Government policy and stakeholder society impact of EU legislation and social partnership with labour economic growth vs recession Political and Economic Context Outsider Systems nature of corporate ownership and control Insider Systems job migration and outsourcing state intervention and social and welfare issues regulations on recruitment and selection, training, awards and equal opportunities Legal Context public policy to free up labour markets changing legal context over time Labour Markets growth of global markets and multinationals changes to domestic industrial structure UK growth of the service sector decline of manual work
financial sector in UK
External Context knowledge workers and female employees
Business Sector
workforce demographics and population pyramid growth of the UK public sector and application of market criteria to working environment
cash limits, business planning, performance related pay
reduces dependence on individuals clarify situations produce consistent behaviour
4 dimensions of national culture affecting business practice
Policies as statements of principles informing strategy and practice Hofstede and National Cultures
appropriateness of policy
The Gap between Policy and Practice
The Importance of External and Internal Contexts Universalism vs Particularism
different priorities of line management different interpretations of policy
significant gap between stated and policy for a number of reasons
Location
poor process of implementation
Individualism vs Collectivism
general consensus vs contingency and situation
common goals and impacts on motivation and management
failure to monitor or evaluate Trompenaars 1993 Neutral vs Emotional
movement from bureaucratic structures to flatter and market based companies have forced HR to reconsider the contribution of the individual
Achievement vs Ascription
Lesson 1 Understanding HRM
shift from managing employment of contract to increasing performance
expression of emotions alphas vs gammas
determination of power - hard work vs pazam
difference of emphasis between developing relationships with employees as individuals or as groups
The Changing Nature of the Employment Relationship
individualism vs collectivism
flexible working part time working and annual hours
Insecurity of employment
Sophisticated HR - employees as assets with clear HR support mechanisms
Management Style
employability vs job for life
Consultative - recognition of unions and integration into firm Purcell 1986 - 4 Styles for managing employee relations
Internal Context
Traditional - labour viewed as factor of production with assumed subordination Constitutional - unions recognised and accepted as inevitable - employee relations based on stability and control
significant influence on HR management corporate centre
Internal Structure greatest impact by M form bureaucracies
divisions operating plants
HRM as a key element of all management activity HRM as shared task with internal tensions movement from bureaucracy to adoption of HR perspectives has changed relationship between management and HR function Regulators - HR function formulates employment rules and procedures
The Role of Management in HR
Links Between Business and HR Strategy
choices critically linked to organisational performance Universalistic
Change Makers - employee relations emphasise the needs of the business Advisers - internal consultancy role allowing management to decide HR initiatives
strategic choices associated with the management of people - planned vs emergent
Boxall and Purcell Theoretical Perspectives on HR HR Models - Story 1992
Handmaidens - specialists operating in submissive relationship with clients
Lesson 1 - Understanding HRM - Mindmap.mmap - 14/03/2008 -
Contingency Resource -based
selection development
emphasis of links between strategy and HRM through the human resource cycle
appraisal reward
strategy should consider more than financial returns to shareholders
Fombrun 1984 - Matching Model
to what extent is there a fit between HRM processes and organisation strategy?
wider base of stakeholders include customers, communities, the environment and staff/workers
weakness of model: unitarist approach with little room for strategic choice and people management driven by organisational objectives - Bratton & Gold 2003
financial perspective customer perspective Kaplan & Norton 1996/2001
internal business perspective
to what extent does the cycle deliver improved performance - Devanna 1984
learning and growth perspective
workforce characteristics, labour markets and wider operational environment
scorecard allows for financial analysis along with building capabilities for future growth
scorecard has a top down orientation with HR procedures prioritised if they fulfil strategic needs such as communicating the vision
situational factors
Balanced Scorecard and Human Capital Reporting
assumption that HR practices are universally effective in increasing performance
trade-offs between owners, employees and unions stakeholder interests
HR critique of model employee influence, reward and work systems HRM policy choices
influenced by Kingsmill Report 2003 size and composition of workforce retention and motivation training and business /skills fit
commitment
6 basic components of HRM
requirement that by 2006 quoted companies will need to provide strategic commentary on range of organisational issues
Beer 1985 - Harvard Framework
Human Capital Reporting
competence HR outcomes - 4Cs Model
cost congruence
remuneration and fair employment policy leadership and succession planning
individual well being, organisational effectiveness and societal goals
main avenue for addressing equal opportunities including age, gender, race, ethnicity, sexuality and disability
long term impacts
Origins of HRM
model is not linear but cyclical
business case has been made for company benefits rather than individual enhancement
feedback loop
Stakeholders, Diversity and Corporate Responsibility
improved customer satisfaction enhanced worker motivation
model assumes dominant direction and influence from environmental factors
Cassell 2001 and Anderson & Metcalf 2003 business benefits;
improved labour supply
paternalistic model prescribing tools and techniques for management use vocational in nature
avoidance of discrimination cases some employers will only have short run interests may be ignored for unskilled workers
Prescriptive tradition
Diversity at Work
critical approach to management assuming its role was to subjugate
Doubts
internal pressure to retain the status quo
Labour process school
depth of management commitment shallow to deep and principled breadth of focus - narrow list of practices to driven by economic expediency to extensive degree of scepticism regarding the actual role of business (Friedman 1970)
HRM as a system of employment regulation where internal and external factors shape the employment relationship
Goss 1994 - Form of EO in organisations Industrial relations approach HRM in the UK - Bach & Sissons 2000 - 3 traditions
Holme and Watts 2000 - the commitment to contribute to economic development working with all stakeholders to improve quality of life
recent approach considering link between strategy and practice analysing the elements of the HR cycle Additional model - organisational psychology
charitable donations, human rights, ethical investment, fair trading growing awareness of CSR mainly due to major scandals such as Enron and Bhopal etc
stresses link between HR and corporate strategy CSR activities
increase of legislative and regulatory pressures
Hard model
Corporate Responsibility Hard vs Soft Models - Storey 1989
business case and concern for lost customers sensitivity to criticisms and threats of boycotts means of providing competitive advantage through differentiation
human resource viewed as factor of production with labour having only commodity status management of 'resourceful humans' competitive advantage through skilled workers
Soft model
Subtopic
motivation for adoption of CSR Storey 1992 Model of HRM insert diagram pp.7
problems in defining what ethical issues are
HRM, Strategy and the Global Context
gradual shift towards convergence across developed nations Universalist
one best way to manage HR and associated practices of job design and quality control application of lean production model clear and unambiguous differences between nations which endure
corporate level - scope, structure and financing business level - competition within given market and customer focus
Strategy operates at 3 levels
power distance - extent to which power is distributed in organisations
operational level - subunits of marketing, finance manufacturing etc
uncertainty avoidance - degree to which societies feel threatened by ambiguous situations individualism/collectivism - balance between groups and individual achievement Rubery & Grimshaw 2003 - Convergence and Divergence
Culturalist
Hofstede 1980 analysis of 117,000 IBM employees
masculinity/femininity - extent to which dominant factors are male i.e. assertiveness
establishment of long term organisational direction - HR impact on future staffing needs of company
representativeness - based on single company perpetuation of national stereotypes
driving organisation forward to achieve sustained competitive advantage - HR impact on what will drive performance critique of Hofstede model
determining organisational scope and positioning in markets - HR implication of staff types - in house vs subcontracted matching of internal resources to environmental fit - SWOT and PESTLE - HR impact of adequate staffing to meet strategic goals
complexity - no explanation of how cultures might vary
Classical Perspective - Grant 1988 & Scholes 2002 differences between societies but are a product of numerous and competing forces on HRM
impact of strategy on operations - i.e. growth through IT customer services will fail if staff aren't capable of meeting the need values and expectations of decision makers - attitude towards unions and recruitment procedures successful strategies emerge incrementally as part of an analytical and iterative process strategy is crafted through use of skills and judgements
Business and Corporate Strategies
Institutionalist
International and Comparative HRM
multi-domestic company - growth through diversification new subsidiaries adapting to local conditions international company - exploitation of parent knowledge through professional managers
Classical Profit Maximising - Deliberate
strategy as product of market forces with most efficient company succeeding
Bartlett & Ghoshal 1989 classification of MNCs
little reason for planning deliberate strategy as success is judged by evolutionary processes maintenance of flexible HR procedures is important factor of competitive advantage - guided evolution Lovas & Ghosal 2000
Evolutionary Profit Maximising - Emergent
transnational corporation - mixture of the above
Adler & Ghadar 1990
impossible to specify the strategy until after the event
HRM in Multinationals
ethnocentric - managers recruited from home country
Processual - Pluralistic/Emergent
polycentric - local nationals appointed
organisations are affected by internal politics and conflicting goals with behaviour seeking to achieve departmental goals
Perlmutter 1969 - international HRM styles and cultures
Granovetter 1985 - strategy shaped by social system - class, gender, regulation and education systems institutional forces will differ between countries and have shaped HR processes
global corporation - world market as integrated whole - centralised hub with limited delegation to subsidiaries
organisational character as related to product lifecycle - greater globalisation as they mature
Whittington 1993 Typology of Strategy
people are too limited and careless to implement a calculated strategy logical Incrementalism - Quinn 1980 - emergence of strategy through internal decisions and external events
differences in HR practices are caused by education, training, legal framework, political and social factors, family and support networks shortcomings of model is that it is deterministic and static assuming that the impact forces themselves aren't open to influence
Emergent Perspectives - Quinn 1980 & Mintzberg 1987
strategy as rational process of calculation and analysis little room for devising HR procedures
explanatory power - doesn't explain why differences exist
geocentric - managers appointed not according to country of origin
Local Isomorphism - subsidiary behaves like local companies and adopts practices to fit into local norms - IBM dealing with Irish unions
