Human Resource Management
& Organisational Development
By Dr Amanda Marshall-Ponting – licensed under the Creative Commons
Attribution – Non-Commercial – Share Alike License
http://creativecommons.org/licenses/by-nc-sa/2.5/
PMBE Learning package 6: Human resources management and organisational
development
Learning materials
INTRODUCTION
The aim of this learning package is to introduce the main debates and key models and literature
associated with human resources management and organisational development. As a result of
working through these materials you will have a better understanding of:
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MANAGEMENT THEORIES
Classical theories of management
The aim of the contributions to early 20th century organisational theory were dominated by efforts to
identify principles which would ensure success with the assumption being that the laws or principles
represented the single best way to manage and organise. Inspiration came from military circles and
much of this language is still used today when we speak of ‘lines of command’ and advice not to ‘put
your head above the parapet’. Classical theorists suggested that the principles of management and
organisation were a non-contextual, technical issue meaning that they could be applied to all
organisations irrespective of size, environment or nature of the outputs or technology used and the
‘one best way’ that results is referred to as ‘structural universalism’. Their prime concern was to
suggest efficient mechanisms of control, how to allocate tasks and reward people, and how to
structure organisations. Emphasis was placed on the existence and need for bureaucratic structures
and processes including transparent and narrow lines of command or pans of control which
embodied clear hierarchical relationships, clear job descriptions and clear procedures.
Classical theories have been criticised on the following grounds:
 Importance of context in influencing the most efficient and effective way of organising and
managing e.g. organisation’s size, its products or services, cultural environment and
technology used;
 The rise in importance of the workforce itself in determining success – the need to attract,
retain and motivate a skilled workforce
 The dynamic nature of the business market and complexity of the market and global
economy which requires organisations to be flexible and innovative;
 Bureaucratic organisations built on these principles are more suited to a known context and
repetitive activities and are poorly equipped to embrace change;
 Changes in social, political and legal environments mean that many of the late 19th/early 20th
century excesses the approach was developed to counterbalance are now unacceptable,
unethical or illegal;
 The dynamic building environment today demands people with leadership qualities rather
than mechanical or administrative skills.
Scientific management – FW Taylor
Fredrik Taylor’s work in the early 20th century focussed on the management of the work task and an
application of scientific principles to work management to establish the most efficient way of
working. Taylor argued that the prime managerial function was to analyse work tasks to ensure that
their processes were efficient and standardised at a time when mass production techniques had not
yet been adopted and practices varied considerably. As workers at the time believed that increasing
productively would lead to job losses, there was little interest in efficiency savings. Taylor’s principles
are still adopted when similar or identical outputs are required on a near-continuous process.
Although aspects of his approach has been rejected in favour of more human considerations, the
principles of division between managerial and workers roles, of standardisation and specialisation
and division of labour and efficiency remain central in many organisations.
See chapter 2
Administrative management – Fayol’s principles of management
Henri Fayol was key in identifying what he considered to be the prime functions of a manager and
prescriptively states how managers should conduct their activities to achieve efficiency. He argued
that managers have an obligation to:
 Plan and forecast to enable the organisation to meet its objectives in the future;
 Organise to fulfil Fayol’s embedded administrative principles;
 Coordinate to ensure resources, actions and outputs are coordinated to achieve desired
outcomes;
 Command and give direction to employees;
 Control to ensure activities meet the plan, orders are followed and management principles
are applied.
He also established 14 principles of management many of which still reflect the way modern
organisations are managed Some, such as unity of command whereby each person has only one
superior to whom they report, have been challenged in this case by the rise of matrix- or projectbased organisations. Some of the principles were common in organisations before Fayol’s work, but
it was not until 1949 that they were set out in a systematic manner.
Table Z: Fayol’s principles of management
Primarily structural principles
Division of work
Authority and responsibility
Unity of command
Unity of direction
Centralisation
Scalar chain
Order
Other principles
Discipline
Subordination of individual interest to general interest
Remuneration of personnel
Equity
Stability of tenure of personnel
Initiative
Esprit de corps
Bureaucratic management – Weber
The German philosopher and sociologist Max Weber (1964-1920) introduced the term ‘bureaucracy’
to organisation studies to capture ideas that people in organisations have their own well defined
tasks and responsibilities, that organisations contain hierarchical reporting structures meaning that
most employees report to another person and have management responsibilities for others, that
there are rules and procedures for completing tasks and that employees positions are based on merit
and they act with a sense of duty towards achieving organisational goals. Although the term
‘bureaucratic’ now has negative connotations it was intended by Weber that increasing bureaucracy
would lead to increasingly efficient operations although this view is now unfashionable. Bureaucratic
forms of organisation increased with the growth of large organisations in the 20th century and jobs
become more specialised and rules and procedures more sophisticated. If the rules and procedures
are deemed to be unhelpful, suppress imitative or creativity employees can become disaffected. *
SOCIAL AND PSYCHOLOGICAL THEORIES
For a team to function effectively and enact its strategy Thompson (2000) argues that ability,
motivation and coordination of skills, efforts and actions of the team members are required. There
are a number of practical actions that can be taken that relate to the size and functioning of the
team such as forming teams that involve no more than nine people to make it easy to schedule
meetings converge on ideas, and communicate, and the use of agendas which determine the
direction of the team, how is should focus its time and energy and the means for achieving its goals.
