THIS PAPER IS NOT TO BE REMOVED FROM THE EXAMINATION HALL MN3075 ZA BSc DEGREES AND GRADUATE DIPLOMAS IN ECONOMICS, MANAGEMENT, FINANCE AND THE SOCIAL SCIENCES, THE DIPLOMA IN ECONOMICS AND SOCIAL SCIENCES AND THE CERTIFICATE IN EDUCATION IN SOCIAL SCIENCES Human Resource Management Wednesday 29 May 2019: 14:30 – 17:30 Time allowed: 3 hours DO NOT TURN OVER UNTIL TOLD TO BEGIN Candidates should answer FOUR of the following EIGHT questions. All questions carry equal marks. © University of London 2019 Page 1 of 3 UL19/0183 1. (a) Compare and contrast the liberal and radical approaches to equal opportunities policies. (10 marks) (b) Critically evaluate the business argument for employing a diverse workforce. (15 marks) 2. (a) Define ‘reneging’ and ‘incongruence’ in the context of psychological contract violation and discuss what factors explain their occurrence. (10 marks) (b) What advice would you give to organisations wishing to avoid or minimise perceptions of psychological contract breach amongst their employees? (15 marks) 3. (a) 360° performance appraisals can be undertaken by various stakeholders. Who are these stakeholders, and what do you think each can contribute to the process? (10 marks) (b) What are the limitations of 360° performance appraisals, and is this type of appraisal useful in all workplaces? (15 marks) 4. (a) Explain Hackman and Oldham’s Job Characteristics Model. (10 marks) (b) Discuss the advantages and disadvantages associated with using the Job Characteristics Model to redesign jobs. (15 marks) 5. (a) What is an ‘internal labour market’? (5 marks) (b) What types of organisations are likely to use internal labour markets? Support your answer with examples. (10 marks) (c) Discuss the advantages and disadvantages for organisations of operating an internal labour market. (10 marks) 6. (a) What criteria should managers take into account when evaluating the effectiveness of recruitment and selection processes? (10 marks) (b) Discuss the biases associated with unstructured interviews and suggest ways in which managers can overcome them. (15 marks) Page 2 of 3 UL19/0183 7. (a) Distinguish between schemes that link pay to individual performance and schemes that relate pay to group performance, and discuss how each of these schemes work. (10 marks) (b) Drawing on agency and motivation theories, discuss the strengths and limitations of individual performance related pay. (15 marks) 8. (a) Distinguish between task and contextual performance. (10 marks) (b) Discuss the consequences of organisational citizenship behaviour for (i) the organisation and (ii) the individual. (15 marks) END OF PAPER Page 3 of 3 UL19/0183 THIS PAPER IS NOT TO BE REMOVED FROM THE EXAMINATION HALL MN3075 ZB BSc DEGREES AND GRADUATE DIPLOMAS IN ECONOMICS, MANAGEMENT, FINANCE AND THE SOCIAL SCIENCES, THE DIPLOMA IN ECONOMICS AND SOCIAL SCIENCES AND THE CERTIFICATE IN EDUCATION IN SOCIAL SCIENCES Human Resource Management Wednesday 29 May 2019: 14:30 – 17:30 Time allowed: 3 hours DO NOT TURN OVER UNTIL TOLD TO BEGIN Candidates should answer FOUR of the following EIGHT questions. All questions carry equal marks. © University of London 2019 Page 1 of 3 UL19/0184 1. (a) According to goal-setting theory, what types of goals are likely to be associated with higher levels of performance? (10 marks) (b) Compare and contrast the orthodox and radical critiques of performance appraisals. (15 marks) 2. (a) Discuss the notions of validity, reliability and fairness in the context of selection and recruitment. (5 marks) (b) What use can yield analysis, time-lapse analysis and cost-per-hire be to organisations when deciding whether a recruitment method is effective and efficient? (10 marks) (c) Discuss the strengths and limitations of on-line recruitment. (10 marks) 3. (a) Discuss the key elements of Taylor’s Scientific Management and the limitations of this approach to job design. (10 marks) (b) How can job enlargement and job enrichment overcome the limitations of Scientific Management? (15 marks) 4. (a) Discuss the assumptions of principal-agent theory. (5 marks) (b) According to principal-agent theory why is individual performance-related pay an effective payment system? (10 marks) (c) Drawing on expectancy and equity theories, discuss ways in which managers can improve the effectiveness of individual performance-related pay. (10 marks) 5. (a) Define ‘reneging’ and ‘incongruence’ in the context of psychological contract violation and discuss what factors explain their occurrence (10 marks) (b) What advice would you give organisations wishing to avoid or minimise perceptions of psychological contract breach amongst their employees? (15 marks) Page 2 of 3 UL19/0184 6. (a) What is meant by numerical flexibility? (5 marks) (b) What can an organisation do to increase numerical flexibility? (10 marks) (c) What are the potential disadvantages of increasing numerical flexibility? (10 marks) 7. (a) Compare and contrast the liberal and radical approaches to equal opportunities policies. (10 marks) (b) Critically evaluate the business argument for employing a diverse workforce. (15 marks) 8. (a) What is an ‘internal labour market’? (5 marks) (b) What types of organisations are likely to use internal labour markets? Support your answer with examples. (10 marks) (c) Discuss the advantages and disadvantages for organisations of operating an internal labour market. (10 marks) END OF PAPER Page 3 of 3 UL19/0184 Examiners’ commentaries 2019 Examiners’ commentaries 2019 MN3075 Human resource management Important note This commentary reflects the examination and assessment arrangements for this course in the academic year 2018–19. The format and structure