6shrm suggested answers

7/30/2019 6SHRM Suggested Answers

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Please note that these are not fully-worked model answers, but they are

intended as a guide to the type of answer expected.

The Association of Business Executives

QCF

Strategic Human Resource

ManagementDecember 2011

Suggested Answers

STRUCTURE OF PAPER: Answer ALL THREE sections

SECTION A: Answer ALL FIVE questions Q1

Q2

Q3

Q4

Q5

14 marks

14 marks

14 marks

14 marks

14 marks

SECTION B: Answer ONE question EitherQ6 orQ7 15 marks

SECTION C: Answer ONE question EitherQ8 orQ9 15 marks

TOTAL MARKS AVAILABLE FOR THE PAPER 100 marks


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SECTION A: Candidates must answerALL FIVE questions in this section. Each question carries14 marks. Section A is worth 70% of the total marks available for this paper.

Question 1

Your Chief Executive Officer (CEO) wants you to create an HR strategy which will help thebusiness prepare for its future organic growth and also for the possibility that, in the medium term,as a platform for its global ambitions, it will acquire companies presently based in other countries.

Q1

(a)

Explain the need for an ethical code of conduct as part of the organisations HR s trategy,particularly as the business grows and becomes more multinational.

The need for an ethical code of conduct:

The HR strategy needs to prepare both the HR function and the workforcegenerally for a future which is to some degree uncertain and so a cultureof readiness for change should be encouraged (rather than a mechanistic,centralised model).

Organic growth requires employees to be ready to do bigger jobs, bothlaterally and vertically, so there should be generous resources madeavailable for personal and managerial development.

The possibility of acquisitions (and mergers) would involve culture shockand cultural integration, so a focus on diversity and the promotion ofdiversity could be helpful.

The people resourcing strategies must attract a proportion of people withtalent who will be prepared to occupy more senior positions withinrelatively short time-scales.

The HR and business strategies should also be designed on theassumption that the organisation is to grow so flexibility (in all its forms)should be an intrinsic part of the corporate pattern.

Further possible items for inclusion in the response to sub-question (a) arelisted below.

Business ethicality is a rapidly-growing consideration for many companies,especially those that have pursued Corporate Social Responsibility.

The presence of a code of conduct may be valuable in stimulating team-based co-operation within the business and also in creatingconsumer/customer confidence.

Customers increasingly value organisations that have a code of conduct,especially if these organisations can demonstrate ways in which the codeis enforced with suppliers, employees and other stakeholders.

Thus the presence of a code of conduct may even become a competitiveadvantage.

The absence of an ethical code may harm the business in the eyes of itscustomers, e.g., if the organisation appears to condone or even encouragechild labour or cruelty to animals.

A good example is Levi-Strauss, with its four core values, summarisedbelow:

- Empathy walking in other peoples shoes.7 marks


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- Originality being authentic and innovative.

- Integrity doing the right thing.

- Courage standing up for what we believe.

Components may typically include: how employees are expected tobehave (towards each other and towards customers); how the code links

to the organisations higher-order values; how the code will be enforced(and the penalties for non-compliance, which should be rigorous); howbreaches of the code can be reported (through a whistle-blowerscharter).

Q1

(b)

Describe the enforcement mechanisms that the organisation needs to introduce toensure that the ethical code of conduct is taken seriously.

Elements could include items from the following. A description of the chosenmechanisms should be included:

Role-modelling from the top

Conspicuous auditing and monitoring of ethicality and compliancethroughout the business

Use of independent auditors and monitors

Whistle-blowing mechanisms which enable offenders to be identifiedthrough confidential routes

Exemplary treatment of offenders in order to send appropriate signals toevery part of the organisation

Prominent dissemination of the code to every employee, with requirementfor individual signatures to indicate acceptance so there can be no

ignorance excuse Non-compliance not condoned when transacting with countries where

ethical codes are different or non-existent 7 marks

Q1 Total Maximum Marks for Question14

marks


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Question 2

Q2 Your CEO has been strongly influenced by the following obse rvation: Unlessorganisations can develop employees who are capable and motivated, and are given theopportunity to make their own decisions, they will not remain competitive and continue tomeet their customers expectations.

Explain how an organisations learning and development strategies can be designed inorder to fulfil these aspirations. Support your answer with examples to show effectivelearning and development strategies in action.

