcing recruitment to agencies
or consultants or using online recruitment, as was revealed in the CIPD (2008a) survey.
A conventional advertisement will have the following aims:
Aims of an advertisement
•
Generate candidates – attract a sufficient number of good candidates at minimum
cost.
•
Attract attention – it must compete for the attention of potential candidates against
other employees.
•
Create and maintain interest – it has to communicate in an attractive and
interesting way information about the job, the company and the terms and
conditions of employment.
•
Stimulate action – the message needs to be conveyed in a way that will prompt a
sufficient number of replies from candidates with the right qualifications for the job.
Information in a recruitment advertisement
•
The organization.
•
The job.
•
The person required – qualifications, experience, etc.
•
The pay and benefits offered.
•
The location.
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•
The action to be taken.
Online recruitment
Online or e-recruitment uses the internet to advertise or ‘post’ vacancies, provide
information about jobs and the organization and enable e-mail communication to take
place between employers and candidates. The latter can apply for jobs online and can email application forms and their CVs to employers or agencies. Tests can be completed
online. Some organizations are using Web 2.0 technologies to search for recruits online
through social networking sites such as Facebook and MySpace. Websites such as
LinkedIIn, which provide personal profiles, can be consulted. Other organizations are
providing ‘blogs’ from existing employees covering their experiences in working for the
organization. The main types of online recruitment sites are corporate websites,
commercial job boards and agency sites.
Corporate websites
These may simply list vacancies and contact details. A more elaborate approach would
consist of a dedicated website area that gives details of vacancies, person specifications,
benefits and how to apply for jobs by for example completing online application forms and
tests. Such areas may be linked directly to an organization’s home page so that general
browsers can access them. An intranet link may be available to enable internal staff to
access the website. Some organizations outsource the management of their website to
recruitment consultants and specialized web agencies.
Commercial job boards
These are operated by specialized firms such as Monster.co.uk and Fish4jobs.com and
consist of large databanks of vacancies. Companies pay to have their jobs listed on the
sites. Information about vacancies may reproduce an advertisement so that the site is
simply an additional form of communication. Alternatively, some vacancies are only found
online. Links may be provided to the organization’s website.
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Agency sites
These are run by established recruitment agencies. Candidates register online but may
be expected to discuss their details in person before they are forwarded to a prospective
employer.
Advantages and disadvantages of online recruiting.
The advantages of online recruiting are that it can reach a wider range of possible
applicants, and it is quicker and cheaper than traditional methods of advertising. More
details of jobs and firms can be supplied on the site and CVs can be matched and
applications can be submitted electronically. The disadvantages are that it may produce
too many irrelevant or poor applications and it is still not the first choice of many job
seekers.
Using agencies and job centres
Most private agencies deal with secretarial and office staff. They are usually quick and
effective but quite expensive. Agencies can charge a fee of 15 per cent or more of the
first year’s salary for finding someone. It can be cheaper to advertise or use the internet,
especially when the company is in a buyer’s market. Shop around to find the agency that
suits the organization’s needs at a reasonable cost. Agencies should be briefed carefully
on what is wanted. They produce unsuitable candidates from time to time but the risk is
reduced if they are clear about your requirements. The job centres operated by the
government are mainly useful for manual and clerical workers and sales or call centre
assistants.
Using recruitment consultants
Recruitment consultants generally advertise, interview and produce a short-list. They
provide expertise and reduce workload. The organization can be anonymous if it wishes.
Most recruitment consultants charge a fee based on a percentage of the basic salary for
the job, usually ranging from 15 to 20 per cent.
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The following steps should be taken when choosing a recruitment consultant:
•
check reputation with other users;
•
look at the advertisements of the various firms to obtain an idea of the quality of a
consultancy and the type and level of jobs with which it deals;
•
check on special expertise;
•
meet the consultant who will work on the assignment to assess his or her quality;
•
compare fees, although the differences are likely to be small and the other
considerations are usually more important.
Using executive search consultants
Use an executive search consultant, or ‘head hunter’ for senior jobs where there are only
a limited number of suitable people and a direct lead to them is wanted. They are not
cheap. Head hunters charge a fee of 30 to 50 per cent or so of the first year’s salary, but
they can be quite cost-effective.
Executive search consultants first approach their own contacts in the industry or
profession concerned. The good ones have an extensive range of contacts and their own
data bank. They will also have researchers who will identify suitable people who may fi t
the specification or can provide a lead to someone else who may be suitable. The more
numerous the contacts, the better the executive search consultant.
When a number of potentially suitable and interested people have been assembled, a
fairly relaxed and informal meeting takes place and the consultant forwards a short-list
with full reports on candidates to the client. There are some good and some not so good
executive search consultants. Do not use one unless a reliable recommendation is
obtained.
Recruitment process outsourcing
‘Recruitment process outsourcing’ (RPO) is the term used when an organization
commissions a provider to take responsibility for the end-to-end delivery of the
recruitment process covering all vacancies or a selection of them. This involves liaising
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with hiring managers to define requirements and specifications, deciding on the best ways
to attract candidates, processing applications, and setting up and facilitating interviews.
Some companies do not hand over all recruitment, using RPO only for high-volume
vacancies and retaining responsibility for senior and specialist jobs.
The advantages of RPO are that it can save time, bring outside expertise to bear on
recruitment problems and free up HR for more value-adding activities. The disadvantage
is the perception by some HR people and line managers that the provider is too remote
to deal with the real issues and that there is a danger of losing control.
Educational and training establishments
Many jobs can, of course, be filled by school leavers. For some organizations the major
source of recruits for training schemes will be universities and training establishments, as
well as schools. Graduate recruitment is a major annual exercise for some companies,
which go to great efforts to produce glossy brochures, visit campuses on the ‘milk run’
and use elaborate sifting and selection procedures to vet candidates, including ‘biodata’
and assessment centres, as described later in this chapter.
Processing applications
When the vacancy or vacancies have been advertised and a fair number of replies
received, the typical sequence of steps required to process applications is as follows:
1. List the applications on a control sheet setting out name, date application received
and actions taken (reject, hold, interview, short-list, offer).
2. Send a standard acknowledgement letter to each applicant unless an instant
decision can be made to interview or reject.
3. The applicant may be asked to complete and return an application form by post or
by e-mail to supplement a letter or CV. This ensures that all applicants are
considered on the same basis – it can be very difficult to plough through a pile of
letters, often ill-written and badly organized. Even CVs may be difficult to sift
although their quality is likely to be higher if the applicant has been receiving advice
from an ‘outplacement’ consultant, i.e. one who specializes in finding people jobs.
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However, to save time, trouble, expense and irritation, many recruiters prefer to
make a decision on the initial letter plus CV where it is quite clear that an applicant
meets or does not meet the specification, rather than ask for a form. For more
senior jobs it is generally advisable to ask for a CV.
4. Compare the applications with the key criteria in the person specification and sort
them initially into three categories: possible, marginal and unsuitable.
5. Scrutinize the possible candidates again to draw up a short-list for interview. This
scrutiny could be carried out by the HR or recruitment specialist, and the manager.
The numbers on the short-list should ideally be between four and eight. Fewer than
four leaves relatively little choice (although such a limitation may be forced on you
if an insufficient number of good applications have been received). More than eight
will mean that too much time is spent on interviewing and there is a danger of
diminishing returns setting in.
6. Draw up an interviewing programme. The time you should allow for the interview
will vary according to the complexity of the job. For a fairly routine job, 30 minutes
or so should suffice. For a more senior job, 60 minutes or more is required. It is
best not to schedule too many interviews in a day – if you try to carry out more
than five or six exacting interviews you will quickly run out of steam and do neither
the interviewee nor your company any justice. It is advisable to leave about 15
minutes between interviews to write up notes and prepare for the next one.
7. Invite the candidates to interview, using a standard letter where large numbers are
involved. At this stage, candidates should be asked to complete an application
form, if they have not already done so. There is much to be said at this stage for
sending candidates more details of the organization and the job so that you do not
have to spend too much time going through this information at the interview.
8. Review the remaining possible candidates and marginals and decide if any are to
be held in reserve. Send reserves a standard ‘holding’ letter and send the others
a standard rejection letter. The latter should thank candidates for the interest
shown and inform them briefly, but not too brusquely, that they have not been
successful. A typical reject letter might read as follows:
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“Since writing to you on… we have given careful consideration to your application for the
above position. I regret to inform you, however, that we have decided not to ask you to
attend for an interview. We should like to thank you for the interest you have shown.”
Bio data
A highly structured method of sifting applications is provided by the use of bio data. These
are items of biographical data that are criterion-based (i.e. they relate to established
criteria in such terms as qualifications and experience that indicate that individuals are
likely to be suitable). These are objectively scored and, by measurements of past
achievements, predict future behaviour.
The items of bio data consist of demographic details (sex, age and family circumstances),
education and professional qualifications, previous employment history and work
experience, positions of responsibility outside work, leisure interests and career/job
motivation. These items are weighted according to their relative importance as predictors,
and a range of scores is allocated to each one. The bio data questionnaire (essentially a
detailed application form) obtains information on each item, which is then scored.
Bio data are most useful when a large number of applicants are received for a limited
number of posts. Cut-off scores can then be determined, based on previous experience.
These scores would indicate who should be accepted for the next stage of the selection
process and who should be rejected, but they would allow for some possible candidates
to be held until the final cut-off score can be fixed after the first batch of applicants have
been screened.
Bio data criteria and predictors are selected by job and functional analysis, which
produces a list of competences. The validity of these items as predictors and the
weighting to be given to them are established by analysing the bio data of existing
employees who are grouped into high or low performers. Weights are allocated to items
according to the discriminating power of the response.
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Bio data questionnaires and scoring keys are usually developed for specific jobs in an
organization. Their validity compares reasonably well with other selection instruments but
they need to be developed and validated with great care and they are only applicable
when large groups of applicants have to be screened.
Application forms
Application forms set out the information on a candidate in a standardized format. They
provide a structured basis for drawing up short-lists, the interview itself and for the
subsequent actions in offering an appointment and in setting up personnel records. An
example of a form is given in the table below.
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Recruitment Sources
Another critical element of an organization's recruitment strategy is its decisions about
where to look for applicants. The total labor market is enormous and spread over the
entire globe. As a practical matter, an organization will draw from a small fraction of that
total market. The methods the organization chooses for communicating its labor needs
and the audiences it targets will determine the size and nature of the labor market the
organization taps to fill its vacant positions.
A person who responds to a help-wanted sign in a store window is likely to be different
from a person who responds to an employer seeking his or her high-demand skills named
in a Linkedin profile. Each of the major sources from which organizations draw recruits
has advantages and disadvantages.
Internal Sources
As we discussed with regard to personnel policies, an organization may emphasize
internal or external sources of job applicants. Internal sources are employees who
currently hold other positions in the organization. Organizations recruit existing
employees through job posting, or communicating information about the vacancy on
company bulletin boards, in employee publications, on corporate intranets, and anywhere
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else the organization communicates with employees. Managers also may identify
candidates to recommend for vacancies. Policies that emphasize promotions and even
lateral moves to achieve broader career experience can give applicants a favorable
impression of the organization's jobs. The use of internal sources also affects what kinds
of people the organization recruits.
External Sources
Despite the advantages of internal recruitment, organizations often have good reasons to
recruit externally. For entry-level positions and perhaps for specialized upper-level
positions, the organization has no internal recruits from which to draw. Also, bringing in
outsiders may expose the organization to new ideas or new ways of doing business. An
organization that uses only internal recruitment can wind up with a workforce whose
members all think alike and therefore may be poorly suited to innovation.
Direct Applicants and Referrals Even without a formal effort to reach job applicants, an
organization may hear from candidates through direct applicants and referrals. Direct
applicants are people who apply for a vacancy without prompting from the organization.
Referrals are people who apply because someone in the organization prompted them to
do so. Direct applicants are likeliest to result when an employer has created such a
positive image that workers seek out the company to apply.
The major downside of referrals is that they limit the likelihood of exposing the
organization to fresh viewpoints. People tend to refer others who are like themselves.
Furthermore, sometimes referrals contribute to hiring practices that are or that appear
unfair, an example being nepotism, or the hiring of relatives. Employees may resent the
hiring and rapid promotion of "the boss's son" or "the boss's daughter," or even the boss's
friend.