of the examination may change in future years, and any such changes will be publicised on the virtual learning environment (VLE). Information about the subject guide and the Essential reading references Unless otherwise stated, all cross-references will be to the latest version of the subject guide (2013). You should always attempt to use the most recent edition of any Essential reading textbook, even if the commentary and/or online reading list and/or subject guide refers to an earlier edition. If different editions of Essential reading are listed, please check the VLE for reading supplements – if none are available, please use the contents list and index of the new edition to find the relevant section. General remarks Learning outcomes At the end of this course, and having completed the Essential reading and activities, you should be able to: • describe the relationship between HRM and organisational performance and be able to critically evaluate the empirical evidence • critically evaluate alternative perspectives on HR practices • analyse the relationship between HR practices and their outcomes for the individual and organisation • evaluate the effectiveness of different HR practices • comment upon the limitations of the theories covered. Planning your time in the examination Many candidates appear to spend a disproportionate amount of time answering two or three questions. This is a risky strategy. You should always attempt four questions and spend an appropriate amount of time on each to increase the likelihood of being awarded a pass. What are the Examiners looking for? You are expected to answer the question that has been set by developing an argument that addresses the given question. In developing their argument, you are expected to exercise judgment and be selective by including material that is relevant to the question and excluding material that is tangential or not relevant to the question. Students should focus on questions asked rather than simply reciting pre-learned subject content. Examiners penalise answers that include all the material a student knows 1 Examiners’ commentaries 2019 about the topic as evidence of lack of ability to exercise judgement or lack of understanding as to what the question is asking. All questions come in two or, more typically, three parts. You should ensure that they answer all parts of the question, giving approximate weight to each based on the marks available. The exam paper is structured in a way that requires students to demonstrate: (i) knowledge and understanding and (ii) application of knowledge and critical thinking. The exam questions are split in 2 or 3 parts (i.e. a, b, c). Part a and (usually) part b require you to demonstrate knowledge and understanding and these questions are based on the basic concepts that are discussed in the module guide. Since marks in these questions are given for knowledge and accuracy and they carry enough marks to give you a ‘pass’, failure to provide a good answer can increase your risk of failing the exam. We therefore strongly advise students to ensure that they are well-prepared to answer the first two parts of each question. The module guide usually includes all the relevant knowledge for these two parts, so good familiarity with the guide is highly advisable. Part c requires further explanation, application of theory, discussion of relevant research evidence and critical evaluation of material. Candidates are sometimes overly descriptive in their answers to the third part and, as a consequence, do not provide a critical perspective on the material presented. You are expected to warrant your claims by citing literature or giving examples, rather than just expressing unsubstantiated opinions. Avoid a descriptive approach and consider writing in a way that articulates different viewpoints. Better answers are able to link these to different theoretical frameworks and empirical evidence and provide references of key authors in the academic literature. The examiners like answers to the second and, where applicable, third parts of each question to be clearly and logically set out and to include a beginning, middle and end: • beginning – present the main argument in the introductory paragraph • middle – develop and substantiate the argument in the main body of the answer • end – use the concluding paragraph to summarise the main points of the argument. Your answer must address the given question, so it is important when answering the question to always ask yourself ‘how is each point I am making relevant to the question?’ By doing so, you should be able to filter out information that is not relevant to the question and only keep parts that are. Do not leave it to the closing paragraph of your answer to make your argument explicit. There are a number of ways to answer a particular question and the quality of the answer (irrespective of the approach taken) depends upon a critical evaluation of the theories and empirical evidence, rather than mere description and recitation of related material. This is difficult if you do not understand the broader material and have not read beyond the subject guide. It is imperative that you read beyond the subject guide, which essentially just provides an introduction and overview, and incorporate evidence of additional reading into your answers. Reading the required references provides greater depth to the topics and is necessary to develop a solid, welldeveloped argument for examination questions. References to studies and key authors can make the difference between a good answer and a very good or excellent answer. Time management is also very important. Candidates must 2 Examiners’ commentaries 2019 aim to answer all four questions and allocate time appropriately given the number of marks available. Finally, the revision is an important part of the exam preparation process. Students are strongly encouraged to revisit past exam papers and study them carefully. This may involve identifying which part of the syllabus they are drawn from and attempting to answer them by making detailed notes or using them as ‘mock’ exam examples. Key steps to improvement Common mistakes and weaknesses Many candidates are disappointed to find that their examination performance is poorer than they expected. This can be due to a number of different reasons and the Examiners’ commentaries suggest ways of addressing common problems and improving your performance. We want to draw your attention to one particular failing – ‘question spotting’, that is, confining your examination preparation to a few question topics which have come up in past papers for the course. This can have very serious consequences. During your studies, you should develop and in-depth understanding of the topics covered in the module guide in preparation for the examination. While candidates may not cover all topics in the syllabus in the same depth, but you need to be aware that Examiners are free to set questions on any aspect of the syllabus. Therefore, it is very important that you develop an in-depth knowledge of all aspects of the course as presented in the module guide. If you rely on a question spotting strategy, it is likely you will find yourself in difficulties when you sit the examination paper. We strongly advise you not to adopt this strategy. Examiners will vary the topics and questions from year to year and may well set questions that have not appeared in past papers – every topic on the syllabus is a legitimate examination target. So although past papers can be helpful in revision, you cannot assume that topics or specific questions that have come up in past examinations will definitely occur again. Students should focus on questions asked rather than simply reciting pre-learned subject content that might apply to another question. Skills and abilities examiners are looking for Throughout the exam, students are expected to demonstrate knowledge and understanding of the HRM concepts covered in the module. Students are further expected to critically evaluate alternative perspectives on HR practices and analyse the relationship between HR practices and their outcomes for the individual and organisation. A critical perspective involves a synthesis of the literature and the evidence and an evaluation of the arguments put forward (including a discussion of the strengths and limitations of each approach). Time management and the ability to provide a coherent structure for each answer are also important. 3 Examiners’ commentaries 2019 Examination revision strategy Many candidates are disappointed to find that their examination performance is poorer than they expected. This can be due to a number of different reasons and the Examiners’ commentaries suggest ways of addressing common problems and improving your performance. We want to draw your attention to one particular failing – ‘question spotting’, that is, confining your examination preparation to a few question topics which have come up in past papers for the course. This can have very serious consequences. We recognise that candidates may not cover all topics in the syllabus in the same depth, but you need to be aware that examiners are free to set questions on any aspect of the syllabus. This means that you need to study enough of the syllabus to enable you to answer the required number of examination questions. The syllabus can be found in the Course information sheet in the section of the VLE dedicated to this course. You should read the syllabus very carefully and ensure that you cover sufficient material in preparation for the examination. Examiners will vary the topics and questions from year to year and may well set questions that have not appeared in past papers – every topic on the syllabus is a legitimate examination target. So although past papers can be helpful in revision, you cannot assume that topics or specific questions that have come up in past examinations will occur again. If you rely on a question spotting strategy, it is likely you will find yourself in difficulties when you sit the examination paper. We strongly advise you not to adopt this strategy. 4 Examiners’ commentaries 2019 Examiners’ commentaries 2019 MN3075 Human resource management – Zone A Important note This commentary reflects the examination and assessment arrangements for this course in the academic year 2018–19. The format and structure of the examination may change in future years, and any such changes will be publicised on the virtual learning environment (VLE). Information about the subject guide and the Essential reading references Unless otherwise stated, all cross-references will be to the latest version of the subject guide (2013). You should always attempt to use the most recent edition of any Essential reading textbook, even if the commentary and/or online reading list and/or subject guide refers to an earlier edition. If different editions of Essential reading are listed, please check the VLE for reading supplements – if none are available, please use the contents list and index of the new edition to find the relevant section. Comments on specific questions Candidates should answer FOUR of the following EIGHT questions. All questions carry equal marks. Question 1 a. Compare and contrast the liberal and radical approaches to equal opportunities policies. (10 marks) b. Critically evaluate