Unit 1: Definition & purpose of SHRM: Unit 1: Definition & purpose of SHRM:
In the past, organisations have tended to view people in three different ways: as a cost, as a resource and as an asset.
What many organisations are now realising is that their employees are central to the successful performance of the organisation and therefore an integrated and coherent approach to managing people is needed.
During the last 15-20 years, however, an increasing number of organisations stated that people are their most important asset and the strategic ma nagement of people has gained equal standing in the organisation’s resource profile alongside finance and capital resources.
The cost of employment in western economies is high; In many sectors it is the major cost.
Emerging debate centres upon the ‘intellectual assets’, the knowledge that can be mobilised for the benefit of the organisation. However, gaining access to, or control or ownership of this knowledge and experience is problematic:
Work is becoming more insecure and flexible.
The notion of organisational boundaries is sometimes less clear.
Employees’ long-term relationships with organisations, the normal route to developing and securing access to expertise, can no longer be taken for granted. Even if change comes from a strategic response to the business environment or may be related to the goals of the organisation, people as well as systems and processes, are important.
There are three challenges facing organis
There are three challenges facing organisations that must be met if ations that must be met if they are to gain they are to gain the competitive advantage we referred to earlier (Mabey and Lawton, 1998):the competitive advantage we referred to earlier (Mabey and Lawton, 1998): The challenge of managing intangible assets. This means the ability to access scarce skills and to cope with the implications of new forms of organisations.The challenge of managing intangible assets. This means the ability to access scarce skills and to cope with the implications of new forms of organisations. The challenge of managing strategic change, including trends towards flexibility in organisations and in job design, the break up of bureaucracies and of traditionalThe challenge of managing strategic change, including trends towards flexibility in organisations and in job design, the break up of bureaucracies and of traditional
structures of employment. These changes create major challenges for working attitudes and relationships and require a sustained and holistic approach to people structures of employment. These changes create major challenges for working attitudes and relationships and require a sustained and holistic approach to people management.
management.
The challenge of innovation in terms of what organisations produce by way of goods and services, and the way they The challenge of innovation in terms of what organisations produce by way of goods and services, and the way they approach the task. Developmeapproach the task. Development, innovation andnt, innovation and creativity become core intangible assets, a focus for managing people strategica
creativity become core intangible assets, a focus for managing people strategically. In other words, bringing the design tasks of lly. In other words, bringing the design tasks of innovation together with a focus oninnovation together with a focus on innovatory behaviour.
innovatory behaviour. A strategic approach to HRM
A strategic approach to HRM involves new ways of operating in involves new ways of operating in organisatorganisations and demands new skills. These ions and demands new skills. These include the need to include the need to understand tacit knowledge, recogniseunderstand tacit knowledge, recognise core competencies and attend to
core competencies and attend to stakeholder views,stakeholder views,
Tacit knowledge is not easily shared. It involves learning and skill, but not in Tacit knowledge is not easily shared. It involves learning and skill, but not in a way that can be a way that can be written down. Tacit knowledge consists often of habits and culture thatwritten down. Tacit knowledge consists often of habits and culture that we do not
we do not recognize in ourselves.recognize in ourselves. It includes: learning from errors
It includes: learning from errors – – people’s reaction, anticipation. Learning from interacting with others; from customer’s needs and people’s reaction, anticipation. Learning from interacting with others; from customer’s needs and expectations. Learning fromexpectations. Learning fromworkwork routines.
routines.
Core competencies are those that are likely to be as important tomorrow as it is today.Core competencies are those that are likely to be as important tomorrow as it is today. Example: analytical skill and problem solving.
Example: analytical skill and problem solving. Linking people management and strategic management: Linking people management and strategic management:
An organisation’s response to external challenge can come from a cascade of environmental triggers. For example,responding to changing requirements in the marketplace will necessitate an evaluation of labour market supply and skills availability. The response can also arise from two other areas:
Keeping pace with successful methodologies tried out in other locations; for example, the trend towards Japanese management or practices such as Just in time (JIT), Business Excellence, and Total Quality Management (TQM).
An assessment of the strengths and capabilities of the organisation; That is, a bottom-up view of strategy formulation.
It will help us, therefore, to try to classify strategy in order to gain an overview of the potential links between active business strategy and SHRM response and provide the first steps in defining the scope and nature of SHRM.
We can classify strategy in several ways: · Using the life cycle model of the product or service Human resource
functions
Introduction Growth Growth Maturity Maturity DeclineDecline Recruitment, selection and staffing Attract best technical/ professional talent -Recruit adequate numbers and mix of qualified workers. -Management succession planning. -Manage rapid internal labour market movements Encourage sufficient turnover to minimize lay-offs and provide new openings. Encourage mobility as reorganizations shift jobs around
Plan and implement workforce reductions and reallocation Compensation and benefits Meet or exceed labour market rates to attract needed talent Meet external market but consider internal equity effects. Establish formal compensation structures. Control compensation Tighter cost control Employee training
and development Define future skillrequirements and begin establishing career ladders Mould effective management team through management development and organizational development Maintain flexibility and skills of an ageing workforce Implement retraining and career consulting services Labour/employee relations
Set basic employee relations philosophy and organization Maintain labour peace and employee motivation and morale. Control labour costs and maintain labour peace. Improve productivity Improve productivity and achieve flexibility in work rules. Negotiate job security and
employment adjustment policies The potential benefits of a
The potential benefits of a strategic approach:strategic approach: Guest’s (1992) model of HRM is based around four goals of: · Strategic integration with planning to ensure coherent HRM policies. · Commitment of the employees to the organisation and to high performance. · Flexibility of both organisational structure and functions,
based on a multiskilled workforce. · High quality of goods and services.
This model is based on three dimensions – commitment, flexibility and quality – to ensure beneficial outcomes such as high job performance, coping with change, cost effectiveness and low levels o f absence and low staff turnover.
Approache
Approaches to s to the strategic management of people:the strategic management of people: The best practice view
The best practice view
The notion of best practice - sometimes called 'high commitment' HRM - proposes that the adoption of certain best practices in HRM will result in better organizational performance. This view starts from the premise that a single set or ‘bundle’ of HR policies and pra ctices will lead to better organisational performance, sustained over a lengthy period, whatever the prevailing business circumstances.
EXAMPLES: These practices included:providing employment security, selective hiring, extensive training, sharing information, self-managed teams, high pay based on
company performance and the reduction of status d ifferentials.
However, there is a huge number of studies which provide evidence of best practices, usually implemented in coherent bundles, and therefore it is difficult to draw generalized conclusions about which is the 'best' way
Some problematic aspects of this view are as follows: Some problematic aspects of this view are as follows:
· Perception of the effectiveness of those practices which emphasise skills of implementation.
