A_HANDBOOK_OF_HUMAN_RESOURCE_MANAGEMENT.doc

A HANDBOOK OF HUMAN RESOURCE MANAGEMENT
PRACTICE
11th edition
CONTENTS – TEACHING NOTES
1. The practice of human resource management
2. Strategic human resource management
3. HR strategies
4. Human capital management
5. The role and organization of the HR function
6. The role of the HR practitioner
7. The impact of HRM on performance
8. International HRM
9. Corporate social responsibility
10. Human resource management research methods
11. Competency-based HRM
12. Knowledge management
13. High-performance work systems
14. Work
15. The employment relationship
16. The psychological contract
17. The essence of organizational behaviour
18. Characteristics of people
19. Motivation
20. Engagement and commitment
21. How organizations function
22. Organizational culture
23. Organization design
24. Organization development
25. Change management
26. Job, role, competency and skills analysis
27. Job and role design and development
28. People resourcing strategy

29. Human resource planning
30. People resourcing practice
31. Recruitment and selection
32. Selection interviewing
33. Selection tests
34. Talent management
35. Career management
36. Introduction to the organization
37. Release from the organization
38. The process of performance management
39. 360-degree feedback
40. Learning and development strategy
41. The process of learning and development
42. Learning and development programmes and events
43. How people learn
44. Organizational learning
45. Management development
46. Reward management
47. Job evaluation
48. Market rate analysis
49. Grade and pay structures
50. Contingent pay
51. Rewarding special groups
52. Employee benefits, pensions and allowances
53. Managing reward systems
54. The employee relations framework
55. Employee relations processes
56. Employee voice
57. Employee communications
58. Health and safety
59. Employee well-being
60. HR policies
61. HR procedures
62. HR information systems

1. THE PRACTICE OF HUMAN RESOURCE
MANAGEMENT
Teaching notes
Contents
These notes contain:
 An outline of the session
 A concept map for HRM
 Definitions ofkey concepts and terms
 Questions and discussion points
 A bibliography
Objective of the session
Provide an overview of the concept of human resource management and its characteristics.
Learning outcomes of the session
The session will cover:
 The meaning ofHRM
 The objectives of HRM
 The policy goals ofHRM
 The characteristics ofHRM
 How HRM developed as a concept
 Reservations expressed aboutHRM
 The context in which HRM operates
 The ethical dimensions ofHRM
Key concepts and terms
In addition, definitions will be provided of the following concepts and terms:
 AMO theory  Matching model of HRM
 Commitment  Mutuality
 Contingency theory  Pluralism
 Hard HRM  Resource-based view
 Harvard framework  Soft version of HRM
 HRM system  Strategic integration
 Human resource management (HRM)

Session outline
The meaning of human resource management (HRM)
A strategic, integrated and coherent approach to the employment, development and
well-being of the people working in organizations.
Other definitions
● ‘All management decisions and action that affect the nature of the relationship
between the organization and its employees – its human resources’ (Beer et al,
1984).
● ‘A distinctive approach to employment management which seeks to achieve
competitive advantage through the strategic deployment of a highly committed and
capable workforce, using an integrated array of cultural, structural and personnel
techniques’ (Storey, 1995).
● ‘The management of work and people towards desired ends’ (Boxall et al, 2007).
The objectives of HRM
● To ensure that the organization is able to achieve success through people.
● To increase organizational effectiveness and capability.
● To be concerned with the rights and needs of people in organizations through the
exercise of social responsibility.
The policy goals of HRM (David Guest)
● Strategic integration.
● High commitment.
● High quality.
● Flexibility.
The characteristics of HRM
‘Human resource management covers a vast array of activities and shows a huge range
of variations across occupations, organizational levels, business units, firms, industries
and societies’ (Boxall et al, 2007). It can:

● be diverse (hard or soft);
● be strategic;
● be business-oriented;
● focus on mutuality – a state that exists when management and employees are
interdependent and both benefit from this interdependency;
● take a unitary view – the belief that management and employees share the same
concerns and it is therefore in both their interests to work together;
● treat people as assets or human capital.
How HRM developed as a concept
Emerged in the 1980s in the form of:
● the matching model – HR systems and the organization structure should be
managed in a way which is congruent with organizational strategy (Fombrun et al,
1984);
● the Harvard framework – based on their belief that the problems of historical
personnel management can only be solved ‘when general managers develop a
viewpoint of how they wish to see employees involved in and developed by the
enterprise, and of what HRM policies and practices may achieve those goals’
(Beer et al, 1984).
Reservations expressed about HRM
● Promises more than it can deliver – HRM is an 'optimistic but ambiguous concept';
it is all hype and hope (David Guest, 1991).
● Manipulative – ‘control by compliance’ (Hugh Willmott, 1993).
● Hostile to interests of employees – ‘Sadly, in a world of intensified competition and
scarce resources, it seems inevitable that, as employees are used as means to an
end, there will be some who will lose out. They may even be in the majority. For
these people, the soft version of HRM may be an irrelevancy, while the hard
version is likely to be an uncomfortable experience’ (Karen Legge, 1998).
The context in which HRM operates
● HRM practices are contingent on the circumstances in which the organization
operates, ie the internal and external environment.

● Contingency theory tells us that definitions of HR aims, policies and strategies, lists
of activities and analyses of the role of the HR department are valid only if they are
related to the situation of the organization.
The ethical dimensions of HRM
The application of HRM requires the exercise of social responsibility – it must be
concerned with the interests (well-being) of employees and act ethically with regard to
the needs of people in the organization and the community.

The HRM system
HUMAN RESOURCE
MANAGEMENT
Learning and
development
Reward
management
Employee
relations
Resourcing
Organization
Organizational
learning
Individual
learning
Management
development
Design Human resource
planning
Development Recruitment &
selection
Job/role design Talent
management
Job evaluation/
market surveys
Grade and pay
structures
Contingent pay
Industrial
relations
Employee voice
Communications
Performance
management
Health and
safety Employee
benefits
HR services
Know ledge
management
Employee
w ell-being
Human capital
management
Corporate social
responsibility
HR strategies, policies, processes,
practices and programmes
HR philosophies

Concept map
performance
management
mutuality
engagement and
commitment
motivation
reward
employee
relations
Human
resource
management
human capital
management
resource-based
view
psychological
contract
humanism organization
development
high
performance
people
resourcing
learning and
development
Concepts Practices

Definitions of key concepts and terms
AMO theory – The formula Performance = Ability + Motivation + Opportunity to
Participate provides the basis for developing HR systems that attend to employees’
interests, namely their skill requirements, motivations and the quality of their job.
Commitment – The strength of an individual's identification with, and involvement in, a
particular organization.
Contingency theory – HRM practices are dependent on the organization’s environment
and circumstances. Definitions of HR aims, policies and strategies, lists of activities
and analyses of the role of the HR department are valid only if they are related to the
situation of the organization.
Hard HRM – People are important resources through which organizations achieve
competitive advantage. The focus is on the quantitative, calculative and business-
strategic aspects of managing human resources in as 'rational' a way as for any other
economic factor.
Harvard framework – The belief held by Michael Beer and his Harvard colleagues (1984)
that the problems of historical personnel management can only be solved when
general managers develop a viewpoint of how they wish to see employees involved in
and developed by the enterprise, and of what HRM policies and practices may
achieve those goals.
HR system – HRM as an integrated and coherent bundle of mutually reinforcing
practices.
Human resource management (HRM) – A strategic, integrated and coherent approach to
the employment, development and well-being of the people working in organizations.
Matching model of HRM – The view held by the Michigan school (Fombrun et al, 1984)
that HR systems and the organization structure should be managed in a way which is
congruent with organizational strategy.
Mutuality – A state that exists when management and employees are interdependent
and both benefit from this interdependency.
Pluralism – The belief that the interests of employees will not necessarily coincide with
that of their employers.
Resource-based view – The view that it is the range of resources in an organization,
including its human resources, that produces its unique character and creates
competitive advantage.

Soft HRM – Treating employees as valued assets, a source of competitive advantage
through their commitment, adaptability and high quality (of skills, performance and so
on) (Storey, 1989).
Strategic integration – The ability of the organization to integrate HRM issues into its
strategic plans ensure that the various aspects of HRM cohere, and provide for line
managers to incorporate an HRM perspective into their decision making.

Questions and discussion points
1. Describe the essential characteristics of human resource management (HRM).
2. What are the differences, if any, between HRM and personnel management?
3. In a seminal article (Personnel Management, 1987), Alan Fowler wrote that the real
difference between HRM and personnel management is ‘not what it is but who is
saying it. In a nutshell, HRM represents the discovery of personnel management by
chief executives’. Keenoy (1997) referred to Storey’s (1995) remark that HRM is a
‘symbolic label’ and suggested that it ‘masked managerial opportunism’. To what
extent are these statements valid today?
4. What are the key aims of human resource management?
5. One of your colleagues says to you that they dislike the term ‘human resource
management’ because it implies that employees are simply being treated as factors
of production to be manipulated by management and not as human beings. How do
you reply?
6. Comment on the following remark by Karen Legge (1995) ‘The language of HRM is
a most appropriate vehicle to represent optimum resource utilization in response to
the bottom line.’
7. Explain contingency theory. What is its relevance to human resource management?

Bibliography
Armstrong, M (1987) Human resource management: a case of the emperor's new
clothes, Personnel Management, August, pp 30–35
Armstrong, M (2000) The name has changed but has the game remained the same?,
Employee Relations, 22 (6), pp 576–89
Beer, M, Spector, B, Lawrence P, Quinn Mills, D and Walton, R (1984) Managing
Human Assets, The Free Press, New York
Boselie, P, Dietz, G and Boon, C (2005) Commonalities and contradictions in HRM and
performance research, Human Resource Management Journal, 15 (3), pp 67–94
Boxall, P F (1993) The significance of human resource management: a reconsideration
of the evidence, The International Journal of Human Resource Management, 4 (3), pp
645–55
Boxall, P F, Purcell, J and Wright, P (2007) The goals of HRM, in (ed) P Boxall, J Purcell
and P Wright, Oxford Handbook of Human Resource Management, Oxford University
Press, Oxford
Caldwell, R (2001) Champions, adapters, consultants and synergists: the new change
agents in HRM, Human Resource Management Journal, 11 (3), pp 39–52
Caldwell, R (2004) Rhetoric, facts and self-fulfilling prophesies: exploring practitioners’
perceptions of progress in implementing HRM, Industrial Relations Journal, 35 (3), pp
196–215
Fombrun, C J, Tichy, N M, and Devanna, M A (1984) Strategic Human Resource
Management, Wiley, New York
Fowler, A (1987) When chief executives discover HRM, Personnel Management,
January, p 3
Francis, H and Keegan, A (2006) The changing face of HRM: in search of balance,
Human Resource Management Journal, 16 (3), pp 231–49
Guest, D E (1987) Human resource management and industrial relations, Journal of
Management Studies, 14 (5), pp 503–21
Guest, D E (1989a) Human resource management: its implications for industrial
relations, in (ed) J Storey, New Perspectives in Human Resource Management,
Routledge, London
Guest, D E (1989b) Personnel and HRM: can you tell the difference? Personnel
Management, January, pp 48–51

Guest, D E (1991) Personnel management: the end of orthodoxy, British Journal of
Industrial Relations, 29 (2), pp 149–76
Guest, D E (1997) Human resource management and performance; a review of the
research agenda, The International Journal of Human Resource Management, 8 (3),
pp 263–76
Guest, D E (1999) Human resource management: the workers’ verdict, Human
Resource Management Journal, 9 (2), pp 5–25
Guest, D E and Peccei, R (1994) The nature and causes of effective human resource
management, British Journal of Industrial Relations, June, pp 219–42
Hope-Hailey, V, Gratton, L, McGovern, P, Stiles, P and Truss, C (1998) A chameleon
function? HRM in the 90s, Human Resource Management Journal, 7 (3), pp 5–18
Keenoy, T (1990) HRM: a case of the wolf in sheep's clothing, Personnel Review, 19 (2),
pp 3–9
Keenoy, T (1997) HRMism and the images of re-presentation, Journal of Management
Studies, 4 (5), pp 825–41
Legge, K (1989) Human resource management: a critical analysis, in (ed) J Storey, New
Perspectives in Human Resource Management, Routledge, London
Legge, K (1995) Human Resource Management: Rhetorics and realities, Macmillan,
London
Legge, K (1998) The morality of HRM, in (ed) C Mabey, D Skinner and T Clark,
Experiencing Human Resource Management, Sage, London
Mabey, C, Skinner, D and Clark, T (1998) Experiencing Human Resource Management,
Sage, London
Mackay, L and Torrington, D (1986) The Changing Nature of Personnel Management,
IPD, London
Mohrman, S A and Lawler, E E (1998) The new human resources management: creating
the strategic business partnership, in (ed) S A Mohrman, J R Galbraith and E E
Lawler, Tomorrow’s Organization: Crafting winning capabilities in a dynamic world,
Jossey-Bass, San Francisco, CA
Noon, M (1992) HRM: a map, model or theory?, in (ed) P Blyton, and P Turnbull,
Reassessing Human Resource Management, Sage Publications, London
Sisson, K (1990) Introducing the Human Resource Management Journal, Human

Sisson, K (1995) Human resource management and the personnel function, in (ed) J
Storey, Human Resource Management: A critical text, Routledge, London
Storey, J (1989) From personnel management to human resource management, in (ed)
J Storey, New Perspectives on Human Resource Management, Routledge, London
Storey, J (1992a) New Developments in the Management of Human Resources,
Blackwell, Oxford
Storey, J (1992b) HRM in action: the truth is out at last, Personnel Management, April,
pp 28–31
Storey, J (1995) Human resource management: still marching on or marching out?, in
(ed) J Storey, Human Resource Management: A critical text, Routledge, London
Thompson, P and Harley, B (2007) HRM and the worker: labour process perspectives, in
(ed) P Boxall, J Purcell and P Wright, Oxford Handbook of Human Resource
Management, Oxford University Press, Oxford
Ulrich, D (1998) A new mandate for human resources, Harvard Business Review,
January-February, pp 124–34
Ulrich, D and Brockbank, W (2005a) The HR Value Proposition, Harvard Press,
Cambridge, MA
Walton, R E (1985) From control to commitment in the workplace, Harvard Business
Review, March–April, pp 77–84
Willmott, H (1993) Strength is ignorance, slavery is freedom: managing culture in
modern organizations, Journal of Management Studies, 30 (4), pp 515–52

2. STRATEGIC HUMAN RESOURCE MANAGEMENT
Teaching notes
Explain the meaning and practical application ofstrategic human resource management(strategic
HRM) within its conceptual framework.
 The conceptual basis ofstrategic HRM
 The fundamental characteristics ofstrategy
 How strategy is formulated
 The aims ofstrategic HRM
 The resource-based view and its implications
 The three HRM ‘perspectives’ ofDelery and Doty
 The significance ofthe concepts of ‘bestpractice’ and ‘bestfit’
 The significance ofbundling
 The practical implications ofstrategic HRM theory
 Best fit  Resource-based view
 Best practice  Strategic configuration
 Bundling  Strategic fit
 Competitive advantage  Strategic HRM
 Configuration  Human resource advantage
 Strategy  Lifecycle model
Contents
 A concept map for the resource-based view
 Definitions of key concepts and terms
 A bibliography

Session outline
The conceptual basis of strategic HRM
Strategic HRM is the interface between HRM and strategic management. It takes the
notion of HRM as a strategic, integrated and coherent approach and develops that in line
with the concept of strategic management (Boxall, 1996).
Strategy
● Strategy is a forward-looking approach selected to achieve defined goals in the
future.
● Strategy is formulated through an emergent and flexible process of developing a
sense of direction, making the best use of resources and ensuring strategic fit.
The meaning of strategic HRM
Strategic human resource management (strategic HRM) defines how the organization’s
goals will be achieved through people by means of HR strategies and integrated HR
policies and practices.
Main concerns of strategic HRM
● Strategic planning.
● The formulation of HR strategies.
● The implementation of HR strategies.
● The strategic behaviour of HR specialists.
Propositions of strategic HRM
● The human resources of an organization play a strategic role in its success and
are a major source of competitive advantage.
● It is people who implement the strategic plan.
● HR strategies should be integrated with business plans (vertical integration).
● Individual HR strategies should cohere by being linked to one other to provide
mutual support (horizontal integration).

The aims of strategic HRM
● To generate strategic capability by ensuring that the organization has the skilled,
committed and well-motivated employees it needs to achieve sustained
competitive advantage.
● To provide ‘unifying frameworks which are at once broad, contingency based and
integrative’ (Dyer and Holder, 1988).
The resource-based view and its implications
● It is the range of resources in an organization, including its human resources, that
produces its unique character and creates competitive advantage.
● HRM delivers added value and helps to achieve sustainable competitive
advantage through the strategic development of the organization’s rare, hard to
imitate and hard to substitute human resources.
● For a resource to have the potential for creating sustained competitive advantage it
should have four attributes: it must be a) valuable, b) rare, c) imperfectly imitable
and d) non-substitutable (Jay Barney, 1991, 1995).
● Resource-based strategic HRM produces what Boxall (1996) refers to as human
resource advantage.
● It provides a practical justification for key aspects of a firm’s HR policies and
practices such as human capital management, talent management, knowledge
management, and learning and development.
HRM perspectives
Delery and Doty (1996) identify three HRM perspectives:
1. The universalistic perspective – some HR practices are better than others and all
organizations should adopt these best practices.
2. The contingency perspective – in order to be effective, an organization’s HR
policies must be consistent with other aspects of the organization especially its
strategy (‘vertical fit’).
3. The configurational perspective – this is a holistic approach that emphasizes the
importance of the pattern of HR practices and is concerned with how this pattern is
related to organizational performance.

