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Instructor's Manual

Strategic Human Resource Management: Contemporary Issues
First edition

Mike Millmore Philip Lewis Mark Saunders Adrian Thornhill Trevor Morrow
For further instructor material please visit:

www.pearsoned.co.uk/millmore
ISBN: 978-0-273-68168-7

 Pearson Education Limited 2007
Lecturers adopting the main text are permitted to download and photocopy the manual as required.

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Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies around the world Visit us on the World Wide Web at: www.pearsoned.co.uk ---------------------------------First published 2007 © Pearson Education Limited 2007 The rights of Mike Millmore, Philip Lewis, Mark Saunders, Adrian Thornhill and Trevor Morrow to be identified as the authors of this Work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988. ISBN: 978-0-273-68168-7 All rights reserved. Permission is hereby given for the material in this publication to be reproduced for OHP transparencies and student handouts, without express permission of the Publishers, for educational purposes only. In all other cases, no part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without either the prior written permission of the Publishers or a licence permitting restricted copying in the United Kingdom issued by the Copyright Licensing Agency Ltd, Saffron House, 6−10 Kirby Street, London EC1N 8TS. This book may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of binding or cover other than that in which it is published, without the prior consent of the Publishers.

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Contents
Introduction An overview of the Instructors’ Manual Strategic Human Resource Management: Contemporary Issues: an overview Rationale and aims of the book Structure of the book Readership Pedagogic features Chapter 1 Strategy and human resource management Learning outcomes Chapter summary Teaching and learning suggestions: • Comment • Student preparation • In the classroom • Follow-up work Answers to self check and reflect questions References Chapter 2 Strategic human resource management: a vital piece in the jigsaw of organisational success? Learning outcomes Chapter summary Teaching and learning suggestions: • Comment • Student preparation • In the classroom • Follow-up work Answers to self check and reflect questions Chapter 3 SHRM in a changing and shrinking world: internationalisation of business and the role of SHRM. Learning outcomes Chapter summary Teaching and learning suggestions: • Comment • Student preparation • In the classroom
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9 9 10 10 11 12 12 14 14 14 14 15 15 15 15 16 16 18 19 19 19 19 20 20 20 21 21 21 23 23 23 23 24 24 24 24

• Follow-up work Answers to self check and reflect questions Chapter 4 Evaluating SHRM: why bother and does it really happen in practice? Learning outcomes Chapter summary Teaching and learning suggestions: • Comment • Student preparation • In the classroom • Follow-up work Answers to self check and reflect questions Answers to part 1 case study Questions: Strategic human resource management at Halcrow Group Limited Chapter 5 The role of organisational structure in SHRM: the basis for effectiveness? Learning outcomes Chapter summary Teaching and learning suggestions: • Comment • Student preparation • In the classroom • Follow-up work Answers to self check and reflect questions Answers to case study questions: Daimlers–Chrysler AG Chapter 6 Relationships between culture and strategic human resource management: do values have consequences Learning outcomes Chapter summary Teaching and learning suggestions: • Comment • Student preparation • In the classroom • Follow-up work Answers to self check and reflect questions Answers to case study questions: Corporate culture and Group values at DICOM Group plc 25 25 27 27 27 27 28 28 28 29 30 30 33 38 38 38 38 39 39 40 40 41 41 42 49 49 49 49 50 50 51 51 52 53 56 4 © Pearson Education Limited 2007 .

Chapter 7 Strategic human resource planning: the weakest link? Learning outcomes Chapter summary Teaching and learning suggestions: • Comment • Student preparation • In the classroom • Follow-up work Answers to self check and reflect questions Answers to case study questions: Human resource planning in mergers and acquisitions References Chapter 8 Strategic recruitment and selection: much ado about nothing? Learning outcomes Chapter summary Teaching and learning suggestions: • Comment • Student preparation • In the classroom • Follow-up work Answers to self check and reflect questions Answers to case study questions: Recruitment and Selection at Southco Europe Ltd References Chapter 9 Performance management: so much more than annual appraisal Learning outcomes Chapter summary Teaching and learning suggestions: • Comment • Student preparation • In the classroom • Follow-up work Answers to self check and reflect questions Answers to case study questions: Performance management at Tyco References Chapter 10 Strategic human resource development: pot of gold or chasing rainbows? Learning outcomes 61 61 61 61 62 62 62 63 64 64 67 71 73 73 73 73 74 74 74 75 76 77 80 84 86 86 86 86 87 87 87 88 88 89 90 93 94 94 94 5 © Pearson Education Limited 2007 .

Chapter summary Teaching and learning suggestions: Comment • Student preparation • In the classroom • Follow-up work Answers to self check and reflect questions Answers to case study questions: INA References Chapter 11 Strategic reward management: Cinderella is on her way to the ball Learning outcomes Chapter summary Teaching and learning suggestions: • Comment • Student preparation • In the classroom • Follow-up work Answers to self check and reflect questions Answers to case study questions: Developing a global reward strategy at Tibbett and Britten group Chapter 12 Managing the employment relationship: strategic rhetoric and operational reality Learning outcomes Chapter summary Teaching and learning suggestions: • Comment • Student preparation • In the classroom • Follow-up work Answers to self check and reflect questions Answers to case study questions: Strategic approaches to the employment relationship social partnership: the example of the Republic of Ireland Further Reading Chapter 13 Diversity management: concern for legislation or concern for strategy? Learning outcomes Chapter summary Teaching and learning suggestions: • Comment 6 © Pearson Education Limited 2007 94 95 95 95 96 97 97 101 105 106 106 106 106 107 107 107 108 108 109 110 113 113 113 113 114 114 114 115 116 116 117 129 130 130 130 130 131 131 .

• Student preparation • In the classroom • Follow-up work Answers to self check and reflect questions Answers to case study questions: Making diversity an issue in leafy Elgarshire Chapter 14 Downsizing: proactive strategy or reactive workforce reduction? Learning outcomes Chapter summary Teaching and learning suggestions: • Comment • Student preparation • In the classroom • Follow-up work Answers to self check and reflect questions Answers to case study questions: The demise of MG Rover Cars? 131 132 133 133 138 140 140 140 140 141 141 141 142 143 143 145 7 © Pearson Education Limited 2007 .

co.pearsoned. Instructor’s Manual Supporting resources Visit www. Strategic Human Resource Management: Contemporary Issues.Millmore et al. student preparation. in the classroom and follow-up work • answers to self-check and reflect questions • answers to case study questions • references • PowerPoint slides Also: The Companion Website provides the following features: • • • Search tool to help locate specific items of content E-mail results and profile tools to send results of quizzes to instructors Online help and support to assist with website usage and troubleshooting For more information please contact your local Pearson Education sales representative or visit www.co..uk/millmore 8 © Pearson Education Limited 2007 .pearsoned.uk/millmore to find valuable online resources Companion Website for students • Answers to self-check and reflect questions For instructors • Instructor's Manual containing: • learning outcomes and summaries • teaching and learning suggestions including comment.

Other ideas for preparatory and in-class activities can be found in this manual. Although tailored to reflect the particular content of specific chapters these sections inevitably reflect our own teaching style preferences. however.e. There is one integrated case covering the Part One chapters (Chapters 1–4). There is substantial standardisation in the ‘Teaching and learning suggestions’ for each chapter with respect to the ‘Student preparation’ and ‘In the classroom’ sections. Each Part Two chapter (Chapters 5–14) has its own specific case study positioned at the end of each chapter. however. Our ideas are not meant to be prescriptive but simply represent suggestions that can be customised or substituted as required. Many of the pedagogic features of this book such as self check and reflect questions. i. follow-up study suggestions and case studies can be used as the basis for preparatory work and/or in-class activities. is to provide sufficient time for students to raise any queries they may have on the reading. Each chapter commentary includes the following features: • • • Learning outcomes Chapter summary Teaching and learning suggestions: • • • • • • Comment Student preparation In the classroom Follow-up work Answers to self check and reflect questions References In addition. The style that we most commonly favour involves the student undertaking preparatory reading and related activities with the teaching session using these activities to build on a base level of knowledge. 9 © Pearson Education Limited 2007 . Answers to the questions for this case appear in this manual immediately after the final chapter of Part One. Its substantive content. Answers to these chapter case study questions appear in this manual immediately after answers to self check and reflect questions for each chapter. comprises a chapter by chapter commentary with supporting ideas and materials for teaching strategic human resource management (SHRM) to undergraduate and postgraduate students of Management and HRM.INTRODUCTION An overview of the Instructors’ Manual This instructors’ manual has been designed to help the lecturer utilise the textbook Strategic Human Resource Management: Contemporary Issues as a teaching resource. Chapter 4. answers are provided to all case study questions and PowerPoint slides are included for all chapters. A key element of the teaching session when adopting this approach. This Introduction incorporates a brief overview of the text in order to set the context for its utilisation as a teaching resource.

In writing this book the key concern was to capture the distinctive focus of HRM. and its key feature for distinguishing it from personnel management. Given the overwhelming consensus that the HRM variant of managing human resources is nothing if not strategic. Our dilemma was that available texts explicitly positioned to address the strategic development of HRM practice were either too inaccessible or insufficiently rigorous in their treatment of strategic integration such that their content mirrored more that to be found in the many personnel or human resource management texts available. we found it impossible to find a single text to adopt as a reader in support of their studies. It is not unusual to find that Personnel Departments have become HRM Departments. in our view the term HRM has come to be inappropriately used such that it has been increasingly adopted in place of personnel management without due regard for its differentiating characteristics. However. we justify our decision on two grounds. This has also been reflected in practise where organisations have relabelled their personnel function. In order to stress this strategic focus and differentiate our work from those loosely titled HRM texts. both generally and with specific reference to a selection of key HR levers. First. Personnel Managers. the title Strategic Human Resource Management. deciding on the title for this book (Strategic Human Resource Management) provided us with something of a conundrum. this loose use of the term creates the possibility that some texts masquerade as HRM when they essentially cover the same ground found in earlier personnel management texts. postgraduate and professional students. This is akin to the proverbial case of ‘old wine in new bottles’! Second. In this sense the term HRM is frequently used in the literature too loosely as a simile for personnel management. We have attempted to build on the personnel foundations of HR theory and practice by exploring in detail what is meant by strategic integration.Millmore et al. We hope that our readership will agree that the strategic component of HRM underpins the content throughout our book. Our aims can be summarised as to write a SHRM book that: • maintains a rigorous and critical focus on the ‘S’ of ‘SHRM’ throughout rather than resorting to a more traditional. 10 © Pearson Education Limited 2007 . personnel management. Strategic Human Resource Management: Contemporary Issues. However. We therefore set about writing a book to bridge this ‘divide’. and issues around its development and delivery in practise. HR Managers and Personnel Officers and HR Officers with no commensurate change in their underpinning ideology or in the way functional roles are executed.. in stressing the strategic focus of the management of human resources we were faced with a particular difficulty of terminology. Many of these HRM texts and some of the SHRM texts allude to strategic integration but arguably after a nod in that direction proceed to present the material in a relatively standard way without maintaining an explicit strategic focus throughout. with reservation. Instructor’s Manual Strategic Human Resource Management: Contemporary Issues: an overview Rationale and aims of the book In teaching strategic approaches to the management of human resources (HRM) to a variety of undergraduate. treatment of the subject domain. If the essence of HRM. is its focus on strategic integration then the ‘S’ of ‘HRM’ is tautological in that it simply adds the strategic element that is already accepted as a given in HRM! It was therefore with some misgiving that we opted for the SHRM title because of the possible confusion this may cause amongst our readership. we have adopted.

and evaluating SHRM) provides an overview of the SHRM territory. Strategic Human Resource Development. Instructor’s Manual • • through its written style and supporting pedagogic features can be readily understood by its potential readership. Strategic Recruitment and Selection.. Also. For example. • Structure of the book The book is divided into two parts. The 10 areas selected for part two inevitably reflect our personal views. Performance Management. The second part looks in detail at 10 selected HRM levers and critically examines how they too can be conceived strategically and operationalised through organisation practice. Culture. in disaggregating this HRM ‘bundle’ to examine its constituent parts we have not abandoned the central HRM tenet of horizontal integration. They are included because we feel that they all represent critical components of SHRM practice. conveys the central importance of vertical and horizontal strategic alignment in a way that enables the reader to appreciate the holistic nature of the concept and how it can be applied in practice to recognised specific areas of HR activity. In all cases our treatment of the 10 selected topics concentrates on their strategic construction and organisational manifestation and consistently adopts a critical perspective that surfaces the difficulties of putting the rhetoric of SHRM into practice. Throughout the chapters making up Part Two we provide crossreferences to other HR levers to emphasise their interconnectedness and use other devices. international SHRM. it is possible to use the integrated Halcrow case to explore further the strategic connections of the various HR levers presented. integrated case – ‘Strategic Human Resource Management at Halcrow Group Limited’ – appears at the end of part one and hopefully sets the scene for the exploration of the specific key HR levers that follow. Many of these selected levers (Strategic Human Resource Planning. and grounds the reader in the practicalities of organisational life in a way that enables them to distinguish between SHRM rhetoric and reality. Diversity and Downsizing) are less frequently covered. Strategic Reward Management and Strategic Employee Relations) will be found in the majority of HRM texts while others (Organisation Structures. In addressing the substance of their respective chapter titles we have endeavoured in this part to present a holistic view of SHRM. In support of our attempts in part one to present a holistic approach to the subject domain we have used one integrated case study to cover all four chapters rather than the chapter case studies that are a feature of part two. selectively. A particular concern has been to surface the complexity lying behind the notion of strategic integration and to explore how this complexity impacts on the conceptual development and practical application of SHRM. Strategic Human Resource Management: Contemporary Issues. although each chapter concludes with its own topic-specific case study. in Chapter 8 (Strategic Recruitment and Selection) we provide a specific example to demonstrate how recruitment and selection can help facilitate the horizontal integration of the various HR levers and in Chapter 7 (Strategic Human Resource Planning: the weakest link?) we frequently use the theme of mergers and acquisitions to illustrate the need for ‘joined-up’ HRM thinking. However. Part One. strategic human resource management. through four chapters (covering respectively: strategy and human resource management. 11 © Pearson Education Limited 2007 .Millmore et al. to reinforce the essence of horizontal integration. This comprehensive.

occasionally. examples sourced from the internet and other news media and. cases drawn from the direct work experiences of the author team. These can all be answered without recourse to other 12 © Pearson Education Limited 2007 . postgraduate and professional students are nearly always already in employment.Millmore et al. Key concepts boxes are used to help explore conceptual development. hypothetical constructions of practical applications. presenting theoretical frameworks and summarising research findings. for example. or between jobs. have undertaken a work placement and/or part-time jobs prior to or during their studies. Learning outcomes at the beginning of each chapter provide the reader with clear statements of chapter objectives and benchmarks against which the reader can assess their subject knowledge and comprehension. These take a variety of forms including. case studies reported in the literature. Pedagogic features The over-riding purpose of Strategic Human Resource Management: Contemporary Issues is to help undergraduate and postgraduate students and students on professional courses get to grips with how the discipline of human resource management can be developed as a powerful adjunct to strategic management. A comprehensive glossary provides brief definitions and/or explanations of key terms and an index is available to help students find their way around the book and its underpinning literature sources. Each chapter deals with a dimension of strategic human resource management and discusses relevant theory and practical applications using as little jargon as possible. to support the formulation and achievement of an organisation’s strategic objectives. Instructor’s Manual Readership This book can be used with a range of students from those with little experience of the world of work to more experienced managers. Full-time postgraduate and professional students tend to enter such programmes following a period of work experience or. Strategic Human Resource Management: Contemporary Issues. This is nearly always the case with our likely readership. The concern throughout is to help students understand how the management of human resources can be developed strategically. at both the conceptual and practical level. Part-time undergraduate. providing subject definitions. and can therefore relate the content of this text to a range of work experiences. identifying key themes. These mark out the subject territory by identifying key areas of discussion and showing how these are structured in the chapter. Self check and reflect questions enable students to check whether they have understood dimensions of the chapter content.. postgraduates and students on professional programmes who are studying the management of human resources either as their subject specialism or as an integral component of more general business and management programmes. It works well if students have some work experience or already have some knowledge of organisational behaviour. for example. like full-time undergraduate students. In practice boxes are used to illustrate how conceptual understanding can be or is being used to inform organisational practice. These too take a variety of forms and include. The principal target audience for this book comprises undergraduates. Tables and figures are used to aid this discussion and as a vehicle for enhancing clarity of communication. Mapping diagrams are incorporated into chapter introductions to provide a visual summary of the chapter content.

Strategic Human Resource Management: Contemporary Issues.Millmore et al. Case study questions require students to apply their knowledge and understanding of chapter content to a variety of organisational scenarios covering many different types of organisation. teaching sessions or tackled during the teaching session itself. Case studies drawn from a variety of sources are used at the End of Part One and Chapters 5−14 to facilitate student comprehension and transfer of learning. the cases and accompanying questions can also be used either as preparatory activities for subsequent class-based. Instructor’s Manual (external) resources and are designed to encourage the student to interact with the chapter readings. They can also be used either as preparatory activities for subsequent class-based teaching sessions or tackled during the teaching session itself. As with self check and reflect questions.. 13 © Pearson Education Limited 2007 . Answers to all self check and reflect questions are provided as part of this instructors’ manual. Answers to all case study questions are provided as part of this instructors’ manual. A summary of key points at the end of each chapter can be used by students before and after reading the chapter to structure their thinking and to ensure that they have digested the main points respectively.

is likely to be difficult to analyse and evaluate. processual approach and systemic perspectives. The implications of each of these approaches for human resource management were subsequently analysed. and often involves dealing with uncertainty and complexity. evolutionary perspectives. Strategic human resource management is concerned with the relationship between an organisation’s strategic management and the management of its human resources. not least because strategic management is a problematic area. understand the significance of strategic integration to explore links between strategy and HRM and its multi-dimensional nature. analyse the resource-based view of the organisation and describe key concepts related to this approach. analyse links between different approaches to strategy and human resource management (HRM). The exact nature of this relationship in practice.CHAPTER 1 Strategy and human resource management Learning outcomes By the end of this chapter you should be able to: • • • • • • define the term strategy. Strategic integration was used to explore possible links between approaches to strategy and human resource management. Six possible strands of strategic integration were identified. Forms of organisational capability were analysed and their relationship to human resource management were evaluated. Integration has been recognised as a necessary condition for HRM to be considered strategic although it is not sufficient to treat it as the only link to define a strategic approach to HRM. Resource-based theory was analysed because of its recognition of an organisation’s internal resources as a potential source of competitive advantage. • • • 14 © Pearson Education Limited 2007 . however. Four approaches to strategy making were described and evaluated: the classical approach. describe and evaluate links between resource-based theory and HRM. Summary • • Strategic management focuses on the scope and direction of an organisation. describe and evaluate a range of approaches to strategy making.

because it ‘brings to life’ the topic and allows the tutor to make a series of valuable teaching points from the chapter. For example. Apple or Microsoft) than to the organisation in which they are an employee. A case based on this. More specifically we ask students to note those topics that they found particularly complex. In the classroom The danger with running a class on this topic is that it runs the risk of being too abstract.Millmore et al. In view of this we think it is an important part of student preparation that they think about the issue of strategy in relation to an organisation where they work or one known to them. Instructor’s Manual Teaching and learning suggestions Comment To many students this may not be the most appealing chapter in the book because it does not immediately deal directly with the topic of strategic human resource management (SHRM). This will be the expectation of most students who will want to ‘jump straight in’ to the topic.g. we believe it is important that students read and make their own notes from the chapter. 15 © Pearson Education Limited 2007 .. the latter may be easier since they may feel closer to the strategy of a well known multi-national of which they are a customer (e. may have dealt with the material on definitions of strategy and strategy formulation in other modules so a brisk move to later sections of the chapter exploring links between approaches to strategy and HRM would be advisable. That said it is important for all students to have a grasp of the early material in the chapter on definitions of strategy and strategy formulation. Strategic Human Resource Management: Contemporary Issues. Practice Box 1. The notion of strategy is particularly abstract for students with limited or no work experience.5 ‘The impact of environmental concern on motor vehicle manufacturers’ raises the important issue of the constraints upon the activities of organisations that forms part of the host of considerations that need to be taken into account in the strategy-making process. or a similar. They form an immediate link with chapter content and enable the tutor to develop many teaching points from the resultant discussions. for example. It may be very useful to ask students to illustrate the points they make in response to the self-check questions with ideas from the chapter’s practice and concept boxes. All students should find the sections on resource-based theory and its recognition of an organisation’s internal resources as a potential source of competitive advantage. We have found that focus on a case study is an important part of a strategy class for HRM students in particular. or interesting (or both) in order that may form the basis of an initial classroom discussion. In this regard it is important to emphasise to students that ‘organisation’ may just as easily mean the department where they work as the corporation. Those students using the chapter as part of a BA Business Studies or MBA course. and forms of organisational capability useful because of the strong relationship to HRM. Student preparation Prior to the class. Specialist HRM students in particular may find this material valuable as they may have dealt with it in fairly basic form in earlier studies. It is also challenging for those students who are in a junior position in their own organisation. Indeed. issue may form a useful platform for analysis of strategy. Completion of the self-check questions for this chapter is particularly useful prior to the class as they may form the basis of group work.

this would recognise use of behaviours that include both planning activities and incrementalism to enact more effectively with the environment. so that both control and learning can coexist. 16 © Pearson Education Limited 2007 .1 seeks to illustrate the range of actual strategies that Mintzberg and Waters (1985) identified. for example.Millmore et al. Answers to Self-Check and Reflect Questions 1. organisations in different countries will be sensitive to their own social. Seek out the possibility of talking to a senior manager in an organisation to discuss its approach to strategy making and the relationship between strategy and HRM in this case. while Mintzberg (1987) recognised that in reality a purely deliberate or purely emergent strategy will not exist. Undertake a search of practitioner publications (related to HR and management). two or three of them to identify references to or evidence of any of the strategic management themes discussed in this chapter and their relationships to the management of human resources. cultural and national institutional systems and adopt an approach to planning that is sensitive to such systemic attributes. where management must react to environmental circumstances. 2. are specifically designed to ensure the practical relevance of HRM is not lost in the consideration of more abstract strategic issues. Where this is the case. The evolutionary perspective adopts a much more deterministic approach.. It was also recognised in the first part of the chapter that theorists who adopt a systemic perspective also agree that organisations should engage in strategic planning. say. identify a number of short articles about case study organisations that often feature in these and select. The first section of the chapter also used the work of Brews and Hunt (1999). These considerations are of course highly abstract but allow us to think about the application of these approaches in practice. perhaps without being aware of the particularistic nature of their actions. Discussion in the first part of this chapter also recognised that ‘real’ organisational behaviour is unlikely to use one approach to the mutual exclusion of other possibilities. we may again refer to the work of Brews and Hunt (1999): their approach to strategic planning recognises the need to undertake this in a flexible manner. Instructor’s Manual Follow-up work The first two of the follow-up study suggestions at the end of the chapter: 1. which illustrates that good quality planning is likely to combine elements of both formal planning and incrementalism. However.1 Is it possible to reconcile any of these four approaches to strategy making in practice and if so how might this occur? Perhaps the first key point to recognise is that these four approaches are theoretical positions and therefore we should not expect any particular organisation to fit neatly into one such position in reality. Strategic Human Resource Management: Contemporary Issues. Figure 1. Mintzberg et al (1998) recognise that real behaviour will combine deliberate control with emergent learning. it was recognised in the first part of the chapter that this perspective has been criticised on the grounds that environmental systems may be more open than is being suggested by this approach to strategy. what they question is the universal applicability of the classical approach to formulate strategy. You may wish to think about applying these ideas to an organisation that you know. from the mainly deliberate to mainly emergent. In this way. It will be multi-national corporations that need to be more overtly sensitive to such systemic differences and to act accordingly. However.

The reality is therefore likely to be highly variable and depends on a range of different factors. however. or another organisation known to you. The integration of employees with the goals of the organisation. 1. The nature of line management integration with HR policies. Instructor’s Manual 1.4 How would you relate the resource-based view to the dichotomy between the planning school and the learning school that we discussed earlier? In simple terms. This may be one in which you currently employed or one that you have worked for previously. The processual approach to strategy making is the one that offers the clearest scope for HRM to be strategically linked to organisational strategy. Resource-based 17 © Pearson Education Limited 2007 . The systemic approach to strategy making recognises that the scope for the strategic integration of HRM with organisational strategy is much less clear: this perspective points to the fact that in many situations HRM will not be conceptualised in a way that is intended to lead to strategic integration. However. according to this theory. Whether there is a Human Resource Director and at what level or levels within the organisation. means that a much more complex and messy picture emerges. the planning school emphasises a deliberate approach to strategy making.3 Think of an organisational situation with which you are familiar.. you may have been able to include consideration of the following aspects: • The nature of the relationship between organisational strategy and HRM. Evolutionary perspectives suggest an approach to strategy making that is highly deterministic.2 What is the scope for the strategic integration of HRM in relation to each of the four approaches to strategy making discussed in this section? Using the behavioural perspective or matching model to explain the link between the classical approach to strategy and HRM suggests that strategic integration may be a feature of this approach. The processes involved in strategy formation in practice. the section on the resource-based view of the organisation later in the chapter includes some discussion that evaluates and challenges this assertion. The learning school by contrast places emphasis on strategy as an emergent process. so that while HRM would need to be closely matched to an organisation’s strategy. require a proactive HRM approach. embedded in the knowledge and skills of those who manage and work in the operating divisions. which may mean that HRM is not strategically integrated and can only adopt a reactive posture. Use the model of the six strands of strategic integration to evaluate. Whilst this question is designed to check your understanding of the elements of this model. The nature of horizontal integration between HRM policy areas and also between HRM and other functional areas in the organisation. which implies a high level of control over the processes involved in relation to both strategy formulation and implementation. as far as you are able. This may have led to some interesting reflections about the nature of strategy in the organisation as well. where HRM is not only informed by organisational strategy but is also capable of shaping it. the extent of the integration of HRM and human resources within the organisation. which suggests that HRM would capable of shaping as well as responding to organisational strategy. its approach would be reactive rather than proactive. Your judgement about the capacity for the organisation to respond to change as the future unfolds related to the capabilities of its human resource base.Millmore et al. business units or departments of organisations. • • • • • 1. Strategic Human Resource Management: Contemporary Issues. Emergent strategy would. However. at least to some extent. it requires you to apply this to an organisation known to you and so your answer will be based on your own evaluation.

Johnson. Authors such as Prahalad and Hamel (1990) discuss examples of large corporations who have intentionally developed core competencies to achieve competitive advantages over others in their respective industries. 59–75. and Scholes. However. If there are different positions here these may be seen as having different implications for the role of HRM. In contrast. Strategic Human Resource Management: Contemporary Issues.F. K. P. Human Resource Management Journal. G. Instructor’s Manual theorists also stress the importance of learning and knowledge as we saw in the discussion in the final part of this chapter. Exploring Corporate Strategy: Text and Cases (6th edn). References Boxall. (2002). Mueller’s evolutionary approach suggests that while organisations may express their strategic intent. including core capabilities. (1996) The strategic HRM debate and the resource-based view of the firm. Harlow: FT Prentice Hall.Millmore et al. this is not to say that organisations will not seek to develop organisational resources and capabilities deliberately. their level of control over the subsequent development of organisational capabilities will not be as deliberate and controlled as these other examples seem to imply. 6(3).. These differences of view appear to suggest that there may be a range of views about intentionality and deliberateness amongst resource-based theorists as there is between those who subscribe to the planning school and those who subscribe to the learning school. 18 © Pearson Education Limited 2007 .

The problems with the matching models (closed) approach are: the ambiguity that attends the defining of strategy. the low regard for organisational context. from collectivism to individualism. and problems concerned with implementation. and the absence of employee input assumed. whereas the matching models (open) approach defines the employee behaviours necessitated by the organisation’s overall strategy. the essentially managerialist stance assumed. explain the history and origins of SHRM. with managers now donning the role of ‘enabler’. Summary • The main principles of SHRM include: • • • • • a stress on the integration of personnel policies both one with another and with business planning more generally. the focus shifts from management–trade union relations to management–employee relations. All of the theoretical approaches to SHRM have their problems. 19 © Pearson Education Limited 2007 • . Those concerned with the universalist approach are: defining the ‘best practices’ to apply. These behaviours are to be delivered through the HR strategy. evaluate the studies which aim to establish the link between SHRM and organisational performance. ‘empowerer’ and ‘facilitator’.CHAPTER 2 Strategic human resource management: a vital piece in the jigsaw of organisational success? Learning outcomes By the end of this chapter you should be able to: • • • • identify the major principles. the locus of responsibility for personnel management no longer resides with specialist managers but is now assumed by senior line management. The matching models (closed) approach specifies HR policies and practices that are relevant to specific organisational situations. The principal theoretical approaches to SHRM are termed: universalist. The universalist approach assumes that there are ‘best HR practices’ that promise success irrespective of organisational circumstances. analyse the main theoretical approaches to SHRM. matching models (closed) and matching models (open). which underpin the concept of strategic human resource management (SHRM). there is stress on commitment and the exercise of initiative.

emphasise the value of contingency theory. In similar vein to Chapter 1 it is an important part of student preparation that they think about the issue of SHRM in relation to an organisation where they work or one known to them. In an attempt to establish the link between SHRM and organisational performance there have been numerous studies conducted since the mid-1990s in the USA and UK. It would be extremely useful as class preparation for students to talk to an HR manager about one of the two key themes.. their prescriptive tone. The section on the three theoretical approaches to SHRM will be of particular interest to many students given the critical stance it takes. the securing and training of high quality staff and internal practices to achieve high quality products. • The growth of interest in SHRM was due to a number of factors including: the crisis of under-performance in American industry.g. The section enables tutors to make valuable points about the value of taking an evaluative stance towards the study of management and. 20 © Pearson Education Limited 2007 . • Teaching and learning suggestions Comment This is a chapter that should appeal to all students studying an SHRM model irrespective of their practical and academic background. a decline in collectivism. This chapter offers such opportunities for reflection. One of the exciting things about teaching management to students is that it enables them to reflect on organisational practice. to what extent is the HR strategy in y(our) organisation integrated. the rise of individualism. we believe it is important that students read and make their own notes from the chapter. which makes sense of what’s going on in reality: the ‘oh! that explains why that is done’. the rise of knowledge workers with differing work expectations.Millmore et al. in particular. among other ideas.. Not only is universalism relevant in the study of SHRM it also permeates the whole of the management literature. It will be of importance for students to think and make notes upon some of the major themes from the chapter in relation to organisation practice in which they may have been involved. to that of the universalist approach. Strategic Human Resource Management: Contemporary Issues. prior to the class. employee functions and job content to enable the organisation to respond quickly to change. and flexibility in terms of organisational structure. like the other models. In general these have been very positive about the relationship between SHRM and organisational performance although most have not offered an explanation as to why certain HR practices are may lead to enhanced organisational performance. and a search for more status by personnel specialists. Student preparation As with other chapters. Some of themes may be: high employee commitment to the goals and practices of the organisation. e. Instructor’s Manual Problems attending the matching models (open) are the models rather idealised nature and. It is rooted in strategic management theory but is a vehicle for examining organisational practice in employment contexts of all types. or ‘now I can see how that idea is linked to this aspect of policy and practice’.

using the ‘open approach’. the test of the degree to which the HR strategy is truly ‘strategic’ is a test of its appropriateness to the organisational strategy. 21 © Pearson Education Limited 2007 . for example. the organisational strategy. which requires specific desired employee behaviours to be adopted if it is to be achieved. In the classroom After an initial class discussion based on the student preparation we have found that the topic of SHRM is best illustrated by case study work. the completion of the self-check questions for this chapter is particularly useful as they may form the basis of group work in the class. just as importantly. discourages those who do not. The variables in the model: the operating environment (both external and internal) in which the organisation finds itself. which argues the existence of a clear and mutually supportive relationship between organisational strategy and HR strategy. Strategic Human Resource Management: Contemporary Issues. We have found the model works really well and illuminates many of the ideas of integration in an interesting way. one of the central concepts of the chapter lends itself very well to this. may all be identified or suggested.. As such this is an initial step in the recruitment overture and. Instructor’s Manual Prior to the class. This may be the case related to the chapter or another of the tutor’s choice. was based on the ‘open’ approach it may be useful to ask students to work with the ideas in their own organisation or read more about organisations who have pursued HRM and estimate the extent to which the approach adopted by the organisation has been ‘open’. Follow-up work To some extent the follow-up work will be dictated by the content of the classroom work. As the chapter explains. in relation to a case study. What this task does is to enable the student to integrate ideas from Chapters 1 and 2. If this is the case it must be an honest attempt to portray reality.Millmore et al. What value would you place in a philosophy statement similar to the BP example above were you searching for employment? This is one of those questions that we cannot answer because it is obviously personal to you. That said the intention of the HR specialists who write and publish such statements is to enthuse you sufficiently to prompt you to register an interest in the organisation. If the case study. For example.1. cultural and personnel strategies) through which the HR strategy is pursued. one of the suggestions for follow-up work in the chapter: • search the specialist practitioner HR literature for case studies that illustrate the way in which clear and cogent organisational philosophies inform HR strategy may be a useful precursor to such an exercise. This is the so-called open approach to SHRM. possibly. Answers to Self-Check and Reflect Questions 2. and the three 'key levers' (structural. The questions create an immediate link with chapter content and enable the tutor to develop many teaching points from the resultant discussions. If the philosophy statement is a genuine attempt to describe life for employees in the organisation then it should be of value to employees because it encourages those potential employees who like the sound of the organisation and. It may be very useful to ask students to illustrate the points they make in response to the self-check questions with ideas from the chapter’s practice and concept boxes. Indeed. a long-term relationship between employer and employee.

. It is not unusual for managers to introduce performance appraisal schemes and incorporate training for managers but not employees. the crisis in American industry) were more important than others.3. We do not take the bleak view that the gap between academia and practice is so wide that the studies will not be of practical benefit. Strategic Human Resource Management: Contemporary Issues.4. The result is often that employees do not understand the part they play in the process. Some may argue that there is little point in academics producing studies such as this if nobody actually in a position to change management policies reads them. of course. is that it is very difficult to say. Above all.4 were in creating the drive to introduce SHRM in major organisations? The simple answer to this question. more importantly. or. Performance appraisal is a good example of this. this will contribute greatly to the influence that HR managers can have at the highest levels in organisations. If some plausible link can be shown. that is. They also point to the difference that factors such as the importance of front-line managers may make. 22 © Pearson Education Limited 2007 . then they are more likely to be effective participants in the process of implementation. It seems intuitively correct to say that carefully designed and skilfully implemented HR practices will have an effect upon the ‘bottom-line’. First. they note some useful measures that may be used to assess HR effectiveness. Instructor’s Manual 2. In what ways do you think the presence of employee voice may be helpful to the implementation of universalist HR initiatives? The central argument behind the concept of employee involvement in the design and implementation of HR initiatives is that better outcomes will result if employees are involved. They identify the key practices and the combination where these practices may be introduced. 2. at the rational level it seems sensible that if employees understand the reasons for and components of a particular initiative. But the studies we have outlined go much further than confirming this. Certainly in the United Kingdom the Chartered Institute of Personnel and Development have done much to commission and publicise the results of the research at conferences and in pamphlets and in-house journals. How influential would you say that the factors noted in Figure 2.Millmore et al. On the face of it does seem reasonable to assume that all of these factors were influential. It would too much to say that they caused the growth of SHRM. The second reason is emotional and concerns the notion of ‘ownership’. This is for two reasons. In many respects the studies tend to confirm a lot of what we might expect. on the HR–organisational performance link. Considering the complexity of this problem is a useful introduction to the section. We are all more likely to engage more enthusiastically in the initiative if we have been part of its conception and design rather that it being imposed upon us. which concluded Chapter 2. Perhaps some (e. When considering such questions as this it raises the extreme difficulty of linking changes in a cause–effect manner. really understand the reasons why the organisation is introducing appraisal. But we can safely say that these factors were associated with the rise in interest in SHRM. What practical contribution do you think the studies linking HR and organisational performance listed in this section have made to the practice of SHRM? Much depends upon the extent to which HR managers take notice of what the studies have concluded.g. 2.2.