· A suggestion that ‘best’ practices do not fit business strategy, which is worrying when linked to the relevance of people management at the top of the organisation. · A problem of real strategic choices – HR is driven by outside factors which point us toward the next model of SHRM, the best fit view.
Criticisms of the ‘best practice’ view as a way of managing people have been constructed on the grounds of: · Cost of implementation.
· Tensions between the need for production and cost minimisation on the one hand, and issues o f flexibility, creativity and skills enhancement on the other. · The restricted applicability of the m odel mainly to the western private sector, where there is wider scope for manageria l choice legally and economically. · The doubtful ability to assess the impact of HR interests using financial measures.
· The belief that it is easier to ‘establish’ and sustain the model on greenfield sites. The best fit view
The best fit view
Best fit argues that HRM improves performance where there is a close vertical fit between the HRM practices and the company's strategy. This link ensures close coherence between the HR people processes and policies and the external market or business strategy.
The success of a ‘best fit’ model depends on its ability to: · Integrate into the strategic plans of the organisation. · Provide horizontal or vertical integration of the key policy areas. How far organisational objectives will be met is dependent on:
· The level of fit between the business strategy and the environment at one level. · The HR strategy and business strategy at a second level.
· The internal coherence of the policy.
‘Best fit’ allows organisations to determine whether a ‘hard’ or a ‘soft’approach needs to be taken given the prevailing circumstances. A ‘hard’ view might include outsourcing, enhanced productivity, and emphasis on tighter contracting. A‘soft’ view relies on involvement, partnership and communication and sharing. Best fit integration
Best fit integration
‘Best fit’ integration is an open template to interpret the environment in which business operates and to evaluate the integrated reaction or responses that are necessary. Best practice differs in that the outcomes are not prescribed. Best practice does not emphasise fit or matching but is solution oriented.
LEVEL OF INTEGRATION REQUIRED TO MEET THE BEST FIT MODEL (BULLER): · A one-way response level where business strategy informs HR strategy.
· A two-way response level where the relationship between the two is interdependent but not fully integrated. · A fully integrated, reciprocal level with top-down, bottom-up strategy formulation.
EXAMPLES:
COMPANY A: Differentiation strategy
HR practices: select highly skilled/minimum controls/invest in training/appraise long-term/IT systems in place/economy of scope/Just in time. COMPANY B: Cost leadership
HR practices: less attractive/reward high output/want predictable behaviour/many controls/appraise short term/minimum training/economy of scale/mass production.
Resource-based approach Resource-based approach
Our third model of SHRM is a bottom-up view. There are significant problems with the principles of the two previous models: · They represent rational and linear approaches to strategy.
· The emphasis on the ‘fit’ of strategy, structure and HR policies does not focus on the distinctive resource capabilities of individuals within the organisation.
· The lack of evidence indicating that explicit HR strategies have an impact on organisational performance. A resource based model has a different perspective from other approaches. Whilst conventional HR approaches start with external factors such as threats and opportunities, the resource based view looks. first at the organisation and its potential, and develops ways to exploit or enhance the available resources.
In a resource based model, the SHRM role becomes one of creating systems and procedures that focus not on external relationships but on how staff and their abilities are used.
The resource based model recognises that many aspects of capability can be formally defined in skill terms and developed accordingly. However, the truly distinctive aspects are often hard to define and are formed through informal processes of learning in the workplace. ASPECTS OF THE COMPANY’S ASEESTS UNDERPIN THE
ASPECTS OF THE COMPANY’S ASEESTS UNDERPIN THERESOURCE BASED APPROACH:RESOURCE BASED APPROACH:
Storey’s view is that sustained competitive advantage derives from assets that add value, are unique or rare, are difficult to imitate and cannot be substituted. Mueller (1998) develops the resource-based view with five propositions concerning the organisation’s assets.
Proposition 1 is that they must be developed in slow, incremental and uncertain ways, not in any linear or p lanned way. Proposition 2 is that they require broad-based commitment over a lengthy period, not a single initiative.
Proposition 3 stresses the importance of ‘routinising’ skill formation activities. Formal and informal learning activities must be effectively captured by the organisation.
Proposition 4 concerns the development of cultures that will allow potential to be used and developed. Challenge rather than conformity, is encouraged as a strategic end, while balancing the need to store organisational value.
Unit 2:
HR departments and change HR departments and change Roles for HR personnel included:
· The development of expertise in scientific organisation of jobs. · Recruitment and training activities.
· The development of legal expertise in various employment areas the reasons for uncertainty faced by the reasons for uncertainty faced by HR personnel:HR personnel:
· The uncertainty of the core area of expertise, for example, the ability to influence and control employee behaviour. · The difficulty of assessing or measuring the value of personnel activities.
· The lack of business awareness on the part of personnel specialists. · The skills of people entering the profession.
· The welfare tradition questions managerial credentials – it is employee-centred. WHAT THE HR DEPARTMENT SHOULD DO:
Originally an American idea, it was based around some guiding principles from ‘best practice’ models: · Changing beliefs and assumptions, so that organisational culture is the key.
· Emphasis on strategy. · Clear lines of management. · Integration of key policies.
Storey (1995) suggest that the HRM approach can be assessed in terms of: · Tasks, where the key is best practice.
· Take up of integrated HR practices (the ability to manage beliefs and assumptions, the strategic importance attached to HR, line manager involvement).
· Value, where we need to ask whose interests HRM serves, whether there are management with a focus on business outcomes, or employee with a focus on developing potential and knowledge.
Criticisms of some aspects of HRM: Criticisms of some aspects of HRM:
· The diversion of communication away from unions toward individual employees. · Work organisation based upon teams.
· Quality circles that excluded trade union control.
· The movement of pay systems away from collective bargaining to individual (exploitative) performance related pay systems. ISSUES THAT NEED TO BE RECONCILED BETWEEN HR PERSONNEL & HRM:ISSUES THAT NEED TO BE RECONCILED BETWEEN HR PERSONNEL & HRM:
THE NEED:
· To incorporate professional HR/personnel practice. · To allow for diversity of approach, b alancing stakeholder needs. · For acceptance of stakeholder interest by management.
· To facilitate employee commitment and knowledge – employees need to develop their potential and commitment. · To address issues of employee flexibility and innovation.
· To raise the profile of HR ma nagement. · To upgrade the skill of HR managers. · To market HR functions within organisations.
HR personnel face a mixture of organisational challenges, and challenges to their own function in it. Whilst HR needs to raise its profile, facilitating change in the organisation, it must retain its specialist skills and be viewed as clearly adding value to the organisation.
