personal management and hrm-cipd text.pdf

7/27/2019 Personal Management and HRM-CIPD text.pdf

1/31

A free sample chapter from Human Resource Management for MBA Students 2ndEdition

By Iain Henderson

Published by the CIPD.

Copyright CIPD 2011

All rights reserved; no part of this excerpt may be reproduced, stored in a retrieval system,

or transmitted in any form or by any means, electronic, mechanical, photocopying, recording,

or otherwise without the prior written permission of the Publishers or a licence permitting

restricted copying in the United Kingdom issued by the Copyright Licensing Agency.

If you would like to purchase this book please visit www.cipd.co.uk/bookstore.

chapter 1

People management: personnelmanagement and humanresource management

INTRODUCTION

Good managers are not only effective in their use of economic and technical

resources, but when they manage people they remember that these particular

resources are special, and are ultimately the most important assets. People are the

only real source of continuing competitive advantage. Good managers also remember

that these particular assets are human beings.

LEARNING OUTCOMES

On completion of this chapter you should:

have a good appreciation of what the people management function in contemporary

organisations comprises

know what we mean by the term human resource management (HRM) and how this differs from

the earlier personnel management (PM) concept of the function

have some appreciation of the theoretical development of HRM

understand the relationship between HRM and business strategy

have an appreciation of the practical application of HRM

understand the impact of new working methods on HRM

recognise some of the key themes of HRM in the twenty-first century.


2/31

Human Resource Management for MBA Students2


By Iain Henderson


Copyright CIPD 2011






Te definition o terms such as personnel management and human resourcemanagement is one area o particular conusion and irritation to generalmanagers, and we will discuss later the differences between what typicallyis meant by these terms. We will use the phrase people management as ageneric term to cover both personnel management (PM) and human resource

management (HRM) in the absence o a specific definition o either.

But broadly, we can say that the people management unction whether wewish to define it as personnel management or as human resource management may be described as:

All the management decisions and actions that directly affect or influencepeople as members of the organisation rather than as job-holders.

In other words, people management is not executive management o individualsand their jobs. Management o specific tasks and responsibilities is the concern othe employees immediate supervisor or manager that is, the person to whom

his or her perormance is accountable (sometimes this might be the personsteam). So people managers whether personnel managers or human resourcemanagers do not have line authority over employees.

Te term human resource management was being used by Peter Drucker andothers in North America as early as the 1950s without any special meaning,and usually simply as another label or personnel management or personneladministration. By the 1980s, however, HRM had come to mean a radicallydifferent philosophy and approach to the management o people at work (Storey,1989; pp45) with an emphasis on perormance, workers commitment, andrewards based on individual or team contribution, differing significantly in all othese rom the corresponding aspects o traditional personnel management.

One o the main characteristics o HRM is the devolution o many aspects opeople management rom specialists directly to line managers. HRM itsel hasbeen called the discovery o personnel management by chie executives. So linemanagers over the past ten years or so have requently been conronted withHRM decisions and activities in their day-to-day business in a way that was notthe case previously.

Tis process has been accelerated by a more recent development which addsto the burden o the line manager while increasing the effectiveness o theorganisation as a whole. Outsourcing o large areas o the traditional personnelmanagement departments routine unctions has happened on a massive scale in

the last decade. Outsourcing o non-core unctions, allowing the organisation toconcentrate on its core competencies, has been one o the single most importantorganisational actors in both business and the public sector in recent times.It is extremely unlikely that this will be set in reverse in the oreseeable uture.In the case o HR services the dis-integrating effects o outsourcing have beenamplified by such related developments as e-HR, in which the use o newtechnologies allows the provision o sel-service HR to employees and managers,and HR business partnering, in which large organisations disperse HR partnersto constituent businesses (Caldwell and Storey, 2007).


3/31

People management: personnel management and human resource management 3


By Iain Henderson


Copyright CIPD 2011






Tis outsourcing does not remove the day-to-day burden o HR rom linemanagers: it increases it. Nor does it remove the need or HR specialists, butthese people are just that highly specialised, technical experts who act asconsultants, either internally in the case o larger organisations, or externally (egas a specialised bureau service used by line mangers as required). Tis means that

it will be more important than ever or line managers to communicate effectivelywith HR specialists and be able to weigh up their advice in an intelligent andknowledgeable manner and to do that they have to speak the language andunderstand the concepts o the expert.

what do people managers do?orrington et al(2008), an authoritative text widely used in teaching managerswho are studying or the proessional exams o the Chartered Institute oPersonnel and Development (CIPD), describe the general role o peoplemanagement as comprising specific objectives under our headings: staffing,perormance, change management, and administration.

Staffing objectivesare firstly concerned with getting the right people in theright jobs at the right times ie the recruitment and selection o staff, butincreasingly these days also advising on subcontracting and outsourcingo staff. Staffing also concerns managing the release o employees rom the

organisation by, or example, resignation, retirement, dismissal or redundancy. Performance objectives: people managers have a part to play in assisting the

organisation to motivate its employees and ensure that they perorm well.raining and development, reward and perormance management systems areall important here. Grievance and disciplinary procedures are also necessary, asare welare support and employee involvement initiatives.

Change management objectivesinclude employee relations/involvement,the recruitment and development o people with the necessary leadershipand change management skills, and the construction o rewards systems tounderpin the change.

Administration objectivesinclude the maintenance o accurate employee dataon, or example, recruitment, contracts and conditions o service; perormance;attendance and training; ensuring organisational compliance with legalrequirements, or example in employment law and employee relations; andhealth and saety.

General managers are increasingly involved directly in all o the first three typeso objectives. Other than in managerial oversight or legal compliance issues,administration objectives tend to remain the preserve o dedicated PM/HRsupport staff.

reflective activity

Write down what you think personnel or human resource managers are actually supposed to do.


4/31



By Iain Henderson


Copyright CIPD 2011






Te above closely reflects the arguments in David Ulrichs highly influentialHarvard Business Reviewarticle o 1998, A new mandate or human resources,which has helped to shape human resources (HR) in the new century. Aferacknowledging that some commentators had been calling or the abolition oHR on the grounds o serious doubts about its contribution to organisational

perormance, Ulrich agreed (Ulrich, 1998; p.124) that:

there is good reason or HRs beleaguered reputation. It is ofen ineffective,incompetent and costly.

His solution was or HR to be reconfigured to ocus on outcomes rather than ontraditional processes such as staffing or compensation:

HR should not be defined by what it does but by what it delivers resultsthat enrich the organisations value to customers, investors and employees.

His recommendations were that:

First, HR should become a partner with senior and line managers in strategyexecution.

Second, it should become an expert in the way work is organised andexecuted, delivering administrative efficiency to ensure that costs are reducedwhile quality is maintained.

Tird, it should become a champion or employees, vigorously representingtheir concerns to senior managers and at the same time working to increaseemployees contribution that is, employees commitment to the organisationand their ability to deliver results.

