Essential of Human Resource Management 5 th Edition Shaun Tyson. Butterworth-Heinemann ISBN: , 464 pages.

Transcription

1 5 th Edition Shaun Tyson Butterworth-Heinemann 2006 ISBN: , 464 pages Theme of the Book A complete reference for Human Resources Management, combining an overview of organisational behaviour, explanations of policies and techniques, as well as introducing employment law and industrial relations. Starting with considering individual difference and its importance for groups and organisations, he takes the reader through a journey of the development of an HR strategy and the implementation of this strategy through selection, assessment, development and reward. An overview of industrial relations and some topical employment law issues conclude a book that is a mixture of Human Resource theory combined with many aspects of what this means in practice.

2 Key Learning Points There are many key points of learning in the book but some of those that stand out are: Individual differences in personality lead to the role of a manager being a difficult one and the need to try and understand the individual s motivation is essential to success. The challenge of establishing the criteria against which potential candidates will be assessed and determining the best way to assess them is one of the greatest challenges in the recruitment and selection of staff. There remains an induction crisis in organisations and the importance of how to deal with staff in the key first few months of employment can not be underestimated. The use of an induction programme, improvements in recruitment practices and better treatment of employees in early stages of employment will help, the responsibility for which lies with the human resources function. The importance of job evaluation in establishing a reward structure that is fair and reasonable should be remembered and as complicated as it can become it should not be overlooked. The role of human resources has developed over time and continues to do so. In an ever changing organisation the need for flexibility in human resources is essential. The role that industrial relations has played, and continues to play, in organisational performance Knowledge Interchange Book Summaries Page 2

3 Contents of the Book The book is divided into seven parts, each considering a different aspect of human resources management. Part 1 The behavioural bases of human resources management 1. Individual differences 2. Groups 3. Organisations Part 2 The developing strategic role of human resources management 4. From personnel management to HRM: how did this field of work develop 5. Human resources strategy 6. Human resources planning Part 3 Recruitment and Selection 7. Job analysis: defining effective performance 8. Recruitment 9. Selecting employees Part 4 Assessing performance and developing people 10. Induction 11. Assessing performance potential 12. Training and development Knowledge Interchange Book Summaries Page 3

4 Part 5 Rewards 13. Job evaluation 14. Pay and benefits 15. Conditions of service Part 6 Industrial Relations 16. The history and development of trade unions 17. Collective bargaining 18. Negotiations techniques 19. Disputes and ways of resolving conflicts 20. Consultation and participation 21. Employment law: institutions and contracts of employment 22. Employment law: managing employment relationships Part 7 Epilogue 23. The contribution of HRM to organisations performance Knowledge Interchange Book Summaries Page 4

5 Behavioural Bases of Human Resources Management Whilst human beings share many common features (physical and mental characteristics) which produce common behaviour patterns, each individual has a unique combination of genetic and environmental factors that combine to produce an individual uniqueness with important consequences. As humans develop mentally and physically they seek to satisfy their needs and are, at the same time, subjected to a range of socialising influences. These influences result in the acquisition of attitudes, values and behaviours which determine our behaviour to others and affect our judgements and decisions. When our beliefs are not based on a rational basis they can be described as prejudices. The condition of human similarity and individual dissimilarity has a significance for the problems of human resource management. In day to day relationships there is a tendency to assume that others see things as we do, whereas individuals receive information and process it based on their own personal backgrounds. It is important to appreciate these differences so as to build a framework for accurately analysing ours, and others, behaviour. After a review of the many theories of motivation Tyson concludes that individual differences mean that managers have to recognise that different motivational forces influence subordinates. He suggests that a greater understanding of the information available may enable them to see general patterns of influence. Motivational patterns arise from: Forces within the individuals The nature of the job The environment of the work Knowledge Interchange Book Summaries Page 5

6 All of which a manager must consider in order to motivate subordinates. A review of group and leadership theories leads to the conclusions: Group cohesiveness and productivity are likely to be higher if there are democratic participative styles rather than strongly task-orientated styles Different leadership styles are required in different situations Self awareness of the leader is key to the effectiveness of the leadership along with an understanding of the nature of the task, the group and its members and the environment. If management is defined as a process of making the most effective use of available human and material resources for the achievement of specified goals, then leadership may be described as the component of management that is most concerned with the use of human resources. The final element of the behavioural bases relates to the organisational structure which Tyson puts into four main categories based on the different emphases used: Structured approach concerned with types and rationale of organisations Human relations approach emphasis on the effects of managerial behaviour on behaviour and the informal systems of behaviour that underlie the organisational structure Systems approach interrelationship of the different parts of the structure people, technology, external environment Contingency approach suitability of structures for organisational functions Knowledge Interchange Book Summaries Page 6