These perspectives can be interpreted as best practice, best fit and bundling
(Richardson and Thompson 1999).
Best practice
This approach is based on the assumption that there is a set of best HRM practices. A
number of lists of ‘best practices’ have been produced, the best known of which was
produced by Pfeffer (1994), namely:
● employment security;
● selective hiring;
● self-managed teams;
● high compensation contingent on performance;
● training to provide a skilled and motivated workforce;
● reduction of status differentials;
● sharing information.
Other lists have been produced by Guest (1999), the US Department of Labor (1993),
Wood and Albanese (1995), Appelbaum et al (2000), Sung and Ashton (2000) and
Thompson and Heron (2005).
It is difficult to accept that there is any such thing as universal best practice. What
works well in one organization will not necessarily work well in another because it may
not fit its strategy, culture, management style, technology or working practices.
Best fit
The best fit approach emphasizes that HR strategies should be contingent on the
context and circumstances of the organization and its type.
‘Best fit’ can be perceived in terms of vertical integration or alignment between the
organization’s business and HR strategies. There is a choice of models, namely:
lifecycle, competitive strategy, and strategic configuration.
1. The lifecycle model
The lifecycle model is based on the theory that the development of a firm takes place in
four stages: start-up, growth, maturity and decline. This is in line with product lifecycle
theory.

2. Competitive strategies
Three strategies aimed at achieving competitive advantage have been identified by
Porter (1985):
a. Innovation – being the unique producer.
b. Quality – delivering high-quality goods and services to customers.
c. Cost leadership – the planned result of policies aimed at 'managing away
expense’.
3. Strategic configuration
This proposition states that organizations will be more effective if they adopt a policy of
strategic configuration (Delery and Doty, 1996).
This is achieved by matching strategy to one of the ideal types defined by theories
such as those produced by Miles and Snow (1978), who identified three types:
prospectors, defenders and analysers.
Limitations to the concept of best fit
● The danger of ‘contingent determinism’ (Paawue, 2004) – claiming that the context
determines the strategy.
● The risk of mechanistically matching HR policies and practices with strategy. It is
not credible to claim that there are single contextual factors that determine HR
strategy, and internal fit cannot therefore be complete.
● Tendency to be static – not taking into account the processes of change.
● Neglects the fact that institutional forces shape HRM – it cannot be assumed that
employers are free agents able to make independent decisions.
Bundling
‘Bundling’ is the development and implementation of several HR practices together so
that they are interrelated and therefore complement and reinforce each other. Research
conducted by MacDuffie (1995) and others showed that bundling improved performance
significantly.

The practical implications of strategic HRM theory
● Emphasizes that the achievement of sustained competitive advantage depends on
the unique resources and capabilities that a firm brings to competition in its
environment.
● Provides a rationale for generating strategic capability and ensuring that the
organization has the people it needs to achieve sustained competitive advantage.
● Stresses that business and HR strategy and functional HR strategies should be
aligned with one another.
Strategic HRM model
HR strategies –
overall/specific
Strategic management –
strategic role of HR
Strategic HRM
Strategic choice
Strategic analysis

Concept Map
implementing good HR
practices
extending skills base
hiring and
developing more
capable people
by
non-
substitutable
resources are not
perfectly mobile
firms more intelligent and
flexible than competitors
imperfectly
imitatable
creates
means
rare strategic fit
valuable
resources are
heterogeneous
strategic
capability
by
derives
from
achieved w hen
resources are
arises w hen
competitive
advantage
unique character of
organization
human capital
advantage
human process
advantage
produce
produce
produce
RESOURCE-BASED
VIEW
financial and other
resources human resources
relates to relates to

Best fit – HR strategies should be congruent with the context and circumstances of the
organization. ‘Best fit’ can be perceived in terms of vertical integration or alignment
between the organization’s business and HR strategies.
Best practice – The assumption that there is a set of best HRM practices and that
adopting them will inevitably lead to superior organizational performance. They are
universal in the sense that they are best in any situation.
Bundling – The development and implementation of several HR practices together so
that they are interrelated and therefore complement and reinforce each other.
Competitive advantage – Achieving and sustaining better results than business rivals
and thus developing competitive edge.
Configuration – The structures, processes, relationships and boundaries through which
an organization operates. The term is used in two special senses: 1) the fit between
an organization’s HR strategy and its business strategy (Delery and Doty, 1996), and
2) the fit of different HR practices with one another (bundling, qv).
Human resource advantage – The concept following the resource-based view that
competitive advantage is achieved when firms have more skilled, intelligent and
effective staff than their competitors.
Lifecycle model – The theory that the development of a firm takes place in four stages:
start-up, growth, maturity and decline.
Resource-based view – The view that it is the range of resources in an organization,
competitive advantage. HRM delivers added value and helps to achieve sustainable
competitive advantage through the strategic development of the organization’s rare,
hard to imitate and hard to substitute human resources.
Strategic configuration – The proposition that organizations will be more effective if they
match their strategy to one of the ideal types such as the prospectors, defenders and
analysers identified by Miles and Snow (1978).
Strategic fit – The need when developing HR strategies to achieve congruence between
them and the organization’s business strategies within the context of its external and
internal environment. Strategic fit refers to the two dimensions that distinguish
strategic HRM: ‘First, vertically, it entails the linking of human resource management
practices with the strategic management processes of the organization. Second,

horizontally, it emphasizes the coordination or congruence among the various human
resource management practices’ (Wright and McMahan, 1992).
Strategic human resource management (HRM) – An approach that defines how the
organization’s goals will be achieved through people by means of HR strategies and
integrated HR policies and practices. It involves the delivery of services in a way that
supports the implementation of the firm’s strategy.
Strategy – The approach selected to achieve defined goals in the future; a declaration of
intent.

1. Describe the main features of a strategic HRM approach.
2. Prepare for a chief executive the business case for adopting a strategic human
resource management approach.
3. What is the resource-based view and what is its practical significance?
4. What is meant by the concept of fit in strategic HRM and what is its practical
significance?
5. How important is flexibility in strategic HRM and how can considerations of flexibility
be reconciled with the need for strategic fit?
6. What does the concept of best practice mean? Give examples.
7. Are there any problems with the concept of best practice? If so, what are they?
8. What does the concept of best fit mean?
9. What are the main best fit models?
10. Are there any problems with the concept of best fit? If so, what are they?
11. What does ‘bundling’ mean and why is it important? Give examples.
12. What problems may arise when ‘bundling’? How can they be overcome?
13. What are the main practical implications of strategic HRM theory?

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3. HR STRATEGIES
Teaching notes
Describe HR strategies – their purpose, how they are formulated and what they contain.
 Purpose ofHR strategy
 General HR strategy areas – high-performance management,high-commitment
managementand high-involvementmanagement
 Specific HR strategy areas
 Criteria for an effective HR strategy
 How HR strategy is formulated
 Fundamental questions on the developmentofHR strategy
 How the vertical integration ofbusiness and HR strategies is achieved
 How horizontal fit (bundling) is achieved
 How HR strategies can be setout
 How HR strategies can be implemented
 High-commitment management
 High-involvement management
 High-performance management
 Horizontal fit or integration
 HR strategy
 Vertical fit or integration
Contents
 A bibliography

Session outline
Purpose of HR strategy
HR strategies set out what the organization intends to do now and in the longer term
about its human resource management policies and practices and how they should be
integrated with the business strategy and each other.
General HR strategy areas – high-performance management
● An approach to HRM that aims to make an impact on the performance of the
organization through its people in such areas as productivity, quality, levels of
customer service, growth and profits.
● High-performance management practices include rigorous recruitment and
selection procedures, extensive and relevant training and management
development activities, incentive pay systems and performance management.
● Note that the term ‘high performance’ is often associated with high commitment or
high involvement and there may be some overlap between these concepts.
General HR strategy areas – high-commitment management
‘A form of management which is aimed at eliciting a commitment so that behaviour is
primarily self-regulated rather than controlled by sanctions and pressures external to the
individual, and relations within the organization are based on high levels of trust’ (Wood,
1996).
General HR strategy areas – high-involvement management
‘High-involvement work practices are a specific set of human resource practices that
focus on employee decision-making, power, access to information, training and
incentives’ (Benson et al, 2006).
Specific HR strategy areas
Specific strategy areas include:
● human capital management;
● corporate social responsibility;

● organization development;
● engagement;
● knowledge management;
● employee resourcing;
● talent management;
● learning and development;
● reward;
● employee relations;
● employee well-being.
Criteria for an effective HR strategy
● Satisfies business needs.
● Founded on detailed analysis and study.
● Can be turned into actionable programmes.
● Is coherent and integrated.
● Takes account of the needs of line managers and employees generally as well as
those of the organization and its other stakeholders.
Fundamental questions on the development of HR strategy
● What are the firm’s strategic objectives and how are these translated into unit
objectives?
● What are the ‘performance drivers’ of those objectives and how do the skills,
motivation and structure of the firm’s workforce influence these performance
drivers?
● How does the HR system influence the skills, motivation and structure of the
workforce?
How the vertical integration of business and HR strategies is achieved
● Understand the business strategy.
● Identify the skills and behaviour necessary to implement the business strategy.
● Understand and develop the HRM practices necessary to elicit those skills and
behaviours. The business strategy may not be clearly defined – it could be in an

emergent or evolutionary state, which would mean that there would be little or
nothing with which to fit the HR strategy.
Problems of achieving vertical integration
● The business strategy may not be clear.
● Even if clear, it may be difficult to determine precisely how HR strategies could
help in specific ways to support the achievement of particular business objectives.
● HR specialists do not always have the strategic capability to make the connection
between business and HR strategies.
● Barriers may exist between top management and HR on strategic issues.
Overcoming the problems
It is up to HR practitioners in their strategic role to overcome these problems by:
● getting to know what the business is aiming to do and what drives it;
● understanding how HR practices make an impact;
● achieving access to strategic business decision making by demonstrating their
credibility as an integral part of the management of the business.
How horizontal fit (bundling) is achieved
● Identify appropriate HR practices.
● Assess how these items can be bundled together so that they become mutually
reinforcing.
● Draw up programmes for the development of these practices, paying particular
attention to the links between them.
How HR strategies can be set out
The format will vary but may typically be set out under the following headings:
● Basic considerations.
● Content.
● Rationale.
● Implementation plan.
● Costs and benefits analysis.

How HR strategies can be implemented
● Analyse business needs and how the HR strategy will help to meet them.
● Communicate full information on the strategy and what it is expected to achieve.
● Involve those concerned in identifying implementation problems and how they
should be dealt with.
● Prepare action plans.
● Project manage the implementation in a way that ensures the action plans are
achieved.

High-commitment management – A form of management aimed at eliciting a
commitment so that behaviour is primarily self-regulated rather than controlled by
sanctions and pressures external to the individual, and relations within the
organization are based on high levels of trust (Wood, 1996).
High-involvement management – A specific set of human resource practices that focus
on employee decision making, power, access to information, training and incentives.
High-performance management – An approach that aims to make an impact on the
performance of the organization through its people in such areas as productivity,
quality, levels of customer service, growth and profits.
Horizontal fit or integration – Linking different HR practices together (also known as
‘bundling’).
HR strategy – Sets out what the organization intends to do about its human resource
management policies and practices and how they should be integrated with the
business strategy and each other.
Vertical fit or integration – Aligning HR strategy with the business strategy.

1. What is the purpose of HR strategy?
2. What are the main areas in which general HR strategies might be developed?
3. What are the main characteristics of high-performance management?
4. What are the main characteristics of high-commitment management?
5. What are the main characteristics of high-involvement management?
6. What are the main areas in which specific HR strategies might be developed?
7. What are the criteria for an effective HR strategy?
8. What are the problems of achieving vertical integration and how can they be
overcome?
9. Under what headings might an HR strategy be set out?
10. How should HR strategies be implemented?

Bibliography
Abell, D F (1993) Managing with Dual Strategies: Mastering the present, pre-empting the
future, Free Press, New York
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Baird, L and Meshoulam, I (1988) Managing two fits of strategic human resource
management, Academy of Management Review, 13 (1), pp 116–28
Baron, D (2001) Private policies, corporate policies and integrated strategy, Journal of
Economics and Management Strategy, 10 (7), pp 7–45
Personnel and Human Resource Management, 16, pp 53–101
Benson, G S, Young, S M and Lawler, E E (2006) High involvement work practices and
analysts’ forecasts of corporate performance, Human Resource Management, 45 (4),
pp 519–27
Boxall, P (1999) Human resource strategy and competitive advantage: a longitudinal
study of engineering consultancies, Journal of Management Studies, 36 (4), pp 443–
63
Gratton, L A (1999) People processes as a source of competitive advantage, in (ed) L
Gratton, V H Hailey, P Stiles and C Truss, Strategic Human Resource Management,
Gratton, L A, Hailey, V H, Stiles, P and Truss, C (1999) Strategic Human Resource
Kepes, S and Delery, J E (2007) HRM systems and the problem of internal fit, in (ed) P
Boxall, J Purcell and P Wright, Oxford Handbook of Human Resource Management,
Lawler, E E (1986) High Involvement Management, Jossey-Bass, San Francisco, CA
Lawler, E E, Mohrman, S and Ledford, G (1998) Strategies for High Performance
Organizations: Employee involvement, TQM, and re-engineering programs in Fortune
1000, Jossey-Bass, San Francisco, CA

Miles, R E and Snow, C C (1978) Organizational Strategy: Structure and process,
McGraw-Hill, New York
Pfeffer, J (1998) The Human Equation, Harvard Business School Press, Boston, MA
Pil, F K and MacDuffie, J P (1996) The adoption of high-involvement work practices,
Porter, M E (1985) Competitive Advantage: Creating and sustaining superior
performance, The Free Press, New York
Rousseau, D M and Wade-Benzoni, K A (1994) Linking strategy and human resource
practices: how employee and customer contracts are created, Human Resource
Schuler, R S and Jackson, S E (1987) Linking competitive strategies with human
resource management practices, Academy of Management Executive, 9 (3), pp 207–
19
Sung, J and Ashton, D (2005) High Performance Work Practices: Linking strategy and
skills to performance outcomes, DTI in association with CIPD, available at
http://www.cipd.co.uk/subjects/corpstrtgy/
Thompson, M (2002) High Performance Work Organization in UK Aerospace, The
Society of British Aerospace Companies, London
Tyson, S and Witcher, M (1994) Human resource strategy emerging from the recession,
Personnel Management, August, pp 20–23
Ulrich, D and Lake, D (1990) Organizational Capability: Competing from the inside out,
Wiley, New York
Performance, US Government Printing Office, Washington, DC
Wood, S (1996) High commitment management and organization in the UK, The
International Journal of Human Resource Management, 7 (1), pp 41–58

Wood, S, de Menezes, L M and Lasaosa, A (2001) High Involvement Management and
Performance, paper delivered at the Centre for Labour Market Studies, University of
Leicester, May
Wright, P M and Snell, S A (1998) Towards a unifying framework for exploring fit and
flexibility in strategic human resource management, Academy of Management
Review, 23 (4), pp 756–72
Wright, P M, Snell, S A and Jacobsen, H H (2004) Current approaches to HR strategies:
inside-out versus outside-in, Human Resource Planning, 27 (4), pp 36–46
4. HUMAN CAPITAL MANAGEMENT
Teaching notes
Objective of session
Introduce concepts of human capital managementand intellectual capital and describe their
practical significance.
Learning outcomes of session
 The concept of human capital
 Characteristics of human capital
 Constituents of human capital
 Significance of human capital theory
 Importance of human capital measurement
 Reasons for interest in human capital measurement
 Approaches to measurement
 Measurement elements
 Factors affecting choice of measurement
 Criteria for HCM data for managers
 Human capital  Human capital management (HCM)
 Human capital advantage  Human capital index – Watson Wyatt
 Human process advantage  Human capital measurement
 Human capital monitor – Andrew Mayo  Intellectual capital
 Intangible resources  Metrics
 Organizational capital  Organizational performance model
 Social capital – Mercer HR Consulting
Contents
 A bibliography

A_HANDBOOK_OF_HUMAN_RESOURCE_MANAGEMENT.doc

Session outline
The concept of human capital
● Human capital comprises the knowledge, skills and abilities of the people
employed in an organization.
● Individuals generate, retain and use knowledge and skill (human capital) and
create intellectual capital.
● Human capital ‘defines the link between HR practices and business performance
in terms of assets rather than business processes’ (Scarborough and Elias, 2002).
Characteristics of human capital
Human capital is non-standardized, tacit, dynamic, context dependent and embodied in
people (Scarborough and Elias, 2002).
Constituents of human capital
Human capital consists of:
● Intellectual capital – the stocks and flows of knowledge available to an
organization, ie the intangible resources associated with people.
● Social capital – the knowledge derived from networks of relationships within and
outside the organization.
● Organizational capital – the institutionalized knowledge possessed by an
organization that is stored in databases, manuals, etc.
Significance of human capital
Human capital theory regards people as assets and stresses that investment by
organizations in people will generate worthwhile returns.
Importance of human capital measurement
Measuring and valuing human capital is an aid to people management decision making.

Reasons for interest in human capital measurement
Human capital constitutes a key element of the market worth of a company.
People in organizations add value
● Focus attention on what needs to be done to make the best use of its human
capital.
● Monitor progress in achieving strategic HR goals and evaluate HR practices.
● You cannot manage unless you measure.
Approaches to measurement
● The human capital index – Watson Wyatt.
● The organizational performance model – Mercer HR Consulting.
● The human capital monitor – Andrew Mayo.
Measurement elements
● Workforce data – demographic data (numbers by job category, sex, race, age,
disability, working arrangements, absence and sickness, turnover and pay).
● People development data – learning and development programmes, performance
management/potential assessments, skills and qualifications.
● Perceptual data – attitude/opinion surveys, focus groups, exit interviews.
● Performance data – financial, operational and customer.
Factors affecting choice of measurement
● Type of organization; its business goals and drivers.
● The existing key performance indicators (KPIs).
● Use of the balanced score card.
● The availability, use and manageability of data.
Criteria for HCM data managers
Data will only be useful for managers if:
● They are credible, accurate and trustworthy.

● The managers understand what it means for them.
● They are accompanied by guidance as to what action can be taken.
● The managers have the skills and abilities to understand and act upon them.

Human capital – The knowledge, skills and abilities of the people employed in an
organization.
Human capital advantage – The achievement of competitive advantage by employing
people with competitively valuable knowledge and skills.
Human capital index – A method of measuring the value of human capital devised by
Watson Wyatt.
Human capital management (HCM) – The process of obtaining, analysing and reporting
on data relating to employees to inform HRM decisions.
Human capital measurement – The process of finding links, correlations and, ideally,
causation, between different sets of (HR) data, using statistical techniques.
Human capital monitor – A method devised by Andrew Mayo (2001) of identifying the
human value of the enterprise or ‘human asset worth’.
Intellectual capital – The stocks and flows of knowledge available to an organization, ie
the intangible resources associated with people.
Intangible resources – The stocks and flows of knowledge available to an organization.
Metrics – Measurements, as used in human capital management, for data on employee
turnover, absenteeism, performance, etc.
Organizational capital – The institutionalized knowledge possessed by an organization
that is stored in databases, manuals, etc.
Organizational performance model – A method of valuing the impact of human capital on
performance devised by Mercer HR Consulting.
Social capital – The knowledge derived from networks of relationships within and outside
the organization.