Strategies for managing cultural differences include: ignoring them. Learning outcomes By the end of this chapter you should be able to: • • • • • • identify some of the key background issues relevant to the internationalisation of business. SIHRM may be better understood by the examination of a model in which classic MNC components and factors relevant to the MNC’s external and internal operating environments influence the SIHRM issues. Summary • • • MNCs pursue international business for a variety of reasons in a variety of ways. evaluate the importance of the cultural perspective on strategic international human resource management. minimising them and utilising them. The importance of MNCs is not new but their growth in recent years has been rapid and significant. The development of key competences by MNCs is important at three levels: organisational. explain the significance of the capability perspective on strategic international human resource management. line management and HR professionals. functions and policies and practices. analyse the significance in the growth of multi-national companies. which in turn affect the concerns and goals of the MNC.CHAPTER 3 SHRM in a changing and shrinking world: internationalisation of business and the role of SHRM. • • • 23 © Pearson Education Limited 2007 . identify the key components of strategic international human resource management. National cultural differences are an important aspect of SIHRM and have been measured by a number of authors allowing these differences to be categorised. define strategic international human resource management.

which we have found is a subject that interests all students and one that promotes lively debate! Student preparation Prior to the class. What is less clear from such debates is the role of SIHRM.. and familiarise themselves with the chapter case study (or an alternative case supplied in advance) and come to the session prepared to tackle the case questions. culture. A starting point that we find useful is to discuss the issues arising from the students’ preparatory reading.g. reinforces the value of reading as an essential prerequisite for class-based discussion and provides a platform from which further class-based activities can be launched. That said the chapter contains the opportunity for many interesting debates where students and tutors may engage. Teaching and learning suggestions Comment This is probably the chapter in the book. 24 © Pearson Education Limited 2007 . This avoids providing lecture input that simply repeats what students have already grasped. Our outline answers to self check and reflect questions follow in the next substantive section of this chapter guide. In the classroom Clearly the approach adopted to ‘student preparation’ can be followed through into the classroom. But that is not clearly the case with some topics. We use a variety of vehicles to bridge student preparation and class-based activities to enhance their understanding of the chapter content and its overall relationship to managing human resources strategically. which will offer the least opportunity for students to engage in reflective learning since most will have no first-hand knowledge of SHRM. a topic which is regularly featured in the news and one on which most of us have strong views. we would ask students to make a note of any queries arising from their reading and to come prepared to raise them during the teaching session. Sometimes this may be formalised by asking students to write down (as questions) the three issues addressed by the chapter where they would like further clarification and guidance. The most useful fund of knowledge that most students possess will be that of MNCs with which they are familiar as customers.Millmore et al. As standard. Instructor’s Manual • The effects of national cultural differences on HR practices can be quite profound with the consequence that the transformability of many of these practices is suspect. e. Strategic Human Resource Management: Contemporary Issues. So the challenge for many tutors will be teasing out valuable learning points related to SIHRM from topics where it is not immediately apparent. An example of this is the ethical dimension to the activities of MNCs. Students may also be asked to do one or more of the following: • • • address pre-set questions and write their answers briefly in note format. complete the self check and reflect questions and come to the session prepared to share and discuss their responses. we believe it is essential that students read and make notes from the chapter.

the increase in communication has facilitated global brands and the desire of consumers to purchase those brands. Finally. in particular air transport and information technology. the Apple I Pod started life in 2002/2003 in the United States but it was a matter of weeks before demand grew across the world to the extent that Apple could not meet demand. Strategic Human Resource Management: Contemporary Issues. there has been a development of support services including banks and government agencies.1. Government agencies provide support for businesses in terms of finance and advice. has been set as part of preparation for the teaching session. The reasons that companies pursue a strategy of internationalisation are not new. Follow-up work The pedagogic features adopted throughout this book are intended to offer up a number of alternatives for follow-up work whilst at the same time leaving the lecturer free to add or substitute their own ideas. Yet the rate of growth of international trade has grown apace in recent years. This is our preferred approach because it makes students more accountable for their personal learning and reserves any group work for case study analysis. students can be formed into groups to share their individual answers and draw conclusions from their discussions. when adopting this approach. Instructor’s Manual However. Historically. at least two alternatives present themselves.Millmore et al. First. to provide a snappy summary of key issues. If they have not already been used as part of class activities any prior preparation of answers to the self check and reflect questions will serve as a useful reinforcement to chapter content. once student queries have been exhausted. we find it useful. empires have been built on thriving international trade. Banks now speed financial exchanges electronically across continents in minutes making economic exchanges efficient and less risky. which themselves can be usefully critiqued. 25 © Pearson Education Limited 2007 . Where preparing answers to self check and reflect questions. students can be asked to contribute individual responses that are then subjected to plenary discussion. we would favour the group approach as a more stimulating approach. Thirdly. Second. There are also a number of follow-up study suggestions after the chapter summary that can be undertaken by students either individually or in groups and an extensive list of references provides many opportunities for further reading. In all cases student responses can be considered against our suggested answers. Answers to Self-Check and Reflect Questions 3. Greater topicality can be achieved by capturing the big business news stories of the week and discussing any SHRM issues that are likely to arise. These have made communications immeasurably easier in the past 10–15 years.. there is easier movement across borders now than in previous generations. However. The free movement of goods and services across the EU is a perfect example of this. if preparing answers to self check and reflect questions was not part of preparatory work but consideration of the questions is to feature as part of the taught session. Why should this be? The first reason is the growth of technology. For example. Secondly.

4. questions will assist the employees to understand power patterns and gain important tacit knowledge about how the organisation works at an informal level. Strategic Human Resource Management: Contemporary Issues. All managers in all organisations follow some procedures very closely and pay scant attention to others. and other similar.2. Such cultural information may not determine decisions but they have the virtue of concentrating managers’ minds upon the consequences of some of their decisions. Perhaps the key role of the HR professional is to ensure that senior and line management develop and practise these competences. the final section of this chapter.5. you could argue that the opportunity to develop international careers is an extremely attractive one for many managerial. But the ways in which this confusion is accommodated in the minds of employees is part of the learning process.globalisation lobby’s position that globalisation was a disadvantageous to your company’s employees? Inevitably your opponents would cite the examples of MNCs. the former perspective has been the focus of this chapter. You could argue that.Millmore et al. Instructor’s Manual 3. If so. These decisions may be concerned with issues of structure (e. taking into account the views of others). But more importantly what such research does is to provide managers with valuable insights. Increasingly.. Of what value is this general grouping of national cultures to managers in their SIHRM activities? You may argue that all they do is confirm the general sort of assumptions that managers have about different cultures. the extent to which the organisation may decentralise its foreign operations with local HR managers and staff) or HR practices (e. all of them are important.g.e. which helps them to sort out what is important and what is not. 3. international business knowledge and the ability to take the role of innovator by seeing old problems in new ways and trying new methods of solving them are important as HR professionals operate strategically rather than pursue a narrower specialist focus.3. for example. 26 © Pearson Education Limited 2007 . 3. But even where MNCs locate production facilities in developing countries you could argue that terms and conditions of employment are often much better than in local companies. 3. on the cultural perspective to SHRM. which they can use in SHRM decision making. emphasises the importance of both cultural adaptability and perspective taking (i. which exploit child labour and vulnerable adult employees by paying poor wages and compelling them to work long hours. Indeed. Which of them is the most powerful? From where does that power emanate? Who wins the battles for scarce resources? Who gets his (usually) or her own way? The answers to these. this is in itself is of some value. This teaches employees a good deal about what the organisation sees as important and what it does not. In addition. Which of the line manager competences do you think are particularly important for HR professionals? Of course.g. whether to impose a standardised reward structure across different countries). However. this has the potential to lead to confusion among employees. which exist among expatriate managers. Tacit knowledge will also be imparted to employees through the patterns of power and influence. In what other ways may the expatriate managers at DecoStore have established tacit knowledge? HCN employees will learn tacit knowledge through the ways in which expatriate managers interpret policies and procedures. As a senior HR manager in a major MNC what arguments would you anticipate using to defend your company against the anti. professional and technical employees. in south-east Asia the migration of rural workers to the cities (similar to the British industrial revolution of the 18th and 19th centuries) is evidence that the opportunities provided in a developing economy are more attractive than remaining among the rural poor. Of course.

assess the choices to be made in respect of the evaluation process and make suitably informed decisions. There are a number of valid reasons relating to organisational culture. identify the various stakeholders in any evaluation and their need both to contribute and to receive feedback. action research has explicit foci on involvement of participants and subsequent action. Within evaluation of SHRM a distinction can be made between typical evaluations and action research. unchallenged assumptions and previous experience that explain why planned formal evaluation of strategic HR has rarely taken place. assess the barriers to evaluation and their causes. Both can make use of both secondary and primary data. Evaluation takes place continuously on an informal and personal basis and will affect people’s choices and behaviours at work. and identify the complexity of issues associated with feeding back the findings of evaluations. Summary • • • Evaluation has the potential to make an important contribution in relation to the implementation of specific HR initiatives but also to wider SHRM. A planned systematic process of evaluation should be included at the beginning of the implementation process for all HR interventions. which may be used to evaluate strategic human resource management.CHAPTER 4 Evaluating SHRM: why bother and does it really happen in practice? Learning outcomes By the end of the chapter you should be able to: • • • • • • • explain the importance and contribution of evaluation to strategic human resource management. outline a range of strategies and data collection techniques involving both primary and secondary data. While both use the same strategies and data collection techniques. identify the range of different purposes an evaluation can serve. • • 27 © Pearson Education Limited 2007 .

let alone strategically. Issues that cannot be dealt with may be fed up from the bottom to high levels of the organisation. It is also a point we believe must be emphasised to the students. We use a variety of vehicles to bridge student preparation and class-based activities to enhance their understanding of the chapter content and its overall relationship to managing human resources strategically. Evaluation may take place over a range of time horizons. As standard. This needs to reflect the context and purpose of the evaluation and be agreed between those undertaking the evaluation and the sponsor. to longitudinal evaluations perhaps using a series of employee attitude surveys. Evaluation of SHRM involves multiple stakeholders and cannot be divorced from issues of power. understand and act to improve the situation. As part of this we recognise that. Sometimes this may be formalised by asking students to write down (as questions) the three issues addressed by the chapter where they would like further clarification and guidance. 28 © Pearson Education Limited 2007 . We have found that producing mind maps of the chapter content is a useful approach to note taking and encourages students to reflect on the internal integration of the subject content of the chapter. In this chapter we argue that the evaluation of HR strategies needs to involve those affected within the organisation as fully as possible. Alternatively the findings can be shared first with those who generated the data. one or a number of research strategies might be more appropriate. Feedback typically involves cascading a summary of findings from the top-down the organisation. Similarly.. This is problematic as we discuss in the chapter. the topic of evaluation rarely being considered in any depth. This is not to say that evaluation can only be undertaken by people within the organisation. This observation forms part of the opening section of this chapter and part of the justification for its inclusion as a discrete chapter. we recognise that to address particular strategic objectives some data collection techniques are likely to collect more appropriate data than others. we would ask students to make a note of any queries arising from their reading and to come to the teaching session prepared to raise them. Student preparation Prior to the class. • • Teaching and learning suggestions Comment An immediate problem facing the delivery of this topic is the overall lack of attention it receives in the HRM literature. the findings are rarely utilised at all. This can help promote ownership of subsequent actions.Millmore et al. we believe it is essential that students read and make notes from the chapter. politics and value judgement. Instructor’s Manual • Prior to evaluating SHRM it is important that a clear understanding of the precise purpose and objectives of the evaluation is reached. Evaluation is rarely included in a planned evaluation and. Strategic Human Resource Management: Contemporary Issues. their role should be to help those within to perceive. on those occasions when it is. Rather it implies that where people external to the organisation are used. which benchmark HR practices. These we suggest can range from one-off case studies perhaps answering the question ‘Where are we now’? through cross-sectional studies. depending upon the purpose of the evaluation.

In all cases student responses can be considered against our suggested answers. Our approach here would be to start with a more general exploration of the integrative case at the end of Part One: ‘Strategic Human Resource Management at Halcrow’ and use this to focus upon evaluation issues. complete the self check and reflect questions and come to the session prepared to share and discuss their responses. Our outline answers to self check and reflect questions follow in the next substantive section of this chapter guide. reinforces the value of reading as an essential prerequisite for class-based discussion and provides a platform from which further class-based activities can be launched. Where preparing answers to self check and reflect questions has been set as part of preparation for the taught session. However. Pre-set questions that we have found useful for structuring student reading. preparatory activities and classroom discussion for the topic of evaluating strategic HRM include: 1. However. students can be asked to contribute individual responses that are then subjected to plenary discussion. similar approaches to those suggested for self check and reflect questions can be adopted. This avoids providing lecture input that simply repeats what students have already grasped. students can be formed into groups to share their individual answers and draw conclusions from their discussions. in particular those highlighted by Questions 6 and 7. when adopting this approach. Where case study work has featured as part of preparatory activities. we find it useful. once student queries have been exhausted. Strategic Human Resource Management: Contemporary Issues. This is our preferred approach because it makes students more accountable for their personal learning and reserves any group work for case study analysis. to provide a summary of key issues. at least two alternatives present themselves.Millmore et al. What are the purposes of evaluation? 4.. we would favour the group approach as a more stimulating approach. which themselves can be usefully critiqued. in doing this it is important to recognise the length of this case and ensure that students have read it prior to the class. A starting point that we find useful is to surface and discuss the issues arising from students’ preparatory reading. Instructor’s Manual Students may also be asked to do one or more of the following: • • • address pre-set questions and write their answers briefly in note format. Outline the range of evaluation strategies that could be chosen to evaluate an HR initiative? In the classroom Clearly the approach adopted to ‘student preparation’ can be followed through into the classroom. Second. and familiarise themselves with the chapter case study (or an alternative case supplied in advance) and come to the session prepared to tackle the case questions. First. if preparing answers to self check and reflect questions was not part of preparatory work but consideration of the questions is to feature as part of the teaching session. Why do organisations fail to evaluate HR initiatives? 3. 29 © Pearson Education Limited 2007 . However. How would you justify the need for evaluation of a new HR initiative to the head of Human Resources? 2.

it is likely that it will focus upon the operational aspects of the course such as the quality of the teaching. What is likely to be less clear is whether the wider impact of the learning was considered. There are a wide variety of arguments you could list here. Possible course could be a module on your current programme or a training course at your workplace. although it is probable that the data were used to improve the course. Your knowledge of how the evaluations were used subsequently is likely to be less certain. Our outline answers to the self check and reflect questions follow in the next substantive section of this chapter guide. any prior preparation of answers to the self check and reflect questions and/or the questions suggested for student preparation and/or the integrative case ‘Strategic Human Resource Management at Halcrow’ will serve as a useful reinforcement to chapter content. b. Some of the most frequently cited include: • • to help organisations respond to their external and internal environments in a timely and positive manner by providing the information to plan strategically. the usefulness of handouts/module guides. However.. 4. Strategic Human Resource Management: Contemporary Issues. What aspects of the course were you asked to comment about? b. to provide a mechanism for capturing individual learning and to enable experience to contribute to organisational learning. If they have not already been used as part of class activities. Answers to the integrated Part One case study questions are included after this chapter. the quality of the lunch. 30 © Pearson Education Limited 2007 . How do you think your evaluation and that of your fellow students was used subsequently? a. a.Millmore et al. the strengths of the course. for many one day courses. support facilities such as library and information technology. Instructor’s Manual Follow-up work The pedagogic features adopted throughout this book are intended to offer up a number of alternatives for follow-up work while at the same time leaving the lecturer free to add or substitute their own ideas.2 List the arguments you would use to justify the need for an organisation to justify evaluating SHRM interventions. Inevitably your answer will depend upon the course that you choose. What is less likely to have been included is some form of evaluation of how much you felt you had learnt or how you felt that the course would contribute to your work life or you future career. the quality of the teaching facilities and.1 Think about the last time you were asked to evaluate a course in which you were participating. the weaknesses of the course. Answers to Self-Check and Reflect Questions 4. There are also a number of follow-up study suggestions after the chapter summary that can be undertaken by students either individually or in groups and an extensive list of references provides many opportunities for directed further reading.

Instructor’s Manual • • • • • to provide an opportunity for analysis and reflection before making adjustments to HR interventions. As you read this section compare the reasons you have listed with those we identify. to help create new insights and shared understanding. perceived lack of a need to evaluate • • • • people ‘know’ the results will be positive. Your answer to this question is unlikely to be in the same format as ours. For both typical evaluation and action research. Strategic Human Resource Management: Contemporary Issues. a blame culture exists within the organisation. although we recognise our list is not exhaustive: 31 © Pearson Education Limited 2007 . organisations do not possess the necessary skills to produce a competent or credible evaluation.. to overcome what may be subjective evaluations by enabling assumptions held to be tested and shared. managers tend to focus on implementation rather than evaluation. • difficulties associated with dealing with negative outcomes • • • previous evaluations have been divisive and negative. to improve management decision making. ‘gut’ feelings are often perceived to be sufficient. there is no consensus regarding universally relevant HR indicators.3 Before you read on based on your own experience make a list of reasons why you might be reluctant to undertake an evaluation of an HR process. a risk of being unpopular with peers. we would hope your answer makes reference to the need to gather data in a rational and systematic manner to find out the extent to which the HR intervention(s) has achieved its objectives. In addition we would have expected you to include at least some of the following advantages for typical evaluation and action research. 4.4 Outline the relative advantages of action research and more typical approaches to evaluation from the perspective of the HR manager sponsoring an evaluation.Millmore et al. 4. to gain acceptance and commitment to SHRM initiatives. To what extent are they the same or similar to those you have identified? The list of reasons that you are likely to have compiled as your own reasons for being reluctant to undertake an evaluation are: • difficulties of undertaking evaluation • • • • HR is widely considered to be virtually unmeasurable. managers often prefer to rely on their informal information channels.

Millmore et al., Strategic Human Resource Management: Contemporary Issues, Instructor’s Manual

A typical evaluation may be advantageous to an HR manager sponsoring an evaluation when: • • • an evaluation was not considered to be a necessary part of the SHRM intervention; the HR manager is uncertain whether s/he will wish to act upon the findings of the evaluation; the HR manager requires the evaluation to be undertaken by people who are obviously separate from the organisation so that the findings are more likely to be seen as objective rather than biased by the sponsor’s beliefs; there is a desire to maintain close control of the evaluation process; there is a desire to maintain close control of the findings and the extent to which these are fed back to their employees.

• •

In contrast action research may be advantageous to an HR manager sponsoring an evaluation when: • • • • • • the evaluation process is seen as an integral part of facilitating strategic change with regard to HRM; there is a wish that employees work alongside those undertaking the evaluation throughout the process; there is a desire to engender employees’ ownership of the findings and any subsequent changes; there is a desire to develop evaluation expertise within the organisation; the HR manager intends that the knowledge gained from the evaluation is transferred to other aspects of SHRM within the organisation; there is a desire to adopt a process consultation approach.

4.5 Outline the advantages that are likely to accrue to an organisation using a range of techniques, rather than just one, to obtain data to evaluate SHRM. One technique on its own is unlikely to provide sufficient data to fully evaluate SHRM. While secondary data can be used to benchmark the evaluation against an industry or perhaps national context there is often still a need to collect a range of data. By selecting appropriate techniques, the data collected can be matched to the objectives of the evaluation more closely. Different techniques are better at collecting different types of data. For example, to gather information from a large number of people and answer ‘what’? questions questionnaires are an efficient method. However, to explore the same situation in more depth and gather information to answer ‘why’? or ‘how’? questions, techniques such as unstructured interviews are likely to be more appropriate as the interviewee can talk freely about events. Using different data sources also enables the finding to be triangulated. If all the findings suggest the same outcome then you can be more certain that the data have captured the reality of the situation rather than your findings being spurious.

32 © Pearson Education Limited 2007

PART 1 CASE STUDY

Strategic human resource management at Halcrow Group Limited
Answers to Case study questions
1. Provide a brief overview of Halcrow Group’s strategy. Like many other former civil engineering companies Halcrow has extended its range of disciplines to cover architecture, project management, environmental science, transport planning and other non-engineering but related skills. To reflect the future needs of the business Halcrow’s operations were brought together in 2001 as four main business groups: Consulting, Property, Transport and Water. The structure of the company was seen as an important component in delivering the strategy. It changed to a matrix structure. There are eight geographical regions meaning that appropriate employees or teams may be brought together for specific projects throughout the world. Each of the four business groups is led by a management team comprising five people including a Group board director or managing director. Within each business group, professional and technical (Professional and Technical staff are assigned to technical skills groups, the leader of whom is responsible for their training and career development. Employees are also assigned to an office in one of the regions. These vary in size from less than 10 to more than 500 employees. The business groups and regional offices are supported by Corporate Support Services, comprising all the corporate and business support functions, including HR, and located predominantly within the United Kingdom. In 2004, Halcrow launched their change programme, ‘Act now’, which was designed to help the group ‘to continue to develop in a dynamic and sustainable way’. The focus of ‘Act now’ was to align employees’ behaviours and approaches to Halcrow’s purpose, values, codes of behaviour and business principles thereby improving individual, team and overall business performance. 2. Outline the linkages between Halcrow Group’s strategy and its strategic human resource management. The focus of the Halcrow change programme, ‘Act now’, was to align employees’ behaviours and approaches to Halcrow’s purpose, values, codes of behaviour and business principles. The intention was that this would improve individual, team and overall business performance. This change programme is intended to be continuous rather than having a specific end date. It emphasises the need for flexibility and the sharing of good practices and learning throughout the group, the centrality of employees to achieving this and the need to monitor and evaluate. The ‘Act now’ change programme is central to everything that Halcrow plan to do in relation to the HRM strategy. The overriding concern is to change the organisation’s culture. It is often said that the Group is full of people who are professional engineers and who take pride in a job well done. In essence, technical excellence has previously taken precedence over commercial success. By the very nature of their training Halcrow people tend to be concerned with ‘detail’ rather than seeing the bigger picture. This has served the group well. But a recent client satisfaction survey commissioned by the group did not show Halcrow in a uniformly glowing light. It reported that Halcrow emerged as technically excellent and a ‘safe pair of hands’ but that clients were looking for much more than technical competence and a track record. They

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Millmore et al., Strategic Human Resource Management: Contemporary Issues, Instructor’s Manual

wanted business partners whose behaviours were aligned to their own needs. In addition the group was also seen as rather ‘grey’. The challenge for Halcrow is to retain the reputation for technical excellence and reliability while becoming increasingly commercially aware, flexible and, above all, more responsive to customer needs. It is a challenge, which the SHRM strategy, through the change programme, is designed to meet. Overall, the key change issue that is driving SHRM is the need for Halcrow to be more responsive in the light of a more competitive industry. Therefore, the principal aim of the new HR initiatives is to generate more competitive employee behaviours which, in turn, is envisaged will generate better all round employee and business performance. 3. What obstacles do you think that Halcrow management will face as it works to change the Group’s culture from one dominated by technical excellence to one that also embraces commercial awareness? Obstacles related to changing the culture highlighted in the case include: • The knowledge and understanding (and qualifications) of the workforce need to be developed to ensure that employees have the requisite commercial skills. At present approximately 80% of Halcrow’s employees are classified by the group as professional and technical (P and T) staff who have a minimum of an undergraduate degree in engineering or a related subject and are also members of a relevant professional institution. The focus of employees is on a job well done. As noted in the case, the group is full of people who are professional engineers and who take pride in a job well done. In essence, technical excellence takes precedence over commercial success. Although Halcrow needs to retain its reputation for technical excellence and reliability, the organisation’s employees must become increasingly commercially aware about the group’s profit performance, flexible and, above all, they need to be more responsive to customer needs in the light of a more competitive industry. This is all occurring in an environment in which Halcrow’s customers are taking technical excellence for granted when making decisions about which consultancy group to employ. In view of Halcrow’s reputation for technical excellence this is also an obstacle.

4. What measures might Halcrow take to increase its retention of young professional graduates? Based on the available data, labour turnover amongst young professional graduates is clearly perceived as a critical problem within Halcrow with the potential to frustrate the achievement of its strategic business plans. The sustainability of their commitment to continued dynamic growth and quest for superior business performance as a route to competitive advantage are being jeopardised by the high levels of labour turnover being experienced amongst Halcrow’s cadre of graduate engineers and, more generally, across P and T staff. This problem of labour turnover assumes greater significance within the prevailing organisational context, characterised by: a shortage of high quality consultants throughout the construction and engineering sectors; fierce competition for such labour; progressive decline in the number of students studying relevant degree courses; and increasing client expectations that projects require a stable staffing base to support their delivery. Despite the frequent reference to the problem there is little hard data available in the case on the extent of labour turnover or its causes. Further, apart from benchmarking within their business sectors, there is no evidence of any broader external comparisons that might shed more light on the problem. Therefore, a useful starting point for increasing the retention of young professional graduates is the use of thorough evaluation to address these gaps. However, and in fairness, steps have already been taken in this direction. Employee survey results have

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Attention to those features alone may help young professional graduates engage with and commit to the organisation. and to what extent does successfully matching employer HR demands and the employee attributes of recruits impact positively on their retention? Further exploration of how recruitment and selection could contribute to improving the retention of young professional graduates could be directly linked to Chapter 8. performance management.. There is also reference to problems concerning the managerial environment. However. the attractiveness of the financial sector as an alternative career pathway. Instructor’s Manual highlighted feedback. recognition and employee involvement and engagement as being particularly problematic areas requiring attention. career development and succession planning. The cursory analysis above at least provides pointers towards future action that can be taken to improve the retention rate of young professional graduates at Halcrow. employee involvement. This embraces required values. for example. However. which if successful is likely in itself to have a positive impact on retention. why not actively involve the ‘at risk’ employee group – young professional graduates – in evaluating the causes of labour turnover and developing action plans to improve retention? This would be entirely consistent with organisational aims to address issues around feedback. Such an approach could incorporate areas such as recruitment and selection and HRD but would almost undoubtedly surface other areas for consideration and action planning. organisational culture. Currently senior managers are working with Kaisen Consulting Ltd to create processes through which employees can become involved in developing actions to improve the managerial environment. culture. Strategic Human Resource Management: Contemporary Issues. recognition. A key consideration is how these HR requirements are being translated into HR practice and the impact that they may have on future retention. Picking up on this last point. it is accepted that we have been highly selective in the areas we have brought to bear on the problem of increasing retention of Halcrow’s young professional graduates. This may even be done in conjunction with other companies in the sector to increase the attractiveness of construction and engineering and to secure an increase in the future supply of such staff. this has to be set in the context of an increasingly articulated specification of the HR base required by Halcrow to achieve its organisational objectives. HR planning. There is also. the leadership and management skills base. Lastly. codes of behaviour and core competencies that underpin the HR strategy designed to improve the organisation’s human capital base. is recruitment and selection being conducted to maximise the probability of bringing appropriate staff into the organisation and avoiding such HR requirements becoming mere platitudes. a lack of detail with respect to HRD particularly with respect to knowledge management and creating a learning environment given the organisation’s emphasis on the need to develop an open culture within which learning transfer is facilitated. Apart from its role in contributing to the acquisition and maintenance of required employee behaviours. It is recognised that the reader could range more widely over the content of the book to focus on how such areas as structure. In addition greater emphasis may need to be placed on a ‘grow your own’ philosophy. 35 © Pearson Education Limited 2007 . human resource development (HRD) represents another important potential area for improving retention. From the case details it is not clear what proportion of young professional graduates are recruited directly into the organisation and what proportion are ‘grown’ through company training schemes. How.Millmore et al. where labour shortages persist it may well be in the organisation’s interest to recruit school leavers into sponsored training programmes to meet their future professional and technical requirements. This would seem to be particularly appropriate if directed at increasing the participation rate in the sector of previously underrepresented groups such as females. A failure to undertake effective induction and to audit training undertaken may in themselves exacerbate labour turnover and cause employees to question the organisation’s commitment to their development and succession planning. worryingly. another possibility emerges from the outputs of internal evaluation activities. increasing concerns over staff development and the lack of succession planning together with a clear acknowledgement within the company that these issues require attention. As part of this.

However. Look again at the list of employee behaviours that Halcrow are trying to encourage throughout the group: • • • • • • • • Treat everyone with respect. there are the inevitable cultural and communication problems. A catalyst for this drive is the group’s recently published codes of behaviour. Of course. Listen to others’ points of view. Never undermine anyone directly or indirectly. To what extent does the data collected by the employee survey allow the HR director to evaluate the extent to which HR initiatives are supporting the Group’s strategic direction? 36 © Pearson Education Limited 2007 . the HR director was keen for this to change. Be professional and ethical at all times. Delivering a strategy through adjusted employee behaviours is a way of thinking with which most will be totally unfamiliar.halcrow. Be honest and open. However. These stress the need for honesty. and what is expected of Halcrow staff.pdf) contains a very clear account of business principles with helpful statements of what is required from the staff and what the staff may expect from the company.com/html/documents/pdf/corporate_info/bus_princ. 6.halcrow. trust and dignity. The Halcrow website (http://www. is the notion of professionalism and what it means accepted consistently internationally. The wording of the list presents immediate potential misunderstandings. (a) What hurdles do you think that Halcrow will have to overcome in its attempt to ensure international employees adopt the Group’s codes of behaviour? (b) Now visit the Halcrow Group website (http:/www. which may attempt to change employee behaviours.com) and read Halcrow’s Statement of Business Principles. the function in all but the most basic administrative sense has been nonexistent.. Help each other – share experiences and lessons learned. the lack of an international HR tradition in Halcrow means that the HR director clearly has a large task on hand establishing the relevance of the function and the mission that HR is attempting to deliver through the change strategy. Strategic Human Resource Management: Contemporary Issues.Millmore et al. paying particular attention to the Code of Business Practice. That is not to say that the employees will openly doubt the relevance of the HR effort. Expand your answer in the light of what this tells you about the Group’s views regarding business integrity. but committing to it fully is a different matter. Instructor’s Manual reward management and diversity management can all be brought into the equation for developing measures for reducing turnover and increasing retention. transparency and integrity in all Halcrow’s business operations. Work together to resolve disagreements. In fact. Be polite. The case reports that the fact that there has been no HR function in any of the offices until recently suggests that HR has experienced a very low profile in Halcrow’s international operations. 5. Does the concept of ethics have the same meaning in all cultures.

This led the HR Director to ask why engagement had only remained constant in a labour market characterised by a shortage of suitably qualified people. recognition and involvement of employees. business group and skill group. Given their need to develop commercial awareness it is important that they also seek to understand their customers’ views regarding this. for example on employee commitment. Average scores for each of the 10 key areas are then be used to highlight those aspects where satisfaction is relatively low and where action may need to be taken. comparisons can be made between different parts of the group highlighting areas that are performing both above and below the Group average. High response rates for the survey (over 67% of employees worldwide returning their questionnaire in 2002 and 72% in 2004) mean that the data collected are more likely to be representative of the Group. Data from Halcrow’s employee survey has been used to calculate an HR Enablement Index for the group. In addition Halcrow appears only to have considered employee engagement from the perspective of the employees. data from the survey (and other sources) suggest that there is still more to be done to improve these and other aspects of HRM such as employee engagement. These will relate to data already held by the organisation in HR records such as the technical versus organisational focus of training and development courses attended (secondary data) as well as collecting additional data. Results from the surveys suggest that there have been improvements in all three areas. (b) What other measures do you think they might adopt? There are a whole host of other measures that might be adopted to evaluate the extent to which initiatives to engage employees within the group are working. has allowed Halcrow to establish the extent to which these issues are being addressed through HR initiatives. This might be done with focus groups with customers or a series of in-depth interviews. involvement. Instructor’s Manual The core content of the questionnaire has remained substantially the same since 2000 enabling benchmark comparisons over time. Halcrow was able to identify those areas of strategic HRM highlighted by employees as being most in need of attention. These were: feedback.. The answer to this question is currently being sought from a range of primary and data including employee exit interviews. subject to agreement and issues of confidentiality. By including location information. Strategic Human Resource Management: Contemporary Issues.Millmore et al. 37 © Pearson Education Limited 2007 . (a) How does Halcrow currently make use of primary and secondary data to evaluate the extent to which initiatives to engage employees within the Group are working? Through the 2000 employee survey (primary data). feedback to them and recognition. client focus. annual reviews between line managers and employees might be developed to explore and feedback issues related to organisational engagement. resources to do their job. Benchmarking the surveys in 2002 and 2004 against the 2000 employee survey. Secondary data on retention rates for the same period revealed that this was within a context of declining labour turnover. Comparison of the 2004 HR Enablement Index score with that for 2002 revealed that there had been no significant change in employees’ engagement. Additional supplementary questions are also included. cooperation from others. staff workshops around the world to discuss issues associated with employee engagement and further analysis of the employee survey data. such as regional office. their competence. empowerment. The 30 questions are used to ascertain employees’ views on 10 key areas that relate clearly to the group’s strategic direction. However. This is an average score of responses to all the questions in each of the ten key areas and provides an overall indication of the extent to which employees are engaged with their work within the Group. For example. 7. to allow specific issues to be evaluated. These include clarity about their job.

matrix. project-based. A fourth perspective relates to the role of organisational politics and the exercise of power that has already been considered and discussed in depth in Chapter 1. These dimensions indicate the complex range of variables to be understood by managers in deciding how they should structure an organisation’s activities to meet its strategic objectives. • • 38 © Pearson Education Limited 2007 . contingency and consistency approaches to the design of organisational structure. The development of these forms indicates some degree of movement from centralised and bureaucratic structures to decentralised and more fluid ones. These relate to the classical universal. organisational structure and human resource strategies. describe and analyse conceptual approaches to the design of organisational structures and discuss their strategic implications. functional. Three perspectives were considered that offer explanations about the relationship between the design of organisational structure and strategic effectiveness. identify principal forms of organisational structure and explore their main effects on those who work within them at both a theoretical and practical level. Dimensions of organisational structure have been identified that can be used to analyse the nature and evaluate the effectiveness of an organisation’s structure.CHAPTER 5 The role of organisational stucture in SHRM: the basis for effectiveness? Learning outcomes By the end of this chapter you should be able to: • • • • define the term organisational structure and evaluate its links to strategy. analyse the relationship between organisational structure and SHRM. divisionalised. Principal forms of organisational structure were reviewed and their effects on those who work within them analysed and evaluated. network. Theoretical linkages between these organisational forms and contingency variables have been recognised. Summary • • • Strategic linkages exist between corporate strategy. demonstrating the strategic nature of structure. They also indicate that the design of organisation’s structure involves managerial or strategic choice. cellular and virtual structures. These forms include: simple.

Choice of organisational structure has been recognised as leading to a problematic relationship between the respective desires for managerial control. Within the context of strategic human resource management (SHRM) models and theories a central theme emerging is that people are the organisation’s most important ‘asset’. this is likely to be a function of both the nature of the structural form that is chosen and the strategy of the organisation. Key issues to consider include: • • The operating environment of the organisation. Strategy is developed at the top of the organisation and the rest of the organisation including the HR function is utilised as a supporting mechanism in the implementation of the strategy. it may operate in a highly complex or changing environment or in a relatively stable one. so how they are organised is crucial to the effectiveness of a strategic approach to the management of human resources (HR). Attempts to maximise centralised managerial control in situations requiring greater organisational responsiveness are likely to affect the pursuit of effectiveness and working relationships adversely. Traditional views about controlling the organisation through structure can be traced back to the early twentieth-century management scientists such as F. Decentralised forms of organisational structure may adversely affect the scope for and nature of organisation-wide human resource strategies. for example is the organisation a public body. Instructor’s Manual • Organisations need to promote human resource strategies that are congruent with the nature of the organisational structure that they chose (or recognise the impact of their structure on their espoused human resource policies and the practice and outcomes of the human resource strategies that they promote). for example the needs of a multi-national company with a wide range of products and services and globally dispersed customer base will be dramatically different from those of a small local firm. For example. organisational efficiency and responsiveness to external conditions and intended markets..Millmore et al. How accountable are the senior executives of the organisation to external influences. Such principles of control are as bureaucratic or mechanistic. These approaches can be directly linked to a view of strategy making that is essentially top-down. The fact that there is a need to regulate the implementation of an HR strategy is accepted but this needs to take of a wide variety of influences into account. How diverse is the organisation. This chapter considers organisational structure in the context of SHRM. the types and range of issue and problems the organisation faces in developing and implementing a strategic approach to the management of its HR. Taylor and Elton Mayo. In practice.W. In this approach to strategic management the organisational structure becomes a method for achieving top-down control. • • Teaching and learning suggestions Comment In general strategy terms one of the most important resources an organisation has is its employees. perhaps reporting to a government minister or is it a publicly quoted company reporting to a board of directors and a variety of internal shareholders or is the business privately owned by a family or group of partners who may be owner managers and have complete control over the current and future direction of the business? • 39 © Pearson Education Limited 2007 . Strategic Human Resource Management: Contemporary Issues.

students can be asked to contribute individual responses that are then subjected to plenary discussion. A starting point that we find useful is to surface and discuss the issues arising from students’ preparatory reading. What are the principal strategic relationships between organisational structures and corporate strategy and how could they be evidenced in practice? 3. We have found that producing mind maps of the chapter content is a useful approach to note taking and encourages students to reflect on the internal integration of the subject content of the chapter. and familiarise themselves with the chapter case study (or an alternative case supplied in advance) and come to the session prepared to tackle the case questions. This avoids providing lecture input that simply repeats what students have already grasped. to provide a snappy summary of key issues. at least two alternatives present themselves. Strategic Human Resource Management: Contemporary Issues. Pre-set questions that we have found useful for structuring student reading. Our outline answers to both self-check and reflect questions and case study questions follow in the next two substantive sections of this chapter guide. we find it useful. We use a variety of vehicles to bridge student preparation and class-based activities to enhance their understanding of the chapter content and its overall relationship to managing HR strategically. However. reinforces the value of reading as an essential prerequisite for class-based discussion and provides a platform from which further class-based activities can be launched. How would you argue the case for and against the formal adoption of structures by organisations? In the classroom Clearly the approach adopted to ‘student preparation’ can be followed through into the classroom. complete the self-check and reflect questions and come to the session prepared to share and discuss their responses. Instructor’s Manual Student preparation Prior to the class. Students may also be asked to do one or more of the following: • • • address pre-set questions and write up their answers briefly in note format. we believe it is essential that students read and make notes from the chapter. How would you define organisational structures and set it into the SHRM context? 2. Where preparing answers to self-check and reflect questions has been set as part of preparation for the teaching session. As standard. when adopting this approach. once student queries have been exhausted. preparatory activities and classroom discussion for the topic of the role of organisational structure in HRM include: 1. we would ask students to make a note of any queries arising from their reading and to come to the teaching session prepared to raise them. Second.. students can be formed into groups to share their individual answers and draw conclusions from their discussions. preparing answers to self-check and reflect questions was not part of preparatory work but consideration 40 © Pearson Education Limited 2007 .Millmore et al. First. Sometimes this may be formalised by asking students to write down (as questions) the three issues addressed by the chapter where they would like further clarification and guidance. However. This is our preferred approach because it makes students more accountable for their personal learning and reserves any group work for case study analysis.

while they may be seen as furthering short-term managerial interests they neither consider the consequences of those affected. Strategic Human Resource Management: Contemporary Issues. Answers to Self-Check and Reflect Questions 5. Instructor’s Manual of the questions is to feature as part of the teaching session.2 What other criticisms do you think may be made against the classical universal approach to the design of organisational structure? The classical universal approach is strongly associated with a philosophy of managerialism. Our outline answers to both self-check and reflect questions and case study questions follow in the next two substantive sections of this chapter guide.. hopefully you will have been able to use the dimensions of structure outlined in Concepts Box 5. However. 5. the longer-term implications of some of the practices that may flow from these universal principals.3 How would you summarise the key differences between the classical universal. There are also a number of follow-up study suggestions after the chapter summary that can be undertaken by students either individually or in groups and an extensive list of references provides many opportunities for directed further reading. 5.1 Drawing on the dimensions of organisational structure outlined above. In all cases student responses can be considered against our suggested answers.check and reflect questions and/or the questions suggested for student preparation and/or the chapter case ‘Daimler–Chrysler AG’ will serve as a useful reinforcement to chapter content. this is based on unitarist principles and does not consider more conflictual frames of reference. leanness and downsizing would support this view about an absence of thinking about these people-centred and longer-term business consequences. The available literature related to the use of forms of flexibility.2. If they have not already been used as part of class activities. This question is designed to allow you to relate theory to your own experiences so your response will be individually related to your own reflections. While some of the practices associated with this approach may be seen as encouraging employee involvement. which themselves can be usefully critiqued. For example. your evaluation may judge that the structure within which you work is not affected by such adverse consequences because of the appropriate ways in which these structural dimensions are applied in this organisational context. too high a level of standardisation or centralisation may in your evaluation be associated with some of the adverse consequences reported in Concepts Box 5. Universal principles are advanced in the name of organisational responsiveness and efficiency. contingency and consistency approaches to the design of organisation structure? 41 © Pearson Education Limited 2007 . Follow-up work The pedagogic features adopted throughout this book are intended to offer a number of alternatives for follow-up work while at the same time leaving the lecturer free to add or substitute their own ideas. we would favour the group approach as a more stimulating approach. use the list of potential organisational consequences from structural deficiencies to evaluate the structure of an organisation known to you. nor.1 and in the discussion that follows this and to relate these to the consequences of structural deficiencies reported in Concepts Box 5. Conversely.2.Millmore et al. any prior preparation of answers to the self. However.