3.11.3 Selection Process
Through personnel selection, organizations make decisions about who will or will not be
invited to join the organization. Selection begins with the candidates identified through
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recruitment and with attempts to reduce their number to the individuals best qualified to
perform the available jobs. At the end of the process, the selected individuals are placed
in jobs with the organization.
The process of selecting employees varies considerably from organization to organization
and from job to job. At most organizations, however, selection includes the steps
illustrated in the diagram below. First, a human resource professional reviews the
applications received to see which meet the basic requirements of the job.
A strategic approach to selection requires ways to measure the effectiveness of selection
tools. From science, we have basic standards for this:
o The method provides reliable information.
o The method provides valid information.
o The information can be generalized to apply to the candidates.
o The method offers high utility (practical value).
o The selection criteria are legal.
3.11.3.1
Selection methods
The aim of selection is to assess the suitability of candidates by predicting the extent to
which they will be able to carry out a role successfully. It involves deciding on the degree
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to which the characteristics of applicants in terms of their competencies, experience,
qualifications, education and training match the person specification. It also involves using
this assessment to make a choice between candidates.
The so-called ‘classic trio’ of selection methods consists of application forms, interviews
and references. But to these should be added selection tests and assessment centres.
Application forms were described earlier and the various types of interviews and
assessment centres are described below, as is the dubious technique of graphology. The
use of references is considered in the next section of this chapter.
Individual interviews
The individual interview is the most familiar method of selection. It involves face-to-face
discussion and provides the best opportunity for the establishment of close contact –
rapport – between the interviewer and the candidate. A structured interview is one that is
built around a set of predetermined questions that may be related to the competencies
required as set out in the person specification or typical situations faced by holders of the
role for which the candidate is being considered. If only one interviewer is used, there is
more scope for a biased or superficial decision, and this is one reason for using a second
interviewer or an interviewing panel.
Interviewing panels
Two or more people gathered together to interview one candidate may be described as
an ‘interviewing panel’. The most typical situation is that in which an HR specialist and
line managers see the candidate at the same time. This has the advantage of enabling
information to be shared and reducing overlaps. The interviewers can discuss their joint
impressions of the candidate’s behaviour at the interview and modify or enlarge any
superficial judgements.
Selection boards or panels
Selection boards are more formal and, usually, larger interviewing panels convened
because there are a number of parties interested in the selection decision. Their only
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advantage is that they enable a number of different people to have a look at the applicants
and compare notes on the spot. The disadvantages are that the questions tend to be
unplanned and delivered at random, the prejudices of a dominating member of the board
can overwhelm the judgements of the other members, and the candidates are unable to
do justice to themselves because they are seldom allowed to expand. Selection boards
tend to favour the confident and articulate candidate, but in doing so they may miss the
underlying weaknesses of a superficially impressive individual. They can also
underestimate the qualities of those who happen to be less effective in front of a
formidable board, although they would be fully competent in the less formal or less
artificial situations that would face them in the job.
Dealing with recruitment problems
Every experienced HR professional who is responsible for recruitment and selection will
occasionally come across a vacancy that is particularly difficult to fill. In this situation any
compromise that involves appointing someone who does not meet the specification must
be avoided. To deal with the problem constructively it is necessary to take the following
actions.
Dealing with recruitment problems
•
Ensure that all the possible sources of candidates have been used.
•
Consider any ways in which the advertisement or website entry could be made
more attractive.
•
Check that the person specification is realistic – that the requirements have not
been overstated.
•
Consider whether it might be necessary to improve the package offered to
candidates – check market rates to ensure that the level of pay and benefits are
competitive.
•
In discussion with the line manager, examine the possibility of reshaping the role
to increase its attractiveness.
•
If the worst comes to the worst, and again in discussion with the manager,
consider alternative ways of carrying out the work involved with existing staff.
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References and offers
After the interviewing and testing procedure has been completed, a provisional decision
to make an offer by telephone or in writing can be made. This is normally ‘subject to
satisfactory references and the candidate should, of course, be told that these will be
taken up. If there is more than one eligible candidate for a job it may be advisable to hold
one or two people in reserve. Applicants often withdraw, especially those whose only
purpose in applying for the job was to carry out a ‘test marketing’ operation, or to obtain
a lever with which to persuade their present employers to value them more highly.
Checking applications
It is a sad fact that applicants all too often misinform their prospective employers about
their education, qualifications and employment record. This was confirmed by a survey
carried out by the CIPD (2008a), which found that 25 per cent of employers had to
withdraw their offers because applicants had lied or misrepresented their application. It is
always advisable to check with universities, professional institutes and previous
employers that the facts given by applicants are correct.
References
The main purpose of a reference is to obtain in confidence factual information about a
prospective employee. This information is straightforward and essential. It is simply
necessary to confirm the nature of the previous job, the period of time in employment, the
reason for leaving (if relevant), the salary or rate of pay and, possibly, the attendance
record.
A written request for a reference could simply ask the precious employer to confirm the
candidate’s employment record. More precise answers may be obtained if a standard
form is provided for the employer to complete. The questions asked on this form should
be limited to the following:
•
What was the period of employment?
•
What was the job title?
•
What work was carried out?
•
What was the rate of pay or salary?
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•
How many days absence over the last 12 months?
•
Would you re-employ (if not, why not)?
Telephone references may save time and may be more reliable. They can be used as an
alternative or in addition to written references. Ask factual questions only and keep a
record of the conversation.
References – legal aspects
•
The key legal points that should be considered when asking for or giving
references are: Once the decision has been made to make an offer, the letter
should state that ‘this is a provisional offer subject to the receipt of satisfactory
references.
•
It has been generally held that there is no common law duty on an employer to
provide references for a serving or past employee unless there is a term to that
effect in the employment contract. But it has been ruled (Spring v. Guardian
Assurance 1994) that there might be a moral duty to provide a reference where it
is ‘natural practice’ to require a reference from a previous employer before offering
employment, and where the employee could not expect to enter that type of
employment without a reference.
•
If a reference contains a false or unsubstantiated statement that damages the
reputation of the individual, action for damages may result.
•
It is possible to succeed in a claim for damages if it can be shown that the reference
provided was negligent because reasonable care had not been taken in preparing
it, which includes ensuring that it is factually correct.
Confirming the offer
The final stage in the selection procedure is to confirm the offer of employment after
satisfactory references have been obtained, and the applicant has passed the medical
examination required for pension and life assurance purposes or because a certain
standard of physical fitness is required for the work. The contract of employment should
also be prepared at this stage.
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Contracts of employment
The basic information that should be included in a written contract of employment varies
according to the level of the job.
Follow-up
It is essential to follow up newly engaged employees to ensure that they have settled in
and to check on how well they are doing. If there are any problems it is much better to
identify them at an early stage rather than allowing them to fester.
Following up is also important as a means of checking on the selection procedure. If by
any chance a mistake has been made, it is useful to find out how it happened so that the
procedure can be improved. Misfits can be attributed to a number of causes, for example
inadequate person specification, poor sourcing of candidates, weak advertising, poor
interviewing techniques, inappropriate or invalidated tests, or prejudice on the part of the
selector
The goals of recruiting (encouraging qualified people to apply for jobs) and election
(deciding which candidates would be the best fit) are different enough that they are most
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effective when performed separately, rather than combined as in a job interview that also
involves selling candidates on the company.
3.11.3.2
Personnel Policies
An organization's personnel policies are its decisions about how it will carry out human
resource management, including how it will fill job vacancies. These policies influence the
nature of the positions that are vacant. According to the research on recruitment, it is
clear that characteristics of the vacancy are more important than recruiters or recruiting
sources for predicting job choice. Several personnel policies are especially relevant to
recruitment:
Internal versus external recruiting-Organizations with policies to "promote from within" try
to fill upper-level vacancies by recruiting candidates internally-that is, finding candidates
who already work for the organization. Opportunities for advancement make a job more
attractive to applicants and employees.
Employment Tests and Work Samples
When the organization has identified candidates whose applications or resumes indicate
they meet basic requirements, the organization continues the selection process with this
narrower pool of candidates. Often the next step is to gather objective data through one
or more employment tests. These tests fall into two broad categories:
1. Aptitude tests assess how well a person can learn or acquire skills and abilities.
In the realm of employment testing, the best-known aptitude test is the General
Aptitude Test Battery (GATB), used by the U.S. Employment Service.
2. Achievement tests measure a person's existing knowledge and skills. For
example, government agencies conduct civil service examinations to see whether
applicants are qualified to perform certain jobs.
Cognitive Ability Tests
Although fewer jobs require muscle power today, brainpower is essential for most jobs.
Organizations therefore benefit from people who have strong mental abilities. Cognitive
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ability tests – sometimes called "intelligence tests"-are designed to measure such
mental abilities as verbal skills (skill in using written and spoken language), quantitative
skills (skill in working with numbers), and reasoning ability (skill in thinking through the
answer to a problem). Many jobs require all of these cognitive skills, so employers often
get valid information from general tests. Many reliable tests are commercially available.
The tests are especially valid for complex jobs and for those requiring adaptability in
changing circumstances.
Job Performance Tests and Work Samples
Many kinds of jobs require candidates who excel at performing specialized tasks, such
as operating a certain machine, handling phone calls from customers, or designing
advertising materials. To evaluate candidates for such jobs, the organization may
administer tests of the necessary skills. Sometimes the candidates take tests that involve
a sample of work, or they may show existing samples of their work. Testing may involve
a difficult team project, a complex computer programming puzzle, or a game simulating
the work environment.
Examples of job performance tests include tests of keyboarding speed and in-basket
tests. An in-basket test measures the ability to juggle a variety of demands, as in a
manager's job.
The candidate is presented with simulated memos and phone messages describing the
kinds of problems that confront a person in the job. The candidate has to decide how to
respond to these messages and in what order. Examples of jobs for which candidates
provide work samples include graphic designers and writers. Tests for selecting
managers may take the form of an assessment center-a wide variety of specific selection
programs that use multiple selection methods to rate applicants or job incumbents on
their management potential. An assessment center typically includes in basket tests, tests
of more general abilities, and personality tests. Combining several assessment methods
increases the validity of this approach. Research suggests that the two most important
skill types identified by an assessment center are problem-solving ability and
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interpersonal skills, but it may be that what makes the assessments valid is that they
provide work samples.
Personality Inventories
In some situations, employers may also want to know about candidates' personalities.
For example, one way that psychologists think about personality is in terms of the "Big
Five"
traits:
extroversion,
adjustment,
agreeableness,
conscientiousness,
and
inquisitiveness. Employers also must ensure that their use of these tests meets legal
standards.
Honesty Tests and Drug Tests
No matter what employees' personalities may be like, organizations want employees to
be honest and to behave safely. Some organizations are satisfied to assess these
qualities based on judgments from reference checks and interviews. Others investigate
these characteristics more directly through the use of honesty tests and drug tests. The
most famous kind of honesty test is the polygraph, the so-called lie detector test.
Employers considering the use of drug tests should ensure that their drug-testing
programs conform to some general rules:
•
Administer the tests systematically to all applicants for the same job.
•
Use drug testing for jobs that involve safety hazards.
•
Have a report of the results sent to the applicant, along with information about how
to appeal the results and be retested if appropriate.
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•
Respect applicants' privacy by conducting tests in an environment that is not
intrusive and keeping results confidential.
Medical Examinations
Especially for physically demanding jobs, organizations may wish to conduct medical
examinations to see that the applicant can meet the job's requirements. Employers may
also wish to establish an employee's physical condition at the beginning of employment,
so that there is a basis for measuring whether the employee has suffered a work-related
disability later on. At the same time, as described, organizations may not discriminate
against individuals with disabilities who could perform a job with reasonable
accommodations.
Likewise, they may not use a measure of size or strength that discriminates against
women, unless those requirements are valid in predicting the ability to perform a job.
Furthermore, to protect candidates' privacy, medical exams must be related to job
requirements and may not be given until the candidate has received a job offer. Therefore,
organizations must be careful in how they use medical examinations. Many organizations
make selection decisions first and then conduct the exams to confirm that the employee
can handle the job with any reasonable accommodations required.
Interviews
Supervisors and team members most often get involved in the selection process at the
stage of employment interviews. These interviews bring together job applicants and
representatives of the employer to obtain information and evaluate the applicant's
qualifications. While the applicant is providing information, he or she is also forming
opinions about what it is like to work for the organization. Most organizations use
interviewing as part of the selection process. In fact, this method is used more than any
other.
