Changes to management practices - The changing context for SHRM

The changing context for SHRM

2.6 Changes to management practices

Over recent decades we have also seen an increasing trend towards the individualization of the employment relationship in some parts of the world (Brown et al, 1998; Pollert, 2005).

This has been in part as a result of the decline in trade union membership in a number of countries (European Commission, 2011), but also as a result of deliberate action on the part of employers wishing to take a more individualized approach to the employment relation-ship. This individualized approach is in line with a unitary perspective (see Chapter 11) and the thinking behind HRM (see Chapter 5).

In harmony with this approach, we have also seen growth in the use of and interest in so-called high-performance, high-involvement, and high-commitment work systems or

practices (see Chapter 8). Although there are some differences in emphasis in each of these approaches, there is much similarity and the terms have been used interchangeably (Lepak et al, 2006). In essence they are concerned with approaches to HRM that deliver superior organizational performance (Whitener, 2001; Lepak et al, 2006) and are appro-priate for organizations in a globally competitive environment. It has been argued that this focus on how HR practices and the organization of work may infl uence organiza-tional performance was stimulated by a debate in the US about future economic per-formance competitiveness, where it was argued that, in addition to technological advances, changes to work systems were required to maintain competitiveness (Boxall and Macky, 2009).

Whilst there has been some discussion about the specifi c practices involved in high-performance work systems (HPWS), it is generally seen to involve an emphasis on teamwork, training (including the development of skills in teamwork and interpersonal interaction), and employee motivation (including job security, internal career progression prospects, variable pay schemes, and skill-based pay). Butler and Glover (2010), building on the work of Bélanger et al (2002), argue that more generally high-performance management com-prises three main dimensions. The fi rst, production management, is concerned with pro-ductive fl exibility and process standardization, a hard approach to quality management.

The second dimension is concerned with the organization of work, centred on teamwork-ing and breakteamwork-ing down traditional skill demarcations. The third is concerned with a commitment-based employment relationship, in order to support the fi rst two dimen-sions. Thus terms and conditions need to be designed to secure commitment and foster alignment with wider organizational goals.

Boxall and Macky (2009) point to the arguments concerning the systemic affects, which suggest that performance gains are greater where organizations adopt a set of comple-mentary practices (Appelbaum et al, 2000). They argue that whilst there is a need for HR practices to be complementary, there is also a need for account to be taken of the broader management system at the workplace and challenge the notion that a universal set of practices delivers enhanced performance, irrespective of context (Boxall and Macky, 2009).

Conclusion

This chapter has presented a summary of recent changes which have been taking place in the world of work and which have implications for the development of HR strategies. This has included changes to both the nature of the workforce and the nature of work. In relation to the workforce we have examined the global labour market and the geographical distribution of the workforce. We have also examined changing orientations to work, including those of the so-called Generation Y. In relation to changes in the nature of work we have explored factors such as the growth of employment in services, the emergence of emotional and aesthetic labour, and the desire for greater fl exibility on the part of both the employer and the employee, and changing employer approaches. In each case we have explored the implications of these changes for the way in which people are managed and the development of HR strategies.

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Summary

● Changes in the distribution and nature of the workforce have important implications for the development of HR strategies.

● Increased time spent in full-time education and early exit from the labour force have reduced the availbality of labour in some EU countries.

● Changing social attitudes have impacted how people participate in work and what they expect from their employers.

● Changes in the nature of work have important implications for the development of HR strategies.

● The increasing prevalence of employment in service work presents different priorties and challenges for the managment of HR.

● Both employers and employees seek fl exibility in the organization and conduct of work.

● The employment relationship has increasingly been individualized and practices have been shaped by a concern for performance.

Review questions

1. Explain how knowledge of world population trends might infl uence the development of HR strategies.

2. How have social trends infl uenced the way in which people participate in work and what are the im-plications of this for SHRM?

3. What factors might infl uence whether an organization opts to export jobs and/or import labour?

4. Examine the implications of greater use of emotional and aesthetic labour for the way in which HR are managed.

5. Why might organizations offer fl exible working options to employees and what factors need to be considered in implementation?