Finally, HR should become an agent o continuous transormation, shapingprocesses and a culture that together improve an organisations capacity orchange.

Ulrichs model o the HR role has set the agenda or people management in thetwenty-first century as being essentially about its contribution to organisationalperormance.

Linda Holbeche, the Director o Research and Policy or the CIPD, has written(Holbeche, 2007; pp1011) that

building organisational capability is HRs heartland,

and she added that HR managers

can help make capitalism human.

Tese two statements more or less sum it all up.

so what is hrm?

What exactly does this rather sel-important-sounding phrase human resourcemanagement actually mean? o many people it is seen as just a ancy or


5/31



By Iain Henderson


Copyright CIPD 2011






pretentious re-labelling o what used to be called personnel management. But tomany managers and management theorists it is vital to the survival and successo organisations in the twenty-first century. Why they think so really derives romone single, simple idea: that people their skills, knowledge and creativity arethekey resource or economic and organisational success in what Peter Drucker

(1993) called the knowledge-based economy.

By the 1970s a settled idea o people management in large organisations hadevolved in developed ree-market economies, and this was typically termedpersonnel management (PM) or sometimes personnel administration (PA).It reflected the predominantly aylorist1organisation o work, which in turnhad developed to exploit the technology available or the mass production oindustrial goods. It acknowledged and incorporated the institutions o collectiveindustrial relations recognising the role and power o trade unions.

Te extraordinary economic success o aylorist industrial practices ensured thatthis became the standard model or all large organisations, even those in service

industries and in the public sector, and PM techniques used in industry egin recruitment and selection were usually assumed to be best managementpractice.

Something o a revolution in people management occurred in the 1980s whichseemingly overturned the established paradigm2o personnel management inavour o human resource management (HRM). I today, over a quarter o acentury later, one surveys the academic and proessional management literatureon people management, whether aimed at specialists or at general managers,one would think the revolution had been total. Normative models3o HRM andexamples o HRM best practice abound, with little or no trace o traditionalpersonnel management.

However, i in act we look at the empirical evidence, we are orced to concludethat indeed there has been a revolution, but that it is not complete in terms oeither organisational culture or management practice.

Few, i any, new techniques o people management have been developed withinHRM. It is ofen the scope and manner o their use, and the intent behind theiremployment, that differs in the two approaches. For example, psychometrictesting and personality profiling have been available or decades but in PMthese were used only or executive and other highly paid appointments. Manyfirms adopting HRM now routinely apply such techniques to all appointments,the intention being not to predict whether one high-cost appointment will besuccessul in a particular role but rather to ensure that all employees can accept astrong common culture.

As we will discuss in some detail in the ollowing section, it makes sense totalk o two paradigms in people management: personnel management (PM)and HRM, the latter being predominant, and increasingly so, but with mostorganisations still showing some mixture o the two.

We will first discuss the evolution o each o these paradigms.


6/31



By Iain Henderson


Copyright CIPD 2011






the evolution of people management and theemergence of personnel management

People management originated in the UK in the nineteenth century amidstthe actory conditions o the first Industrial Revolution. Te unrestrained

capitalism o the initial industrialisation o the UK was restricted by theFactory Acts o the 1840s, which compelled actory owners to consider thewell-being o their workorces, at least to some degree. Enlightened capitalistssuch as Rowntree and Cadbury, who were ofen motivated by religiousconvictions, appointed welare officers to monitor and improve the conditionsand lives o workers. Teir actions would ofen seem intrusive and paternalistictoday or example, they discouraged drinking out o work hours as well asduring. Caring or the welare o employees was thus the first true peoplemanagement role in the sense o organisational responsibility beyond that ospecific job perormance.

With the rise o industrial trade unionism in the twentieth century another role

evolved in people management that o negotiating and communicating with thecollective representatives o the workorce (the workplace shop stewards and theull-time paid trade union officials) on behal o the organisation.

Te rise o scientific management and the organisation o industrial workalong aylorist lines also led to increased interest in more rigorous selection opersonnel administered by management, instead o the haphazard traditionalmethods which ofen relied on the oremen or gangmasters to pick men andwomen or work. It also led to management taking an interest in organising andproviding skills training.

Following World War II, social science particularly as employed in the

Human Relations School started to exert a direct influence on work in theareas o job design, attempting to ameliorate the worst side-effects o scientificmanagement while still achieving its productive and economic benefits. Althoughsuch developments might not affect people management directly, they shapedthe culture in which it was operating and evolving. Te conscious applicationo social science also encouraged the use o more sophisticated techniques inrecruitment and selection, which did have an impact on people managementpolicies and practice.

By the 1970s a airly consistent set o activities and roles had developed orpeople management, which in most large organisations was perceived as a

specialist management unction, usually termed Personnel Management andcomprising the areas o recruitment and selection, pay and conditions oservice, employee welare, industrial relations, training and development, andemployee exit (retrenchment, redundancy or retirement). Most day-to-daypeople management, especially in the area o employee relations, was handledby personnel specialists and not by line managers. In the UK the proessionalstatus o personnel managers was supported by the ormation o the Instituteo Personnel Management (IPM), which was later to evolve and become thepresent-day Chartered Institute o Personnel and Development (CIPD).


7/31



By Iain Henderson


Copyright CIPD 2011






O course personnel management was not without its critics. Peter Drucker(1955) thought that personnel administration, as he called it, was just a set ounrelated, albeit individually important, activities. Te Drucker critique can beread now as an early plea or people management to be returned to line managersas later advocated by HRM models. Te ambiguity o traditional personnel

management was noted with the welare role expected by employees butefficiency and cost-control increasingly demanded o it by management (Legge,1995). Radical critics disliked it on principle (see below).

the development of human resource management

Te people management policies and practices which are usually termed HRMoriginated in manuacturing industry in the USA during the late 1970s and early1980s. Tese represented a significant break with the personnel managementparadigm. A number o actors led to this new management thinking, principallyloss o aith in the traditional approach to mass production, the example oJapanese work organisation and manuacturing processes, and the realisation othe impact o new technology on work practices (Gallie et al, 1998).

Te remarkable success o Japanese manuacturers in the 1970s and 1980s incapturing Western markets or sophisticated products, such as electronics andcars, brought to a head long-standing concerns about traditional aylorist/Fordist models o work organisation. Tese models were characterised by low-or semi-skilled work, close supervision, pay being linked to quantity o output,and at least in mass-production industries assembly-line technologies inwhich the pace o work was controlled by machine. Academic studies had shownconcern about some o the human effects o aylorism and Fordism or decades,

and this led to the rise o the Human Relations School, but by the 1980s it wasrecognised by business and managers as well that the costs o such systems werebecoming unacceptable in terms o low levels o job involvement and weakcommitment to the employing organisation. Tere was an increasing willingnesson the part o employees to disrupt production to achieve higher financial orother rewards despite the damage such action could have on the long-term healtho the organisation. Crucially, it had also become recognised that these traditionalsystems o work organisation were intrinsically unable to produce the qualityoutput now required to compete in a global marketplace (Beer et al, 1984; p.viii).