From the organisational perspective, HR policy must address organisational needs but at the same time attempt to integrate employee and other stakeholder interests. These various pulls may be in conflict with each other.
HR professionals needed increased understanding of three concepts if their contribution toorganisationaorganisational l changechangewas to be of lasting significance in the face of pressures to become more business orientated and strategic:
· New organisational forms and psychological contracts. · The need for partnership in the employment relationships. · Pressure for flexibility at all levels of the organisation.
The push for productivity on the one hand, and the increasing emphasis on the value of personal contribution on the other, often places major contradictions in trying to control work outcomes and costs while mobilising employee commitment. Organisations and employees face disillusionment. Some examples are as follows: · The transfer of social costs from state/organisation to the individual, for example, the costs of d evelopment and career orientation.
· The deregulation of national government policies on employment and the social cost of reducing organisational options for training and employment. · Economic determination threatening the optimistic view of HRM management that is based in investment and mutuality in the employment relationships. · The obsolescence of management work in information societies and the impact on careers.
· Flexibility that impacts on culture, behaviour patterns and personal orientation to organisational goals that may cut across employment and organisational boundaries. The challenges/PROBLEMS facing HR specialists
The challenges/PROBLEMS facing HR specialists
Torrington (1996) suggests that three challenges for personnel specialists arise from their confidence, identity and direction. Confidence
Confidence
Lack of confidence may stem from a series of criticisms of HR staff for being: · Reactive rather than proactive.
· Not strategic. · Not business focused.
· Too employee focused, working with unions. Identity
Identity
For many, the HRM identity of personnel is simply a name change, and the substance of personnel activities has not changed. Direction
Direction
This is significant. The degree of HR involvement in strategic policy making as opposed to implementation is problematic. Some argue that an organisation’s HR capability is too important to be left to HR specialists, suggesting that all managers must be involved. In this situation, personnel act as a technical and independent advisor to policymaking.
Torrington (1998) concludes that the
Torrington (1998) concludes that the prospects for the strategic development of prospects for the strategic development of HR functions are threefold:HR functions are threefold: · HR is legitimately reactive and must create different solutions to the HR implications of change.
· Management should not devolve entire responsibility for HR policy to line managers. This dilutes effective people management across the organisation.
· HR personnel must focus on the process of how people are employed, deployed, empowered and motivated, because preoccupation with organisational employment systems focus exclusively on performance.
HOW HR DEPARTMENTS RESPOND TO SH RM CHALLENGES:
Guest (1998) advocates personnel orientation towards what he calls
Guest (1998) advocates personnel orientation towards what he calls a new orthodoxy based a new orthodoxy based around:around: · Community and partnership.
· Commitment and contracts.
Guest stresses the need to create HR policies that: Guest stresses the need to create HR policies that:
· Reflect newdivisions of labour; that is, choice of where and how to work with organisations. · Balance employee commitment to work, non-work activities and perhaps multiple organisations. · Offer differing levels of commitment and flexible policies to fit these differing employee expectations . Offer contractual flexibility.
Trends in the management of
Trends in the management of HR functions:HR functions:
Each of these has been adopted to address some of the historical criticisms of HR departments.
·Auditing performance:Auditing performance: This is central to the setting up of service level agreements and clear expectations of HR’s role. The objective of auditing HR function is to ensure that the investment in personnel and training can be justified in business terms. The advantages of audits are
The advantages of audits are: Legitimacy and credibility / Value for money / Effectiveness of service delivery / Relevance of service delivery / Basis for adopting service focus.
·Devolution:Devolution:The objective of devolution is to ensure a more business led personnel response to employment issues. It involves the reallocation of personnel activities from specialists either: To line managers / To other specialists, such as the financial controller or company secretary / To other locations away from the main headquarters of the organisation.
Devolution of any of these activities can be a function of either a decision making authority or the day to day management of activities, or both.Hall & Hall & Torrington(1998)Torrington(1998) suggest that devolution of the following activities is most prevalent:
suggest that devolution of the following activities is most prevalent:Work organisation / Training / Recruitment and selection / Appraisal / Employee relations. However, there are no simple and straightforward criteria to guide devolution of activities. Organisations do not necessarily devolve the same policies or indeed to the same degree within the policy areas.
However, some activities are more or less likely to be devolved. HR departments frequently retain strategic areas of the HR function such as policymaking, pay review processes and the design of appraisal schemes. It may also retain operational areas such as the monitoring of performance, provision of advice about disciplinary cases and the coordination of training. Activities that are likely to be devolved are the interview process, disciplinary interviews, job needs analyses and the negotiation of overtime and other work practices.
· Decentralisation of HR function:
· Decentralisation of HR function:Generally, organisations tend to centralise activities to achieve greater control of processes and costs, whereas decentralised activities are thought to allow companies to become more flexible, to speed up decision making and to become closer to their customer base.
A large organisation with a single product will tend towards greater centralisation while multiple products and/or markets will require decentralisation.
There are implications too for the management of people. Centralised structures tend to emphasise the development of specialist skills and knowledge. Decentralised structures lend themselves well to developing flexible management and employee skills and cross-functional working.
Hall & Torrington (1998) outline three different forms of decentralisation to illustrate the main issues of influence on HR d ecisions: 1. Type A may have either a HR unit reporting directly to a head of department or one reporting indirectly to a central head of HR.
2. Type B is the reverse of type A. It may have either a HR unit reporting directly to a central head of HR or one reporting indirectly to a head of department. 3. Type C has only a HR unit reporting directly to a central head of HR.
Reporting lines are important in d etermining whether HR activity is likely to be driven by professional priorities or by management needs. DISADVANTAGES OF DECENTRALISATION
DISADVANTAGES OF DECENTRALISATION: services become fragmented and unintegrated, subject to short-term response, rather than longer-term development of organisation-wide competitiveness.
·OutsourcingOutsourcing: As with many business functions, outsourcing has become an important method of achieving flexibility and reducing costs. The arguments for outsourcing HR services can be summarised as follows:
- Outside organisations can afford to retain a greater level of specialist knowledge that can be called upon when needed.
- HR activities are not ‘core’ skills and therefore can be more easily ‘bought in’ without loss of competitiveness or risk to business performance. The business of the business is not HR management.
- Professional skills have a greater impact when brought in. Outside consultants have a better ‘change’ impact rather than insiders. However, like devolution we must be careful to look at what is being outsourced.
Core activities such as maintaining employee records, operating grievance and discipline procedures, collective bargaining, recruitment, training, reward and so on have not been outsourced. These are seen as central functions, which are either dependent on internal relationships being established or are areas that are confidential or legally sensitive, centrality ensures internal accountability.