End-of-chapter case study Centrica: managing an older workforce

(Based on an interview with Mel Flogdell, Head of HR Policy, Centrica)

Centrica is a top 30 FTSE 100 integrated energy company with almost 37,000 employees, including over 6,000 in the US, operating in seven countries across the globe. British Gas is the UK ‘downstream’

arm of the company. It supplies gas and electricity and installs and maintains central heating and gas appliances and low-carbon and energy-effi cient products and services to UK residential and business customers. British Gas employs over 28,000 of Centrica’s people. Under the company’s Business Principles they make a commitment to respect human rights and to value their employees; as part of this commitment Centrica has developed an active diversity strategy.

In recent years, faced with the changing demographics of the labour force, Centrica has been concerned to ensure that it has a strategy in place that allows the company to meet its current and future HR needs. The company recognized that although the economic downturn has meant that employers have a larger pool of potential employees to choose from, ‘candidates of choice’ have become more discerning when looking for their preferred employer. Having an age-diverse workforce was seen as an important element in sustaining business success and as a response a number of initiatives were put in place to attract and retain an older workforce. Employing greater numbers of older workers was also seen as a way of more closely refl ecting the community and customers

the company serves. Centrica decided to build its reputation as an employer of older workers and to position itself as an employer of choice in later life. When age discrimination legislation was introduced in the UK, Centrica’s approach was to embrace the principles behind it and to create a positive environment for an age-diverse workforce.

The company started by reviewing its HR policies and procedures in order to be confi dent that it was ‘age-friendly’ and that older workers were not disadvantaged. Subsequently three main initiatives were put in place—an extensive programme of fl exible working; the removal of the upper age limit for entry to Centrica’s apprenticeship and trainee schemes; and the introduction of a healthy ageing programme.

Centrica monitors training, promotion, and turnover rates by age and has also developed a number of training programmes for all staff in the areas of diversity and age awareness. Currently in the region of a quarter of Centrica’s workforce is aged 45–65.

Eighty-eight per cent of employees who have requested to carry on working beyond the default retirement age have had their requests granted.

Flexible working

Flexible working was introduced as part of the Work:wise programme, a set of policies designed to accommodate employees’ changing needs throughout their working life. The opportunity to work in a more fl exible way was offered to all employees, and a communications programme, including roadshows and workshops, was launched to explain the options to employees and managers. It was considered important not only to explain what was available to employees, but also to support managers and to deal with concerns they might have about employees working in different ways. The company estimates that in the region of 75% of employees now have some form of fl exible working arrangement, with 42% having a formal arrangement. With fi gures in this region, it is seen to be part of Centrica’s culture and part of the way it does business.

The company also recognized that employees of all ages have various and changing non-work demands on their time. Lifestyle contracts have allowed employees to alter their roles or the hours that they work.

Age limits

The British Gas Academy recruits and trains staff for British Gas Services. In order to increase age diversity in the engineering workforce, a decision was made to remove the upper age limit for their apprenticeship and trainee positions. They reworded their print and online recruitment material, removing words such as ‘young’ and ‘experience’ in order to avoid any age bias. In addition to increasing the pool of recruits, the company was keen to attract older people into the engineering workforce to take advantage of their already developed life skills. The removal of the upper age limit for entry into the British Gas Apprenticeship scheme has resulted in approximately one-third of apprentice engineers now being over 25 on entry to the scheme, with the average age of apprentices having risen from 21 to 24 years old. Trainers have reported that older trainees have a positive impact on group dynamics of trainees and that some of the older recruits have acted as life mentors to the younger recruits.

There were, however, some costs to the company of recruiting older apprentices, since government funding was reduced (a smaller grant is offered for training people over 24), but this is seen to be outweighed by the benefi ts gained. Centrica is aware that having older people join the company in jobs historically undertaken by young people has brought about a culture change in the organization.

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Healthy ageing

The healthy ageing programme is based around the strands of be well, stay well, and get well and information on health is available to employees via a dedicated portal. The programme aims to help employees of all ages maintain good health and to give them practical support to recover from ailments. For example, engineers are given information on how to avoid injury (backs and knees being particularly vulnerable), diet, and exercise including the provision of personal coaches at local gyms. These programmes have resulted in a reduction in absence amongst engineers, from 25% to 2%. Where employees require medical interventions, the company provides assistance to ensure that employees receive early attention, both to reduce their pain and minimize time away from work.

Spending resources in this way is seen by Centrica to provide a good return on investment.

Case study questions

1. What might be some of the challenges of managing an older workforce?

2. Consider how organizations might attempt to change the culture to avoid age discrimination.

3. What other strategies might a company like Centrica pursue to meet the challenges posed by changing demographics of the workforce?