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Interviewing Techniques
Interview techniques include choices about the type of questions to ask and the number
of people who conduct the interview. Several question types are possible:
•
In a nondirective interview, the interviewer has great discretion in choosing
questions. The candidate's reply to one question may suggest other questions to
ask. Nondirective interviews typically include open-ended questions about the
candidate's strengths, weaknesses, career goals, and work experience. Because
these interviews give the interviewer wide latitude, their reliability is not great, and
some interviewers ask questions that are not valid or even legal.
•
A structured interview establishes a set of questions for the interviewer to ask.
Ideally, the questions are related to job requirements and cover relevant
knowledge, skills, and experiences. The interviewer is supposed to avoid asking
questions that are not on the list. Although interviewers may object to being
restricted, the results may be more valid and reliable than with a nondirective
interview.
•
A situational interview is a structured interview in which the interviewer describes
a situation likely to arise on the job and asks the candidate what he or she would
do in that situation. This type of interview may have high validity in predicting job
performance. A behavior description interview (BDI) is a structured interview in
which the interviewer asks the candidate to describe how he or she handled a type
of situation in the past. Questions about candidates' actual experiences tend to
have the highest validity.
SUMMARY
The factors affecting job design
•
The characteristics of jobs.
•
The characteristics of task structure.
•
The process of intrinsic motivation.
•
The job characteristics model.
•
The implications of group activities.
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The characteristics of jobs
•
Job range – the number of operations a job holder performs to complete a task.
•
Job depth – the amount of discretion a job holder has to decide job activities and
job outcomes.
•
Job relationships – the interpersonal relationships between job holders and their
managers and co-workers.
Task structure
Job design requires the assembly of a number of tasks into a job or a group of jobs.
Individuals may carry out a variety of connected tasks (multi-tasking), each with a number
of functions, or these tasks may be allocated to a team of workers or divided between
them. The internal structure of each task consists of three elements: planning (deciding
on the course of action, its timing and the resources required), executing (carrying out the
plan), and controlling (monitoring performance and progress and taking corrective action
when required). A completely integrated job includes all these elements for each of the
tasks involved.
Approaches to job design (Robertson and Smith, 1985)
•
Influence skill variety by providing opportunities for people to do several tasks and
by combining tasks.
•
Influence task identity by combining tasks and forming natural work units.
•
Influence task significance by forming natural work units and informing people of
the importance of their work.
•
Influence autonomy by giving people responsibility for determining their own
working systems.
•
Influence feedback by establishing good relationships and opening feedback
channels.
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Defining requirements
Requirements are set out in the form of job descriptions or role profiles and person
specifications. These provide the information required to draft advertisements, post
vacancies on the internet, brief agencies or recruitment consultants and assess
candidates by means of interviews and selection tests. Recruitment planning A
recruitment plan will cover:
•
the number and types of employees required to cater for expansion or new
developments and make up for any deficits;
•
the likely sources of candidates;
•
plans for tapping alternative sources;
•
how the recruitment programme will be conducted.
REVIEW AND DISCUSSION QUESTIONS
1. What is the process of job design?
2. What are the factors affecting job design?
3. What are the intrinsically motivating characteristics of jobs?
4. What is the job characteristics model?
5. How is role development carried out?
6. Some time ago (1987) Professor Shaun Tyson produced the following prediction:
‘Personnel work can be seen to be subject to conflicting and powerful pressures
which are leading to the balkanization of the personnel role. The territory which
could once have been delineated as personnel country, is being invaded, sold-off,
subdivided and put under lease to consultants, sub-specialists and line managers,
whose crosscutting alliances do not correspond to a coherent, separate function.’
To what extent has this happened since then? If not, what has happened?
7. Peter Reilly made these comments in 2006 on the three-legged Ulrich model: ‘The
model has many advantages, not least that it aims to centralize activities where
there are scale advantages and also keep close to customers where
decentralization is necessary. But it’s not an easy structure to work with. Splitting
the function into three distinct areas has created boundary disputes and
sometimes left a hole at the very heart of HR operation. One consequence of this
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division of labour is that lines of accountability are not always clearly define, the
end result may be a remote service that does not attend to the areas where
managers need most assistance.’ Drawing on research, what can be done to avoid
these problems?
8. The conclusions reached by Brewster et al (2005) after their extensive research
were that: ‘Our study has revealed an increasing emphasis on globalizing HR
processes, with intense discussion around what needs to be global, regional or
national. This new definition of global HR positions the global HR professional as
the guardian of culture, operating global values and systems.’ What do you think
this means in practice for anyone involved in international HRM?
CASE IN POINT - TAKING RESPONSIBILITY
Mayo Clinic Prescribes a Dose of Efficient Work Design
The Mayo Clinic might seem like a strange candidate for work redesign. The organization
is known for setting the gold standard for patient care. Each year, more than a million
patients, many with complex health conditions, travel to the main campus in Rochester,
Minnesota, or to facilities in Arizona and Florida. There they receive "patient-centered
care," in which a team of doctors’ collaborates on treatment, consulting one shared
medical record for each patient. Providing these services brings in annual revenues of
almost $11 billion. Changes in the U.S. health care system are making past practices
unsustainable, however. Mayo's CEO, Dr. John Noseworthy, observed that as health care
costs continue to rise faster than inflation, payers-Medicare, Medicaid, and private
insurance companies-are all putting caps on what they will pay, even as an aging
population needs more care.
Payers are insisting that doctors and hospitals start thinking more like businesses and
figure out ways to deliver consistent patient care more efficiently. Dr. Noseworthy
determined that protecting Mayo Clinic's future would require him to lead a rethinking of
how work is done in every part of the organization, a project he named the Mayo Clinic
2020 Initiative. For the hundreds of projects in this initiative, the changes include some
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restructuring of jobs. For example, a review of the care given to patients with epilepsy
found that some services doctors were providing could be delivered just as well by nurses.
Expanding nurses' jobs in this way not only lowered the cost of a visit, it also freed up a
quarter hour of time per patient for doctors to visit new patients. Similarly, a review of care
following heart surgery led to a decision that nurses should have more control over that
process. The very act of launching the 2020 Initiative changed the jobs of Mayo's
physicians.
Previously their role was all about health care, with the doctors assuming the clinic would
provide whatever resources they requested. Now their role has expanded to include
decision making aimed at eliminating wasted time and money. For example, heart surgery
teams competed to see which team could best shrink the time to set up operating rooms
between surgeries. No prizes were awarded, but the friendly competition cut the average
time in half. Efforts to improve work processes have also addressed the problem of
information overload. Mayo Clinic observed that doctors had available as many as 50,000
data points about any given patient-too much to process quickly and accurately.
To improve care in the clinic's intensive-care units, a team of researchers and IT experts
interviewed doctors to identify which pieces of data are most important to their work. They
identified several dozen and designed a system to display this data set, highlight relevant
measures with color coding, and deliver alarms when certain measures do not conform
to the requirements for providing quality care in a situation. Using the system, the ICUs
have improved their efficiency, patient outcomes, and operating costs.
Questions
1. What responsibilities were added to the jobs of doctors and nurses at Mayo Clinic?
What impact do you think those changes had on the motivational aspect of the
work?
2. What would you expect are the potential consequences of information overload in
an intensive-care unit? Why is it important for ICUs to help doctors meet this kind
of mental demand?
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4
UNIT 4: DEVELOPING PEOPLE
Objectives:
✓ Explain the importance of orientation
✓ Design an orientation programme for a new employee
✓ Explain why the evaluation of the orientation programme is important.
✓ Discuss how to link training programs to organizational needs.
✓ Explain how to assess the need for training.
✓ Explain how to assess employees' readiness for training.
✓ Describe how to plan an effective training program.
✓ Compare widely used training methods.
✓ Summarize how to implement a successful training program.
✓ Evaluate the success of a training program.
✓ Describe training methods for employee orientation and onboarding and for
diversity management.
✓ Discuss how development is related to training and careers.
✓ Identify the methods organizations use for employee development.
✓ Describe how organizations use assessment of personality type, work behaviors,
and job performance to plan employee development.
✓ Explain how job experiences can be used for developing skills.
✓ Summarize principles of successful mentoring programs.
✓ Tell how managers and peers develop employees through coaching.
✓ Identify the steps in the process of career management.
✓ Discuss how organizations are meeting the challenges of the "glass ceiling,"
succession planning, and dysfunctional managers
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4.1
Introduction
Training consists of an organization's planned efforts to help employees acquire jobrelated knowledge, skills, abilities, and behaviors, with the goal of applying these on the
job. A training program may range from formal classes to one-on-one mentoring, and it
may take place on the job or at remote locations. No matter what its form, training can
benefit the organization when it is linked to organizational needs and when it motivates
employees.
Hiring decisions are about finding the people who will be a good fit with the job and the
organization. Any organization that appreciates the competitive edge provided by good
people must take the utmost care in choosing its members.
The organization's decisions about selecting personnel are central to its ability to survive,
adapt, and grow. Selection decisions become especially critical when organizations face
tight labor markets or must compete for talent with other organizations in the same
industry. If a competitor keeps getting the best applicants, the remaining companies must
make do with who is left.
This chapter will familiarize you with ways to minimize errors in employee selection and
placement. The chapter starts by describing the selection process and how to evaluate
possible methods for carrying out that process. It then takes an in-depth look at the most
widely used methods: applications and resumes, employment tests, and interviews. The
chapter ends by describing the process by which organizations arrive at a final selection
decision.
4.2
Employee Orientation and Socialization
Objectives of orientation
•
Acquainting new employees with job procedures.
•
Establishing relationships with co-workers, including subordinates and supervisors
•
Creating a sense of belonging among employees by showing them how their job
fits into the overall organisation.
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•
Acquainting new employees with the goals of the organisation.
•
Indicating to the employees the preferred means by which these goals should be
attained.
•
Identifying the basic responsibilities of the job.
•
Indicating the required behavior patterns for effective job performance.
Model for orientation
•
Phase I –Anticipatory socialization
•
Phase II –Encounter
•
Phase III –Change and acquisition
Benefits of orientation
•
Job satisfaction
•
Labour turnover
•
Commitment to values and goals
•
Performance as a result of faster learning times
•
Costly and time-consuming mistakes
•
Absenteeism
•
Customer service through heightened productivity
•
Manager/subordinate relationships
•
Understanding of company policies, goals and procedures
Responsibility for orientation
•
The supervisor – The head of department
•
The human resources department
•
A 'mentor' or 'buddy
•
The shop steward/staff representative
•
New employees
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Who should be given orientation training?
•
New employees
•
Transferred/promoted employees
•
All current employees
Scope of orientation training
•
General organisational orientation affects all employees in the organisation
•
Specific departmental orientation tailored to the new employees’ specific
department.
Employee handbook – review regularly, guard against too much detail, mention topics
briefly, could also be on website.
Approaches in orientation
•
Informal Orientation:
•
Self-directed orientation
•
employee is encouraged to discover information on their own regarding the
organisation (can be by means of company Intranet).
How long should the orientation training be?
•Avoid cramming all orientation (detailed information) into one long session
•Sessions should not be longer than 2 hours
•Period of orientation should be linked to time it takes to become effective
•Follow-up sessions are important after ±2 months
Planning an orientation programme
•
Developing orientation programme takes 3-6 months
•
Key planning considerations:
▪
Orientation policy
▪
Budget
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Other planning considerations
•
Time needed to plan & implement
•
Other planning considerations -A number of other aspects must also be
considered: (continued)
•
Programme goals, topics to be included, methods of organising and presenting
them, duration of orientation sessions
•
Materials, facilities and personnel to be used
•
General organisation topics versus department and job topics to be covered
•
Qualifications and training needs of human resources personnel, line managers
and supervisors
•
Programme flexibility to accommodate employee differences in education,
intelligence and work experience
•
Designing an orientation programme
Different groups in the organisation require different orientation programmes (e.g.,
management & non-management).
