HUMAN RESOURCE MANAGEMENT
HR as a matter of faith and a focus on what HR does
Concern with ‘doing things right’ in the here and now
The HR function to be integrated with other business functions
Exploitation of e-HR, self-service HR and HR outsourcing
Enabling the line managers
An adding-value business focus that aims to minimise bureaucracy
Rewarding performance, desired employee behaviours and the exercise of discretionary effort
Valuing employees as human capital
Unlocking talent through multiple learning interventions
Concern with HR performance
indicators and HR metrics that
measure what HR delivers
Concern with ‘doing the right things’ now and in the future to contribute to organisational sustainability
According to the CIPD there has been a significant shift in the focus of HR. Whilst recognising that the profession is at its most mature point yet, the CIPD assert that the concern should be with improving organisational performance by building sustainable capability, not just delivering on the day-to-day HR part of the role, although that remains important. An extensive programme of consultation with senior HR professionals and other leaders in business, the public services and management education informed the development of an HR professional map in 2009 and the clear message is that in order to deliver ‘sustainable capability’, HR practitioners need to:
• know their organisations inside out through understanding the drivers of sustainable business performance, and the barriers to achieving it;
• know the main ways in which HR expertise can make an impact and contribute beyond the confines of the traditional role;
• have the behavioural skills to turn knowledge into effective action.
This represents ‘a shift from a primary focus on supporting line managers to manage their people well, to a primary focus on ensuring the organisation has the sustainable capability it needs to deliver its aims both today and in the future’ (Orme, 2009). The HR map charts the profession from three perspectives: functional specialisms/ professional areas, levels of competence and key behaviours. This provides the basis for development programmes and qualifications, and the map is also used as a diagnostic tool and for career planning. The functional specialisms/professional areas are:
1. Strategy, insights and solutions
2. Leading and managing the function
3. Organisation design
4. Resourcing and talent planning
5. Organisation development
6. Learning and talent development
7. Performance and reward
8. Employee relations
9. Employee engagement
10. Information and service delivery
Perspectives and theories relating to HR strategy are explored in the next chapter but it is useful to introduce the fundamentals of a strategic HR approach from a managerial perspective. These are as follows:
1. Linking HR practices to the achievement of corporate strategy and business objectives.
2. Deploying HR practices to lever employee contribution and performance in a desired direction; for example, performance management and culture management in the areas of customer focus and responsiveness to change.
3. Linking HR practices to each other to create complementarities in the pursuit of synergy and increased potency.
4. Aligning the HR function with the business, reinforcing managerial prerogative and emphasising that organisations are employer and not employee led.
5. A belief that proactive ‘good’ HR practices are critical to organisational success and the ability to compete and survive; a ‘people make the difference’ philosophy.
Strategic integration can be vertical and horizontal. Vertical integration means that HR practices and activities are designed to support the achievement of corporate objectives and horizontal integration relates to the internal coherence of HR practices so that HR practices are complementary and ‘bundled’ rather than in conflict; for example, broad-banded pay structures that are complementary to flatter organisational structures and to career and development imperatives. It is not necessary to have a grand plan to be strategic, although clearly a plan provides direction. Torrington and Hall (1998) were quite revealing on HR strategy (emphasis added):
Strategy thus tended to be in many cases reactive rather than proactive, and was built up in a piecemeal rather than holistic way. None of our interviewees identified HR strategy as driving business strategy, but many identified business strategy as driving HR strategy. This demonstrates the personnel function being responsive to business need, and moves us on from the situation of the personnel manager hankering after a nicely-packaged HR strategy driven by lofty ideals distinct from commercial imperatives. The internally integrated, proactive HR strategy seems no more than an ideal to dream of. A stream of strategic decisions is needed rather than a strategy. We found evidence of strategic thinking rather than written HR strategy. The critical issue is whether what constitutes the HR strategy, piecemeal as it is, is simply directed by the business strategy or whether other influences are recognised and incorporated, so that a distinct, authoritative line of thinking on HR issues is integrated with business strategy.
In its broadest sense, therefore, HR strategy is fundamentally about adopting a strategic state of mind, rather than necessarily being extensively engaged in strategic activities or in the design of a grand strategic plan. This strategic state of mind can be enacted at different levels depending on the HR position and the potential of the individual:
Strategic awareness is actively seeking knowledge of the corporate strategy, and HR strategy if it exists; strategic thinking is building this acquired knowledge into day-to-day HR activities; and strategic decision-making is actively incorporating strategic knowledge into making HR decisions. Strategic planning is thinking ahead and predicting the strategic consequences of any HR action.