Systemic - Pluralistic/Deliberate
Femer & Quintanilla 1998 - Complexities of HRM internationally - sources of isomorphic pressures
Cross National Isomorphism - subsidiary expected to confirm to home country HR practices embedded within wider institutional structures of that country Corporate Isomorphism - universalistic approach of MNC where HR practices are imposed regardless of location Global Intercorpoatre Isomorphism - where MNC breaks away from home country and adopted procedures similar to those in competitive market - adopting a position beyond national borders
HRM, Strategy and the Global Context -Marchington Chapter 1.mmap - 17/03/2008 -
minor role of employment law - moulded by employers and unions auxiliary role - provision of statutory framew ork - organised persuasion restrictive role - laying dow n of rules outlining w hat is allow ed and forbidden i.e. striking
role of law in the UK - 3 levels
regulatory role - floor of employment rights for employees volunteerism attacked in 1970s due to economic difficulties leading to greater state intervention UK Influences
industrial relations seen as UK disease w ith UK dismantling of union protections to free labour market encouraging employment flexibility 1997 election of Labour led to adaptation of policy but not significantly - 5 pillars of policy
protecting minimum standards promotion of family friendly policies supporting partnership supporting union recognition
prevailing economic view that market flexibility is good for grow th adaptation of EU Social chapter has increased the impact of initiatives from EU regulations - immediate effect and binding to all states directives - binding but require member state legislation allow ing flexibility
EU law has number of sources
directions - only affect specific parties softer instruments - recommendations, declarations and communications
The Legal Framework
1957 Treaty of Rome - common action on economic progress and opening of barriers to goods 1987 Single European Act - increased use of quality majority voting to increase harmonisation of internal market
EU influences
1993 EU Treaty - joint commitment to achieving high levels of employment 1998 Working Time Regulation - UK opt out evolution of social policy
2002 Employment Act - requirement for employers to consider flexible w orking article 8 - right to privacy article 9 - freedom of thought article 10 - freedom of expression
1998 Human Rights Act - considerable application to employment law
article 11 - freedom of assembly express agreement betw een employer and employee terms implied by common law collective agreements w orks rules
employer - w orker relations built around the principle of the employment contract
Individual Rights
custom and practice statute 1979-1997 reform of employer-union relations central objective to w eaken union pow ers mixture of conflict and cooperation - Blyton 2002
move to reduce extent of collective bargaining due to excess of union pow er efforts to dismantle to close shop have now been completed now difficult to arrange industrial action through recently developed code of practice
post 1997 has seen new statutory provisions w hile retaining Conservative reforms
conflict variation over time and country Collective Rights
contested nature of w ork
high visible during times of industrial action or collective bargaining also affect recruitment and training of staff Braverman 1974 - struggle for control betw een managers and w orkers balance betw een control and cooperation - introduction of ICT and mutual benefits
w orkers from primary labour market w ith greater security through permanency vertical flexibility - employees take on tasks higher and low er than recruitment skill set
perspectives of employment relationship
Core Level
horizontal flexibility - employees undertake w ider range of tasks at same skill level
Edw ards 2003 - structured antagonism interdeterminacy of employment relationship w orkers posses tacit skills - know ledge and understanding gained through life difficult to codify - Cooke 2004
Atkinson 1984 - Flexible Firm Model
contradictory - management need to exercise control and tap creativity antagonistic - only w orkers can offer surplus value employed as w eapon against employer make w ork more tolerable - devising games
Group 1 - w orkers from secondary labour market but internal to organisation
used to advance career - promotions Maslow 1943 & Hertzberg 1966 - factors intrinsic to w ork - recognition and other motivators
Group 2 - w orkers w ho cannot break into secondary market - part timers and temps
Steers 2004 - hygiene factors more important to those w ho do not hold w ork as central to life Periphery Level
Group 3 - w orkers external to the organisation - employed by others i.e. agency staff
job satisfaction
The Changing Nature of Work
Rose 2003 - extrinsic factors help influence those w orkers w ho seek to move jobs
terminology and confusion betw een descriptions and predictions promotion of market deregulation by government and introduction of lean principles
beliefs of each of the parties to the employment relationship psychological contract - Schein 1978
concept
w idely agreed that reciprocal arrangements have now disappeared last 20 years are defined by uncertainty and imbalance
lack of clarity around core and peripheral elements questions as to how far this has occurred and w hy impact of core-periphery model not supported by data
evidence to show grater w ork insecurity and intensivity w ith UK w orkers putting in more hours - Heery & Salmon 2000)
Flexibility and Fragmentation in the Workplace
transference of risk to w orkers through temporary contracts
extensiveness doubts around flexibility insecurity thesis has 3 major elements
assumption that flexible firm is more efficient questions over effectiveness of subcontracted NHS w orkers
costs and benefits
those employed in supply chain for retailers or call centres suffer the w orst
Uncertainty
model fails to note interorganisational relations HRM no longer characterised by relationship betw een single employer and employee - joint ventures and strategic alliances
damage of insecurity to the economy w ider societal impacts
difficult to estimate efficiency of part timers
examples single employer status
those w orking from home feel untrusted by management
Doogan 2001 - contrary theory that people now have greater chance of staying in w ork than 20 years ago
increased fragmentation and blurring of boundaries betw een organisations
evidence that UK w orkers increase their speed and hours of w ork - Burchell 1999
old notions of skill career and learning now replaced by short term visions
Intensity
implications of intensification have been considerable - stress, IBS, sleep problems
boundaries changed by restructure of organisations and areas of activity application of additional burdens and pressures on junior staff
new industries low er trade unionisation, less formal HR systems and larger employment units
Fragmentation
models based on flexible structure may no longer be adequate in analysing changes betw een different organisations
sectoral shift from manufacturing to services
defined as craft or general, open or closed
role of w omen
overall number of unions has now declined along w ith multi-unionism and membership numbers decline has been influenced by industrial sector changes - increase in non manual and service sector jobs
full vs part time
Labour Markets and Employment Patterns
national associations or federations
grow th in temporary employment in last 25 years from 5-7%
impacts on minority and disabled groups and w omen in terms of employment and salary rates
small specialist associations collective bargaining w ith trade unions Employers Associations role of EA's
discrimination
Institutions Affecting HRM at Work
CBI - central body that represents over 250k employers
6.2m disabled adults in UK w ith only 1.2m w orking - numerous govt strategies to address this. ageism sited as cause of discrimination in third of all cases
membership representation
number of w orking days lost has significantly dropped from 10m in 1980 to 500k today
resolving collective disputes arbitration and mediation industrial action
building employment relations settling complaints
higher proportion than most EU countries and are regarded favourably by employers
UK has more temps than US but less than EU nations
specialist industrial bodies
dispute resolution
comprise half of w orkforce but many more w orking part time in service sector w ith low er status 1985-2004 part time w orkers doubled proportion of population at 25-30%
Trade Unions and TUC
UK has one confederation w ith primary role of TUC to lobby governments although its political influence has now declined
advice and guidance
10m in 1970s to 20m today - largest grow th in financial and business services
2004 saw 3m more than in 1985
Forces Shaping HRM at Work
Acas main UK body w ith 6 key areas
providing impartial advice promoting good practice Third Party Agencies
independent body used to adjudicate on recognition of trade unions Central Arbitration Committee Equal Opportunities Commission Commission for Racial Equality Disability Rights Commission Health and Safety Commission
Forces Shaping HRM at Work - Marchington Chapter 2.mmap - 20/03/2008 -
number of w orkers involved in stoppages has also significantly dropped
many retired people seeking to return to the job market demographic trends w ill see older w orkforce in the future
one of the most popular forms of HRM WERS Survey 3/4 of workplaces instituted some form of teamworking time span
55% of establishments use self directed teams
extent of interchangeable skills
41% of establishments claimed this covered half of workforce
Osterman 1994
Torrington 2005 - varied dimensions of teamworking
WERS Survey 2004
Extent of Teamworking
autonomy over allocation of work tasks
33% of groups carried out work without reporting back measurement of scope and autonomy = measure of intensity
range of tasks expected difference between production and service environments
72% of workplaces had some employees in teams
Debates on Teamworking
Geary 1995 - Advanced Teamworking
limitation of direct supervision means to discuss organisation
European Foundation 1997 - Issue of Definition
only 5% measured high intensity
simple task range Lean Production
continuous process operations require teamwork low skilled work can act as teamwork obstacle LP vs STS
limited worker autonomy
Lesson 2 The Case of Teamwork
Technology
assembly lines do not provide teamwork basis Pre-Existing Cultures
team of workers with long cycle times discretion to allocate work election of leaders and judge quality issues appropriate to niche and specialist markets
Role of Unions impact of event affecting organisation can motivate team working - i.e. threat to existence
Factors Promoting Teamworking Role of Precipitating Event
role of unions, national bias towards collectivism vs individualism National/Company Environment benefits are long term and contradict short termism of many managers
fear that teams will undermine management authority
following Volvo model
Applebaum & Batt 1994 - Lean Production vs Socio-Technical Systems Socio-Technical Systems
more common in unionised environments although often introduced to undermine union power
investment in teams will reflect long-run industries such as pharmaceuticals
quality managed through procedures
Applebaum & Berg 1996 - Benefits for Management and Rare Use of Teams
Lesson 2 - The Case of Teamwork - Mindmap.mmap - 01/04/2008 -
Basic definition: that a particular set of HR practices have the ability to bring about improved organisational performance
nature and type of HR practices measures of performance attitude surveys/hours training/employment tests
sector based issues employee skills/org structures
proportion of staff with appraisals/number of applicants per post
methods of data collection and respondent base
difficulties faced by range of recent studies
employee motivation
Guest 1997 - argued that many of these lack statistical rigour
Huselid 1995 - survey of 1000 US organisations
output measures - labour turnover, productivity and corporate financial performance
fundamentally underpins all other practices unrealistic to expect loyalty without security are limits to security - but can be enhanced by HR planning and structuring
longitudinal study of 67 UK manufacturing organisations HRM had greater impact on productivity than strategy and R&D
layoffs can account for long-term strategic loss Patterson 1997
