HRM - Literature 1 Flashcards
In order to manage the relationships between stakeholders’ organisations apply their HRM strategy, which is composed of:
- Recruitment and selection of the employees;
- Terms and conditions employees work under;
- Equal treatment within an organisation;
- Treatment of rule-breaking employees;
- Payment and rewarding policies for employees;
- Learning and development opportunities provided by an organisation.
The history of HRM (industrial welfare)
Industrial Welfare (in the 19th century)
HRM originated with the industrial revolution (middle of 19th century), following the invention of the factory system.Driven by religious values or recognition of the link between employee welfare and factory output, employers improved upon the initial dire conditions in factories through the provision of workplace and family amenities starting in the 1890s.
!!! This led to the creation of the position of the “welfare officer”, who only dealt with employee issues and was the first real case of HR practices still used today (e.g., compliance, health and safety legislation etc.)
The history of HRM (Scientific Management)
Scientific Management
In the early 20th century, Fredrick Taylor developed the “scientific management movement”, which aimed to increases productivity through greater efficiency in production practices, selection and training practices, and incentivised pay for workers. Following the production line and large factories in the 1920s, “labour managers” and “employment managers” were introduced to the workforce. They oversaw the centralisation and standartisation of certain emploment-related functions (e.g., hiring, payroll, record keeping, and dealing with issues such as absences, recruitment, and queries over bonuses etc.) The contemporary concepts of lean manufacturing and continuous improvement are rooted in the scientific movement.
!!! The tight control, resulting from the scientific approach is associated with the rise of collective action and trade unions.
Trade Unions
organised groups of workers which represent members’ interests in maintaining or improving the conditions of their employment by acting collectively as a way to challenge employer power
Industrial relations
the relationship between employers and employees, with a focus on those areas of the employment relationship where employers deal with employee representatives, such as trade unions, rather than individuals.
The history of HRM (Behavioural Science)
The third phase of HRM’s evolution, around the time of the Second World War, known as the “Hawthorne Effect” led to an emphasis on personal development, a better understanding of group work, and the importance of working conditions as a means of motivating employees. This shift in focus became known as the “behavioural science movement”. The 1960s and 70s saw the introduction of a large body of legislation, which provided rights for employees around dismissals, equal pay, pension rights, and health and safety. These changes led to the emergence of the job title “personnel officer and the business discipline of “personnel management” (PM)
The history of HRM (HRM Today)
The contemporary concept of HRM started to emerge in the 1980s, following a move to differentiate traditional PM from HRM. HRM became increasingly more focused on relationships with the individual rather than the trade union and, thus, led to the current definition of HRM: HRM is the strategic and integrated approach taken by an organisation to the management of its most valued assets, namely its people.
! This shift in HRM resulted from a decline in traditional. manufacturing industries and significant growth in the service sector and the emergence of the knowledge worker, which brought about a decline in trade union membership and the perceived significance of trade unions.
With the rise of smartphones and mobile broadband, employee’s working environment changed dramatically => tailored personal development, individual performance-related reward and non-standard hours of work.
Strategic HRM
The term strategic human resource management (SHRM) has emerged as a direct result of HRM being regarded as an essential component of business strategy. SHRM takes macro-level approach, whereas HRM operates at the micro-level.
SHRM is where HR is coordinated and consistent with the overall business objectives, goal and strategy in order to increase business performance.
HRM and the business context. Which internal (and external) factors to the organisation creates distinction with the HRM practices?
Internal factors:
- size and the structure of the organisation
- sector the organisation operates in
- organisational life cycle
- financial health of the organisation
- values and ideology of senior management
- organisational culture
- workforce characteristics
- established custom and practice
External factors:
- competition
- technology
- labour market
- legislation
- regulation and ethics
John Storey (1989) identified four critical features that he believed characterise contemporary HRM, what are these?
1) HRM is explicitly linked with corporate strategy;
2) HRM focuses on commitment rather than the compliance of employees;
3) Employee commitment is obtained through an integrated approach to HR policies in the areas of rewards, selection, training and appraisal;
4) HRM is not just the domain of specialists in the HR function; rather, HRM is owned by line managers as a means of fostering integration.
Lifecycle of the employee:
Attract & Select:
- employer branding
- organisational design
- organisational structure
- recruitment strategy
- selection techniques
- onboarding
Manage & develop:
- Organisational culture
- management style
- performance management
- motivation
- level of employee participation
- discipline and grievance
- learning
- development
Reward & Retain
- pay and benefits
- recognition
- employee engagement
- talent management
- succession planning
- career planning
- employee welfare
- employment relations
Separate:
- exit interviews
- outsourcing
- retirement
- redundancy
The different ways HR strategy can be linked to business strategy:
1) Separation model
2) fit model
3) dialogue model
4) holistic model
5) HR-driven model
HR practitioners have an impact across four different dimensions:
1) Individual level
- building effective relationships and good reputations across the business
2) Organisationally
- they are responsible for the design and delivery of appropriate HR practices that reach right across the organisation.
3) Contextually
- their understanding of the internal and external environments specific to their organisation, are vital in developing the appropriate HR strategy
4) Strategic level
- they have a role in developing leader, manager, and employee perceptions of the HR function as adding value and enabling them to deliver on the business strategy, rather than just managing the more basic operations of the employment relationship.
The following competencies are needed in the mix of the HRM function:
1) credible activists
- trusted; take action positively as needed by business
2) capability builders
- deliver the appropriate HR practices, to build and sustain the workforce
3) change champions
- responding to the external pressures and pace of change, engaging key stakeholders, enabling flexible and adaptable capabilities in the organisation.
4) innovators and integrators
- using latest scientific evidence and business insights to continuously develop new HR practices, in a sustainable and integrated manner
5) technology proponents
- skills to leverage available technologies, that facilitate the effective and efficient delivery of HR practices. Also use HR analytics, so they are positively impacting the business strategy.
Line managers
managers who have employees directly reporting to them and who have a higher level of responsibility than those employees.