the business argument for employing a diverse workforce. (15 marks) Reading for this question The material and required reading for this question is outlined in chapter 2 of the subject guide. Approaching the question a. Good answers analysed the liberal and radical approaches and discussed policy and practice examples of how they can be implemented within the organisation. Excellent answers also discussed their limitations in depth. b. Good answers provided an in-depth analysis of the business case including labour market issues, retention issues, the issue of company image and product development, changing management styles. Excellent answers discussed their limitations in depth. The guide includes various case study examples that if discussed, extra marks were awarded. Question 2 a. Define ‘reneging’ and ‘incongruence’ in the context of psychological contract violation and discuss what factors explain their occurrence. (10 marks) 5 b. What advice would you give to organisations wishing to avoid or minimise perceptions of psychological contract breach amongst their employees? (15 marks) Examiners’ commentaries 2019 Reading for this question The material and required reading for this question is outlined in chapter 5 of the subject guide. Approaching the question a. Good answers provided a definition of reneging and incongruence and explained the circumstances under which they are likely to occur. Better answers discussed in depth the role of inability, unwillingness in reneging and different schemata, complexity and ambiguity of obligations, and communication in incongruence. b. Good answers argued that given that contract breach can arise from reneging or incongruence, these causes have practical implications for the management of contract breach. Some examples include: • Organisations need to be careful in making promises to employees as they may later find they cannot fulfil them. This can happen as early as the recruitment stage, but also later on. • To minimise congruence, organisations may want to increase communication between organisational agents and employees. • The use of realistic job previews may minimise subsequent perceptions of contract breach, as employees will have a good understanding of the job prior to hiring. Overall, better answers were based on the causes of reneging or incongruence outlined above and developed the argumentation in relation to this. Question 3 a. 360° performance appraisals can be undertaken by various stakeholders. Who are these stakeholders, and what do you think each can contribute to the process? (10 marks) b. What are the limitations of 360° performance appraisals, and is this type of appraisal useful in all workplaces? (15 marks) Reading for this question The material and required reading for this question is outlined in chapter 7 of the subject guide. Candidates can also draw ideas from: • Luthans, F. and S. Peterson, ‘360 degree feedback and systematic coaching’, Human Resource Management 42(3) 2002, pp.243–56. • Mabey, C. ‘Closing the circle: participants views of a 360 degree feedback programme’, Human Resource Management Journal 11(1) 2001, pp.41–53. Approaching the question a. Good answers discussed the contribution of each of the following: supervisors/line managers, employees assessing their superiors, teammembers assessing each other, subordinates. b. Good answers elaborated on the administrative burdens and costs associated with introducing such complex systems, also problems associated with assessors ‘gaming the process’, and the issues associated with subordinates to give objective ratings of their supervisors and the wider issue of subjectivity in the process (for example, the extent to which any criterion is commonly understood, in the sense of having the same literal meaning, by all those being assessed and all those doing the assessing). Also, the extent to which those being assessed have any involvement in or contribution to constructing criteria. Better answers incorporated the wider problems with performance appraisals in their discussion (for example, judgemental vs developmental appraisals and 6 Examiners’ commentaries 2019 radical critiques of appraisals). Question 4 a. Explain Hackman and Oldham’s Job Characteristics Model. (10 marks) b. Discuss the advantages and disadvantages associated with using the Job Characteristics Model to redesign jobs. (15 marks) Reading for this question The material and required reading for this question is outlined in chapter 8 of the subject guide. Approaching the question a. Good answers defined the five dimensions, the critical psychological states and the outcomes. They also demonstrated understanding of the links between them. Discussion of the motivating potential score was not necessary as it is a supplement to the model. b. Good answers provided a detailed account of the advantages of the JCM not least highlighting its wide application and practical use to managers. With regards to the disadvantages issues of measuring the dimensions and outcomes and Kelly’s (1992) work are important themes and excellent answers drew on these to address the question. Question 5 a. What is an ‘internal labour market’? (5 marks) b. What types of organisations are likely to use internal labour markets? Support your answer with examples. (10 marks) c. Discuss the advantages and disadvantages for organisations of operating an internal labour market. (10 marks) Reading for this question The material and required reading for this question is outlined in chapter 12 of the subject guide. Approaching the question a. Good answers defined the term ‘internal labour market’ and excellent answers further explained different