•
Design programme to include all the information the newcomer will “need to know”
and the “nice to know” as well
•
“Need to know”–information the newcomer requires as soon as possible to fit in &
be effective
•
“Nice to know” –can be given over a period of time as they settle in
Categories of information:
•
Job-related information
•
General information
Implementing the orientation programme
1. Steps: –Pre-employment preparation
•
Pre-employment information
•
1st day instructions
2. Steps: –The welcome pack
•
Organising the work
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3. Steps: –Briefing colleagues
•
Administrative arrangements
•
Training ––The first day orientation
•
On arrival
•
Basic information
4. Steps: –The initial discussion
•
Building the relationship
•
Immediate supervisor
•
The buddy or mentor
Evaluation of the orientation programme
Benefits:
•
To ensure that the organisation is spending its money wisely and achieving
positive results.
•
That the methods used to assist new employees to integrate and become effective
workers in the organisation are the most suitable.
•
Use questionnaires, surveys, exit interviews and course evaluation forms,
qualitative information can also be gathered:
▪
Who should be involved?
▪
What will be measured?
The problems with orientation programmes
▪
Too much emphasis on paperwork
▪
Information overload
▪
Scare tactics
▪
Too much selling of the organisation
▪
Emphasis on formal, one-way communication
▪
One-shot mentality
▪
No diagnosis or evaluation of the programme
▪
Lack of “follow-up”
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4.3
Training and Development
4.3.1 Needs Assessment
Instructional design logically should begin with a needs assessment, the process of
evaluating the organization, individual employees, and employees' tasks to determine
what kinds of training, if any, are necessary. As this definition indicates, the needs
assessment answers questions in three broad areas:
1. Organization-What is the context in which training will occur?
2. Person-Who needs training?
3. Task-What subjects should the training cover?
The answers to these questions provide the basis for planning an effective training
program. A variety of conditions may prompt an organization to conduct a needs
assessment. Management may observe that some employees lack basic skills or are
performing poorly.
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Organization Analysis
Usually, the needs assessment begins with the organization analysis. This is a process
for determining the appropriateness of training by evaluating the characteristics of the
organization. The organization analysis looks at training needs in light of the
organization's strategy, resources available for training, and management's support for
training activities.
Training needs will vary depending on whether the organization's strategy is based on
growing or shrinking its personnel, whether it is seeking to serve a broad customer base
or focusing on the specific needs of a narrow market segment, and various other strategic
scenarios. An organization that concentrates on serving a niche market may need to
continually update its workforce on a specialized skills set. A company that is cutting costs
with a downsizing strategy may need to provide training in job search skills for employees
who will be laid off. The employees who remain following the downsizing may need crosstraining so that they can handle a wider variety of responsibilities.
Person Analysis
Following the organizational assessment, needs assessment turns to the remaining areas
of analysis: person and task. The person analysis is a process for determining individuals'
needs and readiness for training. It involves answering several questions:
•
Do performance deficiencies result from a lack of knowledge, skill, or ability? (If
so, training is appropriate; if not, other solutions are more relevant).
•
Who needs training?
•
Are these employees ready for training?
The person analysis is therefore critical when training is considered in response to a
performance problem. In assessing the need for training, the manager should identify all
the variables that can influence performance. The primary variables are the person's
ability and skills, his or her attitudes and motivation, the organization's input (including
clear directions, necessary resources, and freedom from interference and distractions),
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performance feedback (including praise and performance standards), and positive
consequences to motivate good performance. Of these variables, only ability and skills
can be affected by training.
Task Analysis
The third area of needs assessment is task analysis, the process of identifying the tasks,
knowledge, skills, and behaviors that training should emphasize. Usually task analysis is
conducted along with person analysis. Understanding shortcomings in performance
usually requires knowledge about the tasks and work environment as well as the
employee.
To carry out the task analysis, the HR professional looks at the conditions in which tasks
are performed. These conditions include the equipment and environment of the job, time
constraints (for example, deadlines), safety considerations, and performance standards.
These observations form the basis for a description of work activities, or the tasks required
by the person's job.
4.3.2 Readiness for Training
Effective training requires not only a program that addresses real needs, but also a
condition of employee readiness. Readiness for training is a combination of employee
characteristics and positive work environment that permit training. It exists when
employees are able and eager to learn and when their organizations encourage learning.
Employee Readiness Characteristics
To be ready to learn, employees need basic learning skills, especially cognitive ability,
which includes being able to use written and spoken language, solve math problems, and
use logic to solve problems. Ideally, the selection process identified job candidates with
enough cognitive ability to handle not only the requirements for doing a job, but also the
training associated with that job. However, since forecasts of the skill levels of the
Namibian workforce indicate that many companies will have to work with employees who
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lack basic skills, they may have to provide literacy training or access to classes teaching
math skills before some employees can participate in job-related training.
Employees learn more from training programs when they are highly motivated to learn
that is, when they really want to learn the content of the training program. Employees tend
to feel this way if they believe they are able to learn, see potential benefits from the
training program, are aware of their need to learn, see a fit between the training and their
career goals, and have the basic skills needed for participating in the program.
Managers can influence a ready attitude in a variety of ways-for example, by providing
feedback that encourages employees, establishing rewards for learning, and
communicating with employees about the organization's career paths and future needs.
Work Environment
Readiness for training also depends on two broad characteristics of the work
environment: situational constraints and social support. Situational constraints are the
limits on training's effectiveness that arise from the situation or the conditions within the
organization.
Constraints can include a lack of money for training, lack of time for training or practicing,
and failure to provide proper tools and materials for learning or applying the lessons of
training. Conversely, trainees are likely to apply what they learn if the organization gives
them opportunities to use their new skills and if it rewards them for doing so.
4.3.3 Planning the Training Program
Decisions about training are often the responsibility of a specialist in the organization's
training or human resources department. When the needs assessment indicates a need
for training and employees are ready to learn, the person responsible for training should
plan a training program that directly relates to the needs identified. Planning begins with
establishing objectives for the training program. Based on those objectives, the planner
decides who will provide the training, what topics the training will cover, what training
methods to use, and how to evaluate the training.
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Objectives of the Program
Formally establishing objectives for the training program has several benefits. First, a
training program based on clear objectives will be more focused and more likely to
succeed. In addition, when trainers know the objectives, they can communicate them to
the employees participating in the program. Employees learn best when they know what
the training is supposed to accomplish. Effective training objectives have several
characteristics:
•
They include a statement of what the employee is expected to do, the quality or
level of performance that is acceptable, and the conditions under which the
employee is to apply what he or she learned (for instance, physical conditions,
mental stresses, or equipment failure).
•
They include performance standards that are measurable.
•
They identify the resources needed to carry out the desired performance or
outcome. Successful training requires employees to learn but also employers to
provide the necessary resources.
Choice of Training Methods
Whether the organization prepares its own training programs or buys training from other
organizations, it is important to verify that the content of the training relates directly to the
training objectives. Relevance to the organization's needs and objectives ensures that
training money is well spent. Tying training content closely to objectives also improves
trainees' learning, because it increases the likelihood that the training will be meaningful
and helpful. After deciding on the goals and content of the training program, planners
must decide how the training will be conducted. As we will describe in the next section, a
wide variety of methods is available. Training methods fall into the broad categories
described in the table below: presentation, hands-on, and group-building methods.
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Training programs may use these methods alone or in combination. In general, the
methods used should be suitable for the course content and the learning abilities of the
participants. The following section explores the options in greater detail.
4.3.4 Training Methods
A wide variety of methods is available for conducting training. The table shows the
percentage of training hours delivered to employees by each of several methods:
instructor-led classrooms, computer-based instruction, virtual classrooms, mobile
devices, and combinations of these methods. Although the share of instruction provided
online has grown over the past few years, classroom training remains the most widely
used of these methods.
Classroom Instruction
Classroom instruction typically involves a trainer lecturing a group. Trainers often
supplement lectures with slides, discussions, case studies, question-and-answer
sessions, and role playing. Actively involving trainees enhances learning.
Communications technology has expanded the notion of the classroom to classes of
trainees scattered in various locations. With distance learning, trainees at different
locations attend programs online, using their computers to view lectures, participate in
discussions, and share documents. Technology applications in distance learning may
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include video – conferencing, e-mail, instant messaging, document-sharing software, and
web cameras.
Computer-Based Training
Although almost all organizations use classroom training, new technologies are gaining
in popularity as technology improves and becomes cheaper. With computer-based
training, participants receive course materials and instruction on a computer or mobile
device. This method also allows for inclusion of audiovisual content, with the added
benefit that users often can control aspects of the presentation-for example, by slowing
down or speeding up the pace of the presentation or rewinding to review material. Many
of these materials are interactive, so participants can answer questions and try out
techniques, with course materials adjusted according to participants' responses.
Online training programs may allow trainees to submit questions via e-mail and to
participate in online discussions. Multimedia capabilities enable computers to provide
sounds, images, and video presentations, along with text.
Computer-based training is generally less expensive than putting an instructor in a
classroom of trainees. The low cost to deliver information gives the company flexibility in
scheduling training so that it can fit around work requirements. Training can be delivered
in smaller doses so material is easier to remember. Trainees often appreciate the
multimedia capabilities, which appeal to several senses, and the chance to learn from
experts anywhere in the world. Finally, it is easier to customize computer-based training
for individual learners. Current applications of computer-based training can extend its
benefits:
•
E-learning involves receiving training via the Internet or the organization's intranet,
typically through some combination of web-based training modules, distance
learning, and virtual classrooms. E-learning uses electronic networks for delivering
and sharing information, and it offers tools and information for helping trainees
improve performance. Training programs may include links to other online
information resources and to trainees and experts for collaboration on problem
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solving. The e-learning system may also process enrollments, test and evaluate
participants, and monitor progress.
‘Quicken Loans uses e-learning to motivate employees to learn from their peers' best
practices in customer service. It created an online contest called "Quicken's Got Talent."
Employees who serve customers over the phone can submit recordings of calls they
handled well. Trainers pick one submission per day to post on the game. Employees listen
to the recordings and rate their co-worker's performance on a scale of l to 5. Each month
the employee who submitted the top-scoring call receives a prize worth up to $200;
winners of the monthly round are eligible for a competition with a $1,000 prize.
The e-learning program tracks participation and creates a library of best-practices
clips that are available for future learning.
•
Electronic performance support systems (EPSSs) are computer applications that
provide access to skills training, information, and expert advice when a problem
occurs on the job. Employees needing guidance can use the EPSS to look up the
particular information they need, such as detailed instructions on how to perform
an unfamiliar task.
On-the-Job Training
Although people often associate training with classrooms, much learning occurs while
employees are performing their jobs. On-the-job training (OJT) refers to training methods
in which a person with job experience and skill guides trainees in practicing job skills at
the workplace. This type of training takes various forms, including apprenticeships and
internships. An apprenticeship is a work-study training method that teaches job skills
through a combination of structured on-the-job training and classroom training. The OJT
component of an apprenticeship involves the apprentice assisting a certified tradesperson
(a journeyman) at the work site.
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An internship is on-the-job learning sponsored by an educational institution as a
component of an academic program. The sponsoring school works with local employers
to place students in positions where they can gain experience related to their area of
study. As described in more detail in the ethics case at the end of the chapter, the federal
government regulates the use of internships in order to protect students from being
exploited by employers using them as a form of low-cost or free labor rather than training
them.
To be effective, OJT programs should include several characteristics:
•
The organization should issue a policy statement describing the purpose of OJT
and emphasizing the organization's support for it.
•
The organization should specify who is accountable for conducting OJT. This
accountability should be included in the relevant job descriptions.
•
The organization should review OJT practices at companies in similar industries.
•
Managers and peers should be trained in OJT principles.
•
Employees who conduct OJT should have access to lesson plans, checklists,
procedure manuals, training manuals, learning contracts, and progress report
forms.
•
Before conducting OJT with an employee, the organization should assess the
employee's level of basic skills.
Simulations
A simulation is a training method that represents a real-life situation, with trainees making
decisions resulting in outcomes that mirror what would happen on the job. Simulations
enable trainees to see the impact of their decisions in an artificial, risk-free environment.
They are used for teaching production and process skills as well as management and
interpersonal skills. Simulations used in training include call centers stocked with phones
and reference materials, as well as mock-ups of houses used for training cable installers.
Another way to enhance the simulation experience is to use virtual reality, a computerbased technology that provides an interactive, three-dimensional learning experience.
