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HUMAN RESOURCE MANAGEMENT
QCF Level 5 Unit

Contents
Chapter Title Introduction to the Study Manual Unit Specification (Syllabus) Coverage of the Syllabus by the Manual 1 The Context of HRM 1: Approach, Organisation and Legal Framework Introduction Definitions History of HRM The People Contribution Roles in HRM HRM and The Law The Context of HRM 2: Behaving Responsibly Introduction Ethics in HRM Health and Safety Equality and Diversity Whistleblowing Workforce Planning Introduction Purposes and Process of Workforce Planning Hard and Soft Workforce Planning Importance of Workforce Planning Redundancy Recruitment and Selection Introduction The Recruitment and Selection Process Defining the Vacancy Advertising The Application Process The Selection Process Different Ways to Gather Data on a Candidate Making the Job Offer Employer Branding E-Recruitment Page v vii ix

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Chapter Title 5 Learning and Development Introduction The Value of Learning Domains of Learning Learning, Training, Development or Education? Learning Theories The Training Cycle Training and Development Methods Employee Induction Roles in Training and Development Management and Development Personal Development The Learning Organisation Performance Management Introduction The Performance Management Process Appraisal – Context and Role The Appraisal Process Objective Setting High Performance Working Discipline and Grievance Introduction The Need for Rules and Procedures Disciplinary Procedures Investigations Disciplinary Hearings Disciplinary Penalties Appeals Grievance Procedures Attendance Employee Reward Introduction Employee Motivation Needs Theories of Motivation Process Theories of Motivation Purposes of Reward The Elements of Reward Financial Reward Flat Rate Pay Systems Performance Related Pay Other Financial and Non-Financial Reward Total Reward Employee Relations Introduction The Nature of the Employer-Employee Relationship Trade Unions and Collective Bargaining Employee Involvement High Commitment HRM

Page 95 97 97 100 101 102 106 109 119 119 120 120 122 125 126 126 129 135 142 147 151 153 153 156 157 158 161 164 165 167 171 173 173 178 185 188 189 190 193 194 196 197 201 202 202 206 207 208

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Introduction to the Study Manual
Welcome to this study manual for Human Resource Management. The manual has been specially written to assist you in your studies for this QCF Level 5 Unit and is designed to meet the learning outcomes listed in the unit specification. As such, it provides thorough coverage of each subject area and guides you through the various topics which you will need to understand. However, it is not intended to "stand alone" as the only source of information in studying the unit, and we set out below some guidance on additional resources which you should use to help in preparing for the examination. The syllabus from the unit specification is set out on the following pages. This has been approved at level 4 within the UK's Qualifications and Credit Framework. You should read this syllabus carefully so that you are aware of the key elements of the unit – the learning outcomes and the assessment criteria. The indicative content provides more detail to define the scope of the unit. Following the unit specification is a breakdown of how the manual covers each of the learning outcomes and assessment criteria. The main study material then follows in the form of a number of chapters as shown in the contents. Each of these chapters is concerned with one topic area and takes you through all the key elements of that area, step by step. You should work carefully through each chapter in turn, tackling any questions or activities as they occur, and ensuring that you fully understand everything that has been covered before moving on to the next chapter. You will also find it very helpful to use the additional resources (see below) to develop your understanding of each topic area when you have completed the chapter. Additional resources  ABE website – www.abeuk.com. You should ensure that you refer to the Members Area of the website from time to time for advice and guidance on studying and on preparing for the examination. We shall be publishing articles which provide general guidance to all students and, where appropriate, also give specific information about particular units, including recommended reading and updates to the chapters themselves. Additional reading – It is important you do not rely solely on this manual to gain the information needed for the examination in this unit. You should, therefore, study some other books to help develop your understanding of the topics under consideration. The main books recommended to support this manual are listed on the ABE website and details of other additional reading may also be published there from time to time. Newspapers – You should get into the habit of reading the business section of a good quality newspaper on a regular basis to ensure that you keep up to date with any developments which may be relevant to the subjects in this unit. Your college tutor – If you are studying through a college, you should use your tutors to help with any areas of the syllabus with which you are having difficulty. That is what they are there for! Do not be afraid to approach your tutor for this unit to seek clarification on any issue as they will want you to succeed! Your own personal experience – The ABE examinations are not just about learning lots of facts, concepts and ideas from the study manual and other books. They are also about how these are applied in the real world and you should always think how the topics under consideration relate to your own work and to the situation at your own workplace and others with which you are familiar. Using your own experience in this way should help to develop your understanding by appreciating the practical application and significance of what you read, and make your studies relevant to your

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personal development at work. It should also provide you with examples which can be used in your examination answers. And finally … We hope you enjoy your studies and find them useful not just for preparing for the examination, but also in understanding the modern world of business and in developing in your own job. We wish you every success in your studies and in the examination for this unit.