Clearly, for small to medium-sized businesses the potential of e-HR is constrained, whereas in multi-site, multinational organisations (the ones we tend to hear about in relation to e-HR) the potential for exploitation of the technology is much greater. Fundamentally e-HR is about using email, the Internet and organisational intranets to facilitate and mediate HR activities, as well as exploiting it as a learning and development medium. e-HR tends to be linked to a restructuring of HR activities to include HR shared service centres, where call centres provide HR services to employees and managers, and it may therefore be more appropriate to use the term
1. Shared HR services − administrative and transactional HR activities, includingemployee enquiries, which are call centre and web based. Business units ‘share’ the HR services with potential cost benefits through economies of scale.
2. HR business partners − HR professionals focused on strategic development andchange management through working closely with senior managers and business units.
3.Centres of excellence − HR experts offer specific expertise and advice in HR activities such as recruitment, reward, employee relations, and learning and development in order to provide specialist support to front line managers, to business partners and to shared HR services (Reilly et al., 2007).
This chapter exposes changes in the world of work and the influences on contemporary HR practice. While recognising that change is taking place, it is important not to become too excitable and suggest that we are entering some kind of brave new HRM world. Armstrong (2000) summed this up:
This is not meant to suggest that there is no change, but to encourage a balanced perspective. It is all a question of degree − line managers have always undertaken the management of human resources, but they may be doing more of it; the HR practitioner has always had to have a business orientation, but perhaps it is sharper now; the HR professional has always had to be aware of strategy, but perhaps there is now a greater emphasis on this. Perhaps the HR profession is in crisis with threats and opportunities being provided by e-enabled HR, shared HR services and outsourcing developments; perhaps it is not: ‘What we see is a variety of approach rather than a clear consensus about the appropriate way to organise the [HR] function. HR specialists have a propensity for navel-gazing and neurosis about their role but on this occasion it seems ill founded. No doubt, however, observers will continue to tell the healthy patient that he or she is ill’ (Torrington, 1998). Armstrong (2000), in concluding his analysis in ‘The name has changed but has the game remained the same?’ states:
This means that HR practitioners must be aware of evolving business needs and how new ideas and good practice might fit those needs, however they are described. In its essentials the game has remained the same but the way it is being played has altered. Whether or not the name has changed is immaterial. New [HR] practices are developed and operated individually or ‘joined up’ because they meet the needs of the situation. What matters is what works.
The perspective of this book encompasses the following contentions:
1. People resourcing and talent planning consists of a set of integrated HR activities which are enacted by HR practitioners and by line managers.
2. People resourcing decisions and activities are contingent upon particular organisational circumstances, and prescriptive and universal people management solutions are to be treated with caution.
3. The world of work is changing, and while the rate of change may sometimes be exaggerated it is important for informed practitioners and managers to be aware of and able to react to the changes.
4. Organisational fluidity and transience coupled with exhortations to self-manage careers can result in workers giving primacy to their own employability concerns.
5. There is no doubt that customer aspirations and power are increasing and resulting in customer-driven organisations. This has significant implications for workers and for managers.
6. Employers may have to compete for good workers through offering competitive financial rewards and attractive non-financial rewards, and through deploying talent management strategies.
7. Contemporary HRM trends feature a business orientation for HR professionals and the pursuit of HR practices strategically aligned to corporate objectives.
8. There are changes in the role of the HR professional encompassing business partnership, e-enabled HR, the reconfiguration of HR services and the potential for outsourcing HR activities. These influences should not be perceived as universal, because the role of the HR practitioner is dependent on the fit with organisational circumstances.
Arkin, A. (2007) ‘Street Smart’, People Management, 5 April, 24−7.
Caulkin, S. (2001) Performance through People, the New People Management − theChange Agenda. London: CIPD.
CIPD (2003) HR: Where we are, where we’re heading. London: CIPD.
CIPD (2004) Business Partnering − a new direction for HR. London: CIPD.
CIPD (2006) ‘The changing HR function: the key questions’, Change Agenda. London:
CIPD (2007) ‘The changing HR function’, Survey Report. London: CIPD.
CIPD (2009a) ‘The HR Profession Map’, www.cipd.co.uk/hr-profession-map, accessed 3 June 2009.
CIPD (2009b) ‘The war on talent: talent management under threat in uncertain times’,
Hot topic. London: CIPD.
Cooper, C. (2000a) ‘HR and the bottom line: in for the count’, People Management, 12 October, 28−34.
Cooper, C. (2000b) ‘Concierge services: chore competency’, People Management, 7 December, 22−5.