7 He then explores the more recent approaches to structures touching upon a greater alignment to business objectives, collaboration and flexibility. Developing Strategic Role of Human Resource Management Human resources management has developed to become the specialisation in the skills in managing the employment relationship. As managers are expected to be accountable and organise the work of others they create employment relationships of their organisations. We may define specialist human resources management as the occupation that exercises a responsibility throughout the organisation for creating, maintaining and adjusting the policies that form the employer s part of the employment contract. When looking at the role of the human resources manager, the history and changing role, from pre 1914 to the present day, are described. Administration Industrial relations systems Business Manager Consultancy Role Support function to line management Policy Strategic Internal Consultancy Service Focus Welfare IR Integration with Service Personnel service Procedures/syste ms based business relevance of agreements Projects, OD, Knowledge Interchange Book Summaries Page 7

8 Record/proced Rule driven programmes/ Change, external, ures Pluralist business Networks Unitary Balance Interests Objectives Servicing Harmony Results/employee Enable change needs of individuals/ managers Legal correctness commitment Organisation responsiveness Job Title Welfare officer IR Manager HR Change manager Employment Labour office manager/director HR director manager Personnel manager Tyson: Models of personnel HRM He concludes there is no one size fits all shape for a personnel function and the flexibility to switch between is necessary for people working in human resource management. On the matter of having an HR strategy, Tyson questions the differences between the intended and realised strategies and also highlights the number of companies with a plan on paper but that fail to realise these strategies. HR planning is concerned with the demand and supply of labour and problems arising from the process of reconciling these factors. Knowledge Interchange Book Summaries Page 8

9 The key lessons regarding HR planning: The plan must be fully integrated into all other aspects of the business Senior management must give a lead in stressing its importance Central human resources planning may be appropriate in some organisations The changing world has led to shorter time frames for forecasting Recruitment and Selection The recruitment of an employee is the originating act of HRM from which all subsequent HR policies come. The importance of making a good recruitment decision can not be overemphasised. Recruitment is about minimising risk and as such the use of a systematic approach increases the likelihood of success. In short, efficient recruitment of staff may be described as knowing what resources you want, what resources are available, and where and how they may be found cost effectively. Despite this there remains the challenge of establishing the criteria against which potential candidates will be assessed and determining the best way to assess them. The traditional interview is not best placed to do this assessment as it is not a real situation and does not last long, it can not cover all the areas that will determine suitability and just because a candidate performs well at interview does not necessarily mean they will perform well in the role. Despite this it remains widely used as both candidates and selectors are familiar with it, at some point a meeting needs to take place between the candidate and the Knowledge Interchange Book Summaries Page 9

10 % of leavers Essential of Human Resource Management employer and despite much research a way of accurately forecasting candidate s suitability has not been discovered. Assessing Performance and Developing People The quality of the human resources in a business determines its growth and survival. Appraisal, management of performance, identification and development of potential and the training and development of employees are keys to success. A systematic approach to employing, developing, inducting, appraising, assessing potential leading to determination of work experience and training is advocated by Tyson. Opportunities for self development, unstructured learning and action learning are also a form of organisational change. There exists an induction crisis whereupon new employees into an organisation are more likely to leave early on in their employment. Wastage Curve Length of service Knowledge Interchange Book Summaries Page 10

11 Poor recruitment practices, poor treatment of employees in early stages of employment and the social adjustment required by new joiners all contribute to the problem. Employers have a responsibility to try and help new employees adjust to their surroundings and need to recognise the importance of this critical early stage. A planned induction programme will help, the responsibility for which lies with the human resources function. The psychological contract is the term used to describe the deal between the employer and employee, not the legal contract, but the bargain implicitly struck about what each party can expect from the other. Once employed the assessment of performance potential becomes important in managing people resources. Looking at an individual s performance means employers considering some elements that are at the heart of the psychological contract. For example people s career and learning opportunities, promotions etc. This process is often done through an appraisal scheme. In order to be effective these need to be: carefully thought out, defined and published Explained to all employees particularly at the time of joining Carried out by trained staff A formal, simple, un-bureaucratic system The use of behaviourally anchored rating scales can be helpful in ensuring the success of any system. Such scales are different from the straight numerical ratings of abstract qualities to focus on actual behaviour and performance. By using the core competencies drafted for a job, a description is given of both high and low performance with individuals being ranked on this scale. Whilst Knowledge Interchange Book Summaries Page 11

