Discovering Management:
Human Resource Management
Prof. Dr. Gudela Grote
D-MTEC
ETH Zürich
Human Resource Management (HRM)
§  Definition:
HRM concerns the policies, practices, and
systems that influence employees' behavior,
attitudes, and performance.
§  Goal:
HRM aims at applying human resources within
organizations such that people succeed and
organizational performance improves.
March 2012
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
2
A tragic
example of
effects of work
on personal
well-being
March 2012
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
3
Effects of Human Resource Management
§  HRM-practices (especially job design and
selection/ appraisal/training) better predict
company performance than R&D, QM, strategy
and technology (West, 2001)
§  Empowerment better predicts company
performance than technology-based management
practices in the short- and long-term
(Patterson et al., 2004; Birdi et al., 2008)
§  HRM-practices as cause and effect of company
performance (Guest et al., 2003)
March 2012
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
4
Characteristics of HRM in successful
companies (Pfeffer & Veiga, 1999)
§  Selective hiring
§  Extensive training
§  Self-managed teams and decentralization
§  Reduction of status differences
§  High compensation contingent on organizational
performance
§  Sharing information
§  Employment security
March 2012
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
5
Characteristics of HRM in successful
companies (Pfeffer & Veiga, 1999)
§  Selective hiring
§  Extensive training
§  Self-managed teams and decentralization
§  Reduction of status differences
§  High compensation contingent on organizational
performance
§  Sharing information
§  Employment security
March 2012
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
6
Evaluation
Implementation
Planning
Prototypical procedure in personnel selection
March 2012
Job analysis
Job requirements
e.g. work samples/tests;
selection of predictors
Selection of
success criteria
Assessment and combination
of predictors
Decision about selection/
placement
Validity testing
Assessment and
combination of
success criteria
Cost-benefit analysis
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
7
Validity of different selection methods
§  Personality dispositions
§
§
§
Cognitive ability tests
General personality tests
Graphology
~ .5
~ .3
~ .0
§  Behavioral simulation
§
§
Work samples
Assessment center
~ .5
~ .55
§  Biographical focus
§
§
§
§
March 2012
CV/references
Biographical questionnaire
Structured interview
Unstructured interview
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
~ .2
~ .35
~ .45
~ .3
8
Characteristics of HRM in successful
companies (Pfeffer & Veiga, 1999)
§  Selective hiring
§  Extensive training
§  Self-managed teams and decentralization
§  Reduction of status differences
§  High compensation contingent on organizational
performance
§  Sharing information
§  Employment security
March 2012
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
9
Personnel development
§  Systematic furthering of personal aptitude in
relation to individual expectations and
organizational requirements
§
§
§
§
§
March 2012
education/training
counselling/coaching
management by objectives
team development
job design
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
10
Basic assumptions in personnel
development
§  Dynamic relationship between person and work:
person and work change continuously, requiring
also continuous adaptation
§  Adaptation can happen from the perspective of
„fit human to task“ and/or „fit task to human“
§
§
March 2012
Define possible career paths: e.g., management
versus technical career
Identify individual career needs: e.g., different types of
career orientations
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
11
Career orientations in Switzerland
(Swiss HR-Barometer, Grote & Staffelbach, 2011)
March 2012
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
12
Career orientations in Switzerland
(Swiss HR-Barometer, Grote & Staffelbach, 2011)
March 2012
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
13
Characteristics of HRM in successful
companies (Pfeffer & Veiga, 1999)
§  Selective hiring
§  Extensive training
§  Self-managed teams and decentralization
§  Reduction of status differences
§  High compensation contingent on organizational
performance
§  Sharing information
§  Employment security
March 2012
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
14
Core concept of job design:
Self-regulating teams
§  Teams: several people who work together over a
period of time to reach common goals and who
share a sense of belonging together
§  Self-regulation: individual and collective
autonomy in order to coordinate work processes
and to cope with process variances and
uncertainties locally
March 2012
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
15
Prerequisites for good team work
§  Adequate common task
§
§
§
Complexity higher than individual competencies
Clear performance criteria
Collective decision competence
§  Shared goal orientation
§
§
Positive goal coupling
Goal transparency and feedback
§  Adequate group composition
§
§
Different perspectives on the task
Shared language
§  Development of group rules
§
§
§
March 2012
Adequate group size
Support for team development (form, storm, norm, perform)
Handling conflicts between individual and collective autonomy
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
16
Characteristics of HRM in successful
companies (Pfeffer & Veiga, 1999)
§  Selective hiring
§  Extensive training
§  Self-managed teams and decentralization
§  Reduction of status differences
§  High compensation contingent on organizational
performance
§  Sharing information
§  Employment security
March 2012
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
17
Changing context for leadership
In the past the question was: "How do I lead a company?"
Today it is:
"How do we lead a company?"
For the future it will be:
"How does a company lead
itself?"
