Managing and Co-ordinating the Human Resources Function (5MHR) GOSH Weekday Tristan Callaghan Click here for the Maphere.

Managing and Co-ordinating the Human Resources Function

(5MHR)

GOSH Weekday

Tristan Callaghan

Click here for the Map

Activity: Business Ideas

Callaghan Associates Training Services will be resourcing and funding a team of consultants who wish to implement an innovative business idea:

•Teleporting service for employees across the UK

•High end hospitality events for sport events

•On-line training subscription provider service – tailored off the shelf

•Dairy – sales of dairy products (vintage/locally sourced)

Learning Outcomes

1. Explain the purpose and key objectives of the HR function in contemporary organisations

2. Understand how HR objectives are delivered in different organisations

3. Understand how the HR function can be evaluated in terms of value added and contribution to sustained organisation performance

4. Understand the HR function's contribution to effective change management

5. Explain the role of ethics and professionalism in HR management and development

6. Understand the relationship between organisational performance and effective HR management and development

Learning Outcome 1

Draw up a short mission statement for the HR function in an identified organisation consisting of 5 clear and distinct statements. Each should reflect your view of current and future priorities. Go on to justify your choice, making reference to major developments in the organisation's business environment.

LO1: Be able to explain the purpose and key objectives of the HR function in contemporary organisations

1.1   Identify major organisational objectives that the HR function is responsible for delivering

1.2   Explain how these objectives are evolving in the contemporary environment

HR Strategic Integration

Horizontal Integration – internal fit

Vertic

al In

tegr

atio

n

– ext

erna

l fit

Organisational Direction

Aim/Mission – where we are now

Strategy/Vision – where we want to be

Objectives – targets/KPIs to meet the aims

Top Organisational Priorities

Manage Costs2

Organisational Growth3

Improve processes4

Focus on customer needs5

Performance/competitiveness/agility1

CIPD Surveys and Reports https://www.cipd.co.uk/hr-resources/survey-reports/

Diversify products/services/new areas6

HR Function Priorities

Employee Engagement3

Performance Management/Reward4

Leadership Development5

Developing a flexible organisation6

Managing change/culture 2

CIPD Surveys and Reports https://www.cipd.co.uk/hr-resources/survey-reports/

Contributing to/formulating/implementing strategy1

Example: Key Business Objectives/Strategies

Objectives: expansion globally, expanding product/service range, improve the quality of products/services (across sectors); increasing market share; enhancing marketing strategy/brand

Evolving objectives: new competitors, new technology, legislation/ regulation

HR statements: international resourcing (identifying top talent); diverse workforce – large skills set/reflect customer base; flexible workforce so staff can move across the organisation; development (e.g. multi-lingual, multi-skilled); employment law (updating knowledge of different countries laws); developing core values that ensure employees adopt behaviours to promote and enhance business objectives/brand

Learning Outcomes

1. Explain the purpose and key objectives of the HR function in contemporary organisations

2. Understand how HR objectives are delivered in different organisations

3. Understand how the HR function can be evaluated in terms of value added and contribution to sustained organisation performance

4. Understand the HR function's contribution to effective change management

5. Explain the role of ethics and professionalism in HR management and development

6. Understand the relationship between organisational performance and effective HR management and development

Learning Outcome 2

Briefly describe the major features you would expect to find in an HR function which has adopted the 'Ulrich Model' as the basis for its structure. Explain the thinking behind this approach to the organisation of an HR function. In what types of organisation do you think it works best and why?

LO2: Understand how HR objectives are delivered in different organisations

2.1   Explain the different ways in which the HR objectives can be delivered in organisation

2.2   Analyse how the HR function varies between organisations in different sectors and of different sizes

In-houseShared Services

OffshoringOutsourcing

HR Options:Delivery of Services

Ulrich: HR Champions

Adapted HR Model - Stool

Variation of HR Practices

HR Practice can vary depending on:

•Sector - e.g. private, public, voluntary

•Industry – e.g. services, retail, manufacturing

•Locality – e.g. local, national, international

Global HR Issues

Recruitment

•Ethnocentric

•Geocentric

•Polycentric

Perlmutter 1969

Isomorphism

•Local

•Cross-national

•Corporate

DiMaggio & Powell (1983)