patterns of adoption, for example, full adoption (external recruitment only at most junior levels) or in a more limited form (for example, external recruitment permitted only when no suitable internal candidates are available). b. Examiners were looking for specific examples of industries that are likely to adopt ILMs (for example, first tier Japanese manufacturing companies and generally organisations that emphasise life-time employment, professional services firms such as accountants, consultants, lawyers and public sector organisations). Better answers pointed out that more generally ILMs are found in organisations which require the development of firm specific human capital and knowledge. c. Good answers provided an in-depth discussion of their advantages in the context of firm-specific skills and knowledge; motivation and commitment of insiders because of promotion prospects; containment of wages at junior levels (tournament theory); higher return on investment in training; retention of knowledge and ‘corporate history’; reduced risk for employers when selecting for jobs. 7 In relation to disadvantages relevant points for discussion included the reduced hiring pool, placing limits on talent selection; restricting possibilities of new perspectives, new ideas, innovation by introducing practices from outside; loss of contact with external pay markets which may create wage rigidity; ILMs may evolve into a seniority / tenure-based promotion systems rather than meritocratic systems; the trade-off between Examiners’ commentaries 2019 the development knowledge of the organisation in ILMs and development of technical knowledge through exposure to different systems. Question 6 a. What criteria should managers take into account when evaluating the effectiveness of recruitment and selection processes? (10 marks) b. Discuss the biases associated with unstructured interviews and suggest ways in which managers can overcome them. (15 marks) Reading for this question The material and required reading for this question is outlined in chapter 2 of the subject guide. Approaching the question a. Candidates were expected to define and explain in depth the following criteria: cost & budget; validity; reliability and fairness. b. Good answers demonstrated understanding of what unstructured interviews are. This was followed by a discussion of the subjectivity biases within the unstructured interview process including: expectancy effect, primacy effect, contrast effect, quota effect, similar-to-me effect, personal liking bias, physical cues and ability to recall information. Excellent answers discussed ways in which these can be overcome (for example, structured interviews, use of interview panels and combined with other selection methods). Question 7 a. Distinguish between schemes that link pay to individual performance and schemes that relate pay to group performance, and discuss how each of these schemes work. (10 marks) b. Drawing on agency and motivation theories, discuss the strengths and limitations of individual performance related pay. (15 marks) Reading for this question The material and required reading for this question is outlined in chapter 6 of the subject guide. Approaching the question a. Good answers discuss commission, piecework and individual PRP on one hand, and profit sharing, gain sharing and team pay schemes on the other. Excellent answers demonstrated understanding of these schemes, as opposed to just naming them. b. Good answers demonstrated understanding of agency theory and proceeded to discuss agency theory’s predictions relating to how PRP achieves alignment of interests. In relation to motivation theories, good answers distinguished between content (Maslow, Herzberg, McClelland) and process theories. In linking content theories with PRP, excellent answers discussed under what circumstances the financial reward associated with PRP will motivate individuals (that is, what motivates people). With regards to process (how are people motivated), excellent answers applied expectancy and equity to how PRP schemes should be designed to have a motivating effect. Excellent answers further presented the Inland Revenue case study by Marsden and Richardson (in the reading list) as a case in point. Question 8 a. Distinguish between task and contextual performance. 8 (10 marks) Examiners’ commentaries 2019 b. Discuss the consequences of organisational citizenship behaviour for (i) the organisation and (ii) the individual. (15 marks) Reading for this question The material and required reading for this question is outlined in chapter 4 of the subject guide. Approaching the question a. Good answers defined task and contextual performance and also drew on specific examples to illustrate the point. Excellent answers clearly pointed out the differences between them, for example that task performance captures proficiency in performing specific work tasks while contextual performance encapsulates behaviours that support the broader organisational, social and psychological environment in which the technical core must function. b. Good answers begun by providing a definition of OCB and moved on to examine the links between OCB and organisational performance (mechanisms include co-worker productivity, managerial productivity, group cohesiveness and group performance). With regards to the individual, good answers discussed its positive effect on performance evaluations and promotion opportunities, and these can be examined through the lenses of the norm of reciprocity and associations that managers make. Additional marks were awarded if answers referenced empirical evidence. 