! The various day-to-day HR practices need to developed to line managers in order to allow for faster decision-making that is more in tune with business needs.
The Michigan model of HRM
Also known as the “fit” or the “contingency” model. Developed by Michigan Business School. Stressed the importance of that alignment, firstly between the HR strategy and the business strategy. Secondly, between the HR practices themselves.
The 5 key areas on which HRM should focus:
1) Selection of the most suitable individuals to meet the needs of the business;
2) Managing performance to achieve corporate objectives
3) Appraising performance and providing feedback
4) Providing rewards for appropriate performance that achieve specific goals
5) Developing employees to meet the needs of the business
Criticism of this model include one-way nature of the HR and business strategy relationship and the lack of recognition of employee interests and behaviour choice.
Guest Model of HRM
This model represents a compromise between the low-involvement and high-involvement approaches of the previous two models (universal and michigan/fit/contingency models). Four key principles, if followed, combine to increase organisational effectiveness:
1) Strategic integration: HR policies must be aligned to the needs of the business strategy, and the various aspects of HRM must be consistent and mutually supportive
2) High commitment: commitment is sought, in that employees are expected to identify closely with the interests of the organisation and behave accordignly
3) Flexibility: this involves the ability and willingness of employees to demonstrate flexibility and adaptability to change as business demands change
4) High quality: this quality of management and staff is important in achieving high performance.
Universal approach to HRM
- Stakeholders include shareholders, leaders, managers, employees, government, etc.
- Each stakeholder has unique, legitimate interests.
- HRM strategy should align with business strategy and reflect stakeholders’ interests.
- Consider situational factors: economic climate, labor market status, workforce characteristics, trade union membership, legislation.
- Stakeholders’ interests + situational factors = foundation for HR practices.
- Outcome: Changes in organizational behaviors or capabilities, leading to specific organizational outcomes.
- Criticisms: Complexity and high involvement approach.
Strategic HRM Contingency Approach
The contingency or “best fit” approach is the belief that organisational context provided the direction as to which HR practices should be chosen. Proponents of this view believe there is no universal answer to the choice of HR practices. The choice is contingent on the context of the organisation and its business strategy. So, each organisation can choose a different set of practices, depending on their organisation-specific context and strategy. External alignment is the key issue.
Strategic HRM Universalist Approach
The Universalist approach focuses on the existence of one set of HRM “Best practices” aimed at creating and enhancing high levels of employee commitment and performance; these will result in superior levels of organisational performance, regardless of the context in which the organisation operates and the competitive strategy of the firm. Pfeffer’s seven HRM practices are:
1) recruiting the right people
2) high wages clearly linked to organisational performance
3) employment security
4) information sharing
5) investment in training and skill development
6) self-managed teams and decentralised decision-making
7) reduced status differentials
these hr practices are also referred to as high involvement and high commitment. In recent years there has been a rise in the use of low-involvement HRM with the growing use of zero-hours contract.
Human resource information system
HRIS is a software system for data entry, tracking and information needs of the HR function. Even when organisations use an HRIS, the data is often not utilised within the organisation to support decision-making.
Human resource (HR) analytics
Human resource analytics is the use of people-related data in analytical processes to address business issues. HR analytics is regarded as an essential capability to ensure HR’s future as a strategic management function for transforming organisational performance for the better.
Different HR analytics definitions
1) Fitz-Enz and Mattox define HR analytics as “primarily a communication device, bringing together data from disparate sources such as surveys, records and operations to paint a cohesive, actionable picture of current conditions and likely futures”. They argue that HR analytics is not just statistics, but an understanding of interactions and relationships is also an important part.
2) Edwards and Edwards have more narrow definition and define HR analytics and define it as “the systematic application of predictive modelling using inferential statistics to existing HR people-related data in order to inform judgments about possible causal factors driving key HR-related performance indicators.”
3) Mondare et al. have the broadest definition and define HR analytics as a process that demonstrates the direct impact of people on importnat business outcomes. Inferential statistics make predictions about populations based on a sample of the population. Causal factors are determinants.
4) Lewler et al. distinguish HR analytics and HR metrics by arguing that HR metrics are measurement of specific HR outcomes, e.g., efficiency, effectiveness and impact. HR analytics are techniques used to show the impact of HR activities through the analysis of HR metrics.
5) Marler and Boudreau’s research shows that HR analytics is often defined by authors as either analysis or decision-making process.
The definition adopted in the chapter defines HR analytics as an “HR practice enabled by information technology that uses descriptive, visual and statistical analyses of data related to HR processes, human capital, organisational performance, and external economic benchmarks to establish business impact and enable data-driven decision-making”
An HR analytics strategy should meet 3 aims:
1) Connect HR data with business data to explore how the HR function influences outcomes at the organisational level
2) Enable HR leaders to design and implement HR management activity in an efficient and effective manner
3) Allow the organisation to measure the effectiveness of HR to deliver its objectives.
Forms of HR analytics analysis
1) Descriptive: the primary focus at the description level is on cost-reduction and process improvement. Efficiency-based HR metrics provide the basis of investigation at this level. The aim of descriptive analytics is to describe relationships and current and historical data patterns through data mining and periodic reports.
examples: employee turnover rate, the cost of new hires, training costs.
2) predictive: predictive analysis includes techniques such as statistics, modelling and data mining that use current and historical facts to make predictions about the future through the use of probability.
example: the probability of selecting the right employees for promotion
3) Prescriptive: prescriptive analytics moves beyond prediction by providing decision options for workforce optimisation. It is used to analyse complex data to predict outcomes and show potential impacts, where various alternative scenarios are presented.
example: return on investment from different learning and development programmes resulting in changes to the bottom line
The sources of data:
1) People - includes basic demographic information, e.g., age, gender, and nationality, specific qualifications and skills of the employee, individual reward and remuneration
2) Programme - includes employee attendance, participation in training and development activities, leadership development and key projects.
3) Performance, includes performance ratings from supervisors, performance rating from peers and customers if using 360-degree feedback, goal attainment, talent and succession plans and assessments.