Using specialized equipment or viewing the virtual model on a computer screen, trainees
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move through the simulated environment and interact with its components. Devices relay
information from the environment to the trainees' senses. For example, audio interfaces,
gloves that provide a sense of touch, treadmills, or motion platforms create a realistic but
artificial environment. Devices also communicate information about the trainee's
movements to a computer.
Business Games and Case Studies
Training programs use business games and case studies to develop employees'
management skills. A case study is a detailed description of a situation that trainees study
and discuss. Cases are designed to develop higher-order thinking skills, such as the
ability to analyze and evaluate information. They also can be a safe way to encourage
trainees to take appropriate risks, by giving them practice in weighing and acting on
uncertain outcomes. There are many sources of case studies, including Harvard Business
School, the Darden Business School at the University of Virginia, and McGraw-Hill
publishing company. With business games, trainees gather information, analyze it, and
make decisions that influence the outcome of the game.
Behavior Modeling
Research suggests that one of the most effective ways to teach interpersonal skills is
through behavior modeling. This involves training sessions in which participants observe
other people demonstrating the desired behavior, then have opportunities to practice the
behavior themselves. For example, a training program could involve several days of fourhour sessions, each focusing on one interpersonal skill, such as communicating or
coaching. At the beginning of each session, participants hear the reasons for using the
key behaviors; then they watch a video of a model performing the key behaviors. They
practice through role-playing and receive feedback about their performance. In addition,
they evaluate the performance of the model in the video and discuss how they can apply
the behavior on the job.
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Experiential Programs
To develop teamwork and leadership skills, some organizations enroll their employees in
a form of training called experiential programs. In experiential programs, participants learn
concepts and then apply them by simulating the behaviors involved and analyzing the
activity, connecting it with real-life situations. Grant Thornton, a firm that provides auditing
and tax services, uses an experiential program called CLEAR Engagement for training
employees in problem solving and teamwork. Groups of about five people each meet for
a day and a half to work through several dozen business decisions that could arise in
work with a client. As participants work through the problems together, they see how
people from other departments bring helpful perspectives, and they build relationships
they can use when they return to work. Experiential training programs should follow
several guidelines. A program should be related to a specific business problem.
Participants should feel challenged and move outside their comfort zones but within limits
that keep their motivation strong and help them understand the purpose of the program.
One form of experiential program, called adventure learning, uses challenging, structured
outdoor activities, which may include difficult sports such as rafting or mountain climbing.
Other activities may be structured tasks like climbing walls, completing rope courses,
climbing ladders, or making "trust falls" (in which each trainee stands on a table and falls
backward into the arms of other group members). The impact of adventure learning
programs has not been rigorously tested, but participants report they gained a greater
understanding of themselves and the ways they interact with their co-workers. One key
to the success of such programs may be that the organization needs to insist that entire
work groups participate together. This encourages people to see, discuss, and correct
the kinds of behavior that keep the group from performing well.
Before requiring employees to participate in experiential programs, the organization
should consider the possible drawbacks. Because these programs are usually physically
demanding and often require participants to touch each other, companies face certain
risks. Some employees may be injured or may feel that they were sexually harassed or
that their privacy was invaded.
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Team Training
A possible alternative to experiential programs is team training, which coordinates the
performance of individuals who work together to achieve a common goal. An organization
may benefit from providing such training to groups when group members must share
information and group performance depends on the performance of the individual group
members. Examples include the military, nuclear power plants, and commercial airlines.
In those work settings, much work is performed by crews, groups, or teams. Success
depends on individuals' coordinating their activities to make decisions, perhaps in
dangerous situations.
Ways to conduct team training include cross-training and coordination training. In crosstraining, team members understand and practice each other's skills so that they are
prepared to step in and take another member's place. In a factory, for example, production
workers could be cross-trained to handle all phases of assembly. This enables the
company to move them to the positions where they are most needed to complete an order
on time.
Coordination training trains the team in how to share information and decisions to obtain
the best team performance. This type of training is especially important for commercial
aviation and surgical teams. Both of these kinds of teams must monitor different aspects
of equipment and the environment, at the same time-sharing information to make the
most effective decisions regarding patient care or aircraft safety and performance. One
way to focus on teamwork behaviors is to have team members participate in an unfamiliar
type of project. For example, a group of managers from Thermo Fisher Scientific divided
into five teams, each assigned to make one course for the night's dinner. Each team was
given the ingredients for a particular dish but not a recipe, and the group members had
to figure out how they would solve the problem together. A similar type of learning occurs
in a team training program called Dig This, which assigns teams to complete a mission
using heavy construction equipment. Training may also target the skills needed by the
teams' leaders. Team leader training refers to training people in the skills necessary for
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team leadership. For example, the training may be aimed at helping team leaders learn
to resolve conflicts or coordinate activities
Action Learning
Another form of group building is action learning. In this type of training, teams or work
groups get an actual problem, work on solving it and commit to an action plan, and are
accountable for carrying out the plan. Ideally, the project is one for which the efforts and
results will be visible not only to participants but also to others in the organization. The
visibility and impact of the task are intended to make participation exciting, relevant, and
engaging. Keller William Realty incorporates action learning into its training program for
real estate agents. New agents participate in a 12-session program that includes coldcalling prospective customers. Getting used to making those calls is essential to winning
the contracts that are the source of a real estate agent's income. Later, they participate
in another training program aimed at learning how to keep generating a steady flow of
leads. In that seven-week program, participants are supposed to make 20 new contacts
every day. On average, this results in participants signing 14 contracts during the training
period, so they are seeing practical benefits even while training. The effectiveness of
action learning has not been formally evaluated. This type of training seems to result in a
great deal of learning, however, and employees are able to apply what they learn because
action learning involves actual problems the organization is facing. The group approach
also helps teams identify behaviors that interfere with problem solving.
4.3.5 Implementing the Training Program
Learning permanently changes behavior. For employees to acquire knowledge and skills
in the training program, the training program must be implemented in a way that applies
what is known about how people learn. Equally important, implementation of a training
program should enable employees to transfer what they have learned to the workplace in
other words, employees should behave differently as a result of the training.
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Principles of Learning
Researchers have identified a number of ways employees learn best. In general, effective
training communicates learning objectives clearly, presents information in distinctive and
memorable ways, and helps trainees link the subject matter to their jobs.
Employees are most likely to learn when training is linked to their current job experiences
and tasks. There are a number of ways trainers can make this link. Training sessions
should present material using familiar concepts, terms, and examples. As far as possible,
the training context-such as the physical setting or the images presented on a computer
should mirror the work environment. Along with physical elements, the context should
include emotional elements.
Transfer of Training
Ultimately, the goal of implementation is transfer of training, or on-the-job use of
knowledge, skills, and behaviors learned in training.
Measuring the Results of Training
After a training program ends, or at intervals during an ongoing training program,
organizations should ensure that the training is meeting objectives. The stage to prepare
for evaluating a training program is when the program is being developed. Along with
designing course objectives and content, the planner should identify how to measure
achievement of objectives. Trainee satisfaction with the program, knowledge or abilities
gained, use of new skills and behavior on the job (transfer of training), and improvements
in individual and organizational performance. The usual way to measure whether
participants have acquired information is to administer tests on paper or electronically.
Trainers or supervisors can observe whether participants demonstrate the desired skills
and behaviors.
4.3.6 Evaluation Methods
To measure whether the conditions are in place for transfer of training, the organization
can ask employees three questions about specific training-related tasks:
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1. Do you perform the task?
2. How many times do you perform the task?
3. To what extent do you perform difficult and challenging learned tasks?
Assessment of training also should evaluate training outcomes, that is, what (if anything)
has changed as a result of the training. The relevant training outcomes are the ones
related to the organization's goals for the training and its overall performance. Possible
outcomes include the following:
•
Information such as facts, techniques, and procedures that trainees can recall after
the training.
•
Skills that trainees can demonstrate in tests or on the job.
•
Trainee and supervisor satisfaction with the training program.
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•
Changes in attitude related to the content of the training (for example, concern for
safety or tolerance of diversity).
•
Improvements in individual, group, or company performance (for example, greater
customer satisfaction, more sales, fewer defects).
4.4
Orientation and Onboarding of New Employees
Many employees receive their first training during their first days on the job. This training
is the organization's orientation program-its training designed to prepare employees to
perform their job effectively, learn about the organization, and establish work
relationships.
Organizations provide orientation because employees need to become familiar with job
tasks and learn the details of the organization's practices, policies, and procedures.
Increasingly, employers understand that success in today's work environment requires
more than employees being able to complete an orientation program, follow rules, and
navigate around the workplace. These employers have taken orientation to the next level,
with the process of onboarding, which aims to prepare new employees for full participation
in the organization.
Onboarding is a conscious attempt to get new employees to connect and identify with
their employer by encouraging them to gather more information about the company, its
history and culture, and its products or services. In so doing, onboarding also helps new
employees adjust to both the social and the performance aspects of their jobs so they
can quickly become productive contributors to the organization.
Orientation programs may combine various training methods, such as documents to read,
classroom instruction, on-the-job training, and e-learning. Decisions about how to conduct
the orientation depend on the type of material to be covered and the number of new
employees, among other factors.
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4.5
Performance Management
Performance management can be defined as a systematic process to improve
organizational performance by developing the performance of individuals and teams
working with an organization. It is a means of getting better results from the organization,
teams and individuals by understanding and managing their performance within a
framework of planned goals, standards and competence requirements. In other words,
performance management is the process of managing an organization’s management
strategy. This is how plans are converted into desired outcomes in organizations.
Performance management is a powerful tool
Performance management is a difficult role to play. Some people have difficulty when it
comes to performance evaluation. Performance management is about motivation and
partnership. When this kind of prospective is shared with your employees and they learn
to see in that way, performance management becomes a powerful tool that will help your
team to become more successful.
4.5.1 Scope and Uses
Many organizations jump from one improvement program to another, hoping that one of
them will provide that big, elusive result. Most managers would acknowledge that pulling
levers for improvement rarely results in a long-term sustained change. The key to
improving is integrating and balancing multiple programs sustainably. You cannot break
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the chain by simply implementing one improvement program and exclude the other
programs and initiatives.
There should be a strong bonding between the issues and the strategy of an organization.
The manner in which an organization implements performance management can be
influenced by its history, goals, mission, vision, strategic priorities, and the various
problems it faces in its economic, political, demographic and technological environment.
4.5.2 The Process of Performance Management
Identifying desired behaviors and targets, and then measuring how well employees are
carrying out the behaviors and hitting the targets are elements of performance
management. Performance management is the process through which managers ensure
that employees' activities and outputs contribute to the organization's goals. This process
requires knowing what activities and outputs are desired, observing whether they occur,
and providing feedback to help employees meet expectations. In the course of providing
feedback, managers and employees may identify performance problems and establish
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ways to resolve those problems. The diagram below shows the six steps in the
performance management process. As shown in the model, feedback and formal
performance evaluation are important parts of the process; however, they are not the only
critical components. An effective performance management process contributes to the
company's overall competitive advantage and must be given visible support by the CEO
and other senior managers. This support ensures that the process is consistently used
across the company, appraisals are completed on time, and giving and receiving ongoing
performance feedback is recognized as an accepted part of the company's culture.
The first two steps of the process involve identifying what the company is trying to
accomplish (its goals or objectives) and developing employee goals and actions to
achieve these outcomes. Typically, the outcomes benefit customers, the employee's
peers or team members, and the organization itself. The goals, behaviors, and activities
should be measurable and become part of the employee's job description.
Step 3 in the process-organizational support-involves providing employees with training,
necessary resources and tools, and ongoing feedback between the employee and
manager, which focuses on accomplishments as well as issues and challenges that
influence performance. For effective performance management, both the manager and
the employee have to value feedback and exchange it on a regular basis-not just once or
twice a year. Also, the manager needs to make time to provide ongoing feedback to the
employee and learn how to give and receive it.
Step 4 involves evaluating performance: the manager and employee discuss and
compare targeted goals and supporting behavior with actual results. This step includes
the annual formal performance review.
The final steps of the performance management process involve both the employee and
the manager identifying what the employee can do to capitalize on performance strengths
and address weaknesses (step 5) and providing consequences for achieving (or failing
to achieve) performance outcomes (such as pay increases, bonuses, or action plans)
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(step 6). This includes identifying training needs; adjusting the type or frequency of
feedback the manager provides to the employee; clarifying, adjusting, or modifying
performance outcomes; and discussing behaviors or activities that need improvement.