How learning and development strategies can be designed in order to produceemployees who are capable, motivated, and prepared to make their own decisions (anexplanation of each chosen point should be offered):

Orientation towards self-managed learning

Promotion of CPD (continuing professional development) in all parts of theorganisation

Employer willingness to encourage and facilitate employee development rather thanjust the provision of specific training to cover immediate operational requirements andshort-term crises

Multi-skilling preparation for the future

Employee participation and involvement in the choice of learning programmes

Deliberate application of learning styles frameworks (Honey and Mumford) to eachemployees preferred learning methods

Management development initiatives that encourage delegation and job enrichment

Performance management criteria that give credit and recognition for the exercise of

initiative, empowerment and discretionary behaviour Supportive actions from line managers, to including coaching and guidance for poor

performers

Substantial amounts of training and learning focused on team work, projectmanagement, knowledge-sharing, and group problem-solving

Provision of learning opportunities for all employees, e.g., to become temporary teamleaders

Programmes that encourage risk-taking, entrepreneurial behaviour and autonomousaccountability.

ExamplesThese may be taken from several sources, including companies like First Direct, Tesco,Amazon, Microsoft, KPMG and the Ritz-Carlton Hotel Group.

Q2 Total marks for question14

marks


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Question 3

Q3

[6.1]

In deciding how to manage the employment relationship, the employer must decidewhether it [the organisation] wants to encourage trade union membership If it seestrade union membership as detrimental to the strategic direction of the organisation, thenit must create an environment in which the need for a trade union is diminished. (KathyDaniels, in Strategic Human Resource Management Building Research-based

Practice, CIPD, 2008, p. 144).

Discuss, using examples (preferably from named organisations) and references toappropriate literature/research evidence in order to support your views.

Discussion could focus on some of the following factors:

Reasons why organisations may want to encourage trade unions

Unions provide a focal point for negotiations with the workforce about critical issues,e.g., pay and benefits.

Without unions, some other form of representative body may be necessary and thereis always the charge that such a body is excessively deferential to managerialpurposes (e.g., staff associations in old-style banks).

Reaching agreement with union representatives, in contrast to imposing decisions,can provide legitimacy and perhaps lead to better decisions. [Marchington andWilkinson, Human Resource Management at Work, CIPD, 2008, p. 391]

Management may decide that it is more important to achieve long-term stability inemployee relations, even though they have to sacrifice some power to the union inthe process.

Some employers take the view that unionisation is inevitable because of the nature ofthe workforce, the industry and the region so it can be better to reach an agreement

with a preferred union rather than tolerate a poor, disorganised and ineffectualrelationship with the workforce at large.

Trade unions perform some functions in the workplace that can assist themanagement of employment relations; if unions did not exist, these functions wouldhave to be performed by management at greater cost.

Reasons why organisations may want to discourage trade union membership

A belief that unions are militant and disruptive, and can encourage grievancesthroughout the workforce.

Unions may be viewed as a source of resistance to change and innovation, in working

practices, flexibility arrangements and so forth.

If the organisation is powerful, with perhaps its power enhanced by conditions in thelocal labour market, it may have specifically sought to restrict or remove unions,reduce wage costs, and enforce a stricter managerial regime.

Some managements will have taken note of the examples provided in othercompanies or other industries, where indeed unions have been disruptive and hostile.

The organisation may espouse a philosophical belief in individualism rather thancollectivism.

Put bluntly, the absence of unions means that the workforce is much more

fragmented and collective action remains very difficult.


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Factors in creating an environment where the need for trade unions is reduced

Elements in the labour market: the ready availability of suitably qualified andmotivated people to replace any who are disaffected.

Elements in the organisation: mechanisms for promoting employee engagement,through involvement, participation, consultation, empowerment, role autonomy and

opportunities for discretionary behaviour. Anticipating and removing all potential sources of employee dissatisfaction and

reduced morale indeed, going further by consciously seeking to raise morale andsatisfaction, e.g., through attitude surveys and the implementation of remedial orimprovement actions.

Avoidance of any potentially headline issues concerning the treatment of individualsor groups in the workforce so giving a lot of attention to resolving differences quietly,positively and amicably.

Generous HRM policies so that companies like IBM, Marks & Spencer and HewlettPackard have been praised for their HR policies, which were designed to offer

employees more than could be achieved by trade unions through negotiations.[Marchington and Wilkinson, op. cit., p. 396]

These policies include a highly competitive pay and benefits package.

A comprehensive battery of recruitment and selection techniques designed to selectindividuals who match organisational norms and discard those who do not fit thecompany profile.

High priority given to induction programmes that socialise new employees into thecorporate ethos and culture.

Single status and harmonised working conditions and employment policies.

Performance management practices and performance appraisal systems which treateach employee as an individual and differentiates between people in terms of theircontribution to organisational success.


marks


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Question 4

Q4 You are approached by the new Chief Executive Officer (CEO) of an organisation whichcurrently treats its employees as if they were just another factor of production likemachinery, plant or money; where the Personnel Department deals solely withadministrative matters and the company has never had a formal human resourcesstrategy.