Additional considerations

•Culture•Legislation•Religion•Language•Labour market•Institutions

HR Across Sectors

Large private sector – more able to use the Ulrich model (or elements – 3 legged); tend to follow so called ‘best practice approaches – e.g. performance related (variable) pay, sophisticated R&S approaches, formalized career paths/graduate recruitment (talent management); more likely to outsource transactional processes; becoming outsources (profit rather than centres)

Small private sector – may see elements of the Ulrich model (some outsourced); one person deals with a number of areas, on-the-job learning, tight control on pay (variable pay provides a large of percentage of final pay); more flexibility to change/ more employee involvement schemes; quick changing HR practices particularly if taken over

Public sector – some elements of Ulrich in the public sector, accountability important (high levels of metrics and detailed HR policies); pay clear transparency and bandings, equality and diversity are embedded throughout practice, transparency in terms of performance, starting to introduce market based mechanisms e.g. PRP; flexible rates for Executives; recruitment and selection – procedural and good practice based for internal staff (external staff more casual approaches); more outsourcing of unskilled labour

Voluntary sector – Ulrich found in some very large charities (more likely to have variations of Ulrich). Charities that rely on public funding more likely to have policies similar to the public sector based on equality, clear processes to deal with performance issues. However, large successful charities may have business partners and best practice HR. Small charities will have limited resources so a small HR function, providing basic HR services and outsourcing services/areas of expertise

Global Multinational Corporation (MNC) – will put Ulrich model in place, can vary this across different regions along with HR practices depending on cultural factors (e.g power distance), strategic partners in place. Large MNC will use centres of excellence either centrally or across regions. Tend to imitate each other (consistent practices) – benchmark against each others

Learning Outcomes

1. Explain the purpose and key objectives of the HR function in contemporary organisations

2. Understand how HR objectives are delivered in different organisations

3. Understand how the HR function can be evaluated in terms of value added and contribution to sustained organisation performance

4. Understand the HR function's contribution to effective change management

5. Explain the role of ethics and professionalism in HR management and development

6. Understand the relationship between organisational performance and effective HR management and development

Learning Outcome 3

You have been asked to advise a growing organisation which employs 75 people in office-based roles but which has no specialist, dedicated HR function. Managers are particularly keen to know the criteria they can use to evaluate the effectiveness of their HR activities and initiatives. Managers will also need to know the major methods they can use to evaluate the contribution made by those responsible for HR within the organisation.

LO3: Understand how the HR function can be evaluated in terms of value added and contribution to sustained organisation performance

3.1 Describe the major criteria used to evaluate the contribution of the HR function and of HR policies and practices

3.2 Assess the major methods used to evaluate the contribution made by HR

Criteria for evaluating contribution of HR

Development of knowledge and skills2

Enhanced employee satisfaction3

Enhanced individual/organisational performance4

Positive feedback from line/senior managers5

Cost savings1

Enhanced customer satisfaction6

Human Capital Management

Factors impacting on measurement

•Type of organization; business goals/drivers•Stakeholder priority•Existing key performance indicators•Use of balanced scorecard•The availability of data

Evaluating Success – HR Metrics

• Resource & Talent Planning – advertising costs, recruitment success rates, selection process in relation to future performance, induction resulting in higher retention

• Learning and talent development – measurement of L&D costs, time spent developing skills; measure number of internal promotions over a period; reduction in complaints/mistakes; feedback on why they leaving such lack of development opportunities

• Service delivery – service level agreements and meeting of targets; performance related KPIs; complaints/satisfaction in relation to shared service sectors; return on investment/cost

• Employee engagement – satisfaction of employees, contribution, meeting targets, correlations with engagement/positive feedback/turnover rates, absence rates, profit per employee, number of ideas given/implemented

• Employee relations – morale, number of disciplinary/grievance/tribunals; turnover rates; issues raised on surveys/questionnaires/exit interviews; number of queries from managers (reduction could mean more effective leadership development)

Intellectual Capital Management

• Human capital – knowledge, skills, abilities and capacity to develop and innovate possessed by people

• Social capital – structures, networks & procedures enabling people to acquire and develop intellectual capital

• Organisational capital – institutionalised knowledge stored in databases and manuals (e.g. HR policies and processes)

Financial perspectiveHow do we appear to

our shareholders?