Outsourcing is a critical step for the organisation that has longer term implications for the knowledge and commitment of one of its key functions. Any decision to do so would need to be based on a careful evaluation of costs, quality of service and impact on the longer term adaptability and flexibility of the organisation. This decision will have significant implications for the reaction and cooperation of line managers and other staff. In short, it is a matter of confidence, identification and trust in a key aspect of the business.
HR service centres: technology and the new division of work: HR service centres: technology and the new division of work:
Bringing technology and new dimensions of work to personnel functions is a natural step.
Using centralised ‘call centre’ technology as well as Intranets to allow independent access by staff for advice, rather thanvia line managers or localised resources, brings a new dimension to providing HR functions in the following ways:
- New technology has enabled computerised systems to improve the collection and categorisation of decision making data in HR. - New technology has provided opportunities to assist with the decentralisation of HR functions, job evaluation, and competence assessment. - Training needs can all be developed in standardised ways for line managers and individual staff.
- Computer-based training can be tailored to the individual, and allow for self paced development and education. ROLES OF HR FUNCTION: ROLES OF HR FUNCTION: ULRICH
ULRICHbasic position is that the HR function must evolve or die – and he strongly believes that it must embrace four key roles if it is to survive. These are: Multiple role model:
Multiple role model: Business focus
Business focus. HR should be held responsible for defining the company’s “organisational architecture”. Business focus / Results orientation and performance enhancement.
Professionalism
Professionalism. Dozens of processes within HR can be done better, faster and cheaper, Ulrich says. Improving efficiency builds HR’s credibility and enables it to advise other parts of the company on how to achieve similar gains.
Professional practice/ new policies to support change or employee commitment. Employee perspective
Employee perspective. It should be the responsibility of HR people to ensure that employees feel committed to the organisation and are contributing fully. This involves training line managers in how to get the best out of people, consulting on work processes, monitoring employee morale and acting as advocate for the employee point of view.
Achieving commitment through partnership or involvement strategies in times of change Change orientation
Change orientation. HR’s role in managing change, Ulrich says, is “to replace resistance[to change] with resolve, planning with results, and fear of change with excitement about its possibilities.” This means creating the right culture and, in particular, mapping out how to move from the presentculture to the desired one.
Diagnosing culture and competence change to support business change an d maintenance of employee commitment
Key competencies of HR professionals: Personal credibility / Ability to manage change / Ability to manage culture / Knowledge of HR practices / Understanding the business.
Functions of HR: Developing people, bringing out talent, supporting the organisational strategy, and being corrective in situations where there are deficiencies. Evaluation of the HR Function:
Evaluation of the HR Function:
The key areas for evaluation of HR FUNCTIONS are:
1.HR Policy HR Policy Formulation:Formulation:Includes strategic policy and how well it supports organisational strategy and goals, and development of core competencies, culture change, etc. How well does policy support devolution of functions where appropriate (e.g. education and training, recruitment)? How well do the enabling policies (to develop skills, career management, rewards, recognition) work?
2.Planning:Planning:How effective is HR planning, recruitment planning, career planning, succession and workforce planning? How well is workforce diversity, job design, organisational structure and change planned?
3.Development:Development:How effective is foundation and induction training, professional development, leadership and management training, career development, mentoring, staff assignments and movement?
4.Staff relations:Staff relations:Areas for assessment include management of industrial relations/employee relations, enterprise bargaining, grievance resolution, communication, promotion of teamwork.
5.Performance:Performance:Is there a business code of conduct (covering ethics) and how well is it adhered to? How effective is induction, how is performance managed, how are staff supervised, how effective is the appraisal programme? Are rewards and recognition programmes effective in enhancing performance?
6.Staffing Practices:Staffing Practices:How effective is appointment and selection? How competitive is remuneration (and does it attract staff of the right calibre to support organisational aims)? How effective is delegation? How effective and fair is the job classification system, work level standards? How flexible is the work environment and is it in keeping with technological developments? How equitable are staffing practices in promotion, rewards, separation?
7.Health and Safety:Health and Safety:What level of training is there for occupational health and safety?
How do you rate the work environment and culture? How is staff with disabilities and long-term illnesses supported? How well are injuries handled? - Three-tier approach:
- Three-tier approach:APAC adopts a three-tier approach to assessing the performance of the HR function. The starting point – module one – gathers fundamental data about the operation of the department, corporate statistics and cost-effectiveness. After analysis this module provides the benchmark from which future progress of the department may be measured. The results can a lso be compared through the APAC database with organisations of similar size and type to provide a broader perspective of what might be achieved.
Module two (APSS) focuses on application: assessing reaction to the personnel service provided and the HR needs of user departments. Module three (APPP) recognises the need for fundamental professional standards by aud iting policies and procedures.
Unit 3:
Unit 3: Employee resourcing strategies: planning and Employee resourcing strategies: planning and competence assesscompetence assessment:ment:
Principles of human resources planningrequire attention to fundamental concepts such as the importance of HR, integration of human resources and company
objectives, efficiency and centralized decision-making. Personnel administration evolved from a primarily process-based function of the 1980s to an all-encompassing organizational component promoting the value of human capital.Human resources planning based on HR guiding principlesensures a well-structured component that synchronizes organizational philosophy and human resources strategy.
Stressing HR Importance: One of the beginning principles of HR planning stresses the importance of human resources. Engaging leadership that understands the impact of a functional human resources department is the best way to adhere to this principle. The Encyclopedia for Business, 2nd Edition, states: "Business consultants note that modern human resource management is guided by several overriding principles. Perhaps the paramount principle is a simple recognition that human resources are the most important assets of an organization; a business cannot be successful without effectively managing this resource." One way to realize the importance of HR is to envision an organization with neither a productive workforce nor the type of support that human resources planning and management provides.
Integrating Human Resources: Human resources serves the needs of the organization, top to bottom, including every member of its workforce. Therefore, integration of human resources functions with overall organizational goals is an HR principle that cannot be overlooked. The importance of integrating HR and company objectives builds on the previously mentioned principle: stressing the importance of human resources. H uman resources activities that are merely an extension of management are signs of poor planning and failure to embrace forward-thinking ideas that improve the company's profitability. An "Entrepreneur" magazine article appropriately titled, "Integrating the Human Resource Function with the Business" reinforces this proposition when it states: "It is not enough for the human resource function to be responsive to management, "customer-oriented," or even aligned as partners with management." That said, a holistic approach to the integration principle of human resources planning ensures human resources will be fully committed to and a part of organizational goals.