Published by: The Association of Business Executives 5th Floor, CI Tower St Georges Square New Malden Surrey KT3 4TE United Kingdom

All our rights reserved. 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 the prior permission of the Association of Business Executives (ABE). © The Association of Business Executives (ABE) 2011

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Unit Specification (Syllabus)
The following syllabus – learning objectives, assessment criteria and indicative content – for this Level 5 unit has been approved by the Qualifications and Credit Framework.

Unit Title: Human Resource Management
Guided Learning Hours: 160 Level: Level 5 Number of Credits: 18

Learning Outcome 1
The learner will: Understand the importance of a professional approach to HRM as an essential means for optimising the performance and commitment of an organisation’s employees. Assessment Criteria The learner can: 1.1 Explain the importance of people as a key corporate resource, and the changing focus of the HR/personnel function (from ‘welfare’ to ‘business partner’). 1.2 Outline the fundamentals of what it means to be a ‘professional’, both as an HR practitioner and also as a manager with accountabilities for people performance – including the ethical, legal and ‘duty of care’ dimensions of the managerial role. Indicative Content 1.1.1 Definition of HRM. 1.1.2 People as an organisation’s key resource. The contribution of HRM to high performance and organisational success. 1.1.3 The history of HRM. 1.2.1 The professionalisation of HRM. 1.2.2 Ethics in HRM and the employer’s duty of care to employees. 1.2.3 The law and HRM. 1.2.4 The responsibilities of the employer and the employee for maintaining a safe and healthy working environment. 1.2.5 Work-related stress and work/life balance. 1.2.6 Equality and diversity and their significance for business success, legal compliance and corporate social responsibility. 1.2.7 Whistleblowing and whistleblowers. 1.3.1 Psychological contract: nature, history, current significance and future development.

1.3 Define the nature of the psychological ‘contract’ between employer and employee, and assess the evolving features of this ‘contract’ in an increasingly turbulent business world. 1.4 Describe the evolving relationship between managers, the workforce, and the HR (personnel) function

1.4.1 The respective roles of and developing relationship between the individual employee, the line manager, the HR professional and other specialists carrying out people management activities.

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Learning Outcome 2
The learner will: Understand the role of effective and efficient people resourcing (HR planning, recruitment and selection) in securing a workforce with the requisite knowledge, skills and attitudes, enabling them to contribute to organisational goals. Assessment Criteria The learner can: 2.1 Explain the purposes and process of HR planning. 2.2 Examine the relevance of HR planning in today’s highly competitive, globalised and increasingly unpredictable environment. 2.3 Identify the principal elements in the processes of recruitment and selection (including erecruitment). Indicative Content 2.1.1 The definition, purposes and mechanics of Human Resource Planning (HRP). 2.1.2 Hard and soft HRP. 2.2.1 The importance of HR planning in a turbulent world. 2.2.2 The definition, purpose and processes for handling redundancy situations. 2.3.1 The meaning of recruitment and selection and the stages involved. 2.3.2 Defining the vacancy and job analysis (job descriptions and accountability profiling) and specifying the personal attributes, capabilities and attitudes required (person specifications and competency frameworks). 2.3.3 Advertising internally and externally. 2.3.4 The application form. 2.3.5 E-recruitment. 2.4.1 Selection methods: the range of techniques available including e-selection. 2.4.2 The significance of authenticity, reliability, sufficiency, validity and cost, with special reference to selection interviewing. 2.4.3 Employee references and making a job offer.

2.4 Assess the reliability and validity of specific techniques for selection, and design suitable selection methods appropriate for a variety of occupational and corporate scenarios.

Learning Outcome 3
The learner will: Understand the theory and practice related to the full range of HRM functions (learning, performance management, reward/recognition and employee relations). Assessment Criteria The learner can: 3.1 Apply learning theories to the design and delivery of costeffective induction and occupational training/development events. Indicative Content 3.1.1 Learning theories and their use in helping to design and deliver learning. How adults learn and different preferred ways of learning. 3.1.2 The differences between learning, development, training and education and the adoption of these different approaches. 3.1.3 What learning is designed to change and its limitations.