1. What is human capital?
2. What is the purpose of human capital management?
3. What questions on people management are raised by human capital theory?
4. Why is the measurement of human capital important?
5. What are the key aspects of human capital that should be measured?
6. What factors determine what human capital data should be reported?

Bibliography
Baron, A and Armstrong, M (2007) Human Capital Management: Achieving added value
through people, Kogan Page, London
Becker, B E, Huselid, M A, Pickus, P S and Spratt, M F (1997) HR as a source of
shareholder value: research and recommendations, Human Resource Management,
Spring, 36 (1), pp 39–47
Bontis, N (1998) Intellectual capital: an exploratory study that develops measures and
models, Management Decision, 36 (2), pp 63–76
Bontis, N, Dragonetti, N C, Jacobsen, K and Roos, G (1999) The knowledge toolbox: a
review of the tools available to measure and manage intangible resources, European
Management Journal, 17 (4), pp 39–1402
CFO Research Services (2003) Human Capital Management: The CFO’s perspective,
CFO Publishing, Boston, MA
Chartered Institute of Personnel and Development (2003) Human Capital: External
reporting framework, CIPD, London
Davenport, T O (1999) Human Capital, Jossey Bass, San Francisco, CA
Donkin, R (2005) Human Capital Management: A management report, Croner, London
Hartley, V (2005) Open for Business: HR and human capital reporting, IES, Brighton
IDS (2004) Searching for the magic bullet, HR Study 783, IDS London
Mayo, A (1999) Making human capital meaningful, Knowledge Management Review,
January/February, pp 26–29
Mayo, A (2001) The Human Value of the Enterprise: Valuing people as assets, Nicholas
Brealey, London
Nalbantian, R, Guzzo, R A, Kieffer, D and Doherty, J (2004) Play to Your Strengths:
Managing your internal labor markets for lasting competitive advantage, McGraw-Hill,
New York
Scarborough, H and Elias, J (2002) Evaluating Human Capital, CIPD, London
5. ROLE AND ORGANIZATION OF THE HR FUNCTION
Teaching notes
 The role of the HR function
 The activities of the HR function
 The diversity of the HR function
 The Ulrich three-legged stool model ofHR organization
 Guidelines on organizing the HR function
 Criteria for evaluating the effectiveness of the HR function

 Benchmarking  Process criteria
 Boundary management  Service level agreement
 Business partners  Shared service centre
 Centre of expertise  Transactional activities
 Offshoring  Transformational activities
 Output criteria  The Ulrich three-legged stool model
 Outsourcing  Utility analysis
Contents
 A bibliography

Session outline
The role of the HR function
● Take initiatives and provide guidance, support and services on all matters relating
to the organization’s employees in order to support the achievements of business
goals.
● Ensure that HR strategies, policies and practices are introduced and maintained
that cater for everything concerning the employment, development and well-being
of people and the relationships that exist between management and the workforce.
● Further the creation of an environment that enables people to make the best use of
their capacities, to realize their potential to the benefit of both the organization and
themselves and, by improving the quality of working life, to achieve satisfaction
through their work.
The activities of the HR function
● Strategic (transformational) activities concerned with the alignment and
implementation of HR and business strategies.
● Transactional – the main HR service delivery activities of resourcing, learning and
development, reward and employee relations.
The diversity of the HR function
HR management involves a variety of roles and activities that differ from one
organization to another and from one level to another in the same organization.
The Ulrich ‘three-legged stool’ model of HR organization
● Centres of expertise – these specialize in the provision of high-level advice and
services on key HR activities.
● Strategic business partners – these work with line managers to help them reach
their goals through effective strategy formulation and execution. They are often
‘embedded’ in business units or departments.

● Shared service centres – these handle all the routine ‘transactional’ services
across the business, which include such activities as recruitment, absence
monitoring and advice on dealing with employee issues such as discipline and
absenteeism.
Guidelines on organizing the HR function
● The head of the function should report directly to the chief executive and be a
member of the top management team involved in developing business strategy.
● Operational units should be responsible for their own HR management affairs
within the framework of broad strategic and policy guidelines from the centre.
● The professional members of the function should have ‘strategic capability’.
● Increased responsibility for HR matters should be devolved to line managers.
Criteria for evaluating the effectiveness of the HR function
Its ability to operate strategically and its capacity to deliver the levels of services
required.
The dimensions of HR effectiveness
● Strategic HRM – the delivery of services in a way that supports the implementation
of the firm’s strategy.
● Technical HRM – the delivery of HR basics such as recruitment, compensation
and benefits.
Quantitative criteria for evaluating the HR function
● Organizational: added value per employee, profit per employee, sales value per
employee, costs per employee, added value per £ of employment costs.
● Employee behaviour: retention and turnover rates, absenteeism, sickness,
accident rates, grievances, disputes, references to employment tribunals,
successful suggestion scheme outcomes.
● HR service levels and outcomes: time to fill vacancies, time to respond to
applicants, measurable improvements in organizational performance as a result of
HR practices, ratio of HR costs to total costs, ratio of HR staff to employees.

How HR people can demonstrate their effectiveness
● Understand the business strategy.
● Anticipate business needs and propose realistically how HR can help to meet
them.
● Show that they are capable of meeting performance standards.
● Provide relevant, clear, convincing and practical advice.
● Provide efficient and effective services.
● Generally reveal their understanding and expertise.
Key points for measuring HR performance (Likierman, 2005)
● Agree objectives against budget assumptions.
● Use more sophisticated measures.
● Use comparisons imaginatively.
● Improve feedback through face-to-face discussion.
● Be realistic about what performance measures can deliver.
Methods of evaluation
● User reaction.
● Employee satisfaction measures.
● Benchmarking.
The HR scorecard (Beatty et al, 2003)
The four headings are:
1. HR competencies – administrative expertise, employee advocacy, strategy
execution and change agency.
2. HR practices – communication, work design, selection, development,
measurement and rewards.
3. HR systems – alignment, integration and differentiation.
4. HR deliverables – workforce mindset, technical knowledge, and workforce
behaviour.

Outsourcing
● Benefits include reduced cost, access to expertise not available within HR,
increased flexibility and speed of response, and freeing-up HR to focus on more
value-adding activities.
● Problems include suppliers increasing charges, short-term decisions on what can
be outsourced, lower employee morale.
Use of management consultants
Provide expertise and may act as service providers in recruitment, executive search and
training.
Marketing the HR function
Persuade management that HR is a service the business needs by making out the
business case – spelling out its benefits in terms of added value and the impact it will
make on performance.
HR budgeting
● Budgets need to be justified and protected.
● Justification means ensuring in advance that objectives and plans are generally
agreed.
● Protection means providing in advance a rationale for each area of expenditure (a
business case) that proves it is necessary and will justify the costs involved.
The HR role of line managers
HR can initiate new policies and practices but it is the line that has the main
responsibility for implementing them.
Better ownership by line managers of HR practices is more likely to be achieved if:
● the practice demonstrably benefits them;
● they are involved in the development and the testing of the practices;
● the practice is not too complicated, bureaucratic or time-consuming;
● their responsibilities are defined and communicated clearly;

● they are provided with the guidance, support and training required to implement
the practice.

Benchmarking (the HR function) – Comparing what the HR function is doing with what is
happening in similar organizations to establish the extent to which good practices
have been adopted and to indicate areas for improvement.
Boundary management – Managing transactions between departments or units across
organizational boundaries.
Business partners – HR specialists who act as business partners share responsibility
with their line management colleagues for the success of the enterprise and get
involved with them in implementing business strategy and running the business.
Centres of expertise – HR units or sections that specialize in the provision of high-level
advice and services on key HR activities.
Offshoring – Employing people overseas to carry out work on behalf of a UK
organization, eg call centres.
Process criteria – Evaluation based on an assessment of how well things are done.
Service level agreement (SLA) – An agreement between the provider of HR services
and the customers who use the service on the level of service that should be
provided.
Shared service centre – An HR unit or an outsourced facility set up to handle routine
‘transactional’ services across the business. These include such activities as
recruitment, absence monitoring and advice on dealing with employee issues, eg
discipline and absenteeism. The customer or user may define the level of the service
and decide which services to take up.
Transactional activities – Those activities carried out by the HR function that deal with
the administration of standard HR practices such as recruitment, training and reward.
Transformational activities – Those activities carried out by the HR function that are
strategic and aim to make significant changes to the organization’s culture and how
the organization functions or how its employees are treated.
Three-legged organization of HR – An HR function organized in line with the three
categories of HR activity identified by Ulrich, namely: centres of expertise, strategic
business partners and shared service centres.
Utility analysis – An analysis of the impact of HR activities measured wherever possible
in financial terms (quantity), improvements in the quality of those activities, and cost–
benefit (the cost of the activities in relation to the benefits they provide).

1. Describe the role of the HR function.
2. What is Ulrich’s ‘three-legged stool’ model of the HR function? Does it make sense?
3. How can the effectiveness of the HR function be evaluated?
4. What are the benefits and the problems of outsourcing?
5. What is the role of line managers in HRM? What can be done to increase their
effectiveness in this role?

Bibliography
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Organizational Dynamics, 32 (2), pp 107–21
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Wiley, New York

6. THE ROLE OF THE HR PRACTITIONER
Teaching notes
 The basic role of HR practitioners
 The business partner role
 The strategic role
 The strategic activities of HR practitioners
 Other key roles – change agent,internal consultant,service provider, guardian ofvalues
 Models of HR roles
 Gaining buy-in from top management
 Gaining support from line managers
 Ethical considerations
 Professionalism
 Ambiguities and conflict in the role
 HR effectiveness
 HR competencies
 Business partner  Conformist innovators
 Continuous professional development  Deviant innovators
 Employee advocate  Evidence-based management
 Impression management  Organizational capability
 Process consulting  Strategic partner
 Thinking performer  Value-added approach
 A bibliography
Content

Session outline
The basic role of HR practitioners
The roles of HR practitioners vary widely according to:
● The extent to which they are generalist (eg HR director, HR manager, business
partner).
● The extent to which specialist (eg head of learning and development, head of
talent management, head of reward).
● The level at which they work (strategic, executive or administrative).
● The needs of the organization.
● The context within which they work.
● Their own capabilities.
The business partner role
As business partners HR specialists:
● Work closely with their line management colleagues.
● Are aware of business strategies and the opportunities and threats facing the
organization.
● Are capable of analysing organizational strengths and weaknesses and diagnosing
the issues facing the enterprise and their human resource implications.
● Know about the critical success factors that will create competitive advantage.
● Adopt a ‘value added’ approach when making a convincing business case for
innovations.
● Share responsibility with their line management colleagues for the success of the
enterprise and get involved with them in implementing business strategy and
running the business.
The strategic role
● Formulate and implement forward-looking HR strategies that are aligned to
business objectives and integrated with one another.
● Contribute to the development of business strategies.

● Work alongside their line management colleagues to provide, on an everyday
basis, continuous support to the implementation of the strategy of the organization,
function or unit.
The strategic activities of HR practitioners
● Formulate HR strategies.
● Provide continuous support to line managers in implementing their business or
operational strategies.
● Proactive in identifying issues that can be addressed through major or relatively
minor HR initiatives.
Other key roles
● Act as change agents, facilitating change by providing advice and support on its
introduction and management.
● Act as internal consultants, working alongside their colleagues – their clients – in
analysing problems, diagnosing issues and proposing solutions.
● Provide services to internal customers. The services may be general, covering all
aspects of HRM, or services may only be provided in one or two areas.
● May act as the guardians of the organization’s values and ethical standards
concerning people. They point out when behaviour conflicts with those values or
where proposed actions will be inconsistent with them.
Models of HR roles
A number of models of HR roles exist, eg:
● Karen Legge (1978), who identified two types of HR managers: conformist
innovators who go along with their organization's ends and adjust their means to
achieve them, and deviant innovators who attempt to change this means/ends
relationship by gaining acceptance for a different set of criteria for the evaluation of
organizational success and their contribution to it.
● Tyson and Fell (1986), who listed three roles: the clerk of works (mainly
administrative), the contracts manager (more sophisticated with an employee
relations focus) and the architect (strategic/innovative).

● Ulrich and Brockbank (2005), who identified four roles: employee advocate, human
capital developer, functional expert and strategic partner.
Gaining buy-in from top management
● Demonstrate that the proposal will meet organizational needs.
● Base the proposal on a compelling and realistic business case that shows the
innovation will increase the business' competitive edge.
● Prove that the innovation has already worked well within the organization (in a pilot
scheme) or elsewhere.
● Specify how the proposal can be implemented without too much trouble.
● Indicate that the innovation will add to the reputation of the company.
● Emphasize that the innovation will enhance the ‘employer brand’ of the company.
● Ensure that the proposal is brief, to the point and well argued.
Gaining support from line managers
Managers need to be convinced that the innovation will help them to achieve better
results without imposing unacceptable additional burdens on them.
Ethical considerations
HR specialists should speak out against plans or actions that are not in accord with the
organization’s ethical standards or values.
Professionalism
HR specialists are professional when they display expertise in doing their work and act
responsibly.
Ambiguities and conflict in the role
HR practitioners have to be 'specialists in ambiguity’. Conflict may arise because of a
clash of values, different priorities and the need for HR to exercise a measure of control
over the people management activities of managers.

HR effectiveness
Effective HR practitioners:
● operate strategically;
● facilitate change;
● understand organizational and individual needs;
● are businesslike and persuasive;
● use an evidence-based management approach;
● deliver their services efficiently and effectively.
HR competencies
The main competencies required by HR professionals are:
● business awareness;
● strategic capability;
● organizational effectiveness;
● capacity as an internal consultant;
● effective service delivery;
● acting in the interests of employees;
● continuous professional development.

Business partners – HR specialists who act as business partners share responsibility
with their line management colleagues for the success of the enterprise and get
involved with them in implementing business strategy and running the business.
Conformist innovators – As defined by Legge (1978), HR specialists who go along with
their organization's ends and adjust their means to achieve them. Their expertise is
used.
Continuous professional development (CPD) – The process that enables the integration
of learning with work in ways relevant to the learner, is self-directed and contributes to
the learner’s development needs.
Deviant innovators – As defined by Legge (1978), HR specialists who attempt to change
this means/ends relationship by gaining acceptance for a different set of criteria for
the evaluation of organizational success and their contribution to it.
Employee advocate – As described by Ulrich and Brockbank (2005), an HR specialist
who focuses on the needs of employees through listening, understanding and
empathizing.
Evidence-based management – Translating principles based on best evidence into
organizational practices.
Impression management – Seeking to make an impact and create a good impression on
senior managers and colleagues by publicizing high-profile innovations.
Organizational capability – The capacity of an organization to function effectively in order
to compete and deliver results.
Process consulting – Helping clients to generate and analyse information they can
understand and, following a diagnosis, act upon.
Strategic partner – As described by Ulrich and Brockbank (2005), an HR specialist who
aligns HR systems to help accomplish the organization’s vision and mission, helping
managers to get things done, and disseminating learning across the organization.
Thinking performer – A CIPD concept that emphasizes that HR professionals have to
think carefully about what they are doing in the context of their organization and within
the framework of a recognized body of knowledge, and have to perform effectively in
the sense of delivering advice, guidance and services that will help the organization to
achieve its strategic goals.

Value-added approach – An approach to HR that emphasizes that one of the most
important aims is to generate added value, ie the extra value in terms of the benefit to
the business generated by HR activities.

1. What are the main roles of HR practitioners?
2. Critically examine the concept of the business partner.
3. Describe the main models of HR roles.
4. How should HR practitioners gain support from top management?
5. What are the main competencies required by HR professionals?

Bibliography
Caldwell, R (2001) Champions, adapters, consultants and synergists: the new change
agents in HRM, Human Resource Management Journal, 11 (3), pp 39–52
Caldwell, R (2004) Rhetoric, facts and self-fulfilling prophesies: exploring practitioners’
perceptions of progress in implementing HRM, Industrial Relations Journal, 35 (3), pp
196–215
Chartered Institute of Personnel and Development (2005) The Thinking Performer, CIPD
Gratton, L A (2000) Real step change, People Management, 16 March, pp 27–30
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difference, Personnel Management, November, pp 40–44
Guest, D E and King, Z (2004) Power, innovation and problem-solving: the personnel
managers’ three steps to heaven?, Journal of Management Studies, 41 (3), pp 401–
23
Hope Hailey, V, Farndale, E and Truss, C (2005) The HR department’s role in
organizational performance, Human Resource Management Journal, 15 (3), pp 49–
66
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Press, Cambridge, MA
Ulrich, D and Brockbank, W (2005) Role call, People Management, 16 June, pp 24–28
Wiley, New York
Watson, A (1977) The Personnel Managers, Routledge and Kegan Paul, London
7. THE IMPACT OF HRM ON PERFORMANCE
Teaching notes
 Outcomes of research on the link between HRM and firm performance
 Problems of establishing a link
 HRM and individual performance
 Link between HRM and organizational performance
 How HR practices make an impact

 AMO formula
 Contingency theory
 Discretionary effort
 Expectancy theory
 Organizational capability
 Organizational effectiveness
 Performance
 Reversed causality
Contents
 A bibliography

Session outline
Outcomes of research on the link between HRM and firm performance
● Firms with a high-commitment strategy had significantly higher levels of both
productivity and quality than those with a control strategy (Arthur, 1992).
● Productivity is influenced by employee motivation; financial performance is
influenced by employee skills, motivation and organizational structures. (Huselid,
1995).
● Firms with high values on the index had economically and statistically higher levels
of performance (Huselid and Becker, 1996).
● High-performance systems make an impact as long as they are embedded in the
management infrastructure (Becker et al, 1997).
● HR practices explained significant variations in profitability and productivity
(Patterson et al, 1997).
● High-performance work systems produced strong positive effects on performance
(Appelbaum et al, 2000).
● A strong association exists between HRM and both employee attitudes and
workplace performance (Guest et al, 2000a).
● A greater use of HR practices is associated with higher levels of employee
commitment and contribution and is in turn linked to higher levels of productivity
and quality of services (Guest et al, 2000b).
● The number of HR practices and the proportion of the workforce covered appeared
to be the key differentiating factor between more and less successful firms
(Thompson, 2002).
● If you have HR practices that focus on effort and skill, develop people’s skills, and
encourage cooperation, collaboration, innovation and synergy in teams for most, if
not all employees, the whole system functions and performs better (West et al,
2002).
● Some evidence has been shown of an association between HRM, as described by
the number of HR practices in use, and performance, but there no convincing
indication that the greater application of HRM is likely to result in improved
corporate performance (Guest et al, 2003).