Customer perspectiveHow do customers see us?

Innovation and learning (people) perspective

Can we continue to improve and add value?

Internal perspectiveWhat must we excel at?

Balanced Scorecard

Methods of Evaluation

• Benchmarking (internal/external) – comparing data with other organisations, industry averages, previous periods, or departments/teams

• Appraisal – identification of performance (scores); KSA identified; learning needs

• Skills audit – measuring current KSA against future needs

• 360 feedback – range of views of a range of people

• Exit interviews – reasons for leaving, may be more honest

• Surveys employees/customers – information to improve service

• Customer feedback/complaints

• Suggestion schemes e.g Savills Dragon’s Den

Others e.g. stakeholder satisfaction; Balanced Scorecard

Learning Outcomes

1. Explain the purpose and key objectives of the HR function in contemporary organisations

2. Understand how HR objectives are delivered in different organisations

3. Understand how the HR function can be evaluated in terms of value added and contribution to sustained organisation performance

4. Understand the HR function's contribution to effective change management

5. Explain the role of ethics and professionalism in HR management and development

6. Understand the relationship between organisational performance and effective HR management and development

Learning Outcome 4

You are asked to brief a newly appointed manager on the role HR managers should play in order to maximise the likelihood that a forthcoming organisation restructuring exercise is judged to have been successful after it is complete. This new manager is particularly concerned to ensure that staff turnover rates do not increase as a result of the proposed reorganisation. What key points would you want to make. Justify your answer.

4. Understand the HR function's contribution to effective change management

4.1 Explain the major theories of effective change management and how these are applied in practice

4.2 Evaluate the role played by the HR function in helping to ensure that change management programmes are successful

Is change necessary?Lewin’s Force Field Analysis

Internal/ External Drivers for Change

Drivers - Internal (I) / External (E)

•Enhance competitiveness (E)•New technology (E/I)•Increasing demand (E)•Legislation (faster payment)•Political – new government•Social – behaviours/demographics•Economic change

Resistance - Internal (I) / External (E)

•Union resistance (I)•Customer resistance•Limitations on skills/resources/attitudes•Cost limitations•Lack of understanding of the rationale•Unable to respond

Types and styles

• Adaptation – small step change

• Reconstruction – rapid/tactical

• Evolution - change in culture over time

• Revolution – rapid and major change

• Education and communication

• Intervention / Direction

• Coercion/edict

Change Models

Bandura (1986)•Expectancy•Desirable outcomes•New behaviours

Mayon-White (1993)1.Diagnosis2.Design3.Implementation

Kotter (1996)

1.Urgency

2.Guiding coalition

3.Vision & strategy

4.Communicate vision

5.Empower action

6.Generate short-term wins

7.Consolidate/ more change

8.Institutionalise

Lewin (1951)•Unfreezing•Changing•Refreezing

Force field analysis

Thurley (1979)•Directive•Bargained•‘Hearts & minds’•Analytical•Action based

Resistance

Resistance to the content of change•Subject area of change e.g. technology, customer needs

Resistance to the process of change (implementation)•Consultation and communication process

•Pace of change – too quick/slow

•Development – plans for skills/knowledge development

•Lack of involvement

•Lack of timescales and actions when problems occur (may occur)

•Lack of support mechanisms – e.g. counselling/ employee assistance programmes

Dealing with resistance – Kubler-Ross (1990)

•Shock, denial and anger – provide clear timelines (who/where); clear communication plans; informing people where they can access information i.e. policies; access to support i.e. EAP

•Frustration, fear and depression – offer of independent external advice – e.g. counsellor/ coach; details of communication/1:1 mechanisms (e.g. HR/OH); build on details on timelines/procedures/support

•Acceptance, understanding, exploration – provide opportunities for meetings/1:1 communication, identify development opportunities and the impact; reinforce future stages and discuss future job roles and benefits to the individual and the organisation

•Commitment and moving on – further developing skills, gaining feedback, identify short and long term goals; celebration event – recognising success and new ways of working. Organise team events. Explore additional training. Incentivise and provide rewards for changing behaviours.