policy of no redundancy
17% variation in profitability explained by job design and HRM practice
Employment Security & Internal Labour Markets
Wood & Albanese 1995 define measurement of security
use of temps to protect core workers expectation that employees will remain with the firm until retirement
theoretical model developed showing pathway linking business and HR strategy with performance outcomes critical finding that small proportion of organisations actually use more than 3 quarters of HR practices measures of effectiveness critical
(1) reduce working hours proportionally Guest 2000
alternatives to downsizing
also important to note that application does not equal effectiveness
(2) team working
critical finding that 3 practices had strong impact on performance
Boxall 1996 - capturing a stock of exceptional human beings to sustain competitive advantage
West 2002
employers now seeking wider range of social and interpersonal skills above technical ability
(3) appraisal further work showed that there was positive relationships between HR and low turnover but not higher performance greater performance requires Ability, Motivation and Opportunity
Selective Hiring and Sophisticated Selection
(3) role of line management as point of contact for non-managerial staff stock availability
number of proxies used to measure selective hiring
(1) applicants per position (2) proportion administered tests (3) sophistication of selection procedures
HRM and Performance
(1) use of AMO model
caution must be given to not recruiting clones which may not encourage initiative and diversity
Defining and Measuring High Commitment HRM
(2) operation of 'big idea' gluing together successes
queue length data
(3) freeze recruitment (4) moving workers to sales increasing demand
links between HR and performance in 61 NHS trusts (1) training
(2) reduce wages to reduce labour cost
Guest 2003
Boxall 1996 - new recruits need to remain at the forefront of their field in both professional expertise and interpersonal skills
(4) application of performance measures to organisational need - Tesco
Pfeffer 1998 - High Commitment HR practices Extensive Training, Learning and Development
theft and stock errors greater research and case studies
growing recognition of the importance of learning as source of sustained competitive advantage learning must be about development rather than training to address crisis important to measure and evaluate the concentration of training and learning
direction of causality and the black box (1) open communications regarding finance and performance ensures staff are informed
list often the consequence of individual preferences little consistency of HR practice in bundle yes/no answers mixed with statistical data
critical importance
variations in proxies used to measure high commitment HRM
Employee Involvement and Information Sharing
objective vs subjective assessments measures of organisational performance such as profitability that have weak linkages with individuals
PESTLE factors and application of high commitment in different countries
variations in proxies used to measure performance
Huselid 1995/Roche 1999 - employee voice critical
Questions about HRM-Performance Link
more prevalent in last decade and seen as fundamental component of organisational success
dangers in relaying on HR self reporting scores
key attribute sought by employers and looked for in CVs - seen to support decision making and innovation
all organisations are subject to forces that shape HR procedures
Boselie 2001 - 12 of Pfeffers 16 factors are common in Netherlands but fewer in the UK Ramsey 2000 - higher levels of performance achieved through work intensification rather than HR processes
(3) participation can provided legitimacy for management actions Information Sharing seen as key factor in best practice - team briefing or quality circles
differences arise depending on expertise of respondents personnel specialists lack detailed knowledge of competitive strategies and proportion of sales derived
(2) teamwork will only succeed with key information to act as basis for contribution
Self Management and Team working doubts about extent of autonomy organisations have in decision making
dual elements of higher compensation and performance related reward Performance related Compensation
celebratory literature argues that best practice is applicable to all organisations
despite criticisms this is listed as significant good practice - however is less widespread in the public sector symbolic manifestations of equality within organisations uniforms and shared canteens
best practice works on assumption that employers can take long term view
Reduction of Status Differential and Harmonisation
easier to engage in high commitment HR if labour costs are low - labour intensive organisations will struggle to increase pay rates
The Universal Application of Best Practice HRM
dependent on types of staff being recruited and may be situational specific growth of non standard contracts has raised the issue of compatibility between best practice HRM and the flexible organisation
self-managed teams seen negatively as intrusive and difficult to implement Barker 1993 - teams produce form of greater control than previous bureaucracy
High Commitment HRM and Performance
often linkages between HR practices - EI would be welcomed if job security existed
Marchington & Gruglis 2000 criticise this approach
Greater synergy between bundles the greater opportunity of organisational success
some groups do seem to be benefiting from best practice suggesting distinctions between long serving and short term workers
Bundles of Human Resource Practices
Wood & de Menezes 1998 - lack of consistency and pick & mix approach to application of HR processes Truss 1997 - little evidence to show deliberate coherence between HR activities while principle of building works there can often be conflicts between practices contradictions and tensions may arise
High Commitment HRM and Performance.mmap - 20/03/2008 -
extension of employee share schemes
many organisations don't have clear business strategies and therefore impossible to claim HRM links
number of attempts to link HRM with business strategy build around notion of 'external fit'
contingency approach suggests rational decision making takes place in logical and sequential way
flexibility required for growth and development ability to recruit and retain motivated staff is critical - long hors and self-development
Models are Deterministic and Top Down
relationship much stronger than classical model negating principle that HRM is independent specialist department
Start-up
aim to gain employee commitment potential benefits as long term little or no formalised HR practices unionisation unlikely
each model places primacy on a single contextual factor if different factors require different HR processes this suggests different organisational sections operate in different ways
formal HR required to build on earlier successes Multiple Influences on a Company
rationale for HR style often influenced by environmental factors rather than employment relationship
Growth Kochan & Barocci 1985 - Life Cycle Models and HRM Application - 4 Stage Model
model suggest scientific management process assuming management know and control all issues bounded rationality suggests this is impossible and is unrealistic to suggest that managers can make decisions about all scenarios employee goals and visions not determined in a vacuum but emerge through negotiated processes
concern that informal procedure may lead to future problems maturing of markets with lower levels of growth and flattening of performance
Managerial Control Maturity
incorrect to assume that senior managers are free to make decisions without influence from other parts of the supply chain.
decline period begins to exacerbate existing problems with emphasis moving towards rationalisation and redundancy
evidence suggests that organisations do not follow the lifecycle model accurately assumptions made about size shape and strength of organisations in each stage of the lifecycle
range of formalised HR procedures operating with high commitment with significant compromises between management and staff increasing focus on the cost of labour and straining relationships appear with unions.
Limitations of Best Fit Model
ignore the processes of internal change
more sophisticated methods of recruitment and selection as well as development appraisal and pay
Models are Static
Decline
HR policies reconsidered as employer seeks to reduce costs
need for a clearer focus on how change occurs and its major influencers and obstacles
production of goods and services at a cheaper rate to competitors
assumption made that employers are free agents making decisions on personal situation assessments increased consultation , working time and parental leave firms are embedded in societies that regulate them
HR follows black hole model - no systems for independent voice
Best Fit HRM - Contingency and Configurational Ideas
increasing role of EU legislation of employment relations
Cost Reduction Strategy
ad hoc recruitment and selection - minimum health and safety and little staff empathy
Neglect of how Institutional Forces Shape HRM
most commonly found in the UK
Rubery & Grimshaw 2003 - how institutional factors have shaped HRM in different countries
aim to produce highest quality products and opposite to cost strategy
Cranshaw 1994 - Sainsburys strategy of good food costs less - stuck in the middle but positively
systematic recruitment and selection
important not to focus on a single factor affecting HR issues i.e. strategy and ignore the influence of others
HRM follows best practice model with a number of characteristics
Schuler 1989 - Competitive Advantage Models
difficult to assess the HR practices of two companies within a similar market segment
how sustainable will this be during economic downturn/recession least common and assumed that groups of highly trained specialists work together to develop complex and changing products
Definition : Penrose 1959 - focus on internal resources at the firm's disposal provides a useful picture of performance and capacity aside from external and environmental forces
best fit - outside in RBV - inside out can be criticised for ignoring external forces too much
Innovation Strategy
much greater emphasis on flexibility and problem solving groups and commitment to broadly defined goals focus on efficiency in existing markets and narrow product ranges
Value - the resource must add value in some way Rarity - shortage of particular resources within market unique historical conditions make imitation difficult difficult to understand precise mixture of resources due to tacit knowledge
Imperfect Imitability - difficult or impossible to imitate these valuable resources
resources may be very complex social phenomenon and beyond management
Defenders
centralised organisational structures building portfolios carefully and over time recruitment is through specific ports of entry with internal promotion
Barney 1991 - potential for sustained advantage requires 4 firm specific attributes
Delery & Doty 1996 - Strategic Configurations
model developed to analyse HR procedures against horizontal and vertical integration - 2 organisational types
inclined to change and adaptability exploring new markers and opportunities HR strategies less internally oriented and seek to buy in staffing rather than grow internally
Lack of Substitutes - resources cannot be made easily obsolete Prospectors argument for combining RBV with organisation theory firms influenced by forces of difference and similarity
Oliver 1997 - RBV application limited as it doesn't consider social context where resource decisions are made
Designing HRM to Fit Organisational Goals
excessive differentiation may cause legitimacy challenges from customer base
training less extensive than defender and focused towards short term needs very little participation and little unionisation with HR limited to admin and support role - possibly even outsourced
summation of proposals and objectives that senior management hold of employees
achievement of balance between differentiation and conformity Espoused Policy Deephouse 1999 - Strategic Balance Theory
Brewster 1983
need for legitimacy will affect the extent of differentiation
may be formal or informal and may be broad philosophical statements how senior management order industrial relations
does RBV relate to entire human capital pool or simply senior management?