● Clear evidence exists between positive attitudes towards HR policies and
practices, levels of satisfaction, motivation and commitment, and operational
performance (Purcell et al, 2003).
Problems of establishing a link
● At present the studies report a promising association between HRM and
outcomes, but we are not yet in a position to assert cause and effect (Guest,
1997).
● HR practices seem to matter; logic says it is so; survey findings confirm it. Direct
relationships between performance and attention to HR practices are often fuzzy,
however, and vary according to the population sampled and the measures used
(Ulrich, 1997).
● Measures that use profit or shareholder value are too remote from the practice of
people management to be useful (Purcell et al, 2003).
HRM and individual performance
The factors that affect the level of individual performance are: ability, motivation and
opportunity to participate (AMO).
Link between HRM and organizational performance
Three propositions on the link:
1. HR practices can make a direct impact on employee characteristics such as
engagement, commitment, motivation and skill.
2. If employees have these characteristics it is probable that organizational
performance in terms of productivity, quality and the delivery of high levels of
customer service will improve.
3. If such aspects of organizational performance improve, the financial results
achieved by the organization will improve.
How HR practices make an impact.
These are set out in the following table.

The HR practices that impact on performance
HR practice area How it impacts
Attract, develop and retain high
quality people
Match people to the strategic and operational needs of the
organization. Provide for the acquisition, development and
retention of talented employees, who can deliver superior
performance, productivity, flexibility, innovation, and high levels
of personal customer service, and who 'fit' the culture and the
strategic requirements of the organization.
Talent management Ensure that the talented and well-motivated people required by
the organization to meet present and future needs are available.
Job and work design Provides individuals with stimulating and interesting work and
gives them the autonomy and flexibility to perform these jobs
well. Enhance job satisfaction and flexibility, which encourages
greater performance and productivity.
Learning and development Enlarge the skill base and develops the levels of competence
required in the workforce. Encourage discretionary learning that
happens when individuals actively seek to acquire the knowledge
and skills that promote the organization’s objectives. Develop a
climate of learning – a growth medium in which self-managed
learning as well as coaching, mentoring and training flourish.
Managing knowledge and
intellectual capital
Focus on organizational as well as individual learning and
provide learning opportunities and opportunities to share
knowledge in a systematic way. Ensure that vital stocks of
knowledge are retained and improve the flow of knowledge,
information and learning within the organization.
Increasing engagement,
commitment and motivation
Encourage productive discretionary effort by ensuring that people
are positive and interested in their jobs, that they are proud to
work for the organization and want to go on working there and
that they take action to achieve organizational and individual
goals.
Psychological contract Develop a positive and balanced psychological contract which
provides for a continuing, harmonious relationship between the
employee and the organization.
High-performance management Develop a performance culture which encourages high-
performance in such areas as productivity, quality, levels of
customer service, growth, profits, and, ultimately, the delivery of
increased shareholder value. Empower employees to exhibit the
discretionary behaviours most closely associated with higher
business performance, such as risk taking, innovation,
knowledge sharing and establishing trust between managers and
their team members.
Reward management Develops motivation and job engagement by valuing people in
accordance with their contribution.
Employee relations Develops involvement practises and an employee relations
climate that encourages commitment and cooperation.
Working environment – core
values, leadership, work–life
balance, managing diversity,
secure employment
Develop ‘the big idea’ (Purcell et al, 2003), ie a clear vision and a
set of integrated values. Make the organization ‘a great place to
work’.

AMO theory – The formula Performance = Ability + Motivation + Opportunity to
Participate provides the basis for developing HR systems that attend to employees’
interests, namely their skill requirements, motivations and the quality of their job.
Contingency theory – HRM practices are dependent on the organization’s environment
and circumstances. Definitions of HR aims, policies and strategies, lists of activities,
and analyses of the role of the HR department are valid only if they are related to the
situation of the organization.
Discretionary effort – The discretion or choice people at work can exercise about the
way they do their job and the amount of effort, care, innovation and productive
behaviour they display.
Expectancy theory – The theory that motivation will be high when people know what they
have to do to get a reward, expect that they will be able to get the reward and expect
that the reward will be worthwhile.
Organizational capability – The capacity of an organization to function effectively in order
to compete and deliver results.
Organizational effectiveness – The capacity of an organization to achieve its goals by
making effective use of the resources available to it.
Performance – What has been achieved and how it has been achieved.
Reversed causality – A situation where A might have caused B but it is just as likely that
B caused A. For example, the assumption that more HR practices leads to higher
economic return when it just as possible that it is successful firms that can afford
more extensive (and expensive) HRM practices.

1. What is the evidence that HRM improves the performance of firms?
2. What are the problems in establishing a link between HRM and firm performance?
3. What HR activities are likely to make the most impact on performance?

Bibliography
Appelbaum, E, Bailey, T, Berg, P and Kalleberg, A L (2000) Manufacturing Advantage:
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turnover, Academy of Management Review, 37 (4), pp 670–87
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13 (8), pp 1299–310
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of Management Reviews, 1 (4), pp 397–413
8. INTERNATIONAL HRM
Teaching notes
 The meaning ofinternational HRM
 Issues in international HRM
 The impactof globalization
 International environmental differences
 International cultural differences
 Convergence and divergence
 Global HR policies
 Managing expatriates
 Convergence
 Divergence
 Globalization
 Home-based pay
 Host-based pay

Contents
 A bibliography

Session outline
The meaning of international HRM
International human resource management is the process of managing people across
international boundaries by multinational companies. It involves the worldwide
management of people, not just the management of expatriates.
Issues in international HRM
● The impact of globalization.
● The influence of environmental and cultural differences.
● The extent to which HRM policy and practice should vary in different countries
(convergence or divergence).
● The approaches used to employ and manage expatriates.
The impact of globalization
Globalization requires organizations to move people, ideas, products and information
around the world to meet local needs (Ulrich, 1998).
International environmental differences
Environmental differences between countries have to be taken into account in managing
globally. These include markets, institutions, regulation, collective bargaining and
workforce characteristics.
International cultural differences
National culture differences can be critical and insensitivity to them can result in
business failure (as well as failure and career consequences for individual managers.
Convergence and divergence
Factors affecting the choice between convergence and divergence (Harris and Brewster,
1999) are the:

● extent to which there are well-defined local norms;
● degree to which an operating unit is embedded in the local environment;
● strength of the flow of resources between the parent and the subsidiary;
● orientation of the parent to control;
● nature of the industry;
● specific organizational competencies, including HRM, that are critical for achieving
competitive advantage in a global environment.
Global HR policies
Three processes constitute global HRM (Brewster et al, 2005):
1. talent management/employee branding;
2. international assignments management;
3. managing an international workforce.
Managing expatriates
Expatriates can be difficult to manage because of:
● Problems associated with adapting to and working in unfamiliar environments.
● Concerns about their development and careers.
● Difficulties encountered when they re-enter their parent company after an overseas
assignment.
● How they should be remunerated.
Special policies for them are required, covering:
● recruitment and selection;
● and review;
● training;
● career management;
● re-entry;
● pay and allowances (home-based or host-based pay).

Convergence – In international HRM, the adoption by a global organization of similar HR
practices across the world.
Divergence – In international HRM, the approach by a global organization when it adapts
its HR practices across the world to suit local conditions.
Globalization – International economic integration in worldwide markets.
Home-based pay – The provision of remuneration (pay, benefits and allowances) to
expatriates that is the same as in their home country.
Host-based pay – The provision to expatriates of salaries and benefits such as company
cars and holidays that are in line with those given to nationals of the host country in
similar jobs.

1. What are the main issues in international HRM?
2. What are the factors that affect the degree of convergence or divergence?
3. What are the main global HR policies?
4. What are the main considerations in managing expatriates?

Bibliography
Adler, N J (2002) International Dimensions of Organizational Behaviour, South-Western,
Cincinnati, OH
Bartlett, C A and Ghoshal, S (1991) Managing Across Borders: The transnational
solution, London Business School, London
Bartlett, C A and Ghoshal, S (2000) Transnational Management Text: Cases and
readings on cross-border management, Harvard Business School Press, Boston, MA
Bradley, P, Hendry, C and Perkins, P (1999) Global or multi-local? The significance of
international values in reward strategy, in (ed) C Brewster and H Harris, International
HRM: Contemporary issues in Europe, Routledge, London
Brewster, C (2004) European perspectives of human resource management, Human
Resource Management Review, 14 (4), pp 365–82
Brewster, C, Harris, H and Sparrow, P (2002) Globalizing HR, CIPD, London
Brewster, C, Sparrow, P and Harris, H (2005) Towards a new model of globalizing HRM,
International Journal of Human Resource Management, 16 (6), pp 949–70
Gerhart, B and Fang, M (2005) National culture and human resource management:
assumptions and evidence, International Journal of Human Resource Management,
16 (6), pp 971–86
Harris, H and Brewster, C (1999) International human resource management: the
European contribution, in (ed) C Brewster and H Harris, International HRM:
Contemporary issues in Europe, Routledge, London
Hofstede, G (1980) Cultural Consequences: International differences in work-related
values, Sage, Beverley Hills, CA
Hofstede, G (1991) Culture and Organization: Software of the mind, Sage, London
Leblanc, B (2001) European competitiveness – some guidelines for companies, in (ed)
M H Albrecht, International HRM, Blackwell, Oxford
Perkins, S J (1997) Internationalization: The people dimension, Kogan Page, London
Perkins, S J and Shortland, S M (2006) Strategic International Human Resource
Management, Kogan Page, London
Sparrow, P R (1999) The IPD Guide on International Recruitment, Selection and
Assessment, IPD, London
Stiles, P (2007) A world of difference?, People Management, 15 November, pp 36–41

Tarique, I and Caligiri, P (1995) Training and development of international staff, in (ed)
A-W Herzorg and J V Ruyssevelde, International Human Resource Management,
Sage, London
. CORPORATE SOCIAL RESPONSIBILITY
Teaching notes
 The meaning ofcorporate social responsibility(CSR)
 CSR strategy
 CSR activities
 The rationale for CSR
 Developing a CSR strategy
 Corporate social responsibility(CSR)
 Stakeholder theory
 Strategic CSR
Contents
 A bibliography

Session outline
The meaning of corporate social responsibility (CSR)
● CSR refers to the actions taken by businesses that further some social good
beyond the interests of the firm and that which is required by law.
● It is concerned with the impact of business behaviour on society and can be
regarded as a process of integrating business and society.
CSR strategy
CSR strategy determines how socially responsible behaviour is exercised both outside
and within the firm.
CSR activities
CSR activities include:
● Incorporating social characteristics or features into products and manufacturing
processes.
● Adopting progressive human resource management practices.
● Achieving higher levels of environmental performance through recycling and
pollution abatement.
● Advancing the goals of community organizations.
The rationale for CSR
There are two arguments for CSR (Hillman and Keim, 2001):
1. There is a moral imperative for businesses to ‘do the right thing’ without regard to
how such decisions affect firm performance (the social issues argument).
2. Firms can achieve competitive advantage by tying CSR activities to primary
stakeholders (the stakeholders argument).

Developing a CSR strategy
● Identify the areas in which CSR activities might take place by reference to their
relevance in the business context of the organization and an evaluation of their
significance to stakeholders.
● Prioritize as necessary on the basis of an assessment of the relevance and
significance of CSR to the organization and its stakeholders and the practicalities
of introducing the activity or practice.
● Draw up the strategy and make the case for it to top management and the
stakeholders in order to obtain their approval.
● Communicate information on the strategy comprehensively and regularly.
● Provide training to employees on the skills they need in implementing the CSR
strategy.

Corporate social responsibility (CSR) – Exercised by organizations when they conduct
their business in an ethical way, taking account of the social, environmental and
economic impact of how they operate, and going beyond compliance.
Stakeholder theory – Organizations must satisfy a variety of constituents (eg workers,
customers, suppliers, local community organizations) who can influence
organizational outcomes.
Strategic CSR – This involves an initial decision on the extent to which the firm should
be involved in social issues and then creating a corporate social agenda – deciding
what social issues to focus on and to what extent.

1. What is corporate social responsibility (CSR)?
2. What are the key CSR activities?
3. What is the rationale for CSR?

Bibliography
Baron, D (2001) Private policies, corporate policies and integrated strategy, Journal of
Economics and Management Strategy, 10 (7), pp 7–45
Business in the Community (2007) Benchmarking Responsible Business Practice,
bits.org.uk
Chartered Institute of Personnel and Development (2007) Corporate Social
Responsibility, CIPD Fact Sheet, www.cipd.co.uk
CSR Academy (2006) The CSR Competency Framework, The Stationery Office, Norwich
Egan, J (2006) Doing the decent thing: CSR and ethics in employment, IRS Employment
Review 858, 3 November, pp 9–16
Freeman, R E (1984) Strategic Management: A stakeholder perspective, Prentice Hall,
Friedman, M (1970) The social responsibility of business is to increase its profits, New
York Times Magazine, September, p 13
Hillman, A and Keim, G (2001) Shareholder value, stakeholder management and social
issues: what’s the bottom line?, Strategic Management Journal, 22 (2), pp 125–39
Husted, B W and Salazar, J (2006) Taking Friedman seriously: maximizing profits and
social performance, Journal of Management Studies, 43 (1), pp 75–91
Levitt, T (1956) The dangers of social responsibility, Harvard Business Review,
September–October, pp 41–50
McWilliams, A, Siegal, D S and Wright, P M (2006) Corporate social responsibility: strategic
implications, Journal of Management Studies, 43 (1), pp 1–12
Moran, P and Ghoshal, S (1996) Value creation by firms, Best Paper Proceedings,
Academy of Management Annual Meeting, Cincinnati, OH
Porter, M E and Kramer, M R (2006) Strategy and society: the link between competitive
advantage and corporate social responsibility, Harvard Business Review, December,
pp 78–92
Redington, I (2005) Making CSR Happen: The contribution of people management,
CIPD, London

10. HUMAN RESOURCE MANAGEMENT RESEARCH
METHODS
Teaching notes
 The nature of research
 Research philosophy
 Planning and conducting research programmes
 Literature reviews
 Approaches to research
 Methods of collecting data
 The basics of statistical analysis
 Central tendency  Multivariate analysis
 Chi-squared test  Null hypothesis
 Correlation  Paradigm
 Critical evaluation  Phenomenology
 Deduction  Positivism
 Dispersion  Primary source
 Evidence-based theory  Proposition
 Experimental design  Qualitative research
 Falsification  Quantitative research
 Frequency  Reductionism
 Grounded theory  Regression
 Hypothesis  Research question
 Induction  Secondary source
 Likert scale  Significance
 Linear regression  Theory
Contents
 A bibliography

Session outline
The nature of research
Research is concerned with establishing what is and from this predicting what will be. It
is about the conception and testing of ideas.
Research philosophy
Research design can be based on a philosophy of positivism or phenomenology:
● Positivism is the belief that researchers should focus on facts (observable reality),
look for causality and fundamental laws.
● Phenomenology is concerned more with the meaning of phenomena than the facts
associated with them.
Planning and conducting research programmes
1. Define research area.
2. Formulate initial research question.
3. Review literature.
4. Assess existing theoretical frameworks.
5. Formalize the research question.
6. Formulate hypotheses.
7. Establish the methodology.
8. Draw up research programme.
9. Prepare and submit proposal.
10. Collect and analyse evidence.
11. Develop conclusions.
Literature reviews
Literature reviews or searches are essential preliminary steps in any research project.
They often focus on articles in academic journals, though textbooks may also be
consulted, especially if they are based on research.

Approaches to research
Research can:
● Be quantitative or qualitative.
● Use inductive or deductive methods.
● Involve the testing of hypotheses.
● Adopt a grounded theory approach, ie an inductive method of developing the
general features of a theory by grounding the account in empirical observations or
evidence.
● Make use of paradigms – common perspectives that underpin the work of theorists
so that they use the same approach to conducting research.
● Make informed judgements about the value of ideas and arguments through critical
evaluation.
● Use critical thinking, which is the process of analysing and evaluating the quality of
ideas, theories and concepts to establish the degree to which they are valid and
supported by the evidence.
Methods of collecting data
● Interviews obtain factual data and insights into attitudes and feelings and can be
structured, unstructured or semi-structured.
● Questionnaires collect data systematically by obtaining answers on the key issues
and opinions that need to be explored in a research project.
● Surveys obtain information from a defined population of people.
● Case studies collect empirical evidence in a real-life context.
The basics of statistical analysis
The statistical analysis of quantified information is used to:
● Identify and convey salient facts about the population under consideration.
● Test hypotheses.
● Make predictions on what is likely to happen.
● Build a model that describes how a situation probably works.
● Answer questions about the strength of evidence and how much certainty can be
attached to predictions and models.

Central tendency – The middle or centre of a set of data.
Chi-squared test – The use of a statistical formula to assess the degree of agreement
between the data actually obtained and that expected under a particular hypothesis.
Correlation – The relationship between two variables. If they are highly correlated they
are strongly connected to one another, and vice versa. In statistics, correlation is
measured by the coefficient of correlation, which ranges from –1 to +1, which indicate
totally negative and totally positive correlations respectively. A correlation of zero
means that there is no relationship between the variables.
Critical evaluation – The process of making informed judgements about the value of
ideas and arguments. It makes use of critical thinking.
Deduction – The process of using logical reasoning to reach a conclusion that
necessarily follows from general or universal premises.
Dispersion – The extent to which the items in a set are spread over a range of data.
Evidence-based theory – A theory that is supported by evidence derived from research.
Experimental design – Setting up an experimental group and a control group and then
placing subjects at random in one or other group. The conditions under which the
experimental group functions are then manipulated and the outcomes compared with
the control group, whose conditions remain unchanged.
Falsification – An approach to testing hypotheses advocated by Karl Popper. He
proposed that it was insufficient simply to assemble confirmatory evidence; what must
also be obtained is evidence that refutes the hypothesis.
Frequency – The number of times a value occurs in a set of data.
Grounded theory – An inductive method of developing the general features of a theory
by grounding the account in empirical observations or evidence. The researcher uses
empirical evidence directly to establish the concepts and relationships that will be
contained in the theory.
Hypothesis – A supposition (a tentative explanation of something) that is taken to be true
for the purpose of argument or a research study.
Induction (scientific method) – The process of reaching generalized conclusions from the
observation of particular instances.
Likert scale – A scale that records the views of respondents to a questionnaire or survey
on the extent to which they agree or disagree with a statement.