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3.1.4 The delivery of learning through different methods (on and off the job). 3.1.5 Employee induction. 3.2 Evaluate suitable methods in performance management (objective setting and systematic performance review) and for managing performance (control/monitoring systems, absence control and the design of disciplinary procedures). 3.2.1 Methods of performance management including objective-setting and systematic performance and development review (appraisal). 3.2.2 360-degree appraisal. 3.2.3 Methods of monitoring and controlling employee absence. 3.2.4 The definition, purpose and content of disciplinary and grievance policies and procedures. The principles behind them. 3.2.5 Gross misconduct and formal vs. informal action. 3.3.1 Employee reward and recognition. 3.3.2 The mix of financial and non-financial rewards. The total reward package. 3.4.1 Methods promoting positive employee relations.

3.3 Describe alternative approaches to reward and recognition in organisations, including ‘total reward’. 3.4 Explain the methods available for promoting positive employee relations in the organisation.

Learning Outcome 4
The learner will: Understand the content and significance of key developments in the HRM arena, especially High Performance Working (HPW), employee ‘engagement’, employer branding, and self-managed learning. Assessment Criteria The learner can: 4.1 Explain the importance of High Performance Working (HPW) as a defined set of business methodologies, and evaluate the application of HPW techniques within specified organisational settings. Indicative Content 4.1.1 The nature and importance of High Performance Working (HPW). 4.1.2 The application of HPW techniques to a range of different organisational situations.

4.2 Describe the benefits to be 4.2.1 The nature and significance of employee gained – for both organisations engagement and methods for promoting engagement. and employees – from a culture of ‘High engagement’ cultures. employee ‘engagement’, and understand the mechanisms which make a high ‘engagement’ culture possible. 4.3 Assess the advantages of 4.3.1 The nature and significance of employer branding. employer branding and identify the 4.3.2 The factors which contribute to the authentic factors which contribute to the development of the organisation as an employer brand. authentic development of the organisation as an employer brand.

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4.4 Explain the importance of personal development throughout an organisation’s workforce, and how to promote self-managed learning both as a practical principle for individual conduct and as a corporate practice for continuous improvement throughout the business

4.4.1 The nature and importance of employee development in each part of the workforce. 4.4.2 How to promote continuous (lifelong) selfmanaged learning by both the individual employee and the organisation. 4.4.3 Knowledge management and the ‘learning organisation’. 4.4.4 Career management and development.

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Coverage of the Syllabus by the Manual
Learning Outcomes The learner will: Assessment Criteria The learner can: Manual Chapter Chap 1

1. Understand the importance 1.1 Explain the importance of people as a of a professional approach key corporate resource, and the to HRM as an essential changing focus of the HR/personnel means for optimising the function (from ‘welfare’ to ‘business performance and partner’) commitment of an 1.2 Outline the fundamentals of what it organisation’s employees. means to be a ‘professional’, both as an HR practitioner and also as a manager with accountabilities for people performance – including the ethical, legal and ‘duty of care’ dimensions of the managerial role 1.3 Define the nature of the psychological ‘contract’ between employer and employee, and assess the evolving features of this ‘contract’ in an increasingly turbulent business world 1.4 Describe the evolving relationship between managers, the workforce, and the HR (personnel) function 2. Understand the role of effective and efficient people resourcing (HR planning, recruitment and selection) in securing a workforce with the requisite knowledge, skills and attitudes, enabling them to contribute to organisational goals. 2.1 Explain the purposes and process of HR planning 2.2 Examine the relevance of HR planning in today’s highly competitive, globalised and increasingly unpredictable environment 2.3 Identify the principal elements in the processes of recruitment and selection (including e-recruitment) 2.4 Assess the reliability and validity of specific techniques for selection, and design suitable selection methods appropriate for a variety of occupational and corporate scenarios 3.1 Apply learning theories to the design and delivery of cost-effective induction and occupational training/development events 3.2 Evaluate suitable methods in performance management (objective setting and systematic performance review) and for managing performance (control/monitoring systems, absence control and the design of disciplinary procedures)

Chaps 1 & 2

Chaps 1 & 9

Chaps 1 & 9

Chap 3 Chap 3

Chap 4

Chap 4

3. Understand the theory and practice related to the full range of HRM functions (learning, performance management, reward/recognition and employee relations).