Operational Policy
Mueller 1996 - social architecture/complexity that resides in organisation dispersing value
either subconsciously or with intent reflected in managerial value systems managers with energy to implement new initiatives
Managers or workers as the key resource
workers need to know how they contribute to performance with clear link between efforts and goals
to implement strategies champions are used within organisations
does RBV relates to human resources or HR practices and processes?
mobile and career oriented individuals often moving positions make use of impression management and those left with responsibility don't feel ownership managers may find themselves distinct from senior managers
human capital advantage - exceptional human talent organisational process advantage - evolved processes such as learning and cooperation
persisting UK class divisions lack of identification with employer goals
Boxall 1996 Focus on people, practices or processes
Resources Based and Institutionalist Views
implication for HR is to ensure both systems and people provide advantage for the firm
doubts of validity of ideas role ambiguity and insecurity
conflicting requirements and lack of rewards
Converting HR Strategy into Practice: Blockages and Barriers
job losses and de layering place additional pressures on management limited institutional pressures to carry out HR activities
work overload
RBV provides useful analytical framework through recognition of historical conditions and different paths taken by organisations and industries
McGovern 1997 three features Boxall 1996
informal relations that evolve over time are hard to imitate
5 reasons why middle managers might not implement HR strategies
management training seen as a low priority limited investment in training and development
management by commission - retained flexibility to vary application of rules Brown 1973
strong institutional mechanisms decrease the impact of HRM on performance
Klein 1984 issue increased in complexity when organisational boundaries are blurred across networks or suppliers Boselie 2003
Tackling neglect of institutional forces and networks beyond the firm
managers unaware they are breaking the rules failure to apply organisational rules
extent to which legislation and directives at international level impact on HRM Important to acknowledge individual organisation has limited autonomy to determine its future set of minimum standards are required to compete in any market firm resources are particularly rare and may be needed to simply survive distinction of HRM to provide 'credible membership' and 'industry leadership' HRM strategies must ensure the viability of the firm as it faces challenges and change
deal making provided discretion to management and allowing staff to manage their time more flexibly
value of retaining flexibility at workplace
wide application of blueprints such as psychometric tests
impact of other players such as suppliers
poor interpersonal skills when communicating with staff
Application of RBV to HRM has identified 5 Major issues
RBV approach ignores institutional issues at national and industry level some firms will have advantage due to their location with better educational infrastructure
increased degree of homogeneity of HR practices in 3 cases
short term nature of managerial work focuses on achievement of numbers rather than people downsizing limits available time
The importance of path dependency
HR practices may look similar but combined with tacit issues provide advantage
extent to which formalised education impacts on HRM
empowerment
problems in ensuring this is transformed into real practice
Categorisation of real Organisation can be Problematic
the mix of factors will be critical
Human Resource Advantage - combination of above creating advantage through excellent people and processes
induction programmes harmonisation and competitive pay
Quality Enhancement Strategy
Viability and industry leadership Boxall & Steenveld 1999
HRM strategies can be enacted to ensure industry leadership
Designing HRM to Fit Organisational Goals.mmap - 23/03/2008 -
compliance with H&S but not aware it is being broken secretly
ambiguity of function - cost and value doubts enhanced by UK culture of financial primacy and short termism
Guest & Hoque 1994 - Reasons for HR Criticism
difficulty to quantify work of HR function measure to raise awareness of HR function through role in corporate Boards Mayo 1999 - HR influence enhanced through movement away from balance sheet approach measurement through stakeholder analysis
Tesco balanced scorecard
mapping of hard data i.e. labour turnover and training costs
Measuring the Contribution of the HR Function
ratio of HR staff to employees percentage of staff receiving appraisals speed and effectiveness to complaints and grievances
measurement through external benchmarking
must consider national and industry differences service level agreements SLA provide specific statement of service provision against which measurements can be made
measurement through internal evaluations
danger of approach that satisfaction of internal customers may affect service quality HR seen as out of touch with commercial realities HR constrains autonomy of managers to make key decisions HR slow to respond to problems
significant criticisms of HRM by line management in many firms
the role of the HR function has evolved over time with early roots in welfare
HR keen to promote theoretical policies that are impractical
Alternative interpretations of the development of HR function with each new set of activities adding to the HR portfolio
Legge 1995 - Vicious circle of Personnel Management major responsibility - team briefing, appraisals and absence shared responsibility - induction and training
2004 IRS survey shows management responsibility
little responsibility - performance, pay and recruitment
transactional aspects of HR - applications, induction and records
due to problems identified evidence shows that managers have taken greater HR responsibilities
Administration 1960s-1970s response to union growth and workplace bargaining
weak levels of skills and competencies to perform HR aspect faddish nature of management interventions means that new ideas or not taken seriously
Negotiation Lack of Skills
The Development of HR as a Specialist Function
Devolving HRM to Line Managers
1960s need to address employment legislation Number of other HR Themes
Legal Expertise 1980-1990s connected to principles of change management, learning and organisational culture
managers feel they don't need training and feel HR role can be easily done Organisation Development
HR skills seen as derived from idealistic view of human nature
Disdain for HR common application - strategic HRM and organisational prominence
in devolving greater responsibility organisations need to consider a range of issues
HRM issues seen as less important than other management roles managers don't have sufficient time to devote to HR issues
Business Partner 1913 Association of Employers
Competing Priorities
1931 Institute of Labour Management Development of the Professional Body
lack of clear procedures will result in management inconsistencies
1946 Institute of Personnel Management 2000 CIPD
issue of compliance to employment legislation - discipline and dismissal cost of poor HR - employment tribunal, loss of customers lapse in safety value of good HR - opposite to above
Inconsistencies in Application 2 arguments to encourage management to take HR function seriously
HR managers relate work to dominant org values and norms
last decade seen movement to assess value of internal HR function
Conformist Innovation Legge 1978 HR strategies for gaining power
2002 PWC survey showing 70% of organisations outsourcing part of HR function
HR managers gain credibility by following social values rather than economic criteria - equal opportunities Deviant Innovation
Problem: tendency to conflate different forms of alternative delivery into one key area shared service centre joint venture between organisations multi-client call centres
HR system provides admin support to management
Changing Responsibilities for HRM
Clerk of the Works trouble shooting role in formalised often unionised system Contracts Manager
Outsourcing may take different forms
Tyson & Fell 1986 Building Site Continuum
most sophisticated model - creating grand designs and integrating HR into wider business
length of contracts may vary training and development executive selection recruitment of temps
The Architect reject notion that HR assumes greater maturity at it moves along continuum
Type of work may vary with different arrangements for each HR function
redundancy
aims to establish new HR cultures - most prominent in forward moving visionary organisation
organisational size and complexity product market uncertainty importance of HR strategy to org
Change Agent
Reliance on outsourcing depending on range of factors
most common role and major aspect of HR work
decisions to make or buy dependent on transaction costs
Adviser
start up costs must be considered as well as consideration of long term costs not always easy to secure performance improvements and it may be costly to terminate project
Analysing the Role of the HR Function Cost Savings
low level operational role responding to routine problems driven by demand
Storey 1992 Four Type Model Service Provider
outsourcing may increase new costs and rigidities along with additional costs of external consultants
operational factor but more prominent in relationship with unions and other internal functions
outsourcing takes advantage of external knowledge and skills
Regulator
Greer 1999 - You outsource when someone else can perform better than you
change agent while influential runs risk of significant costs
Changing Models of HR Service Delivery Critique of Model
consultancies have resources to establish complex databases and provide global support
creating systems to deliver org success expert in the organisation of work and delivers efficiency
Immersing HR professionals in other elements of business helps enhance HR contribution in the long-term
Range of Forces Guiding Outsourcing
Independence
creation of small HR professional group at corporate centre while call centre also established to provide advice to managers greater efficiency Positive implications
integrated solutions and information management
Alternative Structure - Shared Service Centre
lower levels of customer satisfaction less interesting work
Negative implications
higher costs
Changing Responsibilities for HRM.mmap - 23/03/2008 -
transactional work - admin and administration improving efficiency will build reputation of HR function
Employee Champion
subcontractors will have wider access to data but lack experience of what has succeeded and failed in the past
higher customer service ratings
Ulrich 1997/98 - Ineffective Role of HR and needs to adopt 4 Roles
Administrative Expert
voice for employees to improve contribution and representing views
expertise provided free from influence and useful complex situations
greater HR strategic contribution
defines organisational architecture
Business Partner Expertise
Tacit skills difficult to formalise and organisation may become dependent on external providers
external nature is not universal advantage and it is denied workplace culture and traditions
HR function may play more than one role within single organisation partner in execution of strategy
outsourcing may also deny the organisation critical knowledge in house in house approach contributes to organisational learning
advisers operate at strategic level but work to shape HR practices behind the scenes
agent of continuous transformation and shaping process to ensure capacity for change Change Agent
Content Theory - fundamental human need Process Theory - psychological processes employees as rational and economic in approach but lazy and motivated by rewards Taylor - Scientific Model
highly criticised arguing that economic approach self perpetuating in workers worker performance linked to observation and need of group membership and attention
Hawthorne - Human Relations School
criticised for being unitarist in approach
people motivated by hierarchy of issues aiming to satisfy one set of needs before moving onto the others
reasonable workloads reasonable levels of control Pecci 2003 - characteristics of happy workplaces
job security
In Search of the Happy Workplace
Maslow Hierarchy of Needs
wage-effort bargain
little evidence to prove hierarchy and people may demand different factors at different times X - workers are lazy and require control
Theories of Motivation and Reward
Y - workers can be motivated through self esteem and development
McGregor 1960 - Theory X and Y
no direct relationship between satisfaction and dissatisfaction
Service Philosophy - acquisition of experience Fairness Philosophy - right structures of differentials
Hertzberg 1966 - 2 Factor Theory
critical that HR professionals see the link between HR and organisational policy
positive and negative hygiene factors management need to ensure that effort is recognised and rewarded financially and non
Underlying Philosophy
Choice of payments must also reflect circumstances of the organisations
management need to establish schemes that reward appropriate behaviour
hourly, weekly or annual salary
performance outcome expectancy employees recognise consequences for certain actions
flat rate or fixed scales managerial/white collar work shift to simple wages systems - problems with incremental structures - lack of systematic appraisal system
(1) Time Rates
Vroom 1964 - Expectancy Theory Three central concepts
link between reward and effort as motivational factor
low motivation will exist in jobs with little control Nadler & Lawler 1979
payment by output level or fixed sum on achievement of output
1960s & 197s reward systems helped to increase salaries
piecework common in textiles and engineering commission based pay affected by scandals around directory enquiries
Motivation and Pay Systems
(2) Payment by Results
Control - less personal supervision encouragement of speed not quality Erosion - schemes degenerate as result of learning curve and fiddling
Political and Economic Context
1980s & 1990s - free market philosophy and cultivation of enterprise culture lower levels of inflation and cost of living enhanced annual pay increases job size - responsibility, level, knowledge, skills and competencies
three issues for consideration
Complexity - setting of performance standards - work study techniques
individual characteristics - age, experience and qualifications
Types of Payment Scheme
encouragement of staff to identify more widely with organisational goals
labour market factors - supply and demand of skills
Factors Affecting Salary and Wage Levels
Scanlon Plans - ratio of payroll costs to value of production
product market conditions and cost structures
Rucker Plan - difference between sale value output and cost of materials - commercial value of process of conversion workers have little control over bonus size
remuneration philosophy of company (3) Plant/Enterprise Schemes
recruitment and retention
schemes may encourage competition between groups
signals importance placed on behaviour and activities by employer Influences of rewards on HR system
progressive marginalisation of unions greater emphasis on this approach and reflection of enterprise culture of 1980s
reward systems affect corporate cultures cost structure - service sector implications common for management aims to conflict and will impact on remuneration policy
widely used in public sector motivates staff and increases productivity acts as leverage for change
differences in expectations of worker groups
Reward Management in Context
potential benefits (Armstrong 2002)
need for understanding of organisational goals and objectives when formulating reward strategy
links reward to achievement of org goals risk of perceived bias high costs of administration subjectivity and consistency of appraisal
Valence - value to employee of outcome deriving from certain behaviour effort performance expectancy - perception by employee of likelihood of achieving desired objective
can be proliferation of job grades requiring restructures
(4) Performance Related Pay
Integration/Contradiction in Reward Structures
criticisms
New Pay Factor
business strategy of organisation determines behaviours of employees seeking reward assumption that strategy is known and top down!