Linear regression – The mathematical relationship between two variables expressed on
a graph as a straight line.
Multivariate analysis (Manova) – Variance analysis where there is more than one
dependent variable and where the dependent variables cannot be combined.
Null hypothesis – A method used by researchers of testing a hypothesis in which it is
assumed that there is no relationship between two or more variables.
Paradigm – Broadly, a way of looking at things. The term is often used loosely, but
properly it means a philosophical and theoretical framework of a scientific school or
discipline within which theories, laws and generalizations, and the experiments
performed in support of them, are formulated. In other words, it is a common
perspective that underpins the work of theorists so that they use the same approach
to conducting research.
Phenomenology – An approach to research that is concerned more with the meaning of
phenomena than the facts associated with them.
Positivism – The belief that researchers should focus on facts (observable reality).
Primary source – Information obtained directly by a researcher from the originator of the
evidence.
Proposition – A proposal put forward as an explanation of an event, a possible situation
or a form of behaviour.
Qualitative research – Research based on evidence that is not easily reduced to
numbers. It makes use of interviews, case studies and observation.
Quantitative research – Research based on the collection of quantitative data from
interviews, questionnaires, surveys, case studies, tests, observation and experiment.
Reductionism – Reducing phenomena to their simplest elements.
Regression – The relationship between two variables indicating how changes in levels of
X relate to changes in levels of Y.
Research question – A statement that answers the questions: ‘What is this research
project intended to address and what is its potential contribution to increasing
knowledge?’
Secondary source – Information obtained by a researcher that is already available in the
literature or on the internet.
Significance – The degree to which an event could have occurred by chance.

Theory – An established explanatory principle of why something happens and how it
happens based on a hypothesis or hypotheses that have been tested through
research. A theory can be used to make predictions of future developments.

1. How is qualitative and/or quantitative research used in a research project?
2. How are surveys used in a research project?
3. How are case studies used in research?
4. What are the advantages and disadvantages of interviews as a means of obtaining
research data?

Bibliography
Anderson, V (2004) Research Methods in HRM, CIPD, London
Bryman, A and Bell, E (2007) Business Research Methods, 2nd edn, Oxford University
Press, Oxford
Easterby-Smith, M, Thorpe, R and Lowe, A (1991) Management Research: An
introduction, Sage, London
11. COMPETENCY-BASED HRM
Teaching notes
 The different types of competencies
 The contents of competency frameworks
 Reasons for using competencies
 Coverage of competencies
 Applications of competency-based HRM
 How to develop a competency framework
 Keys to success in using competencies
 Competencies and emotional intelligence
 Behavioural competencies
 Behavioural indicator
 Competency
 Competency-based HRM
 Competency framework
 Criterion referencing
 Emotional intelligence
 Role-specific competencies
 Technical competencies
Contents
 A bibliography

Session outline
The different types of competencies
● Behavioural competencies.
● Technical competencies.
● NVQs and SNVQs.
The contents of competency frameworks (the most popular headings)
● Team orientation.
● Communication.
● People management.
● Customer focus.
● Results orientation.
● Problem solving.
● Planning and organizing.
● Technical skills.
● Leadership.
Coverage of competencies (Rankin, 2002)
● Twenty-two per cent covered the whole workforce.
● Forty-eight per cent confined competencies to specific work groups, functions or
departments.
● Twenty per cent have a core competency framework that covers all staff in respect
of behavioural competencies, alongside sets of technical competencies in
functions departments.
Uses of competencies (Competency and Emotional Intelligence 2006/07)
● Learning and development – 82 per cent.
● Performance management – 76 per cent.
● Selection – 85 per cent.
● Recruitment – 55 per cent.

● Reward – 30 per cent.
How to develop a competency framework
● Decide on the purpose of the framework and the HR processes for which it will be
used.
● Make out a business case for its development, setting out the benefits to the
organization.
● Prepare a project plan that includes an assessment of the resources required and
the costs. Involve line managers and employees in the design of the framework.
● Communicate the objectives of the exercise to staff.
● Draw up a list of the core competencies of the business.
● Define the competencies for inclusion in a competency framework.
● Test and finalize and communicate framework.
Keys to success in using competencies
● Frameworks should not be over-complex.
● There should not be too many headings in a framework – seven or eight will often
suffice.
● The language used should be clear and jargon-free.
● Competencies must be selected and defined in ways that ensure that they can be
assessed by managers – the use of ‘behavioural indicators’ is helpful.
● Frameworks should be regularly updated.
Competencies and emotional intelligence
The emotional intelligence elements of self-awareness, emotional management,
empathy, relationships, communication and personal style correspond to competencies
such as sensitivity, flexibility, adaptability, resilience, impact, listening, leadership,
persuasiveness, motivating others, energy, decisiveness and achievement motivation.

Behavioural competencies – The types of behaviour required for successful performance
of a role.
Behavioural indicator – A definition of how the effective use of a behavioural competency
can be demonstrated in a person’s day-to-day work.
Competency – An underlying characteristic of a person that results in effective or
superior performance.
Competency-based HRM – The use of competencies and competency frameworks in
HR activities such as recruitment and selection, performance management, learning
and development, and reward.
Competency framework – A set of definitions of the behavioural competencies used in
the whole or part of an organization.
Criterion referencing – Comparing one measure or situation with a criterion in the form of
another measure or outcome to determine the relationship between them; for
example: in functional analysis, measuring the outcome of learning and development
programmes and comparing test scores with job success and training outcomes.
Emotional intelligence – A combination of skills and abilities such as self-awareness,
self-control, empathy and sensitivity to the feelings of others.
Role-specific competencies – Competencies for generic or individual roles.
Technical competencies – What people have to know and be able to do (knowledge and
skills) to carry out their roles effectively.

1. What are the main types of competencies?
2. What is a competency framework?
3. What are the uses to which competencies are put in HRM?

Bibliography
Boyatzis, R (1982) The Competent Manager, Wiley, New York
Competency and Emotional Intelligence (2006/7) Raising Performance Through
Competencies: The annual benchmarking survey, Competency and Emotional
Intelligence, London
Dulewicz, V and Higgs, M (1999) The seven dimensions of emotional intelligence,
People Management, 28 October, p 53
Goleman, D (1995) Emotional Intelligence, Bantam, New York
Goleman, D (1998) Working with Emotional Intelligence, Bloomsbury, London
Mansfield, B (1999) What is ‘competence’ all about?, Competency, 6 (3), pp 24–28
Mansfield, B and Mitchell, L (1986) Towards a Competent Workforce, Gower, Aldershot
McClelland, D C (1973) Testing for competence rather than intelligence, American
Psychologist, 28 (1), pp 1–14
Miller, L, Rankin, N and Neathey, F (2001) Competency Frameworks in UK
Organizations, CIPD, London
Mirabile, R J (1998) Leadership competency development: competitive advantage for
the future, Management Development Forum, 1 (2), pp 1–15
Rankin, N (2002) Raising performance through people: the ninth competency survey,
Competency and Emotional Intelligence, January, pp 2–21
Rankin, N (2004) Benchmarking survey, Competency and Emotional Intelligence, 12 (1),
pp 4–6
Woodruffe, C (1990) Assessment Centres, IPM, London
Woodruffe, C (1991) Competent by any other name, Personnel Management,
September, pp 30–33
12. KNOWLEDGE MANAGEMENT
Teaching notes
 The purpose and significance ofknowledge management
 Knowledge managementstrategies
 Knowledge managementsystems
 Knowledge managementissues
 The contribution HR can make to knowledge management

 Communities ofpractice
 Data
 Explicit knowledge
 Information
 Intellectual capital
 Knowledge
 Knowledge management
 Learning organization
 Resource-based view
 Tacit knowledge
Contents
 A concept map
 A bibliography

Session outline
The purpose and significance of knowledge management
Knowledge management is about getting knowledge from those who have it to those
who need it in order to improve organizational effectiveness.
It is as much if not more concerned with people and how they acquire, exchange and
disseminate knowledge as it is about information technology.
It is significant because, as Ulrich (1998) points out: ‘Knowledge has become a direct
competitive advantage for companies selling ideas and relationships.’ It is linked to the
concepts of:
● The resource-based-view – the concept that it is the range of resources in an
organization, including its human resources, that produces its unique character
and creates competitive advantage.
● Intellectual capital – the stocks and flows of knowledge available to an
organization, ie the intangible resources associated with people.
● The learning organization – defined by Garvin et al (2008) as a place where
employees excel at creating, acquiring and transferring knowledge.
Knowledge management strategies
● The codification strategy – knowledge is carefully codified and stored in databases
where it can be accessed and used easily by anyone in the organization.
Knowledge is explicit and is codified using a ‘people-to-document’ approach.
● The personalization strategy – knowledge is closely tied to the person who has
developed it and is shared mainly through direct person-to-person contacts. This is
an approach that involves ensuring that tacit knowledge is passed on.
Knowledge management systems
● Operating an intranet.
● Creating ‘data warehouses’.
● Using decision support systems.
● Using ‘groupware’, ie information communication technologies such as e-mail or
Locus Notes discussion bases.

● Creating networks or communities of practice of knowledge workers.
Knowledge management issues
● The pace of change.
● Relating knowledge management strategy to business strategy.
● IT is best used in a supportive role.
● Attention must be paid to the processes (social, technological and organizational)
through which knowledge combines and interacts in different ways.
● The significance of knowledge workers must be appreciated.
The contribution HR can make to knowledge management
Knowledge management is an important area for HR practitioners, who are in a strong
position to exert influence in this aspect of people management.
Scarborough et al (1999) believe that they should have ‘the ability to analyse the
different types of knowledge deployed by the organization… (and) to relate such
knowledge to issues of organizational design, career patterns and employment security’.
HR practitioners should:
● Help to develop an open culture that emphasizes the importance of sharing
knowledge.
● Promote a climate of commitment and trust.
● Advise on the design and development of organizations that facilitate knowledge
sharing. Ensure that valued employees who can contribute to knowledge creation
and sharing are attracted and retained.
● Advise on methods of motivating people to share.
● Help in the development of performance management processes that focus on the
development and sharing of knowledge.
● Develop processes of organizational and individual learning that will generate and
assist in disseminating knowledge.
● Set up and organize workshops, conferences and communities of practice and
symposia that enable knowledge to be shared on a person-to-person basis.
● In conjunction with IT, develop systems for capturing and, as far as possible,
codifying explicit and tacit knowledge.
● Generally, promote the cause of knowledge management with senior managers.

Knowledge Management– Concept Map
dealt w ith by
The concepts of:
 The resource-based
view
 Intellectual capital
 The learning
organization
 Intranet
 Data w arehouses
 Decision support systems
 Groupw are
 Communities of practice
 Mapping sources of internalexpertise
linked to
handled
by
Know ledge management
consists of
contributes
to
Know ledge
Data Information
Explicit
know ledge
Tacit
know ledge
Stocks and
flow s of
know ledge

Communities of practice – Groups of people bound together by shared expertise who
meet together to share knowledge.
Data – The basic facts or building blocks for information and knowledge.
Explicit knowledge – Knowledge that is recorded and available and is held in databases,
in corporate intranets and intellectual property portfolios.
Information – Data that have been processed in a way that is meaningful to individuals.
Intellectual capital – The stocks and flows of knowledge available to an organization, ie
the intangible resources associated with people.
Knowledge – What people understand about things, concepts, ideas, theories,
procedures, practices and ‘the way we do things around here’. It can be described as
’know-how’ or, when it is specific, ‘expertise’.
Knowledge management – Storing and sharing the wisdom, understanding and
expertise accumulated in an organization about its processes, techniques and
operations.
Learning organization – A place where employees excel at creating, acquiring and
transferring knowledge (Garvin et al, 2008).
Resource-based view – The concept that it is the range of resources in an organization,
competitive advantage. HRM delivers added value and helps to achieve sustainable
competitive advantage through the strategic development of the organization’s rare,
hard to imitate and hard to substitute human resources.
Tacit knowledge – Knowledge that exists in people’s minds. It is difficult to articulate in
writing and is acquired through personal experience.

1. Why is the concept of knowledge management important to HR specialists?
2. How is knowledge management linked to the concepts of the resource-based view,
intellectual capital and the learning organization?
3. ‘Understanding knowledge creation as a process of making tacit knowledge explicit…
has direct implications for how a company designs its organization and defines
managerial roles and responsibilities within it. This is the “how” of the knowledge
creating company, the structures and practices that translate company’s vision into
innovative technologies and products’ (Nonaka, 1991, The knowledge creating
company, Harvard Business Review, Nov–Dec, pp 96–104). In this seminal article,
Nonaka demonstrated the significance of knowledge management. He contends, as
this extract indicates, that it must be a fundamental consideration in the design and
operation of organizations. To what extent do you agree with this and why?
4. What is the difference between explicit and tacit knowledge and why is this
significant?
5. You have been asked by your chief executive to prepare a business case for a more
systematic approach to knowledge management in your firm, which can be described
as ‘knowledge intensive’, ie as defined by Swart et al (People and Performance in
Knowledge-intensive Firms, CIPD, London, 2003), a firm that has ‘the capacity to
solve complex problems through creative and innovative solutions’. At present there
are no policies or practices that have been deliberately designed systematically to
enhance the knowledge management capabilities of the company. Prepare the case
that your chief executive would expect to be made on the proverbial one side of a
sheet of paper.
6. ‘Organizational capital (knowledge) stays behind when the employee leaves; human
capital is the intellectual asset that goes home every night with the employee’ (Fitz-
enj, J, 2000, The ROI of Human Capital, American Management Association, New
York). What are the implications of this statement for knowledge management
policies within a firm?
7. ‘Knowledge is at the heart of the new economy… In this knowledge-based economy,
knowledge is not just another resource alongside the other traditional factors but the
only meaningful resource’ (Drucker, P, 1993, Post-Capitalist Society, Butterworth-

Heinemann, Oxford). To what extent do you agree with this claim by Drucker and
why?
8. What contribution can HR make to the development and implementation of
knowledge management policies?

Bibliography
Argyris, C (1991) Teaching smart people how to learn, Harvard Business Review, May–
June, pp 54–62
Blackler, F (1995) Knowledge, knowledge work and experience, Organization Studies,
16 (6), pp 16–36
Blake, P (1988) The knowledge management explosion, Information Today, 15 (1), pp
12–13
Davenport, T O (1999) Human Capital, Jossey-Bass, San Francisco, CA
Drucker, P (1993) Post-Capitalist Society, Butterworth-Heinemann, Oxford
Fitzenji, J (2000) The ROI of Human Capital, American Management Association, New
York
Hansen, M T, Nohria, N and Tierney, T (1999) What’s your strategy for managing
knowledge?, Harvard Business Review, March–April, pp 106–16
Mecklenberg, S, Deering, A and Sharp, D (1999) Knowledge management: a secret
engine of corporate growth, Executive Agenda, 2, pp 5–15
Nahpiet, J and Ghoshal, S (1998) Social capital, intellectual capital and the
organizational advantage, Academy of Management Review, 23 (2), pp 242–66
Nonaka, I (1991) The knowledge creating company, Harvard Business Review,
November–December, pp 96–104
Nonaka, I and Takeuchy, H (1995) The Knowledge Creating Company, Oxford
University Press, New York
Rugles, R (1998) The state of the notion, Californian Management Review, 40 (3), pp
80–89
Ryle, G (1949) The Concept of Mind, Oxford University Press, Oxford
Scarborough, H and Carter, C (2000) Investigating Knowledge Management, CIPD,
London
Scarborough, H, Swan, J and Preston, J (1999) Knowledge Management: A literature
review, Institute of Personnel and Development, London
Swart, J, Kinnie, N and Purcell, J (2003) People and Performance in Knowledge-
intensive Firms, CIPD, London
Tan, J (2000) Knowledge management – just more buzzwords?, British Journal of
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Trussler, S (1998) The rules of the game, Journal of Business Strategy, 19 (1), pp 16–19

Wenger, E and Snyder, W M (2000) Communities of practice: the organizational frontier,
Harvard Business Review, January–February, pp 33–41
13. HIGH-PERFORMANCE WORK SYSTEMS
Teaching notes
 The characteristics ofa high-performance culture
 The characteristics ofa high-performance work system (HPWS)
 The components ofan HPWS
 Impactof an HPWS
 Developing an HPWS
 High-commitmentmanagement
 High-commitmentmodel
 High-involvementmanagement
 High-performance culture
 High-performance management
 High-performance work systems (HPWSs)
 Performance managementmodel
Contents
 A bibliography

Session outline
The key characteristics of a high-performance culture
● People know what's expected of them – they understand their goals and
accountabilities.
● People feel that their job is worth doing, and there is a strong fit between the job
and their capabilities.
● Management defines what it requires in the shape of performance improvements,
sets goals for success and monitors performance to ensure that the goals are
achieved.
● There is a focus on promoting positive attitudes that result in an engaged,
committed and motivated workforce.
● Performance management processes are aligned to business goals to ensure that
people are engaged in achieving agreed objectives and standards.
● Capacities of people are developed through learning at all levels to support
performance improvement.
The characteristics of a high-performance work system (HPWS)
● Links the firm’s selection and promotion decisions to validated competency
models.
● A basis for developing strategies that provide timely and effective support for the
skills demanded to implant the firm’s strategies.
● Enacts compensation and performance management policies that attract, retain
and motivate high-performance employees.
The components of an HPWS
● There is no ‘magic list’ of best practices for an HPWS, although they work best if
bundled together.
● The lists that have been produced include sophisticated HR practices in such
areas as recruitment, learning and development, performance management and
reward processes. Typical lists are shown in the following table.