Processing HR: Human resources information technology (HRIT) contributes greatly to the functionality and accuracy of human resources activities. Many organizations purchase sophisticated human resources information systems (HRIS) that minimize, or even eliminate, human error in processing employment data. Smaller organizations sometimes rely on outsourcing their HRIS needs for managing processes such as recruitment, payroll and compensation. Technology supports an important principle of human resources planning -- human resources data processing in the most efficient and accurate way possible. Centralizing HR Functions: Tying together the principles of human resources planning requires centralizing the HR functions. Systematic processes and
organization adds a component to HR that employees will appreciate. A one-stop shop for meeting the needs of the employer and employees unifies human resources activities and adds value to department functionality. Centralization involves the decision-making, staffing and organizing of HR functions; however, it also addresses the need for physical resources such as an applicant processing area, private conference and interviewing space, and storage for employment and medical-related files.
The contribution of human resource planning The contribution of human resource planning
Organisations are increasingly focusing on HR planning for reasons including: · Supply of skills to address strategic and demographic change.
· Need to focus more on demand and supply from an external and internal perspective of the organisation. · Value of using scenario planning to model the fit with future business environment.
Aspects of organisational design significance for HR planning:
1. The need to alter the way work is performed where securing the supply of some skills is important. This stimulates policy decisions on recruitment practice. 2. A basis for looking at achieving flexibility in the workforce to meet cost requirements and to create environmental, work and authority structures to encourage retention
of highly skilled employees. Models of Human Resource Planning Models of Human Resource Planning
The approach advocated by HR is the so called ‘social science’ approach introduced by Bennison & Casson (1989). This is based on the concept of the manpower system and the manpower map forming the basis of management judgements about social factors: wastage, retirement, skill changes, behavioural/cultural requirements of staff and essentially the basis of the replacement policy.
The important concepts behind the social science approach to planning are as follows:
·WastageWastage – a broader term to include not only physical staff but also key skills, experience and perhaps even such additional aspects as commitment. In practical terms, this means high turnover.
·ProfilingProfiling – in terms of expansion and contraction of the business, key skills, attitudes and so on. This gives a better match between the activities of the business and the skills that staff possess, for example, IT/business consulting businesses moving from computer applications to knowledge based competencies.
·ReplacementReplacement – Decisions about structuring/profiling of jobs, developing staff from within or buying in from outside, depending upon an assessment of the availability of those skills on the external environment.
Human planning stages: Human planning stages:
1. Reconciling future resourcing needs with future HR plans.
2. Considering and applying HR policy so as to have an impact upon the flows of human resources in an integrated way. This includes the pattern of engagement of staff and their movement through the organisation and the stages of exit.
3. Assessing the effectiveness of the HR policies in accessing, creating and using human resource capability. A model of the HR planning process
A model of the HR planning process The stages of HR planning process: The stages of HR planning process: 1. Investigation and analysis 1. Investigation and analysis
The organisation must gather knowledge about:
· The external environment and labour market, looking at for example, national training plans and the location of markets.
· The internal environment and labour market: the age and gender balance of the workforce, the number of employees, wastage rates and so on. · The organisation’s systems, resources, culture, practices and industrial relations.
· Commercial performance requirements such as sales targets, product mix, market segments and profits. 2. Determination of demand
2. Determination of demand
This is one of the key areas of forecasting in the short, medium and long term. The organisation must determine the demand profile of skills, including their life cycle and decline, and the competence mix.
3. Determination of supply 3. Determination of supply
This is the second key a rea of forecasting. The organisation must determine the supply of skills both internally and externally. 4. Decision-making
4. Decision-making
The organisation must then make plans to balance supply and demand of skills. The influences will include skill levels, development and the cost effectiveness of accessing a wider skill base. The areas in which decisions will be taken include:
- recruitment - retirement and redundancy - selection and assessment – outsourcing - promotion and reward - development and retraining - organisation development and culture - the type of employment contracts - performance management - employee relations.
Professionalism in HR Planning Professionalism in HR Planning
Professionalism in HR planning is vital for organisational success. The first aspect of professionalism is understanding the customer, the customer requirements and providing customer satisfaction.
PROFESSIONALISM IS INTEGRATED IN THE HR PLANNING STAGES PROFESSIONALISM IS INTEGRATED IN THE HR PLANNING STAGES
Professionalism requires that HR practices be fair, open and transparent. Today, there is a legal obligation for organisations to ensure equality in the areas of race, disability, age, sexuality, gender and religion.
Professionalism in this area requires the adoption of formalism in capturing customer requirements and selection criteria, and checking adherence against the agreed criteria. This applies to all aspects of HR practices including recruitment, selection, promotion, and separation. Professionalism is also enhanced by engendering, within the organisation as a whole, a culture of equality and respect. One way to promote this is to ensure workforce diversity training is provided to all levels of staff. Categorising HR Capability: Competence Models
Categorising HR Capability: Competence Models The role and function of competence assessment The role and function of competence assessment USES OF COMPETENCE MODELS:
USES OF COMPETENCE MODELS: · Systematically model jobs. · Underpin change.
· Profile people for their development in jobs. · Underpin selection decisions.
· Focus education and training, and personal development plans. · Contribute to performance planning and reward decisions. Hammel & Prahaled (1994
Hammel & Prahaled (1994) talk of ‘bundles of skills’, emphasising a broader concept than purely skills themselves. This definition implies a mix of skills, knowledge, behaviour, information and experience of the organisation. ‘Skill’ is used generally to describe a more tangible set of trainable or learnable tasks. ‘Competence’, with its broader coverage, is more difficult to define but is less easy to imitate and indeed develop.
There are a number of terms used to expand the notion of competence. These include:
· Core competence; unique to the organisation and its activities. · Threshold competence; needed to achieve satisfactory performance.
· Differentiator competence; difficulttoimitate capability that gives competitive advantage. · Emerging or decision competence; the assessment of demand and supply.
· Life cycle competence; matching competence to strategic changes in the business.
· Functional competence; linking task performance based upon criteria, standards and range statements, outlining the contextual situations in which the task is performed.
· Personal behaviour/effectiveness competence; for example, problem solving, communication skills, decision making, integral skills, learning effectiveness and so on. This is at the heart of the supplyside analysis strategy level of the HR plan. Organisations that operate strategically will attempt to define competence at each of these levels and for individual jobs. The results from this will be imported into individual job and p ersonal profiles.