Te perceived superiority o the Japanese model was confirmed or manyWestern managers and academics by an influential MI study in the 1980s whichconcluded that Fordist methods would inevitably be replaced in the car industryby the lean production model o work organisation typified by oyotas workmethods. Tis approach to work organisation was seen to combine the besteatures o both craf-production and mass production (Kenney and Florida,1993) and to achieve very high levels o employee commitment with resultingbenefits in quality and flexibility.

echnology also played a part in shifing managerial concern towards humanresources. Managers had become aware that the rapid development o new


8/31



By Iain Henderson


Copyright CIPD 2011






technologies in competitive markets meant that organisations aced continualtechnological change, which in turn implied the need or continuous learningby employees. Employers would have to be able to assess individual employeestraining needs and provide the necessary investment in changing and upgradingskills.

All this implied the development o a much closer relationship between managersand employees, and thereore also changes in the work o managers as well asthat o workers. In particular, it meant that the traditional approach o managingpeople personnel management or personnel administration, which hadevolved to help manage aylorist/Fordist organisations more effectively wasno longer viable. In an increasingly competitive global economy, with advancingtechnology and better-educated workorces, it was not enough to manage peoplereactively or passively. In the industries that mattered, competitive advantagenow ultimately came not rom capital investment but rom human resources, andthese had to be managed proactively and strategically i an organisation was to besuccessul.

Te collectivised employment relationship, in which trade unions representedthe workorce and bargained with employers on its behal or wages andconditions o employment (ofen on an industry-wide basis), had come to beseen by management as a hindrance to the adoption o the new technologiesand work practices which were necessary to compete with the Japanese. In actmost Japanese workers in the major exporting industries were unionised but theJapanese trade unions did not share the pluralist culture o their counterparts inthe West (see below).

Initially, the new human resource policies were linked to non-unionised andgreenfield sites (Foulkes, 1980; Kochan et al, 1994). ypically, these were in large-scale manuacturing, where the aylorist/Fordist pattern o work organisationhad been most dominant, but the new approach soon exerted influence in allsorts o organisations and in every part o the economy, including services andthe public sector.

Teoretical and academic models o HRM signalled rom the outset theimportance o strategy in normative models o HRM. HRM was regarded assuperior to personnel management or personnel administration partly because itwas supposed to be strategic in two senses: (i) the unction itsel was conceivedo in strategic rather than reactive ways; and (ii) the HRM strategy wouldbe intimately linked to, and consciously supportive o, overall business and

corporate strategies.

perspectives in the management of people

As we will see below, managerial perceptions o how people view relationshipswithin their organisations are important in our analysis o human resourcemanagement. Our rame o reerence will influence how we expect people tobehave, how we think they oughtto behave, and how we react to the behaviour


9/31



By Iain Henderson


Copyright CIPD 2011






o others. We are concerned here with three major perspectives: the pluralist, theunitarist and the radical or critical (Fox, 1966).

the pluralist perspective

Until relatively recently, this reflected the typical Western industrial workplacepost-World War II. It rests on the assumption that society consists o variousgroups which will each have their own interests and belies. It is naive to pretendthat the interests o workers and managers/owners can be ully reconciled, and soinstitutions such as trade unions and arrangements such as collective bargainingare needed to achieve workable compromises between these differing interests. Inthe pluralist view,conflict at work is seen as inevitable, because management andworkers will not have identical interests, but conflict is not in itsel wrong. Teissue is not to try to eliminate it, which would be impossible, but rather how itshould be handled. In cases where conflicts seem to be insoluble at the workplaceor industry level, third-party intervention ofen through state agencies (eg

ACAS: the Advisory, Conciliation and Arbitration Service, in the UK) canprovide solutions.

the unitarist perspective

From this perspective a work organisation has a purpose (or set o purposes)common to all members o it owners, managers and workers. So there shouldbe no real conflict o interest between these groups. Everyone has the sameultimate interest in high levels o efficiency which will generate high profits andadd to shareholder value and allow the payment o high wages.

It is a win/win situation or all concerned. Managers and those they manage

are really all members o the same team. Management has special leadershipresponsibilities and should pursue policies which allow the organisation toachieve its goals and satisy shareholders (and other stakeholders), but which arealso air to employees. On this view, conflictwithin the organisation betweenmanagement and the workorce is perceived as being the result o some sort oailure; it is not regarded as necessary or inevitable in principle, at least, it couldbe eliminated. From this perspective trade unions are ofen seen as competingor the loyalty o the employees, and collective bargaining may be regarded asunnecessary.

Te unitarist perspective in its purest orm was traditionally ound in private,

typically amily-owned employers, but HRM is usually associated with unitarism(sometimes termed neo-unitarism to distinguish it rom the earlier, morepaternalistic, amily-firm version).

the radical/critical perspective

Quite different rom both the other perspectives, this derived originally rom theMarxist view o society and industrial capitalism. In essence this saw all workas inevitably being exploitative o workers. Conflict between management and


10/31



By Iain Henderson


Copyright CIPD 2011






labour was unavoidable as part o wider class conflict in society. Managementalways, and inevitably, represented the interests o capital. Tere may be ewunreconstructed Marxists in the twenty-first century, but shades o post-Marxistthought persist, and there are cultural and social radicals o various types whoreject the mainstream, ree-market culture in which most organisations now

operate. o such radicals, as to nineteenth- and twentieth-century Marxists, workorganisations reflect the inherently unair or oppressive structures o society (orexample, to radical eminists they reflect the patriarchal nature o society) andhelp to buttress these same structures.

Postmodern intellectuals ofen share this view (see McKinlay and Starkey, 1998),and many writers on HRM and management within the Critical ManagementSchool hold a radical perspective in this sense (see, or example, Legge, 1995, andTompson and McHugh, 2002).

From this perspective even enlightened management practices and philosophiessuch as the Human Relations School, or employee empowerment, or profit-

sharing are really either hopelessly naive and doomed attempts to overcomethe inevitable exploitative nature o capitalism/existing society, or are consciousand cynical strategies to ool the employees. Even pluralistic industrial relationsstructures can be seen in this light.

human resource management in theory

We noted above the practical considerations such as quality, competitionand technology which led to questioning o the traditional orms o peoplemanagement. Management theorists were as concerned as practising managersand governments were about the evident ailure o the aylorist/Fordist approachand produced a number o academic models o HRM.

Te theoretical heritage o HRM includes the managerial writings o Peter

Drucker, the Human Relations School, human capital theory, and OrganisationalDevelopment. Interest in HRM proceeded alongside other developments ineconomics, business strategy and organisational change. Many o these ideasrevolved around the notion o theresource-based theory o the firm (Barney,1991) and core competencies (Prahalad and Hamel, 1990), which arguedthat sustained competitive advantage ultimately derives rom a firms internalresources provided that these (i) can add value, (ii) are unique or rare, (iii) aredifficult or competitors to imitate, and (iv) are non-substitutable. O course,human resources fit such a list o criteria well (Storey, 2001).

reflective activity

In terms of the perspectives examined above, how would you describe:

a) your personal perspective?

b) the managerial culture of your own organisation?