Components of an HPWS
Table 12.1 Lists of HR practices in high-performance work systems
Impact of an HPWS
A number of studies demonstrate that the impact of high-performance work systems is
positive. Examples are:
● US Department of Labor (1993): in a survey of 700 organizations, the US
Department of Labor found that firms that used innovative human resource
practices had an HPWS.
● King (1995): a survey of Fortune 1000 companies in the United States revealed
that 60 per cent of those using at least one practice increasing the responsibility of
employees in the business process reported that the result was an increase in
productivity, while 70 per cent reported an improvement in quality.
● Varma et al (1999): a survey of 39 organizations was conducted to examine the
antecedents, design and effectiveness of high-performance initiatives. Results
indicated that HPWSs had a significant impact on financial performance and
created a positive culture change in the organization (eg cooperation and
innovation).
● Appelbaum et al (2000): a survey of 4,400 employees and 44 manufacturing
facilities found that in the steel industry HPWSs produced strong positive effects
 Carefuland extensive
systems forrecruitment,
selection and training.
 Formal systems forsharing
information with employees.
 Clear job design.
 High-levelparticipation
processes.
 Monitoring of attitudes.
 Performance appraisals
 Properly functioning
grievance procedures.
 Promotion and
compensation schemes that
provide for the recognition
and rew ard of high-
performing employees.
 Work is organized to
permit front-line w orkers
to participate in decisions
that alter organizational
routines.
 Workers require more
skills to do their jobs
successfully, and many of
these skills are firm-
specific.
 Workers experience
greater autonomy over
their job tasks and
methods of w ork.
 Incentive pay motivates
w orkersto extend extra
effort on developing skills.
 Employment security
provides front-line
w orkerswith a long-term
stake in the company and
a reason to invest in its
future.
 High-involvement w ork
practices – eg self-
directed teams, quality
circles, and
sharing/accessto
company information.
 Human resource
practices – eg
sophisticated
recruitment processes,
performance
appraisals, w ork
redesign and
mentoring.
 Rew ard and
commitment practices
– eg various financial
rew ards, family friendly
policies, job rotation
and flexi-hours.
 Information sharing.
 Sophisticated
recruitment.
 Formal induction
programme.
 Five or more days of
off-the-job training in
the last year.
 Semi or totally
autonomous w ork
teams; continuous
improvement teams;
problem-solving
groups.
 Interpersonalskill
development.
 Performance feedback.
 Involvement – w orks
council, suggestion
scheme, opinion
survey.
 Team-based rew ards,
employee share
ow nership scheme,
profit-sharing scheme.
US Department of Labor
(1993)
Appelbaum et al (2000) Sung and Ashton (2005) Thompson and Heron
(2005)

on performance, in the apparel industry the introduction of group piecework rates
linked to quality as well as quantity rather than individual piecework, plus multi-
skilling, dramatically speeded up throughput times, and in the medical electronics
and imaging industry those using an HPWS ranked highly on eight diverse
indicators of financial performance and production efficiency and quality.
● Sung and Ashton (2005): a survey of 294 UK companies provided evidence that
the level of HPWS adoption as measured by the number of practices in use is
linked to organizational performance. Those adopting more of the practices as
‘bundles’ had greater employee involvement and were more effective in delivering
adequate training provision, managing staff and providing career opportunities.
Developing an HPWS
The approach to developing an HPWS is based on an understanding of what the goals
of the business are and how people can contribute to their achievement. This leads to an
assessment of what type of performance culture is needed. The steps required are:
1. Analyse the business strategy.
2. Define the desired performance culture of the business and the objectives of the
exercise.
3. Analyse the existing arrangements.
4. Identify the gaps between what is and what should be.
5. Draw up a list of practices that need to be introduced or improved.
6. Identify the practices that can be linked together in ‘bundles’ to complement and
support one another.
7. Assess practicality.
8. Prioritize.
9. Define project objectives.
10. Get buy-in.
11. Plan the implementation.
12. Implement.

High-commitment management – A form of management aimed at eliciting a
commitment so that behaviour is primarily self-regulated rather than controlled by
sanctions and pressures external to the individual, and relations within the
organization are based on high levels of trust (Wood, 1996).
High-commitment model (Guest, 2007) – A move from external control through
management systems, technology and supervision to self-control by workers or
teams of workers who, because of their commitment to the organization, would
exercise responsible autonomy and control in the interests of the organization. The
emphasis is on intrinsic control and intrinsic rewards.
High-involvement management – A specific set of human resource practices that focus
on employee decision making, power, access to information, training and incentives.
High-performance culture – One in which the values, norms and HR practices of an
organization combine to create a climate in which the achievement of high levels of
performance is a way of life.
High-performance management – An approach that aims to make an impact on the
performance of the organization through its people in such areas as productivity,
quality, levels of customer service, growth and profits.
High-performance work systems (HPWS) – Bundles of practices that facilitate employee
involvement, skill enhancement and motivation. They can constitute: ‘An internally
consistent and coherent HRM system that is focused on solving operational problems
and implementing the firm’s competitive strategy’ (Becker and Huselid, 1998).
Performance management model (Guest, 2007) – An approach that focuses on the
adoption of practices designed to maximize high performance by ensuring high levels
of competence and motivation.

1. What is a high-performance culture?
2. What is the distinction between high-commitment, high-involvement and high-
performance work systems?
3. What are the characteristics of a high-performance work system?
4. What are the components of a high-performance work system?

Bibliography
Appelbaum, E, Bailey, T Berg, P and Kalleberg, A L (2000) Manufacturing Advantage:
Armitage, A and Keble-Allen, D (2007) Why people management basics form the
foundation of high-performance working, People Management, 18 October, p 48
Ashton, D and Sung, J (2002) Supporting Workplace Learning for High performance, ILO,
Geneva
Personnel and Human Resource Management, 16, pp 53–101, JAI Press, Stamford,
CN
Spring, 36 (1), pp 39–47
Becker, B E, Huselid, M A and Ulrich, D (2001) The HR Score Card: Linking people,
strategy, and performance, Harvard Business School Press, Boston, MA
Ericksen, J (2007) High performance work systems: dynamic workforce alignment and
firm performance, Academy of Management Proceedings, pp 1–6
Gephart, M A (1995) The road to high performance: steps to create a high-performance
workplace, Training and Development, June, p 29
Godard, J (2004) A critical assessment of the high-performance paradigm, British
Journal of Industrial Relations, 42 (2), pp 349–78
Guest, D (2007) HRM: towards a new psychological contract, in (ed) P Boxall, J Purcell
Press, Oxford
King, J (1995) High performance work systems and firm performance, Monthly Labour
Review, May, pp 29–36
Lawler, E E (1986) High Involvement Management, Jossey-Bass, San Francisco, CA
Lawler, E E, Mohrman, S and Ledford, G (1998) Strategies for High Performance
Organizations: Employee involvement, TQM, and re-engineering programs in Fortune
1000, Jossey-Bass, San Francisco, CA
Nadler, D A (1989) Organizational architecture for the corporation of the future, Benchmark,
Fall, 12–13

Nadler, D A and Gerstein, M S (1992) Designing high-performance work systems:
organizing people, technology, work and information, Organizational Architecture,
Summer, pp 195–208
Ramsay, H, Scholarios, D and Harley, B (2000) Employees and high-performance work
systems: testing inside the black box, British Journal of Industrial Relations, 38 (4), pp
501–31
Stevens, J (2005) High Performance Wales: Real experiences, real success, Wales
Management Council, Cardiff
Sung, J and Ashton, D (2005) High Performance Work Practices: Linking strategy and skills
to performance outcomes, DTI in association with CIPD, available at
http://www.cipd.co.uk/subjects/corpstrtgy/
Thompson, M and Heron, P (2005) Management capability and high performance work
organization, International Journal of Human Resource Management, 16 (6), pp
1029–48
Performance, US Government Printing Office, Washington DC
Varma, A, Beatty, R W, Schneier, C E and Ulrich, D O (1999) High performance work
systems: exciting discovery or passing fad?, Human Resource Planning, 22 (1), pp
26–37
Walton, R E (1985) Towards a strategy of eliciting employee commitment based on
principles of mutuality, in (ed) R E Walton and P R Lawrence, HRM Trends and
Challenges, Harvard Business School Press, Boston, MA
Wood, S (1996) High commitment management and organization in the UK, International
Journal of Human Resource Management, 7 (1), pp 41–58
14. WORK
Teaching notes
This session will cover:
 The nature of work
 The essential components ofwork
 Feelings aboutwork
 Organizational factors affecting work
 The future of work

 Financial flexibility
 Flexible firm
 Functional flexibility
 Lean organization
 Numerical flexibility
 Portfolio career
 Work
Contents
 A bibliography

Session outline
The nature of work
● Most people work to earn a living.
● They also work because of the other satisfactions it brings, such as doing
something worthwhile, a sense of achievement, prestige, recognition, the
opportunity to use and develop abilities, the scope to exercise power, and
companionship.
The essential components of work
● Work produces or achieves something (it is not an end in itself).
● Work involves a degree of obligation or necessity (it is a task set either by others
or ourselves).
● Work involves effort and persistence (it is not wholly pleasurable, although there
may be pleasurable elements in it).
Feelings about work
As established by research conducted by Guest et al (1996) and Guest and Conway
(1997):
● Work remains a central interest in the lives of most people.
● If they won the lottery, 39 per cent would quit work while most of the others would
continue working.
● Asked to select the three most important things they look for in a job, 70 per cent
of respondents cited pay, 62 per cent wanted interesting and varied work and only
22 per cent were looking for job security.
● 35 per cent claimed that they were putting in so much effort that they could not
work any harder and a further 34 per cent claimed they were working very hard.

Organizational factors affecting work
The nature of work alters as organizations change in response to new demands and
environmental pressures. The notions of the flexible firm and the ‘lean’ organization are
particularly significant:
● The flexible firm is one in which there is structural and operational flexibility.
Structural flexibility is present when the core of permanent employees is
supplemented by a peripheral group of part-time employees, employees on short-
or fixed-term contracts or sub-contracted workers. Operational flexibility can be
functional, numerical or financial.
● In the lean organization, lean production aims to add value by minimizing waste in
terms of materials, time, space and people.
The future of work
Futurologists have predicted various fundamental changes, ‘paradigm shifts’, in the
nature of work but as Nolan and Wood (2003) comment, the evidence on work and
employment patterns in Britain confounds many of these claims.

Financial flexibility – Pay levels reflect the state of supply and demand in the external
labour market and flexible pay systems are used that facilitate either functional or
numerical flexibility (qv).
Flexible firm – One in which there is structural flexibility, ie the existence of a core of
permanent employees and a periphery of temporary and sub-contracted workers.
There may also be operational flexibility with regard to the way in which work is
carried out (eg multi-skilling) and flexible working hours.
Functional flexibility – The use of workers who possess and can apply a number of skills,
or who carry out a number of different tasks.
Lean organization – One in which ‘lean’ production takes place, which aims to add value
by minimizing waste in terms of materials, time, space and people.
Numerical flexibility – The number of employees can be quickly and easily increased or
decreased in line with even short-term changes in the level of demand for labour.
Portfolio career – A term coined by Charles Handy (1984) to describe his forecast that
people will increasingly change the direction of their careers during the course of their
working life.
Work – The exertion of effort and the application of knowledge and skills to achieve a
purpose.

1. What is the nature of work?
2. What is a flexible firm?
3. What is lean production?
4. What is the future of work?

Bibliography
Atkinson, J (1984) Manpower strategies for flexible organizations, Personnel
Management, August, pp 28–31
Bridges, M (1995) Job Shift: How to prosper in a world without jobs, Nicolas Brealey,
London
Doeringer, P and Priore, M (1971) Internal Labour Markets and Labour Market Analysis,
Heath, Lexington, DC
Gallie, D and White, M (1993) Employee Commitment and the Skills Revolution, Policy
Studies Institute, London
Gallie, D, Marsh, C and Vogler, C (1994) Social Changes and the Experience of
Unemployment, Oxford University Press, Oxford
Guest, D E and Conway, N (1997) Employee Motivation and the Psychological Contract,
IPD, London
Guest, D E, Conway, N and Briner, T (1996) The State of the Psychological Contract in
Employment, IPD, London
Handy, C (1984) The Future of Work, Blackwell, Oxford
Holbeche, L and Springett, N (2004) In Search of Meaning at Work, Roffey Park
Institute, Horsham
Kinnie, N, Hutchinson, S, Purcell, J, Rees, C, Scarborough, H and Terry, M (1996) The
People Management Implications of Leaner Methods of Working, IPD, London
Leadbeater, C (2000) Living on Thin Air: The new economy, Viking, London
Loveridge, R and Mok, A (1979) Theories of Labour Market Segmentation: A critique,
Martinus Nijhoff, The Hague
Nolan, P and Wood, S (2003) Mapping the future of work, British Journal of Industrial
Relations, 41 (2), pp 165–74
Noon, M and Blyton, P (2007) The Realities of Work, Palgrave Macmillan, Basingstoke
Rifkin, J (1995) The End of Work: The decline of the global labour force and the dawn of
the new economy, Putnam, New York
Thomas, K (ed) (1999) The Oxford Book of Work, Oxford University Press, Oxford
Womack, J and Jones, D (1970) The Machine that Changed the World, Rawson, New York
15. THE EMPLOYMENT RELATIONSHIP

Teaching notes
 Basis of the employment relationship
 Employment relationship contracts
 What is happening to the employment relationship
 Managing the employment relationship
 Developing a high-trust organization
 Theories explaining the employment relationship
 Agency theory  Employment relationship
 Exchange theory  High-trust organization
 Labour process theory  Mutuality
 Pay–work bargain  Pluralist framework of reference
 Procedural justice  Psychological contract
 Relationship contract  Transactional contract
 Trust  Unitary framework of reference
Contents
 A bibliography

Session outline
Basis of the employment relationship
● An undertaking by an employee to provide skill and effort to the employer in return
for which the employer provides the employee with a salary or a wage.
● The employer's obligations also include the duty to provide a safe workplace, to
act in good faith towards the employee and not to act in such a way as to
undermine the trust and confidence of the employment relationship.
● The employee has corresponding obligations, including obedience, competence,
honesty and loyalty.
Employment relationship contracts
The three types are:
1. Relational contract: A contract expressing the relationships between employers
and employees in abstract terms that refer to open-ended membership of the
organization. Performance requirements attached to this continuing membership
are incomplete or ambiguous. It is less well-defined than a transactional contract
(qv).
2. Transactional contract: A contract that has well-described terms of exchange
between employer and employee, which are usually expressed financially.
3. Psychological contract: The combination of beliefs held by an individual and his or
her employer about what they expect of one another. It can be described as the
set of reciprocal but unwritten expectations that exist between individual
employees and their employers.
What is happening to the employment relationship
Three of the more important developments in the employment relationship (Gallie et al,
1998) are:
1. New forms of management, often based explicitly or implicitly on HRM principles
and emphasizing individual contracts rather than collective bargaining.

2. There was some increase in task discretion but there was no evidence of a
significant decline in managerial control; indeed, in some important respects
control was intensified.
3. The higher the level of skill, the more people were involved with their work.
Managing the employment relationship
The dynamic and often nebulous nature of the employment relationship and the
multiplicity of the factors that influence the contract increase the difficulty of managing it.
Developing a high-trust organization
● A high-trust organization exists when management is honest with people, keeps its
word (delivers the deal) and practises what it preaches.
● Trust is created and maintained by managerial behaviour and by the development
of better mutual understanding of expectations – employers of employees, and
employees of employers.
Theories explaining the employment relationship
The theories explaining the employment relationship are:
● Labour process theory: Karl Marx’s theory that capitalists appropriate surplus from
labour by paying it less than the value it adds to the labour process.
● Agency theory: The role of the managers of a business is to act on behalf of the
owners of the business as their agents.
● Exchange theory: Organizational behaviour can be explained in terms of the
rewards and costs incurred in the interaction between employers and employees.

Agency theory – The role of the managers of a business is to act on behalf of the owners
of the business as their agents. But there is a separation between the owners (the
principals) and the agents (the managers) and the principals may not have complete
control over their agents. The latter may therefore act in ways that are against the
interests of those principals.
Employment relationship – The relationships that exist between employers and
employees in the workplace: how they work together and get on with one another.
Exchange theory – The theory that organizational behaviour can be explained in terms
of the rewards and costs incurred in the interaction between employers and
employees.
High-trust organization – One in which high levels of trust exist between employees and
management.
Labour process theory – Karl Marx’s theory that capitalists appropriate surplus from
labour by paying it less than the value it adds to the labour process. As interpreted by
Braverman (1974), the theory refers to the application of modern management
techniques in combination with mechanization and automation, which secures the
real subordination of labour and de-skilling of work in the office as well as the shop
floor.
Mutuality – A state that exists when management and employees are interdependent
and both benefit from this interdependency.
Pay–work bargain – The agreement made between employers and employees whereby
the former undertake to pay for the work done by the latter.
Pluralist frame of reference – A belief based on pluralism, ie that the interests of
employees will not necessarily coincide with those of their employers.
Procedural justice – Treating people fairly in accordance with the principles of natural
justice, ie that individuals should know the standards they are expected to achieve
and the rules to which they are expected to conform, should be given a clear
indication of where they are failing or what rules have been broken.
Psychological contract – The combination of beliefs held by an individual and his or her
employer about what they expect of one another. It can be described as the set of
reciprocal but unwritten expectations that exist between individual employees and
their employers.

Relational contract – A contract expressing the relationships between employers and
employees in abstract terms that refers to open-ended membership of the
organization. Performance requirements attached to this continuing membership are
incomplete or ambiguous. It is less well-defined than a transactional contract (qv).
Transactional contract – A contract that has well-described terms of exchange between
employer and employee, which are usually expressed financially. It is usually limited
in duration and has specified performance requirements.
Trust – The belief that a person may be relied on by meeting our expectations of them
and suiting actions to words.
Unitary frame of reference – A belief based on unitarism, ie that management and
employees share the same concerns and it is therefore in both their interests to work
together.

1. What is the basis of the employment relationship?
2. What types of contract are incorporated in the employment relationship?
3. How can a high-trust organization be developed?