Explain why it is essential for this business to develop and implement an HR strategy.Support your argument with convincing reasons and evidence.

Reasons why an HR strategy is beneficial

It provides a basis against which all HR innovations can be tested.

It structures the performance management processes within the HR function andamong HR professionals.

It demonstrates alignment between the activities of the HR department and the overallstrategies pursued by the organisation.

It can (and should) incorporate and accommodate the interests of all key corporatestakeholders, thus showing an inclusive stance.

It can show the way forward as it prepares the organisation for continuous change,improvement and transformation.

It emphasises the contribution (actual and potential) of the organisations workforce.

It helps build credibility for the HR function not necessarily among the lower-levelemployees, but certainly at executive and Board.

It reflects a number of priorities which most organisations will endorse, e.g., a drivetowards quality, a coherent culture and values, and an approach based on high trust.

Reinforcing evidence

Answers should refer to relevant literature and/or research sources, e.g., Ulrich,Guest, Legge, Purcell, Bratton/Gold, etc.

Material should also be cited from specific organisations where HR strategy ishighly developed and is taken seriously, e.g., IBM, First Direct, Tesco,Sainsburys (whose HR function has recently been merged with CustomerServices).


marks


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Question 5

Q5 As a business grows, some tough strategic decisions may have to be taken about theprofile of the organisations workforce.

Evaluate the arguments for and against an organisation deliberately seeking to becomean employer of choice, using evidence-based argument to justify your views. Ensure

that your answer concludes with a clear recommendation.

The benefits of becoming an employer of choice

Improved recruitment as talented individuals actively seek job opportunities with theorganisation.

Reduced recruitment costs because of the ability to dispense with a good deal ofrecruitment advertising. AXAs rebranding exercise from 2004 onwards has led to aclaimed saving of 1.4m in the first two years, and the time taken to fill vacanciesreduced from 40 days to 30 days on average.

Improved staff retention and reduced labour turnover therefore a reduced need toadvertise to replace departed employees.

A feeling of pride among employees which leads to higher productivity, greater loyalty,better team-work, and a greater willingness to go the extra mile on behalf of theorganisation.

Reduced absenteeism and sickness again with consequential savings because ofthe falling need for managers to engage in return to work interviews and otherexercises intended to deal with unjustified absences.

Better levels of customer service because of staff continuity.

A shared belief in the cultural imperatives of the business particularly important in aglobal enterprise such as the Compass Group.

A faster rate of continuous improvement, transformational change and generalinnovation.

The emergence of a different kind of psychological contract which is more values-based and qualitative in character.

The risks

The costs associated with becoming an employer of choice may exceed the benefits(and there is always the suspicion that this might be the case, because some of thecosts and some of the benefits remain unquantifiable or cannot easily be traced toany specific cause/effect sequence).

Maintenance of the reputation as an employer of choice can be badly damaged oreven destroyed by any single instance in which the actions of the employer are

successfully challenged. Keeping up the employer of choice image may prove difficult if the organisation

encounters financial or other business difficulties, e.g., being forced to makeredundancies or close factories.

The employer of choice strategy may be undermined by counter-productivescenarios, e.g., a high-profile employee claim about alleged discrimination.

A clear recommendationOn the whole the benefits outweigh the risks, so the recommendation should normallyconclude that an employer of choice strategy is worthwhile, however, the other side canbe argued if appropriate justification is given.


marks


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SECTION B: Candidates must answerONE question in this section (NOT BOTH). Each questioncarries 15 marks. Section B is worth 15% of the total marks available for this paper.

EITHER Question 6

Q6 Explain how an organisations HR strategy can best be vertically integrated with itscorporate strategies. Include in your answer at least one example from an organisationto support your argument.

How the organisation can achieve a high level of vertical integration

Through adherence to a strict top-down approach in strategic design.

Through involvement of all relevant stakeholders in the development of a strategicthrust for the organisation as a whole.

Through application of very high-level strategic principles involving a mission, visionand corporate values.

Through a definitively articulated performance management system in whichobjectives and priorities are cascaded down the organisation.

Through a succession of top-down sequential team briefings/meetings.

Through strong leadership from a unified senior executive team, preferably under thecontrol of a charismatic and visionary CEO.

Through the articulation of well-understood Critical Success Factors and KeyEnablers.

Through the activities of a forward-thinking HR Director.

Inclusion of one or more examples, material from relevant literature and research

At least one example of an organisation with a high degree of vertical integration shouldbe given.

A brief discussion of the likely consequences whenever vertical integration is deficient orabsent, e.g., a lack of coherence, wasted resources, unnecessary inter-departmentalconflicts, and so forth could be included.


marks


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OR Question 7

Q7 Explain why horizontal integration between an organisations HR strategy and its otherfunctional strategies (such as finance and marketing) is important, and how it can bestbe achieved. Include in your answer at least one example from an organisation tosupport your argument.