11/31



By Iain Henderson


Copyright CIPD 2011






One o the first, and most important, intellectual proponents o HRM was theHarvard Business School (HBS). Te aculty and alumni o the School agreedin the early 1980s that a new course in HRM was required to equip generalmanagers to deal with the changes that were occurring both in society and inthe competitive environment in which business had to operate. Accordingly, in

1981, HBS introduced a course in HRM in its core MBA curriculum, the firstnew required course since Managerial Economics twenty years beore (Beer et al,1984; p.ix). Te primary intention o Beer et alwas to develop a ramework orgeneral managers to understand and apply HRM in their organisations. Figure 1shows the Harvard model o HRM.

Figure 1 Te Harvard model o HRM

Shareholders

Management

Employee groups

Government

Community

Unions

Employee influence

Human resource flow

Reward systems

Work systems

Workforce characteristics

Buisness strategy and conditions

Management philosophy

Labour market

UnionsTask technology

Laws and societal values

HR outcomesHRM policy choices

Situational factors

Long-term

consequencesCommitment

Competence

Congruence

Cost effectiveness

Individual well-being

Organisational

effectiveness

Societal well-being

Stakeholder interests

Source: Beer et al (1984; p.16 Map o the HRM territory)

Te central issue here is perormance managing human resources to achievepositive HR outcomes in terms o a committed workorce, working in harmonywith the objectives o the organisation and achieving competence and costeffectiveness. Tese outcomes in turn lead to positive long-term consequences:firstly organisational effectiveness, but also individual and societys well-being.

We should note the emphasis on policy choice. Tis implies that managers haveat least some degree o discretion in their HR policies. Te situational actors andstakeholder interests identified in the model may impact on managerial decisionson HRM, but none o these will determinewhich HRM polices are ollowed. Techoice made will have outcomes and long-term consequences both o which, asthe model shows, may eed back into policy choices, and, in the longer term, alsointo the stakeholder interests and situational actors.

Te Harvard model has been influential worldwide. Hollinshead and Leat (1995)used the model as a ramework to examine HRM in Germany, France, Italy,


12/31



By Iain Henderson


Copyright CIPD 2011






the Netherlands, Sweden, the UK, Japan, Australia and the USA. However, asthese authors acknowledge (1995; p.27), although the undamental principlesand relationships identified by the model are pretty much universal, it is alwaysnecessary when applying it in a specific country, or in making comparisonsbetween countries, to give due weight to specific cultural actors.

For instance, in the UK rom the end o World War II to the 1980s trade unionswere unusually powerul, and while their power is now much diminished, thatera has lef a legacy o a pluralistic industrial relations ramework, especially inthe public sector. In Germany and Scandinavia trade unions remain relativelypowerul, whereas in the USA their influence has been waning or a generationand is practically non-existent in many industries, especially high-technology andother knowledge-based ones. Te wide degree o applicability o the Harvardmodel is one o its most useul aspects.

O course, there have been significant developments in management practiceand theory since the 1980s when the Harvard model was first conceived or

example, in areas such as knowledge management, talent management, ethicsand corporate governance, the details o which ofen transcend the limits o theHarvard model. echnological advances also have had an obvious major impacton work including HRM (eg online recruitment, teleworking, the use o virtualteams). Nonetheless, the model has proved to be remarkably durable because, asits authors intended, it still serves as a wide-ranging map o the HRM territory.It is still probably the best single model to give general managers an initial pictureo what HRM entails and what it tries to achieve. Te biggest single omissionrom the Harvard model is the neglect o learning and development.

universalist versus contingency

One o the aultlines in the theoretical debates on HRM has been an argumentthat in one orm or another has run through all o management literaturerom the time o aylors scientific management to the present day. Tis iswhether there is one best way to manage ie is there a set o principles whichi applied correctly will always bring better perormance, or does it depend onthe particular circumstances and actors such as the nature o the work andtechnology that is employed? Tis is sometimes reerred to as the universalistversus contingency debate.

Somewhere between the two extremes lies the best fit view: there may or maynot be eternal, universally applicable management techniques but experience

(sometimes supported by theory) shows that, given similar structures andcontexts, successul organisations tend to employ the same methods or policies.

At the time o writing we see this debate in the arguments over whether thereare specific bundles o HRM which enhance perormance. In reality, the debatein HRM is usually about the range and choice o techniques rather than one oabsolute principle. Tere probably are some generic HR processes and generalprinciples o people management common to all successul organisations(Boxall and Purcell, 2006; p.69). No one really doubts that it is best to be as


13/31



By Iain Henderson


Copyright CIPD 2011






systematic and accurate as possible in selecting people or work, or example,but there is much less certainty as to whether it is effective or even ethical toscreen employees personality profiles to select only those whom the organisationbelieves will conorm to the company culture.

On the other hand, Huselid (1995) argues that there is sound evidence,gathered rom over 1,000 firms in various (US) industries, or a universalistcase or specific high-perormance work practices impacting on firms financialperormance.

Te ramework presented by the Harvard model is clearly in the contingencycamp, but can accommodate a variety o best fit practices in various specificenvironments (eg industries, technology groups or cultures) as determined by thesituational actors and stakeholder interests.

Critical and postmodernist interest has always been high in academic treatmentso HRM, especially in the UK or example, Legge (1995), Blyton and urnbull

(1992), du Gay and Salaman (1992), and Kennoy (1999). As might be expected,such commentators tended to be hostile to the HRM model and were ofenopposed to its adoption, earing that it represented continuing or even enhancedexploitation o ordinary employees.

On the other hand, even non-radical critics have pointed out that the specificpractices associated with HRM are actually rather varied in nature, even inthe theoretical models, and some have questioned whether they really can beregarded as making up a coherent approach to the management o people.For example, perormance-related payment systems on the one hand seem torepresent an individualisation o the employment relationship, whereas thepromotion o team involvement eg quality circles and total quality management

(QM) represent the opposite (Gallie et al, 1998; pp67).

hard and soft models of hrm

wo main variants o HRM were identified early in academic discussions oHRM: hard HRM with an emphasis on the strategic, quantitative aspects omanaging human resources as an economic actor in production, and sofHRM rooted in the Human Relations School and emphasising communication,motivation and leadership (Storey, 1989). All models o HRM are concernedwith strategic issues, but hard models typically have a stronger ocus onensuring that the HRM strategy fits and is driven by the overall corporate

strategy (Keenan, 2005). Tis is a matter o degree, however, since all HRMmodels stress the importance o taking a strategic view o the human resource,but in the Harvard model, or example, the link to business strategy is impliedrather than explicit. able 1 shows a simple typology o HRM models withclassification according to (i) the degree o emphasis on strategic fit, and (ii) ahard or sof model o HRM.