Business & People Aspect of Change

Source: Watson & Reissner (2010: 509)

Analysis Planning Communication

Implementation

Institutionalisation

Communication, swift decision-making barriers, managing resistance

Disbelief & Ridicule Acknowledgement Taken for granted

Business Aspects

People Aspects

Learning Outcomes

1. Explain the purpose and key objectives of the HR function in contemporary organisations

2. Understand how HR objectives are delivered in different organisations

3. Understand how the HR function can be evaluated in terms of value added and contribution to sustained organisation performance

4. Understand the HR function's contribution to effective change management

5. Explain the role of ethics and professionalism in HR management and development

6. Understand the relationship between organisational performance and effective HR management and development

Learning Outcome 5

Senior managers decide that there is a need to enhance its reputation for ethical and professional dealings with its stakeholders. You are asked to develop ideas about what this may mean for the manner in which pay rates are determined. An informal approach is used where by individuals negotiate a starting salary when they are offered a job and see that increase as and when their line managers decide that a rise is deserved and affordable. Briefly critique the existing approach from an ethical standpoint. What sort of alternative system are you likely to recommend is adopted? Justify your answer.

5. Explain the role of ethics & professionalism in HR management and development.

5.1 Put the business case for managing HR management and development in a professional, ethical and just manner

5.2   Explain the significance of policies aimed at promoting equality, diversity, work–life balance, justice and dignity at work

CIPD Code of Professional Conduct

• Professional Competence and Behaviour – knowledge and competence

• Ethical Standards and Integrity – honesty and sensitivity

• Representative of the Profession – role model and uphold the reputation of the profession

• Stewardship – challenge and influence

CIPD (2012) Professional Code of Conduct http://www.cipd.co.uk/about/code-of-conduct-review/profco

Professional and Ethical Issues

Equitable pay and reward2

Clear and transparent policies and procedures3

Learning & development on behaviours4

Right to raise a grievance/concerns5

Diversity & Equal Opportunities1

HR and other leaders - role models6

Business Case

• Avoiding litigation – costly tribunal cases, in the public view

• Enhance profits/performance – engaged staff who are dealt with fairly

• Reputation/competitive advantage – enhances the band

• Attracts customers – ethical policy on treating staff – customers behaviours change based on ethics

• Securing contracts or contracts – e.g. from the public sector

• Save costs – complaints, ETs

• Diverse staff representing a customer base

Significance of Policies

• Equality & diversity – wide range of skills/knowledge; expands customer base; fair treatment/equal opportunity; enhances innovation; consistency/transparency

• Work–life balance – employee engagement; attract/motivate/retain staff (brand); productivity (tired and lethargic less productive); reduced absence

• Justice and dignity at work – clear policies; right to fair hearing/investigation; right to be accompanied and appeal. Performance – right to improve/right to support (with reasonable timescales). Right to respect and not to be bullied/harassed. Right to challenge/raise a grievance

Learning Outcome 6

Article: 'Front-line managers as agents in the HRM-performance causal chain: theory, analysis and evidence' by Purcell and Hutchinson. Write a brief summary setting out the main conclusions that the authors reach in the article and state how convincing you find these to be and why. (Human Resource Management Journal in 2007 (volume 17.1, pages 3-20)

LO6: Understand the relationship between organisational performance and effective HR management and development

6.1   Identify and evaluate research evidence linking HR practices with positive organisational outcomes

6.2   Explain the meaning of high-performance working and human capital and the way they impact on organisational practice

• Financial performance - skills, motivation and structures (Huselid 1995)

• High-performance - management infrastructure (Becker et al 1997)

• High-performance work - strong performance (Appelbaum et al 2000)

• Strong association between HRM and performance (Guest et al 2000a)

• Horizontal integration & team-working - performance (West et al 2002)

• Number of HR practices - no clear link with performance (Guest et al, 2003)

• ‘Black Box’ – Ability, Motivation & Opportunity (Purcell et al, 2003)

• Strategic narrative; leadership; voice; integrity – engagement/productivity (McLeod and Clarke 2009)

Armstrong, M (2009) A Handbook of Human Resource Management Practice (11th Edition). London: Kogan Page

Link between HR and Performance

• Survey 12 best practice organisations – longitudinal research

• Link between commitment & leadership behaviour/HR practices

• FLMs’ people management/leadership behaviour and the application of HR practices (implied symbiotic relationship)

• FLMs essential in enhancing performance (development vital)