Bersin recommends a four-level process in the development of HR analytics capabilities in organisations, which allows a gradual build-up of analytical skills and capacities. The four levels are:
1) Develop junior analysts’ capabilities in defining metrics and ensure that the key data is collected, reported and stored in a usable manner.
2) Creation of a reporting function that links HR information to business objectives. Furthermore, relevant external data is presented in a visually interesting and understandable format. Following these steps, the data can be used to persuade senior management that there is a need of action on strategic matters.
3) Strategic analytics using modelling and statistical tools which focuses on aspects such as the segmentation and optimisation of talent.
4) Predictive skills allow organisations to forecast risk by designing algorithms.
Categorical variables compromise a number of categories, e.g., job type, job level. There are three types of categorical measures:
1) Binary variables; only consist of two categories, e.g, a driving licence as you either do or do not have it;
2) Nominal variables; consist of three or more categories, e.g, nationality;
3) Ordinal variables; categorical variables that can be ranked, e.g., ranking employees based on their education level.
Continuous variables can be measured on a numerical scale, e.g., employee salary. A “likert-type scale” is usually used to measure the strength of employee attitudes in organisation, e.g., scale ranging from 1 (very dissatisfied) to 5 (very satisfied). Variables measured via various forms can be analysed using a number of sophisticated software programs, e.g., advanced excel, spss and the R project.
The workforce planning:
the workforce planning is ensuring the right number of people with the necessary skills are employed in the right place at the right time to help deliver an organisation’s short- and long-term objectives.
The human resource planning cycle:
1) Stocktaking
(the identification of the factors likely to shape the operation of the firm)
- External and internal factors are assessed separately. Issues relating to the economic climate, employment legislation and technological advancement are all likely to influence the present and future plans of the firm.
- The numbers employed, the profile of the workforce, training provision history, work conditions, performance reviews, team dynamics, and so on, are just some organisational factors that shape how employees behave and perform in their roles.
2) Forecasting
- the stage of the human resource planning cycle where the organisation must predict the demand for and supply of labour in order to meet the strategic goals of the firm.
- Examining past business trends can help a firm make more sound predictions for the future.
- An important dimension of assessing the internal supply of labour is what the HR function describes as succession planning, which refers to the process through which a successor for a departing staff member can be found in a way that minimises any disruption to the organisation.
3) Develop action plans
- Action planning is the stage in the human resource planning cycle where the organisation makes a specific plan regarding how best to use the workforce to help meet the strategic goals of the firm. Action plans would typically involve recruitment, retraining or redeployment as appropriate.
- Talent management is the systematic and integrated approach taken within an organisation to the attraction, recruitment, engagement and retention of those employees who have been identified to be of particular value to the strategic development of the firm.
4) Implementation
5) Assess and adjust plans if required
Key talent identification terms:
1) Underperformers are those employees who are currently not aching a high level of performance and have little potential to make a key contribution to the strategic development of the firm.
2) Key performers are those employees who are currently achieving a high level of performance but have little potential to make a key contribution to the strategic development of the firm.
3) Untapped potentials are those employees who are currently not achieving a high level of performance but with the necessary changes have the potential to make a key contribution to the strategic development of the firm.
4) HIPOs (High potentials)/stars are those employees who are currently achieving a high level of performance and have the potential to make a key contribution to the strategic development of the firm.
The Recruitment Process?
The first stage in the recruitment process is a job analysis. Detailed information about the role and responsibilities of the vacant position is gathered in this stage, usually by someone in HR. The key outputs of the job analysis are a job description and a person specification.
Job analysis
The process used to gather detailed information about the various tasks and responsibilities involved in a position. Through this process, the knowledge, skills, abilities, attitudes and behaviours associated with successful performance in the role are also identified.
Job Description
The detailed breakdown of the purpose of the role and the various tasks and responsibilities involved in a particular job.
Person Specification
This specifies the type of person needed to do a particular job. It essentially translates the job description into human terms.
What is the difference between formal and informal methods in terms of vacancies?
Formal methods are those where the vacancy is officially advertised, and informal methods are those where candidates find out informally about a potential vacancy. Candidates may also send spontaneous (unsolicited) applications to the organisation, which is also recognized as an informal method of recruitment.
Internal Recruitment
Takes place when a vacancy is advertised to potential candidates from within the existing employee base in the organisation. It is cost-effective since the job vacancy advert can be posted on the intranet site, and as the “new recruit” is actually an existing employee, who is already familiar with the organisational culture, products and processes. Internal recruitment is important for staff development as well as staff morale in the organisation.
External recruitment
It occurs when a vacancy is advertised to potential candidates outside the existing employee base in the organisation. External and internal recruitment mirror each other in terms of advantages and disadvantages.
E-recruitment
The use of the internet to help attract candidates to apply for vacancies in the organisation. Social networking sites potentially offer speed, efficiency and the ability to target and attract specific candidates in the recruitment process. For candidates, it potentially offers multiple sources of information about the employer and the possibility of contact with existing employees to gain a more realistic job preview. The main disadvantage is the sheer number of potential applicants that result from an online job advert, which can then be difficult to filter and shortlist.
International recruitment
Used where the vacant position requires skills and/or competencies that are not readily available in the national context. International recruitment is often used for senior executive positions, where the best person for the job is sought, regardless of nationality. However, the costs associated with overseas recruitment can be high. If the candidates are shortlisted, the organisation will have to cover transport costs for interviews and relocation. There may also be issues to be dealt with in relation to immigration laws and work visas.
Shortlisting
sifting process where those candidates who most closely match the predetermined job-specific requirements are separated out from all other applicants. A shortlisting matrix is used to evaluate each candidate against these criteria. The selection criteria used in this matrix are drawn from the job requirements and person specifications and should have already been identified prior to the position being advertised.
Online Screening
A useful way for organisations to reduce the number of applicants; however, it may eliminate suitable candidates who actually meet the criteria but have not used the specific words searched for by the ATS. As part of the online screening process, organisations can also use online ability tests and personality questionnaires as an initial method of screening applications.