To be effective, the entire performance management process should be reviewed each
year to ensure that what is being measured at the employee level aligns strategically with
company, division, and departmental goals and objectives.
4.5.3 Methods for Measuring Performance
Organizations have developed a wide variety of methods for measuring performance.
Some methods rank each employee to compare employees' performance. Other methods
break down the evaluation into ratings of individual attributes, behaviors, or results. Many
organizations use a measurement system that includes a variety of the preceding
measures, as in the case of applying total quality management to performance
management. The diagram below compares these methods in terms of our criteria for
effective performance management.
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Approaches to Performance Management
Decisions such as whom to hire, what to pay, what training to offer, and how to evaluate
employee performance directly affect employees' motivation and ability to provide goods
and services that customers value. Companies that attempt to increase their
competitiveness by investing in new technology and promoting quality throughout the
organization also invest in state-of-the-art staffing, training, and compensation practices.
The table above emphasizes that there are several important HRM practices that should
support the organization's business strategy: analyzing work and designing jobs,
determining how many employees with specific knowledge and skills are needed (human
resource planning), attracting potential employees (recruiting), choosing employees
(selection), teaching employees how to perform their jobs and preparing them for the
future (training and development), evaluating their performance (performance
management), rewarding employees (compensation), and creating a positive work
environment (employee relations). An organization performs best when all of these
practices are managed well.
At businesses and other organizations with effective HRM, employees and customers
tend to be more satisfied, and the companies tend to be more innovative, have greater
productivity, and develop a more favorable reputation in the community
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Employees in today's organizations are not interchangeable, easily replaced parts of a
system but a source of the company's success or failure. By influencing who works for
the organization and how those people work, human resource management therefore
contributes to basic measures of an organization's performance, such as quality,
profitability, and customer satisfaction.
Human resources have these necessary qualities:
•
Human resources are valuable. High-quality employees provide a needed service
as they perform many critical functions.
•
Human resources are rare in the sense that a person with high levels of the needed
skills and knowledge is not common. An organization may spend months looking
for a talented and experienced manager or technician.
•
Human resources cannot be imitated. To imitate human resources at a highperforming competitor, you would have to figure out which employees are
providing the advantage and how. Then you would have to recruit people who can
do precisely the same thing and set up the systems that enable those people to
imitate your competitor.
Human resources have no good substitutes. When people are well trained and highly
motivated, they learn, develop their abilities, and care about customers. It is difficult to
imagine another resource that can match committed and talented employees.
4.6
HR's Role in Setting a Climate for People Development
Developing Employees for Future Success
In all these ways, managers provide for employee development-the combination of formal
education, job experiences, relationships, and assessment of personality and abilities to
help employees prepare for the future of their careers. Human resource management
establishes a process for employee development that prepares employees to help the
organization meet its goals.
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Training, Development, and Career Management
Organizations and their employees must constantly expand their knowledge, skills, and
behavior to meet customer needs and compete in today's demanding and rapidly
changing business environment.
Modern organizations are expected to provide development opportunities to employees
without regard to their sex, race, ethnic background, or age so that they have equal
opportunity for advancement. In this climate, organizations are placing greater emphasis
on training and development. To do this, organizations must understand development's
relationship to training and career management.
Development and Training
The definition of development indicates that it is future oriented. Development implies
learning that is not necessarily related to the employee's current job. Instead, it prepares
employees for other jobs or positions in the organization and increases their ability to
move into jobs that may not yet exist. Development also may help employees prepare for
changes in responsibilities and requirements in their current jobs, such as changes
resulting from new technology, work designs, or customers. In contrast, training
traditionally focuses on helping employees improve performance of their current jobs.
Many organizations have focused on linking training programs to business goals. In these
organizations, the distinction between training and development is more blurred. The
table below summarizes the traditional differences.
4.7
Approaches to Employee Development
Formal Education
Organizations may support employee development through a variety of formal
educational programs, either at the workplace or off-site. These may include workshops
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designed specifically for the organization's employees, short courses offered by
consultants or universities, university programs offered to employees who live on campus
during the program, and executive MBA programs (which enroll managers to meet on
weekends or evenings to earn a master's degree in business administration). These
programs may involve lectures by business experts, business games and simulations,
experiential programs, and meetings with customers.
Assessment
Another way to provide for employee development is assessment-collecting information
and providing feedback to employees about their behavior, communication style, or skills.
Information for assessment may come from the employees, their peers, managers, and
customers. The most frequent uses of assessment are to identify employees with
managerial potential to measure current managers' strengths and weaknesses.
Organizations also use assessment to identify managers with potential to move into
higher-level executive positions. Organizations that assign work to teams may use
assessment to identify the strengths and weaknesses of individual team members and
the effects of the team members' decision making and communication styles on the
team's productivity. For assessment to support development, the information must be
shared with the employee being assessed. Along with that assessment information, the
employee needs suggestions for correcting skill weaknesses and for using skills already
learned. The suggestions might be to participate in training courses or develop skills
through new job experiences. Based on the assessment information and available
development opportunities, employees should develop action plans to guide their efforts
at self-improvement.
Interpersonal Relationships
Employees can also develop skills and increase their knowledge about the organization
and its customers by interacting with a more experienced organization member.
Increasingly, these interactions are taking place online with social-media tools, as
described in "HRM Social." More formally, two types of relationships used for employee
development are mentoring and coaching.
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Mentors A mentor is an experienced, productive senior employee who helps develop a
less-experienced employee, called the protege. Most mentoring relationships develop
informally as a result of interests or values shared by the mentor and protege. According
to research, the employees most likely to seek and attract a mentor have certain
personality characteristics: emotional stability, ability to adapt their behavior to the
situation, and high needs for power and achievement.
Mentoring relationships also can develop as part of the organization's planned effort to
bring together successful senior employees with less-experienced employees. One major
advantage of formal mentoring programs is that they ensure access to mentors for all
employees, regardless of gender or race. A mentoring program also can ensure that high
potential employees are matched with wise, experienced mentors in key areas-and that
mentors are hearing the challenges facing employees who have less authority, work
directly with customers, or hold positions in other parts of the organization. However, in
an artificially created relationship, mentors may have difficulty providing counseling and
coaching. One practical way employees can address this shortcoming is to look for more
than one mentor, including informal relationships with interested people outside the
organization. For their part, mentors should accept mentees who exhibit responsibility
and a desire to learn.
Coaching A coach is a peer or manager who works with an employee to motivate the
employee, help him or her develop skills, and provide reinforcement and feedback.
Coaches may play one or more of three roles:
1. Working one-on-one with an employee, as when giving feedback.
2. Helping employees learn for themselves-for example, helping them find experts
and teaching them to obtain feedback from others
3. Providing resources such as mentors, courses, or job experiences
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4.8
Development-Related Challenges
A well-designed system for employee development can help organizations face three
widespread challenges: the glass ceiling, succession planning, and dysfunctional
behavior by managers.
The Glass Ceiling
As we mentioned in Chapter 1, women and minorities are rare in the top level of Namibian
corporations. Observers of this situation have noted that it looks as if an invisible barrier
is keeping women and minorities from reaching the top jobs, a barrier that has come to
be known as the glass ceiling.
Succession Planning
Organizations have always had to prepare for the retirement of their leaders, but the need
is more intense than ever. The aging of the workforce means that a greater share of
employees are reaching retirement age. Many organizations are fueling the trend by
downsizing through early-retirement programs. As positions at the top of organizations
become vacant, many organizations have determined that their middle managers are
fewer and often unprepared for top-level responsibility. This situation has raised
awareness of the need for succession planning-the process of identifying and tracking
high-potential employees who will be able to fill key positions when they become vacant.
Succession planning offers several benefits. It forces senior management to regularly and
thoughtfully review the company's leadership talent. It ensures that critical, sometimes
hard-to-find talent is available. It provides a set of development experiences that
managers must complete to be considered for key positions, so the organization does not
promote managers before they are ready. Succession planning systems also help attract
and retain ambitious managerial employees by providing development opportunities.
Succession planning focuses on high-potential employees, that is, employees the
organization believes can succeed in higher-level business positions.
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Research shows that an effective program for developing high potential employees has
three stages:
1. Selection of high-potential employees-Organizations may select outstanding
performers and employees who have completed elite academic programs, such
as earning a master's degree in business administration from a prestigious
university. They may also use the results of psychological tests such as
assessment centers. Ideally, organizations would use such assessments to find
candidates scoring high in intellect, social skills, and drive to achieve, which
together would be associated with getting exceptional results as a manager.
2. Developmental
experiences-As
employees
participate
in
developmental
experiences, the organization identifies those who succeed in the experiences.
The organization looks for employees who continue to show qualities associated
with success in top jobs, such as communication skills, leadership talent, and
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willingness to make sacrifices for the organization. In today's high-performance
business environment, these assessments should measure whether participants
in the program are demonstrating an ability to lead and delivering results that
contribute to the company's success. Employees who display these qualities
continue to be considered high-potential employees.
3. Active involvement with the CEO-High-potential employees seen by top
management as fitting into the organization's culture and having personality
characteristics necessary for representing the company become actively involved
with the chief executive officer. The CEO exposes these employees to the
organization's key people and gives them a greater understanding of the
organization's culture. The development of high-potential employees is a slow
process. Reaching stage 3 may take 15 to 20 years.
The diagram above breaks this process into eight steps. It begins with identifying the
positions to be planned for and the employees to be included in the plan. Planning should
also include establishing position requirements and deciding how to measure employees'
potential for being able to fill those requirements. The organization also needs to develop
a process for reviewing the existing talent. The next step is to link succession planning
with other human resource systems. Then the organization needs a way to provide
employees with feedback about career paths available to them and how well they are
progressing toward their goals. Finally, measuring the plan's effectiveness provides
information for continuing or adjusting future succession plans.
SUMMARY
Discuss how to link training programs to organizational needs.
•
Organizations need to establish training programs that are effective-in other words,
programs that:
•
teach what they are designed to teach and
•
teach skills and behaviors that will help the organization achieve its goals.
•
Organizations create such programs through instructional design.
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•
The steps in this process are to conduct a needs assessment, ensure readiness
for training (including employee characteristics and organizational support), plan a
training program, implement the program, and evaluate the results.
Explain how to assess the need for training.
•
Needs assessment consists of an organization analysis, person analysis, and task
analysis.
•
The organization analysis determines the appropriateness of training by evaluating
the characteristics of the organization, including its strategy, resources, and
management support.
•
The person analysis determines individuals' needs and readiness for training.
•
The task analysis identifies the tasks, knowledge, skills, and behaviors that training
should emphasize. It is based on examination of the conditions in which tasks are
performed, including equipment and environment of the job, time constraints,
safety considerations, and performance standards.
Explain how to assess employees' readiness for training.
•
Readiness for training is a combination of employee characteristics and positive
work environment that permit training.
•
The necessary employee characteristics include ability to learn the subject matter,
favorable attitudes toward the training, and motivation to learn.
•
A positive work environment avoids situational constraints such as lack of money
and time. In a positive environment, both peers and management support training.
Describe how to plan an effective training program.
•
Planning begins with establishing training objectives, which should define an
expected performance or outcome, the desired level of performance, and the
conditions under which the performance should occur.
•
Based on the objectives, the planner decides who will provide the training, what
topics the training will cover, what training methods to use, and how to evaluate
the training.
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•
Even when organizations purchase outside training, someone in the organization,
usually a member of the HR department, often is responsible for training
administration.
•
The training methods selected should be related to the objectives and content of
the training program.
•
Training methods may include presentation methods, hands-on methods, or
group-building methods.
Compare widely used training methods.
•
Classroom instruction is most widely used and is one of the least expensive and
least time-consuming ways to present information on a specific topic to many
trainees. It also allows for group interaction and may include hands-on practice.
•
Audiovisual techniques and computer-based training (often called e-learning) need
not require that trainees attend a class, so organizations can reduce time and
money spent on training. Computer-based training may be interactive and may
provide for group interaction.
•
On-the-job training methods such as apprenticeships and internships give trainees
firsthand experiences.
•
A simulation represents a real-life situation, enabling trainees to see the effects of
their decisions without dangerous or expensive consequences.
•
Business games and case studies are other methods for practicing decisionmaking skills. Participants need to come together in one location or collaborate
online.