14/31



By Iain Henderson


Copyright CIPD 2011






able 1 A typology o HRM models: hard/sof, and strategic fit

Hard HRM model Sof HRM model

High emphasis on strategic fit Fombrun et al(1984) Mabey and Salamansopen approach (1995)

Low emphasis on strategic fit Schuler and Jackson (1987)Huselid (1995)

Beer et al(1984)[the Harvard model]

Guest (1987)

summing up theoretical hrm: key differencesbetween personnel management and human resourcemanagement

At this stage the reader might plausibly ask, Why bother with personnelmanagement? Havent you just shown us how it has been replaced by HRM?Well, not quite. As we shall see below, the empirical evidence is that the adoptiono HRM in practice has been incomplete when compared to theoretical models.At the time o writing it can make sense to talk o two traditions in peoplemanagement: one largely ollowing the personnel management (PM) paradigmand the other the HRM paradigm most organisations showing some aspects oeach in their management o people, and ew ollowing either completely. able 2on page 16 contrasts theoretical PM with theoretical HRM along a number o keycharacteristics.

are models useful?

Beore we look at this comparison we should deal with another question thesceptical reader might have. We acknowledge that both the HRM and PMdescriptions above may never be ound in their entirety in real lie. So the scepticmay reasonably ask: why bother with them? Te work o the great social scientistMax Weber provides an answer with his concept o ideal types (Weber, 1949; p.90).

An ideal type is ormed by simpliying the description o complex reality toaccentuate its most important eatures and ignore less relevant ones, so that whatis really vital about the subject under study can be identified and understood.Weber did not mean that the ideal type is some completely hypothetical entity,but rather that it possesses all o the relevant eatures o the type exhibited in

extreme clarity. Ideal types exist, but you cannot expect to find them empiricallyin their purest states.

For example, no actual coin in circulation meets perectly all the requirementso its design because o imperections in manuacture and wear in use, yet wehave complete knowledge o what the coin ideally should be like an ideal type.By comparing any actual coin to this ideal type an expert can grade or classiythe condition o a rare coin in terms o, or example, wear and damage, and soestimate its worth to a collector (Bailey, 1994).


15/31



By Iain Henderson


Copyright CIPD 2011






Te concept o ideal types is very useul in social science. For instance, aneconomist will not expect to find examples o pure competition in any actualmarket in real lie but by having an explicit model o pure competition he or shecan make comparisons between the actual and the ideal and come to a reasonedjudgement as to whether improvements in the degree o competition in the

market should be pursued.

So, bearing in mind the dictum o the anonymous statistician that all models arewrong, but some are useul, we can regard the descriptions o PM and HRM inable 2 as representing ideal types o PM and HRM respectively. We could thenstudy the characteristics o the people management unction in a real firm ororganisation, and use the descriptions in able 2 to help us to assess whether thiswas closer overall to the HRM model or the PM one.

In some contexts ideal types might seem to be similar to normative models, asdiscussed in this chapters Endnote 3. Tey are not identical, however. Te authoro a normative model may expect it to be ully realisable in practice, whereas or

the reasons given above, ideal types are not.

We can consider the differences in the characteristics o the two models.

Strategic nature: traditional PM was usually expected to work on a shorttime-scale fire-fighting (ie dealing with immediate problems such as localindustrial relations issues, or urgent staff shortages) rather than taking along-term, strategic view o people management issues. Note the implications orthis longer-term perspective or all HR issues, and the necessity or an articulatedstrategy or HRM, which should not only be coherent in itsel but should beinormed by, and support, the business strategy o the organisation.

Te psychological contractis not to be conused with the legal contract oemployment, or any written statement o terms and conditions o employment.As the term implies, it exists purely in the mind o the employee and his or hermanagers, and so is unwritten and never clearly articulated. It has been describedby Armstrong (2009; p.297) as ollows:

Te psychological contract expresses the combination o belies held byan individual and his or her employer about what they expect rom oneanother.

Tere will always be some sort o psychological contract between the employeeand the organisation, but David Guest concluded (Guest, 1996) that:

a positive psychological contract is worth taking seriously because it isstrongly linked to higher commitment to the organisation, higher employeesatisaction and better employee relations.

Te PM model assumed that the basis o the psychological contract wascompliance the employee would do as he or she was told and the employerin turn expected this. Management should be able to determine exactly what isrequired o the employee and enorce at least minimal compliance. Te HRMmodel, on the other hand, assumes that the employee shows positive, willing


16/31



By Iain Henderson


Copyright CIPD 2011






able 2 Ideal types o personnel management and human resource management

Characteristics Personnel management

(PM)

Human resource management

(HRM)

Strategic nature Predominantly dealing with

day-to-day issues Ad-hoc and reactive in nature: a

short-term perspective rather than

strategic

Dealing with day-to-day

issues; but proactive in natureand integrated with other

management unctions A deliberately long-term,

strategic view o human resources

Psychological

contract

Based on compliance on the part

o the employee

Based on seeking willing

commitment o the employee

Job design ypically aylorist/Fordist ypically team-based

Organisationalstructure

Hierarchical endency to vertical integration

Flexible with core o keyemployees surrounded by

peripheral shells High degree o outsourcing

Remuneration Collective base rates Pay by position Any additional bonuses linked to

aylorist work systems

Market-based Individual and/or team

perormance Pay or contribution

Recruitment Sophisticated recruitment

practices or senior staff only Strong reliance on external

local labour market or mostrecruitment

Sophisticated recruitment or all

employees Strong internal labour market or

core employees. Greater relianceon external labour market or

non-core

raining/development

Limited and usually restrictedto training non-managerial

employees. Narrowly job-related.

Management development limitedto top executives and ast-track

candidates

ransormed into a learningand development philosophy

transcending job-related training.

An ongoing developmental roleor all core employees including

non-management. Strongemphasis on management and

leadership development A learning organisation culture

Employeerelations

perspective

Pluralist: collectivist; low trust Unitarist: individualistic; hightrust

Organisation othe unction

Specialist/proessional Separated rom line management Bureaucratic and centralised

Largely integrated into linemanagement or day-to-day HR

issues Specialist HR group to advise and

create HR policy

Welare role Residual expectations No explicit welare role

Criteria orsuccess o the

unction

Minimising cost o humanresources

Control o HR costs, but alsomaximum utilisation o human

resources over the long term

Source: adapted and developed rom Guest (1987)


17/31



By Iain Henderson


Copyright CIPD 2011






commitment. Because more is expected rom employees, management cannotalways speciy exactly what is required, and so employees must use their ownjudgement and initiative to a much greater extent than in the past. Tey mustalso extend and upgrade their skills and knowledge-bases.

Job design: the compliance sought in aylorist organisational culture is reflectedin the low degree o autonomy workers typically have in such a context. Wewould expect the PM model to be ollowed where jobs tend to be designedunder scientific management principles (see Endnote 1). Te search or greatercommitment in the HRM approach implies that employees should be allowedand encouraged to use sel-control in matters o work and organisationaldiscipline, rather than be driven by a system o compliance and directionimposed upon them by management. eamworking and similar initiatives wouldbe much more common under HRM than PM.