equal opportunities cultural dimension - PRP will vary between countries and cultures
Basis for rewards - are people paid for what they do or for skills and competencies? Pay for Performance - should staff be paid for seniority or performance?
inclusion of staff in financial performance of organisation schemes don't provide real involvement
(5)Financial Participation and share Ownership
market position of company
no linkage between effort and reward Structural Content Dimensions
internal/external pay comparisons - to what extent does management value equity? centralised/decentralised reward strategy degree of hierarchy - reward based on position or achievement
Lawler 2000 - Strategic Design of Reward Systems
reward mix - types of rewards provided to individuals Process Dimension
communication policy - open or closed? decision making practices - involvement of staff or not?
reward systems need to fit with HR systems as a whole - without fit there will be conflicts CONTINGENCY APPROACH
Motivation and Pay Systems.mmap - 31/03/2008 -
form of deferred pay and wider fringe benefit Defined Benefit Scheme - pension calculated as percentage of final salary Defined Contribution - regular payments made by employee and employer
Pensions
recruitment, retention, improvement of employee relations and management of retirement research has shown that many organisations only use pensions for recruitment purposes
Objectives of occupational pension provisions
a process whereby jobs are placed in a rank order according to demands placed upon them
process of reducing differences between manual and non manual workers and provision of single status
degree of confusion regarding the process - writing job description is central but not designed to evaluate job holder
1960s research identified disparities in working hours, pay, holidays and discipline
widely used in 50-75% of organisations
1980s influences from Japanese companies - symbolic egalitarianism BP chemicals linkage of continuous improvement and individualising employment relations
establish rational pay structure Arthurs 2002 Objectives for introducing job evaluation
to create pay relationships between jobs
Harmonisation
Job Ranking - JD's placed in rank order to provide league table
technology cuts across demarcation lines legislation has narrowed differences between workers growth in single table bargaining
Paired Comparison - systematic comparison between all jobs
Factors increasing harmonisation Non Analytical Evaluation Schemes
changes in employment structures
Job Classification - grade numbers decided and definition then produced Criticism - highly subjective with implicit assumptions made
1997 harmonisation of 1.2m council workers costly nature of equalising notice periods workers unwilling to accept cash less benefits
to reduce disputes and grievances
Job Evaluation
Points Rating - breaking down of job into series of factors such as skill and judgement then applying a weighting for measurement
Pitfalls of Harmonisation
confusion of goals of harmonisation with management
Equity and Fairness in Reward Management
Hertzberg 1987 - employees motivated by inherent need to succeed at challenging tasks Semler 1993 - Brazilian Management Style - how employees accept responsibility following good treatment
Analytical Evaluation Schemes
Factor Comparison - ranking of jobs and attachment of monetary values equal pay legislation requires schemes to be analytical and gender neutral new technology is changing roles and introducing new skills
skill variety
Armstrong & Murlis 1998 - transitional nature of Job Evaluation
task identity task significance autonomy
costly bureaucratic nature
feedback
Criticisms of Job Evaluation
people don't work for money rather for acceptance and recognition Crosby 1980 Recognition and Feedback
Non Financial Rewards and Recognition
rewards and praise can have negative impact on creative jobs
rewards for exemplary and additional work
difficulties in application to knowledge or team based working
compression of pay grades into wider bands no more than 5 or 6 bands for all staff Broadbanding
emphasis on external relativities less reliance on rigid job evaluation
Kohn 1993 suggestion schemes
Stredwick 2002 - Two Types of Formal Recognition Schemes job rotation
Equal Value Considerations
job enlargement job enrichment autonomous work groups
Involvement, Autonomy and Responsibility
team working sick pay, company cars, health insurance and holidays job security staff provided with core benefits and are offered menu of others to add to them of their choice strong overlap with motivation theory
Equity and Fairness in Reward Management .mmap - 01/04/2008 -
greater flexibility of working arrangements decisions now made lower down hierarchy
Hackman & Oldham 1976 - 5 Core Job Characteristics for Satisfaction and Motivation
Flexible Benefits Cafeteria Benefits
Equal Pay Act 1970 and Amendment Regulations 1983 implications for pay schemes - must not reflect discriminatory values
process that begins with recruitment and leads into continuous development recruits briefed on performance standards, establish learning needs and undergo socialisation process some induction processes will be more basic than others - may consist of rite of passage
Employee Assistance Programmes increase availability of counselling services increase of 40% in stress related illness in the UK with 13.4m lost days in 2001
informal processes may cause problems of isolation, confusion and low morale
(4) Counselling and Support (1) Induction and Socialisation
employers benefit through lower levels of turnover and reduced absenteeism
problems will create different types of cost for the company understanding of pressures on new recruits needs to be individually tailored in recognition of individual need Planning Inductions
role of line manager is critical and building positive relationships will be beneficial for the future administrative - orientation, H&S, culture and history social integration - importance of informal groupings, partnering and mentors
Induction Content
cultural control - educating employees on company values - indoctrination?