Bibliography
Braverman, H (1974) Labour and Monopoly Capital, Monthly Review Press, New York
Cox, A and Purcell, J (1998) Searching for leverage: pay systems, trust, motivation and
commitment in SMEs, in (ed) S J Perkins and St John Sandringham, Trust, Motivation
and Commitment: A reader, Strategic Remuneration Research Centre, Faringdon
Cyert, R M and March, J G (1963) A Behavioural Theory of the Firm, Prentice-Hall,
Edwards, P K (1990) Understanding conflict in the labor process: the logic and anatomy
of struggle, in Labor Process Theory, Macmillan, London
Fox, A (1973) Beyond Contract, Faber and Faber, London
Gallie, D, White, M, Cheng, Y and Tomlinson, M (1998) Restructuring the Employment
Relationship, The Clarendon Press, Oxford
Gennard, J and Judge, G (2005) Employee Relations, 3rd edn, CIPD, London
Guest, D E and Conway, N (1998) Fairness at Work and the Psychological Contract,
IPD, London
Herriot, P, Hirsh, W and Riley, P (1988) Trust and Transition: Managing the employment
relationship, Wiley, Chichester
Kessler, S and Undy, R (1996) The New Employment Relationship: Examining the
psychological contract, IPM, London
Macneil, R (1985) Relational contract: what we do and do not know, Wisconsin Law
Review, pp 483-525
Rubery, J, Earnshaw, J, Marchington, M, Cooke, F L and Vincent, S (2002) Changing
organizational forms and the employment relationship, Journal of Management
Studies, 39 (5), pp 645–72
Shaw, R B (1997) Trust in the Balance, Jossey-Bass, San Francisco, CA
Thompson, M (1998) Trust and reward, in (ed) S J Perkins and St John Sandringham,
Trust, Motivation and Commitment: A reader, Strategic Remuneration Research
Centre, Faringdon

Thompson, P and Harley, B (2007) HRM and the worker: labour process perspectives, in
(ed) P Boxall, J Purcell and P Wright, Oxford Handbook of Human Resource
Tyler, T R and Bies, R J (1990) Beyond formal procedures: the interpersonal context of
procedural justice, in (ed) J S Carrol, Applied Social Psychology and Organizational
Settings, Lawrence Erlbaum, Hillsdale, NJ
16. THE PYSCHOLOGICAL CONTRACT
Teaching notes
 A definition of the psychological contract
 The psychological contractand the employmentrelationship
 The core of the psychological contract
 The significance ofthe psychological contract
 Changes to the psychological contract
 The state of the psychological contract
 How psychological contracts develop
 Developing a positive psychological contract
 Employability
 Psychological contract
 Social exchange theory
Contents
 A bibliography

Session outline
A definition of the psychological contract
● A psychological contract is a set of unwritten expectations that exist between
individual employees and their employers.
● It is a system of beliefs that encompasses the actions employees believe are
expected of them and what response they expect in return from their employer
and, reciprocally, the actions employers believe are expected of them and what
response they expect in return from their employees.
The psychological contract and the employment relationship
The aspects of the employment relationship covered by the psychological contact will
include, from the employees’ point of view:
● how they are treated in terms of fairness, equity and consistency;
● security of employment;
● scope to demonstrate competence;
● career expectations and the opportunity to develop skills;
● involvement and influence;
● trust in the management of the organization to keep their promises.
From the employer's point of view, the psychological contract covers such aspects of the
employment relationship as competence, effort, compliance, commitment and loyalty.
The core of the psychological contract
The core of the psychological contract can be measured in terms of fairness of
treatment, trust, and the extent to which the explicit deal or contract is perceived to be
delivered.
The significance of the psychological contract
A psychological contract creates emotions and attitudes that form and control behaviour.

Changes to the psychological contract
The nature of the psychological contract is changing in many organizations in response
to changes in their external and internal environments. For example, there is more focus
on mutuality, a variable employment relationship and employability.
The state of the psychological contract
● A national survey (WERS) in 2004 found that the only area in which there was
more dissatisfaction than satisfaction was pay.
● A higher proportion than might have been expected (72 per cent) was satisfied or
very satisfied with the work itself.
● Equally high percentages were satisfied with regard to having a sense of
achievement and scope for using initiative.
How psychological contracts develop
Psychological contracts are not developed by means of a single transaction; they evolve
over time and can be multifaceted.
Developing a positive psychological contract
● Define expectations during recruitment and induction programmes.
● Communicate and agree expectations as part of the continuing dialogue that is
implicit in good performance management practices.
● Adopt a policy of transparency on company policies and procedures and on
management’s proposals and decisions as they affect people.
● Generally treat people as stakeholders, relying on consensus and cooperation
rather than control and coercion.

Employability – The ability of an individual to take on new forms of employment, within or
without the company.
Psychological contract – The combination of beliefs held by an individual and his or her
employer about what they expect of one another. It can be described as the set of
reciprocal but unwritten expectations that exist between individual employees and
their employers.
Social exchange theory – A theory that explains social change and stability as a process
of negotiated exchanges between parties.

1. What is the psychological contract?
2. What is its significance?
3. How can a positive psychological contract be developed?

Bibliography
Argyris, C (1957) Personality and Organization, Harper & Row, New York
Guest, D (2007) HRM: towards a new psychological contract, in (ed) P Boxall, J Purcell
and P Wright, Oxford Handbook of Human Resource Management, Oxford
Guest, D E and Conway, N (1997) Employee Motivation and the Psychological Contract,
IPD, London
Guest, D E and Conway, N (1998) Fairness at Work and the Psychological Contract,
IPD, London
Guest, D E and Conway, N (2002) Communicating the psychological contract: an
employee perspective, Human Resource Management Journal, 12 (2), pp 22–39
Guest, D E, Conway, N and Briner, T (1996) The State of the Psychological Contract in
Employment, IPD, London
Hiltrop, J M (1995) The changing psychological contract: the human resource challenge
of the 1990s, European Management Journal, 13 (3), pp 286–94
Katz, D and Kahn, R (1966) The Social Psychology of Organizations, John Wiley, New
York
Rousseau, D M (1995) Psychological Contracts in Organizations, Sage, Thousand
Oaks, CA
Rousseau, D M (2001) The idiosyncratic deal: flexibility versus fairness, Organizational
Dynamics, 29 (4), pp 260–73
Rousseau, D M and Greller, M M (1994) Human resource practices: administrative
contract makers, Human Resource Management, 33 (3), pp 385–401
Schein, E H (1965) Organizational Psychology, Prentice-Hall, Englewood Cliffs, NJ
Sims, R R (1994) Human resource management's role in clarifying the new
psychological contract, Human Resource Management, 33 (3), pp 373–82
Spindler, G S (1994) Psychological contracts in the workplace: a lawyer's view, Human
Resource Management, 33 (3), pp 325–33
17. THE ESSENCE OF ORGANIZATIONAL BEHAVIOUR

Teaching notes
 A definition of organizational behaviour
 The characteristics oforganizational behaviour
 The factors affecting organizational behaviour
 The sources and applications oforganizational behaviour theory
 The significance oforganizational behaviour theory
 Behavioural science
 Organizational behaviour
 Process theory
 Social sciences
 Variance theory
Contents
 A bibliography

Session outline
A definition of organizational behaviour
‘The study of the structure, functioning and performance of organizations, and the
behaviour of groups and individuals within them’ (Pugh, 1971).
Characteristics of organizational behaviour (Ivancevich et al, 2008)
● It is a way of thinking about individuals, groups and organizations.
● It is multidisciplinary.
● There is a distinctly humanistic orientation.
● It is performance-oriented.
● The use of scientific method is important in studying variables and relationships.
● It is applications-oriented in the sense of being concerned with providing useful
answers to questions that arise when managing organizations.
Organizational behaviour and the social and behavioural sciences
● Organizational behaviour studies use social and behavioural science
methodologies, which involve scientific procedures.
● The social sciences include the disciplines of psychology, social psychology,
sociology, anthropology, economics and political science.
● Behavioural science is mainly concerned with psychology and sociology. It was
defined by Kelly (1969) as: ‘The field of enquiry dedicated to the study of human
behaviour through sophisticated but rigorous methods.’
Factors affecting organizational behaviour
The actions, reactions and interactions of people that constitute organizational behaviour
are influenced by the following factors:
● The characteristics of people at work – individual differences, attitudes,
personality, attributions, orientation and the roles they play.
● How people are motivated.
● The process of employee engagement.

● The process of organizational commitment.
● How organizations function.
● Organizational culture.
Explaining organizational behaviour
Variance theory
● Variance theory explains the causes of organizational behaviour by reference to
the independent or causal variables that cause a change and result in dependent
variables – the outcomes of the change.
● Variance theory involves the definition and precise measurement of the variables.
Process theory
Process theory explains organizational behaviour by producing narratives that provide
probable explanations of the outcomes of a series of events.

1. What is meant by organizational behaviour?
2. What is the basis of organizational behaviour studies?
3. What are the factors affecting organizational behaviour?

Bibliography
Argyris, C (1960) Understanding Organizational Behaviour, Dorsey Press, Homewood,
IL
Baron, R and Byrne, D (2000) Social Psychology, Allyn and Bacon, London
Bowditch, J L and Buono, A F (2006) A Primer on Organizational Behaviour, Wiley, New
York
Brooks, L (2006) Organizational Behaviour: Individuals, groups and organizations, FT
Prentice Hall, Harlow
French, W L, Kast, F E and Rosenzweig, J E (1985) Understanding Human Behaviour in
Organizations, Harper & Row, New York
Huczynski, A A and Buchanan, D A (2007) Organizational Behaviour, FT Prentice Hall,
Harlow
Ivancevich, J M, Konopaske, R and Matteson, M T (2008) Organizational Behaviour and
Management, McGraw-Hill/Irwin, New York
Kelly, J (1969) Organizational Behaviour, Irwin, Homewood, IL
Locke, E A (2004) The Blackwell Handbook of Principles of Organizational Behaviour,
Blackwell, Oxford
Miner, J B (2007) Organizational Behavior 4: From theory to practice, Sharpe, New York
Mohr, L B (1982) Explaining Organizational Behaviour: The limits and possibility of
theory and research, Jossey-Bass, San Francisco, CA
Mullins, l J (2005) Management and Organizational Behaviour, FT Prentice Hall, Harlow
Mullins, I J (2006) Essentials of Organizational Behaviour, FT Prentice Hall, Harlow
Nadler, D A and Tushman, M L (1980) A congruence model for diagnosing
organizational behaviour, in (ed) R H Miles, Resource Book in Macro-organizational
Behaviour, Goodyear Publishing, Santa Monica, CA
Newstrom, J W (2007) Organizational Behaviour: Human behaviour at work, McGraw-
Hill, New York
Penny, D and Ellis, S (2006) Introduction to Organizational Behaviour, McGraw-Hill,
Maidenhead
Pugh, D S (ed) (1971) Organization Theory: Selected readings, Penguin Books,
Harmondsworth
18. CHARACTERISTICS OF PEOPLE

Teaching notes
 AMO theory
 Individual differences
 Variations in personal characteristics
 Personality theories
 Emotional intelligence characteristics
 Types of behaviour
 Role theory
 Ability  Orientation theory
 Attitude  Perception
 Attribution theory  Personality
 Bounded rationality  Psychological climate
 Emotion  Role
 Emotional Intelligence  Self-efficacy
 Intelligence
Contents
 A concept map for personality
 A bibliography

Session outline
Individual differences
The development of HR processes and the design of organizations are often based on
the belief that everyone is the same and will behave rationally when faced with change
or other demands. But the behaviour of people varies because of their characteristics
and individual differences and it is not always rational.
Bases of variations in personal characteristics
● Competencies – abilities and skills.
● Constructs – the conceptual framework that governs how people perceive their
environment.
● Expectations – what people have learnt to expect about their own and others’
behaviour.
● Values – what people believe to be important.
● Self-regulatory plans – the goals people set themselves and the plans they make
to achieve them.
Personality theories
Personality is a product of both nature (hereditary) and nurture (the pattern of life
experience). Personality can be described in terms of traits or types.
Emotional intelligence characteristics
● Self-management.
● Self-awareness.
● Social awareness.
● Social skills.
Types of behaviour
The types of behaviour associated with individual differences are:
● perception;

● attribution;
● orientation;
● carrying out roles;
● bounded rationality.
Role theory
● The role individuals occupy at work, and elsewhere, exists in relation to other
people.
● This is their role set, which consists of the individuals with whom a role-holder
interacts and therefore influences and is also influenced by them.
behaviour
sensing/
intuition
thinking/
feeling
perceiving/
judging
conscientiousness
extraversion
agreeableness
neuroticism
attitudes
extraversion/
introversion
openness
nature nurture traits types
(Jung)
self-
perception
personality
tests
a product
of
described in
terms of
impacts on assessed
by
PERSONALITY

Ability – The quality possessed by people that makes an action possible.
Attitude – A settled mode of thinking.
Attribution theory – This explains how people assign causes to events.
Bounded rationality – The extent to which people behave rationally is limited by their
capacity to understand the complexities of the situation they are in and their
emotional reactions to it.
Emotion – Feelings such as anger, fear, sadness, joy, anticipation and acceptance that
arouse people and therefore influence their behaviour.
Emotional intelligence – A combination of skills and abilities such as self-awareness,
self-control, empathy and sensitivity to the feelings of others.
Intelligence – The capacity for reasoning and abstract thinking governing the ability to
solve problems, apply principles, make inferences and perceive relationships.
Orientation theory – This examines the factors that are instrumental, ie serve as a
means, in directing people’s choices about work.
Perception – The intuitive understanding, recognition and interpretation of things and
events.
Personality – The psychological qualities that influence an individual’s characteristic
behaviour patterns in a stable and distinctive manner (Huczynski and Buchanan,
2007).
Psychological climate – A situation where psychological significance and meaning is
given by perceptions.
Role – The part played by individuals and the patterns of behaviour expected of them in
fulfilling their work requirements.
Self-efficacy – An individual's self-belief that he or she will be able to accomplish certain
tasks, achieve certain goals or learn certain things.

1. How do individual differences arise?
2. What are the main personal characteristics that affect people’s behaviour at work?
3. What is the trait theory of personality? Comment on its validity.
4. What is attribution theory?

Bibliography
Argyle, M (1989) The Social Psychology of Work, Penguin, Harmondsworth
Arnold, J, Robertson, I T and Cooper, C L (1991) Work Psychology, Pitman, London
Bandura, A (1982) Self-efficacy mechanism in human agency, American Psychologist,
37, pp 122–47
Blackburn, R M and Mann, R (1979) The Working Class in the Labour Market,
Macmillan, London
Burt, C (1954) The differentiation of intellectual ability, British Journal of Educational
Psychology, 24, pp 45–67
Cattell, R B (1963) The Sixteen Personality Factor Questionnaire, Institute for
Personality and Ability Training, IL
Chell, E (1985) Participation and Organisation, Macmillan, London
Chell, E (1987) The Psychology of Behaviour in Organisations, Macmillan, London
Costa, P and McRae, R R (1992) NEO PI-R: Professional manual, Psychological
Assessment Resources, Odessa, FL
Eysenck, H J (1953) The Structure of Human Personality, Methuen, London
Gagne, R M (1977) The Conditions of Learning, 3rd edn, Rinehart and Winston, New
York
Goldthorpe, J H, Lockwood, D C, Bechofer, F and Platt, J (1968) The Affluent Worker:
Industrial attitudes and behaviour, Cambridge University Press, Cambridge
Goleman, D (1995) Emotional Intelligence, Bantam, New York
Goleman, D (1998) Working With Emotional Intelligence, Bloomsbury, London
Grandey, A (2000) Emotion regulation in the workplace: a new way to conceptualize
emotional labour, Journal of Occupational Psychology, 5, pp 95–110
Guest, D E (1984) What's new in motivation, Personnel Management, May, pp 30–33
Guilford, J P (1967) The Nature of Human Intelligence, McGraw-Hill, New York
Heider, F (1958) The Psychology of Interpersonal Relationships, Wiley, New York
Huczynski, A A and Buchanan, D A (2007) Organizational Behaviour, 6th edn, FT
Prentice Hall, Harlow
Ivansevich, J M, Konopaske, R and Matteson, M T (2008) Organizational Behaviour and
Management, 8th edn, McGraw-Hill/Irwin, New York

James, R and Sells, S B (1981) Psychological climate: theoretical perspectives and
empirical research, in (ed) D Magnusson, Towards a Psychology of Situations: An
interactional perspective, Erlbaum, Hillsdale, NJ
Jung, C (1923) Psychological Types, Routledge and Kegan Paul, London
Katz, D and Kahn, R (1966) The Social Psychology of Organizations, Wiley, New York
Kelley, H H (1967) Attribution theory in social psychology, in (ed) D Levine, Nebraska
Symposium on Motivation, University of Nebraska Press, Lincoln, NB
Levinson, D (1978) The Seasons of Man’s Life, Knopf, New York
Makin, P, Cooper, C and Cox, C (1996) Organizations and the Psychological Contract,
BPS Books, Leicester
Miller, S, Hickson, D J and Wilson, D C (1999) Decision making in organizations, in (ed)
S R Clegg, C Hardy and W R Nord, Managing Organizations: Current issues, Sage,
London
Mischel, W (1968) Personality and Assessment, Wiley, New York
Mischel, W (1981) Introduction to Personality, Holt, Rinehart and Winston, New York
Salovey, P and Mayer, J D (1990) Emotional intelligence, Imagination, Cognition and
Personality, 9, pp 185–211
Schmidt, F L and Hunter, J E (1998) The validity and utility of selection methods in
personnel psychology: practical and theoretical implications of 85 years of research
findings, Psychological Bulletin, 124 (2), pp 262–74
Thurstone, L L (1940) Current issues in factor analysis, Psychological Bulletin, 30, pp
26–38
Toplis, J, Dulewicz, V and Fletcher, C (2004) Psychological Testing, Institute of
Personnel Management, London
Vernon, P E (1961) The Structure of Human Abilities, Methuen, London
Weiner, B (1974) Achievement Motivation and Attribution Theory, General Learning
Press, New Jersey
Wright, D S and Taylor, A (1970) Introducing Psychology, Penguin, Harmondsworth
19. MOTIVATION
Teaching notes
 The process of motivation
 Types of motivation
 Motivation theories
 Motivation and money

 Content (needs) motivation theory  Maslow’s hierarchy of needs
 Discretionary behaviour/effort  McClelland’s need theory
 Equity theory  Motivation
 ERG theory  Process or cognitive theory (motivation)
 Expectancy motivation theory  Quality of working life
 Extrinsic motivation  Reinforcement theory
 Goal motivation theory  Social learning theory
 Herzberg’s two-factor theory of motivation  Theory X
 Instrumentality  Theory Y
 Instrumentality motivation theory  Valency-instrumentality-expectancy theory
 Intrinsic motivation
Contents
 A bibliography

Session outline
The process of motivation
● Motivation is goal-directed behaviour.
● People are motivated when they expect that a course of action is likely to lead to
the attainment of a goal and a valued reward – one that satisfies their needs and
wants.
Types of motivation
The two basic types are:
1. Intrinsic motivation – the self-generated factors that influence people’s behaviour,
which may arise from the work itself.
2. Extrinsic motivation – this occurs when things are done to or for people to motivate
them.
Motivation theories
Motivation theories are classified as:
● reinforcement theory;
● instrumentality;
● content (needs) theory;
● process theory;
● Herzberg’s two-factors model.
Reinforcement theory
As experience is gained in taking action to satisfy needs, people perceive that certain
actions help to achieve their goals, while others are less successful.
Instrumentality
The belief that if we do one thing it will lead to another. It assumes that people will be
motivated to work if rewards and penalties are tied directly to their performance; thus the
awards are contingent upon effective performance.