• Poorly designed policies can be ‘rescued’ by good management behaviour

• FLM vital in chain between HR practices and performance

• Selfridge Co - sales increase (23%), reduced payroll costs (5%)

Front-line managers (FLMs) - causal chain

(Purcell & Hutchinson 2007)

High Performance Working Practices

Source: Sung, J & Ashton, D (2005) Achieving Best Practice in your Business. High Performance Work Practices: linking strategy and skills to performance outcomes. London: DTI/CIPD

http://www.cipd.co.uk/hr-resources/research/high-performance-work-practices.aspx

High Performance Working Practices: High Involvement

Sung, J & Ashton, D (2005) Achieving Best Practice in your Business. High Performance Work Practices: linking strategy and skills to performance outcomes. London: DTI/CIPD http://www.cipd.co.uk/hr-resources/research/high-performance-work-practices.aspx

Provision of business plan2

Staff association3

Staff suggestion schemes4

Quality circles/total quality management5

Circulating performance information1

Self-directed/cross functional teams6

High Performance Working Practices: HR Practices

Sung, J & Ashton, D (2005) Achieving Best Practice in your Business. High Performance Work Practices: linking strategy and skills to performance outcomes. London: DTI/CIPD http://www.cipd.co.uk/hr-resources/research/high-performance-work-practices.aspx

Formal R&S assessment tools2

Annual review of learning needs3

Multi-skilling (training)4

Structured induction5

Appraisal/Feedback1

Work (re)design6

High Performance Working Practices: Reward and

Commitment

Sung, J & Ashton, D (2005) Achieving Best Practice in your Business. High Performance Work Practices: linking strategy and skills to performance outcomes. London: DTI/CIPD http://www.cipd.co.uk/hr-resources/research/high-performance-work-practices.aspx

Profit-sharing2

Share-options3

Flexible job descriptions4

Flexible working5

Performance related pay1

Non-pay benefits6

High Performance Working Practices

Sung, J & Ashton, D (2005) Achieving Best Practice in your Business. High Performance Work Practices: linking strategy and skills to performance outcomes. London: DTI/CIPD http://www.cipd.co.uk/hr-resources/research/high-performance-work-practices.aspx

Having sophisticated R&S processes in place ensures high quality recruits, if these are inducted effectively this will increase performance from the outset, and also reduce early turnover rates. The longer employees remain the company the more likely the organisation will retain skills and knowledge. Further developing skills and knowledge that will be provide career opportunities for individuals will enable them to fulfil future roles and enhance individual and hence organisational agility. Through giving individuals autonomy in developing their own flexible job descriptions, will engage and involve the individual in determining how they can add value to the organisational aims and objectives (enhancing commitment). To enable this organisations need to provide clear business plans, performance and vision with a set of clear objectives integrated into the appraisal process. This process will help identify future career goals/paths.

Criticisms of the Best Practice Approach

• Cross sectional research rather than longitudinal research• Does not always take into account external factors• Predominantly based on large companies• Can be outdated by the time it is published• Line managers/HR managers responses – positive spin?• Are companies able to put in best practice because they are so big?• No sophisticated measurement

Intellectual Capital

•Human Capital: knowledge, skills, abilities and capacity

•Social: structures, networks and procedures

•Organisational: institutionalised knowledge

Impact High Performance Working/Human Capital

• Demographic data

• Recruitment/retention

• Learning/talent development

• Performance

• Engagement and opinion

• Reward and pay

Source: CIPD (2012) Human Capital Factsheet http://www.cipd.co.uk/hr-resources/factsheets/human-capital.aspx

CIPD: Continuous Professional Development (CPD)

• All members are expected to complete, monitor and reflect on CPD (click here)

• Tool for developing knowledge/skills/behaviours

• CIPD HR Profession Map (click here) and Associate Membership criteria (click here) can help you self-assess

• Evaluate and select development options to meet your needs

• Identify knowledge/skills gained from completing each unit

• Complete/monitor/reflect on CPD (click here)

• End of course: send final CPD to [email protected]

Conclusions

To help your learning and understanding provide key conclusions/learning points from the session

1.?2.?3.?4.?5.?6.?

Consider areas for further development and identify sources (e.g. reports, texts, journals to further enhance learning)