5 The discussion in this section has considered the impact of decentralised organisational structures on the development of human resource strategies. alternatives to hierarchy and structures that facilitate these. ‘Fluidity’ by contrast is associated with decentralisation.2 and related discussion are examples of this type of effect. 5. this offered a pathway for progression linked to the provision of training and development. The contingency approach requires a more situational analysis and believes that effective organisations will result from a structural design that takes account of the demands created by the environment and the characteristics of the organisation. Instructor’s Manual The classical universal approach is associated with the identification of so-called best practice principles that may be used in a variety of organisational settings. how would you summarise ‘organisational fluidity’? ‘Fluidity’ is used. if this is indeed their real aim. 5. bureaucracy. Organisations based on centralised and bureaucratic principles are therefore likely to develop corporate HR strategies that are applied across the organisation. Secondly. The impact of structures based around centralised controls and bureaucratic procedures may thus act to impair HR strategies aimed at promoting or improving employees' performance. It is therefore associated with the notion of 'one best way'. It highlights the need to analyse the internal fit between the various elements of an organisation's structure to produce a higher level of effectiveness and performance. Answers to Case study questions Answers for the Daimler–Chrysler (DC) case study have been presented in the form of a PowerPoint presentation that can be used to respond to class discussion and analysis of the case study.4 Using the ideas discussed above. especially in the context of recent developments to differentiate more strongly between core and peripheral groups of workers. This is likely to indicate a failure by those responsible to appreciate the lack of congruence between the impact of this type of structure and the aims of such HR strategies. Strategic Human Resource Management: Contemporary Issues. following Clegg and Hardy (1996). For certain groups of employees. the actual incidence of organisations using more radical types of structure is still very much in the minority. Those outside particular groups may be excluded from the intentions of these HR strategies. incrementally progressive rewards and security of employment..Millmore et al. a centralised and bureaucratic organisational structure is likely to have an adverse impact on the intended outcomes of certain HR strategies in an organisation. authority and centralisation. These characteristics are associated with a psychological contract that exchanges security and gradual progression in the organisation for loyalty and commitment. hierarchy. or movement away from. collaboration. However. 42 © Pearson Education Limited 2007 . the effects of such corporate HR strategies may be questioned in practice. involvement and commitment. The later forms described in the section entitled ‘Principal forms of organisational structure and their effects on those who work within them’ progressively describe attempts to construct structures that are intended to produce these outcomes. Concepts Box 5. The bureaucratic approach also points to the creation of centralised rules that are likely to include those related to HR. The consistency approach allows for structural variation based on a broader range of aspects. the need for participative and entrepreneurial behaviours. as the opposite to. division of labour. Bureaucracy is associated with systems of rules and rule-following. Of course. How do you think a more centralised and bureaucratic form of organisational structure will affect the development of human resource strategies? Large organisations based on these principles were associated traditionally with the existence of an internal labour market.

Question 1 New HR Strategy Downsizing and “Decruitment” Options • • • • • • • • sharing Firing and/or layoffs Voluntary Severance Incentive Program Recruitment stop Transfers Reduced workweeks Early Retirements Job Regular Unpaid Sabbatical Common Mistakes in Restructuring & Creating New HR Strategies • Not involving management and employees • Avoiding employee input when times get tough • Faulty belief that downsizing employees will boost financial performance • Breaking the psychological contract that reflects the common interests of employers and employees • Failure to treat employees fairly and with dignity 43 © Pearson Education Limited 2007 . also describe some strategic elements of the organisational structure.Millmore et al.. Strategic Human Resource Management: Contemporary Issues. Germany) you are required to develop a ‘suitable HR strategy' and to propose solutions to the problems raised by the actual situation of DC and the intentions of the CEO described above. State your understanding of the situation at DC and determine the needs of DC (problems within DC and reasons for the new organisational structure). Instructor’s Manual 1 As the HR-Director of DC (Stuttgart.

This may also be a reflection of a generally rather poor (strategic) HR management of DC’s head office. Strategic Human Resource Management: Contemporary Issues. There were incredible problems integrating Chrysler in the DC group. which HR areas or HR challenges are concerned? Please name some of these challenges. It took years to fix many post-merger problems. Instructor’s Manual Organizational Structures to Support HR Strategies in the 21st century Cultural Change Complexity Knowledge Transportation tech Communication tech Technology Diversity Flexibility Flatter Smaller Quicker networked Pace of Innovation Demographic Change Globalization Hyper Competition 2 Whereas German companies like Deutsche Bank AG.. You are therefore also asked you to answer the following questions: • • In light of the intentions in the announcement of DC (text above). There are many other examples of a poor international HR policy of DC.Millmore et al. Then establish a plan of action by formulating and justifying possible solutions to the challenges you have identified. Lufthansa AG or Allianz AG are seen by specialists and scholars as ‘truly’ global companies with excellent strategic HRM policies Daimlers Chrysler lacks such a reputation. 44 © Pearson Education Limited 2007 .

Prod. empowerment.Prod. cost savings fewer layers of management • Creating a more “horizontal” company ( defining the firm’s core processes) • More networking in a matrix • Reassigning support staff from headquarters to divisional offices and workplaces • Empowerment of employees Improving organisational effectiveness at DC: Key HR Challenges Fundamental Challenge Organizational Designs (1) Functional Organization CEO Product Organization CEO VP Production Product ion Man.. Product A VP Product B Production Man. Strategic Human Resource Management: Contemporary Issues. Prod. Instructor’s Manual Question 2 Improving organizational effectiveness at DC: Key HR Challenges • Centralization of strategic functions • Concentration of operational functions which are demanded by different companies of DC-Group (realization of synergies) • Decentralization of all other operational functions which are specific for each business units • Tendency toward a “matrix structure” • Flatter organizations: Quicker communication. A Production Man. B VP Marketing ProductManager A ProductManager B VP HRM VP Product A Production Man. Prod. A Product Manager A HRM Man.Millmore et al. B Product Manager B HRM Man. Product B 45 © Pearson Education Limited 2007 .

. Chrysler Human Resources Human Resources Mercedes IT and Organisation Mercedes IT and Organisation R&D R&D Mercedes Production 46 © Pearson Education Limited 2007 .Millmore et al. Mercedes Fin. Instructor’s Manual Fundamental Challenge Organizational Designs (2) CEO Matrix Organization Functional Managers Production Marketing HRM Manager Product A Manager Product B 3 What type of organisational structure should be created and implemented to support the new HR strategy? Question 3 Possible (Matrix-) Structure of DC Group HO Board Mercedes Board Chrysler Board Finances Fin. Strategic Human Resource Management: Contemporary Issues.

Strategic Human Resource Management: Contemporary Issues. training.) Stimulating and Nurturing Innovation and an innovative culture Employee (Enabling. involvement. confidence. Organizational development Effective organisation (Business Success. motivation.Millmore et al. Instructor’s Manual 4 What are possible advantages (and disadvantages) of creating a new organisational structure? Question 4 Global Product Division Advantages of new structure • Clear responsibility for a Product or a Division • Control within Division product-based structure • Decision making within Products Areas • Responsibility for Strategy and Top Management (for all Divisions) • Additionally responsible for Strategy (Group and all Top-Strategies of Divisions) Headoffice Strategy Strategy Product ProductA A Europe Europe CEO CEO Mercedes Mercedes Car CarGroup Group Product ProductB B Americas Americas Top Top Management Management Product ProductC C Asia Asia Human Human Resources Resources Marketing Marketing How to provide a DC-culture of empowerment..) Involve Unions as partners A “new” leadership style with Mercedes 47 © Pearson Education Limited 2007 . participation and innovation? Explain business plans and strategy Explain the necessary change of employees’ role and responsibilities. improved productivity and quality...

g. Develop and manage Common international Culture vs. admin services. compensation. training. matrix) 6. the company will have to recruit new international managers. national or corporate Culture 2. International Communication and network (projects. systems. Assignment and Performance Management 3. Instructor’s Manual 5 In developing and implementing the new structures. • Monitor progress and adjust the vision as required DC’s SHRM Approach in a truly global Company 1. • Create a guiding coalition. Train Employees and Managers. processes. competency management) 5. Strategic Human Resource Management: Contemporary Issues. Manage cultural diversity and draw benefits out of it 48 © Pearson Education Limited 2007 . Staffing. give incentives • anchor the new ways of doing things in the company’s culture.. e. and information flow) • Show short-term wins. IHRM is “state of the art” (instruments. How could the company really select and develop a group of experienced international managers? What instruments would you use? Question 5 Recruiting New International Managers Managing the Change Process • Establish a sense of urgency • Mobilize commitment to change through communication and involvement • Access to information on business plans and operational performance. cross-cultural teams. International Recruitment.Millmore et al. conferences. cross-cultural training. build up international “people pool” without regard to nationality 4. involve unions and workers representatives as partners at every stage • Develop a shared vision and communicate the vision • Enable employees to make the change (team structure and development.

values and behaviours that belong to and have been learned by a group and. Summary • An understanding of culture and the interactions between different spheres of culture such as national and organisational. analyse the linkages between organisational and other cultural spheres and SHRM interventions. because they are considered to be valid. Culture is one of a range of factors that can influence an organisation's competitiveness. discuss the importance of organisational and national cultures in managing SHRM interventions. This is known as the convergence/ divergence debate. explore the three main perspectives through which culture has been explored within organisations: integration. assess the complexity of issues associated with aligning culture to an organisation’s strategic direction. think and feel. These are taught to new members of the group as the correct way to perceive. SHRM interventions can influence the culture within an organisation. There is long-standing debate as to whether the impact of national cultural differences is declining or increasing. At the same time. can assist in the selection and application of effective HRM interventions and the hierarchies in which they are placed.CHAPTER 6 Relationships between culture and strategic human resource management: do values have consequences? Learning outcomes By the end of this chapter you should be able to: • • • • • explain the meanings of national and organisational cultures and the debates relating to their existence. differentiation and fragmentation. have been internalised and are taken for granted. Researchers have developed dimensions upon which national cultures can be placed. These emphasise the importance of power and the way it is exercised. such • • • • 49 © Pearson Education Limited 2007 . alongside other factors. beliefs. Culture consists of shared attitudes.

Instructor’s Manual as tolerance of uncertainty. we start by considering different meanings of culture and exploring different typologies of national cultures. We have also found that most students are also familiar with Johnson and Scholes’ cultural web. the basic underlying assumptions upon which these practices or artefacts are based need to be changed. These are often divided into top-down (programmatic) and bottom-up (critical path) approaches. SHRM interventions are largely concerned with structural means of influencing and supporting these visible manifestations. as well as impacting upon human resource (HR) policies and practices. 1994: 405). while a large number of views and prescriptions for realigning or changing an organisation’s culture abound. the relative focus on individuals and the way in which conflicts are resolved. the fact that typologies are inevitably generalisations of the national and workplace reality.Millmore et al. is something that can. and in particular that it is ‘something an organisation has’ (Legge. • Nations’ scores against dimensions of national cultures can be thought of as stereotypes representing the mean around which scores for individual members of that country are dispersed. • • • Teaching and learning suggestions Comment Most students will come to this topic having already experienced it in other modules. One advantage is that students are likely to be familiar with both Handy’s four fold typology of organisational cultures and may well have also be aware of Hofstede’s dimensions of national cultures. often from business strategy modules. As these are deeply and strongly held within each employee’s subconscious they are difficult to change. This presents advantages and disadvantages. we adopt a structure of general to specific. to a lesser extent. There is likely to be less variation within countries than between countries. Strategic Human Resource Management: Contemporary Issues. Within organisations culture is most visible in practices or artefacts and. Within this analysis we feel it is worth emphasising. This implies that an organisation’s culture. Within this chapter. In our consideration we adopt the standpoint that an organisation’s culture is an objective entity. orientation to time. at least theoretically. To this end we offer an analysis of a variety of ways in which this might be achieved and the contribution SHRM might make. Not surprisingly we consider the implications of different cultures for different SHRM interventions. For this reason. be manipulated and managed to achieve alignment with an organisation’s strategic direction. especially over the short term. Consequently. we try to make the links between theory and practice in the self-check and reflect 50 © Pearson Education Limited 2007 . A particular difficulty facing the teaching of culture in relation to SHRM is therefore. Building upon this we then examine frameworks for understanding organisational cultures and typologies of organisational. espoused values. in reality the process is long term and complex needing careful study prior to attempting any strategy of change. Re-aligning an organisation’s culture is a complex process utilising a range of strategies. However. To re-align an organisation’s culture. especially to students with limited workplace experience that. this may well be offset by their limited understanding and acceptance of either typology uncritically..

we believe it is essential that students read and make notes from the chapter. Is it better to adopt a top-down or a bottom-up approach to organisational change? In the classroom Clearly the approach adopted to ‘student preparation’ can be followed through into the classroom. We use a variety of vehicles to bridge student preparation and class-based activities to enhance their understanding of the chapter content and its overall relationship to managing HR strategically. reinforces the value of reading as an essential prerequisite for class-based discussion and provides a platform from which further class-based activities can be launched. This avoids providing lecture input that simply repeats what students have already grasped. we would ask students to make a note of any queries arising from their reading and to come to the teaching session prepared to raise them. 51 © Pearson Education Limited 2007 . Strategic Human Resource Management: Contemporary Issues. we find it useful. Based upon your reading do you consider culture is something an organisation is or one of a series of organisational attributes? 2. We have found that producing mind maps of the chapter content is a useful approach to note taking and encourages students to reflect on the internal integration of the subject content of the chapter. However. Our outline answers to both self-check and reflect questions and case study questions follow in the next two substantive sections of this chapter guide.Millmore et al. when adopting this approach. complete the self-check and reflect questions and come to the session prepared to share and discuss their responses. preparatory activities and classroom discussion for the topic of culture and SHRM include: 1. Sometimes this may be formalised by asking students to write down (as questions) the three issues addressed by the chapter where they would like further clarification and guidance. Instructor’s Manual questions and the boxed examples. Why do you think it is often stated that it is difficult to change an organisation’s culture? 4. to provide a brief summary of key issues. As standard. A starting point that we find useful is to surface and discuss the issues arising from students’ preparatory reading. What are the main similarities and differences between different typologies of national cultures? 3.. Students may also be asked to do one or more of the following: • • • address pre-set questions and write their answers briefly in note format. once student queries have been exhausted. These allow the students to explore how the material they are studying applies to the world of work. Student preparation Prior to the class. Pre-set questions that we have found useful for structuring student reading. and familiarise themselves with the chapter case study (or an alternative case supplied in advance) and come to the session prepared to tackle the case questions.

students can be asked to contribute individual responses that are then subjected to plenary discussion. there is unlikely to be time for groups to consider all four questions.Millmore et al. which themselves can be usefully critiqued. This is our preferred approach because it makes students more accountable for their personal learning and reserves any group work for case study analysis. there is scope for further detailed development of our answers and examples are provided as to how this might be put into operation. If coming to the case afresh. espoused values and basic underlying assumptions mutually reinforce each other. Follow-up work The pedagogic features adopted throughout this book are intended to offer a number of alternatives for follow-up work while at the same time leaving the lecturer free to add or substitute their own ideas. they can be introduced into discussion of the case study and their validity critiqued. students can be formed into groups to share their individual answers and draw conclusions from their discussions. However. If they have not already been used as part of class activities. First. Our outline answers to both self-check and reflect questions and case study questions follow in the next two substantive sections of this chapter guide. similar approaches to those suggested for self-check and reflect questions can be adopted. Strategic Human Resource Management: Contemporary Issues. There are also a number of follow-up study suggestions after the chapter summary that can be undertaken by students either individually or in groups and an extensive list of references provides many opportunities for directed further reading. Our answers to the three questions arguably present a degree of comprehensiveness and detail unlikely to be echoed within the parameters of a standard teaching session. Where case study work has featured as part of preparatory activities. 52 © Pearson Education Limited 2007 . A further task for part-time students could involve them exploring their own organisation’s culture with a view to analysing the extent to which the symbols/artefacts. Second. In addition. Here we would suggest that groups major on one of the case questions only moving on to others if they have time. preparing answers to self-check and reflect questions was not part of preparatory work but consideration of the questions is to feature as part of the teaching session. Instructor’s Manual Where preparing answers to self-check and reflect questions has been set as part of preparation for the teaching session. any prior preparation answers to the self-check and reflect questions and/or the questions suggested for student preparation and/or the chapter case ‘Corporate culture and group values at DICOM Group plc’ will serve as a useful reinforcement to chapter content. we would favour the group approach as a more stimulating approach. In all cases student responses can be considered against our suggested answers. However.. at least two alternatives present themselves.

Instructor’s Manual Answers to Self-Check and Reflect Questions 6. Strategic Human Resource Management: Contemporary Issues. To what extent do your suggestions differ? Inevitably your precise answer will depend upon the two contrasting countries you have chosen. 53 © Pearson Education Limited 2007 .Millmore et al. UK employees are likely to have a lower level of uncertainty avoidance.2 Examine Tables 6. This means there are less likely to be differences in their views in this area. As you will see.1 and 6. both having scored towards the masculine on Hofstede’s masculinity/femininity dimension.2 and select two countries with contrasting profiles. strategies and practices becoming more similar between countries multinational organisations have no national allegiances. In our answer we have chosen the United Kingdom and Japan. Both UK and Japanese employees are likely to place emphasis on performance at work.1 Produce a table summarising the arguments for convergence and for divergence of national cultures using the following structure: Arguments for convergence • • • • advances in telecommunications mean the world is becoming smaller people are increasingly buying global brands there is a rapid increase in the use of technology growing numbers of multinational firms will result in structures. According to Hofstede.. UK employees will also be less likely to be happy with large pay and reward differentials than Japanese employees. although the dimensions differ. However. This suggests that the UK employees are more likely to prefer bonuses such as individual performance related pay while those in Japan may prefer team-based performance related pay or company wide bonuses. only an international common purpose many managers are trained in western business schools which tend to underpinned by similar ideologies Arguments for divergence • • • • • language differences encourage divergence different religious beliefs mean things are done differently political systems and laws differ between countries countries differ in their level of economic development within countries workforces are increasingly culturally diverse • • 6. Hofstede: The United Kingdom scores lower on the power distance dimension than Japan. Hofstede’s work highlights that UK and Japanese employees differ markedly on uncertainty avoidance. Now repeat this process using Trompenaars and Hampden-Turner’s dimensions. Use Hofstede’s dimensions to suggest how SHRM interventions to motivate and appraise employees might differ between these countries. this suggests that UK employees will be less likely than Japanese employees to accept uneven distributions of power within the workplace and will expect more consultative decision-making. the suggestions based upon these dimensions are similar. Hofstede’s research suggests that UK employees are likely to be more individualistic than Japanese employees.

UK employees are likely to be more universalist than those in Japan. Trompenaars’ and Hampden-Turner’s dimension achievement versus ascription suggest that UK employees are more likely to expect rewards such as promotion for their own achievements. Instructor’s Manual implying that they are less likely to be motivated by long-term job security. perhaps. The specific versus diffuse and the attitudes to the environment dimensions also support this assertion. Some of those that are readily apparent are the stories relating to the founding and early years of HP.. although they are articulated in individuals’ practices and. Japanese employees are more likely to consider the wider external context within which their performance has occurred. which would be developed for Japanese employees. deeper underlying meanings upon which these are based are more difficult to decipher. the organisation’s espoused values. 6. This suggests that schemes to motivate UK employees are more likely to need to be clearly delineated with well defined criteria than those in Japanese organisations. emphasising the interdependency of their own performance with that of others. Not surprisingly therefore it would seem likely that UK employees are more likely to prefer bonuses such as individual performance related pay while those in Japan may prefer team-based performance related pay or company wide bonuses. The latter suggests that. Japanese employees focus’ on ascription suggests that seniority and promotion linked to age or time served in the organisation are more likely to be acceptable. Trompenaars and Hampden-Turner According to Trompenaars and Hampden-Turner. 54 © Pearson Education Limited 2007 . In contrast.com.Millmore et al. The former suggests that Japanese employees are more likely to consider issues such as performance holistically. in contrast to UK employees. What clues do these give you about the culture of HP? Which culture do you consider was dominant in the merger between HP and Compaq? As you browse through these pages you will find lots of clues to HP’s corporate culture. UK employees being more likely to consider motivation as a linear sequence where specific performances result in specific rewards. 6. This may be reflected in the focus on longer-term targets rather than quick results more normally expected in UK organisations. In particular. Consequently. Trompenaars and Hampden-Turner’s individualism versus communitarianism dimension is almost identical to Hofstede’s individualist/collectivist dimension.4 Visit HP’s corporate website at http://www. the underlying values upon which an organisation’s culture are based are held deep within individual employees’ subconscious. Finally. Strategic Human Resource Management: Contemporary Issues. Use the menus to go to the pages headed ‘Company information: About us – History and Facts’. they occur almost automatically and are taken for granted.3 Why do you think it is difficult for managers to describe their organisation’s culture in detail? Although outward manifestations of culture are easy to discern (relatively visible). Hofstede’s work highlights that Japanese employees are likely to have a longer-term view than their UK employees. Differences in attitudes to time also support this suggestion. As discussed in this chapter.hp. This means that the reward package developed is likely to differ from that. This means they are likely to be thought about only rarely. Relative scores on the neutral versus emotional dimension suggest that communicating personal feelings when motivating employees is more likely to be acceptable in the United Kingdom than in Japan.

6). 55 © Pearson Education Limited 2007 . The provision of medical insurance for employees. The purpose. The institution of flexible working hours. performance measurement and reward schemes can be used to monitor and reinforce desirable behaviours in employees such as openness. 6. For example. HR systems can be designed and implemented to support the desired culture. Training interventions can also be used to help educate employees about the reasons for the re-alignment and the new desired behaviours.Millmore et al. and the holding regular parties to show that the company cares for its employees. Symbols of cultural re-alignment such as the management structure. an electronic instrument used to test sound equipment. or flex-time. retention and redundancy can be used to help ensure that employees’ skills and preferred approaches to working match an organisation’s requirements. This combined with the company retaining the HP name may be taken to suggest that the HP culture was dominant in the merger (see also Practice Box 6. they built the company's first product. there is relatively less information provided than for HP’s development as outlined above. good listening skills and the recognition that everyone in an organisation wants to do a good job. The use of charitable giving and other activities to show the company’s belief that it has a responsibility to be a good corporate citizen. Instructor’s Manual Others relate to the management style adopted and the SHR interventions made by the company. The use of reward schemes to reflect the company’s belief that all employees should share directly in the company’s success. Similarly recruitment. Strategic Human Resource Management: Contemporary Issues. and that they project values appropriate to both the strategy and the culture. as explained by Bill Hewlett was ‘to allow employees to gain for family leisure. The design and location of buildings reflect the company philosophy that people require attractive and pleasant surroundings to attain maximum job satisfaction and to perform to the best of their abilities. They include: • The story that when Bill Hewlett and Dave Packard founded HP in 1939. using first names to address them. It is important that such interventions are aligned to the desired culture. conduct personal business. This policy encourages employees to discuss problems with a manager without reprisals or adverse consequences. avoid traffic jams or to satisfy other individual needs’. The use of an open door policy to create an atmosphere of trust and mutual understanding.’ • • • • • • • Although the website talks about the historical development of Compaq – the company with whom HP merged in 2002.. learning and risk taking. and therefore the overall strategy of the organisation. in a Palo Alto garage. The HP management style of management by walking about was created by the founders and emphasises personal involvement.5 How might an organisation use SHRM interventions to support a culture re-alignment process? SHR interventions are likely to be used to support and facilitate cultural re-alignment rather than initiate it. office space and car parking allocations can be used to reinforce the new culture.

it is important that the HR interventions used provide consistent clues to the desired culture.4 highlights those of Bate’s (1995) design parameters of culture re-alignment for which a top-down approach is more effective. In particular. This is especially where all that is required are changes at the practice/artefact level or rapid change is required. Open University CMS and a number of technical staff are undergoing Microsoft Certification training. At present within the UK office. However. All levels of staff are encouraged to take advantage of both in-company and external training programmes. DICOM have recently introduced a new initiative. staff are attending courses as divers. Top-down approaches may also be effective where it is essential that the new culture’s message is spread throughout all levels of an organisation such as the merger between HP and Compaq. albeit within the confines of company procedures and policies (paradoxical as it might sound). The ability of the message to penetrate in such cases depends on the communication process being highly structured. Inevitably the visual cultural webs that are constructed by the students will differ. The unofficial (although heavily endorsed by senior management) aim is ‘To make money and have fun doing it’. Re-examining Table 6. Strategic Human Resource Management: Contemporary Issues.6 Why might organisations choose a top-down approach to cultural re-alignment? Top-down approaches may be appropriate in particular circumstances or at particular times during a culture change process. As senior management would put it. ‘The DICOM Academy’. Consequently. If there is a business advantage in the training. 56 © Pearson Education Limited 2007 . Training is a very important part of DICOM’s culture. ‘We like to steer with very long reins’. Johnson and Scholes (1993:60) continue that at their best such routines ‘lubricate’ the workings of the organisation. DICOM is promoted to its staff as the ‘DICOM Family’. such as training programmes. each sphere is likely to contain at least some of the following elements drawn from the case: Routine: this is the way that different members of the organisation link behave towards each other and link together or ‘the way we do things around here’. Instructor’s Manual Whether top-down or bottom-up strategies are adopted. although initially only amongst a sub group of employees rather than the whole organisation. Rituals: these are performances that re-enforce the routines above. it must be remembered that in the short-term. assessment and promotions.Millmore et al. where expressiveness is essential to culture re-alignment or to a particular stage of the culture re-alignment process then a top-down approach may be most appropriate. Answers to Case study questions 1. However. management and staff operate together with the minimum of supervision necessary and allow staff great freedoms to do their jobs in their own way. as CIPD diploma. Thus. then DICOM will finance it and allow the individual the time to complete it. the table emphasises the ability of top-down approaches to communicate simple messages quickly. These have included Leadership and Marketing. bottom-up approaches are more likely to generate a shared understanding and ownership of the new culture. In contrast. construct a cultural web for DICOM group. As part of the programme all DICOM management (and those identified as management for the future) are being offered a series of one-week courses at various venues around the world. 6. taught by Harvard Business School professors alongside DICOM board members.. such an approach is likely to generate some resistance to the new culture’s values and basic underlying assumptions. Drawing on the information given in this case.

In the main. hires of disabled staff and donations to charity. Where this is not possible. DICOM's board of directors asked all subsidiaries to complete an annual report on promotions. The case highlights the story regarding the company’s tenth anniversary celebrations. logos. Instructor’s Manual Performance appraisal is carried out annually. all the stories emphasise the humanity and caring nature of the Swiss based board of directors and how this permeates the entire company. including the interview and selection process. ‘How do you rate your punctuality on a scale of one to ten’? If the member of staff has very different ideas of the rating to his/her manager. ‘Dear Friends’. Stories: these are told by members of the organisation to each other. keeping them informed of company news and performance. Symbols: these include things such as offices. This would make some conversations within the organisation fairly unintelligible to outsiders. They are used to illustrate the company's values to visitors. new recruits and mavericks. and are asked things such as. Wherever possible. Control systems: these are measurement and reward policies that emphasise what is important to the organisation. with three monthly reviews in some areas. The onus is very much on the staff to review their own performance. we have set the standard to our competitors.Millmore et al. titles and terminology. staff are given as much responsibility as they can handle as quickly as possible in both their own development and their working lives. Announcements regarding company performance and other news are communicated regularly to the whole company through email from the CEO. cars. Strategic Human Resource Management: Contemporary Issues. Wherever possible. and focus attention on it accordingly. Subsidiaries are also expected to produce a bimonthly newsletter for local staff. although completely sensible to those within. They fill in their own appraisal schedule with their line manager. which was hired exclusively for the company for the whole weekend. This helps reinforce the feeling of camaraderie. they are involved in the writing of the job specification and the recruitment process. 57 © Pearson Education Limited 2007 . and membership. Virtually all employees work in an open plan offices and symbols of rank and seniority are discouraged. then a discussion is held and a compromise reached. Everyone has the right to have their say and be involved in decision-making. Language is very important within DICOM with unique ‘organisational’ meanings being given to some everyday words. Their aim is to create awareness of organisational history. which themselves can become representative of the nature of the organisation. internal staff are promoted into managerial positions as they arise. For example: DICOM word 'Standards!' We don't wear stripes Meaning Well done! Congratulations! For example. He always begins the email. outsiders. personalities and important events.. Stories form a very important part of the way DICOM portrays itself. All the 800 company staff from around the world and their partners were invited to Switzerland for all expenses paid weekend of celebrations at the Lucerne opera house. new hires and people who come for job interviews. as well as giving them to opportunity to include their own personal and departmental news. and always makes a point of finishing off by thanking everyone for their hard work and commitment. This is done with the aim of promoting ‘ethical awareness’ amongst DICOM's management. Legend has it that the company chairman paid for this out of his own pocket.

All are encouraged to make suggestions to improve workgroup performance against certain measurable criteria. If anyone said ‘These people work for me’ or ‘these are my staff’ people would become quite annoyed and expect a later apology. As noted within the case. Workgroups normally meet on a monthly basis to discuss problems and progress. there is the Managing Director. We have found that in answering the question. ‘standards’ Language is very important within DICOM with unique ‘organisational’ meanings being given to some everyday words. the role of senior management in the group’s tenth anniversary celebrations emphasises how management are associated with core assumptions and beliefs that are important to the organisation. although employees do have ‘rank’ the display of ‘stripes’ is not encouraged. We are a premier business partner of the world's leading system integrators. The vision and mission are both set out clearly at the beginning of the case. students benefit most from seeing how each sphere in their cultural web enables each of six bullet points that make up the mission are addressed using a simple table. a number of awards and prizes are given out to individuals and workgroups who have been voted as exceptional by their colleagues. For example: Mission statement Cultural web sphere Limited evidence Symbols Language is very important within DICOM with unique ‘organisational’ meanings being given to some everyday words. Having constructed their cultural webs. Senior Managers. Senior management is most likely to be associated with the core assumptions and beliefs as to what is important to the organisation. These then enable DICOM to work towards its vision. For example.. Strategic Human Resource Management: Contemporary Issues. 2. relationships and again what is important to the organisation. Within the United Kingdom. Where performance of an individual is exceptional. For example. ‘standards’ Evidence We care for our customers better than anyone else in our industry. software developers. When visitors are shown around the company. Instructor’s Manual Measurement is a continual process. This might be the granting of extra holiday. Students are likely to find this sphere more difficult to discern from the case.Millmore et al. Assess the extent to which DICOM Group’s culture is aligned to its vision and mission. even if official performance reviews are not. managers have discretion to reward them in a way most valuable to the individual. However. DICOM has a very flat organisational structure. students are likely to find this and subsequent questions far easier to answer. Every year at the Christmas celebration. IT resellers and OEMs We only compete with superior products and services in fast growing information technology sectors in which we can achieve and maintain a dominant market share Symbols 58 © Pearson Education Limited 2007 . and is likely to demonstrate power structures. Power structures: these are associated with the key constructs of the paradigm. Organisational structure: this is the more formal way in which the organisation functions. a meal for them and their partner or a public display of gratitude at an award ceremony. Junior/Workgroup Managers and staff. managers introduce their staff saying ‘These are my colleagues’.

We constantly aim to achieve attractive returns for our shareholders. Individualism/collectivism refers to the extent to which individuals are orientated to themselves and their immediate family. To us respect.2) for Switzerland? Give reasons for your answer. DICOM is promoted to its staff as the ‘DICOM Family’. reflected in a co-operative relationship with the society and the environment in which we operate. All levels of staff are encouraged to take advantage of both in-company and external training programmes including the DICOM Academy. Control systems Workgroups normally meet on a monthly basis to discuss problems and progress. rather than wider strong cohesive in-groups that offer protection in exchange for unquestioning loyalty. Rituals Training is a very important part of DICOM’s culture. To what extent do you consider that DICOM Group’s culture exhibits characteristics identified by Hofstede (Table 6. Strategic Human Resource Management: Contemporary Issues.1) and by Trompenaars and Hampden-Turner (Table 6. As noted within the case. 59 © Pearson Education Limited 2007 .Millmore et al. Junior/Workgroup Managers. Masculinity/femininity refers to the extent to which assertiveness and decisiveness are prioritised over more caring values such as nurturing and concern for quality of life. Within DICOM inequalities between people appear to be minimised and consultative decision appears more likely to be used. At the same time. although employees do have ‘rank’ the display of ‘stripes’ is not encouraged. DICOM has a very flat organisational structure. there are the Managing Director. Instructor’s Manual We hire the highest calibre employees available and continually invest in their development. The unofficial (although heavily endorsed by senior management) aim is ‘To make money and have fun doing it’. integrity and loyalty constitute very important values. Within the United Kingdom. All are encouraged to make suggestions to improve workgroup performance against certain measurable criteria. and staff. Routine Stories Power structure 3. the resolving of differences by discussion emphasises the feminine aspects of this dimension. Within DICOM importance is placed upon competition and high performance emphasising the ‘masculine’ aspects of this dimension. with three monthly reviews in some areas. Senior Managers. Performance appraisal is carried out annually. The onus is very much on the staff to review their own performance. This suggests the organisation is more collectivist.. DICOM providing training and good physical conditions. The humanity and caring nature of the Swiss based board of directors and how this permeates the entire company. In DICOM contracts of employment appear to be based on mutual advantage. Hofstede Power distance relates to the extent to which less powerful employees accept that power is distributed unequally.

present and future) or circular and synchronic (seasons and rhythms). Neutral versus emotional highlights the extent to which it is acceptable to express emotions publicly and communicate the full extent of personal feelings. for example analysing issues by reducing them to specific facts. by establishing rapport between individuals. tasks. Within DICOM.Millmore et al. However. Strategic Human Resource Management: Contemporary Issues. Relationships with people are important within DICOM. Within DICOM employees appear to regard themselves as part of a group and consequently more communitarian than individualistic.. Individualism versus communitarianism emphasises that societies can be individualistic or collectivist. It is less clear from the case where DICOM is placed upon this dimension. From the information within the case. Trompenaars and Hampden-Turner Relationships with people Universalism versus particularism. understandings and contexts. it appears possible to discuss performance issues and communicate personal feelings. it is uncertain where DICOM would be placed on this dimension. Confucian dynamism captures the long. the emphasis on results and high performance suggests a more short-term orientation. Instructor’s Manual Uncertainty avoidance relates to the extent to which people feel threatened by ambiguous or unknown situations. Specific versus diffuse is concerned with the relative importance ascribed by different cultures to focusing on the specific. numbers or bullet points. Rather they are expected to be made logically. personal relationships are not anticipated to impact upon business decisions.or short-term orientation. Although DICOM places emphasis on the importance of social obligations. 60 © Pearson Education Limited 2007 . impartially and professionally suggesting a more universalist focus. little information on which is provided in the case. Attitudes to time This focuses particularly on whether time is viewed as linear and sequential (past. This is contrasted with a focus upon analysing issues by integrating and configuring them into relationships. Achievement versus ascription This focuses upon the way in which status is accorded. These differences are likely to impact on how planning and organising takes place. DICOM places relatively high values on achievement rather than status.