What does person-organization fit refers to?
it refers to the extent to which a person and an organisation share similar characteristics and/or meet each other’s needs.
What does person-job fit refers to?
It is the degree to which there is a match between the abilities of the person and the demands of the job, or the desires of a person and the attributes of the job.
The decision as to which selection method to use is impacted by a number of factors:
1) The ability of the method to predict suitability for the position;
2) The appropriateness of the method for the seniority and level of the position;
3) The specific selection criteria;
4) The time and effort required to use the technique;
5) The skills and abilities of those involved in the selection decision;
Costs of each method;
6) Equality issues.
There are two key issues in the choice of selection methods, what are these?
1) Validity - looks at how closely a selection method measures what it is supposed to measure and how successful it is in doing this.
2) Reliability - if it consistently measuring what it sets out to measure
Selection interviews
They normally involve an organisational represnetative meeting the candidates face to face and remain the most popular method of selection, despite their accepted shortcomings. There are a number of types of selection interviews including telephone interviews, video interviews, and 1-1 interviews.
Unstructured interviews vs Structured interviews
Unstructured interviews are essentially an informal chat between the interviewer and the prospective candidate and have low predictive validity. They involve an interview where different questions may be asked of different applicants.
Structured interviews can provide an important and valid means of selecting an employee. The interview is structured to provide an important and valid means of selecting an employee. The interview is structured to ensure that interview questions are based strictly on job-related criteria, and these same questions are asked of all candidates and answers are rated. The most common forms of the structured interview are the competency-based interview and the situational-based interview.
Competency-based interviews
These are structured about job-specific competencies that require interviewees to describe specific tasks or situations. They work on the belief that the best indication of future behaviour is past behaviour. One of the problems with competency-based interviews is that candidates who frequently encounter them learn to “fake” answers, as there are many books and websites devoted to learning how to “perform” in this interview setting. They will have worked on these questions in advance, often delivering answers they believe the interviewer wants to hear.
Situational-based interview
It takes a similar approach, but works on the premise that the interviewer wants to establish what the candidate would do if presented with a situation.
Problems with the Selection interview:
1) Confirmatory bias: interviewers are often accused of making their minds up about a candidate within the first 30 seconds of the person entering the room.
2) Horns or halo effect: a perceptual error, where one single characteristic of the individual creates an overly positive or negative impression of the interviewee, and this then carries unbalanced weight in the selection decision.
3) Stereotypes: stereotypes are prejudices or beliefs about the characteristics of people from a particular group of individuals, who are seen as sharing the same attributes.
4) Contrast error: the interviewer compares and contrasts one interviewee with other candidates in a way that artificially inflates or deflates the evaluation of the candidate
5) Projection error: the interviewer rates candidates with characteristics, experience or preferences similar to themselves more favourably than other candidates. The reverse is also true.
Psychometric testing
The term most often is used to encompass all forms of psychological assessment. Types of tests include following:
1) General intelligence tests: measure the ability to think about ideas, analyse situations and solve problems. Various types of intelligence tests are used.
2) Attainment tests: these measure levels of knowledge and skills;
3) Cognitive ability tests => these include:
3.1) verbal comprehension: the ability to understand and use both written and spoken language;
3.2) Numerical ability: the speed and accuracy with which a candidate can solve arithmetic problems;
3.3) Reasoning ability: the ability to invent solutions to diverse problems.
Personality profiling
It is based on the fact that personality is viewed by many organisations as an important determinant of behaviour at work. Personality tests are often used as employers search for predictors of success in a role. These personality tests are usually based on the trait-factor analytical model of personality. Commonly used profiles include The Big Five and the Sixteen Personality Factor Questionnaire.
Assessment centre
It is not actually a place but it describes the process, which normally lasts for one or two full days. In an assessment centre, a group of assessors identifies the most suitable candidates by using a series of exercises and tests to assess multiple competencies. The techniques used include work sample tests, leaderless group discussions, psychometric tests and in-tray simulations. Today there are used particularly in graduate recruitment.
Works sample tests
These are used to test applicants by asking them to complete tasks similar to those involved in the actual job.
Graphology
The study and analysis of a person’s handwriting, which is believed to reveal a behavioural profile of the individual.
Performance appraisal
An interview between an employee and their manager to:
- Review the employee’s performance;
- Set future goals (which can be used to manage rewards);
- Make decisions regarding promotion and development.
Performance management
Performance Management is establishing and measuring employee goals to improve individual and organisational performance.
Performance management is increasingly synonymous with strategic human resource management (SHRM). According to this stream of literature, advanced HR practices can increase organisational performance.
Advanced HR practices
Also referred to as high-performance work practices (HPWPs) are people management practices that are strategic or progressive in nature. These include pay performance, information sharing, teamwork and performance management.
The ability-motivation-opportunity (AMO) model
A Dominant model in HRM literature which explains how advanced HR practices (or High-performance work practices). The Ability-motivation-opportunity (AMO) model suggests that HR practices play a significant role in increasing employees’ ability (A), motivation (M), and Opportunity (O) to participate. By doing so, employees can perform better. Hence, P (Performance) = A + M + O
Practices that can improve parts of the AMO model:
1) Training improves ability;
2) Pay performance management improves motivation;
3) Teamwork and information sharing provides opportunities;
Performance management is important for managers because it facilitates them to:
1) Clarify key organisational goals and priorities;
2) Measure subordinates’ work performance
3) Motivate subordinates by recognising achievements
Performance management is important for employees as it facilitates them to:
1) Learn what is valued in the organisation;
2) Communicate their views about the job;
3) Identify career and training development needs.
For a performance management system to work effectively, it must:
- have clear aims and measurable success criteria;
- Be designed and implemented with appropriate employee involvement
- Be simple to understand and operate
- Have its effective use core to all management goals
- Show employees how their performance goals are linked with organisational goals
- Focus on role clarity and performance improvement
- Be aligned to a clear and resourced training and development infrastructure
- Clarify the purpose of any direct link to reward, and build in proper equity and transparency safeguards
- be regularly and openly reviewed against its success criteria.