However, it is also important to consider the individual needs of the team members as these can
impact the functioning of the team either positively or detrimentally, and to provide an environment
in which individuals can develop their own skills and provide opportunities for the team to develop
and train together enabling them to build trust and appropriate ways of working. Hackman (1987)
puts forward four criteria that we could use to evaluate team effectiveness: productivity,
satisfaction; individual well-being and organisational gains. As far as the focus of this learning
package is concerned, we would want to consider whether the team learnt anything from working
together, whether members are able to work better together in the future and whether individuals
would want to work with the same team again in the future. As far as individual well being is
concerned, does the team provide an opportunity for growth, development and fulfilment and are
team members more frustrated by their involvement with the team or more satisfied?
Human Resources Management – Elton Mayo
The work of George Elton Mayo which originated in the 1930s focussed upon organisational
development and group behaviour in the workplace, more specifically the effects of social relations,
motivation and employee satisfaction. Such human relation theories conceptualise organisations as
human cooperative systems rather than mechanical contraptions (source needed). Viewed as such,
Mayo stressed the importance of natural groups in which social aspects take precedence over
functional organisational structures, two way communications and good, cohesive leadership to
communicate goals and ensure effective, coherent decision-making.
Studies of groups can be split into one of three main types: studies about group processes
(interactions and communications links), group dynamics, and group relations and the informal
organisation. Elton Mayo’s human resources management research was influenced by the group
relations studies of Hawthorne. These studies, carried out between 1924 and 1932, were
commissioned by the Hawthorne Works electric factory near Chicago to explore whether light levels
and other changes in the work environment affected workers productivity levels. In one of the
studies, two selected women were asked to select four of their colleagues to join the test group
which would continue their work assembling telephone relays in a separate room for the next five
years. Different variables were changed including the number and duration of breaks, the provision
of food during the breaks and shortening the work day and these changes usually resulted in
productivity increases even if the variable was changed back to the original condition. The
researchers concluded that the workers increased their work rate because they perceived they were
being monitored individually, but also that being able to choose your own co-workers, working as a
group, being singled out as special as evidenced by their working in a separate room and having a
sympathetic supervisor who consulted with them on the working condition changes were the real
reasons for the productivity increases. Mayo (date) concluded that these findings show how the
individuals became a team which cooperated fully with the experiment and what they thought was
expected from them.
A similar experiment, but conducted by May and Warner between 1931-32, focussed upon the
impacts of payment incentives on a group of fourteen men assembling telephone switching
equipment and researchers were surprised to see a decrease in productivity. The workers were paid
according to their individual productivity but productivity still decreased as they feared the company
would lower the base rate paid or use productivity to justify firing some group members later.
Detailed observation of the group found the existence of informal groups within the formal groups
and these worked to control the group members and their interactions with their bosses by
developing informal behaviours such as agreed answers. This example demonstrates how workers
were more responsive to social forces determined by their peer group than the formal incentives
and control mechanisms of management.
These studies have been criticised however (e.g. Parsons, 1974). In some of the studies the
participants received feedback about their productivity – for example work rate counters which
informed participants of the number of components completed – and that this feedback biased the
rates as could the learning effect and skill improvement that came about as a result of practice with
the task. Mayo counters such criticisms by arguing that these experiments are about testing the
overall effect and as such the important finding for management is related to how they can make
workers perform differently or better because of allowing them to feel different.
It was found that productivity improved when changes were made and dropped when the studies
were concluded and this was attributed to the increasing motivation workers felt of the interest that
was shown in them.
Questions about motivation arise when we consider why it is that people behave in certain ways.
When motivated people respond to conditions operating within and outside of themselves and
motivation is often studied with reference to the needs, motives, drives, goals and incentives of the
individual. There are three approaches to motivation: satisfaction theories which assume a satisfied
worker is a productive worker; incentive theories based on the principle of reinforcement whereby
workers will work harder given a specific reward for good performance; and intrinsic theories which
argue that man will work best if given a worthwhile job and allowed to get on with it the reward
being the satisfaction of the work itself.