CHAPTER 7 Strategic human resource planning: the weakest link? Learning outcomes By the end of this chapter you should be able to: • • • • • identify and discuss the core principles that underpin the concept of strategic human resource planning. It involves forecasting the future demand for and supply of labour and drawing up HR plans to reconcile mismatches between the two. analyse the conceptual and operational difficulties surrounding the practise of strategic human resource planning. assess the relevance of strategic human resource planning to organisations facing an increasingly changing business environment. operational matters. may conspire to reduce the effectiveness of HRP practice or may limit its application to short-term. When viewed as the vital link between organisation and HR strategies HRP can be regarded as a bridging mechanism fulfilling three vital roles: aligning HR plans to organisational strategies to further their achievement. These difficulties may be sufficient to lead organisations to abandon any thoughts of practising HRP. and acting in a reciprocal relationship with organisational strategies such that HR issues become a central input into the strategy formation process. critically evaluate the extent to which strategic human resource planning represents the vital connecting link between organisational strategy and SHRM practice. Patchy and limited data on HRP practice points to its low level of take-up by organisations leading to an alternative perspective of HRP as the missing or weakest link between • • • 61 © Pearson Education Limited 2007 . Summary • HRP is the name given to formal processes designed to ensure that an organisation’s human resources capability can support the achievement of its strategic objectives. uncovering HR issues that can threaten the viability of organisational strategies and thereby lead to their reformulation. Numerous difficulties surrounding the practise of HRP may thwart its potential to serve as the link between organisational strategy and SHRM practice. review potential avenues for addressing the difficulties associated with human resource planning to enhance its operational viability.

for example. Instructor’s Manual organisational and HR strategies. building towards a flexible workforce that can manage the vagaries arising from unplanned developments and an uncertain future. Drawing on the seminal work of Schuler and Jackson (1987). Here the argument is that to identify and develop HR practices relevant to different organisational strategies requires a deliberate planning intervention. particularly in the United Kingdom. we believe it is essential that students read and make notes from the chapter. which makes the case for human resource planning (HRP) to be regarded as the prime vehicle for translating the strategic imperatives of organisations into meaningful human resourcing strategies. Increasingly mainstream HR texts do not include a chapter on human resource planning and where they do its strategic role receives only passing attention. Strategic Human Resource Management: Contemporary Issues. This leads to a paradox where the more the complexities of organisational life warrant the establishment of HRP as the vital link the more these complexities are likely to cause HRP to be cast aside to become the missing/weakest link. it is also important to emphasise that this one-way. It is also important to emphasise to students that there is a potential conflict between the whole notion of planning and the environmental uncertainties surrounding many organisations. policies. One reason for this is the conflation of HRP and HRM such that both may come to be regarded as synonymous. top-down strategic relationship between corporate and HRM strategies is only one of a number of different types of strategic fit such that at the other extreme. • Avenues for confronting operational difficulties and forging HRP as the pivotal bridging mechanism between organisational strategy and SHRM practice focused on: raising the profile of HR issues generally and the status and credibility of HR practitioners particularly. procedures and operational activities. HRP is the bridge that links their competitive strategies with HRM practices. HRP when used to identify and generate core competences can become a vehicle for shaping organisational strategy itself. HRP. Therefore to be useful HRP processes have to be shaped so that they can accommodate planned and unplanned change over different time horizons. We have found that producing mind maps of the chapter content is a useful approach to note taking and encourages students to reflect on the internal integration of the subject content of the chapter. Teaching and learning suggestions Comment An immediate problem facing the delivery of this topic is the overall lack of attention it receives in the human resource management (HRM) literature.Millmore et al. Planning suggests a degree of certainty that is largely unrealistic in today’s volatile business climate.. despite its potential bridging role between corporate strategies on the one hand and HRM strategies and operational activities on the other. that is. evaluation and adaptation and adopting a multi-stakeholder approach to make this a realistic possibility. However. for example. This is not the stance adopted in this chapter. using contingency and scenario planning to introduce flexibility into the HRP process. 62 © Pearson Education Limited 2007 . Student preparation Prior to the class. and developing an HRP process centred on continual review.

Pre-set questions that we have found useful for structuring student reading. if preparing answers to self check and reflect questions was not part of preparatory work but consideration of the questions is to feature as part of the teaching session. This is our preferred approach because it makes students more accountable for their personal learning and reserves any group work for case study analysis. we would favour the group approach as a more stimulating approach. As standard. However. What are the principal strategic relationships between HRP and corporate strategy and how could they be evidenced in practice? 3. How would you define HRP and set it into the SHRM context? 2. complete the self check and reflect questions and come to the session prepared to share and discuss their responses. This avoids providing lecture input that simply repeats what students have already grasped. students can be formed into groups to share their individual answers and draw conclusions from their discussions. What do you understand by the HRP paradox and how does this impact on the utility of the concept? 4. once student queries have been exhausted. and familiarise themselves with the chapter case study (or an alternative case supplied in advance) and come to the session prepared to tackle the case questions. at least two alternatives present themselves.Millmore et al. Instructor’s Manual We use a variety of vehicles to bridge student preparation and class-based activities to enhance their understanding of the chapter content and its overall relationship to managing human resources (HR) strategically. when adopting this approach. Strategic Human Resource Management: Contemporary Issues. reinforces the value of reading as an essential prerequisite for class-based discussion and provides a platform from which further class-based activities can be launched. In all cases student responses can be considered against our suggested answers. Sometimes this may be formalised by asking students to write down (as questions) the three issues addressed by the chapter where they would like further clarification and guidance. to provide a snappy summary of key issues. Students may also be asked to do one or more of the following: • • • address pre-set questions and write their answers briefly in note format. which themselves can be usefully critiqued. 63 © Pearson Education Limited 2007 . A starting point that we find useful is to surface and discuss the issues arising from students’ preparatory reading. However. students can be asked to contribute individual responses that are then subjected to plenary discussion. we would ask students to make a note of any queries arising from their reading and to come to the teaching session prepared to raise them. preparatory activities and classroom discussion for the topic of strategic HRP include: 1. Our outline answers to both self check and reflect questions and case study questions follow in the next two substantive sections of this chapter guide. we find it useful. How would you argue the case for and against the formal adoption of strategic HRP by organisations? In the classroom Clearly the approach adopted to ‘student preparation’ can be followed through into the classroom. Second. First. Where preparing answers to self check and reflect questions has been set as part of preparation for the teaching session..

Further the hard. However. quantitative manifestation of HRP arising from redundancy may simultaneously exhibit a soft edge. Instructor’s Manual Where case study work has featured as part of preparatory activities. Our outline answers to both self check and reflect questions and case study questions follow in the next two substantive sections of this chapter guide. A further task could require students to research reported case examples of mergers and acquisitions and analyse the extent to which HRP is evident during the planning. Strategic Human Resource Management: Contemporary Issues. Group outputs can then be used as the basis for a plenary consideration of Questions 1 and 2. The organisation may be trying to manage the cultural integration of surviving employees or setting aside the cultural inheritance to re-align the organisation culture. Follow-up work The pedagogic features adopted throughout this book are intended to offer up a number of alternatives for follow-up work while at the same time leaving the lecturer free to add or substitute their own ideas. Here hard HRP will often involve: restructuring work activities to remove unnecessary duplication. Like much else in the literature this is far too simplistic and ignores the potential for both to operate in tandem and for hard HRP to have a soft edge and vice versa. ‘Human resource planning in mergers and acquisitions’. forecasting staff numbers against this reduced requirement. including its 64 © Pearson Education Limited 2007 . For example. self check and reflect questions and/or the chapter case study. similar approaches to those suggested for self check and reflect questions can be adopted. implementation and consolidation stages and the likely consequences of their findings. Our approach here would be to start with a more general exploration of the HRP implications of mergers and acquisitions and use this to develop an evaluative framework against which practice in the three case companies can be analysed.. If they have not already been used as part of class activities. there is unlikely to be time for groups to consider all four questions.1 To what extent can the hard and soft variants of HRP be regarded as mutually exclusive? Too frequently hard and soft HRP are presented as either/or alternatives. Greater topicality can be achieved by capturing the big business news stories of the week. There are also a number of follow-up study suggestions after the chapter summary that can be undertaken by students either individually or in groups and an extensive list of references provides many opportunities for directed further reading. Although ‘hard’ this action may be vital if the planned synergies from merger/acquisition are to be realised. can be set as follow-up work and should serve as a useful reinforcement of chapter content. throughout the chapter mergers and acquisitions are used as a linking theme to illustrate facets of HRP practice. and making staff surplus to requirement redundant to bring labour supply into line with demand. The way the organisation manages the process.Millmore et al. at the same time soft HRP may be evident. Answers to Self-Check and Reflect Questions 7. Here we would suggest that groups be allocated one of the case companies (Deutsche Bank/Bankers Trust or British Petroleum/Amoco or Volvo/Ford) and asked to work through Questions 3 and 4 for their allocated company. discussing the HRP issues that are likely to arise and exploring how HRP might be used effectively to address these issues. If coming to the case afresh.

this is a restrictive interpretation because ‘right person’ could equally be said to refer to the soft. To get you started. The key lies in how ‘right’ is interpreted and similar analysis can be applied to ‘right place’ and ‘right time’.. a number of these attributes represent intangibles. Some are personal. Here ‘right’ could be expressed in terms of skills and competences. Phase III Shape Surfaces and recognises the potentially unique contribution an organisation’s human capital can make to long-term strategic direction. 65 © Pearson Education Limited 2007 . knowledge and attitudes mix to be analysed. You might find it helpful to structure your answer in tabular format. Here it is interpreted as referring to the number of employees with manpower planning being about ensuring that the supply of staff matches the demand for staff arising from the different tasks to be performed.2 To what extent can the view that HRP is all about ensuring that the right person is in the right place at the right time be interpreted as a soft. approach to HRP? In a similar vein to Question 1. commitment. 7. Strategic Human Resource Management: Contemporary Issues. values etc. Instructor’s Manual treatment of survivors. ‘control’ and ‘shape’ phases of Ulrich’s (1987) model of transitions in SHRP (see Table 7. cultural orientation. this simple view of HRP has been strongly associated with the ‘hard’ variant but arguably contains within it the potential for a ‘soft’ interpretation. Therefore. some contextual and some organisational such that any attempt to incorporate them within HRP will require an approach that reflects the longer-term orientation consistent with strategically focused HRP. motivation. Provides a formalised process for generating plans to tackle the HR issues arising from strategic planning. one example under each of the three phases identified by Ulrich has been provided below. However. it can be argued that a broader interpretation reflects more comprehensive definitions of HRP. qualitative dimension of HRP. Provides a formalised process that encourages organisations to take account of HR issues early on in strategy making thereby reducing the risk of implementation failures due to a lack of HR capability. However.4). employees unable to make the necessary adjustment may find themselves managed out of the organisation. is likely to directly affect the success of the redundancy programme itself and the future prospects of the emerging organisation. This view is often bracketed with manpower planning with the assumption that the ‘right person’ carries with it quantitative overtones. Ensures that the HR dimension receives due attention in the strategy making process.Millmore et al. Phase II Control Enables HR strategies to be linked to and integrated with organisational strategies. Similarly. Enables the appropriateness of the organisations current skills.3 How would you map out the benefits of HRP identified in the above analysis against the ‘regulation’. if cultural alignment is imperative for the future survival of the organisation. although this view of HRP appears simple in appearance. Phase I Regulation Provides detailed information that enables tighter control over staffing numbers and costs. as well as hard. 7. Provides a process for raising people issues early in the strategy – setting debate and ensures that business-based plans are put in place for the people outcomes of this debate. Generates a detailed audit of an organisation’s human capital.

the fourth strand. Operates as a major facilitator of competitive advantage. Planning appears less formalised and the big decision to locate a production unit in the Czech Republic arises from the economic 66 © Pearson Education Limited 2007 . plans and control mechanisms to help achieve the organisation’s over-arching mission and strategy. Facilitates the pursuit of high performance organisations commonly associated with SHRM by focusing on a high commitment. Crucial to helping organisations to adapt the workforce to meet changing demands arriving from a dynamic socio-economic climate. Weaknesses. HRP has an important role to play in reconciling the needs of individual employees and the needs of the organisation.Millmore et al. The Farquhar case The Farquhar case appears to be much more opportunistic. strategies. skills and attitudes. policies. Instructor’s Manual Provides a mechanism for forecasting labour demand against internal and external supply in terms of numbers. productivity and trust agenda. Opportunities and Threats) analysis to analyse and draw on the strengths of the existing staff. procedures and practice to be developed as a coherent bundle of activities. The use of the SWOT (Strengths. Generates a variety of HR solutions for tackling the complexity of problems arising from strategy making. Matches labour demand and supply and through gap analysis surfaces mismatches between the two that need to be addressed. the fifth strand. provides an opportunity for these to shape strategy formulation and suggests the possibility for two-way strategic integration. autonomous and effective interaction. This led to the formulation of a set of HR objectives. The integration of HR policies and practices horizontally and vertically contributes positively to organisation performance. the second). 7. Enables HR strategies. however. innovative. Strategic Human Resource Management: Contemporary Issues. These together with the cross-integration of the objectives for the nine functional areas provides for horizontal integration. This mirrors the first and third strands of strategic integration (and perhaps by implication.4 For each of the above cases answer the following question and justify your answer with reference to case evidence: • Which of the six strands of strategic integration are evident in the case company? The SIBUC case HRP at SIBUC reflects a systems perspective where it is conducted as a rational process flowing down through the three levels of organisational strategy. HRP starts from the organisation mission and strategic objectives.. Emerging from the strategic objectives is a set of what could be called core competences such as service vocation. which inform the objectives for each of the nine functional areas. knowledge.

it is not clear what HRP processes 67 © Pearson Education Limited 2007 . Therefore. For Deutsche Bank/Bankers Trust this has a clear line through to downsizing/redundancy whereas with BP/Amoco and Volvo/Ford we are reading ‘synergies’ as a euphemism for rationalising business functions. 1.Millmore et al. Developments in the Czech plant are also working upwards to influence production practice at Huntley. there is a pre-merger or integration phase where organisations have the opportunity to assess the compatibility or fit between the merging organisations. it has been necessary to make assumptions that we recognise in reality may be open to question. First. significant strategic change. Salama et al (2003) refer to these two phases as the courting and the marriage phases respectively. and particularly with Deutsche Bank/Bankers Trust and BP/Amoco. leading to redundancy as a natural consequence. However. As such these phases arguably cover the due diligence period ahead of merger and the short to medium-term HRP time horizon following merger. For Deutsche Bank/Bankers Trust and Volvo and Ford restructuring is at a corporate level whereas with British Petroleum (BP) and Amoco it appears to be more concerned with merging functional operations. post-merger consolidation phase that may also incorporate further. There is also evidence that hard HRP issues are being persued. it seems to us that the exercise was designed more to identify issues that would have to be addressed during the marriage phase than to determine whether the merger should go ahead or not. Third.. It should be remembered throughout that there is limited specific data available on the HRP processes and activities deployed by the case companies. In all three cases there appears to be an understanding of the importance of cultural compatibility and the need to successfully manage any emerging acculturation process. Second. In answering the case study questions we found it helpful to keep in mind that mergers and acquisitions comprise a number of key stages. is a longer-term. Although Farquhar’s corporate strategy is not made explicit the location decision clearly reflects first and second-order strategic decisions and therefore relates to the first and second strands. Across all three cases. In all three cases attention is being paid to second-order strategic issues concerning structures. What are the main similarities and differences between them? In all three cases it appears that any HRP considerations lie downstream from a first-order strategic decision to merge. This reflects concern for soft HRP issues. reminiscent of the fourth strand. In this sense Farquhar appears to be responding to change in a dynamic business environment. Answers to Case study questions We would like to emphasise that we have used Salama et al’s (2003) work as a vehicle for an analysis of HRP particularly as it applies to mergers and acquisitions. One possible exception is the Deutsche Bank and Bankers Trust merger where it might be argued that the results of the cultural assessment exercise could have resulted in ‘the marriage’ being called off. which reflects the sixth strand of strategic integration. Strategic Human Resource Management: Contemporary Issues. It should be stressed that this was not the main point of focus in their study and their published work obviously reflects this. Instructor’s Manual potential emerging from Eastern Europe. where there is more detail available. at times. In terms of process both BP/Amoco and Volvo/Ford established integration teams to help manage the merger although their emphasis appeared to be more on identifying potential operational synergies. Compare and contrast the three outline cases from an HRP perspective. there is the post-merger or integration phase where plans to exploit the potential synergies provided by mergers and acquisitions are finalised and implemented.

HR concerns appear to play second fiddle to other functional concerns arguably raising the risk of merger failure because of poor HRP as highlighted by Appelbaum and Gandell (2003). to have been deferred until after operational synergies have been achieved. being played by any HR function in planning and implementing the merger. Lastly. a vital ingredient to successful mergers and acquisitions. and acting in a reciprocal relationship with organisational strategies such that HR issues become a central input into the strategy formation process’. For BP/Amoco the focus appears to be on the marriage phase with different approaches adopted for managers and employees. However. In the HRP chapter summary it was argued that ‘When viewed as the vital link between organisation and HR strategies HRP can be regarded as a bridging mechanism fulfilling three vital roles: aligning HR plans to organisational strategies to further their achievement. The choice between the other two case scenarios is much more difficult as there is merit in both their approaches to HRP. uncovering HR issues that can threaten the viability of organisational strategies and thereby lead to their reformulation. we found it easier to identify Volvo/Ford as the merger situation we believed to have been handled least effectively from an HRP perspective.Millmore et al. at best. appears being handled differently across the three cases. we were initially attracted to the Deutsche Bank/Bankers Trust case where we felt there was more explicit concern to incorporate the second of these HRP roles concerned with ‘uncovering HR issues that can threaten the viability of organisational 68 © Pearson Education Limited 2007 . For Volvo/Ford there is no explicit reference to communication processes. Although the integration team in Volvo/Ford was seen ‘as an important vehicle for overcoming cultural differences’ there is no suggestion as to how this was to be achieved. despite the process being essentially top-down there is evidence pointing to the use of ‘employee voice’ to provide a bottom-up perspective. We would argue that both the Deutsche Bank/Bankers Trust and BP/Amoco cases evidence the first role of ‘aligning HR plans to organisational strategies to further their achievement’. the fact that a cultural analysis of the two companies has been derived from employee perceptions implies that some form of employee survey has been conducted during the courting phase. Strategic Human Resource Management: Contemporary Issues. However. If you had been responsible for the HRP dimension of each of the three merger situations. For Deutsche Bank/Bankers Trust the communication focus appears to be directed at employees during the courting phase through the cultural assessment exercise and enhanced communication to close the information gap revealed by its findings. with Deutsche Bank/Bankers Trust there appears to be a close fit between the analysis of results from the cultural assessment exercise and subsequent management action and HR initiatives deployed. Communication. in each of the three cases there is no real indication as to the role. This would certainly appear to be behind the cultural analysis at Volvo/Ford and can be seen to be driving management thinking at Deutsche Bank/Bankers Trust.. Instructor’s Manual are being used to generate the HRP initiatives being implemented. if any. apart from the initial cultural analysis and organisational restructuring. systems and processes. However. 2. which do you think was handled most effectively and why? Interestingly. However. on the basis of available information. involvement beyond this is not evident although at BP/Amoco it might be part of the input into establishing desired work behaviours. This is unlikely to have happened by accident and suggests that deliberate planning lies behind such integration. With Deutsche Bank/Bankers Trust and BP/Amoco there is evidence of specific downstream HRP initiatives designed to facilitate achievement of strategic objectives whereas with Volvo/Ford such HRP appears. Here. For the former there were regular meetings designed to breakdown barriers between BP and Amoco managers whereas for the latter attitude surveys are being used to surface issues that managers would need to address if they are to win over the ‘hearts and minds’ of employees. However.

we concentrate more on detailed operational HRP issues arising from the case scenarios. particularly with respect to their handling of the pre-merger integration phase. Consider the approach to employee involvement in key areas such as ‘integration team’ membership and development of new working values as well as a broader consideration of the employee relations strategy to be adopted. This incorporates a longer-term perspective and we particularly liked the intended use by BP/Amoco of regular monitoring of employee attitudes to shape future managerial action to secure their commitment to the new company. we would argue that BP/Amoco comes out stronger in the post-merger integration phase. There appeared to be less concern for longer-term HRP issues within the Deutsche Bank/Bankers Trust case. 3. However. Here. 69 © Pearson Education Limited 2007 . These can be used to facilitate a discussion around developing a broader and deeper analysis of the three case scenarios from an HRP perspective. this could have been improved significantly if greater attention had been paid to HRP during the courting phase and the outcomes of this used to further guide HRP decisions during the marriage phase.Millmore et al. human resource development (HRD). transfers. Instructor’s Manual strategies’. 3. While this is a critical consideration there is evidence that not only is this dimension being actioned within BP/Amoco but that they are also dealing with soft HRP issues to a greater extent. develop a new corporate culture for the merged company. 2. With BP/Amoco we particularly liked the fact that rather than imposing a cultural blueprint they appeared to be more concerned to identify and develop appropriate behaviours from an analysis of current patterns of employee behaviour. Use these values and behaviours as the operational criteria when making HR decisions with respect to selection for redundancy. Given the challenge to existing Deutsche Bank working values. Deutsche Bank/Bankers Trust 1. reward allocation etc. the Deutsche Bank/Bankers Trust marriage appears to overly focus on the hard HRP issues surrounding business efficiency. There is an apparent concern to develop a new corporate culture and the commitment to build from current patterns of work behaviour is also evident in the approach being adopted for integrating systems and processes. From this perspective it could be argued that the Deutsche Bank/Bankers Trust case evidences a more comprehensive approach to HRP than BP/Amoco. We have simply provided short. based on the above analysis. bullet point responses to provide examples of the sort of HRP practices we would have advocated. promotions. we believe that the HRP dimension of the respective merger scenarios was handled most effectively within BP/Amoco. However. Here ‘best practice’ is being used as the guiding criteria for such decisions irrespective of where it appears across the constituent companies. Strategic Human Resource Management: Contemporary Issues. Apart from a concern to challenge prevailing working values. Develop communication channels/initiatives to cover the ‘marriage’ phase of merger and the longer-term consolidation phase. If you had been responsible for the HRP dimension of each of the three merger situations what would you have done differently and why? More general points relating to HRP in the three merger situations are covered in our answer to question four below. contrary to this initial position. 4. Translate this cultural blueprint into those over-arching employee values and behaviours (perhaps using a competency framework) thought to be necessary to achieve long-term merger and corporate business success.. the post-merger consolidation phase. 5. In conclusion. including HR. Throughout the cases there is very little reference to arguably a third phase of mergers and acquisitions.

Identify further key HRP issues and develop appropriate responses. the focus in the cases is on short-term and. Plan how to manage the fallout from any: restructuring. 3. Second. HR systems and processes such as job grading and remuneration. In the case scenarios there is no clear division or distinction in identified HR interventions between those relevant to short and long-term planning cycles. Again we would suggest that our responses here leave scope for further development through facilitated discussion in-class. attitudes. particularly in terms of downsizing/redundancy. employee relations strategies etc. While a merger can be seen as an example of first-order strategy it does not in itself constitute the long-term corporate strategy of the organisation. the absence of a broader corporate strategy makes it impossible to evaluate the appropriateness of any HRP activity directed at furthering its achievement or to uncover HR issues that might threaten its viability. Significant investment in communication to keep employees informed and engaged in the merger process (and beyond). Challenge the apparent quota-based approach to manager selection and replace with a performance and/or competency-driven approach. 2. Make more explicit the nature and scope of employee involvement with respect to the ‘integration team’. This throws up two important limitations in HRP terms. 4. managing survivors. the long-term cycle requires different clusters of people processes to secure strategic integration compared to those required for the ‘short-term cycle’. 5. these might include. 6. medium-term HRP activity. development of core behaviours. First. More generally we would have given active consideration to all the other points raised above against the Deutsche Bank/Bankers Trust and BP/Amoco cases. in terms of temporal analysis. to a lesser extent. change management approaches. and performance management.). Strategic Human Resource Management: Contemporary Issues. This ignores HRP related to the ‘long-term cycle’. it might be surmised that the mergers reported on are designed to achieve competitive advantage through cost minimisation but this is almost certainly not the whole picture. 70 © Pearson Education Limited 2007 . functional rationalisation. Instructor’s Manual 6. BP/Amoco 1. competences. development of new corporate culture. HRD strategies for acculturation and organisation structures to facilitate the emerging corporate culture (or vice versa). Apart from communication and employee involvement identified above. What this corporate strategy might be in the three case scenarios is not made explicit in the information provided. structures. Volvo/Ford Here we would have done just about everything differently. Work through key organisational structures and assess the HRP consequences of any revised structures. for example. Critically evaluate the HRP process and practice evident in the three cases against the subject content of the chapter. 4.Millmore et al. A clear HRP focus in the ‘courting’ phase to establish what will be the likely HR issues that will need to be addressed as part of the merger process (core values. analysis of ‘best practice’ etc. As identified by Gratton et al (1999). At best. In terms of the information available we would certainly have wanted to work through the HRP implications of identified cultural differences between Volvo and Ford and the major structural reorganisation as well as making explicit the HR remit of the integration team if it is to fulfil its role as ‘an important vehicle for overcoming cultural differences’..

the merger) let alone future shocks. S. there is also little focus on any post-merger consolidation phase. Second. HRP concerns appear to be almost exclusively directed at the output rather than the input level. The centrality of flexibility to HRP.. This may be an important phase if the marriages are not to subsequently breakdown and lead to ‘divorce’. We are in the dark as to how HR interventions have been determined and as to how they fit into a broader HRP process. Although there is hard HRP thinking evident in the first two case scenarios we are left to speculate on the extent of any labour demand and supply forecasting. This third role concerned the ‘reciprocal relationship with organisational strategies such that HR issues become a central input into the strategy formation process’. 2. J. and very much related to Gratton et al’s (1999) temporal perspective.H. First.Millmore et al. against the chapter content. The Journal of Management Development. only serves to demonstrate how difficult it is to practice strategic HRP. (2003) A cross method analysis of the impact of culture and communications upon a health care merger. This means that the quantitative dimension of HRP receives no substantive coverage and that the overall scope of any HRP is in consequence restricted. Instructor’s Manual The above analysis throws up two further important limitations in all the case scenarios presented. there is no mention of HRP ownership making it difficult to discern the role. Without this it is not possible to determine which conceptual models of HRP might apply to practice in the case companies. 22:5. if any. it is difficult to discern any HP consideration around the general issues of managing change and enhancing organisational competence to deal with planned changes (e. 370–409. In brief. While the evident concentration on cultural issues exemplifies soft HRP concerns it is arguably at the expense of a broader consideration of the soft and hard HRP issues surrounding mergers and acquisitions. Notwithstanding the complexities associated with HRP our review should also lead to a greater understanding of the possible consequences of ineffective or non-existent HRP (in this case with mergers). if it is to gain credence as an operational HR tool. and Gandell. together with answers to Questions 1–3. That the above critique. As will be evident from answers to earlier questions. What is apparent throughout the chapter case study is that within the consideration of three mergers involving international companies there is little or no detailed information on the HRP processes deployed by the case organisations. there is no evidence that the third ‘vital role of HRP identified in the chapter summary has played any part in organisational thinking. 3. 71 © Pearson Education Limited 2007 . we flag up three further considerations: 1. As far as can be seen here. There does not appear to be any evident HR strategy underpinning HRP (in an HR strategy input–HRP output relationship) or deriving from it (in an HRP input–HRP strategy output relationship). Strategic Human Resource Management: Contemporary Issues.g. References Appelbaum. Despite the adage ‘to fail to plan is to plan to fail’ our review of some of the HRP issues to be confronted in mergers alone exemplifies the complexities associated with the process and lends credence to those who question its operational efficacy. Further. There is no evidence of any contingency or scenario planning being used to inject flexibility into the HRP process or steps being taken to build flexibility into the workforce itself so that it can better deal with the vagaries of future uncertainties as well as planned change. of any extant HR function or the extent to which HRP has been embedded in line managers’ role responsibilities. is not surfaced by any of the three case scenarios.

Holland. (1999) People processes as a source of competitive advantage. P. W. and Truss. S. 72 © Pearson Education Limited 2007 . G. Strategic Human Resource Management: Contemporary Issues. Oxford: Oxford University Press. Corporate Rhetoric and Human Reality. L. Journal of European Industrial Training. C.. and Vinten. 27(6). Hope Hailey. (1987) Linking competitive strategies with human resource management practices.E. (eds) Strategic Human Resource Management. V. Salama. 313– 321. Stiles.. Oxford University Press.S.. in Gratton.. L.. 207–19.. Schuler. R. British Petroleum–Amoco. P. and Jackson. Ford–Volvo’. Gratton. Hope Hailey. (2003) Challenges and opportunities in mergers and acquisitions: three international case studies — Deutsche Bank–Bankers Trust. A. Stiles. (1999) Strategic Human Resource Management: Corporate Rhetoric and Human Reality.Millmore et al. L. Instructor’s Manual Gratton. V. and Truss. 170–198. The Academy of Management Executive. C. 1(3).

a long-term perspective. • • 73 © Pearson Education Limited 2007 . and multi-stakeholder involvement. the use of high validity. The strategic variant elevates the organisational importance of recruitment and selection and leads to the generation of a more demanding person specification. These two outcomes generate four consequential interrelated. and the use of HRP as a bridging mechanism between strategy and HR practice. explain how recruitment and selection practice can be shaped to accommodate the demands of strategic change and unplanned change arising from an uncertain future. Far from being a simple notion strategic fit has been revealed as a multi-dimensional concept where it is possible to identify at least six different strands. analyse how recruitment and selection can be developed to fit a variety of strategic scenarios using illustrative examples to support your analysis. sophisticated selection methods.CHAPTER 8 Strategic recruitment and selection: Much ado about nothing? Learning outcomes By the end of this chapter you should be able to: • • • • • • provide an underpinning rationale in support of the development and practise of strategically integrated recruitment and selection. secondary features that are likely to shape strategic recruitment and selection practise: the adoption of a front-loaded investment model. This means that strategic recruitment and selection has potentially to be aligned with multiple interpretations of strategy if it is to satisfy its strategic credentials. account for the apparent mismatch between the rationale for strategic recruitment and selection and paucity of evidence of its practise. identify and explain the major features of strategic recruitment and selection and summarise these through an explanatory model. It is possible to construct a model of strategic recruitment and selection around three primary features: strategic integration. evaluate evidence to determine the extent of strategic recruitment and selection practice. Summary • The pursuit of competitive advantage. interest in SHRM and the role of recruitment and selection in securing one of an organisation’s most valuable assets provide a powerful rationale for the development of strategic recruitment and selection. rigorous evaluation of outcomes.

and case study questions most of which require the reader to work through the conceptual construction of strategic recruitment and selection and/or apply it to a number of real organisational scenarios. This approach is supported directly by the self-check and reflect. what was found was that traditional approaches to recruitment and selection. therefore. Strategic Human Resource Management: Contemporary Issues. continue to dominate organisational practice. This may account for why there is. we believe it is essential that students read and make notes from the chapter. From this stance it is argued that it would therefore be rational for organisations to tailor their recruitment and selection practice to meet their strategic imperatives.Millmore et al. Student preparation Prior to the class. On this basis the prime concern of recruitment and selection would be the employment of staff who can make a direct contribution to the achievement of an organisation’s strategic objectives. For this reason the chapter explores the concept of strategic recruitment and selection in depth. the wide chasm that exists between the apparent logic for its practise on the one hand and the absence of evidence of its practise on the other and its lack of coverage in the literature. The overwhelming majority of literature on recruitment and selection focuses on its traditional construction and delivery and not its strategically-driven variant. if not the most important. On balance and despite a powerful rationale to the contrary. Two particular difficulties facing the teaching of strategic recruitment and selection are. In brief. a paucity of literature on strategic recruitment and selection. • • Teaching and learning suggestions Comment The chapter begins by presenting a rationale for the adoption and practise of strategic recruitment and selection by organisations. It particularly draws on material from Chapters 1 and 7 to illustrate and explore the multiple meanings of strategic fit in relation to strategic recruitment and selection. recruitment and selection practice can be shaped to support long-term changes in strategic direction. 74 © Pearson Education Limited 2007 . a review of research findings at the end of the chapter concludes that there is little evidence that strategically-driven recruitment and selection is being practised by organisations. Instructor’s Manual • Despite uncertainties surrounding strategy implementation and the business environment as it unfolds over time. Whatever the merits of this argument. In contrast. organisational approaches to recruitment and selection practice appear to be dominated by traditional and not strategic approaches. We have found that producing mind maps of the chapter content is a useful approach to note taking and encourages students to reflect on the internal integration of the subject content of the chapter. driven by the demands of specific job vacancies. it is argued that over the last two decades there has been considerable focus on strategic management and its crucial role in securing competitive advantage and that employees are a critical.. resource for achieving an organisation’s strategic objectives. like HRP. The overall conclusion is that although the case for adopting strategic recruitment and selection may be seductively persuasive it is arguably another case in the HR arena where the rhetoric runs ahead of the reality.

As standard. Second. once student queries have been exhausted. This avoids providing lecture input that simply repeats what students have already grasped. Students may also be asked to do one or more of the following: • • • address pre-set questions and write their answers briefly in note format. if preparing answers to self check and reflect questions was not part of preparatory work but 75 © Pearson Education Limited 2007 . Sometimes this may be formalised by asking students to write down (as questions) the three issues addressed by the chapter where they would like further clarification and guidance. First. how would you map out the entire recruitment and selection process in a flow diagram? 2. students can be asked to contribute individual responses that are then subjected to plenary discussion. students can be formed into groups to share their individual answers and draw conclusions from their discussions. reinforces the value of reading as an essential prerequisite for class-based discussion and provides a platform from which further class-based activities can be launched. we find it useful. This is our preferred approach because it makes students more accountable for their personal learning and reserves any group work for case study analysis. Instructor’s Manual We use a variety of vehicles to bridge student preparation and class-based activities to enhance their understanding of the chapter content and its overall relationship to managing HR strategically. What are the main strengths and weaknesses of the recruitment and selection process you have drawn up in response to Question 1? 3. at least two alternatives present themselves. to provide a snappy summary of key issues. However. and familiarise themselves with the chapter case study (or an alternative case supplied in advance) and come to the session prepared to tackle the case questions. Our outline answers to both self check and reflect questions and case study questions follow in the next two substantive sections of this chapter guide. However. What do you understand to be the key similarities and differences between the traditional approach to recruitment and selection focused on job fit and the strategic variant focused on organisational fit? 4. Based on prior learning and/or experience.. A starting point that we find useful is to surface and discuss the issues arising from students’ preparatory reading. when adopting this approach.Millmore et al. we would ask students to make a note of any queries arising from their reading and to come to the teaching session prepared to raise them. Strategic Human Resource Management: Contemporary Issues. What problems are likely to be encountered by an organisation intent on developing and practising a strategic approach to recruitment and selection? 5. Where preparing answers to self check and reflect questions has been set as part of preparation for the teaching session. preparatory activities and classroom discussion for the topic of strategic recruitment and selection include: 1. complete the self check and reflect questions and come to the session prepared to share and discuss their responses. To what extent can a recruitment and selection exercise that you have encountered be classified as strategic? In the classroom Clearly the approach adopted to ‘student preparation’ can be followed through into the classroom. Pre-set questions that we have found useful for structuring student reading.