Pedlar and Burgoyne Pedlar and Burgoyne
In this model of the eleven qualities of a successful manager, you should note how important the personal and interpersonal aspects are. Of the eleven attributes only two might be described as traditional measures of competence, knowledge of organisational practice and professional knowhow a nd skill. The eleven qualities are: 1. Command of basic facts such as goals and plans of the organisation, and product knowledge
2. Relevant professional understanding; technical, marketing and financial knowledge 3. Continuing sensitivity to events and being open to information
4. Analytical, problemsolving, decisionmaking skills 5. social skills and abilities; interpersonal skills 6. emotional resilience and the ability to cope with stress 7. proactivity; the inclination to respond purposefully to events 8. creativity: being able to come up with unique responses to situations 9. mental agility, grasping problems quickly
10. balanced learning habits and skills: being independent learners, the ability to think in the abstract; the ability to use different learning processes and a wide view of the nature of management
11. selfknowledge; the skill of introspection. WH Smith model
WH Smith model
This model is used to underpin graduate recruitment and development, and covers nine competences that are sought in each area are as follows: Written
Written communicacommunication:tion:
· Presents ideas concisely and in a structured way. · Uses appropriate language and style. · Grammar and spelling are accurate. Oral communication: Oral communication:
· Speaks to others with ease and clarity.
· Expresses ideas well and presents arguments in a logical way.
· Gives information and explanations which are clear and easily understood · Listens actively to others. Leadership:
Leadership:
· Shows skill in directing group activities. · Has natural authority and gains respect of others. · Capable of building an effective team.
· Involves all team members, gives advice and help when required. Team membership:
Team membership:
· Fits in well as a peer and as a subordinate.
· Understands own role and the role of others within a team. · Shares information and seeks help and advice when necessary.
· Offers suggestions and listens to the ideas of others. Planning and organising skills:
Planning and organising skills: · Can make forward plans and forecasts.
· Can define objectives and allocate response to meetings. · Sets realistic targets and decides pri orities.
· Devises systems and monitors progress. · Makes good use of time.
Decision making: Decision making:
· Evaluates alternative lines of action and makes appropriate decisions.
· Identifies degrees of urgency for decisions.
· Responds to situations quickly and demonstrates flexibility. Motivation:
Motivation:
· Shows energy and enthusiasm. · Works hard and is ambitious.
· Able to work on own initiative with l ittle detailed supervision. · Sets own targets and is determined to achieve them. Personal strength:
Personal strength:
· Is self confident and understands own strengths and weaknesses. · Is realistic and willing to learn from past failures and successes. · Is reliable, honest and conscientious.
· Can cope with pressure and control emotions. Analytical reasons:
Analytical reasons:
· Can quickly and accurately comprehend verbal and numerical information. · Able to analyse d evelopments objectively and to r each logical conclusions. · Can present well reasoned and persuasive arguments.
Goldman (1998) identified 25 surface behaviours that emanate from five basic core ‘capacities’. These include self awareness, self regulation, motivation, empathy and social skills.
Organisational competence Organisational competence
Core competencies are seen as giving an organisation its competitive edge, and in many cases is viewed as essential to its survival. The terms core skills, core competencies and organisation’s capability
DEFINITION:
DEFINITION: An organisation’s core skills, core competencies and distinctive capability make up its strategic core. Core skills a re associated with an individual, core competencies with a team, and the organisation’s combination of core competencies make up its distinctive capability. This distinctive capability of the organisation is referred to asorganisationalorganisationalcompetencecompetence.
HR competencies such as: HR competencies such as:
· Intellectual ability: in a commercial environment, this translates to the ability to balance organisational objectives with market realities. · Relational ability: ability to work in a team, relate easily and crossculturally, and show empathy.
· Professional knowledge: strong business knowledge in the relevant field (e.g. technology, finance, operations, marketing). · Negotiating skills: ability to balance conflicting objectives from different parties.
· Flexibility: in moving from one role to another, mobility.
· Perseverance and determination: the ability to execute and achieve successful outcomes.
Additionally at the management levels HR competencies include leadership, cultural awareness, communication, motivation. Applying competence models
Applying competence models
Nordhaug (1993) offers us a comprehensive view of competence, but it is used throughout the employment system. Meta-competences
Meta-competences
These are the most general competences and include: · Literacy.
· Analytical capability. · Creativity. · Ability to communicate. · Ability to cooperate. · Ability to tolerate uncertainty. · Negotiation skills. Industry
Industry competenccompetenceses
These competences are not tied to any one firm in an industry: · Knowledge of the industry’s history, structure and development. · Ability to analyse the operations and strategies of competitors. · Knowledge about key persons, networks and alliances in the industry. · Ability to relate to other companies in the industry.
Intra-organis
Intra-organisational ational competencescompetences These are organisationspecific competences:
· Knowledge about colleagues.
· Knowledge of aspects of the organisational culture.
· Knowledge of networks, alliances and communication channels within the company. · Familiarity with political dynamics within the organisation and its subunits. · Knowledge of the f irm’s strategy and goals.
Standard technical competences Standard technical competences
These are competences with high task specificity but low firm or industry specificity: · Typing or wordprocessing skills.
· Computing skills.
· Knowledge of accounting and budgeting principles. · Craft and professional skills that can be applied across industries. Technical trade competences
Technical trade competences
These competences are taskand industryspecific, but not specific to the organisation, for example: · Skills in assembling computers.
· Bartending skills. · Hairdressing skills. Unique competences Unique competences
These competences are firmand taskspecific: · Skills related to particular tools crafted in the firm. · Skills in repairing tailored technology. · Skills in operating specialised filing or data systems.
· Skills related to the maintenance of specific organisational procedures.
A key feature of organisational strategy has, therefore, been to focus on management competencies and management developmental needs. The following 11 highperformance management competencies were identified in an article ‘ The kind of competence for Rapid Change’, Tony Cockerall, (PersonnelManagement, 1989): 1.Information search 2. Concept formation 3. Conceptual flexibility 4. Interpersonal search 5. Managing interaction 6. Developmental orientation 7. 1.Information search 2. Concept formation 3. Conceptual flexibility 4. Interpersonal search 5. Managing interaction 6. Developmental orientation 7. Impact 8.Impact 8. Selfconfidenc
Selfconfidence 9. e 9. Presentation 10. Proactive orientation 11. Presentation 10. Proactive orientation 11. AchievemenAchievement orientationt orientation Unit 4: Performance management:
Unit 4: Performance management: PMS definition
PMS definition: Bevan & Thompson (1992) offer the following definition: PMS communicate a vision of the organization’s objectives to the employees--PMS provide the departmental/business unit and individual performance targets that are drawn from the wider organizational objective--PMS provide a formal review process of how the objectives have been met--PMS establish the basis for identifying training, development and reward decisions as outcomes from the review process.