Organisational structure: reflecting the higher-commitment working associatedwith HRM we would expect to find less hierarchical and more flexible

organisational structures, with the team as the organisational building-blockand with ewer management levels. Organisations eaturing PM will tend tobe hierarchical, pyramid-shaped and bureaucratic. Tose ollowing HRM willtypically be flexible with a core o key employees surrounded by peripheral shellso other workers. Note that the core employees are not all senior executives thecore is defined as comprising those members o the organisation who possess theskills, knowledge and competence necessary or the organisations success. Coreworkers will possess considerable market attractiveness and will consequentlyenjoy better remuneration and terms o employment than others. In return, theywill be expected to provide high levels o perormance and flexibility in working,and accept the need or continuous learning and re-skilling to support incessant

technological and process improvement. Te peripheral shells o employees actas buffers against short-term market fluctuations and can be relatively easily shedor reinorced. Tus employees in those parts o the organisation will tend to beemployed on short-term or temporary contracts. HRM organisations also tend toeature considerable outsourcing o non-core work.

Remuneration: PM is usually associated with traditional approaches toremuneration, long pay scales characterising the hierarchical organisationalstructure mentioned above, reflecting length o service rather than currentcontribution. Pay structures are usually agreed via collective bargaining, at least ornon-managerial employees. Te HRM approach to remuneration is more ocusedon rewarding contribution and is likely to be individually or team-based. Tis

implies both the use o perormance management and appraisal and the setting obase rates rom the market rather than by means o collective agreements.

Recruitment: sophisticated techniques such as the use o psychometric testing,psychological profiling and assessment centres have ofen been used with PM orrecruitment and selection into senior executive posts, while much simpler andless costly methods usually suffice or non-managerial employment. With HRMthese sophisticated tools are much more likely to be used or all employees, or atleast core ones.


18/31



By Iain Henderson


Copyright CIPD 2011






raining and development: when employees are viewed mainly as a cost (whichshould be minimised), commitment to training is usually negligible, employersearing that employees will be poached by ree-loading competitors who do notraining themselves, and this would be the typical position in the PM paradigm.An exception was ofen made, however, in industries with collective agreements

on apprentice training. Except or large PM organisations, management trainingand development would be virtually non-existent. When two UK academics, IainMangham and Mick Silver, surveyed management development in the mid-1980s,they reported a surprisingly high proportion o firms which seemed to do nomanagement training at all, on the grounds that, as one respondent put it, Weonly employ managers who can do the job (Mangham and Silver, 1986).

In HRM there is a culture o continuous development o all core employeeswho are seen as the originators and possessors o the organisations strategiccompetencies necessary or sustainable competitive advantage. Senior managersare not exempt, the directors and CEO receiving executive development. Tiscommitment would not be expected in the peripheral shells surrounding thecore.

Employee relations perspective ie the dominant managerial perspective withinthe organisation: personnel management typically operates in a unionised,pluralistic environment. Tis can be contrasted with the HRM model in whichthe employment relationship is much more individualised than when dealingwith the workorce collectively. Tis is reflected in, or example, the absence otrade unions and the introduction o perormance-related rewards systems.

Te unitarist nature o HRM would seem to discourage the ormation o apluralist organisational culture, but in practice there have been examples whereHRM has been successully adopted within a previously pluralist culture whilemaintaining the pluralist style o collective bargaining in employee relations. Seeor example ayebs account o the Scottish division o the American firm NCR(ayeb, 1998). But see also the empirical evidence rom the Workplace Industrial/Employment Relations Surveys in the UK (reerred to below in this chapter) onthe long-term decline o trade unionism in the UK.

Te organisation of the functiondiffers in the two models. In the PM model theunction tends to be seen as a specialist unction which, in many importantrespects such as dealing with employee relations issues, is separate rom linemanagement. Tis ofen leads to the creation and maintenance o large, ratherbureaucratic, personnel departments. Te HRM model instead stresses that

most people management, even employee relations, is actually just part onormal management, at least in its day-to-day aspects. Accordingly in the HRMmodel, where there are specialist HR departments, they will be small and highlyspecialised and their unction is (i) to ormulate HR policies and (ii) act asinternal consultants to line managers. Te line managers will implement most HRpolicy, only seeking the involvement o HR in particularly difficult issues.

Welfare role: there are at least residual expectations under PM o a welare role,the personnel manager being the member o the management team who couldbe approached with personal problems (at least i these impacted on work). Tis


19/31



By Iain Henderson


Copyright CIPD 2011






always led to ambiguous perceptions o PM. By the time the PM paradigm hadbecome ully established, there was no doubt that it was a management unctionwith the primary objective o reducing and controlling labour costs (see Criteriaor success below) but many employees expected a uller welare aspect than wasofen given, and this was a principal reason or the ambiguity with which PM was

ofen viewed. Unreconstucted finance managers sometimes viewed PM in similarterms albeit negatively as an unnecessary cost on the organisation. So personnelmanagers ofen elt themselves to be the meat in the sandwich caught betweendissatisfied employees and unsympathetic management colleagues, neither owhom really understood what they were supposed to be doing. Marxist criticsalways saw PM as in any case reflecting the perceived contradictions o capitalism(Legge, 1989), but even dyed-in-the-wool ree-marketers could see the possibilityo perceived inconsistencies in the role o PM and unreconciled expectations here.

Tere is no explicit welare role in HRM although proponents might argue thatwith its unitarist culture it is no longer necessary. Critics would not agree.

Te two models also show very different criteria for success of the functionie how the organisation judges the perormance o the people managementunction. In the personnel management model, the organisation will judgethe effectiveness o the unction by how well it minimises unit labour costs; inthe HRM model by how well it maximises the use o the organisations humanresources (while still maintaining proper control o costs).

reflective activity

Taking each of the people management characteristics listed in Table 2 to be represented by

a seven-point scale in which 1 corresponds to pure PM and 7 to pure HRM, profile your own

organisation. Is it predominantly PM or HRM? Why is that, do you think?

It can be a useful exercise to discuss your results first with a senior line manager and then with a

senior HR manager.

hrm in practice

In addition to the theoretical literature, empirical studies have shown thatsignificant changes in the practice o managing people in modern organisationshave occurred in recent years. Interpretations may sometimes be controversial,

but that there have been changes is not in doubt.

Te late 1980s and early 1990s saw a transormation in the vocabulary omanagement in the UK, as in the USA, concepts such as empowerment,teamworking and commitment becoming widespread, along with humanresource management itsel. Substantial survey evidence shows the adoption oa range o new practices which reflected HRM ideas: McKersie (1987); Storey(1992); Fernie et al(1994); Osterman (1994); Wood and Albanese (1995) eveni these studies ound less evidence ointegrated adoption o the whole HRM


20/31



By Iain Henderson


Copyright CIPD 2011






programme, or o Waltons (1985) assumed transormation o the employmentrelationship rom control to commitment (Gallie et al, 1998; pp9, 57).