Goal-setting theory
Goal-setting theory states that setting goals that are specific and challenging yet attainable motivate employees to increase performance. To ensure that a goal is suitable, the SMART framework can be used. One should question if the goals are Specific, measurable, Attainable, Realistic and Timed.
The relationship between goal setting and performance can be strengthened by the following factors:
- Goal commitment;
- Goal importance;
- Self-efficacy; which is one’s self-confidence in one’s ability to perform;
- Receiving feedback; which is information, either positive or negative, regarding an employee’s performance.
Expectancy theory
Expectancy theory suggests that employee motivation to perform is based on a combination of three factors:
1) Expectancy (E): the probability that work effort will be followed by a given level of task performance. For instance, the probability that effort to study for an exam will be followed by a good performance and grade;
2) Instrumentality (I): The probability that a given level of achieved task performance will be followed by various work outcomes. For example, if my performance reaches the target, will I receive the associated rewards?
3) Valence (V): the value attached by the individual to various work outcomes. For example, are the rewards valued enough to work hard to achieve?
A limitation of this theory is that it assumes rationality with respect to how the individual thinks and behaves, and this may not always materialise in reality. Consequently, a difficulty for organisations is motivating people in different ways based on their individual needs.
Equity theory
Equity theory refers to the comparison between inputs (what an individual brings to employment, e.g., effort, performance) and outputs (factors received in return for inputs, e.g., rewards recognition). Equity theory focuses on how equally and fairly employees have to be treated. If there is a perceived inequality, the employee will attempt to restore equity by either distorting their inputs (e.g., reducing effort and performance levels), disregarding the comparable employee or terminating the relationship.
What does Den Hartog, Boselie and Paauwe’s model of Performance Management suggest?
Den Hartog, Boselie and Paauwe’s model of Performance Management suggests that if performance management is aligned with other HR practices, employee’s perceptions and attitudes (e.g., commitment, trust and motivation) will be impacted. Perceptions and attitudes, in turn, affect employee performance and then organisational performance. By aligning performance management with other HRM practices, it is ensured that consistent messages are communicated to employees. Line managers play a central role as they implement the policies, for example through appraisals, feedback and training. This demonstrates HR development from an administrative to a functional role.
Engagement
The extent to which employees demonstrate energy, dedication and immersion in their work. Engagement is important as it improves performance and in turn the organisation’s competitive advantage. Performance management can enhance employee engagement by creating meaning and interest in work by focusing on intrinsic motivating factors (e.g., responisbility).
For performance management to be fair, it must adhere to the following principles:
1) Procedural justice; the performance management process is transparent and fair and that employees have an input in the process;
2)Distributive justice; the actual outcomes decided upon during performance management are fair. E.g., are employees recognised for their achievements based on a particular performance rating;
3) Interactional justice; how employees are treated and communicated with, during the performance management process.
Rating in performance management
Rating is when the appraiser rates an employee’s performance using a predetermined scale. A typical example of a rating scale is the behaviourally anchored rating scale (BARS). BARS links ratings to behaviour at work by assessing the relative amount of activity on a certain behaviour using a numerical scale.
An advantage of rating is that it is relatively simplistic and when possible focuses on individual objective performance.
A disadvantage of rating is that there is a high degree of subjectivity, which undermines objectivity and consistency.
Ranking in performance management
Ranking describes managers ranking workers from best to worst based on a specific characteristic or the overall job performance.
An advantage of ranking is that it is simple to implement and enables easy comparison between individuals.
A disadvantage of ranking is that it has been criticised on ethical grounds.
An additional disadvantage is that the notion of performance may not be adequately defined and hence not measurable.
The critical incident technique.
It is a technique that collects and analyses reports on incidents of actual behaviour that constitute job performance. The appraiser’s observations of incidents of good or bad performance are the basis for assessing or discussing performance.
An advantage is that it might be considered objective, as the behaviours assessed are job-related.
A disadvantage is that it is costly, timely, and requires managers to have excellent observational skills.
180-degree feedback
a form of upward appraisal and involves employees rating their manager’s performance. One way this is done is through anonymous questionnaire, as it limits the potential for managerial retribution. Managers may also rate employees similarly. 180-degree feedback recognizes the multidimensionality of performance and is a more comprehensive approach.
An advantage is that it can improve managerial effectiveness and leadership. Furthermore, it can give employees more voice and empowerment.
A disadvantage is that managers might perceive it as a threat to their careers.
360-degree feedback
it is derived from a composite rating from peers, subordinates, supervisors, superiors and occasionally customers and clients. Feedback is often collected through a questionnaire. 360-degree feedback is increasingly useful as work is now less hierarchical, more team-based and more customer-focused. Hence, managers might not always be the best person to observe and consequently rate performance.
Advantages of 360-degree feedback are that it:
- Provides employees with a broader perspective regarding how they are perceived
- supports a climate of continuous improvement
- it is considered more reliable because feedback is wide-ranging
Disadvantages of 360-degree feedback are that it:
- does not always provide honest feedback
- may result in action following the feedback provided;
- can be a bureaucratic process to implement
Disadvantages of 360-degree feedback can be mitigated through:
- careful design;
- communication;
- adequate training;
- follow-up.
Competency-based assessment
this assessment is based on the idea that past behaviour is the best predictor of future behaviour. This approach aims to establish the skills and behaviours needed to be successful currently and for future developments. Behavioural expectations are usually defined by managers by converting different competencies (e.g., teamwork, communication skills), into specific examples by desirable and undesirable behaviours. These are then used as a means to evaluate performance. An advantage of this approach is that it uses both a “how well it’s done” measure and the traditional “what is achieved measure”.
A disadvantage is that it is difficult to define all competencies in terms of specific behaviour. A competency-based approach assists with talent pool management and succession planning.
Performance management pitfalls
Performance management has attracted criticism regarding both the practice itself and how it is implemented. A more radical and critical view of performance management questions management’s preoccupation with controlling, directing and shaping employee behaviour.