For students who are adding a strategic focus to prior studies of HRM it is more useful to focus on their answers to Questions 3–5 of those suggested for student preparation. A further task for full-time students would be to utilise material on recruitment and selection practice gathered as part of any search for a ‘first destination’ job and analyse it for evidence of strategic practise.. Even if this did not form part of ‘student preparation’ it is normally possible to get students to share and analyse their recruitment and selection experiences in this way. Groups can be asked to share their flow diagrams and draw up a composite flow chart before analysing it in terms of the second question suggested for student preparation (What are the main strengths and weaknesses of the recruitment and selection process you have drawn up in response to Question 1?). Follow-up work The pedagogic features adopted throughout this book are intended to offer a number of alternatives for follow-up work while at the same time leaving the lecturer free to add or substitute their own ideas. ‘Recruitment and Selection at Southco Europe Ltd’. we would favour the group approach as a more stimulating approach. However. 76 © Pearson Education Limited 2007 . they can be introduced into discussion of the case study and their validity critiqued. Here the first question suggested for student preparation (Based on prior learning and/or experience. Strategic Human Resource Management: Contemporary Issues. which themselves can be usefully critiqued. For students who have not previously studied recruitment and selection before it is useful to spend more time on exploring the fundamentals of the ‘traditional’ process. Our outline answers to both self check and reflect questions and case study questions follow in the next two substantive sections of this chapter guide. Instructor’s Manual consideration of the questions is to feature as part of the teaching session. In all cases student responses can be considered against our suggested answers. there is unlikely to be time for groups to consider all four questions. Here we would suggest that groups major on one of the case questions only moving on to others if they have time. If they have not already been used as part of class activities. will serve as a useful reinforcement of chapter content. There are also a number of follow-up study suggestions after the chapter summary that can be undertaken by students either individually or in groups and an extensive list of references provides many opportunities for directed further reading. We have particularly found it useful to focus on students’ practical experiences of recruitment and selection and to analyse these to evaluate their strategic credentials against the conceptual models provided in the chapter. If coming to the case afresh. Where case study work has featured as part of preparatory activities. how would you map out the entire recruitment and selection process in a flow diagram?) can be used as the basis for group work. In addition there is scope for further detailed development of our answers and examples are provided as to how this might be put into operation. self check and reflect questions and/or the chapter case study. similar approaches to those suggested for self check and reflect questions can be adopted.Millmore et al. Our answers to the four questions arguably present a degree of comprehensiveness and detail unlikely to be echoed within the parameters of a standard teaching session.

adoption of a long-term perspective consistent with the strategic focus. the need to facilitate change in an increasingly turbulent business environment.4 and Figures 8. The authors’ answer to this question is summarised in Key Concepts 8. If you have already read Chapters 1. 8. Before you read on.1 Imagine that you work as an HR officer for a company that is unhappy with the effectiveness of its current recruitment and selection practice. If you have not already done this you should now do so although the full value of this question will have been lost if it was not answered before reading on. In summary. 8. It is argued that the themes below emerge from this section in the following order of appearance: • • • • • • • a strategic focus so that recruitment and selection is linked inextricably with corporate objectives.2 What potential features emerge from your reading of the section ‘What is the rationale for strategic recruitment and selection’? that you would expect to be incorporated into the development of a conceptual framework of strategic recruitment and selection? This is another interactive question although here the answer is embedded in the rest of the chapter and is therefore not so obvious. This is one of two questions designed to engage the reader with the subject through a process of interaction.3 To what extent do staffing processes at the Dionysos reflect the strategic approach to recruitment and selection encapsulated by the conceptual framework and model depicted in Key Concepts 8. the hotel: 77 © Pearson Education Limited 2007 . Write them down now in note form. recognising the importance of recruitment and selection when human resources are viewed as an organisation’s most valuable asset. take five minutes out to think through the main arguments that you would use to structure such a paper. Instructor’s Manual A further task for part-time students could involve them researching their own company’s recruitment and selection activities in more depth with a view to analysing its strategic credentials against the conceptual referents provided in the chapter.. Further on in the chapter these themes take form through the development of a conceptual framework and model of strategic recruitment and selection.3 and 8. the need for recruitment and selection to be internally integrated with other activities making up the HR bundle. Strategic Human Resource Management: Contemporary Issues.3 and you would have been able to compare your answer against this and weigh the significance of any differences.4? Before directly addressing this question it is arguably important to reflect on the contextual circumstances impacting on recruitment and selection practice at the Dionysos. 2 and 7 you should find these helpful in developing your ideas.Millmore et al. and the need to adopt a broader organisational focus into the processes of job analysis. You have been asked to write a paper presenting a rationale for the development and subsequent implementation of strategic recruitment and selection. You might like to go back and see how the above themes have been reflected in these explanatory devices. Answers to Self-Check and Reflect Questions 8. the need for HRP to match recruitment and selection activities to corporate strategy.

if one exists. There is a strong link between the personal attributes. While not privy to the corporate strategy of the Palace. management style and employee involvement. and can be classified as a small to medium family business. required in staff and the business goal with particular emphasis on service quality and family fit. although not formalised..Millmore et al. With respect to secondary features recruitment and selection at the Dionysos. second and third order strategic decisions. On the basis of the reported events and their detailed exposure in the tabloids it would seem that the antithesis of strategic recruitment and selection is operating here. The hotel industry is very labour intensive and dependent on the quality and performance of its staff. Although this evaluation is not explicitly linked to recruitment and selection. fidelity.4 To what extent does the process used to recruit Ryan Parry reflect a strategic approach to recruitment and selection? It is recommended that you conduct your analysis against the conceptual framework and model of strategic recruitment and selection presented earlier in the chapter (Key Concepts 8. Presumably therefore the success of the Dionysos in meeting its business goals has to be down in no small measure to the staff employed to deliver its vision. it is difficult to believe that the security of the monarch and other members of the Royal Family is not a central objective. An analysis of the Buckingham Palace example against featured templates of strategic recruitment and selection is clearly constrained by a lack of detailed information. Within this identified context. current recruitment and selection practice could be argued to reflect the strategic variant through at least two strands of strategic integration. reflects a front-loaded investment approach and use of sophisticated selection with some evidence of multi-stakeholder involvement. welfare. despite reference to careful selection. integrity etc. the signs are not good. The strategy itself suggests a longer-term focus of creating a market niche and. a degree of HRP is evident in the HR practices developed and their integration with strategic imperatives.4 and Figures 8. and although it does not fit neatly into the normal classifications of strategy. However. would be fundamental attributes of personal specifications designed to recruit staff against this paramount concern for security. or core competencies. Instructor’s Manual • • • • is located in Turkey and not subject to the draft of legislation operating on recruitment and selection within the European Union. Allied to this. 8. presumably so he could reveal all. currently operates in a loose labour market where supply of labour exceeds demand. The probationary period is tantamount to an extended. essentially provides a single product that supports a relatively straightforward approach to first. There is also evidence of horizontal integration through an inter-related bundle of HR practices including staff development. performance management. There is also extensive and meaningful involvement of staff in making appointments to their work groups. Strategic Human Resource Management: Contemporary Issues.4). Although not cited in the case. although somewhat unconventional by UK standards. There was either no strategic connection or the recruitment and selection process blatantly failed to deliver it. it might be expected that personal attributes such as commitment to the Royal Household.3 and 8. realistic and valid application of work sampling which costs a minimum of one month’s pay for each shortlisted candidate. but it begs the question as to 78 © Pearson Education Limited 2007 . particularly given the sensitivity to media relations. both Rim and Ahmet actively use their MBA qualifications to inform their business planning. In addition there appears to be significant attention given to evaluating organisational performance against key performance indicators. reward management. honesty. a feature of Borucki and Lafley’s definition of strategic recruitment and selection. by implication it incorporates measurements of the quality of service provided by recruits. Selection methods used appear to be very basic and far removed from sophisticated selection with no evidence of a front-loaded investment model or multi-stakeholder involvement. Ryan Parry resigned from his post.

the fact that responsibilities for recruitment and selection are generally divided in organisations between line managers and specialist personnel practitioners raises the possibility that respondents may only participate in part of the process. the use of a non-directed. For management students this covered SHRM. For personnel students this covered strategic integration.11 that might explain the low incidence of strategic recruitment and selection reported? First. prior to producing their data students were exposed to other course inputs and preparatory activities. Taken together this could result in an over-statement of features of recruitment and selection associated with the strategic variant which could not be quantified. for example. This may provide them with an incomplete or distorted picture of the process. Class-based discussion allowed the opportunity for further elaboration or correction. The data was not likely to be doctored for a particular audience as its use was not disclosed until after its production. Respondents were not led by the structure and content of data collection methods such as questionnaires or interview questions. As a result students were arguably sensitised to relevant subject material that was particularly associated with the beginning and end points of the recruitment and selection process and. strategic human resource practice. Lastly. However. However. there was an element of leading in as much as their responses were not completely nondirected. these two groups were almost equally represented and taken together should provide a comprehensive picture of the state of play particularly where line manager and personnel practitioner respondents hail from the same organisation. it could be argued that there is a greater motivation for students to complete a task in which they have a vested interest (i. that students may simply omit elements of the flow chart in their rush to complete ‘homework’. HRP and recruitment and selection. Students do not always undertake preparatory work as diligently as their tutors might like and it is possible.. While this was the intention it may nevertheless result in features being incorrectly omitted or inadvertently invented.Millmore et al. self-reporting procedure (flow chart production) inevitably reflects the personal perceptions of the respondent. By definition respondents were close to the action and not remote as might be the case with some respondents to questionnaires. Third. Strategic Human Resource Management: Contemporary Issues. However. part of their personal study) than there is for questionnaire recipients to become respondents. Second. It is also important to remember that there is an assumption here that student perceptions of practice will reflect what they see as the most significant aspects of recruitment and selection practice. more generally.e.5 In Chapter 2 a number of studies exploring the contribution of SHRM to organisational performance reported on. Instructor’s Manual how long he could have worked at the Palace without being rumbled! What does this say about effective evaluation of recruitment and selection? 8. A critique of the research methodology used by each study was presented under the banner of ‘Study limitations’. what limitations can you identify in the study outlined above in Practice 8. HRP and recruitment and selection. Put another way if those responsible for recruitment and selection activities do not perceive any 79 © Pearson Education Limited 2007 . On a similar basis. It is possible to conjecture that if senior managers maintain that their organisation’s human resource practices are strategic but that operational staff do not identify with this then the strategic message has not been internalised. it might be argued that the study was directed at recruitment and selection practice generally and was not directly focused on strategic recruitment and selection. emphasis was placed on the beginning and end points of their flow charts. other survey methods are not without these problems but here there were a number of checks and balances in operation. Additionally. As described earlier. Fourth. Also the fact that in some instances a number of respondents were employed by the same organisation (as many as eight in one case) and the availability of company-produced documentation made it possible to compare and contrast data and identify any glaring inconsistencies. the process of data collection itself is open to abuse.

diversity. Instructor’s Manual strategic significance they are unlikely to be found practising the strategic variant whatever the organisational intent! Answers to Case study questions The first two of four case study questions are embedded in the case itself and have been answered here as we expected our readers to answer them. “performance management’. 1. we would argue that competencies associated with innovation. ‘seamless teamwork’. ‘operational excellence’. Further.. managing change. strategy. A useful starting point to competency analysis to meet the strategic requirements of innovation and quality is the work of Schuler and Jackson (1987). quality enhancement. foreign languages and teamwork are likely to be ‘core’ to Southco realising its strategic imperatives. longer-term focus. long/intermediate-term focus. They identified the following required employee behaviours to support the respective strategies of innovation and quality enhancement: Innovation – high degree of creativity. equal attention to process and results. Quality enhancement – repetitive and predictable behaviours. modest concern 80 © Pearson Education Limited 2007 . and ‘appreciation of cultural diversity’. solutions’. we would argue that these strategic concerns are being pursued in a dynamic global market place where change is a constant. although further material relevant to these case questions may be revealed as the case unfolds. All of this leads potentially to very demanding person specifications although we argue that in a team working environment it is not necessary for all members to posses all required core attributes. Strategic Human Resource Management: Contemporary Issues. modest degree of co-operation and interdependence. Based on the information provided with respect to organisation context. Therefore. innovation and quality strategies underpinned by a performance. vision. team-based culture. At times these strategic intents may surface internal contradictions that may put further pressure on recruitment and selection practice. and high tolerance of ambiguity. high degree of co-operation and interdependence. high concern for quality. Working from this analysis. Questions 1 and 2 have been answered solely on the basis of what has gone before in the case narrative. ‘a climate of constant change’. high degree of risk-taking. Putting our own strategic interpretation on these contextual statements. developed further in Chapter 2. what core competencies do you feel will underpin Southco’s recruitment and selection processes? For us the key words appearing in the opening section of the case (covering organisation context. vision. strategy. mission statements and annual key objectives) that impact on recruitment and selection are: ‘leading global source of engineered access …………. ‘continuous growth’.Millmore et al. it would seem that the organisation is pursuing a mixture of growth. performance management. mission statements and annual key objectives. What we advocate instead is that teams need to contain a critical mass of the required attributes among its membership.

81 © Pearson Education Limited 2007 . performance management. low risk-taking.. and others require further exploration to establish their full meaning or legitimacy. 2.Millmore et al. With respect to teamwork. makes joint decisions. This may simply be expressed in terms of fluency in a number of particular languages but would need to embrace the full range of linguistic competencies. conceptual flexibility. Strategic Human Resource Management: Contemporary Issues. however. impact. 1993). the legitimacy of our ideas can be discussed further through class discussion. a high degree of co-operation and interdependence. concept formation. openness. Adding to this. managing interaction. foreign languages and teamwork. interpersonal search. and transformational leadership skills. comprehension etc. goal directed. encourages ideas. written. We could go on but what is already emerging is a very demanding list that leads us to three further points. For example. and with a strong concern for the needs of individuals with a capacity to contribute to their further development (Bass. and equal attention to process and results can be related to effective team working and a high degree of risk-taking. a number of these overlap competency boundaries. high concern for process. is a reminder that core competencies represent those required in sufficient quantity in the workforce as a whole to support the achievement of corporate strategies and do not represent a person specification to be applied to every prospective employee. that: the list could be augmented. However. What do you think would be an appropriate recruitment and selection procedure for Southco to follow? Map out your answer providing as much detail as possible on the recruitment and selection methods you would use. irrespective of whether the focus is internal or external we would advocate that the process should start with the development of comprehensive role descriptions and person specifications that capture the demands arising form the strategic and competency analysis presented immediately above. We would argue. and high commitment to organisational goals. Third. encourages ideas. verbal. diversity. for example: experiments. managing change. the competencies are generated they need to be validated in the specific organisational context to which they apply if they are to serve a useful purpose. some entries are open to challenge. First. and high tolerance of ambiguity to managing change. Standing somewhat outside this list are the competency requirements around foreign languages required by global operations. 1990. particularly in the area of diversity (where we have been deliberately silent but where Chapter 13 can be used as a source of ideas). developmental orientation. admits mistakes. Instructor’s Manual for quantity. Evenden. charismatic. As before. To operate successfully in an environment of dynamic change arguably requires a critical mass of employees who possess competencies associated with continuous learning and development. presentation. Cockerill (1989:54–55) cites 11 competencies that are associated with high performance management in rapidly changing environments: ‘information search. for example. openness. proactive orientation. it could be argued that admits mistakes. Therefore we would expect these recruitment documents to adequately reflect role responsibilities and competencies associated with organisational requirements with respect to innovation. for example. Second. We start with a given that recruitment policy at Southco dictates that in the first instance vacancies must be advertised internally. and achievement orientation’. These include. any debate around core competencies should be accompanied by the caveat that. inspirational. quality enhancement. A number of the above employee behaviours are arguably also relevant to other identified competency requirements. adopts rational approaches to problem solving. self-confidence. makes joint decisions and concern for the needs of individuals with a capacity to contribute to their further development are all relevant.

However. key managerial appointments and areas of short supply we advocate that this be supplemented by open days/evenings designed to enable prospective candidates to subject the organisation to close scrutiny. This is 82 © Pearson Education Limited 2007 . Instructor’s Manual The job description and person specification will be used as the basis for the creation of a realistic job and organisational preview to be shared with candidates. Although some of the information will be common the competency-based component of the application form will need to be tailor-made if it is to be fit for purpose. We recommend that this should be supported by open access to a help line to discuss the vacancy and. Encouragingly there appears to be evidence of both external. 1993) of HRM at Southco where the corporate alignment of the HR function is seen as a critical success factor and the most senior HR manager is regarded as an indispensable member of the senior management team. Strategic Human Resource Management: Contemporary Issues. interpersonal competencies and teamwork. Given the likely complexity of the persons’ specifications the use of multiple selection methods will almost certainly be necessary if reasonable levels of validity are to be achieved.Millmore et al. This is seen to be particularly relevant to support the assessment of cultural fit. the organisation. as stakeholders. work sampling etc. motivation and personality supported by simulated group exercises to further assess teamwork competencies. at every opportunity. 3. With respect to external advertising it is difficult to be precise because specific copy and media placement will depend on the particular vacancy in question. Initially the shortlisting panel should identify all those applicants where there is agreement amongst all three stakeholders that they meet the shortlist criteria based on their independent assessments. For major recruitment exercises involving multiple vacancies. Assessment centre exercises directed at work sampling would be designed so as to actively involve other important stakeholders and enable their participation in the selection process. attitudes to others. structured and behaviourally oriented to assess directly those competences incorporated into application forms. These stakeholders would then meet to determine the shortlist. So. Under these circumstances assessment centres. Based on the competency analysis we would anticipate the use of psychometric testing to assess dimensions such as attitudes. demanding exercise would be to take competencies identified under Question 1 and work through how each one could be assessed in detail within the multiple selection method context advocated. To what extent could Southco’s approach to recruitment and selection be classified as strategic? Justify your answer with evidence drawn from case material. For each vacancy we would require a competency-based application form that reflects precisely the core organisational and job competencies demanded by the role. psychometric testing. taking risk-taking or high tolerance of ambiguity the task would be to work through how these could be assessed through interview. would be a sensible option. Cockerill (1989) argued that competencies can be assessed reliably through direct observation and simulated assessment centre conditions. intelligence. 1998) and institutional integration (Mabey and Iles. this must be preceded by a detailed analysis of potential recruitment sources augmented by an evaluation of the company’s previous recruitment exercises. In-depth interviews would be competency-based. This would start with the production of objective job advertisements providing sufficient detail to enable the prospective candidate to assess their continued interest in the vacancy. to ensure a realistic preview of both is fully communicated. vertical integration (Mabey et al. To provide greater objectivity we would propose that applications received are evaluated independently by three stakeholders against the persons’ specifications. Hopefully any panel discussion will then be about discussing finer distinctions between such applicants before finalising the shortlist.. for example. If there is an interest in exploring the topic of strategic recruitment and selection in greater depth then a further. when recruiting externally. which feature direct observation as one of their elements.

the use of sophisticated selection methods and a multi-stakeholder approach are evidenced by: • • • • • • • the philosophy that recruiting the ‘wrong’ person leads to substantial organisational costs. What is not evident. With respect to the secondary features of strategic recruitment and selection (adoption of a front-loaded investment model. we conclude that at the very least Southco are operating a highly professional and sophisticated recruitment and selection process and that at the very best it has strong strategic underpinnings. Strategic Human Resource Management: Contemporary Issues. demonstrating both the primary features of strategic integration and a longer-term perspective. the HRD manager and the current role holder. is the extent to which this overtly strategicallydriven approach to recruitment and selection. Although not incorporated into the case study. Here we would argue that the adoption of a front-loaded investment model. however.. the use of sophisticated selection methods and a multi-stakeholder approach) there is certainly some clear evidence to support some of these features. presentations and the assessment of team interaction. rigorous evaluation. With respect to the primary features of strategic recruitment and selection (strategic integration. is less clear-cut. competency assessments. This is not to say that this is not the approach followed and. the information material sent to candidates to establish realistic organisational and job previews. on the basis of available information the process does not meet all of our criteria for strategic recruitment and selection and therefore as currently evidenced is classified as largely but not fully strategic. this was exemplified by the process used to recruit a new managing director during the time the case study was being written. How this feeds through to recruitment and selection practice.Millmore et al. On the basis of the evidence available. Instructor’s Manual further evidenced through the corporate scorecard where the HR function is seen to represent one of the key measurables relating to performance delivery against corporate goals. psychometric testing. it can at least be argued that the over-arching concern for organisational fit directly reflects these primary features. and the joint decision-making process conducted against competency and cultural fit assessments. However. is used to underpin the recruitment and selection of staff lower down the organisational hierarchy. however. and acknowledging that this will not necessarily represent a complete picture. objectives and competencies then became the basis for all subsequent recruitment and selection activity. the involvement line managers and more senior levels of the management hierarchy. as revealed by our answer to the last case question below. 83 © Pearson Education Limited 2007 . long-term perspective and formalised HRP). the length of selection events. the concern for candidate fit both with organisation culture and its global context and the requirement for candidates to be able to adapt to the fastpaced business environment characterising Southco all reflect a strong strategic focus. the use of a competency-based approach. These key role responsibilities. on the basis of evidence available from the case. Here the strategic objectives of the organisation were used to identify the key role responsibilities and related objectives of the managing director over the short and longer-term and the personal competencies necessary to deliver these successfully. the use of behaviourally-based interviews.

.) Human Resource Management: Issues and Strategies. 219– 45.M. (1993) The strategic integration of assessment and development practices: succession planning and new manager development. in Harrison. rigorous evaluation of recruitment and selection processes and outcomes to assess: the validity of specified competencies and appointment decisions. costeffectiveness. (ed. Harrison. and Iles. Personnel Management. C.Millmore et al.3. 16–34.4 and Key Concepts 8. 84 © Pearson Education Limited 2007 . 3(4).4? From the foregoing analysis it is argued that the following changes or additions are necessary in order for Southco’s recruitment and selection processes to more fully meet the model. (1993) The strategic management of recruitment and selection. Organizational Dynamics. evidence of a long-term focus being adopted in addition to the more immediate job requirements in most appointments throughout the organisational hierarchy.4 and Key Concepts 8. Strategic Human Resource Management: Contemporary Issues. R. Evenden. Instructor’s Manual 4. R. 52–56. What changes would you make to Southco’s recruitment and selection processes in order to more fully meet the model. Addison–Wesley. (1990) From transactional to transformational leadership: learning to share the vision. 19–31. • References Bass. Addison– Wesley. the explicit use of a HRP mechanism or equivalent to translate corporate objectives into valid core competencies. and more comprehensive evidence that key stakeholders are routinely being involved in recruitment and selection exercises. P. and the successful management of change. 8.) Human Resource Management: Issues and Strategies. core dimensions and conceptual framework of strategic recruitment and selection captured respectively in Figures 8.3. (ed. 8. and to inform the further development of recruitment and selection practice. core dimensions and conceptual framework of strategic recruitment and selection captured respectively in Figures 8. A. evidence that the qualities of the organisation’s existing HRs are being considered as an input into strategy formulation to establish two-way strategic integration. Wokingham. Winter. Mabey. stakeholder satisfaction. September. contribution to the achievement of corporate objectives and strategies. (1989) The kind of competence for rapid change. Wokingham. Human Resource Management Journal.4 in Chapter 8: • • • • • • evidence of closer strategic alignment for a wider range of appointments throughout the organisational hierarchy. R. Cockerill. B. the clear articulation and use of a set of core values and/or competencies to inform recruitment and selection decisions broadly throughout the organisation.

Human resource management.S. Salaman. The Academy of Management Executive. J. 85 © Pearson Education Limited 2007 . (1998). (1987) Linking competitive strategies with human resource management practices. S. Instructor’s Manual Mabey. Schuler.. 1(3). and Jackson. and Storey. Strategic Human Resource Management: Contemporary Issues.E. 207–19. Oxford. a strategic introduction (2nd edn).Millmore et al. R.. C. Blackwell. M.

analyse the reasons for the growth in importance of performance management. evaluate some of the major criticisms of performance management. Among the reasons for the growth in importance of performance management. An important way of integrating the HR practices is to use the skills. suggest ways in which performance management may link more closely to strategic human resource management. • • 86 © Pearson Education Limited 2007 . Although the performance indicators approach to performance management has proliferated in many organisations. behaviours and attitudes necessary to deliver effective job performance as a way of assessing individual success. explain the performance management systems model and the key processes embedded in the model. Performance management has the facility to change the culture and therefore the working practices of organisations as part of a concerted effort to generate change through its role as part of an organisation’s ‘high performance’ HR strategy.CHAPTER 9 Performance management: so much more than annual appraisal Learning outcomes By the end of the chapter you should be able to: • • • • • define performance management and explain its relationship to strategic human resource management. Summary • • • • Performance management is an umbrella term to describe not a single activity but a range of activities which may be gathered together to enhance organisational performance. are the desire to achieve greater organisational effectiveness and the dissatisfaction with traditional performance appraisal. it offers a restricted perspective on performance management. Performance management may be linked to the organisation’s strategy through horizontal and vertical integration.

We use a variety of vehicles to bridge student preparation and class-based activities in order to enhance their understanding of the chapter content and its overall relationship to managing human resources (HR) strategically. Pre-set questions that we have found useful for 87 © Pearson Education Limited 2007 . Sometimes. we would ask students to make a note of any queries arising from their reading and to come to the teaching session prepared to raise them. the hope is that the reader will see how performance management is an intrinsic part of the SHRM approach and fit this chapter neatly in the framework of the whole content of the book. Our outline answers to both Self-Check and Reflect Questions and case study questions follow in the next two sections of this chapter guide..Millmore et al. Instructor’s Manual • The performance management systems models includes inputs such as external and internal contexts and employee skills. the assumed compliance of employees and the dangers of prescribing a particular model of performance management without paying due regard to the organisation’s context. we believe it is essential that students read and make notes from the chapter. which is written to demonstrate that performance management is much more than performance measurement. this may be formalised by asking students to write down (as questions) the three issues addressed by the chapter where they would like further clarification and guidance. Yet. Included in the major conceptual flaws in performance management thinking are the potential preoccupation with management control. The chapter opens with a section. as the chapter title makes clear. Thus. processes including setting objectives and 360-degree appraisal. and enhanced organisational performance. the chapter concentrates very much on the processual approach to performance management. the chapter is not just about the process of performance appraisal. complete the Self-Check and Reflect Questions and come to the session prepared to share and discuss their responses. the ‘metrics’ approach that dominates in so many organisations. • Teaching and learning suggestions Comment This chapter has been written from the perspective of the HRM specialist rather than the management generalist. This is an important distinction. What the chapter attempts to achieve is to place performance management clearly within the framework of SHRM by placing emphasis upon the extent to which performance management can be integrated with other HR components. Student preparation Prior to the class. and familiarise themselves with the chapter case study (or an alternative case supplied in advance) and come to the session prepared to tackle the case questions. Students may also be asked to do one or more of the following: • • • address pre-set questions and write their answers briefly in note format. Therefore. HR outputs such as performance plans and pay awards. this is treated as just one aspect of performance management. Strategic Human Resource Management: Contemporary Issues. As standard.

we would favour the group approach as a more stimulating method. we find it useful. However. This avoids providing lecture input that simply repeats what students have already grasped. Where case study work has featured as part of preparatory activities. Our outline answers to both self-check and reflect questions and case study questions follow in the next two sections of this chapter guide. Our approach here would be to start with a more general exploration of the performance management implications of the case.check and reflect questions was not part of preparatory work but consideration of the questions is to feature as part of the teaching session. First. What do you think are the most important outputs of the performance management model in your organisation or one known to you? In the classroom A starting point for classroom activities that we find useful is to raise and discuss the issues arising from students’ preparatory reading. when adopting this approach. How would you define performance management and set it into the SHRM context? 2. Instructor’s Manual structuring student reading. at least two alternatives present themselves. once student queries have been exhausted. If they have not already been used as part of class activities. similar approaches to those suggested for self check and reflect questions can be adopted. Where preparing answers to self.Millmore et al. reinforces the value of reading as an essential prerequisite for class-based discussion and provides a platform from which further class-based activities can be launched. Strategic Human Resource Management: Contemporary Issues. students can be asked to contribute individual responses that are then subjected to plenary discussion. which themselves can be usefully critiqued. preparatory activities and classroom discussion for the topic of performance management include: 1.check and reflect questions has been set as part of preparation for the teaching session. to provide a summary of key issues. What are the weaknesses of performance management in many organisations? 3. students can be formed into groups to share their individual answers and draw conclusions from their discussions. In all cases student responses can be considered against our suggested answers. any prior preparation of answers to the self-check and reflect questions and/or the questions suggested for student preparation and/or the chapter case ‘Performance management at Tyco’ will serve as a useful reinforcement to chapter content. What are the principal strategic relationships between performance management and corporate strategy and how could they be evidenced in practice? 4. However. This is our preferred approach because it makes students more accountable for their personal learning and reserves any group work for case study analysis. Follow-up work The pedagogic features adopted throughout this book are intended to offer a number of alternatives for follow-up work while at the same time leaving lecturers free to add or substitute their own ideas. if preparing answers to self.. 88 © Pearson Education Limited 2007 . There are also a number of follow-up study suggestions after the chapter summary that can be undertaken by students either individually or in groups and an extensive list of references provides many opportunities for directed further reading. Second.

a coach and facilitator? There are a number of reasons why this may be a difficult.3. Many managers do not find it easy to be more consultative because it is not as easy. 9. indeed. Instructor’s Manual Answers to Self-Check and Reflect Questions 9. to grasp.1 What factors do you think would explain the weaknesses Radnor and McGuire found in their research? It seems that they may well stem from one particular source: the imposition of performance management upon managers in the UK public sector by central government. In what ways do you think the psychological contract is threatened by the shortcomings in the implementation of performance management at Stiles et al. 9.. So many managers are managers because they have been good technicians. The image of the boss ‘as someone who tells me what to do’ as opposed to ‘someone who asks me if I would be happy to do it’ is a difficult one for many managers. employees. In the organisations surveyed in the research it seemed that there were a lot of reasons for those promises not being kept. In addition. better development etc. They reflect managerial judgements about. and how to assess so the objectivity evident in performance appraisal is equally evident in other performance management activities. their potential managerial skills have traditionally not been considered when promotion decisions are made. Giving negative feedback in such a way that it is accepted as legitimate by employees is a difficult skill. To what extent do you think that the lack of objectivity in performance appraisal may be overcome in performance management? There is an argument that a lack of objectivity is inherent in most assessments of employee performance. that is they are clearly not independent of the mind. Strategic Human Resource Management: Contemporary Issues. there is an insufficiency of the skills needed to practise the new style of management. By objective we mean phenomena having reality independent of the mind. what to assess. and. If they 89 © Pearson Education Limited 2007 . which is what seemed to be happening.Millmore et al. The traditional promotion route for many managers is through the ranks of their technical skill. not the least of which is traditionalism. Commitment-seeking HR activities such as performance management are usually accompanied by explicit and implicit messages of which make promises to employees of better rewards. the point is that the initiative in many cases was not the idea of managers in the organisations in which it was implemented. So it is understandable if many find the ‘people’ side of their management role difficult and forbidding. Perhaps the best that can be hoped for is a following of government guidelines.’s organisations? In the research the key components of the psychological contract were organisational commitment and trust.4. in particular. Yet in many Western developed countries at least.2 What obstacles do you think may stand in the way of an attempt by organisations to adopt a ‘new style’ of management in which the 'new style' manager is supportive. 9. This raises question about the extent to which it is reasonable for those managers to be enthusiastic about their performance management scheme and transmit this enthusiasm to their line managers and employees. Many managers say that the most difficult thing that they have to do is to tell employees that they are being made redundant. It contradicts generations of thought and practice. Yet all decisions in the range of activities concerned with performance management are subjective. the general consensus is that this may be the most effective way to get the best out of people. a team leader. However wellintentioned the government was.

9.g. But some cases of negligence may be the consequence of the employee not having sufficient awareness of what constitutes negligence. Repeated brusqueness on the part of the assistant A would be a misconduct case for the disciplinary procedure whereas assistant B may well be treated as ‘incapable’. 9. Given the strategic thrust of this book and this chapter it may be that there is a lack of strategic coherence concerned with performance management due to the lack of vertical and horizontal integration. The most important precursor to the pursuit of these activities is that the managers must be committed to the effective principles of the scheme. There may be a case for moving assistant B to alternative work more suited to her skills and experience (e. Answers to Case study questions 1. For example. Some of these problems are: resistance from managers who see performance management as just more ‘HR bureaucracy’. However. frequent and candid feedback. Clearly it is how effectively the managers conduct these activities that will determine that the performance management system is effective.e. not involving customer contact). which may be concerned with principle rather than practice. What problems may be involved in distinguishing between lack of capability and negligence? In practice the difference may be quite difficult to establish. Negligence suggests a strong element of wilfulness. Unfortunately. the ‘metrics’ based performance 90 © Pearson Education Limited 2007 . i. assess performance fairly.5. support employee development and possible career progression. lack of resources and lack of evaluation of schemes in order to see what could be improved. provide useful. Instructor’s Manual are not kept then managers should not be surprised if levels of trust and commitment are not what they hoped for.6 What other potential problems may be relevant to the introduction or implementation of performance management? Like most other HR initiatives the list is endless! The main problems. always assuming that her employer can offer her such work. there are other potential difficulties. In this case the employee is deliberately negligent due to a slipshod. there is a difference between call centre operator A.. What action is needed to ensure that Tyco managers play their full part in ensuring that the performance management system is effective? The handbook. careless attitude.Millmore et al. Strategic Human Resource Management: Contemporary Issues. This is easier said than done. he or she is not capable of understanding what negligence means in the context of his or her job. The way in which you would treat these two employees would be quite different. lack of training for managers and employees. are concerned with ineffective implementation rather than flawed design. who treats customers in a brusque manner because she is having a bad day to assistant B who always treats customers in this manner because she does not know the difference between brusqueness and a polite yet business-like manner. which outlines the details of the scheme specifies that managers must: • • • • set and clarify employees’ goals. as the chapter has sought to illustrate. In many organisations performance management is seen as just another personnel department imposition: ‘as long as it’s done and the forms are filled in that is all that is necessary’. lack of top management commitment.

demands a quite different psychological approach from that with which many employees are familiar. development needs identification. The second responsibility that is thrust upon employees as part of the scheme. This is profoundly different from the ‘metrics’ based performance measurement approach to performance management where the emphasis is solely on results. take responsibility for their own professional development. Commitment to the performance management scheme and an enlightened attitude to the management of people must be allied with training in the skills of goal setting. many of us have grown up with the idea of the organisation being a ‘good company to work for’. and it is designed to assess not only the results that employees achieve but the way in which these results are achieved. This is very different from the idea of employees accepting responsibility for their own career planning and development. which will ‘look after us’. All this will mean that Tyco managers should play their full part in ensuring that the performance management system is effective. solicit. The implications for managers of these twin aims are important. which believes that how people do what they do is as important as what results they achieve. It is consistent with characteristics of the ‘new psychological contract’ which are set out in Table 9. What is also necessary is an enlightened attitude to the management of people. Table 9.1 below. What action is needed to ensure that Tyco employees are equipped to gain the maximum benefit from the performance management system? The handbook which outlines the details of the scheme specifies that employees must: • • • • work hard to achieve their goals. assess their performance objectively. After all. to take responsibility for their own professional development. They are used to the idea of the employer accepting responsibility for employee development. It suggests that commitment to the effective principles of the scheme is not enough. In the same way as managers must be committed to the principles of the performance management scheme at Tyco so must employees. feedback giving and assessment. Strategic Human Resource Management: Contemporary Issues.Millmore et al. 2.1 Characteristics of the ‘old’ and ‘new’ psychological contract Characteristic Focus of the employment relationship Format Duration Underlying principle Intended output Old Security and a long-term career in the company Structured and predictable Permanent Influenced by tradition Loyalty and commitment New Employability to cope with changes in this and future employment Flexible and unpredictable Variable Driven by market forces Value added 91 © Pearson Education Limited 2007 . Instructor’s Manual measurement approach to performance management tends to encourage such a bureaucratic outlook. This is clearly not the approach at Tyco as the second and third aims of the performance management scheme make clear: • • it empowers employees to take an active and influential part in the processes. listen to and act upon feedback..

3. This suggests that the key task for Tyco management is to communicate the performance management strategy and policy throughout its operating companies and to train all those involved in its operation. with particular emphasis on self-management. performance. fair treatment for those who leave the organisation as it changes. But. operational and people management processes aligned to organisational objectives – to build trust. team capabilities and project-based activities – to enable and support performance improvement and organisational potential. The characteristics of such a strategy are: • • decentralised. What should be the priority concerns of Tyco HR specialists in their attempt to ensure that the performance management system is fully integrated with other HR activities? The chapter goes into some detail about how performance management systems may be fully integrated with other HR activities. will be quite difficult for many employees who are more used to defensiveness when faced with criticism.. Assessing their performance objectively obviously demands similar openness. and. Vertical integration may be achieved by reinforcing to the Tyco mission. development of people capacities through learning at all levels. even of the more constructive type. It demands an openness that. given all that Chapter 3 says about cultural adaptation that is clearly easier said than done. The aim is to unite Tyco teams throughout the world into a single operating company with a healthy culture characterised by alignment and growth opportunities. devolved decision-making. 4. Instructor’s Manual Employer’s key responsibility Employee’s key responsibility Employer’s key input Employee’s key input Fair pay for a fair day’s work Good performance in present job Stable income and career Time and effort High pay for high job performance Making a difference to the organisation Opportunities for self-development Knowledge and skills Adapted from Hiltrop (1995:290). Part of the section defining national culture in Chapter 3 states 92 © Pearson Education Limited 2007 . to solicit. is consistent with the personal acceptance of responsibility for career development. enthusiasm and commitment to the direction taken by the organisation.Millmore et al. and engagement with the needs of the community outside the organisation – this is an important component of trust and commitment-based relationships both within and outside the organisation. made by those closest to the customer – so as constantly to renew and improve the offer to customers. Strategic Human Resource Management: Contemporary Issues. is consistent with what the chapter notes about performance management being seen as part of a so-called ‘high performance’ HR strategy. again. The third responsibility that is thrust upon employees as part of the scheme. listen to and act upon feedback. and the notion of the necessity for employees to accept more responsibility for their own development. • • All this suggests an emphasis upon attention to organisation structural design (see more detail in the chapter). relating the organisation’s business objectives to those of the individual. What problems may be encountered in applying a standardised performance management system throughout the 100 countries in which Tyco operate? The overall aim of Tyco’s performance management system is to contribute to the company’s goals of achieving operational excellence and becoming one unified company. and training and development to support performance management. crucially. This.

which seems intuitively wrong. H. The complexity of ideas contained in the previous answers to this case study suggests that Tyco employees in different operating countries will think very differently about some of the issues. But the cost of this is the element of standardisation of the performance management system.Millmore et al. This will enable the company to take advantage of different ideas and insights from wherever they may come. This approach does not rule out the possibility of the MNC developing a strong corporate culture: but there is sufficient flexibility to adapt that culture to local conditions’ (Perlmutter. So Tyco’s aim. This may be an important part of the MNCs overall business strategy since the strength of international brands such as Wal-Mart and Starbucks depends upon the customer receiving a similar experience in whichever part of the world the store is situated. European Management Journal. The first approach sees cultural differences as irrelevant. This perspective sees cultural differences as a problem but does not ignore such differences. At first sight. it follows that it is likely to be even more so in cultures where dependence upon the employer has traditionally been prevalent. References Hiltrop.M. Here Tyco will be concerned to use cultural differences as a learning opportunity and a source of competitive advantage. 1.. Take. 9–18. The second approach to dealing with national cultural differences is minimising cultural differences. An example here is China. may not be realisable. however laudable. 286–294. Indeed. solve problems and make decisions both within and outside their employing organisations’. Strategic Human Resource Management: Contemporary Issues. Columbia Journal of World Business. Chapter 3 specifies three ways of dealing with national cultural differences: ignoring the differences. 1969). both inside and outside work. or at least to push them to one side in the pursuit of standardisation and efficiency. this seems consistent with Tyco’s desire to ‘become one unified company…. The third approach is utilising cultural differences. (1969) The tortuous evolution of the multi-national corporation. minimising the differences and utilising the differences. Perlmutter.to unite Tyco teams throughout the world into a single operating company with a healthy culture characterised by alignment and growth opportunities’. 93 © Pearson Education Limited 2007 . Instructor’s Manual that ‘(national culture) affects all aspects of how people think. which is located in the host country should be as local in identity as possible’. (1995) The changing psychological contract: the human resource challenge of the 1990s. the notion of individual responsibility for self-development. J. It may be that standardisation is consistent only with bureaucracy and effectiveness with differentiation. Tyco may admire the marketing strategy of these organisations but this implies an HR strategy that is similarly uniform. for example. We are left wondering whether an effective standardised performance management system is possible. If this is a problem for many organisations in highly individualist cultures like the United States and the United Kingdom. 13(3). such flexibility may be dictated by the necessity for adapting to local custom and legislation. Operating companies in different countries are given some decision-making autonomy on the basis that ‘local people know what is best for them and the part of the organisation. whose state-owned enterprises for much of the latter part of the 20th century operated a cradle to grave welfare system where the employer accepted responsibility for all aspects of the employee’s life.