12 better than some traditional scales there are still some difficulties with such ratings. They can be time consuming and expensive to produce requiring review as job descriptions change. The increased use in 360º appraisal, whereby a number of people who have significant business relationships with the jobholder are asked to give feedback against competencies that are desired for the job. The increased popularity can be put down to the idea that feedback from colleagues, subordinates and peers is valuable to help improve performance. Often the administration of the scheme is done by the human resources department, as they collect and collate the anonymous data before passing it to the jobholder. Whilst they are encouraged to discuss the results with their manager this is not by any means compulsory. The purpose of such a scheme is one of personal development. Assessment of people for promotion is the same process as for the recruitment of staff. Assessing general potential is another role of the human resources function; assessing the level and type of work that an employee has the potential to perform. Such an assessment is made from a range of records that are held centrally. Individuals, human resources and the line manager jointly take responsibility for this. Individuals are unable to do this on there own as they may over or underestimate their value to the business, but it is essential that they are involved in the process to ensure congruence between their and the organisations views. This process is often carried out through a series of career development interviews. Knowledge Interchange Book Summaries Page 12

13 Rewards Rewards are seen to be of strategic importance with the overriding principle that the policy for total rewards, including recognition, benefits and the psychological contract, should be aligned to corporate goals, with a clear line of sight from the individual s actions to the rewards for achieving these goals. Less bureaucratic structures and the involvement of market forces have appeared to simplify reward systems. The different personal motivations give rise to different reasons for working. Employees will have an idea of the relative worth of different jobs and will match their individual values against the values of the organisation. Managers need to understand how to evaluate jobs and how to build reward structures to support their employee relations strategy. Such systems need to take into account the management s philosophy and the adopted organisations strategy. Flexible, market responsive, systems need to control wage and salary policies and give interest groups necessary representation In order to express jobs in salary and wage terms and to establish a reward structure we need to undertake a process of job evaluation to measure the relative worth of different jobs. Different methods of such evaluation exist: Placing jobs in order of importance or relative value to each other. It ranks jobs and does not consider the component parts. This is known as whole job ranking. An organisational structure exists with predefined grades. Jobs are compared to the grade descriptions and placed in relationship to other jobs. Knowledge Interchange Book Summaries Page 13

14 Common factors are identified for jobs and these are then compared through a process of points rating. Jobs are then ordered according to their rating. Consultants Hay/McBer developed a widely used scheme whereby comparisons are made between jobs in different organisations to establish a market rate for jobs. Comparing jobs with each other based on a certain number of predetermined factors and then converting these benchmarked factors to monetary values. Theoretical approaches such as that of Elliott Jaques (1964) which says that individuals are subconsciously aware when their work, payment and capacity are all approximately at an acceptable level of demands and rewards. Thus people can feel over or underpaid and over or under worked. Whilst an interesting debate, its usefulness in job evaluation remains unproven. Rewarding people on the basis of the decisions they make leads to a series of bands being adopted. Jobs fall into one or another band and monetary values assigned to each level. Using a computer to rank and calculate variations of opinions made by assessors as to the ranking of a job. The outcome of any job evaluation is an ordered and accepted pay structure where there is a logical relationship between the amounts paid and the job factors and where the differentials between jobs fit into the structure and are approved. Changes in organisational structures, the pace of change and the need for flexibility in the workplace has led to a movement away from large numbers of individual grades. Employees work in several teams often in a matrix structure and careers being sideways as well as upwards. As a result the collapsing of several grades into wide bands (a process known as broadbanding) gives rise to a series of job families which would have previously had different pay bands. Knowledge Interchange Book Summaries Page 14

15 Matching the salary level to the ability, potential and current performance of an employee is the goal of the salary scale s adequacy. It is necessary to match an employee s perceived value of self worth with the recognition of their performance in order to retain them. One way of doing this is through performance related pay, whereby an employee s pay is increased based on merit, thus showing recognition and rises are related to the employee s contribution towards the organisations objectives. Such a payment can be given as a bonus or consolidated into the salary. Its success is dependant upon the robustness of the appraisal system. A competence based pay increase rewards the employee s improvement in job-related skills and abilities. Concentrating on inputs and not outputs is the main criticism of competence based pay increases. In practice an element of competence related pay can be built into a broadband system. Under both of these types of performance related pay there is little evidence that performance improves purely as a result. Aside from matters relating to strategic human resources management, recruitment and selection, performance assessment and development and rewards, the human resources function have a responsibility for the conditions of service of employees. Flexible working hours and holiday and pay entitlements, human resource managers are required to deal with a range of welfare issues. With an increase in stress related absenteeism and a legal requirement to deal with work related stress this is a key area of work. New challenges such as drug related issues are becoming a major problem and, as examples of workers being under the influence of drugs increases, organisations are turning to testing for substance abuse. Specialist counselling services are being developed in the workplace and specialist welfare officers can offer help. Knowledge Interchange Book Summaries Page 15