DTI (2005) ‘High performance work practices: linking strategy and skills to performance outcomes’, Achieving best practice in your business (in association with the CIPD). London: DTI.
Economist Intelligence Unit (2008) Talent Wars: the struggle for tomorrow’s workforce.
Peters, T.J. and Waterman, R.H., Jr (1982) In Search of Excellence: Lessons from America’s
best-run companies. New York: Warner.
Pfeffer, J. (2007) ‘Human Resources from an organizational perspective: some paradoxes explained’, Journal of Economic Perspectives, 21(4), 115−34.
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update on CIPD policy and research, Issue 27, p. 16, 7 May, London: CIPD.
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delivering results. Boston, MA: Harvard Business School Press.
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Ulrich, D. and Brockbank, W. (2005b) The HR value proposition. Harvard Business School Press.
TOPIC 1 - QUICK QUIZ
If you feel ready, please attempt the following quiz. Don’t worry if there are some questions you can’t answer − you can always try again later.
TOPIC 1 - SELF-ASSESSMENT EXERCISES
Attempt the following exercises. If you have understood the reading, you should be able to answer these questions competently.
A model answer is available for each question, but try to answer on your own first. Your responses won’t match the model answers exactly, but you should compare your performance with the models and consider whether you took all the relevant factors into account. Rate your performance honestly. If you haven’t performed as well as you hoped, you may need to go over parts of the Essential reading again.
Call centres in the financial services sector − just putting you on hold . . .
UniBank was founded in the West Midlands during the late nineteenth century and by 1990 had become a traditional national high-street bank with branches in most UK towns and cities. Its main business is in personal banking and financial services for individual customers and small businesses. It has subsidiary business units which handle personal insurance, mortgages and share-dealing, but these are managed separately from the high-street banking concern.
By the mid 1990s all traditional banks were feeling the pressure of fierce competition in financial services, intensified by the arrival of new entrants such as supermarkets and other well-known brands. With an eye to the growing commercial success of direct line banking organisations, UniBank decided to enter the telephone banking sector, and has recently been able to improve shareholder value by switching a significant proportion of its general account management and enquiry activity to a dedicated call centre, named UniCall. This resulted in the closure of many smaller, unprofitable branches and the consequent need for redundancies. UniBank attempted to redeploy existing employees where possible, but also needed to recruit new staff to work in the national call centre. True to its origins, and mindful of the relatively high unemployment rates in the West Midlands, UniBank decided to locate UniCall just outside Birmingham. However, none of this was achieved easily, since the press and public expressed concern and dismay at the closure of so many small local branches, and there was strong trade union resistance to the job losses. Thus is it true to say that currently staff morale is low, that there is considerable anxiety and discontent with the new arrangements, and that the staff at UniCall itself are beginning to feel somewhat exposed as the debate about branch closures rages in the media.
At present UniCall employs 150 staff and operates 24 hours a day, 7 days a week on a 4-shift system. The majority of staff work on the daytime shifts. Staff work at sets of 4 desks, wear headsets with microphones to take the calls and operate terminals with access to all the required account and product information. Supervisors are responsible for each shift and there are two call centre managers and a deputy manager, one of whom is always either available at the centre or can be contacted by mobile phone. Pay scales are standardised; there is a starting rate of £15 000 which applies to newly recruited staff during their 6 months probationary period, after which they are placed at the bottom of a 4-point scale which rises by increments to £20 000. Employees proceed up the scale by annual increments until they reach the top point, after which further increases are dependent on promotion to supervisory or managerial work. Supervisory grades start at £22 000 and rise similarly to £27 500. There is no performance management system in place, and as yet the idea of an appraisal system has not been developed. UniCall is located in pleasant, airy open-plan offices which are nicely decorated and have good basic facilities including a snack and sandwich service, a rest room, a separate smoking room, and a kitchenette for the preparation of hot drinks and snacks; thus the ‘hygiene’ factors are fairly good.
UniBank remains aware of the way in which the banking and personal finance sector is likely to develop and management recently decided to expand the service at UniCall to include the provision of mortgages and insurance, thus providing more of an integrated ‘one-stop shop’ service. Furthermore, work has already started on the development of an online banking system, ‘UniLine’, in parallel with the telephone service. UniBank has been somewhat late in its realisation of the importance of online banking, and thus finds itself at something of a disadvantage here. The new operation, UniLine, is located in the same set of buildings as UniCall, and urgently needs both programming staff and others with knowledge of banking and financial services who can help both to develop and run the initial trials of UniLine. It is also clear that if the local labour market is unable to supply this type of expertise at a competitive rate, then UniBank will have to consider alternative approaches.
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