Content (needs) theory
The theory focuses on the content of motivation in the shape of needs. Its basis is the
belief that an unsatisfied need creates tension and a state of disequilibrium. To restore
the balance a goal is identified that will satisfy the need, and a behaviour pathway is
selected that will lead to the achievement of the goal and the satisfaction of the need. All
behaviour is therefore motivated by unsatisfied needs. Needs theory has been
developed by Maslow, Alderfer and McClelland:
● Maslow’s hierarchy of needs – there are five major need categories that apply to
people in general, starting from the fundamental physiological needs and leading
through a hierarchy of safety, social and esteem needs to the need for self-
fulfilment, the highest need of all. When a lower need is satisfied the next highest
becomes dominant and the individual’s attention is turned to satisfying this higher
need. The need for self-fulfilment, however, can never be satisfied. Maslow`s
needs hierarchy has an intuitive appeal and has been very popular. But it has not
been verified by empirical research such as that conducted by Wahba and Bridwell
(1979), and it has been criticized for its apparent rigidity – different people may
have different priorities and it is difficult to accept that needs progress steadily up
the hierarchy.
● Alderfer (1972) devised his ERG theory of human needs, which has three
categories: existence needs, relatedness needs and growth needs.
● McClelland (1961) identified three needs as being most important for managers:
achievement, affiliation and power.
Process theory
Process theory is concerned with the psychological processes or forces that affect
motivation, as well as basic needs. The main process theories are:
● Expectancy theory – motivation will be high when people know what they have to
do to get a reward, expect that they will be able to get the reward and expect that
the reward will be worthwhile.
● Goal theory – motivation and performance are higher when individuals are set
specific goals, when goals are difficult but accepted, and when there is feedback
on performance.
● Equity theory – this refers to the perceptions people have about how they are
being treated as compared with others. Better motivation is achieved when people

are dealt with equitably, ie treated fairly in comparison with another group of
people (a reference group) or a relevant other person.
These three process theories are generally regarded as the most significant. Expectancy
theory is particularly important in reward management.
Herzberg’s two-factor model
The two factors in Herzberg’s model are:
1. Te satisfiers that motivate individuals to superior performance and effort.
2. The dissatisfiers or hygiene factors that prevent job dissatisfaction, while having
little effect on positive job attitudes.
Herzberg pointed out that while financial incentives may motivate in the short term, the
effect quickly wears off. This theory has been attacked because it is said to be based on
inadequate research. But the concepts of ‘hygiene factors’ and the transient effect of
rewards persist.
Motivation and money
Money is a powerful motivating force because it is linked directly or indirectly to the
satisfaction of many needs. Money may in itself have no intrinsic meaning, but it
acquires significant motivating power because it comes to symbolize so many intangible
goals.
Motivation strategies
Motivation strategies aim to create a working environment and to develop policies and
practices that will provide for higher levels of performance from employees. They include
the development of total reward systems and performance management processes, the
design of intrinsically motivating jobs and leadership development programmes.
Summary of motivation theories
Category Type Theorist(s) Summary of theory Implications
Instrumentality Taylorism Taylor (1911) If we do one thing it leads to another.
People will be motivated to work if
rewards and punishments are
directly related to their performance.
Basis ofcrude attempts to
motivate people by incentives.
Often used as the implied
rationale for performance-
related pay, although this is
seldom an effective motivator.

Reinforcement The
motivation
process
Hull (1951) As experience is gained in satisfying
needs,people perceive that certain
actions help to achieve goals while
others are unsuccessful.The
successful actions are repeated
when a similar need arises.
Provide feedback that positively
reinforces effective behaviour.
Needs (content)
theory
Hierarchy of
needs
Maslow
(1954)
A hierarchy of five needs exist:
physiological,safety,social,esteem,
self-fulfilment.Needs ata higher
level only emerge when a lower need
is satisfied.
Focuses attention on the
various needs thatmotivate
people and the notion that a
satisfied need is no longer a
motivator. The conceptof a
hierarchy has no practical
significance.
ERG theory Alderfer
(1972)
Three fundamental needs:existence,
relatedness and growth.
A simpler and more convincing
approach to Maslow’s on the
motivation provided by needs.
Managerial
needs theory
McClelland
(1975)
Managers have three fundamental
needs:achievement,affiliation and
power.
Draws attention to the needs of
managers and the important
conceptof ‘achievement
motivation’.
Process/cognitive
theory
Expectancy
theory
Vroom
(1964),
Porter and
Lawler
(1968)
Effort (motivation) depends on the
likelihood thatrewards will follow
effort and that the reward is
worthwhile.
The key theory informing
approaches to rewards,ie that
there mustbe a link between
effort and reward (line of sight),
the reward should be
achievable and it should be
worthwhile.
Goal theory Latham and
Locke (1979)
Motivation will improve if people
have demanding butagreed goals
and receive feedback.
Provides the rationale for
performance management, goal
setting and feedback.
Equity theory Adams
(1965)
People are better motivated if treated
equitably.
Need to have equitable reward
and employmentpractices.
Social
learning
theory
Bandura
(1977)
Emphasizes the importance of
internal psychological factors,
especiallyexpectancies aboutthe
value of goals and the individual's
ability to reach them.
Influences performance
managementand learning and
developmentpractices.

Theory X and
theory Y
General
approaches
to motivation
McGregor
(1960)
Theory X is the traditional view that
people mustbe coerced into
performing;theory Y is the view that
people will exercise self-direction
and self-direction in the service of
objectives to which they are
committed.
commitment,rewards and
integrating individual and
organizational needs.
Instrumentality Taylorism Taylor (1911) If we do one thing it leads to another.
People will be motivated to work if
rewards and punishments are
directly related to their performance.
Basis ofcrude attempts to
motivate people by incentives.
Often used as the implied
rationale for performance-
related pay, although this is
seldom an effective motivator.
Reinforcement The
motivation
process
Hull (1951) As experience is gained in satisfying
needs,people perceive that certain
actions help to achieve goals while
others are unsuccessful.The
successful actions are repeated
when a similar need arises.
Provide feedback that positively
reinforces effective behaviour.
Needs (content)
theory
Hierarchy of
needs
Maslow
(1954)
A hierarchy of five needs exist:
physiological,safety,social,esteem,
self-fulfilment.Needs ata higher
level only emerge when a lower need
is satisfied.
Focuses attention on the
various needs thatmotivate
people and the notion that a
satisfied need is no longer a
motivator. The conceptof a
hierarchy has no practical
significance.
ERG theory Alderfer
(1972)
Three fundamental needs:existence,
relatedness and growth.
A simpler and more convincing
approach to Maslow’s on the
motivation provided by needs.
Managerial
needs theory
McClelland
(1975)
Managers have three fundamental
needs:achievement,affiliation and
power.
Draws attention to the needs of
managers and the important
conceptof ‘achievement
motivation’.
Process/cognitive
theory
Expectancy
theory
Vroom
(1964),
Porter and
Lawler
(1968)
Effort (motivation) depends on the
likelihood thatrewards will follow
effort and that the reward is
worthwhile.
The key theory informing
approaches to rewards,ie that
there mustbe a link between
effort and reward (line of sight),
the reward should be
achievable and it should be
worthwhile.
Goal theory Latham and
Locke (1979)
Motivation will improve if people
have demanding butagreed goals
and receive feedback.
Provides the rationale for
performance management, goal
setting and feedback.
Equity theory Adams
(1965)
People are better motivated if treated
equitably.
Need to have equitable reward
and employmentpractices.
Social
learning
theory
Bandura
(1977)
internal psychological factors,
especiallyexpectancies aboutthe
value of goals and the individual's
ability to reach them.
Influences performance
managementand learning and
developmentpractices.

Theory X and
theory Y
General
approaches
to motivation
McGregor
(1960)
Theory X is the traditional view that
people mustbe coerced into
performing;theory Y is the view that
people will exercise self-direction
and self-direction in the service of
objectives to which they are
committed.
commitment,rewards and
integrating individual and
organizational needs.

Content (needs) motivation theory – A theory based on the content of motivation in the
shape of needs. It states that an unsatisfied need creates tension and a state of
disequilibrium. To restore the balance a goal is identified that will satisfy the need,
and a behaviour pathway is selected that will lead to the achievement of the goal and
the satisfaction of the need.
Discretionary behaviour/effort – The discretion or choice people at work can exercise
about the way they do their job and the amount of effort, care, innovation and
productive behaviour they display.
Equity theory – This refers to the perceptions people have about how they are being
treated as compared with others. To be dealt with equitably is to be treated fairly in
comparison with another group of people (a reference group) or a relevant other
person.
ERG theory – Alderfer’s theory of human needs (1972), which postulated three primary
categories: existence, relatedness and growth.
Expectancy motivation theory – The theory that motivation will be high when people
know what they have to do to get a reward, expect that they will be able to get the
reward and expect that the reward will be worthwhile.
Extrinsic motivation – This occurs when things are done to or for people to motivate
them.
Goal motivation theory – As developed by Latham and Locke (1979), this states that
motivation and performance are higher when individuals are set specific goals, when
goals are difficult but accepted, and when there is feedback on performance.
Herzberg’s two-factor theory of motivation – The motivation factors in Herzberg`s model
are the satisfiers or motivators, because they are seen to be effective in motivating
the individual to superior performance and effort, and the dissatisfiers (the hygiene
factors), which essentially describe the environment and serve primarily to prevent job
dissatisfaction, while having little effect on positive job attitudes.
Instrumentality – The concept that if one thing is done it will lead to another.
Instrumentality motivation theory – People will be motivated to work if rewards and
penalties are tied directly to their performance.
Intrinsic motivation – The self-generated factors that influence people’s behaviour that
may arise from the work itself.

Maslow’s hierarchy of needs – There are five major need categories starting from the
fundamental physiological needs and leading through a hierarchy of safety, social and
esteem needs to the need for self-fulfilment, the highest need of all. When a lower
need is satisfied the next highest becomes dominant and the individual’s attention is
turned to satisfying this higher need.
McClelland’s need theory – Three needs are most important: achievement, affiliation and
power.
Motivation – The strength and direction of behaviour and the factors that influence
people to behave in certain ways.
Process or cognitive theory (motivation) – This explains motivation as a function of
psychological processes or forces as well as of basic needs.
Quality of working life – The feelings of satisfaction and happiness arising from the work
itself and the way people are treated at work.
Reinforcement theory – The belief that changes in behaviour take place as a result of an
individual’s response to events or stimuli and the ensuing consequences (rewards or
punishments).
Social learning theory – As a motivation theory, social learning theory (Bandura, 1977)
recognizes the significance of the basic behavioural concept of reinforcement as a
determinant of future behaviour but also emphasizes the importance of internal
psychological factors, especially expectancies about the value of goals and the
individual's ability to reach them. In learning theory, social learning theory expresses
the belief that effective learning requires social interaction. Social learning theory has
also influenced behaviour modelling processes.
Theory X – McGregor’s (1960) description of the traditional view that the average human
dislikes work and wishes to avoid responsibility and that, therefore, ‘most people must
be coerced, controlled, directed, threatened with punishment to get them to put
forward adequate effort towards organizational objectives’.
Theory Y – McGregor’s (1960) theory of integration which, in contrast to theory X,
emphasizes the importance of recognizing the needs of both the organization and the
individual and creating conditions that will reconcile these needs so that members of
the organization can work together for its success and share in its rewards.
Valency-instrumentality-expectancy theory – Formulated by Vroom (1964) to explain the
process of motivation where valency stands for value, instrumentality is the belief that

if we do one thing it will lead to another, and expectancy is the probability that action
or effort will lead to an outcome. Forms the basis of expectancy theory.

1. What is motivation?
2. What are the main types of motivation?
3. Which motivation theories are most relevant to HRM?
4. What impact does money in the shape of financial rewards have on motivation?

Bibliography
Adams, J S (1965) Injustice in social exchange, in (ed) L Berkowitz, Advances in
Experimental Psychology, Academic Press, New York
Alderfer, C (1972) Existence, Relatedness and Growth, The Free Press, New York
Allport, G (1954) The historical background of modern social psychology, in (ed) G
Lindzey, Theoretical Models and Personality, Addison-Wesley, Cambridge, MA
Arnold, J, Robertson, I T and Cooper, C L (1991) Work Psychology, Pitman, London
Bandura, A (1977) Social Learning Theory, Prentice-Hall, Englewood Cliffs, NJ
Bandura, A (1986) Social Boundaries of Thought and Action, Prentice-Hall, Englewood
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20. ENGAGEMENT AND COMMITMENT
Teaching notes
 Comparison ofthe concepts of engagementand commitment
 The significance ofemployee engagement
 The factors that influence engagement
 Engagementstrategy
 Measuring engagement
 Engagementand job satisfaction
 The meaning oforganizational commitment
 The importance ofcommitment
 Problems with the conceptof commitment
 Factors affecting commitment
 Developing a commitmentstrategy
 The contribution of HR to developing commitment
 Commitment
 Discretionarybehaviour/effort
 Discretionarylearning
 Engagement
 Job satisfaction
 Learning culture
 Organizational climate
 Unitary frame of reference
Contents
 A bibliography

Session outline
Comparison of the concepts of engagement and commitment
Engagement is job-oriented and commitment is organization-oriented. This is a clear
distinction but the terms are often confused.
The significance of employee engagement
There is a close link between high levels of engagement and positive discretionary
behaviour.
The factors that influence engagement
● An employee’s understanding of his or her role, where it fits in the wider
organization, and how it aligns with business objectives.
● How people feel about the organization, whether their work gives them a sense of
personal accomplishment and how they relate to their manager.
Engagement strategy
Enhance motivation through the work itself, the work environment, leadership and
opportunities for growth.
Measuring engagement
This can be done through published surveys that enable benchmarking against the
levels of engagement achieved in other organizations. Alternatively, organizations can
develop their own surveys to suit their circumstances.
Engagement and job satisfaction
● The concept of job satisfaction is closely linked to that of engagement.
● Job satisfaction refers to the attitudes and feelings people have about their work.
Positive and favourable attitudes towards the job lead to engagement and
therefore job satisfaction.

● The level of job satisfaction is affected by intrinsic and extrinsic motivating factors,
the quality of supervision, social relationships with the work group and the degree
to which individuals succeed or fail in their work.
The meaning of organizational commitment
● Commitment refers to attachment and loyalty. It is associated with the feelings of
individuals about their organization.
● As defined by Porter et al (1974), commitment is the relative strength of the
individual's identification with, and involvement in, a particular organization.
The importance of commitment
Two schools of thought about what makes commitment important:
1. The 'from control to commitment' school was led by Walton (1985a and 1985b).
2. The 'Japanese/excellence' school, represented by writers such as Ouchi (1981),
Pascale and Athos (1981) and Peters and Waterman (1982).
Problems with the concept of commitment
● Its unitary frame of reference.
● It might inhibit flexibility.
● It does not necessarily result in improved organizational performance.
Factors affecting commitment
Kochan and Dyer (1993) have indicated that the factors affecting the level of
commitment are:
● Strategic level: supportive business strategies, top management value
commitment and effective voice for HR in strategy making and governance.
● Functional (human resource policy) level: staffing based on employment
stabilization, investment in training and development, and contingent
compensation that reinforces cooperation, participation and contribution.
● Workplace level: selection based on high standards, broad task design and
teamwork, employee involvement in problem solving, and a climate of cooperation
and trust.

Developing a commitment strategy
● Initiatives to increase involvement and 'ownership'.
● Communication.
● Leadership development.
● Developing a sense of excitement in the job.
The contribution of HR to developing commitment
HR can provide advice and guidance on:
● communicating corporate values;
● building trust;
● making commitment a two-way process;
● developing a positive psychological contract;
● the development of partnership agreements, single status and increased
employment security;
● the use of performance management to align individual and organizational goals.

Commitment – The strength of an individual's identification with, and involvement in, a
particular organization.
Discretionary behaviour/effort – The discretion or choice people at work can exercise
about the way they do their job and the amount of effort, care, innovation and
productive behaviour they display.
Engagement – This takes place when people at work are interested in and positive, even
excited about their jobs and are prepared to go the extra mile to get them done to the
best of their ability.
Job satisfaction – The attitudes and feelings people have about their work. Positive and
favourable attitudes towards the job indicate job satisfaction. Negative and
unfavourable attitudes towards the job indicate job dissatisfaction.
Learning culture – An environment that promotes learning because it is recognized by all
concerned as an essential organizational process to which they are committed and in
which they engage continuously.
Organizational climate – The relatively persistent set of perceptions held by organization
members concerning the characteristics and quality of organizational culture (French,
Kast and Rosenzweig, 1985).
Organizational commitment – The strength of an individual's identification with, and
involvement in, a particular organization.
Unitary frame of reference – A belief based on unitarism, ie that management and
employees share the same concerns and it is therefore in both their interests to work
together.

1. What is the difference between engagement and commitment?
2. What is the significance of employee engagement?
3. What are the factors that affect employee engagement?
4. What are the factors affecting job satisfaction?
5. What are the characteristics of commitment?
6. What are the actors affecting commitment?
7. How can commitment be developed?

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