9 Examiners’ commentaries 2019 Examiners’ commentaries 2019 MN3075 Human resource management – Zone B Important note This commentary reflects the examination and assessment arrangements for this course in the academic year 2018–19. The format and structure of the examination may change in future years, and any such changes will be publicised on the virtual learning environment (VLE). Information about the subject guide and the Essential reading references Unless otherwise stated, all cross-references will be to the latest version of the subject guide (2013). You should always attempt to use the most recent edition of any Essential reading textbook, even if the commentary and/or online reading list and/or subject guide refers to an earlier edition. If different editions of Essential reading are listed, please check the VLE for reading supplements – if none are available, please use the contents list and index of the new edition to find the relevant section. Comments on specific questions Candidates should answer FOUR of the following EIGHT questions. All questions carry equal marks. Question 1 a. According to goal-setting theory, what types of goals are likely to be associated with higher levels of performance? (10 marks) b. Compare and contrast the orthodox and radical critiques of performance appraisals. (15 marks) Reading for this question The material and required reading for this question is outlined in chapter 7 of the subject guide. Approaching the question a. Good answers discussed the SMART framework, but better answers also examined issues associated with the extent to which employees have participated in goal-setting, the degree to which the goals are accepted, and ability as a mediator. Arnold et al.’s (1998) work (discussed in the module guide) provides a good reference to address these points. b. Good answers discussed the distorting effects in performance appraisals (for example, recency, halo and horn, crony, Veblen and impression) and problems associated with judgemental appraisals, consistency and target setting that focuses on behaviours that can be measured. In relation to the radical critique, issues of management power and control were explored by better answers, and excellent answers also examined how management’s ability to use PAs in such a manner might be overestimated and employee capacity for resistance ignored. 10 Examiners’ commentaries 2019 Question 2 a. Discuss the notions of validity, reliability and fairness in the context of selection and recruitment. (5 marks) b. What use can yield analysis, time-lapse analysis and cost-per-hire be to organisations when deciding whether a recruitment method is effective and efficient? (10 marks) c. Discuss the strengths and limitations of on-line recruitment. (10 marks) Reading for this question The material and required reading for this question is outlined in chapter 2 of the subject guide. Approaching the question a. Excellent answers provided clear definitions of validity, reliability and fairness drawing on the relevant sections of the module guide. b. Excellent answers explain each type of source analysis and full marks were awarded if candidates covered all the relevant points from the module guide. c. Good answers outlined the advantages and disadvantages of online recruitment as they are elaborated in the module guide drawing on the work of Beardwell and Claydon (2010). Better answers examined the organisational and job circumstances that make on-line recruitment suitable for some jobs and some organisations but not others. Question 3 a. Discuss the key elements of Taylor’s Scientific Management and the limitations of this approach to job design. (10 marks) b. How can job enlargement and job enrichment overcome the limitations of Scientific Management? (15 marks) Reading for this question The material and required reading for this question is outlined in chapter 8 of the subject guide. Approaching the question a. Good answers discussed specialisation and division of labour on one hand, and separation of conception and execution on the other. Deskilling, lack of production flexibility and boring/repetitive jobs were discussed as limitations of Scientific Management. b. Good answers demonstrated understanding of the differences between enlargement and enrichment and clearly demonstrated how they can overcome the specific problems of Taylorism. Excellent answers further elaborated on the limitations of both approaches. Question 4 a. Discuss the assumptions of principal-agent theory. (5 marks) b. According to principal-agent theory why is individual performance-related pay an effective payment system? (10 marks) c. Drawing on expectancy and equity theories, discuss ways in which managers can improve the effectiveness of individual performance-related pay. (10 marks) Reading for this question The material and required reading for this question is outlined in chapter 6 of the subject guide. 