Chap 5

Chaps 6 & 7

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3.3 Describe alternative approaches to Chap 8 reward and recognition in organisations, including ‘total reward’ 3.4 Explain the methods available for Chap 9 promoting positive employee relations in the organisation 4. Understand the content and significance of key developments in the HRM arena, especially High Performance Working (HPW), employee ‘engagement’, employer branding, and selfmanaged learning. 4.1 Explain the importance of High Performance Working (HPW) as a defined set of business methodologies, and evaluate the application of HPW techniques within specified organisational settings 4.2 Describe the benefits to be gained – for both organisations and employees – from a culture of employee ‘engagement’, and understand the mechanisms which make a high ‘engagement’ culture possible 4.3 Assess the advantages of employer branding and identify the factors which contribute to the authentic development of the organisation as an employer brand 4.4 Explain the importance of personal development throughout an organisation’s workforce, and how to promote self-managed learning both as a practical principle for individual conduct and as a corporate practice for continuous improvement throughout the business Chaps 1 & 6

Chap 9

Chap 4

Chap 5

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Chapter 1 The Context of HRM 1: Approach, Organisation and Legal Framework
Contents
Introduction

Page
2

A.

Definitions What is HRM? The HR processes model The HR outputs model What is horizontal integration? What is vertical integration?

2 2 2 4 4 4

B.

History of HRM How did the role of the HR professional develop? Who carries out HR activities?

5 5 5

C.

The People Contribution Are people really that important to organisations? What is the psychological contract?

6 6 8

D.

Roles in HRM Why is there a tension between staff and employers? Are there particular models for organising HR activities? What role does the line manager play? What role do governments play in HRM?

9 9 10 12 13

E.

HRM and The Law Does the legislation consist of only legal statutes? What is an employment contract? What is the employer's duty of care?

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The Context of HRM 1: Approach, Organisation and Legal Framework

INTRODUCTION
By the end of this and the following chapter you should understand the importance of a professional approach to Human Resource Management (HRM) as an essential means for optimising the performance and commitment of an organisation‟s employees. You should be able to: (a) (b) Explain the importance of people as a key corporate resource and the changing focus of the HR/personnel function (from „welfare‟ to „business partner‟). Outline the fundamentals of what it means to be a „professional‟, both as an HR practitioner and also as a manager with accountabilities for people performance, including the ethical, legal and „duty of care‟ dimensions of the managerial role. Define the nature of the psychological „contract‟ between employer and employee, and assess the evolving features of this „contract‟ in an increasingly turbulent business world. Describe the evolving relationship between managers, the workforce, and the HR (personnel) function.

(c)

(d)

Note: Activities in this manual are designed to encourage you to think about particular ideas or approaches to HRM in the light of the preceding text. There are no right answers (and none provided) – just think about the questions and perhaps make some notes about your response.

A. DEFINITIONS
What is HRM?
“Ask any three economists for a definition of economics and you will get four different answers!” The same can be said of human resource management. People are unique, complex and no single definition fully captures the developing and multifaceted nature of Human Resource Management. Dividing HRM up into its constituent parts no more captures the subject than a study of anatomy captures what it means to be human. But definitions are necessary. HR processes lead to  HR outputs lead to  Organisational success

The HR processes model
We can explain HRM as the sum of a number of constituent processes, as shown in the following table.

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The HR Processes Model Overview elements HR strategy – A long term perspective that addresses the big questions about how the best return can be obtained from the human resources available now and in the future. Organisation development – Managing the hard (structure, systems) and soft (culture, values) features of the organisation. Day-to-day elements People resourcing – Getting the right number of the right sorts of people in the right place at the right time and ethically getting rid of them when they are not needed. Learning and development – Creating an environment in which employees and others associated with the organisation (contractors, owners, governors, associates) get the necessary knowledge, skills and attitudes. Performance management, reward and recognition – Creating structures that attract, retain and motivate staff; controlling employee costs. Employee relations – Creating a workforce that is appropriately supportive, involved and engaged with the business.

This is fairly straightforward and many HR departments will be structured around this model. Figure 1.1: HR Department Structure HR Strategy (HR top team)

Recruitment Unit

Learning and Organisation Development

Employee reward (Pay policy and payroll)

Employee Relations (HR business partners)

Activity 1
How are HR functions structured in your organisation, or an organisation with which you are familiar?