The importance of horizontal integration (5 marks)

Without it, the organisations resources will to some extent be dissipated.

The organisation fails to present a unified front both internally and externally.

Horizontal integration facilitates inter-functional co-operation and cross-functionalimprovement or remedial projects.

Horizontal integration creates effective relationships, especially among boundary-spanning roles.

Guest (1987) refers to integration achieved through the principle of complementarity(mutuality) of employment practices aimed at generating employee commitment,

flexibility, improved quality and internal coherence between HR functions.

Strategic fit along these lines makes it much easier for the HR department to achieveprogress with the co-operation of other functional parts of the business.

Ways in which horizontal integration can be achieved

Through constant dialogue and bridge-building between each part of the HRdepartment.

Through frequent communications with all other parts of the business.

Through negotiating trade-offs in order to achieve progress by compromise.

Through generic adherence to some higher-level purposes and values.

Inclusion of the required example

Appropriate authors may include Ulrich, Guest, Purcell, Huselid, Armstrong, etc.

Evidence may also include examples of scenarios in which horizontal integration doesor did not exist.


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SECTION C: Candidates must answerONE question in this section (NOT BOTH). Each questioncarries 15 marks. Section C is worth 15% of the total marks available for this paper.

EITHER Question 8

Q8 Your organisation used to increase wages and salaries every year. However, profits are

down and it can no longer afford to do so.

Outline and evaluate the options for a revised reward and recognition strategy in yourorganisation. Conclude your answer with a clear and justified recommendation.

Review of the options available

Total disclosure of the situation to everyone in the workforce.

A wage/salary freeze, and removal of additional benefits in the form of bonuses (butnot sales commissions, if previously payable).

Replacement of a general wage/salary increase by a more selective system in whichindividual performance/contribution is measured and rewarded (or not), within an

overall budget ceiling this, in effect, involves the introduction of performance-relatedpay.

Role-modelling from the top-down, so all conspicuous expenditure is eliminated, toremove accusations of unfairness.

Creation of schemes which recognise and reward individual or team-basedcontributions to the improved financial performance of the organisation, with rewardsbeing based on a percentage of the calculated savings and benefits.

More radically, consideration of outsourcing parts of the business to low-costenvironments, e.g., customer service support functions to India or China.

If appropriate or permissible, the organisation could seek to introduce some form ofshare ownership scheme, turning employees into partners.

Other approaches may be feasible, but all the choices should be accompanied by someanalysis of the benefits and risks. Ideally, too, the argument will be reinforced withreferences to specific organisations and/or relevant literature/research.

A clear recommendation

Any recommendation should follow logically from the earlier analysis in the answer.

Reinforcing evidence should be supplied.

Q8 Total marks for question 15marks


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OR Question 9

Q9 Your organisation used to increase wages and salaries every year. However, profits aredown and it can no longer afford to do so.

Show how a total reward approach may help to overcome the problems faced by theorganisation. Support your views with evidence-based argument derived from researchand the experience of other organisations.

The concept of total reward

This is an expression of the principle that all aspects of pay and benefits provisionshould be treated as a unified whole, including non-financial recognition andqualitative acknowledgment for performance, progress and achievement.

According to Armstrong (2006), total reward is made up of:

- Financial rewards = Non-financial rewards

Financial rewards embrace: base pay, contingent pay, long-term incentives (e.g.,share incentive plans), pension, holiday pay, health care, personal insurance, flexiblebenefits, etc.

Non-financial rewards cover: learning and development, workplace learning, training,performance management, career development, recognition, compliance with theorganisations core values, leadership, employee voice, achievement, job design,work-life balance, talent management.

Explanation of the relevance of a total reward approach to the situational scenario

It is possible that the inability to pay a further round of wage/salary increases can bediluted by increases in some non-financial benefits.

The current reward strategy may have concentrated unduly on financialconsiderations, which in turn will have created routine expectations about incrementseach yearand further expectations that each years increments would be greaterthan those delivered the year before (cf Herzbergs view of pay as a hygiene factor).

Armstrong (2006) suggests that rewards can be split into transactional rewards andrelational rewards, the latter depending on how employees are engaged by the linemanager and organisation in general. Clearly the company can move in thisdirection, and seek therefore to modify the existing psychological contractaccordingly.

Unfortunately this transformation cannot be accomplished overnight.

The organisation may also be able to make use of some of the ethical dimensionsconcerning pay and benefits, e.g., concern about pollution (from cars), gift incentives(carbon credits) and so forth.

Inclusion of evidence-based argument from research and/or named organisations


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