identify training needs evaluate individual performance IRS Review 2003 - Reasons for Appraisal
identify good performance ensure communications identify and deal with poor performance
formal review takes place annually should provide honest and open discussion between colleagues manager uses counselling skills to actively listen and offer feedback Lewis & Sargent 2004 - skill aptitude, health or physical/mental quality
appraisals undertaken by immediate manager appropriate when rewards are concerned
workers should only be dismissed after series of warnings if capability issues is related to change in job this should be assessed by management
voluntary feedback from peers
Capability
Performance Management
Managing Poor Performance
rationale that's elf awareness increased along with improvement multi-rater providing greater validity
consideration should be given to health and work history reference to process in ACAS handbook
Popular for number of reasons Ill Health
DDA 1995 will have impact on dismissal issues
fosters spirit of continual improvement
measure of corporate health and may be a good indicator of motivation
Benefits of 360 degree
enhances commitment of staff fits with notion of involvement and empowerment
absence has significant cost to UK economy and UK has poor record of worker health
effective in open and accepting cultures
much research has focused upon preventable short term absence first stage to address this is accurate data - but may organisations are unfamiliar of this
un conducive culture
(2) Reviewing and Appraising Performance
Managing Attendance
when issues of reward are considered employee unlikely to discuss in depth conflicting aims
(3) Reinforcing Performance Standards
following collection of data problems can be defined and allow the creation of performance management systems
can be seen as expensive and time consuming Bureaucracy problems in terms of meaningfulness objectivity and accuracy
CIPD determined that disciplinary actions were widely used may include informal chats, counselling, medical support services
facilitates open communication framework for effective assessment of poor performers
360 degree reviews
answering the phone is measurable but not valuable Halo effect Strategies to deal with Absence
pilot exercises at Tesco removed pay for first 3 days of sickness
Horn effect
Validity General Problems with Performance Reviews
distortions
Recency effect
James 2002 - no occupational therapy, reluctance by departments to take on redeployed staff
management of diffiuclt people and winder communication skills Management Training and Skills
capacity of NHS to support schemes employee resistance to rehab difficulty in finding other duties
Veblen effect - central tendencies Doppelganger effect
UK historically poor at supporting people back to work
Rehabilitation and Health Management
Redman 2001 review as part of control process
IRS employment review 2004 - barriers to rehabilitation PM review for Control
persuading managers of rehab value waiting for sick notes
assumption that employees will accept feedback but not enough evidence to prove this
mental health rehab even more complex Evidence of Success this will remain as organisational function with 70% of employees undertaking review Future of Performance Review
Performance Management.mmap - 24/03/2008 -
peer review systems used to undermine co workers - appraisal as disciplinary gaze
review is not management panacea - not all managers work well with this format
changes can be incremental and not seen as a problem for managers and employees radical changes will require more concentrated changes around managerial roles, structure, training and employee communications HRM considerations are likely to permeate technical changes if they are;
Introducing Technological Change
result of investment into technology regarded as routine HR specialists have no natural role to play
Role of HR as Change Makers
Role of the HR Function Many employees have welcomed technology changes
Legge 1993
business managers experiment with management
Paternalistic/Traditional Companies little communication and engagement participatory or non approach top down or bottom up
Sewell & Wilkinson 1992 Types of Involvement Policies
Purcell & Ahlstrand 1994 - typology of management styles
will result in differing perceptions depending on position of engagement within the firm
informal resistance to change has been seen as workflow system issues rather than HR problem
top down approaches with lack of communication may ignore impacts on staff
Employee Involvement
EI Schemes involve 2 way flow of ideas and responsibility
Importance of Management Style
managers have degree of discretion when introducing new technology
Implementation Stage - degree of involvement dependent on reaction of staff to changes
extent of engagement and involvement will influence response of employees to new technology
New Technology and Employee Involvement Large Companies - Sophisticated Approach - formal consultation and extensive communication
need to involve staff
Initiation Stage - strategic perception of IT investment - involvement dependent on role of HR function
WERS 1998 survey has shown low level HR involvement around technical change evidence suggests that in hi tech companies the HR function was marginal
part of general business strategy
EI expressed in a number of ways McLoughlin & Clark 1994
Technological Change in Non-Union Environments
absence of unions may be disadvantage because of importance in obtaining meaningful management voice McLoughlin 1993 reaching agreement with union can create legitimacy Marchington & Wilkinson 1996
L4 Mindmap.mmap - 09/05/2008 -
common and divergent issues between employer and employees
two way dialogue allowing workers to influence events in workplace
both have vested interest in company success with negative effects on profit affect salaries and other benefits
Edwards 2003
HR managers play critical role in this process external influences such as regulation allowing managers to think more creatively about available choices
are critical divergent interests
employer seek to buy labour at lowest possible price employee seeks to sell labour at highest possible price
employment relationship defined by conflict and cooperation
Dundon 2004 - Analysis of Worker Voice
valuing employee contributions
neither side is consistently unified
improved performance and productivity
3 positive impacts of voice
management will have conflicting objectives between layers and departments
improved managerial systems EU concept of social dialogue centres on partnership between employees and staff
BUT notion of two sides is simplistic
partnerships can be viewed at different levels
Ferner & Hyman 1998 - 3 Characteristics of Social Partnership
encourages representation
conflicts between unions and hierarchy of membership issue of 3rd party intervention by government - legislation and pay regulation
workers have different interests from managers Public Policy Context
private business
some employees view partnership as 'Union Trojan' managers may view partnership as slowing down decision making and increase costs UK business environment focus on short-termism creates less incentives for longer term partnerships
Management Role in Employee Relations
sectoral differences
public sector
size differences - multi establishment vs single unit firms impact of employee relations vs other corporate issues reducing labour costs
Unions often have little choice but to accept partnerships or face de-recognition
industrial relations policy as part of wider long term corporate plans
companies with partnership arrangement shed jobs faster in declining industries
channel discontent through official channels increasing productivity and utilisation of labour
Kochan 1986 - Strategic Choice Model
partnerships had no impact on wage settlements and were unlikely to figure as component of union revitalisation
Kelly 2004
increase control over the labour process
short term solutions have been seen to be problematic although evidence shows management have adopted pragmatic and opportunistic approaches
requirement to establish works council if firm exceeds 1000 employees
key influences that shape management perception Unitary view of firm as team striving for single goal
template provided for EWC in each firm as well as requirement for AGM seeks to ensure that employees are consulted about the organisation they work in
public corporations voluntary sector
Different context of management nature
Employee Voice and Social Partnership
no room for factions and conflict seen as abnormal Fox 1966 - Frames of Reference Model European Works Council Directive (EWC)
EWC seen as opportunity for management to community elements of corporate strategy and facilitate discussion of change
Pluralist view sees the organisation as comprising various groups with common and divergent interests
issue of union recognition lies at heart of employee relations 1970s - assumed most employers would recognise unions and support their work policy and procedure has changed significantly
union initiated and based on collectivist principles wedded to principle of statutory employee rights
1977 Bullock report addressed issues of worker representation at Board level
notions of partnership have become more popular
influenced by anti-corporatism of Thatcher which encouraged firms to evolve measures best suited to them individualist in approach and stressed direct communication with workers
Extent and Nature of Union Recognition
extension of tasks undertaken
companies were waiting to se how legislation was enacted trade unions have increased resources to improve their profile employees have adapted to EU regulation on consultation regulation of freedom to dismiss workers
From Industrial Democracy to Employee Involvement
Recognition by Agreement Smith & Morton 2001 - Impact of 1999 Employment Relations Act
Upward Problem Solving
increase stock of ideas and encourage team working
Gall & McKay 1999 - increase of new recognition agreements
Employee Involvement
driven by business and 'bottom line' criteria tapping employee knowledge and opinion
1990s - many firms introduced new practices without consultation
number of companies likely de recognise have already done so
recognition of unions achieved by
inform and educate staff of management plans briefings and routine communications
places with unions supported by management arrangement
Practical Forms of EI Downward Communication
linking individual reward to unit success
Managing Worker Voice
Increased distinction in UK between 3 types of workplace
Financial Involvement
places where unions are being edged out non union areas
proportion of UK workplaces with recognised unions fell to 45% in 1998 substantial sectoral variation 95% in public sector 25 in private recognition varies in scope and depth
significant component of employee relations from 1920s-1980s Brown 1998
prominence of bargaining has declined in recent years and now takes place at a work level
employers will recognise unions for certain activities such as grievance or discipline
non manual make up largest group of members and fewer new firms are likely to have unions
Is concerned with substantive and procedural issues
management may view unions as part of communication process in larger firms
many blockages caused by management of future relations
employees may decide it is more important to achieve long term stability in relations
Working with Unions
extent of bargaining has reduced in recent years along with membership and recognition
Collective Bargaining
shape and size differs between sectors and firms and bargaining level will differ between workplace to multi-employer
Reasons for Working with Unions
lack of power to reduce the power of unions in the workplace
multi employer bargaining has significantly reduced in the UK and disappeared in the private sector aim to encourage devolved responsibility for financial control
Charlwood 2003
Millward 2000
movement to marginalise or de-recognise unions often driven by disputes with unions over changes needed
Beaumont 1987
other firms have taken advantage of superior power base to remove of restrict union activities
non unionism has a geographic element with greater representation in the South East and certain sectors
in some cases this has been influenced by approaches to individualism and performance related pay over collective approaches
argue that terminology of non-unionism is limited Good Ugly
categorised non union firms into 4 groups
Guest & Hoque 1994
reductions in shop stewards
Managing Without Unions
Lucky leaders in product market - large companies with clear strategies
Edging out the Unions
reduction of available time for union activity Changes associated with marginalisation
comprehensive recruitment, induction, training processes
greater emphasis on individualism Good Firms
focus on employee communication and feedback
WERS 1998 confirmed trend to hollow out collective agreements with managers viewing certain HR issues off limits to unions
poor terms and conditions
complete withdrawal of collective bargaining by unions within a firm
deprivation of rights
views communication as negative
lack of support for DOCAS arrangement lower priority for collective bargaining
competitive pay in excess of market
low pay and limited rights
instrumental approach explains why unions are seen in local and economic terms reduced willingness to become union members even when encouraged
shift has moved towards greater emphasis on site and unit level negotiations
identified a number of 'household name' firms that were praised for employee relations that attempted to offer more than the unions could
Bad
unionisation as inevitable
people join unions for instrumental reasons such as protection from arbitrary management decisions
Managerial prerogative is increased since 1980s with many firms prepared to use it
Managing Worker Voice.mmap - 09/05/2008 -
Recognition from application to Central Arbitration Committee Recognition Ballots
Task Participation and Teamwork
Bad and Ugly Firms
De-Recognition
removal of bargaining rights for one or more union in multi union environment
partnership had limited application in the UK for many years failure of traditional approaches to labour management and rethinking of union strategy led to number of pioneering partnerships in 1980s and 1990s Labour victory in 1997 and 1999 Partnership at Work Fund created a boom of partnership industry
Unions - prospect of return to influential position in employer relations
All stakeholders had interest in this approach
A psychological contract of mutual high trust and high organisational commitment
Partnership is a set of structured cooperative relationships between management and employees of an organisation
TUC launched partnership institute Government - addressed strategy of economy modernisation
shared commitment to business goals Context
recognition of legitimate differences between parties
Employers - reason for scepticism and CBI gave guarded welcome
ensures flexibility of firm is not a expense of job security Brown 2000 - Major Characteristics of Partnerships
Labour ending opt out of Masstrict Treaty and inclusion of provisions for collective employee representation
open and well informed dialogue and consultation
What is Partnership?
opportunities for staff development seek to add value through staff motivation
impact of EU directive on information and consultation 2002 Information and Consultation of Employees (ICE) - creation of representative structures
enhanced competitiveness through employer flexibility
Legal Environment Employers Mutual Gains from Partnerships
priority of security reflects performance of workers from reward to security
greater staff identification with corporate goals
enhanced security and career development based on training and development
explicit relationship established between flexibility and security Staff
distinction between Employment and Job Security UK collective agreements have no legal forces and UK employers have fewer legal protections and security is highly fragile
Trade Off between Flexibility and Employment Security
Partnership in the UK
ramification of approach to security means that employers see union role as supporting organisational change undermining their historical role
Partnership principle has become very controversial and it both lauded and criticised
partnerships introduced into larger organisations with existing consultation and representation
partnership stresses consensual approach to industrial relations Sophisticated HR
significant number of agreements in public sector and privatised utilities private service sector is mixed with some strong examples such as Pizza Express
Analytical Implications Terry & Smith 2003 - Partnership in the UK to date
survey shows that well established and resources system of communication and engagement was essential for success of partnerships
is partnership with unions or employees directly? different views across the world on whether unions are best representatives of workers
required training and support less evidence to show benefits to staff and employees
UK and US see unions as oppositional in nature and contest relationships with them - Traditionalist view
UK management viewed as pragmatic and will adopt approaches to employee relations as dictated by operational needs
Partnership Working in Organisations
ideological hostility to collectivism is not as strong in UK as in USA but a significant shift is required Failure of current HR policies due to lack of union involvement shifts in ideological moods reflect wider social and political pressure
BUT employment relationship seen as being antagonistic in nature linked to analytical implications - who is included?