What distinguish PMS from other systems:
What distinguish PMS from other systems:PMS have businessled outcomes that may be assessed against definite business objectives--The system is integrated with interlocking procedures and flows of information--There is a mix of quantitative and qualitative objectives--There is a focus not only on system design but also on the manner of implementation, that is, PMS are process/culture sensitive and as such, are flexible--PMS rely on a participative approach by managers and staff alike, which can align with other organizational processes, for example, employee relations, communications and decisionmaking processes.
What makes PMS linked to
What makes PMS linked to the business strategythe business strategy: objective setting- ongoing review of objectives- the development of personal improvement plans linked to training and development- formal appraisal with feedback-pay review- a competencebased organizational capability review.
PMS Key features:
PMS Key features:The business led and linked objectives- The ongoing participation review process framed around a clear management style of open feedback- The definition of both formal training needs and jobbased learning objectives linked to a capability and competence review, which can lead to a review of the wider HR policy.
The key management processes that take place within PMS and link to HR planning are:
The key management processes that take place within PMS and link to HR planning are:Formulation of clear organizational objectives cascaded down to departmental, business unit or team level-Measurement of objectives-Appraisal decisions- Performancerelated pay- Coaching and counseling staff at the job level to enhance-skill and learning capability- Success management or career management.
CATEGORIES OF MANAGEMENT
CATEGORIES OF MANAGEMENT TECHNIQUES TECHNIQUES 1- 2 :1- 2 :
THE PROCESS APPROACH :High performance is best secured by analyzing the work which needs to be done to achieve a predetermined result, and then designing the most efficient sequence or method of work activities. In short, to find ‘the one best way’. There is an assumption that employeeswill follow this method because, from an analytically logical viewpoint, it is patently obvious that it is the best way of working.
THE PEOPLE APPROACH: High performance can be achieved only through people. So, if the right people are selected for the right jobs in the right numbers, if they are trained in the appropriate skills, and if they are effectively led and motivated, then they will inevitably work well. There is a n assumption that; by and large, competent, motivated people will evolve their own best methods of working.
MBO vs PMS
MBO vs PMS: MBO : packaged system-Applied to managers-Emphasis on individual objectives- Emphasis on quantified performance measures-Jobs divided into key results areas (KRAs)-Objectives set for each KRA-Performance measures -Task and personal goals-Annual appraisal including discussion of new goals- Most schemes used complex paperwork-Schemes ‘owned’ by specialists.
PMS: Tailor-made systems-Applied to all staff-Emphasis on corporate goals and values-Inclusion of qualitative performance indicators-Jobs divided into principal accountabilities-Objectives set for each accountability-Performance indicators-Task and personal goals-Annual appraisal including discussion of new goals-Some schemes have complex paperwork-Schemes ‘owned’ by line management.
Fowler PMS problems
Fowler PMS problems: over-reliance on quantifiable objectives- what can be measured is what is done- lack of responsiveness to formalized objective setting, inflexibility. Flower MBO problems
Flower MBO problems: isolated objectives- lack of ownership- overly formal, once yearly event- not embedded in development- over-emphasis on quantifiable objectives. PMS facilitates the strategic management of people by
PMS facilitates the strategic management of people by: A proactive process of evaluating organizational procedures and attitudes- Bottom line orientation and focus of staff in all that theydo; alignment of organisational and individual goal- Management style changes for line managers- Balance of team and individual goals- Balancing bottom line operation with organizational process/qualitative focus.
FOWLER He advocates greater attention to: - the fit of PMS with organisational culture
- more flexible systems to support ongoing learning, participation and development - avoidance of overly formal recording systems
- development of line manager skills: feedback, coaching/consultancy, and support - staff commitment to an ongoing improvement culture
- attitudes/value/style change in organisations supported by well linked PMS. What PMS should do to be
What PMS should do to be more effectivemore effective:The history of the organization-Its management style- Its industrial relations tradition- Its size, formality a nd market sensitivity- The emphasis on reward and performance links-Performance versus development orientation/culture.
The nature and scope of
The nature and scope of objectivesobjectives: objectives are set to cover theneedneedto: Develop competence (skill formation)-Meet targets (operational demands)-Create an appropriate corporate culture. However, Objectives can be defined atthree levelsthree levels: productivity and output related, jobrelated, and personrelated
Productivity/outp
Productivity/output ut related objectivesrelated objectives: These are measurable and quantifiable output targets, for example: Reducing costs- Achieving sales targets- Meeting preset manufacturing volumes-Achieving percentage customer satisfaction levels on service delivery-Maintaining time targets on responding to enquiries in Service Centers. Job related targets
Job related targets: These involve meeting the main job/functional objectives set down in the job description for the specified level of competence: Main responsibilities and accountability achieved-Job description tasks met-Obligations and service relationships to internal and external customers met.An exampleAn examplefor a manufacturing manager might be the responsibility for the timely provision of production plans.
Person-relate
Person-related d objectivesobjectives: These involve behavioral outcomes in terms of how the job is performed, for example, contributing to teamwork and quality activities, or communicating with customers. Differences in the way that organizations specify and emphasize targets often reflect the nature of the business and the culture of the
organization. Some organizations concentrate on the ‘outcomes’ and deliverables, others on improving process capability, leaving relationships as the basis for achieving better performance.Hence, there are some common trends in the nature of the performance relationshipsHence, there are some common trends in the nature of the performance relationships: Emphasis on qualitative, behavioral factors an d the differentiation of individual and organizational performance. (You may recall the resource based view of the organization.) -Increasing ‘bottom line’ (profit/cost) prioritization to be fed down to each employee- Importance of communicating organizational requirements in ways that individuals can align their activities and behavior
The link to corporate objectives :
The link to corporate objectives :Many commentators felt that the individualized form of PMS created a narrow focus on competitive activity, possibly based upon selfinterest rather than teamwork and the wider organizational objectives. Therefore, objectives are now more often expressed on behalf of teams and rewards linked to teambased outcomes, as wenoted in the section above on personrelated objectives.
Employee appraisal schemes
Employee appraisal schemes:(Usually, appraisal takes place annually between the manager and the employee. However, there are a number of trends that are changing the style and relationship of the appraisal.)Form:Form:One important trend is to hold periodic reviews on a more regular basis. This allows for a more dynamic process of discussion and adjustment to objectives.Purpose:Purpose:Fulfil two important aspects: Objectives should remain relevant and achievable -The process of dialogue allows for relationship building and coaching to take place.
