Evaluating HRM

Question 1

What is the importance of evaluation HRM?

Answer 1

• HR manages must ensure that their functions help to facilitate the achievement of the organisation’s strategic business objectives by enabling strategic drivers
• HRM must be recognised as a strategic business partner
• Evaluation of HRM activities is integral to ensuring top management and line management support

Question 2

How does HRM impact employees?

Answer 2

• Enacted HR Practices
• Lead to
• Employee Attitudes
• Lead to
• Employee Behaviours

Question 3

What are the employee attitudes affected by enacted HR practices?

Answer 3

• Job Satisfaction
• Work Motivation
• Organisational Commitment

Question 4

What are the employee behaviours affected by employee attitudes?

Answer 4

• Task Performance
• Discretionary Effort
• Membership Behaviour
• Organisation Citizenship Behaviours

Question 5

What are the approaches to evaluating HRM?

Answer 5

• 1. The HR Audit

* 2. More holistic approach

Question 6

Broadly, what is the HR audit approach?

Answer 6

• HR as a business partner
• Quantitive indicators of HRM performance
• HR metrics

Question 7

Broadly, what is the holistic approach?

Answer 7

• HR as a business partner and employee advocate
• Quantitative and qualitative indicators of HRM performance
• Recognise the other casual relationships

Question 8

What is the empirical link between HRM and performance?

Answer 8

• A lot of empirical research examining the impact of HRM, and ‘bundles’ of HRM practices on firm performance outcomes
• Signinfncat associations between HR practices targeted at developing employee performance and motivation and ROA and market cap
• Research also suggests that organisations with HR professionals that make evidence-based decisions about HR practice have higher financial performance than those do that not

Question 9

What does the HR audit approach involve?

Answer 9

• Involves a systematic analysis and evaluation of the HR function
• Uses HRIS data & HR indicators or metrics

Question 10

What is the HR audit approach interested in?

Answer 10

• Interested in a) costing HR actives and b) broader quantitative HR metrics
• Interested in measuring the effects or outcomes of HR activities
• Interested in benchmarking to determine whether there have been improvements in HR activities

Question 11

What is the purpose of the HR audit approach?

Answer 11

• To assess whether HR processes are effective in their own right and to identify areas where change or improvement is required
• To determine whether HR processes and practices are supporting and enabling business strategy and corporate values and mission
• TO make HR practices more efficient & cost effective
• To comply with laws and regulation
• To communicate to top management and line management the importance of HRM

Question 12

How are HR programs costed in the HR audit approach?

Answer 12

• Staffing
  
  • Advertising
  • Administration costs
• Rewards
  
  • Payroll costs
  • Insurance premiums
• HRD
  
  • Training expenses
  • Training consultant’s fees
• Employee Relations
  
  • Absenteeism
  • Labour turnover
  • Compensation and litigation costs

Question 13

What is the more holistic approach?

Answer 13

• The evaluation of HRM needs to be goal orientated and holistic
  
  • “a single minded pursuit of economic rationality to the exlucsion of other factors carrier seeds of its own destruction. Recognition of the relational rationality means that the social goals have to be considered, especially those concerning organisational justice and social legitimacy”

Question 14

What are the key factors of the more holistic approach?

Answer 14

• 1. Governance of the employment relationship HRM» Work-Related attitudes and behaiouvrs
     - Task performance
     - Membership
     - Organisational citizenship
• 2. Alignment
     - HRM»Firm performance (mediated relationship)

Question 15

Broadly, what are indicators of HR performance?

Answer 15

• 1. Broader/global indicators
     - Alignment
     - Governance and compliance
• 2. Domain or process specific indicators
     - Indicators can be either quantitate or qualitative

Question 16

What are the broader/global indicators of HR performance?

Answer 16

• Quantitative indicators
  
  • HR department cost per employee
  • Human capital return on investment
  • Labour costs as a percentage of revenue
  • Voluntary seperation/turnover rates
  • Absenteeism rates

Question 17

What are the causes of absenteeism?

Answer 17

• Stress caused by WHS issues
• Job disatisfaction
• Poor attendance incentives
• Job boredom
• Poor interpersonal communication
• Poor management - employee relations

Question 18

How is HRM aligned with organisational objectives?

Answer 18

• Identify strategy
• Identify strategic drivers
• Identify HR practices & processes to support & enable strategic drivers

Question 19

What is the relationship between HRM and governance and compliance?

Answer 19

HR has a role to play in the governance of the employment relationship, by promoting ethical behaviour, and fair treatment of all employees and other stakeholders

Question 20

What does governance encompass?

Answer 20

• Employment relations & compliance
• Diversity management & compliance
• Postive psycholgical climate

Question 21

What are the characteristics of a positive psychological climate?

Answer 21

• Employee well being & WHS
• Relations between managers and employees
• Relations between employees
• Resourcing employees
• Resourcing managers

Question 22

What are employee surveys?

Answer 22

A systematic method of determining what employees think about their job, supervision and the organisation

Question 23

What do employee survey’s measure?

Answer 23

• If valid and reliable, can measure
  
  • Employee engagement
  • Attitudes towards HR processes
  • Attitudes towards co-workers
  • Organistional justice perceptions

Question 24

When should employee survey’s be used?

Answer 24

• Should only be conducted if top management is thoroughly committed to:
  
  • Informing employees of the results of the survey
  • Implementing changes indicated by the survey results

Question 25

What are the benefits of employee surveys?

Answer 25

• Generating development suggestions
• Generating evidence for changes in policy and pracitce
• Communicating management’ attitude towards employees and decision making
• Employees releasing pent-up feelings
• Discovering unknown grievances

Question 26

What are exit interviews?

Answer 26

Are conducted with employees who are separating from the organisation

Question 27

What are the goals of exit interviews?

Answer 27

• To maintain good public relations with departing employees

* Discover the employee’s reasons for leaving

Question 28

What should exit interviews cover?

Answer 28

• Relationship with supervisor
• Working conditions
• Perceptions and attitudes toward HR processes
• Suggested improvement s

Question 29

What are the general challenges of evaluating HRM?

Answer 29

• Heterogeneity of HR practices
• Easy to measure costs - hard to measure benefits
• Practices/performance causality
• Isolation of HR practices utility
• Lag in process-improvements
• Evaluating is costly/time consuming
• How do you define organisational performance?

Question 30

What are the overall conclusions about evaluating HRM?

Answer 30

• HR department needs to be able to demonstrate the benefits, impacts and costs of its activities
• Should use a combination of quantitative and qualitative measures that show HR’s strategic contribution to organisottnal objectives and employee well-bring
• HRM function needs to balance: governance of employment relationship + Enable and support business strategy