Problems that performance management can create for employees:
- performance expectations can induce pressure and strain workers;
- performance monitoring is directly related to employee stress, mental fatigue, and physical tiredness;
- Destructive or negative feedback can have a debilitating effect on employees, as it can threaten their self-esteem;
- ratings can often be irrelevant;
- as employees sometimes have little control over the performance targets, it can be discouraging;
- human errors, especially by line managers, can make performance management a subjective and contentious process;
- The rater’s human biases can impact the performance appraisal interview.
The contrast effect
The contrast effect is when an appraiser makes exaggerations about an employee’s performance based on the previous candidate they assessed. The contrast effect can be demotivating for employees because they are constantly compared to an unrealistic target (e..g., a peer who is more experienced or performing exceptionally). They therefore may never realise their true potential.
The first impression error
The first impression error is when an initial judgment, either positive or negative is made about someone and subsequent performance is ignored. Therefore, a problem is that the entire review period is not taken into account.
The recency effect
The recency effect is the opposite of the first impression error, as it is when the appraised only remembers the end of the appraisal. Therefore, a problem is that they ignore what happened at the beginning of the review period.
The halo effect
The halo effect is when the rated allows their overall opinion of an employee to influence how they rate the employee on specific performance-related aspects of their work.
The similar-to-me effect
The similar-to-me effect is when a rater gives an employee a favourable rating because they share similar characteristics.
The central tendency bias
The central tendency bias is when an appraiser gives employees a score in the middle of the rating scale, and consequently, all employees are rated as average. The rater is avoiding making a tough decision regarding the rating of performance.
The skewing bias
The skewing bias is when performance results are scored largely to the left or right of the scale, as the appraiser is overly positive or overly negative in their rating. Therefore, the assessment of performance is distorted.
Attribution bias
Attribution bias is a cognitive bias that explains the systematic errors people make when evaluating or explaining their own and other’s behaviour. For example, an appraiser might assume that an employee’s poor performance is a result of them being lazy, when in fact the underlying reason is that they lack the appropriate skills to perform well.
Stereotyping
Stereotyping is when generalisations are made about particular types of people, which in turn can distort our overall perceptions.
Overcoming performance management pitfalls:
- the appraiser is adequately trained;
- The line managers and employees are involved in the design;
- Performance management is an open system that is visibly owned by senior management;
- Performance management has ease of administration;
- There is always a follow-up on the appraisal actions.
Objectives an key results (OKRs)
Objective and key results (OKRs) is used by Google and is a technique for setting and communicating goals in which multilevel and ongoing feedback is built. The consequences of the review are decided by management and other members of the oraganisation. However, this performance amnagement system may not translate well into organisations in which tasks are narrowly defined and the knowledge of employees is lower.
Feedforward interviews
Feedforward interviews is another innovative approach to performance management and is a strengths-based approach to performance evaluation. During these interviews, employees are encouraged to explain the positive experiences they have at work and experiences that have excited them, and only after this are they told the results of their actions. This approach allows employees to identify their strengths and areas for improvement, and recognizes the diversity that individuals bring to their roles.
The five basic steps to manage underperformance are:
1) Identify and agree on the problem;
2) Establish the reason for the shortfall;
3) Decide and agree on the action required;
4) Resource the action;
5) Monitor and provide feedback.
GROW model for coaching:
-Setting a GOAL;
-Assessing the current situation/REALITY
-Assessing the available OPTIONS;
-Deciding what you WILL do.
The GROW model does not assume that the coach is an expert in the underperformer’s sitution, but the coach is seen as a faciliatotr that helps employees choose the best solution for themselves. It is more impactful when people create their won conclusions instead of having them given to them. Coaches play a significant role in the WILL stage of the GROW model by asking very specific questions about planned actions to address underperformance.
When managing underperformance, HR departments have a particularly important role as they:
1) Have responsibility to provide support and guidance to line managers who are faced with underperformance issues;
2) Provide legal advice to avoid a potential lawsuit;
3) Document all stages of the process in an independent manner, which is particularly useful if there are disagreements or ambiguities from either the employee or manager’s perspective.
Training
Training is the process of acquiring the knowledge, skills, and attitudes required to perform a role effectively. Training focuses on employees improving their work standards within short time period. It can be formal (in a classroom or training room) or informal (on the job). Furthermore, it can vary in regard to structure and the specificity of the skills taught. The benefits of training for individuals and organisations are: skill enhancement, competence development and improved organisational performance.
Education
Education is the acquisition of knowledge, skills and experience through a period of sustained study which often leads to a qualification.
Learning
Learning is a range of formal, informal or incidental activities which create a sei-permanent or permanent change in behaviour, which in turn contributes to individual, team organisational and societal effectiveness. Incidental learning is unplanned and arises from a particular context, situation or critical event, e.g., observing colleagues at work.
Development
Development is a range of activities that help an individual grow and enhance their knowledge, skills and experiences gradually over the long term. Development includes both formal and informal opportunities. An individual largely constructs their development journey themselves.
Human Resource development (HRD)
Human Resource Development (HRD) is the provision of learning, development and training opportunities to improve individual, team, organisational and societal effectiveness. The focus of HRD is the organisational level, improving the effectiveness of organisations and achieving strategic alignment to the external environment.
Cognitvisim
Cognitivism is the process of absorbing. storing and retrieving learning in the brain through the creation, amendment and structuring of mental schemas. Learning is viewed as a process that creates semi-permanent changes in mental processes and creates associations between different aspects of knowledge. Initially, learning is absorbed through the senses and an individual then creates a mental schema involving actions, events and perspectives. Mental schemas are internal structures that store and retrieve knowledge and can be combined, extended or altered to accommodate new knowledge. When trainers are applying cognitivist principles, they will introduce new topics by first stimulating and dreawing upon previous knowledge in order to bring existing schemas to the forefront. Trainers should ensure that learners can process and organise effectively, for example through demonstrations, mnemonics, metaphors anc concept mapping.