SHRD is characterised by: senior management sponsorship. transformation in the role of HRD specialists from training providers to proactive change agents. it is possible for the more familiar systematic cycle of HRD to be modelled to incorporate the characteristics of SHRD.CHAPTER 10 Strategic human resource development: pot of gold or chasing rainbows? Learning outcomes By the end of this chapter you should be able to: • • • • • develop and discuss a continuum of strategic maturity upon which different approaches to Human resource development (HRD) can be located. and comprehensive evaluation of SHRD interventions. At the strategically mature end HRD approaches and specific interventions reflect full strategic integration through their effective accommodation of two-way vertical and horizontal integration. effective collaborative partnerships between HRD specialists and line managers. The learning organisation focuses on the process of learning to learn so as to enable learning within organisations to • • • 94 © Pearson Education Limited 2007 . critically review the rhetoric and reality of the role of managers as key SHRD stakeholders. identify and explain the major features of Strategic human resource (SHRD) and organise these into a conceptual framework. the commitment and active involvement of all levels of management. systematic environmental scanning to maximise the lead time for developing HRD responses to change. tactical responses to operational problems encountered. a learning culture. Summary • It is possible to construct a continuum of HRD strategic maturity upon which different approaches to HRD can be positioned. analyse the significance of the learning organisation and knowledge management to SHRD. Here any strategic linkage is accidental and HRD interventions represent isolated. The learning organisation and knowledge management have emerged as two recent approaches to HRD that have a strong strategic connection. analyse how systematic approaches to HRD can be accommodated in conceptual frameworks of SHRD. At the strategically immature end HRD is conducted in isolation of organisational strategies. Although often positioned at the non-strategic end of the continuum of strategic maturity. In addition to strategic integration.

An important feature of the chapter is the attention given to the traditional systematic cycle of HRD and its strategic potential. Felicity and Stanley. we believe it is essential that students read and make notes from the chapter. This strategic potential is often overlooked in the SHRD literature whereas in Chapter 10. We have found that producing mind maps of the chapter content is a useful approach to note taking and encourages students to reflect on the internal integration of the subject content of the chapter. As standard. depicted in Practice Boxes 10. will provide a useful teaching vehicle for the exploration of the SHRD subject domain. Strategic Human Resource Management: Contemporary Issues. Instructor’s Manual be faster than their competitors and the rate of change. • Within a multi-stakeholder perspective.Millmore et al. These represent three key themes running through Chapter 10 although with respect to multi-stakeholder responsibilities and involvement the emphasis on HRD professionals commonly found within the SHRD literature is downplayed in favour of a greater focus on managers as HRD stakeholders. for a variety of reasons. throughout the chapter. managers can be identified as the linchpin for the successful execution of SHRD. through the use of a conceptual model of strategic maturity developed along the lines of a continuum. we have tried to capture and explore different degrees of strategic HRD focus. This is graphically illustrated by ‘A case of two managers’. or integration. Here. their willingness and ability to assume this central role in SHRD is questionable. the centrality of learning and a learning culture to SHRD and multi-stakeholder responsibilities and involvement. We hope the concept of a continuum. In this literature there is a particular emphasis on strategic integration. We use a variety of vehicles to bridge student preparation and class-based activities in order to enhance their understanding of the chapter content and its overall relationship to managing HR strategically. An important consideration here is the critical role played by managers in learning and development generally and its strategic manifestation particularly. However. Student preparation Prior to the class.. along with other models of HRD. Sometimes this may be 95 © Pearson Education Limited 2007 . we would ask students to make a note of any queries arising from their reading and to come to the teaching session prepared to raise them. disseminate and utilise existing knowledge and generate new knowledge in order to sustain an organisation’s competitive position and promote innovatory behaviour. Teaching and learning suggestions Comment Contrary to the situation for strategic human resource planning and strategic recruitment and selection there is a much greater wealth of literature available on the topic of strategic human resource development (SHRD). with an absence of any strategic connection at one end and full strategic integration at the other. Both concepts place a premium on human capital as the route to sustainable competitive advantage where learning and knowledge can assume the status of an organisation’s core competence. we have attempted to show that irrespective of how HRD is portrayed or constructed it is possible to provide it with a strategic focus. Knowledge management adopts a narrower focus and seeks to capture.11.10 and 10.

Strategic Human Resource Management: Contemporary Issues. Instructor’s Manual formalised by asking students to write down (as questions) the three issues addressed by the chapter where they would like further clarification and guidance. To what extent could HRD practice in an organisation known to you be classified as strategic and what would be necessary to increase its strategic credentials? In the classroom Clearly the approach adopted to ‘student preparation’ can be followed through into the classroom. and familiarise themselves with the chapter case study (or an alternative case supplied in advance) and come to the session prepared to tackle the case questions. Our outline answers to both self check and reflect questions and case study questions follow in the next two substantive sections of this chapter guide. Second. students can be formed into groups to share their individual answers and draw conclusions from their discussions. Where case study work has featured as part of preparatory activities. This avoids providing lecture input that simply repeats what students have already grasped. if preparing answers to self check and reflect questions was not part of preparatory work but consideration of the questions is to feature as part of the teaching session. students can be asked to contribute individual responses that are then subjected to plenary discussion.. While preparing answers to self check and reflect questions has been set as part of preparation for the teaching session. we find it useful. similar approaches to those suggested for self check and reflect questions can be adopted. to provide a snappy summary of key issues. Drawing on the models and conceptual developments contained in the chapter. preparatory activities and classroom discussion for the topic of strategic HRD include: 1. when adopting this approach. reinforces the value of reading as an essential prerequisite for class-based discussion and provides a platform from which further class-based activities can be launched. However. complete the self check and reflect questions and come to the session prepared to share and discuss their responses. which themselves can be usefully critiqued. Pre-set questions that we have found useful for structuring student reading. However. there 96 © Pearson Education Limited 2007 .Millmore et al. How could organisational HR practice be developed and implemented to foster greater commitment among managers to their HRD role responsibilities? 5. once student queries have been exhausted. A starting point that we find useful is to surface and discuss the issues arising from students’ preparatory reading. Why are the concepts of the learning organisation and knowledge management so difficult to get to grips with? 4. This is our preferred approach because it makes students more accountable for their personal learning and reserves any group work for case study analysis. we would favour the group approach as a more stimulating approach. If coming to the case afresh. what for you constitutes SHRD? 2. In all cases student responses can be considered against our suggested answers. To what extent is SHRD an unrealistic organisational aspiration and why? 3. Students may also be asked to do one or more of the following: • • • address pre-set questions and write their answers briefly in note format. First. at least two alternatives present themselves.

Second. Third. At another level. One common denominator amongst students is that they are all actively engaged (or should be!) in the process of learning. Of these. is to ask them to reflect on the relevance of concepts underpinning the learning organisation and knowledge management to their student learning experiences and how they think these could be exploited in the world of work by both themselves and their work organisations. An interesting exercise. is seen to lie at the heart of SHRD. Therefore. which incorporate a placement element. there is a clear focus on continuous individual and organisational learning and growth. Answers to Self-Check and Reflect Questions 10.. At one level. with its emphasis on developing human capital as a core competence. we have found it both feasible and useful to surface these experiences during class discussion and to subject them to critical analysis in order to evaluate their strategic credentials. SHRD can be viewed as a process that helps influence and shape strategy making. providing workplace learning experiences and utilising the resultant outputs of knowledge.1 Based on the story so far. is where HRD is managed strategically to help achieve organisational objectives. There are also a number of follow-up study suggestions after the chapter summary that can be undertaken by students either individually or in groups and an extensive list of references provides many opportunities for directed further reading. There is also due consideration given to mutuality of interests between individual and organisational needs through focusing on achieving the longer-term aspirations of both. Instructor’s Manual is unlikely to be time for groups to consider all four questions. strategic integration is the most frequently cited but takes on a number of different forms. ‘INA’. it is possible to identify a focus on future change that not only reinforces the long-term perspective but also casts SHRD into a proactive as well as reactive process. what do you think are the essential characteristics of SHRD? Analysing the content of HRD/SHRD definitions surfaces a number of characteristics of the concept. In addition.Millmore et al. Lastly. First. the creation of a learning culture. If they have not already been used as part of class activities. therefore. Here we would suggest that groups major on one of the case questions only moving on to others if they have time. Our outline answers to both self check and reflect questions and case study questions follow in the next two substantive sections of this chapter guide. is horizontal integration with other SHRM activities. Follow-up work The pedagogic features adopted throughout this book are intended to offer up a number of alternatives for follow-up work while at the same time leaving the lecturer free to add or substitute their own ideas. Strategic Human Resource Management: Contemporary Issues. skills and attitudes is seen as a necessary input into organisational learning and the achievement of business goals and strategies. HRD is an area where almost every student has some experience irrespective of whether they are full or part time. will serve as a useful reinforcement of chapter content. the self check and reflect questions and/or the chapter case study. 97 © Pearson Education Limited 2007 . The majority of full-time students will have accumulated work experience prior to and during their higher education studies and many will be following business-related courses.

Strategic Human Resource Management: Contemporary Issues. which gives rise to a number of potential problems. For example. the adoption of SHRM may result in the total abandonment of a specialist HR (and HRD) function making it impossible to activate the HRD functional interventions anticipated by Garavan. line managers and senior managers with no reference to employees. Instructor’s Manual 10. against this. how would you critique Garavan’s depiction of SHRD as summarised in Key Concepts 10. Within Garavan’s analysis business strategy is introduced in a generalised way that masks its true complexity and SHRD is essentially cast in a downstream relationship to it (although there is acknowledgement of the potential for HRD to influence strategy formulation through its attention to environmental scanning). or even increased. there may be a need for a set of technical skills necessary to 98 © Pearson Education Limited 2007 .3 How can SHRD help support second-order strategy changes designed to produce a flatter organisational structure through delayering? Recessionary pressures and cost reduction strategies frequently lead to organisations trying to do more for less. Another problem area arises around the central characteristic of 'integration (of HRD) with organisational missions and goals’ (Garavan. while at the same time the displaced managerial processes need to be absorbed into the job specifications for those that remain. This is not to say that this shift in responsibility is an outcome of SHRD but it is legitimate to question whether the onus of responsibility might be different under HRD and SHRD respectively. Stakeholder involvement covers HRD specialists. including the emphasis of on-the-job training versus off-the-job training. Such issues are discussed at length elsewhere in this book and you are particularly referred back to Chapters 1.2 Before reading on. Often this means substantial downsizing and/or delayering with the two frequently being synonymous as layers of management are removed from the organisation. Lastly. approaches to the more prosaic areas of training needs analysis and HRD delivery. In previous chapters it has been stressed that strategy is a multi-dimensional concept incorporating two-way vertical integration against a number of different orders (or levels) of strategy. Most of the key characteristics he identified relate specifically to the HRD function. However. his two characteristics of ‘top management support’ and ‘line manager commitment and involvement’ (Garavan. In order to accommodate restructuring through delayering employees almost inevitably require a different skills base.2? Although Garavan’s early work provides a very useful starting point to an exploration of SHRD he appears to approach the subject very much from the perspective of the HRD specialist. Increasingly employees may be expected to take the lead role in their own personal development thereby shifting responsibility for SHRD.. This would clearly represent a position that is inconsistent with SHRM with its emphasis on devolvement of HR to line managers. Third. might be differently oriented under SHRD compared to HRD. his characteristic features of SHRD appear to have a very managerialistic bias. 1991: 17–18). it could be argued that this perspective may signal that the HRD function is seen as the most important stakeholder with prime responsibility for HRD. When they are applied in tandem the consequence for the remaining workforce is that levels of output may have to be maintained. Similarly.Millmore et al. By placing together a heavy emphasis on the functional responsibilities of HRD specialists on the one hand and increased managerial responsibility and involvement on the other it may be setting up a recipe for conflict between these two respective stakeholders. First. 7 and 8 for confirmation. if taken to its extreme. It may be recalled that in a number of definitions reviewed earlier there was an emphasis in the mutuality between individual and organisational growth such that SHRD was concerned not only with strategic integration but also with developing employees towards their full potential. 1991: 18 and 20) reflect the SHRM roots of SHRD but could lead to a second difficulty. 10. Firstly. although the absence of a specialist HRD function may be rare in large organisations the same cannot be said for small and medium-sized organisations. A final possible area of critique arises from potential gaps in Garavan’s (1991) analysis.

problem solving. refers to Top management support – where the strategic integration of HRD requires the active support and participation of senior management in order to become a reality and Line manager commitment and involvement – where the line manager takes centre stage in identifying and addressing the HRD needs of subordinates. Organisations will then need to develop specific HRD interventions to address these needs and are likely to do so against the conventional decision options confronting HRD practitioners. This is consistent with the key role played by managers in performance management systems (Chapter 9) where they play a vital downstream and upstream role. commitment and involvement have been identified as key characteristics of SHRD. for example. For example Garavan’s (1991) analysis. performance appraisal and discipline. competency-based HRD programmes and the use of open learning as a vehicle for acquiring theoretical knowledge.4 Why might it be argued that managers are the linchpin in the successful introduction and maintenance of SHRD? Underpinning SHRD is the notion of strategic integration where HRD acts to both influence and shape an organisation’s strategic direction and support its effective implementation. Instructor’s Manual support multi-skilling in order to enable employees to learn the jobs of colleagues and to cross hierarchic job boundaries. there are conceptual skills. as a component of SHRD. Examples include quality assurance. In the downstream role they act to cascade strategic integration down through the organisation. McCracken and Wallace (2000) built on these two propositions to argue that SHRD requires top management leadership and line manager collaboration with HRD specialists to develop strategic partnerships if full strategic integration is to be achieved. Examples here could include giving and receiving feedback. communication.Millmore et al. The SHRD portents for effective restructuring. preventative maintenance and customer service. HRD. work scheduling. which are frequently demanded by the vertical integration of work particularly where it embraces managerial responsibilities. negotiation. Approaches to HRD frequently focus on knowledge and skill dimensions and neglect attitudes perhaps in the hope that appropriate attitude change will automatically flow from behavioural change! The business conditions that frequently spawn restructuring programmes may well lead to disinvestment in HRD rather than challenge the myopic managerial stance on HRD. there are behavioural skills that are strongly associated with management processes and effective team organisation. for example. They also argue that senior managers should take responsibility for scanning the organisation environment and identifying the HRD implications arising from their analysis (Key Concepts 10. stock inventories and maintenance functions.3). In their upstream role they act as the channel for the upward communication that can highlight impediments to strategy implementation and/or provide an input into strategy making. Almost every change to organisational structures will carry with it the need to develop additional and/or different skills in the workforce.2. Management support. This potentially represents a formidable HRD agenda particularly given the multi-dimensional nature of the skills base outlined above. 99 © Pearson Education Limited 2007 . Thirdly. skills associated with quality control. however. group dynamics and personnel functions such as recruitment. Secondly. on-the-job versus off-the-job HRD or internal versus external provision. Managers are arguably the conduit through which this two-way strategic integration can be developed. Strategic Human Resource Management: Contemporary Issues.. risk assessment. This clearly places a premium on management development. which are designed to provide practical skill development. are not particularly encouraging. Lastly. 10. managers may not be of a sufficiently high calibre to handle the challenges to traditional command and control structures presented by restructuring through delayering. leadership. depicted in Key Concepts 10. Possibilities might include National Vocational Qualifications (NVQ)s. Whatever management's motivation for delayering the implications it has for SHRD should now be readily apparent.

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The active involvement of managers in SHRD covers a number of key areas of responsibility. Managers: • • • will frequently take the lead role in identifying HRD needs; are likely to have substantial input into organisational SHRD resourcing decisions; increasingly contribute directly as coaches and mentors as SHRD interventions move away from prescriptive off-the-job courses to focus on the learning opportunities offered by the immediate workplace; and are likely to be at the heart of the effective transfer of know-how acquired either through offthe-job HRD or workplace learning.

Senior managers arguably represent the dominant coalition of interests in organisations and through their decisions and behaviour, exert strong influence on the prevailing organisation culture. Their decisions on the structural design of the organisation, commitment to their personal development and performance in executing their HRD role responsibilities help determine the extent to which the organisation develops a learning environment. For example, the extent to which mangers are able to create the conditions that support mutual learning and which capture, disseminate and share learning as well as an appropriate culture that supports experimentation, risk-taking, independent thinking, discord, authority based on expert knowledge rather than status is likely to be instrumental to the creation of a learning culture. 10.5 What factors have contributed to the relatively low level of importance attaching to management development? Running through the chapter are a number of references to factors that may impact adversely on management development. For ease of reference these might be grouped under three headings. Based on your own experiences you may of course be able to add to those factors identified here. Firstly, there are the direct experiences of the managers themselves. They may have got where they are with little personal investment in management education and training, which may therefore be perceived as largely irrelevant. This attitude is likely to be reinforced if organisations demonstrably promote staff into management positions on the basis of their functional expertise rather then their potential management competence. Secondly, their interpretation of their role may emphasise functional rather than managerial responsibilities. This may reflect a comfort zone where they find it easier to carry on much as before rather than tackle a set of difficult responsibilities for which they feel inadequately prepared. Further if the way they develop their staff is not explicitly rewarded their functionally oriented behavioural patterns are likely to be reinforced. Thirdly, the way they are managed within the organisation will impact on their attitudes to personal development. They may have experienced little by way of quality one-on-one development time with their manager and are therefore exposed to poor role models. Further, the emphasis on short-term results may send out signals that longer-term investment in HRD is a low priority.

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Answers to Case study questions
1. How is INA trying to build a learning culture and how would you assess its success to date? INA’s commitment to the development of a learning culture and the critical strategic significance of it doing so successfully are clearly evident. In moving to the position where the company intends to compete on the basis of its skill base, the development of a culture of continuous improvement and building towards a learning organisation are seen as essential in order for it to realise its strategic vision. The company regards its survival and future success as being dependent on its ability to learn faster than the rate of change. Although only a short way into its period of strategic re-alignment, the company has already taken a number of significant steps towards building a learning culture. An interesting initiative was the initial step taken to hold individual meetings with all employees, which surfaced their perceptions on the obstacles confronting the development of a learning culture and ideas on how they could be addressed. The fact that management responded to their ideas with a clear set of actions communicated early confirmation of the importance of employee voice and of managers’ own recognition of their need to learn. Another key initiative was the development of systems to support company financed individual learning plans (similar to EDAPs) particularly, as it transpired, that some of the HRD outcomes of these plans involved employees attending non work-related study in their own time. Such investment should have communicated a clear message that the company values and is prepared to support learning for its own sake. The re-launch of a suite of NVQ programmes was clearly designed to underpin the development of the company’s skill base. The introduction of the NVQ level 2 programme in performing manufacturing operations for all of the company’s production operators exemplifies INA’s commitment to learning and development throughout the organisation. Another important milestone was the development of a learning centre. Here, computerised learning facilities provide a network of HRD possibilities for all staff and as an example of its impact to-date 100 employees have signed up for the Government-initiated Learndirect courses. In-house continuous improvement courses further reinforce the focus on learning and, importantly, this is increasingly being supported by those already trained becoming involved as coaches, mentors and NVQ assessors in order to help cascade the outputs of the various training programmes throughout the organisation. As roles are redefined HRD support is also being offered to help facilitate these changes such as programmes to develop meetings skills to support the active engagement of employees in the works council and its sub-committees. Interestingly the trade union Amicus also appears to be fully committed to fostering the development of a learning organisation. It has secured significant funding for investment in the company’s learning centre and appoints and sponsors four learning representatives and uses TUC courses to support their role development. At this early stage it is obviously impossible to assess how successful INA has been in its intent to develop a learning culture because it is, by definition, a long-term project. However, early signs are encouraging. For some operators gaining the NVQ award represented their first ever external qualification and a number already seem to have got the learning and development bug as they are now progressing through levels 3 and 4 of the programme. Other encouraging signs are: the active use of learning centre facilities by employees; the transfer of non work-related study to work situations by some employees; the general organisational commitment to learning being valuable in its own right; and the cyclical impact of learning and development as those already trained increasingly get involved in the development of others and thereby further develop their own skills base.

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2. In a number of models of SHRD, employees, line managers and senior managers are identified as having important roles to play in its development (for example Mabey et al, 1998; McCracken and Wallace, 2000). To what extent do these stakeholders represent obstacles to the development of SHRD in INA and how are any such obstacles being addressed? The starting position for business turnaround was not particularly propitious. The workforce was characterised by long-serving employees who had received little task-based HRD. In addition the workforce was generally cynical about management’s change intentions because of the failure of previous turnaround initiatives. This cynicism was arguably evidenced by the operation of the ‘grapevine’, which was not only rife but had become the most believed source of information in the company. From the collective (union) perspective: the works council was regarded as little more than a forum for discussing housekeeping issues; shop stewards viewed confrontation and not collaboration as the natural modus operandi; and employee relations had deteriorated to such a low level that despite INA’s dire predicament strike action was being actively mooted in response to a number of unresolved issues. For line and senior managers the major frustration was that they could not adequately fulfil their role responsibilities, including those related to HRD. In response to the company’s predicament, the demands of production had resulted in the HR roles of managers, supervisors and team leaders becoming diluted. In a chain reaction team leaders were spending too much time helping out with production meaning that the management hierarchy had become distorted with supervisors operating as team leaders and managers as supervisors. Also management’s previous track record in HRD did not augur well for INA’s change in strategic direction. Previous attempts to build skills through NVQ (National Vocational Qualifications) programmes had foundered because of lack of time and commitment amongst supervisors to undertake the necessary assessments of employee competencies. Based on the above, the identified stakeholders could have represented a very significant impediment to the proposed strategic re-alignment. However, action being taken appears not only to be addressing identified obstacles but doing so successfully. As a starting point we would argue that the steps being taken to build a learning culture described immediately above, carry with them significant potential to successfully address the obstacles presented by stakeholder attitudes, behaviours and competencies. For employees, two steps appear to be particularly important. First, was the one-to-one meetings directed at: communicating the company’s position honestly; explaining the company’s vision for business turnaround; and signaling management’s commitment to that vision. Second, was the direct HRD investment by INA in its employees such that even if the latest attempt at business turnaround failed those employees would have at least been equipped with high-level, portable skills that would significantly enhance their employability. A key step from the collective perspective was the forging of a partnership agreement with the trade union Amicus. This resulted in the union signing-up to the change programme and appears to have been a major contributory factor in changing the employee relations climate and opening up a genuine twoway dialogue as exemplified by the re-alignment of the works council’s remit and operation. For managers, supervisors and team leaders an important step has been the redefinition of their role responsibilities to enable them to commit to their HRD responsibilities. This has been supported by training needs analysis to identify skills gaps that might constrain effective role performance and appropriate training to meet identified needs such as communication. This has led, for example, to the introduction of an NVQ level 3 in business improvement techniques for supervisors and an NVQ level 3 in management for team leaders.

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3. Where would you position INA along the HRD strategic maturity continuum (Figure 10.8) and how would you justify your placement decision? Drawing on the work of Garavan (1991) and McCracken and Wallace (2000), the strategic credentials of INA’s HRD activities have initially been analysed against their 9 characteristics of HRD as follows: 1. There is clear vertical strategic alignment between INA’s decision to compete on the basis of quality and its commitment to develop workforce capability through switching investment in machinery to investment in human capital in order to build an employee skill base capable of realising the company’s strategic vision. Although there is reference in the case to the works council now playing a key role in developing strategy there is too little detail here to suggest that this vertical strategic integration is anything but downstream at this stage and is therefore more consistent with Garavan’s views. 2. Consistent with Garavan, the active support of senior management for HRD is apparent through the many initiatives detailed above. This is reinforced by the assistance senior managers provide in customising training to meet INA’s context and their participation in its delivery to those with leadership roles. However, no clear picture emerges that senior managers are adopting the strategic HRD leadership role championed by McCracken and Wallace. 3. The strategic and consequent HRD re-alignment, identified in 1 above, appears to have been formulated directly from environmental scanning. However, this is again more consistent with Garavan’s views as it appears to reflect the previously cited downstream strategic relationship rather than a senior management role to scan the environment for HRD implications as advocated by McCracken and Wallace. 4. HRD plans and policies appear to be being systematically integrated with organisational strategy within a clearly defined HRD strategy directed at developing a continuous improvement culture and building towards a learning organisation consistent with the SHRD views of McCracken and Wallace. 5. There is clear evidence of line manager commitment and involvement. This is consistent with their pivotal role in HRD anticipated by Garavan. However, there is no substantive evidence of line managers developing strategic relationships with HRD specialists as propounded by McCracken and Wallace. 6. The case provides no substantive evidence related to HRD being developed alongside and in a complementary way with other HRM activities. Therefore, although there may be some implicit evidence to the contrary, it is argued that horizontal integration is missing from the strategic equation. 7. The case provides no substantive evidence related to the roles of training specialists in INA. However, reports of INA’s story by Roberts (2003) and Evans (2004) both appear to indicate that the Personnel Manager in delivering his HRD role responsibilities is fully engaged as an innovative change consultant consistent with McCracken and Wallace’s construction of SHRD. 8. Again consistent with McCracken and Wallace’s construction, there is an evident and significant role being played by HRD to influence and change organisational culture. 9. The case provides no substantive evidence related to the process of evaluating HRD in INA. However, the summary of achievements to date, detailed at the end of the case, point to the success of the changes being made at INA particularly in terms of their strategic contribution. Without further data it is impossible to assess the contribution of the various HRD interventions although against this it could be argued that this must have been substantial for the company to be named ‘Welsh people development company of the year’ in 2003 and shortlisted for CIPD’s annual People Management Award in both 2003 and 2004.

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In addition, it is argued that evidence of multi-stakeholder involvement in HRD places INA towards the right hand side of the continuum of HRD strategic maturity depicted in Figure 10.8 in the chapter. Apart from the involvement of senior managers, line managers and training specialists apparent in the foregoing analysis, this includes: • • • • collaboration with a local college in delivering the NVQ level 2 programme in performing manufacturing operations; employee representatives through their participation in the works council, its subcommittees and as learning representatives; support of the trades union Amicus in part funding INA’s learning centre; and the pivotal role being played by line staff in transforming the company’s skill base.

On balance we argue that the above analysis (points 1, 2, 3, 5 and 9) reflect more Garavan’s (1991) depiction of SHRD although elements of McCraken and Wallace’s depiction are evident in points 4, 7 and 8. This, together with evident multi-stakeholder involvement, pushes our placement of INA on the continuum (Figure 10.8) further to the right. In conclusion, although recognising that there is limited evidence of two-way vertical strategic integration, we argue that INA’s current position on the 6 point continuum of HRD strategic maturity is significantly to the right of point 4 (‘HRD’) and just short of point 5 (‘SHRD’). 4. Either – what recommendations would you make to help INA move further towards strategically mature HRD? Or – what further evidence would be needed to justify positioning INA at the SHRD end of the HRD strategic maturity continuum (see Figures 10.3 and 10.8)? Given our analysis in Question 3 above we argue that to fully satisfy positioning INA at the SHRD point on the continuum and to move it even further to the right towards the final point of SHRD plus requires: • two-way strategic integration where HRD more explicitly informs strategy formulation and subsequently leads to the position where employee capabilities become identified as the organisation’s core competence; the development of strategic partnerships between line managers and those with specialist HRD role responsibilities; concerted attention being paid to horizontal integration to ensure the development of a complementary bundle of HRM activities; and success criteria of HRD interventions to be defined at the point of their development and subsequently evaluated using transparent processes with results being openly disseminated throughout the organisation.

• • •

With a nod to the second’ option of Question 4, it could of course be that INA is already doing the above and all that is required is evidence to this effect. More directly, we would argue that to fully justify our current positioning of INA on the continuum requires additional evidence in support of: • HRD plans and policies being developed within a clearly articulated and coherent HRD strategy;

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McCracken. and Wallace. References Evans. and evaluation of the direct strategic contribution of HRD. Journal of European Industrial Training. 105 © Pearson Education Limited 2007 . 281–290. 15(1). 24(5). (2000) Towards a redefinition of strategic HRD. M. Z. Strategic Human Resource Management: Contemporary Issues. 17–30.N. J. Instructor’s Manual • • • • the organisation change consultant role of HRD specialists. Journal of European Industrial Training. 11 November. Garavan. (2003) Learning leads the way. (1991) Strategic human resource development.Millmore et al. HRD’s input into shaping and managing culture change. M. 6 November. People Management.. it is argued that it is too early to position INA against a concept that is fundamentally long-term in its orientation and that what will be needed is an accumulation of confirmatory evidence over time. 32–33. 34–35. Lastly. the strategic contribution being made by those with specialist responsibility for HRD. Roberts. (2004) Bearing up brilliantly. People Management. T.

Strategic reward management plays an important role in delivering the organisation’s overall business strategy by creating in employees certain behaviours. which includes a reward strategy as well as other HR strategies such as the cultural strategy. • • • 106 © Pearson Education Limited 2007 . In this chapter the move from traditional pay structures to job family and broadbanded structures were examined. strategies. which impact upon strategic reward management are the organisation cultural strategies. the structural strategy and other HR strategies. The intra-organisational factors. Competence-related pay was analysed as the means by which reward may complement other HR strategies. The reward contribution to the organisation’s structural strategies involves changing reward structures. Principal among these are those factors. the team and the business unit and the organisation. explain the factors in the external environment which have led to the increased interest in strategic reward management. plans and processes used by organisations to develop and maintain reward systems.CHAPTER 11 Strategic reward management: Cinderella is on her way to the ball Learning outcomes By the end of the chapter you should be able to: • • • define reward management and strategic reward management. structural strategies and other HR strategies. which have impacted upon the commercial environment in which organisations operate creating the necessity to be more competitive and responsive to change. A variety of factors in the external environment have led to the increased interest in strategic reward management. These may be at the level of the individual. These employee behaviours may be produced by an HR strategy. the need for which are implied by the business strategy. Summary • Reward management is concerned with financial and non-financial rewards to employees and embraces the philosophies. In terms of reward the principal contributors to the organisation’s cultural strategies are pay for performance schemes. policies. analyse the links between intra-organisational factors that impact upon strategic reward management.

which is the theme of this chapter. Our outline answers to both self check and reflect questions and case study questions follow in the next two sections of this chapter guide. Student preparation As with other chapters. The chapter also includes a discussion of some of the ethical concerns which attend new types of reward. such as recognition and pensions. Instructor’s Manual Teaching and learning suggestions Comment The chapter makes the point that reward has always enjoyed something of a Cinderella status in the world of personnel management. Pre-set questions that we have found useful for structuring student reading. which impact upon strategic reward management and strategic reward management. It is this change.. The chapter has a detailed analysis of the factors in the external environment. This includes non-pay benefits. we believe it is essential that students read and make notes from the chapter prior to the class. complete the self check and reflect questions and come to the session prepared to share and discuss their responses. Strategic Human Resource Management: Contemporary Issues. But the main part of the chapter is about the environment internal to the organisation and the links between intra-organisational factors. we would ask students to make a note of any queries arising from their reading and to come to the teaching session prepared to raise them. It has traditionally been about the rather dull but necessary concerns of wage and salary administration than the more exciting arena of strategy. How would you define strategic reward management and set it into the context of SHRM? 107 © Pearson Education Limited 2007 . As standard. Sometimes this may be formalised by asking students to write down (as questions) the three issues addressed by the chapter where they would like further clarification and guidance. The term ‘strategic reward management’ is also explained. This chapter covers evidence. reward now plays a central part in HR strategy. We use a variety of vehicles to bridge student preparation and class-based activities in order to enhance their understanding of the chapter content and its overall relationship to managing HR strategically. A broad definition of reward is used in the chapter. and familiarise themselves with the chapter case study (or an alternative case supplied in advance) and come to the session prepared to tackle the case questions. which have led to the increased interest in strategic reward management. which suggests that the situation in many organisations may not have changed that much in the last twenty years. Students may also be asked to do one or more of the following: • • • address pre-set questions and write their answers briefly in note format. This serves as the guiding framework for most of the chapter.Millmore et al. However. preparatory activities and classroom discussion for the topic of strategic reward management include: 1. as well as wages and salaries. for the more progressive organisations times have changed.

What are the principal strategic relationships between strategic reward management and corporate strategy and how could they be evidenced in practice? In the classroom A starting point for classroom activities that we find useful is to raise and discuss the issues arising from students’ preparatory reading. students can be asked to contribute individual responses that are then subjected to plenary discussion. Second.. once student queries have been exhausted. Where preparing answers to self check and reflect questions has been set as part of preparation for the teaching session. to provide a summary of key issues. Follow-up work The pedagogic features adopted throughout this book are intended to offer a number of alternatives for follow-up work while at the same time leaving lecturers free to add or substitute their own ideas. any prior preparation of answers to the self check and reflect questions and/or the questions suggested for student preparation and/or the chapter case ‘Developing a global reward strategy at Tibbett and Britten Group’ will serve as a useful reinforcement to chapter content. at least two alternatives present themselves. First. which themselves can be usefully critiqued. Our outline answers to both self check and reflect questions and case study questions follow in the next two sections of this chapter guide.Millmore et al. There are also a number of follow-up study suggestions after the chapter summary that can be undertaken by students either individually or in groups and an extensive list of references provides many opportunities for directed further reading. students can be formed into groups to share their individual answers and draw conclusions from their discussions. However. In all cases student responses can be considered against our suggested answers. This is our preferred approach because it makes students more accountable for their personal learning and reserves any group work for case study analysis. Where case study work has featured as part of preparatory activities. we find it useful. What factors in the external environment have led to the interest in strategic reward management? 3. Our approach here would be to start with a more general exploration of the strategic reward management implications of the case. This avoids providing lecture input that simply repeats what students have already grasped. However. similar approaches to those suggested for self check and reflect questions can be adopted. Strategic Human Resource Management: Contemporary Issues. Instructor’s Manual 2. when adopting this approach. If they have not already been used as part of class activities. if preparing answers to self check and reflect questions was not part of preparatory work but consideration of the questions is to feature as part of the teaching session. reinforces the value of reading as an essential prerequisite for class-based discussion and provides a platform from which further class-based activities can be launched. we would favour the group approach as a more stimulating method. 108 © Pearson Education Limited 2007 .

it tends to be larger organisations that blaze the trail in terms of ‘good HR practice’ and second. This may be for two reasons in particular. As the chapter text notes. some truth in this. hinge upon the willingness of governments to legislate. The general thrust of the organisation’s affairs serves the model in the same way as the formal written strategy. Developing competences in employees is worthless if they are not to be used in the workplace. when measures such as this are introduced smaller organisations cry foul and argue that initiatives such as work-life balance policies hinder their ability to manage their own businesses and harm their commercial viability. pay) to intrinsic factors (e. of course. However. putting a proportion of employees’ income at risk may lead to such behaviours as overwork. 11. which may damage both mental and physical health.Millmore et al. Much work has gone into defining competences in the areas of job design. you may argue that the cause of women wishing to have families and careers would be greatly harmed by the absence of maternity legislation. There is.3. Variable pay also carries with it the threat of greater unfairness in that decisions have to be made by managers about the level of pay to be received.2 is more appropriately applied to the larger organisation with a specialist HR (if not necessarily reward) function. the more subjective the process becomes the more scope there is for perceived unfairness among employees. competence 109 © Pearson Education Limited 2007 . There are other potential disadvantages. What obstacles stand in the way of the more widespread adoption of work-life balance policies? It is undoubtedly more likely that work-life balance policies will be more prevalent in larger organisations. But relatively little attention has given to the issue of measurement for pay purposes. therefore. 11. Additionally. resources tend to be spread less thinly in larger organisations. What problems occur to you when you look at Figure 11.based pay? Most problems occur with the definition and measurement of competences.2. Instructor’s Manual Answers to Self-Check and Reflect Questions 11. Strategic Human Resource Management: Contemporary Issues. Chapter 1 explains that strategy formulation is not the neat.2? There is one which cries out from the diagram: what if the organisation does not have a business strategy? The theory of strategic reward management explained in the chapter revolves around the assumption that this will be in place. The pace the adoption of general work-life balance policies may.. Moving from a situation where all pay is base pay to one where there is a combination of base and variable pay does carry with it threats. 11. Another problem may be the disentangling of the motivational effects of enhanced reward and enhanced skills. This may be more straightforward when manual skills are involved but for many knowledge-based jobs the problems come with the so-called soft skills such as team leadership or motivating others.g. What may these be? Variable pay puts a proportion of the pay packet ‘at risk’ through techniques. which the literature often assumes. That said it would be realistic to point out that Figure 11.1. Some reward commentators believe that applying extrinsic benefits (e. These reasons may provide the answer to the question. Employee wellbeing is potentially threatened by an increased amount of insecurity and unpredictability that is potentially harmful both economically and psychologically. unproblematic process. Usually. This is now taken for granted in developed countries.g. selection and training. This too creates the potential for employee instability.4 What may be some of the potential disadvantages of competence. First.2. But the absence of a formal written strategy does not necessarily invalidate the model in Figure 11.