The design of appraisal schemes
The design of appraisal schemes: 2 types . The first is ‘control orientation’, and the second is a ‘developmental orientation’. Control orientation
Control orientation: he starting point and assumption is often that ‘somebody up there’ acting as a controlling authority is saying that we need to stimulate effective performance and develop targets, offering reward for above average achievement. This is often perceived by staff negatively. The them and Us attitudes are formalized through power to judges via paper work, which seals a view of how well somebody is perceived to work(as we mentioned above PMS are more in quantitative things , so even when it come to the control orientation we can see that they judges their employees through paper work. The control approach works best where clear targets are available, which can be objectively judged, and people are used to this results orientation
Developmenta
Developmental l orientationorientation: This is an employee who genuinely wants to know how they are performing and what the organization thinks of their contribution and would, as a result, want to clarify their job role and enhance their career. The employee is addressing the matter for themselves. The situation moves from the employee as the starting point, not wanting to be told but helped through problems and limitations, whatever the source. The employee needs support to enhance contribution and the matching of their skills with organizational needs.
Outcomes of developmental orientation :
Outcomes of developmental orientation :Development of cooperative behaviour rather thanresistance between appraisee and app raiser-Easier to confront issues and resolve problems in an open way-Can deal impersonally and objectively with performance issues without damaging relationships-High trust and integrity required if the identification of‘poor’ performance leads to penalties rather than assistance and support.
The problem with this
The problem with this orientationorientationis that it might also lead to few visible performance outcomes, although proponents might argue that implicit commitment generates improvement. n manager and employee. It is also a highly skilled counseling approach that not all managers are wellequipped attitudinally to adopt.
Types of appraisal:
Types of appraisal:Corbridge & Pilbeam (1998) offer a useful overview of the main types of appraisal, which include Top-down schemes:
Top-down schemes:The most traditional form of appraisal, this emphasizes both subordinate feedback and the lead on objective setting coming from the top. The problems often cited with this form are: It stresses traditional organizational hierarchies-There may be a lack of impartiality, and favoritism- There can be a lack of full knowledge of the employee in ‘flatter’ structure.
Self-appraisal
Self-appraisal: Self appraisal is rarely used, as are independent forms of appraisal. It encourages greater ownership and participation in the appraisal scheme through self-reflection and helps ensure full preparation for the appraisal discussion. In an open environment it allows managers to shift from a directive, informing style to a counseling style, thereby assisting staff to form objectives and plans, moving f rom ‘telling’ to ‘selling’ to ‘facilitating’, which is seen as a creative and more effective level of satisfaction and ownership.
Upward appraisal
Upward appraisal: it has been increasingly used to reflect the growing trend for organizations to recognize that they have a du ty to provide effective working systems for employees. In upward appraisal, in a modest way, employees are invited to provide managers with a rating on such dimensions as effective communication, involvement in decisionmaking, clarity of objectives and goals, and so on. Often this ra ting is completed anonymously although more recent trends show managers conducting this process in staff focus groups as a basis for getting feedback on a range of management issues that impact upon staff.
Peer appraisal:
Peer appraisal:involves members of teams evaluating each other. One of the arguments for this type of system is the pressure to treat internal working relationships as internal ‘customer’ relationships using similar feedback systems to external customer feedback techniques.this method of feedback can o ften be further developed into full service level agreements. It is however complex to run in order to get the multiple channels working and assimilated. There are also sensitivities involved and careful development of staff is required in using such schemes.
Multi-directional
Multi-directional appraisaappraisall: Also called ‘360-degree appraisal’, there are key similarities here with peer appraisal. However, the key difference is that multidirectional appraisal deliberately sets out to collect data from outside the immediate team and often from external customer feedback. Its key advantage is to overcome the criticisms of impracticalities and lack of knowledge of a single appraiser. As we have seen, it can be complex and, of course, it does expose staff to potentially hostile views, which may be outside of their total control. The term ‘360-degree appraisal’ refers to the various sources of data: boss, peers, customersand reporting staff, in order to achieve a morecomprehensive understanding of the performance relationships.
Problems with
Problems with appraisalappraisalss:Overtime to complete the paperwork- Vague objectives and inconsistent standards of objective setting-Emphasis on getting the review ‘over’ rather than on the quality of the interview process- Dependence culture: manager judges and informs, staff await outcome rather than be proactive in its development-Narrow individual orientation that ignores wider feedback and operating context-Failure to really integrate appraisal issues within the wider organizational and operational reality. Trends in performance appraisal:
Trends in performance appraisal:the PMS system. Fletcher (1993) identifies a number of trends in performance appraisal within the broad PMS: Reduction of paperwork. Many schemes develop extensive forms and categories of questions for staff to prepare as part of the appraisal preparation and for managers to complete after the interview. Too much time is spent of form filling at the expense of quality of discussion- Clarity of objective setting. It is increasingly important to have precise, meaningful and auditable goals related to the business and not general or unaccountable objectives- Emphasis on the quality of the review discussion. The review interview is critical in terms of manager feedback, the quality of employee commitment to preparing for and contributing to a selfevaluation and discussion of organizational factors of performance- Greater involvement of staff in the process. Organizations are increasingly assessing levels of staff involvement, and encouragement to be involved by the manager.
Unit 5: Reward Management: Unit 5: Reward Management: Definition
DefinitionIn HRM a reward is generally defined as a scheme to support and reinforce desirable behaviour, such as wage rate that increases with the productivity of the worker.
The Role of Reward systems: An Analytical Framework:
The Role of Reward systems: An Analytical Framework:Lawler (1984) laid down a nine-point framework for taking strategic decisions in his review of the strategic role of reward and organisational development.
•These nine points will be used as a basis for analysing past decisions and laying out future policy. Strategic issues in the design of reward systems
Strategic issues in the design of reward systems •1. Base of rewards:1. Base of rewards:Job based, person based, skill based. 2. Performance and incentivisation
2. Performance and incentivisation – –scope for scope for progressionprogression: Individual, group or organisational criteria. •3. Market position:3. Market position:Position in sector: upper/mid/lower position.
•4. Internal 4. Internal versus external comparison:versus external comparison:Internal v external equity. Strategic issues in the design of reward systems
Strategic issues in the design of reward systems
•5. Centralised versus decentralised reward :5. Centralised versus decentralised reward :Decision making – localisation. •6. Degree of pay hierarchy:6. Degree of pay hierarchy:Number of structures. - Integration of job structures. •7. Reward mix:7. Reward mix:Balance of pay and benefits. - Degree of choice. - Harmonisation.
•8. Process issues:8. Process issues:Communication policy: transparency. - Decision making: extent of vision, individual involvement in job, pay evaluation and pricing. •9. Reward systems9. Reward systems – –consequences/integration:consequences/integration:Link to prevailing business. - Flexibility. - Consistency with other HR systems.
Base of Rewards Base of Rewards