Behaviourism
Behaviourism is a semi-permanent change in behaviour that results from the application of positive and negative reinforcements. Behaviourism recognises that learners respond to stimuli in the external environment and are conditioned to behave in particular ways as a result of feedback they have received in relation to responses stimuli. Reward reinforcement will strengthen particular behaviours, in turn increasing the likelihood that they reoccur. Punishment reinforcement will weaken specific behaviours, in turn decreasing the likelihood of their reoccurrence. When trainers are applying behaviourist principles, they will try to achieve behavioural change by applying positive feedback, encouragement and reinforcement. Trainers should give feedback during practice opportunities to constructively correct mistakes and guidance and rules associated with learning. Trainers should ensure that the layout o the training room promotes positive behaviour, e.g., a circular room to encourage group discussions.
Experiental learning
Experiential learning is the cyclical process of making meaning through reflection and experience. The stages, as shown in the model below, will be explained in more detail. The experiental learning cycle, explains four stakes in the learning cycle:
1) Situation analysis (Concrete experience - having an experience)
- during this stage, learners can pursue experiences (e.g., performing a task for the first time, participating in a complex activity, seeking feedback) in both a reactive or proactive way. Over time, employees are expected to be increasingly proactive. Opportunities can occur both in a work and non-work setting.
2) Problem analysis (Reflective observation - reviewing the learning experience)
-involves reflection, which can be maximised by encouraging learning to think about:
1. ways in which the task or activity could have been undertaken
2. comparison between set targets and realised targets
3. Guided reading and discussion with others
3) Solution analysis (Abstract conceptualisation - reaching conclusion about the experience)
-learners are required to reach conclusion regarding what has been learned from the experience. The learner should ask the following four questions:
1. What have I learned from the experience?
2. How does the experience differ from previous experiences?
3. How will I handle similar experiences in the future?
4. what could i have done differently?
4) Implementation analysis (Active experimentation - planning the next stage)
There are 4 learning styles, what are these?
- Activists: like to get fully involved in the action, seek out new experiences, are enthusiastic about new ideas and are open-minded. However, they may be overenthusiastic about novelty and may act first and only reflect on the consequences later.
- Reflectors: like to observe experiences from different perspectives. Furthermore, they, like data collection and analysis, always focus on the big picture and factor in the observations of others. However, reflectors are slow to reach definite conclusions and tend to be shy.
- Theorists: like to continually focus on analysis, develop theories based on multiple observations, think logically and integrate many facts and observations into coherent explanations.
- Pragmatists; are focused on trying new ideas, searching for new ideas and availing themselves of every opportunity to try out new applications. However, they dislike long-drawn-out discussions.
The Strategic Human Resource Development (SHDR) model
The Strategic Human Resource Development (SHDR) model illustrates learning activities focused on individuals, teams and organisations and aims to enhance the alignment of human resources with the strategic goals of the organisation. The SHRD model fosters a learning culture and builds the employees’ agility and flexibility, this allows organisations to respond effectively to changes in the external environment.
The following features are important in an SHRD model:
1) Strategic integration: SHRD supports the implementation of business goals, shapes the formulation of corporate strategy and goals and supports and is supported by other strategic HRM activities.
2) Multi-stakeholder perspective: SHRD recommends stakeholder engagement with a variety of stakeholders to deliver organisational value
3) Dynamic capabilities: SHRD helps organisations to build flexibility in employee knowledge and skills so that they are able to sense, seize and reconfigure internal processes to meet external realities.
4) Centrality of knowlegde management systems: knowledge management systems play an important role in storing, sharing and communicating knowledge to different units. This is important as knowlede is critical to creating organisational value. External knowledge regarding the environment is particularly important to intergate.
5) Creation of a learning culture: SHRD creates a culture that promotes learning and develeopment. Fostering organisational learning assists in identifying and responding to high levels of environmental uncertainty.
The Learning Organisation Model
The Learning Organisation Model focuses on learning how to learn and enabling employees’ learning to develop creativity, innovation, change and transformation. Furthermore, the model focuses learning on changing organisational behaviour and views learning as an end in itself.
The learning organisation
The learning organisation is an organisation focused on building a learning culture and integrating learning across all levels, systems and employees of the organisation.
The characteristics of the learning organisation as a model to learning in organisations:
1) Learning is derived from many experiences: planned and unplanned, deliberate and accidental, successes and failures;
2) Learning has significance in itself, and learning how to learn is critical;
3) Organisations learn from the external and internal environment at all times;
4) Learning organisations encourage employees to collaborate and work in teams;
5) Learning is continuous, habitual and internalised;
6) Learning can be used to create change and transformation;
7) Organisational leaders need to act as a role model and support learning;
8) Enquiry, dialogue and creation of new learning opportunities are important;
9) Learning occurs both because it is facilitated by managers and employees and because it occurs naturally
5 disciplines at the heart of the learning organisation:
1) System thinking - the effectiveness of organisations builds on processes, structures and strategies that must work together in harmony.
2) Personal Mastery - organisations can only learn through their people, and hence employees should be encouraged to achieve a high level of expertise in their field
3) Mental Models - mental schemas are important in shaping behaviour in organisations and can inhibit creative thinking. Therefore, existing models need to be challenged to drive creativity
4) Building a Shared Vision - it is important to align departments and business units in relation to the goals, values and mission of the organisation
5) Team learning - it is important for individuals to work together and collaborate effectively.
The ADDIE Model
The ADDIE model depicts a cycle of activities:
1) Analysis of learning and development needs
2) Design of learning objectives and assessment instruments;
3) Development of learning content and activities, embedding content within technological platforms;
4) Implementation of learning, including plans for training the learner and teacher;
5) Evaluation of the outcomes of the learning experience.
Advantages and disadvantages of the ADDIE Model
Advantages of the model are that it is simple to understand and provide a useful starting point for organisations.
The disadvantages of the model are that:
- it does not consider organisational strategy, learning and development strategy and HRM strategy as key components of the cycle.