These varied by country and by contract. many contracts were determined by the terms and conditions transferred from the customer. Preventing perceptions of unfairness is well-nigh impossible. Answers to Case study questions 1. and create competitive advantage for Tibbett and Britten Group in the marketplace. There were short. This meant that there were a wide variety of pay and grading arrangements in operation. One of the basic ‘truths’ of reward management is that all of us. initiate a cost-effectiveness review of current reward expenditure in light of what is identified as valued by employees. These were to: • • address tactical issues impacting negatively on employee motivation and engagement.. Strategic Human Resource Management: Contemporary Issues. both inside and outside our employing organisation. The potential harmful outcomes of a lack of internal reward consistency are always the perception by some employees that they are being unfairly treated in comparison with others. Most non-management employees were not on Tibbett and Britten Group terms and conditions. 110 © Pearson Education Limited 2007 . which the company wished to introduce across the company. It should be borne in mind that most of Tibbett and Britten Group’s employees were transferred from major customers such as Debenhams. Local managers had traditionally agreed to vary certain arrangements locally and to pay upper quartile rates. particularly by improving its reputation as a contractor and employer of choice. There were also differing local relationships with trade unions. or to use a particular form of competency-based pay. as employees compare our salaries with someone else. for instance. Homebase or IBM.Millmore et al. But employers can take as many steps possible to lessen these by attempting to achieve internal consistency within the organisation and external consistency with similar jobs and similar employers in the relevant labour market. and create a culture where performance drives reward and recognition. guide country managers in the alignment of reward policies and projects within overall group principles. Clearly it was felt that such fundamental concerns of reward strategy were being prejudiced by a lack of internal reward consistency.and long-term incentives and other benefits. and maintain the flexibility for local innovation and adaptability to customer's needs. While the use of Tibbett and Britten Group incentives and benefits had become more consistent. Tibbett and Britten sought to do this through bringing a measure of internal consistency to reward by establishing a group policy framework that would: help managers communicate a coherent policy on reward. Instructor’s Manual development) renders employees less motivated by the prospect of achieving new competences. Why do you think that the creation of internal consistency was such an important objective of the new reward strategy? The key to the answer to this question lies in the second and third objectives of the broader framework for reward. These employees retained their existing terms and conditions of employment. Managing the anomalies thrown up by this inconsistency was a key issue in the company's relationships both with employees and customers.

suggests decisions which do not reflect internal consistency. Again. Look again at the ten principles. Does not all human activity contain the potential for contradiction? Are we all as humans entirely rational and consistent in our thoughts and actions? Of course. As the chapter points out. Implement rewards selectively and tactically. Strategic Human Resource Management: Contemporary Issues. It may sound a bit pedantic. responding to customer requests. as opposed to their similarity. the components of this principle: flexibility. of course. and for inconsistencies such as favouritism. The latter suggests the potential for subjectivity rather than objectivity. Again. Preventing internal inconsistency is. These may be: Principle ’Think global. strongly differentiating rewards. but the emphasis upon the unique characteristics of certain roles. One of these. Instructor’s Manual 2. be unworkable. in recognition of the unique characteristics of certain roles. but the threat of internal inconsistencies must be recognised. act local’ by creating programmes that employ group principles and maintain optimum internal consistency and cohesion. Do you think there may be any potential contradictions inherent in these principles? Some potential contradictions are suggested. while providing the flexibility to adapt to local market requirements and practices. as a critical component of the Total Rewards strategy. leads to differentiation which potentially leads to internal inconsistency and perceived unfairness. Potential contradictions It may sound a bit pedantic but the very act of providing the flexibility to adapt to local market requirements and practices may in itself contain the potential to lead to internal inconsistencies. Incorporate flexibility in the design of reward programmes. we are not. 111 © Pearson Education Limited 2007 . Pay for performance. ‘recognition from the head’ rather than ‘recognition from the heart’. arguably. The pursuit of internal consistency suggests to us an activity associated with cool rationality. To deny the opportunity for managers the scope for flexibility to adapt to local market requirements would. diversity. which reflect the underlying contribution of individuals through performance assessment against stretching objectives. This can lead to a situation of ‘forced’ differentiation which contains the potential for internal inconsistency and perceived unfairness. to provide the benefit of choice across our increasingly diverse workforce and to facilitate controlled tailoring to customer requests. Being aware of its potential is neither. impossible and may be undesirable. This may be for a variety of reasons.. choice. where justified. which the Tibbett and Britten Group reward principle opposite overlooks. The answer to this question may strike you as rather over-critical. Support and encourage all managers to ‘recognise from the heart’ the contribution of individuals and teams. is that the contribution of individuals may be broadly similar.Millmore et al. one of the problems of problems of paying for individual job performance is that managers find differentiating between individual performance levels is very difficult. And Tibbett and Britten Group reward principle designers are no different from the rest of us.

112 © Pearson Education Limited 2007 . Strategic Human Resource Management: Contemporary Issues. The point was made that preventing perceptions of unfairness is well-nigh impossible. While managers at Tibbett and Britten Group may not want to go as far as revealing all the details about the rewards to individuals the basis upon such reward decisions were made will lessen the possibility of perceived unfairness. After all. Instructor’s Manual 3.. But employers can take as many steps possible to lessen these by attempting to achieve internal consistency within the organisation and external consistency with similar jobs and similar employers in the relevant labour market. the less employees know about pay reward decisions the weaker position they are in to challenge those decisions. What potential benefits do you think may accompany the achievement of greater transparency in the new reward strategy? Look again at the answer to Question 1.Millmore et al. It is tempting for employers to conceal their reward decisions as much as possible on the basis that concealment heightens management control while transparency lessens management control.

This discussion is presented under the central theme of employee involvement and participation. traditional collectivism. as are the elements involved in the development of the psychological contract at the workplace and organisational level. Four possible organisational approaches to the management of the employment relationship are presented. assess the linkages between SHRM and employee relations. Summary • The management of the employment relationship is a central area of discussion. individualised SHRM and the black hole. evaluate the concepts of partnership and the psychological contract. Key parties to the employment relationship can be the grouped into bodies representing employers and employees. identify the various formats for organising the employment relationship at a range of levels. Within this context two key approaches are discussed in depth namely partnership and the psychological contract. Two key differing perspectives in relation to a strategic approach to the management of the employment relationship – namely unitarism and pluralism – are identified and discussed. Potential policies and practices in relation to managing employee relations in a strategic manner are discussed. These four approaches are: new realism. The practical realities of developing and managing partnership are discussed. define employee involvement and voice. • • • 113 © Pearson Education Limited 2007 . define the employment relationship. research and organisational practice within the field of SHRM. Key theoretical contributions in relations to strategic HRM and employee relations have been identified and grouped. Key concepts include the shift from traditional industrial relations to employee relations. evaluate the strategic approaches to managing the employment relationship.CHAPTER 12 Managing the employment relationship: strategic rhetoric and operational reality Learning outcomes By the end of this chapter you should be able to: • • • • • • • explain the importance of the employment relationship to SHRM .

1995. Strategic Human Resource Management: Contemporary Issues. Storey. Industrial relations are generally understood to refer to the relationship between employers and employees collectively. This simplistic definition highlights a potential problem in the employment relationship. This exploration emerges in the second and third areas of this chapter. Tyson. we would ask students to make a note of any queries arising from their reading and come to the teaching session prepared to raise them. The focus of industrial relations was firmly based on collective relationships that existed between individual or often groups of employees and the representatives of employees. we believe it is essential that students read and make notes from the chapter. if the relationship is merely based on interaction at best is will be operational and as such have little strategic value for the parties involved. Schuler and Jackson. 1995. Sometimes this may be formalised by asking students to write down (as questions) the three issues addressed by the chapter where they would like further clarification and guidance. The aim of this chapter is to explore and assess the linkages that exist between employee relations and SHRM. We use a variety of vehicles to bridge student preparation and class-based activities to enhance their understanding of the chapter content and its overall relationship to managing human resources strategically. Central to this discussion has been the shift away from industrial relations to employee relations. In the third area of the chapter evidence of the practices associated with a strategic approach to the management of the employment relationship will be presented. 2003). Traditionally the management of the employment relationship has focused around the concept known as industrial relations. In the second area an analysis of key theoretical discussions on the linkages between SHRM and employee relations will be presented. namely trade unions. In the last 25 years the human resource management (HRM) literature has seen significant focus and evaluation being placed on a ‘strategic’ approach to the development and implementation of HRM policies and practices (Legge. 1999. As standard. Extensive discussions on this strategic approach will have taken place in previous chapters of this book and the purpose of this chapter is to consider the management of the employment relationship and evaluate the strategic choices that are available to the various parties in this relationship. These practices are grouped around the central SHRM concept of employee involvement and participation.Millmore et al. 1995. Student preparation Prior to the class. Boxall and Purcell.. We have found that producing mind maps of the chapter content is a useful approach to note taking and encourages students to reflect on the internal integration of the subject content of the chapter. Instructor’s Manual Teaching and learning suggestions Comment Our aim in this chapter is to consider how the management of the employment relationship can contribute to the achievement of SHRM. 114 © Pearson Education Limited 2007 . Essentially. the chapter has three key areas– the first area focuses on defining the changes that have taken place in the employment relationship. Students may also be asked to do one or more of the following: • address pre-set questions and write their answers briefly in note format. The term employment relationship can be defined most simply as the interaction between employers and employees.

How would you define the employment relationship and set it into the SHRM context? 2. Where case study work has featured as part of preparatory activities. if preparing answers to self check and reflect questions was not part of preparatory work but consideration of the questions is to feature as part of the teaching session. reinforces the value of reading as an essential prerequisite for class-based discussion and provides a platform from which further class-based activities can be launched.Millmore et al. similar approaches to those suggested for self check and reflect questions can be adopted. Second. Strategic Human Resource Management: Contemporary Issues. First. However. students can be formed into groups to share their individual answers and draw conclusions from their discussions. students can be asked to contribute individual responses that are then subjected to plenary discussion. to provide a snappy summary of key issues. preparatory activities and classroom discussion for the topic of managing the employment relationship include: 1. In all cases student responses can be considered against our suggested answers. 115 © Pearson Education Limited 2007 . Instructor’s Manual • • complete the self check and reflect questions and come to the session prepared to share and discuss their responses. at least two alternatives present themselves. Our outline answers to both self check and reflect questions and case study questions follow in the next two substantive sections of this chapter guide. This is our preferred approach because it makes students more accountable for their personal learning and reserves any group work for case study analysis. and familiarise themselves with the chapter case study (or an alternative case supplied in advance) and come to the session prepared to tackle the case questions. discussing the employee relations issues that are likely to arise and exploring how a strategic approach to the management of the employment relationship might be used effectively to address these issues. However. Greater topicality can be achieved by capturing the big business news stories of the week. How would you argue the case for and against the formal adoption of strategic employee relations by organisations? In the classroom Clearly the approach adopted to ‘student preparation’ can be followed through into the classroom.. we find it useful. when adopting this approach. A starting point that we find useful is to surface and discuss the issues arising from students’ preparatory reading. once student queries have been exhausted. which themselves can be usefully critiqued. This avoids providing lecture input that simply repeats what students have already grasped. we would favour the group approach as a more stimulating approach. What do you understand by the term strategic approaches to the management of the employment relationship? 4. Where preparing answers to self check and reflect questions has been set as part of preparation for the teaching session. Pre-set questions that we have found useful for structuring student reading. What are the principal strategic relationships between employee relations and corporate strategy and how could they be evidenced in practice? 3.

If they have not already been used as part of class activities. Answers to Self-Check and Reflect Questions 12. Given the emergence of the HRM models of management in the 1980s do you believe that unitarism is a more appropriate way of managing the employment relationship in the twenty-first Century? You can characterise pluralism as reflecting adversarial relationships between employers. Employee relations operate in a wide range of industries and sectors and are often linked to non-unionised workplaces. These procedures would be based on collective bargaining and joint consultation. This model is very closely associated with traditional personnel management and industrial relations and in the context of the private sector it operated in industries that have been in the decline over the last 20 years.1 Define the employment relationship and discuss the changes that have taken place to the relationship in recent years? The employment relationship at the simplest level is the interaction between the employer and the employee. employees and trade unions. This led to the term ‘new’ being used in relation to unitarism and ‘old’ being used in relation to pluralism. 12. This approach may be contrasted with employee relations. Our outline answers to both self check and reflect questions and case study questions follow in the next two substantive sections of this chapter guide. any prior preparation of answers to the self check and reflect questions and/or the questions suggested for student preparation and/or the chapter case ‘Strategic Approaches to the Employment Relationship Social Partnership: The example of the Republic of Ireland’ will serve as a useful reinforcement to chapter content. Traditional industrial relations are still in operation but largely in the public sector and traditional industries. Conflicts could occur over virtually everything and disruptions to work would occur frequently. There are also a number of follow-up study suggestions after the chapter summary that can be undertaken by students either individually or in groups and an extensive list of references provides many opportunities for directed further reading..2 Fox (1966) clearly believed that the pluralistic perspective on employee relations was the most valid and realistic way to manage the employment relationship. SHRM has had a major impact in this area and you can use SHRM as a tool for focusing your responses to this question and the emergence of the concept of employee involvement and participation is closely linked to SHRM. continental Europe and North America operate an employment relationship that is 116 © Pearson Education Limited 2007 . we are all unitarists and that all employers have highly committed employees as a consequence of employee involvement and participation.Millmore et al. The United Kingdom and Ireland. Instructor’s Manual Follow-up work The pedagogic features adopted throughout this book are intended to offer a number of alternatives for follow-up work while at the same time leaving the lecturers free to add or substitute their own ideas. Strategic Human Resource Management: Contemporary Issues. The organisational reality is of course not quite as straightforward. which in the rhetoric of HRM would lead us to believe. Highly formalised procedures would exist at the workplace or industry level. You can focus on discussing industrial relations and employee relations and highlight the shift away from collectivism to individualism.

This means that the concept of working for one organisation throughout a 40-year career is becoming less and less appealing. the ‘promise’ of a job and career for life is an expensive one. Strategic Human Resource Management: Contemporary Issues. The second trend is the desire that many employees have to take control of their lives. previous relationships between the employer. You should be able to identify. the structure of the organisation..4 Consider the arguments for and against the development and introduction of a partnership agreement in an organisation. Why do you think it was so important to have a tripartite agreement between the national Government. 12. 12. Factors to be included in your analysis are: the industry where companies operate. can be viewed as an advantage or a disadvantage. employees and the union and the current methods for employee involvement and participation. In such a climate. there may be an element of overstatement here in that the idea or the rhetoric as it has referred to it in this chapter may be running somewhat ahead of the organisational reality. The nature of the organisation you choose will have a major impact on how you answer this question. You should be able to talk about the recent developments at national. Outline the main driving factors for the development of social partnership in Ireland? 2. The first is that all organisations have to be mindful of operating costs.5 To what extent is the ‘new’ psychological’ contract a myth dreamed up by HR commentators to add a new dimension to discussions about SHRM? As with significant elements of the general theory of SHRM. discuss and assess the four distinct types of management of the employment. depending on the organisation. You should attempt to evaluate the policies and practices of the organisation in relation to the four distinct approaches to the management of the employment relationship and decide which of the approaches is most prominent in the organisation. Why do you think it has been possible to develop and sustain social partnership in Ireland for such a long period? 4. industrial and organisational levels. the organisational culture. The involvement of management is of vital importance and. In considering each approach to the management of the employment relationship approach you should be able to identify the key concepts and components of each approach and compare and contrast this with the policies and practices of the organisation they have chosen. the ownership of the organisation. In the United Kingdom and Ireland most public sector employees are managed in a pluralistic manner. In presenting arguments for and against the partnership model you should consider the elements required to develop a partnership agreement and the key stakeholders involved. employers and trade unions? 3. their key markets. Instructor’s Manual largely pluralistic in nature. Do you think it would be possible and/or beneficial for the UK to develop its own model of social partnership? 117 © Pearson Education Limited 2007 . products or services.Millmore et al. using Guest’s (1995) evaluation of the four possible approaches to the management of the employment relationship describe the current employment relationship. 12. the size of the organisation.3 Choose an organisation with which you are familiar and. The emergence of the ‘new’ psychological contract can be considered as the consequence of two observable trends. Answers to Case study questions 1.

. It is simply to note that we are dealing here with a matter of popular controversy – one at the core of the public policy-making process. a balance of payments surplus. see more later). This is not to argue that governments have no scope for independent. communitarian (populist/‘green’/grass-roots). The answer to this question arises from their role in management of national economies. maintenance and enhancement of national prosperity – involving pursuit of objectives like low inflation. Its political approach might be: • • • • neo-liberal/individualistic (‘Thatcherite’). Employee Relations Policy Choices 'Bias' of System (political Inclination?) Liberal. to take care of. overall aim might be defined as the achievement. full employment and so on. Approach may also depend on whether it has sectional interests. like unions or employers. favourable currency exchange rates. In neutral terms. Instructor’s Manual The answers to this case study are presented in the form of a handout that can be used in answering the questions presented in the case study or for studying the subject of employee relations approaches in more depth. Social Partnership Handout Broad aim: to understand the development of classical and competitive neo-corporatism and to examine social partnership in the Irish Republic against this theoretical background. And an important influence will usually be the ideological disposition of the government. social democratic (‘labour’/socialist). But there clearly are choices – political choices – to be made about. or neoLiberal – unitarist (right wing?) Position of Unions Weak NeoLaissez Faire Strong Free Collective Bargaining (FCB) 118 © Pearson Education Limited 2007 . autonomous action – that they are always prisoners of ideology and/or interest groups. Question 1 Factors driving social partnership in Ireland Governments and Pay The Irish Government were seeking to have an influence on the pay and working conditions of its Citizens. or of the capitalist system itself. which will have priority. Strategic Human Resource Management: Contemporary Issues. or even corporatist (on which.Millmore et al.

. 3. both liberal and corporatist systems require a weak. to attain neo-laissez faire IR. accepting unemployment as method of wage regulation by ending ‘social partnership’: elimination of unions and employers from influence on formation of government social and economic policy. Strategic Human Resource Management: Contemporary Issues. erosion of legal job security rights. trade union movement. for them to be weakened. representative unions. with the totally free operation of markets.Millmore et al. It was the growing strength of trade unionism – the strength that people gained by facing the economic system not as individuals but as part of a combination (or collective) of people – which forced 19th century economic liberalism away from laissez faire individualism towards an accommodation with union-based collectivism. Instructor’s Manual Corporatist – pluralist (left wing?) Corporatism Bargained or neoCorporatism Neo-laissez faire Crouch uses 'liberal' in original 19th Century sense – as demanding the freeing of individuals from all forms of community. using a number of measures: by legal restrictions on union power in workplace – help employers resist unionisation. In particular: ‘Freedom from interference by the state in the economy (in the 19th Century) meant allowing market forces to work without interference. The product of this accommodation with the new power of the unions was encouragement of free collective bargaining (FCB) between employers and independent. tendering for public services. individualism meant liberty for the individual to grasp opportunities available to him. economic. and make it more difficult to engage in industrial action by ‘de-regulation’ of the labour market: no minimum wage. 119 © Pearson Education Limited 2007 . Revived in Ronald Reagan’s America and Mrs Thatcher’s Britain in 1980s. but it also meant being forced to remain an individual and not to combine with others ‘ (Emphasis added). or at least quiescent. pursuit of individual self-interest is the engine of economic progress. state must ensure that vested interests – especially trade unions – are not permitted to interfere. its three essential tenets are: 1. 2. as a product of neoliberalism. using essentially illegitimate collective power. no ‘union labour only’ contracts. moral and political restraints. no role for government in setting pay and conditions of employment. and no role for interest groups in formation of public policy. privatisation of state enterprises. Free collective bargaining To operate in their purest forms. In late 1970s British unions were still strong – so it was necessary. Similarly.

and the effective redistribution of wealth. Strategic Human Resource Management: Contemporary Issues. What actually provoked the European turn to neo-corporatism from 1960s onwards? Two things: • high inflation. to apply moral pressure. general distrust of law and its restrictive effects. Support: took form of state-funded conciliation and arbitration. complete self-reliance and independence of TUs. and free meant: • • • virtually total independence of industrial relations system from government control. And it usually included incomes (control) policies. low productivity.. progressive and defensive of diversity. Exhortation: the most a government operating a rigorous liberal collectivist FCB policy might do as regards wage levels was to urge the parties to moderation Corporatism ‘Classical’ Neo-Corporatism As we have already noted. economic and social justice were most likely to be assured by unregulated free collective bargaining. It involved state and organisations of employers and workers working jointly to achieve social justice. These ‘freedoms’ were regarded as so essential that the only real interventions by governments were: • • • to offer further support for FCB. to provide a substitute for it and/or. neo-corporatism was generally influenced by a social democratic ideology. employers and employers’ associations. which set minimum wages in certain trades. industrial militancy. and was popular in Europe in 60s and 70s. designed to provide help when ‘normal’ bargaining had not produced agreement. Substitute: was represented in what later came to be known as Wages Councils. FCB faith was based on conviction that both order on the streets and just as importantly. 120 © Pearson Education Limited 2007 . In Britain and Ireland FCB also retained in one important respect the key liberal canon of ‘no state interventionism’: governments were to be – more or less – bystanders as regards industrial relations.Millmore et al. Instructor’s Manual This was liberal in traditional ideological terms. but also liberal in a modern sense – meaning tolerant.

But it revived in 1990s – in a different form. the argument was that ‘a rising tide lifts all boats’ – in other words. Instructor’s Manual • slow down in post-war boom – including a so-called ‘investment strike’. ‘Classical’ agreements usually involved increases in public spending – often funded by borrowing. The focus of agreements now turned towards: • • • • pay deals consistent with national competitiveness. as in Ireland. beneficial negotiating breakthroughs. Competitive Neo-Corporatism But. In defence of absence of specific mechanisms to reduce inequality. new neo-corporatist pacts began to include de-regulation. Why? • • • economic recession. globalisation of markets. skill and quantity of labour. reform of tax and social welfare systems. measures to increase flexibility. There was also effective abandonment by many governments of Keynesian demand management. sustainable levels of public expenditure.. It was now about competitiveness. rather than entrepreneurial ventures. Sometimes this also involved labour market regulation concessions to unions. ‘top-down’. Strategic Human Resource Management: Contemporary Issues. in a variety of forms – including some of the mechanisms used by the Thatcher government in 1980s: 121 © Pearson Education Limited 2007 . this tradition of neo-corporatism virtually withered on the vine in Europe in the 80s. for example. Union sides no longer claiming pacts as major. governments sought to change the behaviour of both the employers and the trade unions by giving them a role in policy-making. poverty and want. everyone would benefit automatically from economic success. such as: • • legislation protecting employees from arbitrary or unfair dismissal. under which the captains of capital invested in property. enterprise and cutting public expenditure. but also curtailed latitude that existed to use public spending to prime economic activity. This reflected not only an ideological move to the neo-liberal right. In response. (In Ireland the late 1970s legislation requiring appointment of worker directors to boards of semi-state companies is a good example of this). Instead found themselves on defensive: ‘best that could be achieved in difficult economic conditions’. Instead of labour market regulation. ideological shift towards neo-liberal thinking. representative employee involvement in organisational decision-making.Millmore et al.

employee involvement. under tripartite National Understandings the weakest and lowest-paid members were protected by agreed minimum pay increases. thirdly. In 1986 it produced a comprehensive prescription for economic recovery including – most significantly in view of involvement of the unions in the NESC – the cutting of public expenditure. looking back at our policy choices. only be possible with the agreement of the social partners – government. Implementation would. employees Irish Congress of Trade Unions (ICTU) and government continued their work.. unions and employers. Strategic Human Resource Management: Contemporary Issues. For employers decentralised bargaining had been a mixed blessing. ‘bottom-up’. And while pay increases outstripped inflation and thus threatened competitiveness. However. of course. the ‘social costs’ of employment – taxation. pensions and social welfare – were also an increasing burden. and threatened to undermine solidarity of TU movement. direct. individualised. Number of strikes had fallen significantly. Instructor’s Manual • • on employee involvement. In the space of a little over a decade the employee relations climate has been transformed from a confrontational win/lose model to one that is far closer to modern win/win corporate relationships. wage dispersion in the 1980s widened the gap between top and bottom.Millmore et al. The tripartite bodies representing employers Irish Business Employers Confederation (IBEC). second. linked to promotion of company objectives. Question 2 Back to National Agreements: The importance of a tripartite agreement? The role played by social partnership in Ireland’s current economic success cannot be overstated. A return to social partnership promised help on all these fronts. and the National Economic and Social Council (NESC) was to play key role in revival of neocorporatism. and trends in wage levels had begun to moderate. Though the employers were not exactly inspired by the idea. centralised bargaining (‘neo- 122 © Pearson Education Limited 2007 . especially achieving competitive edge. But all governments had relied on borrowing rather than cutting expenditure to meet social spending. But why go back to partnership? For the unions there were several considerations: • • • first. falling membership and increasing unemployment made leaders fear that what was happening to unions in Thatcher’s Britain might also occur in Ireland. towards employers’ rather than workers’ interests. then. perhaps only serious choice now is between neolaissez faire and neo-corporatism? We shall now look at the case of social partnership in the Republic of Ireland Inherited policy: free collective bargaining. emphasis changed too.

which were argued by the unions to be in breach of the PESP. and also weathered change of government – when FF made run for a majority in a snap election in 1989. Its tight pay 123 © Pearson Education Limited 2007 . failed. Yet this had no discernable effect on the government’s approach to PESP. the Programme for Economic and Social Progress (PESP). But the FF ‘social partnership’ inheritance had also been reasserting itself.Millmore et al. So PESP was succeeded by Programme for Competitiveness and Work (PCW). FF viewed the difficulties of the 1983–87 Coalition with more political concern than political pleasure. Strategic Human Resource Management: Contemporary Issues. and to reduce direct taxation on lower paid workers covered by the PAYE system. Instructor’s Manual corporatism’ or ‘social partnership’ in other words) did seem to offer the possibility of linking economic and fiscal reform with pay determination. and 2% thereafter – with underpinning minimum of £4. But PNR included other broadly expressed ‘classical’ commitments: • • • to promote increased employment through industrial development. Against the background of a recovering economy. Main reason was that they were going to inherit those difficulties – as in due course they did. a new agreement was fairly inevitable. were already on-side. with only a very small number of TDs. neo-liberal economic agenda. From PNR to PESP There was widespread recognition by employers and unions that the PNR had beneficial effects. as a minority government formed in 1987. and some careful wooing of ICTU figures in advance ensured that the unions. but also permitted extra amount to be negotiated at enterprise or plant level. so it was followed by a similar agreement. From PESP to Programme for Competitiveness and Work (PCW) In 1992 that Government was succeeded by a more left-leaning Fianna Fáil/Labour Coalition. and preferably pay restraint Fianna Fáil (FF) and a new partnership. including devaluation of the Ir£ that government had tried hard to resist As well as several pay-related crises. The result was a 3-year tripartite agreement – the grandly-titled Programme for National Recovery (PNR). It set sharp limits on pay. there were also major rows over income tax increases – and about cuts in social welfare benefits. covering the period up to 1993. there were some serious economic setbacks during the PESP period. The PDs. Yet the programme still held together.. The most significant features were (‘competitive’?) commitments to the control of public expenditure and a reduction in government borrowing. Although it seemed to be working well. with only a 3% per annum increase on first £120 per week of earnings. had a ‘new right’. and was obliged to make a coalition pact with the new Progressive Democrat party (PDs). to improve social welfare provision. at any rate. This allowed of much the same percentage increases.

to meet the benchmark a National Centre for Partnership was established to promote partnership in enterprises and workplaces. Negotiating this time with a Fine Gael (FG)/Labour/Democratic Left (‘Rainbow’) Coalition Government. low pay and high levels of relative income poverty (Allen 2001. Kirby 2002). long-term unemployment and social exclusion’. it had a key part devoted to ‘developing partnership in the workplace’. once again. Strategic Human Resource Management: Contemporary Issues.. it was argued that economic growth had accelerated in a period marked by increasing income inequality. and a focus on equality. an ICTU internal report on new management methods seemed to endorse ‘bottom-up’ EI with a ‘competitive edge’ component. there were too many marginalised people not enjoying any of the fruits of the ‘Celtic Tiger’. one of the main non-pay issues addressed by the PCW was unemployment. PCW ended on a sour note. The tone was set by the name – Partnership 2000 (or P2000). then. P2000 − Making partnership a priority Although this made negotiation of a new agreement more difficult. Private sector companies were encouraged as well to reward employees by means of profit-sharing. ICTU saw it ‘as a watershed in the evolution of social partnership’ and believed ‘it would determine whether it develops or dies’. It was a last opportunity ‘to widen and deepen the national partnership process into a genuine partnership at the level of the workplace’. a vexed labour market regulation question. On to the equality. for ICTU now wanted more than the lip service paid to this in the PNR and PESP. Another was employee involvement (EI). which attended the PCW ensured. Instructor’s Manual provisions followed much the same pattern as in the two previous pacts. But while there were more words about participation in the PCW. the continuing economic success. that a deal would be done in the end. Adding a more traditional or ‘classical’ neo-corporatist dimension. As well as the obvious – better pay and tax relief – it demanded ‘mechanisms to develop partnership at the workplace level. ICTU set itself very different targets than those outlined for the PNR almost a decade before. In other words. the plant and the office. 124 © Pearson Education Limited 2007 . The extent of new workplace partnership would be ‘the union benchmark when we come to assess its success or failure’. concerning union recognition. employment and ‘social inclusion’ aspects.Millmore et al. But P2000 also included strong commitments to ‘promoting enterprise’ and the setting up of a National Competitiveness Council. was passed for resolution to a tripartite ‘High Level Group’. Finally. What was wanted was for partnership at national level to be complemented by partnership in the enterprise. IBEC (Irish Business and Employers’ Confederation – the successor to FUE) fought hard against anything too prescriptive. with public service workers complaining loudly that they had done poorly in comparison with other groups. but more attention was given to non-pay issues. Significantly. As title suggests. There was further disappointment for ICTU when post-agreement discussions produced little more. So implementation of chapter on partnership ‘is the most important challenge for all the parties’. P2000 laid stronger emphasis on dealing with such issues.

500 primary school teachers. it now represented predominantly public sector employees.40 and rose to IR£4.70 in July 2001. and gainsharing. Under final PPF terms. PPF also sought to deepen the workplace partnership measures begun under P2000. was the most they could obtain from the talks process. under the aegis of five ‘frameworks’. family-friendly work. it increased to IR£5 (€6. Where to after P2000? There were a number of other things to cheer supporters of social partnership Though anecdotal evidence suggested wage drift beyond agreed norms.. workers on IR£200 would receive 16 3% and other workers 15.000 pay settlements confirmed that the level of adherence was ‘remarkably high’. And there were other achievements: • • agreement in broad terms to a procedure for union recognition.25) in October 2002 – when the agreement expired. those on low incomes and those living in the more deprived areas of the country. the educationally disadvantaged. Targeted specifically were the long-term unemployed. Strategic Human Resource Management: Contemporary Issues. 125 © Pearson Education Limited 2007 .65% over 33 months. Arising from these. Small wonder some of those involved complained of ‘partnership fatigue’! Question 3 Why has social partnership remained in Ireland: arguments for and against. 20 working groups came into existence to address policy development and implementation in a number of areas: childcare. Several interesting ‘non-pay’ parts to the deal. Social Welfare Bill to give increases worth another £5 a week to workers earning under £200 per wk. housing. unemployment had dropped sharply. majority voice of Irish workers. including agreement to increase of 1. Programme for prosperity and fairness In January 2000 union leaders agreed that a new offer of 15%. The NMW started at IR£4. Moreover. Stick with partnership?: no! On the neo-liberal side it was argued: • firstly.75%. plus another 10% in tax cuts. Built on too were earlier programmes involving the social partners in a range of areas of public policy. ICTU was no longer the authentic. The new agreement was called the Programme for Prosperity and Fairness (PPF).Millmore et al. a survey of 1. workers on basic national minimum wage (NMW) were to receive increases worth 18. the unions had ‘pushed their luck’ too far. Instructor’s Manual New agreement contained Government commitments to spend £25m on a range of important social projects before 2000.

With so much US investment. as it were. And pay militancy was rising in the public sector. • • This demanded return to the ‘leaner’ and less complicated agreements of the late 80s and 90s. management and employees. The Netherlands. housing. Needed now was a dose of free market. laissez faire industrial relations – to sharpen up the act of the unions. Italy. Associated worry that many managers and union officials were ill-equipped to deal with face-to-face negotiating at firm and plant level. This was not the right moment. To make economic matters worse.. neo-liberalism with a social conscience. Instructor’s Manual • • and it had failed to convince most investors – especially the US high-tech companies – to recognise trade unions. fourthly. the pay agreement at the core of the PPF was becoming a fiction. soon after the 2002 General Election – which returned the FF/PD coalition for a second term – suspicions about looming problems in public finances were proved justified. secondly. Finland. thirdly. it was claimed that the aims that prompted the birth of social partnership in the late 80s had been almost fully realised.Millmore et al. but tax receipts appeared to be in serious decline too. Portugal and Spain). gain sharing etc. secondly. so it was argued. there was some apprehension that a return to unfettered FCB would be too much of a shock for the industrial relations system. Could increases really be held to 2 – 3% in a highly successful economy with real labour shortages?. and perhaps most telling. Increases in the booming parts of the private sector appeared to be exceeding the PPF’s pay norms. three main pressures for a continuation of social partnership: • firstly. that was deepened by the 9/11 terrorist attacks. it was argued that retaining neo-corporatism was essential in face of an economic downturn. Greece. Strategic Human Resource Management: Contemporary Issues. Ireland is especially vulnerable to effects of the US recession of 2001. 126 © Pearson Education Limited 2007 . Expenditure running well beyond expectations. But of course the new Irish pacts actually contained elements of both old and new neocorporatism: • classical – fairness and social justice. thirdly. there was widespread ‘partnership fatigue’ arising from the 20+ working groups set up under the PPF on work. and represented. It would be even more regrettable to abandon the uniquely Irish neo-corporatist model – one that incorporated both classical and competitive neo-corporatism. a simple argument was that the cumulative benefits of social partnership were so obvious that it would foolish to throw them all away. to make any radical change of approach. Germany. Social partnership might be essential for economic stability. Stick with partnership?: yes! As against all that. • • Question 4 Bringing it all together Eight out of 25 EU member states came to pacts of a competitive neo-corporatist kind in the recent past (Belgium.

English speaking – once again shared. Favourable conjunction of circumstances? – in other words ‘luck’! All these factors would play a part in the creation of a social partnership agreement in the United Kingdom. but issues of justice and fairness have not been lost sight of. would surely be a mistake to let this major indigenous institutional achievement fall by the wayside. low value of the euro – this is the one no one talks about. but it must not be discounted!. Table 12. low corporation tax – a crucial advantage.1: Key policy elements sustaining progress factors the United Kingdom could consider in a social partnership agreement. Competitiveness obviously became a stronger component with passage of time. but have to have a good product to be a good salesperson. but this could only be used for infrastructural projects. 127 © Pearson Education Limited 2007 .. but social costs are even lower in the United Kingdom. Instructor’s Manual • competitive – recognition of the importance of success of the national economy. low social costs – yes. Industrial Development Authority is good at selling Ireland – yes. But was neo-corporatism/social partnership a major factor in the development of the Celtic Tiger? What created the Celtic Tiger and can social partnership work in the United Kingdom? Cynics dismiss social partnership as causal factor. Strategic Human Resource Management: Contemporary Issues. but Republic of Ireland is the only English-speaking country within the Eurozone. but shared with United Kingdom. educated labour force – important. so let us try to evaluate what actually was responsible for recent Irish economic growth: • • • • • • • • • European money (‘Euro-gold’) – OK. The present Irish model of social partnership thus represents what we might call a ‘balanced’ version of neo-corporatism – unique to RoI.Millmore et al. good government? – who knows!.