Handy (DATE) argues that while there is support for a happy worker staying in the same organisation
and positive correlations with mental health, there is little evidence that they will actually work
harder. Where there are correlations between satisfaction and productivity it may be that the
productivity causes the satisfaction rather than the other way around. Herzberg’s (DATE) TwoFactor theory – shown in figure XX – is a satisfaction theory and it maintains that in any work
situation you can distinguish between the factors that cause satisfaction and dissatisfaction. These
factors are not opposites of one another and so dealing with the dissatisfying factors will not turn
them into satisfying factors. The dissatisfying factors, what Herzberg called hygiene or maintenance
factors, are those to do with conditions of work (company policy, supervision, salary) and they are
necessary conditions of successful motivation. The motivators are the factors to do with satisfaction
such as recognition, the work itself and responsibility and the existence of these factors in the
absence of the hygiene factors means that workers will not be well motivated.
Figure XX: Herzberg’s two-factor theory
Some definitions related to motivation
Needs: These can be physiological or social or to do with security or esteem, and they can
give rise to certain behaviour patterns but we may or may not act on them.
Motives: are the inner states which activate behaviour to allow us to attain a goal.
Drives: the behaviour pattern associated with achieving a particular goal e.g. searching for
food when hungry
Goals, incentives: these reduce or satisfy the behaviour associated with the drive
Maslow’s Hierarchy of Needs (Maslow, 1943) – illustrated in figure X – is an example of content
theory of motivation and it assumes that individuals possess a baggage of motives that await
gratification and subsequently that we can attempt to explain motivation in terms of what arouses
and energises behaviour. There is also an assumption that individuals will strive to reach their full
potential, the position of self-actualisation, and that self sacrifice will be needed to achieve this. The
model also assumes that the path to self-actualisation is a linear one with progression to the next
stage based upon the successful attainment of the needs associated with the previous stage.
Figure X: Maslow’s hierarchy of needs
An alternative view of motivation is provided by Cassidy and Lynn (1989, in McKenna) who argue
that a person with a motivation to achieve tends to define their goals in accordance with some
standard of excellence. Six of these standards include work ethic and the belief that performance in
itself is good, the pursuit of excellence and desire to perform to the best of one’s ability, aspiration
to status, mastery and competitiveness against set standards rather than other people,
competitiveness and the acquisition of money and wealth. McCllelland (1967, in McKenna) believes
that a society’s overall economic performance will be high if the average level of need to achieve is
high in the population and this is reflected in society’s values, and that this is a good predictor of
economic growth. He argues that the need to achieve can be measured and that it is high in
entrepreneurs and low in distinguished scientists due to low success rates and long periods without
feedback on progress in the work that they do. The need to achieve also helps to draw out the
features of tasks which will help to keep individuals motivated. For example, challenging but
feasible tasks where the individual has a sense of control, regular feedback and standards for
measuring performance are important in allowing high flyers to flourish with money being seen as a
symbol of achievement rather than a motivating factor.
Management by objectives – Peter Drucker
But management isn’t always focussed upon managing teams or subordinates and measuring the
quality of this. Drucker’s (DATE) concept of management by objectives is based on the need to be
able to measure the success and failure of managerial performance and it allows results to be
focussed upon rather than activity via the translation of corporate objectives into measures of
individual, group and departmental performance.
Starting at the top, setting overall objectives in figure X below, the key tasks, results, performance
standards and activity areas are set along with the information to be used for measuring task
performance in both quantitative (or measurable) and qualitative ways. Work improvement plans
are developed and implemented which set key tasks against action plans with target dates which use
control data to monitor performance. Performance is reviewed regularly for participation and
agreement which assesses both the present and future directions. This feeds into reviews and
previews which consider capability, career development and succession planning and the training
and development needs this might require.
Setting overall
objectives &
action plans
Develop the
organisation
for MBO
Appraisal of
results
Review
Periodic
appraisals &
feedback on
progress
Setting
individual
objectives &
action plans
Figure X: Management by objectives (Drucker, DATE)
Table X: Drucker’s, (1955, 1990) tangible and intangible objectives
Tangible objectives
Intangible objectives
Market standing, reputation, position, sales performance
Innovation, enterprise, R&D, future focus
Productivity & output performance
Use of human premises, capital, other financial resources
Productivity, profitability, effectiveness
Managerial performance and development
Worker performance and attitude
Public responsibility
The balance for each of these objectives will differ between organisations, but this approach is
designed to ensure the organisation does not ignore one area of performance to the detriment of
others, for example the lack of complacency and focus on new future products resulting from
excellent sales performance. Therefore, it is important that:
 direction is clear to all departments and functions;
 proper courses of action and standards of behaviour and attitude are indicated;
 effective performance and how it is measured relevant to the function is clear;
 rationale for removing unproductive aspects is given;
 areas of responsibility, authority and accountability are indicated.