•
Behavior modeling gives trainees a chance to observe desired behaviors, so this
technique can be effective for teaching interpersonal skills.
•
Experiential and adventure learning programs provide an opportunity for group
members to interact in challenging circumstances but may exclude members with
disabilities.
•
Team training focuses a team on achievement of a common goal.
•
Action learning offers relevance, because the training focuses on an actual workrelated problem.
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Summarize how to implement a successful training program.
•
Implementation should apply principles of learning and seek transfer of training.
•
In general, effective training communicates learning objectives, presents
information in distinctive and memorable ways, and helps trainees link the subject
matter to their jobs.
•
Employees are most likely to learn when training is linked to job experiences and
tasks. Employees learn best when they demonstrate or practice what they have
learned and when they receive feedback that helps them improve.
•
Trainees remember information better when it is broken into small chunks,
presented with visual images, and practiced many times. Written materials should
be easily readable by trainees.
•
Transfer of training is most likely when there is social support (from managers and
peers), technical support, and self-management.
Evaluate the success of a training program.
•
Evaluation of training should look for transfer of training by measuring whether
employees are performing the tasks taught in the training program. • Assessment
of training also should evaluate training outcomes, such as change in attitude,
ability to perform a new skill, and recall of facts or behaviors taught in the training
program.
•
Training should result in improvement in the group's or organization's outcomes,
such as customer satisfaction or sales. An economic measure of training success
is return on investment.
Describe training methods for employee orientation and onboarding and for diversity
management.
•
Employee orientation is training designed to prepare employees to perform their
job effectively, learn about the organization, and establish work relationships.
•
Because success in today's work environment requires more than following rules,
employers have begun supplementing basic orientation programs with an
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onboarding process, aimed at preparing new employees for full participation in the
organization.
•
Onboarding is an ongoing process that addresses social as well as task-related
aspects of work in order to prepare employees for complying with policies and
rules, clarifying job requirements, understanding the organization's culture, and
connecting with co-workers.
•
Orientation programs may combine several training methods, from printed
materials to on-the-job training to e-learning.
•
Diversity training is designed to change employee attitudes about diversity and/or
develop skills needed to work with a diverse workforce.
•
Evidence regarding these programs suggests that diversity training is most
effective if it is part of management's long-term commitment to managing diversity
as an opportunity for people to learn from one another and acquire teamwork skills.
Discuss how development is related to training and careers.
•
Employee development is the combination of formal education, job experiences,
relationships, and assessment of personality and abilities to help employees
prepare for the future of their careers.
•
Training is more focused on improving performance in the current job, but training
programs may support employee development.
•
In modern organizations, the concept of a career is fluid-a protean career that
changes along with changes in a person's interests, abilities, and values and
changes in the work environment.
To plan and prepare for a protean career requires active career management, which
includes planning for employee development. Identify the methods organizations use for
employee development.
•
Organizations may use formal educational programs at the workplace or off-site,
such as workshops, university courses and degree programs, company-sponsored
training, or programs offered by independent institutions.
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•
An assessment process can help employees identify strengths and areas requiring
further development. Assessment can help the organization identify employees
with managerial potential or identify areas in which teams need to develop.
•
Job experiences help employees develop by stretching their skills as they meet
new challenges.
•
Interpersonal relationships with a more experienced member of the organizationoften in the role of mentor or coach-can help employees develop their
understanding of the organization and its customers.
Describe how organizations use assessment of personality type, work behaviors, and job
performance to plan employee development.
•
Organizations collect information and provide feedback to employees about their
behavior, communication style, and skills.
•
The information may come from the employees, their peers, managers, and
customers.
•
Many organizations use performance appraisals as a source of assessment
information. Appraisals may take the form of 360-degree feedback.
•
Some organizations use psychological tests designed for this purpose, including
the Myers-Briggs Type Indicator and the DiSC assessment.
•
Assessment centers combine a variety of methods to provide assessment
information.
•
Managers must share the assessments, along with suggestions for improvement.
Explain how job experiences can be used for developing skills.
•
Job experiences contribute to development through a combination of relationships,
problems, demands, tasks, and other features of an employee's jobs.
•
The assumption is that development is most likely to occur when the employee's
skills and experiences do not entirely match the skills required for the employee's
current job, so employees must stretch to meet the demands of the new
assignment.
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•
The impact varies according to whether the employee views the experience as a
positive or negative source of stress.
•
Job experiences that support employee development may include job
enlargement, job rotations, transfers, promotions, downward moves, and
temporary assignments with other organizations.
Summarize principles of successful mentoring programs.
•
A mentor is an experienced, productive senior employee who helps develop a lessexperienced employee.
•
Although most mentoring relationships develop informally, organizations can link
mentoring to development goals by establishing a formal mentoring program. A
formal program provides a basis for ensuring that all eligible employees are
included.
•
Mentoring programs tend to be most successful when they are voluntary and
participants understand the details of the program.
•
The organization should reward managers for employee development, carefully
select mentors based on interpersonal and technical skills, train them for the role,
and evaluate whether the program has met its objectives.
Tell how managers and peers develop employees through coaching.
•
A coach is a peer or manager who works with an employee to motivate the
employee, help him or her develop skills, and provide reinforcement and feedback.
•
Coaches should be prepared to take on one or more of three roles: working oneon-one with an employee, helping employees learn for themselves, and providing
resources, such as mentors, courses, or job experiences.
Identify the steps in the process of career management.
•
The process begins with data gathering. Employees use information to determine
their career interests, values, aptitudes, and behavioral tendencies, looking for
opportunities and areas needing improvement. Data-gathering tools often include
psychological tests or exercises that ask about career status and plans.
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•
The organization then provides feedback by communicating information about the
employee's skills and knowledge and how these fit into the organization's plan.
•
The employee sets goals and discusses them with his or her manager, who
ensures that the goals are specific, challenging, and attainable.
•
Finally, the employee works with his or her manager to create an action plan and
follow-up for development activities that will help the employee achieve the goals.
•
Discuss how organizations are meeting the challenges of the "glass ceiling,"
succession planning, and dysfunctional managers.
The glass ceiling is a barrier that has been observed preventing women and other
minorities from achieving top jobs in an organization. Development programs can
ensure that these employees receive access to development resources, such as
coaches, mentors, and developmental job assignments.
•
Succession planning ensures that the organization prepares qualified employees
to fill management jobs as managers retire. It focuses on applying employee
development to high-potential employees.
•
Effective succession planning includes methods for selecting these employees,
providing them with developmental experiences, and getting the CEO actively
involved with employees who display qualities associated with success as they
participate in the developmental activities.
•
For dysfunctional managers who have the potential to contribute to the
organization, the organization may offer development targeted at correcting the
areas of dysfunction. Typically, the process includes collecting information about
the manager's personality, skills, and interests; providing feedback, training, and
counseling; and ensuring that the manager can apply new, functional behaviors on
the job.
Identify the activities involved in performance management.
•
Performance management is the process through which managers ensure that
employees' activities and outputs contribute to the organization's goals.
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•
First, the organization specifies which aspects of performance are relevant to the
organization.
•
Next, the organization measures the relevant aspects of performance through
performance appraisal.
•
Finally, in performance feedback sessions, managers provide employees with
information about their performance so they can adjust their behavior to meet the
organization's goals. Feedback includes efforts to identify and solve problems.
Discuss the purposes of performance management systems.
•
Organizations establish performance management systems to meet three broad
purposes.
•
The strategic purpose is aimed at meeting business objectives. The system does
this by helping to link employees' behavior with the organization's goals.
•
The administrative purpose of performance management is to provide
information for day-to-day decisions about salary, benefits, recognition, and
retention or termination.
•
The developmental purpose of performance management is using the system as
a basis for developing employees' knowledge and skills.
Define five criteria for measuring the effectiveness of a performance management
system
•
Performance measures should be strategic-fitting with the organization's strategy
by supporting its goals and culture.
•
Performance measures should be valid, so they measure all the relevant aspects
of performance and do not measure irrelevant aspects of performance.
•
These measures should also provide interrater and test-retest reliability, so that
appraisals are consistent among raters and over time.
•
Performance measurement systems should be acceptable to the people who use
them or receive feedback from them.
•
A performance measure should be specific, telling employees what is expected
of them and how they can meet those expectations.
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Compare the major methods for measuring performance.
•
Performance measurement may use ranking systems such as simple ranking,
forced distribution, or paired comparisons to compare one individual's performance
with that of other employees.
•
These methods may be time consuming, and they will be seen as unfair if actual
performance is not distributed in the same way as the ranking system. requires.
•
However, ranking counteracts some forms of rater bias and helps distinguish
employees for administrative decisions.
•
Other approaches involve rating employees' attributes, behaviors, or outcomes.
•
Rating attributes is relatively simple but not always valid, unless attributes are
specifically defined.
•
Rating behaviors requires a great deal of information, but these methods can be
very effective. They can link behaviors to goals, and ratings by trained raters may
be highly reliable. Rating results, such as productivity or achievement of objectives,
tends to be less subjective than other kinds of rating, making this approach highly
acceptable.
•
Validity may be a problem because of factors outside the employee's control. This
method also tends not to provide much basis for determining how to improve.
•
Focusing on quality can provide practical benefits, but is not as useful for
administrative and developmental decisions.
Describe major sources of performance information in terms of their advantages and
disadvantages.
•
Performance information may come from an employee's self-appraisal and from
appraisals by the employee's supervisor, employees, peers, and customers.
•
Using only one source makes the appraisal more subjective. Organizations may
combine many sources into a 360-degree performance appraisal.
•
Gathering information from each employee's manager may produce accurate
information, unless the supervisor has little opportunity to observe the employee.
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•
Peers are an excellent source of information about performance in a job where the
supervisor does not often observe the employee. Disadvantages are that
friendships (or rivalries) may bias ratings and peers may be uncomfortable with the
role of rating a friend. • Subordinates often have the best chance to see how a
manager treats employees. Employees may be reluctant to contribute honest
opinions about a supervisor unless they can provide information anonymously.
•
Self-appraisals may be biased, but they do come from the person with the most
knowledge of the employee's behavior on the job, and they provide a basis for
discussion in feedback sessions, opening up fruitful comparisons and areas of
disagreement between the self-appraisal and other appraisals.
•
Customers may be an excellent source of performance information, although
obtaining customer feedback tends to be expensive.
Define types of rating errors, and explain how to minimize them.
•
People observe behavior often without a practical way of knowing all the relevant
circumstances and outcomes, so they necessarily interpret what they see.
•
A common tendency is to give higher evaluations to people we consider similar to
ourselves.
•
Other errors involve using only part of the rating scale: Giving all employees ratings
at the high end of the scale is called leniency error. Rating everyone at the low end
of the scale is called strictness error. Rating all employees at or near the middle is
called central tendency.
•
The halo error refers to rating employees positively in all areas because of strong
performance observed in one area.
•
The horns error is rating employees negatively in all areas because of weak
performance observed in one area.
•
Ways to reduce rater error are training raters to be aware of their tendencies to
make rating errors and training them to be sensitive to the complex nature of
employee performance so they will consider many aspects of performance in
greater depth.
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•
Politics also may influence ratings. Organizations can minimize appraisal politics
by establishing a fair appraisal system and bringing managers together to discuss
ratings in calibration meetings.
Explain how to provide performance feedback effectively.
•
Performance feedback should be a regular, scheduled management activity so
that employees can correct problems as soon as they occur.
•
Managers should prepare by establishing a neutral location, emphasizing that the
feedback session will be a chance for discussion, and asking the employee to
prepare a self-assessment.
•
During the feedback session, managers should strive for a problem-solving
approach and encourage employees to voice their opinions and discuss
performance goals.
•
The manager should look for opportunities to praise and should limit criticism.
•
The discussion should focus on behavior and results rather than on personalities.
Summarize ways to produce improvement in unsatisfactory performance.
•
For an employee who is motivated but lacks ability, the manager should provide
coaching and training, give detailed feedback about performance, and consider
restructuring the job.
•
For an employee who has ability but lacks motivation, the manager should
investigate whether outside problems are a distraction and, if so, refer the
employee for help. If the problem has to do with the employee's not feeling
appreciated or rewarded, the manager should try to deliver more praise and
evaluate whether additional pay and other rewards are appropriate.