Alternative view sees changing nature of union representation - mounting challenges and lower membership have forced them into consensual direction
shared interest in improving organisational performance
Who are the Partners? Ackers & Payne 1998 - 2 reasons why Partnerships may work in the UK
Sophisticated HR - employees as assets with clear HR support mechanisms
Future of UK Partnerships
Consultative - recognition of unions and integration into firm partnership structure may follow Purcell styles matrix
lack of legal regulation and hostility to collectivism means UK employers unlikely to introduce continental partnership model Kelly 2000
Purcell 1986 - 4 Styles for managing employee relations
Constitutional - unions recognised and accepted as inevitable - employee relations based on stability and control
Partnership in Theory and Practice Mechanism of engagement between staff and management
origin in Northern Europe in 1950s collective bargaining and widespread legal rights
combination of employment regulation and construction of strong centralised institutions
any critical arguments should be considered before final decisions are made
in contrast to Negotiation which is targeted towards bargaining Regulated Model
process of informed debate and discussion preceding final decisions
criticised as inflexible and costly in global economy Consultation
but countries retain high labour productivity few legal protections and unilateral management prerogative employment relations dealt at individual level with lower security but greater market flexibility
process needs to be supported by significant information across a range of organisational activities Deeply embedded in EU but less so in UK
Deregulated Model
common in USA and Asian economies
European Model of Partnership: Between Regulation and Deregulation
Significant implications for HR strategy to ensure strong consultation systems are in place key focus of partnership is to improve competitive performance
most deregulated Western European state
employee security and competence will theoretically lead to acceptance of required change
influenced by EU regulation and required to adopt parts of regulated model partnership being introduced into weaker working environment with lower levels of regulation and weak unions Many EU countries looking to deregulate markets with movement towards to EU convergence that looks to combine benefits of both models
UK
Improved Organisational Performance
evidence shows link between performance and greater employee improvement employee security can facilitate work reorganisation and technological innovation partnership however does not address issues of conflict or pay and reward and focused towards high performance outcomes
Lesson 5 Mindmap.mmap - 10/05/2008 -
Traditional - labour viewed as factor of production with assumed subordination
high levels of occupational rather than organisational commitment links created between academics through communities or networks of practice knowledge can be sticky or leaky knowledge critical to the organisation exists but cannot be located knowledge leaks along networks of practice
Brown & Duguid 2000
Professional Communities
knowledge sticks between different organisational practices organisation will have different views to knowledge creation than that of its employees further implication of knowledge movement suggests that expertise in teaching skills may not be shared in different subject areas
traditional area of underdevelopment in UK institutions review of personnel management during 1980s found few examples of personal function those responsible had little influence over processes and were focused toward admin centre rather than staff
Keep & Sisson 1992
Personnel Management in UK Universities interest in LO stimulated by need to remain competitive in turbulent environment
significant changes with most universities containing personnel department new universities are more managed than older ones despite changes there is still little clarity on on the role played by personnel
The Learning Organisation
conflict of organisation and learning one seeks to organise and reduce variety while learning seeks the opposite
perceptions of university as ivory tower inhabited by scholars pursuing knowledge in rigorous ways reality of universities similar to wider public sector with requirements to deliver cost effectiveness through measurement of performance
LO concerned with ways in which organisations design themselves to value manage and enhance skills and career development
Jackson 2001
Salaman 2001
Barry 2001
principle problem with LO concept is learning viewed as purpose of organisation rather than means to an end
Higher Education in the UK
1990s rapid growth in student numbers mirrored by reduction in funding by student
Findlay 2001
Can all Organisations be Learning Ones?
universities now forced to compete openly for resources - targeted towards research activities
ideals of LO have little in common with private and commercial sector work Keep & Rainbird 2000
individual and organisational views on useful and beneficial learning will differ significantly
critical challenge to establish an integrated set of policies across the organisation to support LO aims
evaluation of learning benefits
Who Wins from Learning?
at strategic level need for holistic relationship between HR and organisational strategy Regulators - HR function formulates employment rules and procedures
Management Style
Challenge for the HR Function HR Models - Story 1992
effective organisational governance - fair and trustworthy management
Findlay 2001 Influences on employee perceptions
traditional style unlikely to see learning as viable or attractive
Change Makers - employee relations emphasise the needs of the business Advisers - internal consultancy role allowing management to decide HR initiatives
only certain types of business strategy see learning as necessary but not those with cost reduction strategy
Keep 1981 - critical issue is extent to which organisations want staff to learn
important to reflect on the HR role in making the organisation a LO
what employees are prepared to contribute to the organisation in exchange for security
Business Studies Education: A Learning Organisation
Handmaidens - specialists operating in submissive relationship with clients devolution of HR function to managers how will this affect the creation of a LO?
associated to factors such as reward and job security Scarbrough 1998 - Management of the Psychological Contract
senior managers believe innovation and creativity can be achieved by commitment
Affective Commitment: employees share the values and goals of an organisation investments made by individuals over time to organisation people work and learn collaboratively with learning taking place each day
Myer & Allen 1984 - Continuance Commitment
Employee Commitment and the Learning Organisation
incorrect assumption that learning is done in isolation - evidence suggests learning is achieved through communities and occupational networks members bound together by mutual and collective understanding of community nature community built through mutual engagement participation accepted through activities and actions
survival of organisation depends on renegotiation of psychological contract Herriot & Pemberton 1997
Learning Through Social and Occupational Networks
creation of fair exchange securing individual commitment increasing competitive environment has led to competitive cost based strategy having a greater negative impact on contracts
Goffee & Scase 1992 Wenger 2000 - Features of Communities of Practice
community produces repertoire of communal resources - language, routines tools etc
additional dimension to issues of commitment where these workers are focused towards individual or professional goals rather than corporate ones
often ignored within the organisation Knowledge Workers and Professionals
Lesson 6 Mindmap.mmap - 12/05/2008 -
lack of alternative substitutes to existing jobs - individuals remain but may not share values and goals
overcoming conflict requires better integration of knowledge workers within corporate environment
personal assistance offered on a 1-1 basis commonly used and seen as an effective learning tool problems associated include it being used in an ad hoc way and many coachers lack sufficient training
Coaching
learning delivered or enabled through e-technology accommodates access at different times and place lack of PC access lack of support and human interface
seen rapid expansion but not as much as predicted E-Learning
content is concerned with knowledge long term training need trainees are scattered
CIPD identifies effective e-learning when;
expensive situations need simulation set in context of social and economic environment of organisation continuous and rapid change and requirements for management to respond No management development Isolated Tactical MD: ad hoc and reactive
Trends and Development in Learning
Integrated and Coordinated MD: career structure and assisted learning MD Strategy Implements Corporate Policy: implementation of policy
Management Development
Burgoyne 1988 - 6 Levels of MD Maturity
MD Strategy Input into Corporate Policy Formation Strategic Development of Management of Corporate Policy methods for MD include MBA, management degrees, internal or external training courses and action learning enables integration of learning with existing professional work in a meaningful way
system aimed at developing intellectual capability and conceptual understanding through learning process
needs to be continuous be owened and managed by individual learner
Education
driven by individual needs have clear learning outcomes
Essential Principles of CPD
process to facilitate learning to increase effectiveness in aspects of work
Continuing Professional Development Training
evaluate learning
changes taking place within individual and on the process whereby the learner acquires knowledge
be seen as essential part of professional and personal life Learning critical that HR ensure learning is located within the organisational context
motor skills
aspects of behaviour practised in the work situation that individuals are required to perform at an acceptable level
ensuring culture is supportive or learning ensuing management are committed to learning
manual dexterity social and interpersonal
top 3 critical factors in promoting learning
technical and analytical
providing employees with time to learn Skills helping faster integration of new staff avoidance of errors
Definitions and Terminology
Benefits from learning
increased staff flexibility
Tacit Skills: ability to perform tasks without awareness of doing so - highly valued knowledge
The Strategic Dimension
difficult to measure financial value of learning to company
comprehension application
fixed costs including accommodation or equipment
Bloom 2004 - Taxonomy of Learning Hierarchy
salaries and on costs of trainers variable costs depending on length and nature of training undertaken
analysis synthesis evaluation
Costs associated with Learning behaviours demonstrated by individuals when undertaking job relevant skills
opportunity costs harder to measure may include payments to employees cost of wasted materials
Whiddett & Hollyfolde 2003 breadth/awareness and strategic perspective
specification of needs at individual and organisational level
oral and written communication
Competency Management Charter Initiative management standards
training must represent the best solution to existing problems and is not a cure for all organisational problems
leadership and assertiveness Teamworking analysis and judgement
global review of short and longer term objectives to determine need
drive and flexibility
assessment of staff against objectives competence/performance management approach using JDs to determine required needs
Organisational Training Need
critical incident - focus on prioritising the main problem within organisation
Identification of Training and Learning Needs 3 Levels of Training Need
identification of specific training needs
Learning and Development at Work
job specification role analysis
range of methods for application
Job Training Need
task observation linked to job training need and includes identical processes linked to performance appraisal
Personal Training Need traditional approach seeks to determine clear aims and goals to approach
signal, stimulus and response learning classical conditioning - stimulus creates response
most helpful objective are those that describe expected behaviour but conditions under which they will occur critical to recognise knowledge skills and abilities brought by staff to learning event
BF Skinner - Behaviourist Approach Devising a Learning Plan