11 Examiners’ commentaries 2019 Approaching the question a. Excellent answers discussed principal-agent theory by drawing on the notions of information asymmetry, measurement/monitoring of effort/ output and moral hazard. b. Good answers begun by explaining what PRP is, followed by a discussion of how it can overcome monitoring/measuring of output/effort problems by aligning the interests of agents and principals. c. Good answers demonstrated understanding of expectancy and equity theories by providing an in-depth discussion of their assumptions and the processes by which motivation is achieved. Excellent answers applied them to PRP in order to argue that how PRP schemes are designed and administered is important in determining their effectiveness. Question 5 a. Define ‘reneging’ and ‘incongruence’ in the context of psychological contract violation and discuss what factors explain their occurrence (10 marks) b. What advice would you give organisations wishing to avoid or minimise perceptions of psychological contract breach amongst their employees? (15 marks) Reading for this question The material and required reading for this question is outlined in chapter 5. Approaching the question a. Good answers provided a definition of reneging and incongruence and explained the circumstances under which they are likely to occur. Better answers discussed in depth the role of inability, unwillingness in reneging and different schemata, complexity and ambiguity of obligations, and communication in incongruence. b. Good answers argued that given that contract breach can arise from reneging or incongruence, these causes have practical implications for the management of contract breach. Some examples of how excellent answers addressed the question include: • Organisations need to be careful in making promises to employees as they may later find they cannot fulfil them. This can happen as early as the recruitment stage, but also later on. • To minimise congruence, organisations may want to increase communication between organisational agents and employees. • The use of realistic job previews may minimise subsequent perceptions of contract breach, as employees will have a good understanding of the job prior to hiring. Overall, excellent answers were based on the causes of reneging or incongruence outlined above and developed the argumentation in line with these causes. Question 6 a. What is meant by numerical flexibility? (5 marks) b. What can an organisation do to increase numerical flexibility? (10 marks) c. What are the potential disadvantages of increasing numerical flexibility? (10 marks) Reading for this question The material and required reading for this question is outlined in chapter 12 of the subject guide. 12 Examiners’ commentaries 2019 Approaching the question a. Good answers demonstrated understanding that the term numerical flexibility refers to the firm’s ability to adjust the amount of labour it hires or pays when demand for products/services changes. b. Better answers discussed the various practices and provided a more detailed discussion of outsourcing, part-time work and fixed term contracts (all discussed in detail in the module guide). Candidates were expected to clearly illustrate how these arrangements represent numerical flexibility and exceptional answers highlighted the shortcomings of these approaches. Question 7 a. Compare and contrast the liberal and radical approaches to equal opportunities policies. (10 marks) b. Critically evaluate the business argument for employing a diverse workforce. (15 marks) Reading for this question The material and required reading for this question is outlined in chapter 2 of the subject guide. Approaching the question a. Good answers analysed the liberal and radical approaches and discussed policy and practice examples of how they can be implemented within the organisation. Excellent answers discussed their limitations in depth. b. Good answers provided an in-depth analysis of the business case including labour market issues, retention issues, the issue of company image and product development, changing management styles. Limitations were also discussed in depth. The guide includes various case study examples that if discussed, extra marks were awarded. Question 8 a. What is an ‘internal labour market’? (5 marks) b. What types of organisations are likely to use internal labour markets? Support your answer with examples. (10 marks) c. Discuss the advantages and disadvantages for organisations of operating an internal labour market. (10 marks) Reading for this question The material and required reading for this question is outlined in chapter 12 of the subject guide. Approaching the question a. Good answers defined the term ‘internal labour market’ and excellent answers further explained different patterns of adoption, for example, full adoption (external recruitment only at most junior levels) or in a more limited form (for example, external recruitment permitted only when no suitable internal candidates are available). b. Examiners were looking for specific examples of industries that are likely to adopt ILMs (for example, first tier Japanese manufacturing companies and generally organisations that emphasise life-time employment, professional services firms such as accountants, consultants, lawyers and public sector organisations). Better answers pointed out that more generally ILMs are found in organisations which require the development of firm specific human capital and knowledge. c. Excellent answers provided an in-depth discussion of their advantages in the context of firm-specific skills and knowledge; motivation and 13 Examiners’ commentaries 2019 commitment of insiders because of promotion prospects; containment of wages at junior levels (tournament theory); higher return on investment in training; retention of knowledge and ‘corporate history’; reduced risk for employers when selecting for jobs. In relation to disadvantages relevant points for discussion included the reduced hiring pool, placing limits on talent selection; restricting possibilities of new perspectives, new ideas, innovation by introducing practices from outside; loss of contact with external pay markets which may create wage rigidity; ILMs may evolve into a seniority / tenure-based promotion systems rather than meritocratic systems; the trade-off between the development knowledge of the organisation in ILMs and development of technical knowledge through exposure to different systems. 14