Evidence o the adoption o a number o key HRM practices in the UK hasbeen authoritatively established by the series o Workplace Industrial Relations/Workplace Employment Relations Surveys.Tese surveys provide a nationallyrepresentative account o the state o employment relations, working lie andthe management o people inside British workplaces, and o how these have allbeen changing over a quarter o a century. Te surveys were jointly sponsoredby the Department o rade and Industry (DI), the Advisory, Conciliation andArbitration Service (ACAS), the Economic and Social Research Council (ESRC)and the Policy Studies Institute (PSI), and were conducted in 1980, 1984, 1990,1998 and 2004. Tese were all large-scale, representative surveys. Te fieldworkor the 2004 survey, or example, was conducted between February 2004 andApril 2005: ace-to-ace interviews were conducted with around 3,200 managersand almost 1,000 worker representatives. Over 20,000 employees completed andreturned a sel-completion questionnaire.

Te 1990 survey ound evidence o a shif rom collectivism to individualism,with a marked decline in trade unionism, and a significant increase in the sorto approaches to participation and communication that are embraced by HRM,such as team briefings, quality circles and newsletters. Tere was also evidenceo organisational changes such as the increasing involvement o line managers inpersonnel activities (Millward etal, 1992).

Te 1998 survey ound that human resource matters were ofen incorporated inwider business plans. Tey concluded that there was evidence that a number opractices consistent with a human resource management approach were wellentrenched in many British workplaces (Cully et al, 1999).

Te preliminary findings o the 2004 survey showed that most o the HRpractices which the earlier surveys had identified had become consolidated orwere increasing in use (Kersley et al, 2006).

Tese findings reinorced the view that many organisations operated a flexibleorganisation with a core o key employees and a peripheral workorce oother workers who typically enjoyed less secure and less attractive terms andconditions o employment. A large majority (83%) o workplaces had part-timeemployees (up rom 79% in 1998). In 30% o all workplaces more than halo the workorce were part-time employees. Just under one third (30%) oworkplaces had employees on temporary contracts. Te use o temporaryagency staff, although less prevalent than fixed-term contracts, was still quitewidespread, 17% o all workplaces employing temps. About one fifh (22%)gave preerence to internal applicants when recruitiung, and the proportion washigher or the private sector (25%).

Te selection process usually involved the use o interviews, application ormsand reerences. Personality or competency tests, although used less requently,had gained in importance in the search or greater objectivity in selection, eventhough their validity and reliability continued to be subjects o debate. Among


21/31



By Iain Henderson


Copyright CIPD 2011






workplaces using personality tests, three-fifhs (61%) o managers said that theyused these tests when recruiting core employees. Perormance or competencytests were routinely used in 46% o workplaces. Perormance tests were also morelikely to be used when recruiting core employees, irrespective o their occupation,even more so than personality tests. Overall, one third (34%) o all workplaces

used such tests or these recruits.

Te use o perormance appraisals had increased, 78% o managers in workplacesreporting in 2004 that perormance appraisals were undertaken, compared with73% in 1998. wo-thirds (65%) o all workplaces conducted regular appraisals ormost (60% or more) non-managerial employees (48% in 1998).

Most workplace managers (84%) reported that off-the-job training had beenprovided or some o their experienced, core employees over the previous year an increase since 1998, when 73% o workplaces provided training or some otheir experienced core employees.

Te authors o the 2004 survey noted that in recent years much o the discussionabout methods o work organisation had concerned high-perormance,high-commitment or high-involvement work practices. Tese were practicesthat were intended to enhance employee commitment and involvement, ofenby increasing employees participation in the design o work processes and thesharing o task-specific knowledge. Te most commonly cited practices includedteamworking, cross-training (or multi-skilling) and the use o problem-solvinggroups.

eamworking was the most common, almost three-quarters (72%) o workplaceshaving at least some core employees in ormally designated teams. Teincidence and operation o teamworking had changed little since 1998. Where

teamworking was in place, it was usually embedded among staff: our-fifhs(80%) o workplaces with teamworking extended it to at least three-fifhs ocore employees. In 83% o workplaces with teamworking, teams were givenresponsibility or specific products and services, and in 61% they could jointlydecide how work was done. However, in just 6% they were allowed to appointtheir own team leaders.

Cross-training involves training staff to be able to undertake jobs other thantheir own. wo-thirds (66%) o workplaces had trained at least some staff to beunctionally flexible; again, this proportion had changed little since 1998 (69%).Around one-fifh (21%) o workplaces had groups o non-managerial employeesthat met to solve specific problems or discuss aspects o perormance or quality.Te equivalent figure in 1998 had been 16%. Almost hal (48%) o all workplaceshad trained at least some core employees in teamworking, communication orproblem-solving skills in the previous year.

Tese new methods o working are at once the effects o development in HRMand the cause o urther changes in HRM practice.

Additionally, the 2004 survey ound that the UK trend or work culture tobecome more unitarist and less pluralistic was unremitting. rade unionism


22/31



By Iain Henderson


Copyright CIPD 2011






continued to decline, particularly in the private sector; almost two-thirds oworkplaces (64%) had no union members (compared to 57% in 1998), and unionmembers made up a majority o the workorce in only one-sixth (18%) o allworkplaces (22% in 1998).

Subsequent empirical research such as the 2009 European Company Survey(Euroound, 2010) confirms the picture.

summing up hrm practice

So the empirical evidence seems clear. In most UK workplaces the managemento people has been progressively moving closer to the HRM model and awayrom the PM model over the last 20 years (see able 2), and the most recentevidence suggests strongly that this is continuing. We can assume that the UKis not unique in this, and that giving due weight to local cultural and contextual

actors, similar changes in the management o people have been happeningworldwide in the developed and developing economies.

key themes in human resource management in thetwenty-first century

Te authors o the 2004 Workplace Employment Relations Survey (2004 WERS) reerred to above (Kersley et al, 2005) identified many o the key themes currentin HRM.

Te survey noted the interest in the UK in high-perormance,

high-commitment or high-involvement work organisation and practices.Tis was confirmed by a study unded by the UK government Departmento rade and Industry (DI) and conducted in association with the CIPD.High-Performance Work Strategies: Linking strategy and skills to performanceoutcomes(DI/CIPD, 2005) comprised detailed case studies o a sample o 10firms drawn rom the Sunday imes100 Best Companies to Work For 2004, anda survey o nearly 300 firms.

In addition to reinorcing the findings o the 2004 WERS survey this reportprovided urther empirical evidence on present managerial interests in themanagement o people in the UK. Te case studies established good practice

in a range o high-perormance work practices (HPWPs), these being definedas:

a set o complementary work practices covering three broad areas or bundleso practices covering: high employee involvement practices eg sel-directed teams, quality circles

and sharing/access to company inormation human resource practices eg sophisticated recruitment processes,perormance appraisals, work redesign and mentoring


23/31



By Iain Henderson


Copyright CIPD 2011






reward and commitment practices eg various financial rewards, amily-riendly policies, job rotation and flexi-hours.