"Boundaryless, flattened, flexible, project-based and teambased organizations that employ temporary, externalized and
remote workers, whose tasks are more intellectual amd less
routine and cannot be controlled and coordinated by structure
or direct supervision, need mechanisms of coordination
through shared meaning systems and a shared sense of
purpose" (Shamir, 1999)
March 2012
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
18
Management of uncertainty as strategic
and operational leadership function
Ø  Balance between
minimizing uncertainty, which creates stability, and
coping with uncertainty, which creates flexibility
ing
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High sta
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High lev
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Little op
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Feedfor
y
Flexibilit
Stability
March 2012
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
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New issues in leadership
§  Leadership portfolios
§
In order to match different situational demands with
adequate leadership behaviors, leaders must develop
portfolios of styles and behaviors and understand
when to use which behavior.
§  Shared leadership
§
March 2012
Leadership involves different tasks that can be taken
on by different team members and may shift between
team members.
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
20
Sharing different leadership functions in
medical teams (Künzle et al., 2010)
p<.05
(n.s)
(n.s)
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
Nurses
Content-oriented
March 2012
Low performing teams (n=6)
(n.s)
Leadership (Mean rate per Minute)
Leadership (Mean rate per Minute)
High performing teams (n=6)
Residents
Structuring
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
Nurses
Content-oriented
Residents
Structuring
21
Characteristics of HRM in successful
companies (Pfeffer & Veiga, 1999)
§  Selective hiring
§  Extensive training
§  Self-managed teams and decentralization
§  Reduction of status differences
§  High compensation contingent on organizational
performance
§  Sharing information
§  Employment security
March 2012
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
22
Pay is ...
…
…
…
…
…
money
compensation
reward
incentive
recognition
Ø  Procedural and distributive justice of pay
systems at least as important as absolute
amount of own pay
March 2012
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
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March 2012
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
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Performance-related pay
§  A part of the overall pay is determined on the basis of
individual/group/company performance.
§  Increasing use
§
§
§
in the US more than in Europe
for managers more than for non-managerial employees
in larger companies more than in smaller companies
§  Critical voices become louder:
§
§
§
Is the rewarded behavior the desired behavior?
Danger of reducing intrinsic motivation
Conflict between individual and team performance
§  Pay schemes related to organizational performance tend
to avoid these problems
March 2012
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
25
Characteristics of HRM in successful
companies (Pfeffer & Veiga, 1999)
§  Selective hiring
§  Extensive training
§  Self-managed teams and decentralization
§  Reduction of status differences
§  High compensation contingent on organizational
performance
§  Sharing information
§  Employment security
March 2012
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
26
Characteristics of HRM in successful
companies (Pfeffer & Veiga, 1999)
§  Selective hiring
§  Extensive training
§  Self-managed teams and decentralization
§  Reduction of status differences
§  High compensation contingent on organizational
performance
§  Sharing information
§  Employment security
March 2012
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
27
Employment relationship: Social exchange
defined by legal and psychological contracts
t + Goal achievement
March 2012
Firm
Psychological
contract
e.g. employability, job
security
e.g. goal-orientation,
loyalty
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
Employee
$ + Goals
Employee
Legal contract
Firm
Employment relationship
28
Flexible working: Any time, any place,
contract work, pay for performance
March 2012
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
29
Flexible working: Change from a
traditional to a new contract? (Raeder & Grote, 2001)
Traditional contract
New contract
Job security /
Life-long employment
Flexibility / Accepting insecurity
Internal promotion
Internal development
Specialization
Goal / Performance orientation
Loyalty/
Identification
Employability / Focus on own
competencies
March 2012
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
30
Psychological contracts in Switzerland
(Swiss HR-Barometer, Grote & Staffelbach, 2011)
Mix of old
and new
contract
March 2012
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
31
Using the psychological contract to
handle employment uncertainties
§  Communicate and match reciprocal expectations
and offers
§  Support employability through training, job
design, and systematic career management
§  Distribute risks between organization and
employee according to individual coping
capabilities
March 2012
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
32
Characteristics of HRM in successful
companies (Pfeffer & Veiga, 1999)
§  Selective hiring
§  Extensive training
§  Self-managed teams and decentralization
§  Reduction of status differences
§  High compensation contingent on organizational
performance
§  Sharing information
§  Employment security
March 2012
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
33
Beyond "rational choice": HRM-practices
as expression of organizational culture
§  Organizational culture implies
§
§
§
Assumptions about human nature (e.g., motivation, trust
versus control)
Images of organizations (e.g., brain, machine, family)
Assumptions about how organizations work best
(e.g., centralization versus decentralization)
§  These assumptions strongly influence choices of
HRM practices beyond and possibly even against
empirical evidence.
March 2012
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
34
Characteristics of HRM in successful
companies (Pfeffer & Veiga, 1999)
§  Selective hiring
§  Extensive training
§  Self-managed teams and decentralization
§  Reduction of status differences
§  High compensation contingent on organizational
performance
§  Sharing information
§  Employment security
March 2012
Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch
35