variation in drive and motivation to learn by different staff members
Cognitive Learning
insight experience and 'aha' moment powerful reinforcer of learning - case studies
learning as information processing
Pedag og ical
Instruction
Operant conditioning - desired response is rewarded after delivery
stimulus-stimulus connections
signal with message passed across communication channel
Lecture
signals encoded for transmission
Cybernetics Individual Based
messages subject to noise which acts as obstacle
Group Based
Stammers & Patrick 1975
learning hindered by other stimuli and amount of information sendable is limited learning by imitation of others
Case Studies
Self Managed
enables transfer of tacit skills
Andragogical
tell -show-do-review processes early part of pilot course or assembly lines
Bandura 1977 - Social Learning Theory
Instructional: used for basic programmable skills and transfer of routine information
allows for sharing of social and interpersonal skills doesn't incorporate feedback or evaluation
4 Stage Training Process System The Process of Learning
individuals can also learn negative or inappropriate skills
estimations show that 25% is recalled from this process attention span 20 mins
Lecture: required from providing large numbers of people with information
cost effective way of providing information
Snape 1994 - 4 Categories of Training Methods
Delivering Training
Testing Concepts in new Situations
Concrete Experiences
Formation of Abstract Concep ts Generalisations
Obser vation and Reflection
relative to presenter communication method trainer supports group and allows for conclusions to be met allows for problem solving and addressing real life situations important for cases to be appropriate length and content
Case Studies: team oriented approach to learning allowing individuals to propose solutions
Kolb & Honey 1995 Learning Process Model
approach often criticised for not providing right balance of content and length undertaken at required pace of individual needs
Activists - learning by involvement
choice of method will vary based on cost, situation and location factors regarded as most effective way of learning at work and most common
Reflectors - learning by review and reflection 4 different learning models with individuals having orientation to one or more
Self Managed: learning by the individual including e-learning and language labs
many organisations provide in house training and in certain cases professional qualifications most critical step of training process and frequently not carried out in many firms Reaction Level: most commonly used approach providing feedback at the end of the session Immediate Level: measure of training objectives: exams, tests, projects and cases Intermediate Level: impact on job performance and application to workplace - interviews, questionnaires and observations
Kirkpatrick 1967 4 Levels of Evaluation
number of customer complaints level of sales or productivity number of accidents absenteeism or turnover
Ultimate Level: impact of training on organisational performance using number of indicators
letters unanswered
Marchington Chapter 9.mmap - 11/05/2008 -
Evaluating Outcomes
Theorists - learning through context of theory and concepts Pragmatists - learn through linking new information and real life situations
increasing feature of modern working resulting from changes in the economic environment due to M&A and other changes preclusion of insecurity by keeping workforce intact finding alternative cost efficiencies natural attrition and reducing temporary staff
impact of job losses and redundancies can have negative impact on surviving staff
Job Insecurity
Preventative Strategies
Brockner 1991 - Survivor Syndrome
however many firms will not be able to source such alternative options as this requires alternative cost strategies
survivors are more change averse, resentful and competitive - development of long hours culture can lead to a range of health related issues including depression and substance abuse
minimisation of hardships by loser and survivors notice given or grouping of job losses i.e. all in one go re-employment assistance and continued employer support
Ameliorative Strategies Greenhalgh 1991 - Coping Strategies for meeting insecurity
repairing of damage done to commitment of survivors provision of guarantees to survivors around job security
Managing Insecurity
Organisational Restructure and Job Insecurity
Restorative Strategies
important to not confuse good intentions with reality
defines what employees are prepared to give by way of effort and contribution in exchange for job security
approach will depend on organisational business strategy innovation vs cost reduction preventative strategies will require other methods for savings
recent movements that withdraw security from the contract has been shown to lead to increased turnover rates General comments on strategies
internal capital market within firms often leads to to short term cost focus
Psychological Contract
while intentions to leave may not be realised due to lack of attractive alternatives this will impact on individuals performance survivor guilt leads to negativity and undermining employee commitment Guest & Peccei 1992
Lesson 7 Mindmap.mmap - 29/05/2008 -
major criticism of EO has been that it functions as a process of organisational growth change is likely to be limited in times of economic stagnation approach requires significant cultural change and many organisations will have well established groups that will resist this social expectations of fair treatment have increased and are well established nationally
Can Diversity Management Succeed?
increasing number of women in the workforce have also moved to shift this issue into the open
interactions and attitudes between employers and staff are influenced by legislation
Business pressures will force many companies to introduce this approach and consider how diversity issues affect their companies
1975 Sex Discrimination Act
Anti-Discrimination Legislation and Equality Codes
1976 Race Relations Act 1995 Disability Discrimination Act some improvements have developed in this area but men are still prevalent in many companies senior management
terminology entering UK discussion in 1990s as equality approach dealing specifically with minorities significant disagreement about definition and meaning organisation needs to fit its approach to this differences
Dickens 1994 - Overview of UK Equal Opportunities
diversity approach recognises that all employees are different and workplaces can benefit from recognising this difference requires firm to rethink its practices such as movement away from long hours culture to encourage home and fixable working
traditional argument for equality has been based on an ethical or coercive framework
Managing a Diverse Workforce Managing Diversity
The Business Case for Equality
business case approach to diversity argues the same as EO but adds additional concepts such as diverse teams increase productivity
has been difficult to convince bottom line benefits for many firms
problems have been most likely in companies pursuing a cost strategy
Other demographic trends including ageing workforce has led to changing perceptions
Lesson 8 Mindmap.mmap - 29/05/2008 -
mainstreaming of EO has lead to a wider application of the process above that of managerial decision making
Changing Organisational Cultures
wider issues included use of different languages sexual harassment and styles of working increasing prominence of work life issues
many changes are likely to be long term and costs of inequality are unlikely to have been measured
stronger case made for firms pursuing an innovation strategy particularly due to changing demographics and increase of women in the workforce
further argument was made in favour of approach equality from a business perspective argument that discrimination was an economically inefficient method of working
diversity cultures works to ensure that all people are empowered to meet their full potential some organisations however see a difference between people based on group association or intrinsic nature
Limitations of Business Case Model
higher levels of unemployment amongst ethnic minorities
equal treatment of women will lead to a widening of the employee pool
this has lead in many cases to the marginalisation of HR and unions in UK
role of globalisation in undermining distinctive national economic and industrial policy influence of international financial markets and monetary union growth of MNC who have become powerful actors in the international economy and majority shareholders in areas of employment and output
characterised by international competition
20% of employees in developed world work in an MNC
product market characterised by import penetration and MNC manufacturing most successful have been Japanese companies and US companies have emulated Lean strategies and approaches
Internationalisation of Economic Activity
The Motor Industry
access to markets and capital economies of scale
movement to greater integrate subsidiaries and encourage competition for resources from corporate centre
Reasons for MNC evolution
transfer technical expertise reduce exposure to currency risk and access low labour
internationalisation will have a wide range of implications for the HR function and employees
emergence of MNCs as stateless players shifting resources towards opportunities rootless management structures with international cadre of management
HR management will include the creation of international structures to bring HR management into one place enabling information exchange and development of common HR policies
intra-enterprise trade within MNCs now largest source of economic interchange
Ferner & Edwards 1995
Implications for Managers and Employees
however many MNCs often maintain characteristics of home country
The Internationalisation of HR
further challenges will include development of mobile management cadre moving across the organization
concentration of operations in country of origin means that MNCs retain national characteristics
erosion of local autonomy selling of new approaches such as PRP comparison of employee performance across subsidiaries and different countries
Challenges of common labour management policy
important distinction between MNCs is the impact of capital market structures on behaviours
'Country of Origin' Influence on MNC
to achieve synergies MNCs are now moving towards international structures and capture cross border linkages
In this model MNCs will adopt cost minimisation approach to labour management Germanic and Latin systems have more stable shareholdings and are free to pursue longer term goals - prioritising production function and openness in industrial relations
single product MNCs may see single management structure across company multiple product MNCs may apply international product divisions approach has facilitated cross border collaboration within HR function
Business sector and geographic location will have an impact on MNC policies
Institutions of collective bargaining and employee involvement Ferner & Varul 2000 - Challenges facing integration and HR impacts
International Integration and MNC
way in which management functions are defined and differentiated within the company US more proactive than Europe particularly around employee benefits reflecting tight labour markets
often due to framework of labour regulation
German model highly legalistic and reactive and more concerned with training functions
Lawrence 1996 - differences within international HR functions
result of ongoing negotiations and trade offs between operational management and HQ many subsidiaries will fail to share best practice in order to maintain competitive advantage many companies will attempt to overcome this resistance by introduction do countervailing measures comparing subsidiary performance through ICT solutions
Lesson 9 Mindmap.mmap - 01/06/2008 -
Edwards 1993 balance between centralised and decentralised decision making process
employee development approach employees as enduring assets
industrial functions will have working bases in a number of countries each of them with different HR regulations
nature of the regulatory framework that HR must interpret and implement
nature of system viz training and development
German models see banks as key company stakeholders
Anglo-Saxon economies are fluid and allow easy take overs with management focused towards short term interests
most MNCs will seek to achieve degree of integration in service or production provision
orientation of company towards internal or external market
detached relationships between shareholders and companies often a feature of UK/US companies
MNCs will often defer HR policy to national subsidiaries