- It ignores the political realities of an organisation, e.g., competition for resources, shifting organisational priorities;
- In earlier conceptions, evaluation was considered the final stage in the model. It is increasingly recognised that continuous evaluation is important, as leaving evaluation until the end of the training can do little to help improve the instructions.
- It lacks attention to key internal and external stakeholders and does not consider how they should be included in key decisions related to stages of the instructional design process;
- It assumes that instructional designers are aware of all the relevant training requirements prior to developing the training content. This is not always realistic; it may not be cost-effective and may be impractical in fast-paced organisations
The needs identification process (In ADDIE Model) consists of three key stages:
1) Data collection - finding the nature of the need and if it is an individual, team or organisational need;
2) Identification of the capability/performance gap - determining the nature and extent of the performance/capability gap and making an assessment regarding whether the gap can be addressed using an appropriate learning and development intervention.
3) Recommendations and prioritisation of learning needs - making recommendations on training activities that are relevant in the context, feasible within organisational and budgetary constraints and can be delivered within the capabilities of the learning and development function.
Activities engaged in by learning and development specialists during the analysis stage (ADDIE Model)
1) Take responisbility for the development of learning and development strategy
2) Clarify the organisational mission and strategy
3) Conduct an internal and external stakeholder analysis
4) Specify the strategic challenges and opportunities facing the organisation
5) Generate strategic alternatives for learning and development and gain commitment from stakeholders
6) Agree a strategic learning and development and plan
Important decisions that need to be made by learning specialists at the stage of design (ADDIE Model)
- Formulating learning objectives or outcomes;
- Panning the assessment strategy
- Determining the levels, types and difficulties of the activities within the module or course;
- Selecting the delivery method for learning
The Selection of Delivery Methods for Learning (ADDIE Model)
- Bite-size; quick training events that provide employees with a dip into learning and updates in developments in technical and professional areas;
- Blended learning; customized to suit the needs of individuals
- Formal classroom courses; structured learning interventions undertaken in a classroom setting. An advantage is that they are cost-effective and can deliver common knowledge to a large group of learners.
A disadvantage is that learning problems in a classroom setting may be different from in an actual workplace setting; - Digital learning; technology-delivered instructions. An advantage is that learners can choose when, where and what to learn.
A disadvantage is that the learner is responsible to participate in learning activities. - Coaching - helping individuals and groups to perform effectively
- Mentoring - guiding and suggesting appropriate learning experiences for the mentee
- Job instructions; one-to-one or group instruction carried out at the workplace and delivered while the learner is engaged in performing work tasks and activities;
- Planned work experience; learner performs a variety of roles throughout the organisation for specific perios of time in order to sample different tasks;
- Projects - used to develop technical and/or managerial skills. Projects can be completed individually or as a team;
- Assignments - preparation of managers for promotion and advancement within the organisation.
Learning and development methods (ADDIE Model)
Lecture - a structured, planned talk usually accompanied by visual aids.
Group discussion - allows the free exchange of knowledge, ideas and opinions on a particular issue/theme.
Role play - the enactment of a role in a protected environment. Learner suspends reality and adopts a particular persona.
Case study - the examination of a situation or events. Learning takes place through the analysis of detailed material and the identification of potential solutions.
In-tray exercise: learners are given a series of documents, files, letters and memos and are asked to select apprpriate actions
Video or film: used to show a real-life situation and different ways of dealing with it, or to provide key information to a large audience.
The implementation stage delivers the course to learners. The effective implementation of learning and development activities requires that trainers are aware of:
1) the different ways in which people learn
2) the needs of adult learners (giving them significant control over how and when they learn)
3) The motivation of learners
4) The environment in which the learning occurs.
The 4 main purposes of evaluation stage
1) To prove that the learning investment added value to the organisation and understand whether the learning intervention achieved what it intended to do.
2) To control learning and development activities to ensure they are of an appropriate standard, delivered within budget and fit in with organisational priorities.
3) To improve the quality of learning and development activities.
4) To reinforce the learning that took place during the learning intervention
Kirkpatrick’s four levels of learning and development evaluation:
- Reaction:
Reaction evaluation focues on the personal reactions of participants to the learning and development experience:
-did participants enjoy the training?
-did participants conside the training relevant?
-was the training a good use of participants time?
-did participants like the administrative arrangements and learning setting?
=>Completed immediately after the training ends; easy to obtain reaction feedback; Important to know if participants were not positive about the training.
- Learning:
Learning evaluation is concerned with the measurement of learning before and after a learning and development event:
-did participants learn what was specific in the learning objectives?
-did participants enhance their skills as a result of the training?
-Did the training result in a change in participants’ attitudes and values?
=> Learning is typically assessed using structured assessments or tests that are administered bedore and after the training.
=> Organisations typically undertake post-training assessment; however, pre-training learning assessments are less common and may elicit unfavourable reactions from participants.
- Behaviour
Behaviour evaluation focuses on how the learning and development activity impacted on job-related behaviours:
-Did participants transfer their learning to the workplace?
- Did participants develop the relevant skills and knowledge?
-Were there observable and measurable changes in trainees’ performance when back in their role?
-Are trainees aware of changes in their behaviour, knowledge, skill level?
=> Observation and interviews carried out over time are required to assess changes in behaviour, and the relevance and sustainability of the change. One-off assessments are not reliable because people change in different ways.
=> measurement of behaviour change is complex, and more difficult to quantify and interpret than reaction and learning evaluation.; surface-level questions and tick box approaches will not generate strong evidence; line managers may not be willing to participate in the evaluation process.
- Results
Results evaluation focuses on the measurement of return on investment (ROI) and organizational performance as a result of investment in training:
-lag measures will be used because the impact of training and performance may take some time to manifest itself.
- typical measures include volumes, values, percentages, timescales, ROI, and other quantifiable aspects of organizational performance.
=> ROI evaluations are typically undertaken for single training programmes rather than for a suite of learning and velopment activities
=> ROI evaluations are expensive to conduct as they require a large amount of data collection and sophisticated statistical analysis techniques
=> In the final analysis, it may be difficult to prove that a particular set of benefits can be related to a particular learning and development acitvity.