•
For an employee lacking both ability and motivation, the manager should consider
whether the employee is a good fit for the position. Specific feedback or
withholding rewards may spur improvement, or the employee may have to be
demoted or terminated.
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•
Solid employees who are high in ability and motivation will continue so and may
be able to contribute even more if the manager provides appropriate direct
feedback, rewards, and opportunities for development.
Discuss legal and ethical issues that affect performance management.
•
Lawsuits related to performance management usually involve charges of
discrimination or unjust dismissal. Managers must make sure that performance
management systems and decisions treat employees equally, without regard to
their race, sex, or other protected status.
•
Organizations can do this by establishing and using valid performance measures
and by training raters to evaluate performance accurately. A system is more
likely to be legally defensible if it is based on behaviors and results, rather than
on traits, and if multiple raters evaluate each person's performance.
•
The system should include a process for coaching or training employees to help
them improve, rather than simply dismissing poor performers.
•
An ethical issue of performance management is the use of electronic monitoring.
This type of performance measurement provides detailed, accurate information,
but employees may find it demoralizing, degrading, and stressful.
•
Employees are more likely to accept electronic monitoring if the organization
explains its purpose, links it to help in improving performance, and keeps the
performance data private.
REVIEW AND DISCUSSION QUESTIONS
1. How does development differ from training? How does development support
career management in modern organizations?
2. What are the four broad categories of development methods? Why might it be
beneficial to combine all of these methods into a formal development program?
3. Recommend a development method for each of the following situations, and
explain why you chose that method.
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a. An employee recently promoted to the job of plant supervisor is having
difficulty motivating employees to meet quality standards.
b. A sales manager annoys salespeople by dictating every detail of their work.
c. An employee has excellent leadership skills but lacks knowledge of the
financial side of business.
d. An organization is planning to organize its production workers into teams
for the first time.
4. A company that markets sophisticated business management software systems
uses sales teams to help customers define needs and to create systems that meet
those needs. The teams include programmers, salespeople who specialize in
client industries, and software designers. Occasionally sales are lost as a result of
conflict or communication problems among team members. The company wants
to improve the effectiveness of these teams, and it wants to begin with
assessment. How can the teams use 360-degree feedback and psychological tests
to develop?
5. In an organization that wants to use work experiences as a method of employee
development, what basic options are available? Which of these options would be
most attractive to you as an employee? Why?
6. Many employees are unwilling to relocate because they like their current
community and family members prefer not to move. Yet preparation for
management requires that employees develop new skills, strengthen areas of
weakness, and be exposed to new aspects of the organization's business. How
can an organization change an employee's current job to develop management
skills?
7. Many people feel that mentoring relationships should occur naturally, in situations
where senior managers feel inclined to play that role. What are some advantages
of setting up a formal mentoring program, rather than letting senior managers
decide how and whom to help?
8. What are the three roles of a coach? How is a coach different from a mentor? What
are some advantages of using someone outside the organization as a coach?
Some disadvantages?
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9. Why should organizations be interested in helping employees plan their careers?
What benefits can companies gain? What are the risks?
10. What are the manager's roles in a career management system? Which role do you
think is most difficult for the typical manager? Which is the easiest role? List
reasons why managers might resist becoming involved in career management.
11. What is the glass ceiling? What are the possible consequences to an organization
that has a glass ceiling? How can employee development break the glass ceiling?
Can succession planning help?
12. Explain. Why might an organization benefit from giving employee development
opportunities to a dysfunctional manager, rather than simply dismissing the
manager? Do these reasons apply to non - management employees as well?
13. "Alicia!" bellowed David to the company's HR specialist, "I've got a problem, and
you've got to solve it. I can't get people in this plant to work together as a team. As
if I don't have enough trouble with our competitors and our past-due accounts, now
I have to put up with running a zoo. You're responsible for seeing that the staff gets
along. I want a training proposal on my desk by Monday." Assume you are Alicia.
14. Is training the solution to this problem? How can you determine the need for
training?
15. Summarize how you would conduct a needs assessment.
16. How should an organization assess readiness for learning? In Question 13, how
do David's comments suggest readiness (or lack of readiness) for learning?
17. Assume you are the human resource manager of a small seafood company. The
general manager has told you that customers have begun complaining about the
quality of your company's fresh fish. Currently, training consists of senior fish
cleaners showing new employees how to perform the job. Assuming your needs
assessment indicates a need for training, how would you plan a training program?
What steps should you take in planning the program?
18. Many organizations turn to e-learning as a less-expensive alternative to classroom
training. What are some other advantages of substituting e-learning for classroom
training? What are some disadvantages?
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19. Suppose the managers in your organization tend to avoid delegating projects to
the people in their groups. As a result, they rarely meet their goals. A training needs
analysis indicates that an appropriate solution is training in management skills.
You have identified two outside training programs that are consistent with your
goals. One program involves experiential programs, and the other is an interactive
computer program. What are the strengths and weaknesses of each technique?
Which would you choose? Why?
20. Consider your current job or a job you recently held. What types of training did you
receive for the job? What types of training would you like to receive? Why?
21. A manufacturing company employs several maintenance employees. When a
problem occurs with the equipment, a maintenance employee receives a
description of the symptoms and is supposed to locate and fix the source of the
problem. The company recently installed a new, complex electronics system. To
prepare its maintenance workers, the company provided classroom training. The
trainer displayed electrical drawings of system components and posed problems
about the system. The trainer would point to a component in a drawing and ask,
"What would happen if this component were faulty?" Trainees would study the
diagrams, describe the likely symptoms, and discuss how to repair the problem. If
you were responsible for this company's training, how would you evaluate the
success of this training program?
22. In Question 21, suppose the maintenance supervisor has complained that trainees
are having difficulty trouble shooting problems with the new electronics system.
They are spending a great deal of time on problems with the system and coming
to the supervisor with frequent questions that show a lack of understanding. The
supervisor is convinced that the employees are motivated to learn the system, and
they are well qualified. What do you think might be the problems with the current
training program? What recommendations can you make for improving the
program?
23. Who should be involved in onboarding of new employees?
24. Why would it not be appropriate to provide orientation programs purely online?
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25. Why do organizations provide diversity training? What kinds of goals are most
suitable for such training?
26. You have received an e-mail from your operations director to the effect that he is
confused by the terms ‘high performance’, ‘high commitment’ and ‘high
involvement’ management. He wants to know what the differences are between
them, if any. He would also like your views on how any of them might benefit the
company, particularly distribution and customer service. Draft a reply.
27. What has recent research told us about the extent to which high-performance
working leads to improved levels of organizational performance?
28. Your managing director has asked you to draft a paper for the board on why the
organization should introduce a high-performance work system. Prepare the paper
explaining what such as system would look like and how it might be developed.
29. How does a complete performance management system differ from the use of
annual performance appraisals?
30. Give two examples of an administrative decision that would be based on
performance management information. Give two examples of developmental
decisions based on this type of information.
31. How can involving employees in the creation of performance standards improve
the effectiveness of a performance management system? (Consider the criteria for
effectiveness listed in this chapter.)
32. Consider how you might rate the performance of three instructors from whom you
are currently taking a course. (If you are currently taking only one or two courses,
consider this course and two you recently completed.)
a. Would it be harder to rate the instructors' performance or to rank their
performance? Why?
b. Write three items to use in rating the instructors one each to rate them in
terms of an attribute, a behavior, and an outcome.
c. Which measures in (b) do you think is most valid? Most reliable? Why?
d. Many colleges use questionnaires to gather data from students about their
instructors' performance. Would it be appropriate to use the data for
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administrative decisions? Developmental decisions? Other decisions? Why
or why not?
33. Imagine that a pet supply store is establishing a new performance management
system to help employees provide better customer service. Management needs to
decide who should participate in measuring the performance of each of the store's
salespeople. From what sources should the store gather information? Why?
34. Would the same sources be appropriate if the store in Question 5 used the
performance appraisals to support decisions about which employees to promote?
Explain.
35. Suppose you were recently promoted to a supervisory job in a company where you
have worked for two years.
36. You genuinely like almost all your co-workers, who now report to you. The only
exception is one employee, who dresses more formally than the others and
frequently tells jokes that embarrass you and the other workers. Given your
preexisting feelings for the employees, how can you measure their performance
fairly and effectively?
37. Continuing the example in Question 36, imagine that you are preparing for your
first performance feedback session. You want the feedback to be effective-that is,
you want the feedback to result in improved performance. List five or six steps you
can take to achieve your goal.
38. Besides giving employees feedback, what steps can a manager take to improve
employees' performance?
39. Suppose you are a human resource professional helping to improve the
performance management system of a company that sells and services office
equipment.
The company operates a call center that takes calls from customers who are
having problems with their equipment. Call center employees are supposed to
verify that the problem is not one the customer can easily handle (for example,
equipment that will not operate because it has come unplugged). Then, if the
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problem is not resolved over the phone, the employees arrange for service
technicians to visit the customer. The company can charge the customer only if a
service technician visits, so performance management of the call center
employees focuses on productivity-how quickly they can complete a call and move
on to the next caller. To measure this performance efficiently and accurately, the
company uses electronic monitoring.
a) How would you expect the employees to react to the electronic monitoring?
How might the organization address the employees' concerns?
b) Besides productivity in terms of number of calls, what other performance
measures should the performance management system include?
c) How should the organization gather information about the other performance
measures?
CASE IN – POINT: Huntington Ingalls Builds a Workforce to Do ''Hard Stuff"
Huntington Ingalls Industries (Hll) is the largest U.S. shipbuilding company serving the
military; its products include aircraft carriers, submarines, Coast Guard cutters, and more.
A military ship is a hugely complex product, and the sailors' lives depend on it being
precisely made to specifications. To meet its motto of "Hard stuff done right" in the handson work of shipbuilding, Hll combines careful hiring with a commitment to training.
Building military ships is highly specialized, possibly requiring a military clearance as well
as technical skills and physical strength, so positions are hard to fill. HII finds educated,
strong people and then trains them to do the job. One aspect of training is a set of
apprenticeship programs.
These run for four to eight years and combine classroom learning with on-the-job training.
The latter may include training in crafts like welding and pipe fitting or in specialized areas
such as rigging or nuclear testing. The program at the Newport News, Virginia,
shipbuilding facility covers 19 trades, along with the choice to participate in eight
advanced programs. Another facility, in Mississippi, offers apprenticeships in 13 trades.
The two programs together have 130 instructors, many of whom themselves attended
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one of the schools. Employees are paid for a 40-hour week, including their time on the
job and in classes.
A first-year apprentice can earn $35,000 a year, with raises bringing the salary up to
$58,000 after completion of the program-and because the program is paid for, they
graduate without student loans to repay. The training culminates in an apprentice degree
that comes close to meeting the standards for an associate's degree, so employees with
a desire to continue on toward a college degree are well on their way. Employees who
stay with HII for 40 years also can apply that experience to becoming designated a master
shipbuilder. Hll's 1,400 master shipbuilders are another source of instructors for its
apprenticeship program.
Another way in which HII seeks excellence through training is in its use of technology.
Several years ago, it began researching ways to employ "augmented reality" in business
applications including training. Augmented reality refers to displaying an overlay of digital
information over a view of the physical world, the way football broadcasts on television
draw lines on the field to illustrate plays.
In HII's training, it is used for showing the steps required to operate equipment while the
trainee is at the equipment, viewing it on a tablet computer. HII's success with this method
has drawn the interest of the U.S. Navy, which may begin using HII's augmented-reality
technology to help sailors learn how to conduct maintenance.
Questions
1. What training methods does Huntington Ingalls use, according to the information
given? How do these support its business needs?
2. How might HII evaluate the success of its training?
Sources.- Huntington Ingalls Industries, ''About Us,"
http://www.huntingtoningalls.com, accessed April 25, 2018; The Apprentice
School, home page and ''About Us," http:/ /www.as.edu, accessed April 25, 2018;
"Huntington Ingalls, Augmented Reality," http://nns.huntingtoningalls.com,
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accessed April 19, 2016: Tony Bingham and Pat Galagan, "Hard Stuff Done
Right," TD, December 2015, pp. 31-34: Bill Ermatinger, "Craftsmanship,
Scholarship and Leadership," TD, December 2015, pp. 37-40; Allyson Versprille,
"Augmented Reality Could Help Solve Ford-Class Carrier Cost Woes," National
Defense, December 2015, pp. 38-40.
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