Most of the criticisms stem from the problems of setting aims and objectives (cf John Humble).
There is a tendency for activities to be set in stone unless mechanisms for maintaining flexibility,
dynamism and responsiveness are built in and this can bring with it a focus on objectives that leaves
little opportunity for personal judgement or initiative to be employed. Furthermore, there is an
expectation that the work and market environments will remain stable whereas changing and new
work proprieties, changing employee relations, changes to work practices and technologies and
operational constraints are real threats to this requirement. Finally, because the approach is time
consuming to set up and can be bureaucratic in nature, once established people are keen to recoup
this time and effort investment and follow the process religiously.
The criticism about the clarity and setting objectives can be addressed by consideration of how this
should be achieved and this is particularly important because this and understanding about why
work has been allocated are features of organisation and groups that fail to perform effectively.
Drucker (1986b) argued that to avoid any ambiguities, goals should be:
 be written down to give greater credibility and serve as a visual reminder;
 be positive;
 have precise aims and targets;
 be personal and related directly to members of departments, reconciling and acknowledging
conflicting and divergent purposes everyone has in being there;
 be specific, quantifiable and measurable;
 be challenging, motivating the department and its individuals to work harder, more
effectively and more productively than previously;
 be realistic and achievable;
 be prioritised;
 be understood, accepted and valued by all.
Types of power – French and Raven
Types of authority
Other later theories
RECRUITMENT AND RETENTION
APPRAISAL AND REWARDS
EMPLOYEE DEVELOPMENT AND TRAINING
HR POLICIES AND ORGANISATIONAL PERFORMANCE
CONCLUSIONS
DEFINITIONS
Analogy:
Model:
Power: and its variants (position, personal etc)
Strategy: plans for the allocation of a firm’s resources to reach identified goals.
Structure: The way the organisation’s unit relate to one another e.g. centralised, functional,
decentralised, matrix, network etc.
Systems: the procedures, processes and routines characterising how work is to be done e.g. financial
systems, appraisal systems.
Skills: distinctive capabilities of the organisation or its personnel.
Staff: Numbers and types of personnel within the organisation.
Style: Organisation’s cultural style determining how key managers behave to achieve goals.
Shared value: what the organisation stands for and believes in (central beliefs and attitudes)
Websites of use
www.kwintessential.co.uk (for quizzes)
Terry Gilliam, film “Brazil” about the less attractive features of bureaucracy
KEY TEXTS
Drucker, P.F. (1955) Management by objectives. Prentice Hall.
Drucker, P.F. (1986) The practice of management. Prentice Hall.
Drucker, P.F. (1990) Frontiers of management. Heinemann.
Handy, C.B. (1985) Understanding organizations (3rd ed.) Penguin Books, London.
Schein (1984) Coming to a new awareness of organizational culture, Sloan Management Review.
Waterman Jr., R.H., Peters, T.J., and Phillips, J.R. (1980) "Structure is not organisation" Business
Horizons 23 (3) 14
REFERENCES
Cray, D. and Mallory, G.R. (1998) Making sense of managing culture. International Thomson Business
Press, London.
Cross, R., Laseter, T., Parker, A. & Valasquez, G. (2006) Using social network analysis to improve
communities of practice, California Management Review, 49(1), pp32-60
Hackman (1987, in Thompson)
Herzberg (DATE)
Hofstede, G. (1980) Culture’s Consequences: International differences in work-related values. Sage,
Beverly Hills.
Maslow (DATE)
Ouchi, W.G. (1981) Theory Z: how American business can meet the Japanese challenge. AddisonWesley, Reading, Mass.
Punnett, B.J. and Withane, S. (1990) Hofstede’s value survey module: to embrace or abandon?
Advances in International Comparative Management, 5, 69-89.
Roberts, J. (2006) Limits to communities of practice, Journal of Management Studies, 43(3), pp62139
Thompson (2000)
Wenger, E. and Snyder, W. (2000) Communities of practice: The organizational frontier, Harvard
Business Review, January-February, pp139-45.
ARGUMENT LP2: Research looking at transferring working practices across societal boundaries has a
long history in organisational studies covering the failures of managers to recognise the effects of
contrasting social systems to more recent work aiming to understand what about Japanese meant
that their companies were outperforming their international competitors (e.g. Ouchi, 1981).