It was ound rom the case studies that leadership was regarded as crucialin creating, shaping and driving these high-perorming organisations. Skillsdevelopment was ocused on achieving specific business outcomes and levels operormance. In most o the case studies, high levels o training and continuousdevelopment were regarded as undamental to success, and tacit skills andinstitutional knowledge were perceived as relatively more important thantechnical skills. Employees could learn all the time as part o their normal workand were encouraged to innovate and improve perormance (individual, teamand organisational).

High-perorming organisations tended to be leaders in their industries andthey set the standards or best practice. In most o the case studies HPWPs hadbeen used to create business success rom the ounding o these companies,but to ensure their continued success, these practices were subject to constant

modification in line with the requirements o business objectives.

Te wider survey o CIPD members established how ar the high-perormancework practices identified in the case studies were adopted by other UKorganisations, and examined the relationship between the level o adoption ohigh-perormance work practices and a range o organisational outcomes. It wasound that many o the HPWPs had been adopted by UK organisations, and therewas evidence that the level o HPWP adoption, as measured by the number opractices adopted, was positively correlated with better organisational outcomes.For example, those adopting more HPWPs identified had greater employeeinvolvement, and were more effective in delivering adequate training provision,in motivating staff, in managing change and in providing career opportunities.Tese organisations also had more people earning over 35,000 and ewer peopleearning less than 12,000.

the international context

Te importance o high-perormance working or organisational perormancewas confirmed in the international context by an earlier joint study rom theInternational Federation o raining and Development Organizations (IFDO) owhich the CIPD in the UK is a member and the International Labour Organisation(ILO). Tis examined high-perormance working in nine organisations around theworld (ILO/IFDO, 2000): the Laiki Bank(Cyprus), theMandarin Oriental Hotel

(Hong Kong), SAS Security Servicesand Comort Driving Centre (Singapore),W.H. Smith & Sonsand Torn Lighting (UK), South Arican Breweries, andMotorola and the Social Security Administration(United States).

High-perormance working was understood (ILO/IFDO, 2000; Appendix B) tobe associated with:

the achievement o high levels o perormance, profitability and customersatisaction by enhancing skills and engaging the enthusiasm o employees.


24/31



By Iain Henderson


Copyright CIPD 2011






Te report also cited an Organization or Economic Co-operation andDevelopment (OECD) definition o the characteristics o HPW organisations as:

flatter non-hierarchical structures, moving away rom reliance onmanagement control, teamworking, autonomous working based on trust,communication and involvement. Workers are seen as being more highlyskilled and having the intellectual resources to engage in lielong learningand master new skills and behaviours.

Te report concluded:

Increasing evidence is becoming available about the connections betweenpeople management and development and the bottom line. Researchershave identified three ways in which this occurs: through the use o best HRpractice; getting the right fit between business strategy and HR practices;and using specific bundles o practices, varied according to organisationalcontext. Te case studies used in the ILO/IFDO research show significant

evidence o the use o all these approaches. Tey bear witness to the searchby organisations or an alignment between practices and outcomes andactive searching or examples o good practice.

Te report thus also illustrates how HRM now has a global relevance beyond theUS/UK industrial cultures in which it first developed.

O course the concept o high-perormance working has not been without itscritics in terms o both its theoretical base and its practical effects eg Guest(1997); Guest et al(2003); MacDuffie (1995); Applebaum et al(2000); Legge(2001); Purcell (1999) but the International Labour Organisation (ILO) couldacknowledge the validity o many o the criticisms and, while calling or more

research to clariy contested areas, conclude (ILO/IFDO, 2000) that:Increasing evidence is becoming available about the connections betweenpeople management and development and the bottom line . . . Teseamless application o people management and development and linemanagement leadership, expertise and vision provides the strategy andpowerhouse or high-perormance working. Finding out how to manageand develop people so as to generate reedom to learn and contribute willbe a major challenge in the early part o the twenty-first century.

So the empirical evidence is mounting up to support the commonsenseview that the idea that better management o people should lead to better

perormance at individual, team and organisational level everything else beingequal is probably true. Common sense would also suggest it is wise to takewhat management theorists call a contingency approach to this question. Tatis, instead o looking or a universally applicable set o HR practices that willinevitably lead to better perormance in all cases, the specific circumstanceso the situation should be taken into consideration. For example, individualperormance-related pay might boost perormance in some cases, such as salespersonnel, but not others (policemen, say). Tis does not alter the underlying keyprinciple that reward should reflect contribution. It just means that the principle


25/31



By Iain Henderson


Copyright CIPD 2011






may be applied in different ways according to the circumstances. It is worthremembering here the policy choice aspect o the Harvard model (Figure 1).

In act, the DI/CIPD (2005) report cited above ound that different bundleso high-perormance work practices seem to be effective in different industrysectors (p.71):

Tere is no one best way or one best set o practices: this is not a tick-boxapproach. Te crucial component is the business strategy, because thisunderpins the choice o practices, the way they are implemented and theireffectiveness in improving perormance. It is the business strategy that givesthe high-perormance working practices their dynamism and provides theramework against which perormance can be evaluated and improved. ...

Te choice o which bundle o practices to use in order to achieve a givenorganisational outcome or objective is influenced by the type o sector inwhich the organisation or company is operating. Some bundles o practices

are more effective in particular industrial sectors than others.

key themes in hrm

Te findings o these reports, together with those o the WERS series, especiallythe 2004 survey, allow us to build a picture o the key themes in HRM in thetwenty-first century.

Te adoption ohigh-perormance work practices also known as,high-commitment or high-involvement work practices which areintended to achieve better individual, team and organisational perormanceby increasing employee commitment and involvement. Tese are typically

thought o as comprising bundles o sophisticated HR practices in the areaso employee involvement, resourcing (eg in recruitment), and rewards andcommitment.

A flexible organisation with a core o key employees (includingnon-managerial employees) with greater investment in these human resources;and a peripheral workorce o other workers who typically enjoy lesssecure and less attractive terms and conditions o employment and less HRdevelopment. But in efficient organisations the barriers to the core will bepermeable to hard-working and capable employees on the periphery.

Te organisation o work at a micro-level teamworking, cross-training,multi-skilling,and problem-solving groups to increase unctional flexibility,

participation in the design o work processes, and the sharing o task-specificknowledge.

Sophisticated HR practices in recruitment and selection eg the useo psychometric testing and personality profiling and competency andperormance tests or a wide range o key or core employees includingnon-managerial ones.

Employee relations in a unitarist environment trade unions are in ahistorically precipitate decline in most advanced economies, and especially


26/31



By Iain Henderson


Copyright

personal management and hrm-cipd text.pdf

Documents