16 Industrial Relations In general the term industrial relations describes the relationship between employers and trade unions or other collective employee groups as well as the arrangements that these relationships give rise to. As such it is a large topic and the book picks up on some of the key areas. One way of looking at management is that there is one management team seeking to manage people in the organisation, all of whom are working towards one goal (a unitary perspective). An alternative view is to see organisations as a number of interest groups, each with different and sometimes competing interests, and thus the manager s role is to balance the interests of the different groups. The book covers a brief history of the development, growth, rise and decline of union membership throughout the years. It concludes by questioning how the trade unions can adjust to the social partnership role and how they can withstand the pressure from overseas low wage economies. An industrial relations policy should seek to: Preserve, or create harmony, in relationships with groups of workers Enable to orderly introduction of change Control costs which form a large part of total costs and support the pricing policy Influence productivity. Knowledge Interchange Book Summaries Page 16

17 Given the workers and employers need to settle wages, conditions and procedures between them, this is done through negotiations. There are two different approaches: Distributive bargaining This is when there are finite resources and the negotiation is about the distribution of these resources. Integrative bargaining This is about how to resolve a problem to the satisfaction of all parties. Tyson works through a step by step approach to negotiations. It then considers conflict and challenges whether managers can expect to have the total commitment to the task of all workers and also whether dissatisfied groups have a right to express their disagreement and use their collective power in confrontation. This expression may be explicit, such as strikes, lockouts and other withdrawal of cooperation, or less obvious such as high labour turnover, absenteeism, customer complaints increases and a general lack of interest or motivation in work. In addition to action taken against employers workers sometimes take action against other workers (members of a different union) or action against the outputs of the organisation (e.g. refusal to handle the goods produced). Management have a number of options of procedures for dispute resolution: disciplinary procedures, grievance procedures, dispute procedures, arbitration or interpersonal resolution (less procedural approaches). Tyson introduces the institutions involved in creation and maintaining of employment law. He considers the setting up of employment contracts and specifically addresses the issue of express and implied terms of such Knowledge Interchange Book Summaries Page 17

18 contracts. Express terms being those specifically agreed upon by both parties, implied being those which whilst not stated impose obligations on both parties. Dismissal (wrongful, unfair and the Statutory Dismissal and Disciplinary Procedure) are discussed, as is the Statutory Grievance Procedure. A guide to redundancies and an introduction to TUPE precede an overview of the legal issues surrounding pay. The final chapter of the industrial relations section of the book gives descriptions of the main statutes and regulations that are designed to manage relationships, reflect the wider values in society and which embody the way people should be treated and protected. The concluding chapter to the book considers the debate about the contribution of HRM to organisational performance. HRM constantly seems to have to justify itself partly as many of its functions can not be distinguished from those of line management. How a business recruits, develops, rewards, communicates and manages its workers directly influences motivation, effort and outputs. But how much of this is due to the policies and practices developed by HR is harder to determine. Diagram of relationships in the contribution of HRM to organisational performance. Business Strategy Senior line manager objectives Stakeholder outcomes HR Strategy Policy Bundles HR Outcomes Knowledge Interchange Book Summaries Page 18

19 Author SHAUN TYSON is Emeritus Professor of Human Resource Management at Cranfield School of Management. He has experience of Human Resource Management in the public sector and in corporations such as the Thorn Group, and has held a faculty position at the Civil Service College, Sunningdale. He holds a PhD from London School of Economics and is a Fellow of the Chartered Institute of Personnel and Development, a Fellow of The Royal Society of Arts and a Member of the British Psychological Society. He is also a member of the Association Française de Gestion des Ressources Humaines and was awarded a Doctorate (honoris causa) from the University of Lyon. He is a Visiting Professor at the University of Paris. He has published 18 books on human resource management and has written extensively on human resource strategy and policies. He has carried out consultancy assignments and research with a wide range of public and private sector organisations in the UK and overseas. He broadcasts regularly on industrial relations and people management issues. Knowledge Interchange Book Summaries Page 19

20 Cranfield School of Management Produced by the Learning Services Team Cranfield School of Management Cranfield University 2008