. maintaining and sharing economic Development and prosperity Infrastructure The environment Adaptation to continuing change Delivering a fair and inclusive society Poverty and social inclusion Health and addressing health Inequalities Equality Access to quality public services Challenge of delivering a fair and inclusive society Workplace relations and environment Protecting employees rights ensuring greater equality Improving skills Promoting health and safety Achieving a better work .Millmore et al. there is another wider lesson to be learned by the United Kingdom from social partnership • because the Irish experience shows that neo-corporatism is a real and demonstrably effective policy alternative to full-blooded neo-liberalism.life balance Developing integrated policies for migrant workers Partnership in the workplace Social partnership: two clear potential benefits for the United Kingdom: • • low inflation – a key factor early on. for both the United Kingdom and for potential investors. 128 © Pearson Education Limited 2007 . It seems impossible. Strategic Human Resource Management: Contemporary Issues. psychological effect – arguably the most important in the long-term. Instructor’s Manual Policy Area Macro-economic Themes Public expenditure taxation Competitiveness and inflation Building. to conclude other than that social partnership was key if not the key. to recent economic success of the Republic of Ireland and could be a key to future economic success in the United Kingdom. But as well as those relating to employee relations and economic results. then.

1998. Manchester: MUP. 2004. London: Routledge. ‘Two Cheers for Corporatism.Millmore et al. 1995. British Journal of Industrial Relations.iol. Political Issues in Ireland Today. For opposing views. in Collins N & Cradden T (eds). 2002. and Kirby P. ‘Pay Determination in the Republic of Ireland: Towards Social Corporatism?’. 129 © Pearson Education Limited 2007 . The Celtic Tiger: The Myth of Social Partnership in Ireland. Further Reading Essential piece is Cradden T. 3rd edn. Vol 36 No 2. Irish Congress of Trade Unions website at [http://www. For a denser piece see Roche WK & Cradden T.ie/ictu]. Visser J. Instructor’s Manual That a social partnership/neo-corporatist Ireland and a free market/neo-laissez faire United States were both among the best performing economies 1990s and early 2000s is an adequate testimony to this. Also worth a look are: Teague P. Vol 33 No 2. in Adshead M & Millar M. ‘Neo-corporatism and social partnership’. see Allen K.. 2000. Strategic Human Resource Management: Contemporary Issues. One for the Market: Industrial Relations. ‘Social Partnership in Ireland: ‘a rising tide lifts all boats?’. Wage Moderation and Job Growth in Holland’. London: Palgrave. Public Administration in Ireland. British Journal of Industrial Relations. 2003. The Celtic Tiger in Distress. Manchester: MUP.

social background. is deeply rooted in traditional approaches to human resource management. gender. is like SHRM. explore the interdependence between managing diversity and equal opportunities approaches in managing human resources strategically. increased productivity and. ethnicity and disability. Summary • Conceptualisations of diversity management within the literature can be broadly categorised into two groups: • the equal opportunities approach.CHAPTER 13 Diversity management: concern for legislation or concern for strategy? Learning outcomes By the end of this chapter you should be able to: • • • • • explain the differences between managing diversity and equal opportunities approaches to diversity management and the debates relating to these approaches. it seems probable that the benefits of diversity management will only be realised within the context of the re-alignment of an organisation’s culture to one • 130 © Pearson Education Limited 2007 . it can be argued. the managing diversity approach. improved employee relations. there is limited empirical evidence to support these claims in either the UK or USA. a satisfying working environment for employees. improved competitive edge. Despite a lack of evidence. it can be argued. be able to integrate diversity management with other SHRM issues such as organisational culture. which focuses upon an explicit holistic strategy of valuing differences. which has a legislative and compliance focus and is concerned with equality of status. increased job satisfaction and higher employee morale. • • The business case claimed for a managing diversity approach includes a better public image for the organisation. evaluate the business case for diversity management. driven by organisational needs. This. opportunities and rights. However. for the organisation. This. It is argued that organisations will only survive and prosper in an increasingly competitive and dynamic global environment if they respond to the heterogeneity of their markets. such as age. assess the implementation issues for organisations adopting diversity management as part of their strategy to manage human resources.

It is also an area of SHRM where. diversity management remains a theoretical concept rather than a strategic reality. However. The most frequent reason advanced for this is that organisations believe they are already undertaking sufficient investment through ensuring equality of opportunity. Teaching and learning suggestions Comment Issues of diversity and diversity management have received considerable coverage in the national press. For this to happen. combining equal opportunities and managing diversity approaches. the ability to attract and retain talented people is now rated higher than market share in the top 10 non-financial measures investors use to analyse company performance. It is this variation that and the associated implications that form the focus of this chapter. for many organisations. however. advice is available. Instructor’s Manual where diversity is valued. • Empirical evidence suggests that. As part of this the question as to whether managing diversity represents a strategic shift from equal opportunities is addressed. However. Strategic Human Resource Management: Contemporary Issues. EU enlargement and associated migration have considerable diversity implications for organisations both in the United Kingdom and elsewhere in the EU. particularly with regard to ethnicity. for organisations and in particular how these beliefs relate to recent European Union (EU) employment related legislation. The topicality of this chapter’s material means that it is relatively easy to make it both relevant and exciting to students using recent news events to highlight these issues. as a consequence. for organisations considering the implementation of a managing diversity approach. despite this. In the current highly competitive labour market. Within organisations issues associated with the composition of organisations’ workforces and their management are a strategic imperative for Human Resource (HR) Managers and. The chapter starts by considering the different ways in which diversity management has been conceptualised. we believe it is essential that students read and make notes from the chapter.Millmore et al. gender and ethnicity. are changing and becoming increasingly challenging for many organisations. it will be necessary to persuade those in power that this will impact positively on organisational effectiveness. age and gender. Building upon this equal opportunities and managing diversity approaches to diversity management are compared and contrasted and the debates relating to these approaches discussed. the ways in which such issues associated with workforce diversity are tackled and the approach adopted are varied. However. After evaluating the business case for adopting diversity management. owing to major shifts in the demographic composition of the workforce including age. We have found that producing mind maps of the chapter content is a useful approach to note 131 © Pearson Education Limited 2007 . their management a necessity. most students often have firmly held personal beliefs regarding what is right and wrong. the issues for organisations wishing to implement a managing diversity approach to managing their human resources are assessed.. few have considered the implications of their beliefs for their own world of work. Student preparation Prior to the class. Traditional markets for attracting talented people.

3. Sometimes this may be formalised by asking students to write down (as questions) the three issues addressed by the chapter where they would like further clarification and guidance. Pre-set questions that we have found useful for structuring student reading. This is our preferred approach because it makes students more accountable for their personal learning and reserves any group work for case study analysis. A starting point that we find useful is to surface and discuss the issues arising from students’ preparatory reading. preparatory activities and classroom discussion for the topic of diversity management include: 1. As standard. This avoids providing lecture input that simply repeats what students have already grasped. However. However. complete the self check and reflect questions and come to the session prepared to share and discuss their responses.Millmore et al. Where preparing answers to self check and reflect questions has been set as part of preparation for the teaching session. What are the main differences between equal opportunities and managing diversity approaches? 2. Strategic Human Resource Management: Contemporary Issues. Outline the key legislation with regard to equal opportunities and managing diversity since 1975. we would ask students to make a note of any queries arising from their reading and to come to the teaching session prepared to raise them. when adopting this approach. we would favour the 132 © Pearson Education Limited 2007 . Our outline answers to both self check and reflect questions and case study questions follow in the next two substantive sections of this chapter guide.. once student queries have been exhausted. What arguments have been put forward to support the business case for managing diversity? In the classroom Clearly the approach adopted to ‘student preparation’ can be followed through into the classroom. reinforces the value of reading as an essential prerequisite for class-based discussion and provides a platform from which further class-based activities can be launched. to provide a short summary of key issues. students can be asked to contribute individual responses that are then subjected to plenary discussion. First. We use a variety of vehicles to bridge student preparation and class-based activities to enhance their understanding of the chapter content and its overall relationship to managing human resources strategically. students can be formed into groups to share their individual answers and draw conclusions from their discussions. we find it useful. Second. Instructor’s Manual taking and encourages students to reflect on the internal integration of the subject content of the chapter. at least two alternatives present themselves. if preparing answers to self check and reflect questions was not part of preparatory work but consideration of the questions is to feature as part of the teaching session. Students may also be asked to do one or more of the following: • • • address pre-set questions and write up their answers briefly in note format. and familiarise themselves with the chapter case study (or an alternative case supplied in advance) and come to the session prepared to tackle the case questions.

age and gender: • The overall population of working age (16–59) across the EU is due to fall from 228m at present to 203m in 2030. There are also a number of follow-up study suggestions after the chapter summary that can be undertaken by students either individually or in groups and an extensive list of references provides many opportunities for directed further reading.2.. Instructor’s Manual group approach as a more stimulating approach. 133 © Pearson Education Limited 2007 .1 and 13. If coming to the case afresh. Most full-time students will have accumulated work experience prior to and during their higher education studies and many will be following business-related courses. Answers to Self-Check and Reflect Questions 13. Here we would suggest that groups major on one of the case questions only moving on to others if they have time. Follow-up work The pedagogic features adopted throughout this book are intended to offer up a number of alternatives for follow-up work while at the same time leaving the lecturer free to add or substitute their own ideas.1 and 13. Where case study work has featured as part of preparatory activities. 1 Note down the changes in the EU’s population highlighted by Figures 13.2 indicate the following key trends in relation to full. Our outline answers to both self check and reflect questions and case study questions follow in the next two substantive sections of this chapter guide. Equal opportunities and diversity is an area where every student has some experience irrespective of whether they are full or part time.and part-time work. we have found it both feasible and useful to surface these experiences during class discussion and to subject them to critical analysis to evaluate their strategic credentials.Millmore et al. which themselves can be usefully critiqued. If they have not already been used as part of class activities.and part-time work. there is unlikely to be time for groups to consider all four questions. similar approaches to those suggested for self check and reflect questions can be adopted. In all cases student responses can be considered against our suggested answers. age and gender? What implications do you consider these changes are likely to have for SHRP (strategic human resource planning)? What other demographic changes do you predict based upon your own knowledge of labour markets? The Eurostat (2005) data shown in Figures 13. How are these predicted changes likely to impact upon the composition of the labour force in relation to full. which incorporate a placement element. Therefore. any prior preparation of answers to the self check and reflect questions and/or the questions suggested for student preparation and/or the chapter case ‘Making diversity an issue in leafy Elgarshire’ will serve as a useful reinforcement to chapter content. Strategic Human Resource Management: Contemporary Issues.

men still account for the most senior management positions in the United Kingdom. the number of full-time workers in the EU is set to fall by 8%. Over the next 25 years. • as well as the following limitations: • treats everyone the same.Millmore et al. but the number of long part-time work (20–31 hours per week) is predicted to remain constant. and focuses on ‘disadvantaged’ groups. The area is a developing one. general trends would indicate that over the next 25 years. race and disability being on the statute books for three decades. • As for other more general trends indicated by the above data. In terms of gender composition. particularly short part-time work. despite three decades of legislation. Those relying on the so-called ‘traditional’ model of an employee as being white. can mean people lose their individuality and that simply by being a member of a particular group discrimination is assumed to be an issue. and through such attention has made practices like direct sex and race discrimination a rarity. the above trends indicate that employers have little option but to broaden their view on the types of people to target in the labour force. the movement has gained much from legislative backing.. the working population across the EU will be older. are likely to find themselves facing severe skills shortages in the not too distant future. there has been little observable impact (except in the case of direct race and sex discrimination) on employment patterns. • 134 © Pearson Education Limited 2007 . and increase of more than 40%. of 16–24-year olds. however. less reliant on full-time workers and a greater shift to more flexible forms of working. is set to rise by 5% across the EU. for example. able-bodied. Instructor’s Manual • • • • However. under 45 and working full-time. 80% of labour market growth by 2010 will be amongst women by 2010 only 20% of the workforce will be white. What do you consider to be the strengths and limitations of the equal opportunities and the managing diversity approaches to diversity management? 13. regulations to limit age discrimination and to protect against discrimination based on sexual orientation. with new provision being made as circumstances require. male. with Acts in relation to sex. Short part-time work (less than 19 hours). gaining legislative force in the 1970s. able-bodied. Strategic Human Resource Management: Contemporary Issues. in the UK. employment growth will occur in the part. the following are frequently mentioned in the literature: • • • • a decline in the youngest labour market group. male and under 45. Thus. For example. the population is set to rise from 83m in 2005 to 123m in 2030. in the 60 plus age group.time sector.2 Equal Opportunities Although your list may differ in the way it is worded from the one below we would expect you to have listed most of the following strengths: • the equal opportunities movement. has focused attention on the organisational practice of equal opportunities. more typically associated with a female workforce.

3 Outline the strengths and limitations for diversity management of the equal opportunities approach. and since the law applies to all but the smallest enterprises. has meant that the issue of equality in employment has been on the organisational agenda for the past 30 years or so. as well as the following limitations: • • • Few examples exist of the approach actually delivering what it promises. Diversity Management Although your list may differ in the way it is worded from the one below we would expect you to have listed most of the following strengths: • • • It is a strategic approach to managing people. to a much more positive and businessfocused approach to ensuring workplace equality. organisations may be unable to resource initiatives with little to show in the way of short-term payback. the equality approach does not address this issue. The agenda becomes a far more positive one. particularly with the addition of EU directives. • it is argued that a compliance-based model may mean that organisations while complying with the letter of the law. making some organisations feel that this is an overly burdensome and highly regulated area.Millmore et al.. rather than a punitive avoidance of legal penalty. do not actually comply with the spirit of the law. emphasising the value to be gained from valuing and embracing difference. Strategic Human Resource Management: Contemporary Issues. which shifts the focus from legal compliance to leveraging and valuing difference for organisational benefit. 13. based primarily on legislative provision. Instructor’s Manual women’s pay still lags behind that of men and those from ethnic minorities and the disabled have made few inroads into senior organisational positions. few organisations will be unaware of the issue or of their obligations under the legislation the equality approach has undoubtedly fallen out of favour in recent times. Its focus on improving organisational performance through promoting practices designed to enhance individual productivity is seen as a key component of effective people management. The strengths for diversity management of the equal opportunities approach which you are likely to have outlined should include: • the equal opportunities approach. from an external imperative to an internal one. It is a move away from a compliance-based model. in the current fast-paced business environment. The business focus of ensuring maximum profit may be at odds with key principles of social justice and fairness The extent of organisational change required to fully embrace the approach is considerable. i.e. which does not try to suppress difference but actually seeks to identify it and value it. • 135 © Pearson Education Limited 2007 . This makes the time ripe for an approach to equality.

United States of America or Europe to support key contentions made. individual or both? 13.Millmore et al. the possibility of wider-scale culture change within the auspices of a diversity management programme. either in the United Kingdom. the focus on the business case promotes a view that issues of social justice. Instructor’s Manual The limitations for diversity management of equal opportunities should include: • the approach may be negatively viewed by organisations used to the restrictive equal opportunities approach. and with the adoption of EU directives organisations have a considerable number of regulations to comply with..4 Outline the strengths and limitations for diversity management of the managing diversity approach. and more importantly to articulate organisationally in terms of practical measures that need to be taken to advance the agenda.5 To what extent is it appropriate to support a positive climate for diversity management for purely business-focused reasons rather than as part of its cultural values? Those supporting the view that it is appropriate to support a positive climate for diversity management for purely business-focused reasons. Organisations may in these circumstances feel they are doing enough. strategic and ultimately holistic approach to the management of equality and difference. equity and fairness. may raise some of the following points to support their position: 136 © Pearson Education Limited 2007 . business-linked drivers. Your limitations are likely to include: • • • • little empirical evidence. there is confusion as to the focus of interest. equity and fairness are no longer important. organisations then believing there to be little difference. group. to one where differences between individuals are valued simply because of their positive impact upon organisational performance. a plethora of consultants in the area renaming a basic equality of opportunity approach as diversity management. for some organisations the shift from an approach based on social justice. The strengths you have outlined are likely to include: • • • • a shift in the agenda from externally focused drivers for action to internally. • • 13. The shift in mindset required from avoiding discrimination to actively valuing difference may be difficult to grasp. and that this is not an area to which further resources can be invested. may seem morally questionable. Strategic Human Resource Management: Contemporary Issues. a more positive. closer contact and understanding with customer and employee markets. the equality approach has led to a plethora of legal regulation.

then that is an added bonus. The point here would be that diversity management should occur because it is simply right to treat people with dignity and respect. However. what happens when the results do not come quickly enough? Does the organisation stop valuing difference? • • At the heart of this approach is the difficulty of taking moral issues. a link between a diverse workforce and an improved ability to meet customer requirements through improved understanding is of great value. 137 © Pearson Education Limited 2007 . would firms actually start calculating how much they would save by not managing diversity effectively. reducing turnover and absenteeism will all be highly persuasive to organisations seeking elusive competitive advantage. If this brings the business some financial benefit. in times of high competition. and without a solid business case to support it. would this be advocated? A diversity management programme. Organisations are increasingly looking for strong financial justification before willing to commit resources to initiatives. emphasis on the link between effective diversity management and access to new and emerging labour markets will be a powerful argument. and if it were more than the benefit they would gain. the contributions they can make and the difference in the perspectives. There is no need to go further and start trying to calculate exactly how right this is in terms of bottom-line profitability. links to improving productivity. Taking this position to its logical end. valuing people for who they are. rather than as part of cultural values would be likely to raise the following points: • How can you actually do a cost/benefit analysis on what is right and what is wrong? Diversity management. senior managers in the organisation who are responsible for the effective utilisation of scarce resources are not going to commit considerable amounts of that resource to projects where the only benefit to be gained is that the company is considered to have done the right thing. but the financial benefit should not be the reason why diversity is valued within the organisation.Millmore et al. the diversity management agenda will be lost. in tight labour markets. Strategic Human Resource Management: Contemporary Issues. in times when customer satisfaction is at a premium. and framing them as strategic objectives capable of measurable financial return. becomes little more than a collection of initiatives that have little underlying rationale.. skills and experiences that they bring is simply the right thing to do. few organisations would commit resources to such programmes. and clearly the right thing to do. Instructor’s Manual • without articulating the financial return an organisation could gain from diversity management. Those who are uncomfortable with the linking of diversity management to purely businessfocused outcomes. not underpinned by deeply held corporate values. • • • Consequently the overall position of those with this view would be that diversity management is important. people both inside and outside the organisation would soon see through this fairly cynical approach to the issue If all that supports the adoption of a diversity management approach is some perceived business benefit.

In addition their workforce monitoring has highlighted a lack of women in more senior positions within the organisation. it is worth first reflecting on what is understood by managing diversity and equal opportunities approaches. as illustrated by the diversity and equality training. is based on an explicit message that differences are to be valued and are an asset to meeting the needs of the population of Worcestershire. In addition to monitoring to assure compliance with equal opportunities legislation. such as those set by the Disability Discrimination Act 1995 and the Race Relations Amendment Act 2000. 2. personality. This managing diversity approach. The approach that Worcestershire County Council has taken is to force employees to recognise that diversity issues are important. they have recognised that for some parts of the county there is a marked mismatch between ethnicity of employees and that of residents in receipt of services. The equal opportunities approach is based upon on compliance with legislation. How has legislation impacted upon Worcestershire County Council’s approach to diversity management? Worcestershire County Council are keen to be seen as not just ‘ticking boxes’ to meet legislative requirements. valuing equality and avoiding unfair disadvantage.. the council complying with legislation. Rather they wanted be taking actions that actually made a difference to those living in the county and working for the County Council. social background. Worcestershire County Council’s employees reflect the composition of the county as a whole. ethnicity and work style. In the case it is stated that they were determined to address these issues and raise the awareness of all staff to the diversity of needs of those living in Worcestershire and of their employees. However. disability. Worcestershire County Council has focused upon development and training activities required in response to Race Relations Amendment Act 2000. In contrast the managing diversity approach is based on an explicit strategy of valuing differences such as gender. In order to answer this question. alongside this it has also stressed that the County Council’s commitment to equality and dignity is much broader. With regard to ethnicity. there was a need to recognise diversity. Do you consider Worcestershire County Council to be adopting a managing diversity or equal opportunities approach to diversity management? Give reasons for your answer. need to be addressed and. Strategic Human Resource Management: Contemporary Issues.Millmore et al. However. opportunities and rights. Alongside this the council’s Chief Officers Management Board has realised that to get the best from all employees. as part of this. reiterating the traditional arena of equality of status. Instructor’s Manual Answers to Case study questions 1. the underpinning principles of the council’s approach consisting of four interrelated and overlapping phases embracing all diversity issues: • • • • Phase 1 – Capturing attention (awareness campaign) Phase 2 – Addressing the issues (training) Phase 3 – Operational briefings for managers Phase 4 – Embedding the learning 138 © Pearson Education Limited 2007 . These differences are an asset to work being done more efficiently and effectively and organisational goals being met. age. to challenge widely held perceptions.

there is no one right answer to this question. 4. Consequently all employees needed to know that the County Council was treating diversity and equality as special and important issues and had been provided with thought provoking information prior to commencing diversity awareness training (phase 2). what do you see as the key strengths and limitations of this approach? Obviously.. which will provide the most up to date answer to this question.htm 139 © Pearson Education Limited 2007 . Inevitably because of the time to train so many employees and the ongoing nature of training in a dynamic environment there will be a need to refresh and update people. However. Subsequent to this diversity training commenced and is again still ongoing.org. Evidence that the phased approach is working include ongoing improvements to the ways in which services are delivered and the fact that both race and disability are issues of legitimate discussion amongst employees.uk/ home/wccindex/wcc-chief-exec-equality-and-diversity.whub. Worcestershire’s phased approach has been based upon the premise that people learn best when they are motivated and interested. Updates on this training and the associated successes can be found in the Council’s newsletter Equality News. This was the basis for the ongoing poster campaign. Despite these concerns. what specifically would you see as being the key focus of your role? What information/evidence do you think you would need to collect/disseminate to ensure the County Council makes progress towards its goal of better serving residents and of valuing diversity amongst its workforce to make a difference to people’s lives. Instructor’s Manual 3. can be downloaded as a . Do you agree with Worcestershire County Council’s phased approach to diversity management. The latest version of this.pdf file from http://worcestershire.whub. By not making diversity training compulsory. employees can opt out of being trained. If you were Worcestershire County Council’s Diversity Officer. and not just to comply with legislation? This work is currently being undertaken by the County Council and is set out in their Corporate Equalities Scheme document.500 employees.Millmore et al. Strategic Human Resource Management: Contemporary Issues. The County Council has employed a Diversity Officer whose job is entirely concerned with diversity issues.org. the case suggests that diversity is becoming embedded within the County Council. Copies of this can be downloaded from http://worcestershire.uk/home/wcc-chief-exec-equality-news The Council’s approach is both time consuming and expensive as the authority has over 17.

Even where this approach is not used there may still be a negative effect arising from the creation of negative survivors’ reactions and the loss of organisational competence. workforce reduction strategy has been found to impair. These are: the workforce reduction strategy. organisational performance. discuss the role of organisational theories and human resource interventions to provide strategies to manage the process of downsizing more effectively. analyse the role downsizing plays in contributing to organisational HR strategies and the interrelationships with other HR interventions such as performance management. which may lead to adverse consequences. Three organisational strategies have been identified to achieve downsizing. identify a range of organisational strategies to downsize and evaluate their implications. explore the implications of outsourcing for SHRM. discuss the significance of employee involvement and influence in relation to the implementation of downsizing. and the systemic change strategy. and evaluate their significance for organisations using this type of change strategy. organisation redesign strategy. An important distinction has also been drawn between the use of proactive and reactive approaches to downsizing. Its use is likely to generate a range of reactions from those who remain in an organisation. The use of a reactive. this will generate further negative survivors' reactions leading to adverse consequences for the organisation. describe the nature of survivors' reactions to downsizing and the existence of moderating variables affecting these. Where organisations use methods to implement downsizing that emphasise managerial control at the expense of perceived influence by employees. • • • Summary • Downsizing is an organisational strategy to reduce the size of an organisation's workforce. employee involvement and commitment and training and development. • • 140 © Pearson Education Limited 2007 . rather than improve.CHAPTER 14 Downsizing: proactive strategy or reactive workforce reduction? Learning outcomes By the end of this chapter you should be able to: • • • • explain the purpose of downsizing and analyse the problems associated with its use.

Indeed. job insecurity. A range of organisational theories. we believe it is essential that students read and make notes from the chapter. The chapter therefore. can be used to suggest appropriate human resource interventions to manage the process of downsizing more effectively. Students may also be asked to do one or more of the following: • address pre-set questions and write their answers briefly in note format. organisational justice. Sometimes this may be formalised by asking students to write down (as questions) the three issues addressed by the chapter where they would like further clarification and guidance. 141 © Pearson Education Limited 2007 . Instructor’s Manual • The incidence and strength of survivors' reactions are affected by the existence of moderating variables. We use a variety of vehicles to bridge student preparation and class-based activities to enhance their understanding of the chapter content and its overall relationship to managing human resources strategically. Reducing an organisation's headcount is a more concrete idea to them than. focuses upon the human aspects of downsizing to maximise the positive and minimise the negative outcomes of using of this strategy. within the chapter we argue that the successful use of downsizing requires the implementation of and integration with other human resource strategies discussed in this book. However. These highlight the scope for downsizing organisations to intervene to seek to minimise their incidence or manage their effects. downsizing is also capable of promoting and contributing to other organisational strategies. As standard. related to equity. say. in reality the process of downsizing is highly complex and can often generate a range of reactions that undermine the strategic objectives for downsizing. It is a major HR strategy used by organisations of all sizes. realigning an organisation’s culture (Chapter 6) and appears to offer cost savings through fewer people being employed. This chapter explores such reactions and their consequences for an organisation using this strategy.Millmore et al. depending on the characteristics of the organisational context. As a major organisational HR strategy.. Strategic Human Resource Management: Contemporary Issues. job redesign and organisational stress. although such a strategy may be easier for students to comprehend at this superficial level. At a superficial level most students see downsizing as a reassuringly simple and inviting strategy to consider. We have found that producing mind maps of the chapter content is a useful approach to note taking and encourages students to reflect on the internal integration of the subject content of the chapter. we would ask students to make a note of any queries arising from their reading and to come to the teaching session prepared to raise them. Through doing this possible negative reactions to downsizing may be avoided or reduced and the greatest benefits from its use gained. the closure of MG Rover Cars Longbridge plant providing the case study. • Teaching and learning suggestions Comment Downsizing was frequently in the news when we were preparing this chapter. Student preparation Prior to the class.

students may wish to compare how the same events are reported by different media.Millmore et al. Second. Alternatively. A starting point that we find useful is to surface and discuss the issues arising from students’ preparatory reading.. What interventions may be used to help manage downsizing and how do these relate to equity theory. Outline the range of strategies that an organisation may choose when downsizing and the implications for both organisations and their employees. This avoids providing lecture input that simply repeats what students have already grasped. First. 142 © Pearson Education Limited 2007 . 3. However. students can be asked to contribute individual responses that are then subjected to plenary discussion. at least two alternatives present themselves. organisational justice. when adopting this approach. communication and the psychological contract? In the classroom Clearly the approach adopted to ‘student preparation’ can be followed through into the classroom. As already noted. if preparing answers to self check and reflect questions was not part of preparatory work but consideration of the questions is to feature as part of the teaching session. job insecurity. Instructor’s Manual • • complete the self check and reflect questions and come to the session prepared to share and discuss their responses. similar approaches to those suggested for self check and reflect questions can be adopted. As part of this. Pre-set questions that we have found useful for structuring student reading. preparatory activities and classroom discussion for the topic of downsizing include: 1. you could obtain more recent newspaper reports to extend the case on MG Rover Cars at the end of the chapter. Our outline answers to both self check and reflect questions and case study questions follow in the next two substantive sections of this chapter guide. Here we would suggest that groups major on one of the case questions only moving on to others if they have time. If at the time you are teaching this topic there is an organisational downsizing taking place. downsizing is a strategy that most students will have heard about via the media. once student queries have been exhausted. and familiarise themselves with the chapter case study (or an alternative case supplied in advance) and come to the session prepared to tackle the case questions. to provide a short summary of key issues. we would favour the group approach as a more stimulating approach. Where preparing answers to self check and reflect questions has been set as part of preparation for the teaching session. What do you understand to be the main differences between downsizing and redundancy? 2. Strategic Human Resource Management: Contemporary Issues. students can be formed into groups to share their individual answers and draw conclusions from their discussions. we find it useful. reinforces the value of reading as an essential prerequisite for class-based discussion and provides a platform from which further class-based activities can be launched. Where case study work has featured as part of preparatory activities. If coming to the case afresh. This is our preferred approach because it makes students more accountable for their personal learning and reserves any group work for case study analysis. it may well be helpful to use this as an alternative case study. there is unlikely to be time for groups to consider all questions. In all cases student responses can be considered against our suggested answers which themselves can be usefully critiqued. However.

As you continue with your reading of this chapter. If they have not already been used as part of class activities. Strategic Human Resource Management: Contemporary Issues. which of the following events would you classify as downsizing methods: compulsory redundancy. a particular function or layer) requiring action to overcome the effects of technological obsolescence. Our outline answers to both self check and reflect questions and case study questions follow in the next two substantive sections of this chapter guide. Such managerial capability and competence may not be present in other organisations. recruitment freeze. Each will place demands upon those remaining in employment (the survivors) requiring these employees to cope and adapt. Instructor’s Manual Follow-up work The pedagogic features adopted throughout this book are intended to offer up a number of alternatives for follow-up work while at the same time leaving the lecturer free to add or substitute their own ideas.g. or who will be offered some inducement to accept voluntary severance.. is one way of increasing managerial control over the implementation of downsizing.Millmore et al. you will learn more about the implications of using each of these methods for both employees and the employer. natural attrition. the factors referred to in the literature (e. HRM approach is more likely to exist in larger organisations or those that are part of a larger group of companies. 14. This reactive approach may also be more symptomatic of organisations in decline. induced redeployment. a strategic planning and environmental scanning capacity) that underpin a proactive approach may not be present in many organisations (Kozlowski et al.3 Which factors related to the methods used to implement downsizing might affect managerial control and employee influence over the process? Targeting those to be made redundant. There are also a number of follow-up study suggestions after the chapter summary that can be undertaken by students either individually or in groups and an extensive list of references provides many opportunities for directed further reading. job share. These other types of organisations may have a tendency to muddle along and be more likely to adopt reactive approaches where environmental factors create pressures that cannot be ignored. reduced product demand or for some other reason.2 Why might the requirement to adopt a proactive downsizing strategy in order to minimise its negative consequences be difficult to achieve in practice? The literature on which this sub-section is based certainly points to the need for a proactive approach to downsizing as part of the means to minimise and manage negative survivors’ reactions that may adversely affect organisational objectives.e.. Targeting relates to the ability of an organisation's management to focus workforce reductions in areas (i. 14. voluntary redundancy involuntary redeployment? Give reasons for your answer. The alternative to a targeted approach to workforce reductions is to engage in either unfocused or across-the- 143 © Pearson Education Limited 2007 . early retirement.1 Using Shaw and Barrett-Power’s definition of downsizing (outlined earlier). In addition. The short answer to this question is that all of them are downsizing methods as they will all result in a reduction in the size of the workforce. 1993). Answers to Self-Check and Reflect Questions 14. the existence of an integrated. any prior preparation of answers to the self check and reflect questions and/or the questions suggested for student preparation and/or the chapter case ‘The demise of MG Rover Cars’? will serve as a useful reinforcement to chapter content. However.

these may be reduced if the procedures by which they were reached are considered fair. beliefs and values etc.. The use of selection criteria offers a further means to exercise managerial control in relation to the downsizing process. Such an alternative approach has been associated with cost reduction strategies. 144 © Pearson Education Limited 2007 . You will have also reflected on the methods used to implement downsizing. The alternative to any form of selection in relation to a voluntary approach to redundancy is made clear by Lewis (1993: 28): ‘the volunteer population may become an irresistible force and the pattern of volunteers may largely determine the distribution of actual redundancies’. 14. why you would have. It is therefore. Where negative reactions are created by outcomes that are seen as unfair. You can see what a potentially complex picture can emerge from this type of event. If you have. or did have. or who would survive. This is related to the amount of employee involvement in the process such as through consultation and communication as well as providing employees with options such as voluntary redundancies. short-termism and a low level of managerial control. the prevailing employment circumstances and the need for your redundant colleagues to find work. We hope that you do not have to experience this! Where you have to manage this situation we hope that the ideas in this chapter provide at least some help! 14. sympathetic reactions towards your colleagues.4 How would you react to the redundancy of colleagues in the organisation for which you work. related to employees’ perceptions regarding the outcomes downsizing decisions made. This approach is likely to lead to the types of post-downsizing organisational problems discussed in the main body of the chapter. Selection criteria may be used in relation to an ostensibly voluntary approach. such as in relation to individuals performance or in that they affect both employees and their managers equally they will perceive the downsizing more positively. Where the organisation did not consider those made redundant you may be expected to experience fairly strong or strong sympathetic reactions to those so affected. Where the organisation simply used a workforce reduction strategy. the method of redundancy. While targeting (see above) may be used to identify work areas or groups for downsizing. without much thought about those who survived. as well as the closeness of your working relationships. However. this event. This may be even more the case where they are fairly treated. if you are persuaded by the theory being advanced in this chapter you will have made connections to the approach of the organisation in terms of its downsizing strategy. provides a check in relation to particular individuals whom the organisation wishes to retain. informational and interpersonal treatment may impact positively on downsizing survivors’ reactions. or more precisely given the question.5 Outline how perceptions of distributive. Instructor’s Manual board reductions. you may be expected to experience fairly negative reactions. Distributive treatment refers in this case to the outcomes of downsizing. However. Where employees perceive that these outcomes are fair. This may not be the case where you feel that those selected for redundancy were appropriately selected.Millmore et al. The possibility of fair outcomes also impacts upon perceptions of the procedures through which these decisions were reached. perhaps related to a general cost reduction strategy. how did you react and why?) Your response to this question will clearly be personal to a certain extent. Strategic Human Resource Management: Contemporary Issues. The outcome of this lack of managerial control could be a mismatch between actual and required human resource profiles of the downsized organisation. or in an organisation for which you have worked? (Perhaps you have actually experienced this event. in relation to targeted areas. procedural. there may be a number of reasons related to your psychological characteristics. the use of selection criteria. Selection criteria may also be used as the only filter where volunteers are sought from across the organisation.

holding a jobs fair on parkland beside the site. Answers to Case study questions One would hope that students will be answering these questions with the benefits of hindsight and other material. The reasons for this support were. Approximately 3. retraining courses for those who had lost their jobs. the impact upon the local economy.Millmore et al. setting up a register of manufacturing vacancies.. Finally.000 employees at suppliers of the factory also lost their jobs. setting up an office on the Longbridge site and the distribution of information packs to redundant workers by JobCentre Plus. in particular by line managers has been shown to have considerable influence on employees’ perceptions. These employees did not receive the statutory 90 day notice period because of the sped of the redundancies. Instructor’s Manual Interpersonal treatment. Where employees are treated sensitively by line managers they are likely to feel more positive about the downsizing. Why do you believe this support was offered? A range of support was offered to redundant workers. A few hundred MG Rover staff were retained by the administrators to look after the Longbridge factory site. rather than just that contained in the three newspaper reports. a further 17. This was part of a £150m package pledged by the government to help the workers at MG Rover and their suppliers who had lost jobs. MG Rover went into administration after Shanghai Automotive Industry Corporation pulled out of collaboration talks.000 employees at MG Rover were made compulsory redundant. according to the newspaper extracts: • • • statutory redundancy requirements. Strategic Human Resource Management: Contemporary Issues. the provision of clear information about both downsizing decisions and the reasons for these decisions has also been shown to impact positively on reactions to the downsizing. the large number of workers upon whom the closure impacted. 2. the government employment and benefits agency. 145 © Pearson Education Limited 2007 . Sensitive treatment of those who are leaving has also been shown to impact positively on those who survive the downsizing (stayers). Outline the organisational downsizing strategy as adopted by Rover. As a result of the factory closure. It included: • • • • • redundancy payments averaging £5. However. 1.000 each. from the extracts it is possible to develop answers to each of the four questions. Outline the range of support offered to redundant Rover workers.

. The Labour government. That totalled almost £36. MG Rover workers signed up for training courses.Millmore et al. BMW.000 per worker. Why did the UK Government become involved in the downsizing at Rover? One will never know for sure. pledged £175m and the EU put up £40m.000 workers who lost jobs when MG Rover collapsed in April had found new employment within 6 weeks of the downsizing. What were the intended and unintended outcomes of the downsizing strategy adopted? Intended outcomes • • About 1. Strategic Human Resource Management: Contemporary Issues. Unintended outcomes • The impact upon the local economy was less than expected due to the ‘tight labour market’ and the diversification strategy for purchasing components adopted by MG Rover’s previous owner. Instructor’s Manual 3.250 out of more than 5. Workers who obtained employment were earning less in their new jobs than they did at the Longbridge plant • • 146 © Pearson Education Limited 2007 . Others might feel it was due to the redundancies occurring when the Labour Government was campaigning for re-election and the marginal constituency of Redditch was close by! 4. MG Rover was of strategic importance. It might be argued that as last UK owned major automotive manufacturer. which was seeking re-election when MG Rover collapsed.