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The Context of HRM 1: Approach, Organisation and Legal Framework

The HR outputs model
Alternatively, we can look at HRM from the point of view of its „outputs‟. This model has four elements: staffing, administration, performance and change. Figure 1.2: HR outputs model Staffing the organisation Sufficient numbers of the right people in the right place at the right time. Employment administration Keeping the organisation within the law, getting staff paid, developing policies and administrative practices. The Four Objectives of HRM Organisational performance Engaging and supporting the workforce so that people make their best contribution.

Organisational change management Aligning culture, structure, learning and development etc to advance the business. For these objectives to be met HRM must be integrated horizontally and vertically.

What is horizontal integration?
One of the beauties of HRM is that all of these topics link with each other. Your organisation‟s long term HR strategy leads to a resourcing plan for getting the people you need. Recruitment (part of people resourcing) overlaps with induction (learning and development). However, induction also involves finding ways to engage the new member of staff with the decision making processes of the business (employee relations). Induction will involve setting work objectives (performance management) that take account of the direction in which the business is going (organisation development). Those objectives will only be met if sufficient rewards are available. We could go on. We call this horizontal integration. Without it HRM is dysfunctional.

What is vertical integration?
The activities of line managers and HR professionals need also to be integrated with the strategy and business plans of your organisation. If an organisation‟s business plan is to increase productivity by 3% next year and to reduce costs by another 3% this will probably need to be reflected in the way performance is managed and in pay settlements for next year. Hence HRM must be vertically integrated with top level business decisions. If your organisation is also subject to control from outside (for example, by Government or Regulator) your HRM decisions will need to be vertical integrated with that external environment too.

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B. HISTORY OF HRM
How did the role of the HR professional develop?
We can see three distinct phases.  Welfare As a result of the industrial revolution, people in organisations were often looked upon as adjuncts to machines i.e. doing the things that machines were not yet able to do. They were managed accordingly. Little surprise, then, that society developed a need for welfare workers, to make best use of the welfare provisions available to workers and their families. This continued through the two world wars. "People professionals" were engaged in largely welfare roles, representing the interests of workers.  Industrial relations In the 1960s, improved communication and collaboration saw the increased growth in the power of trade unions as a counterbalance to the powerful employer, in both the public and private sectors. The emphasis was on industrial relations; keeping the workers at work. People management professionals began to be looked upon as neither management nor unions but as independent arbitrators between the two and the title "personnel manager" was adopted. Government direct labour was high. The relationship between employer and employed was often adversarial and the power of the trades union was strong.  Human resource management The 1980s saw a dramatic shift. Competition increased, low productivity meant low job security and management seized back the power (with some drama, such as in the UK miners‟ strike and in the newspaper printing industry). The job for life culture disappeared, along with the need for an independent arbitrator between the employer and the employee. Personnel managers were doomed to extinction unless they found a new role. The result? Personnel managers became "human resource managers" and clearly identified themselves with the interests of the employer. In Europe, this coincided with a mushrooming of employment legislation, which naturally fell to the new breed of HR professional. By the start of the new millennium the key contributions of the HR professional became enhancing human performance, change management and keeping the employer on the right side of the law.

Who carries out HR activities?
Managing people is a shared activity and many people play a part. The more professionalised an activity becomes, the greater the number of specialist, professional staff there are involved in that activity. The degree to which it is delegated to line managers will vary from country to country, from sector to sector and even from unit to unit within your organisation. It is always good to remember that the way you have experienced HR is not the way it is organised everywhere else. More is said later when we consider roles and the developing relationships in HRM.

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The Context of HRM 1: Approach, Organisation and Legal Framework

C. THE PEOPLE CONTRIBUTION
“Our people are our most important resource.” “If that were true you wouldn‟t treat us like this.”

Are people really that important to organisations?
For as long as owners and managers have been claiming that their people are their greatest asset, HR professionals and academics have been looking for the evidence that connects the way people are treated to the success of their organisation. (If we can demonstrate that business success depends upon good people management and development, key decision makers are much more likely to pay attention to HR issues.) The good news is that evidence is now available and widely accepted. The bad news is that there is no single right way to manage and develop people that will guarantee your organisation‟s success. There are many other variables to be taken into account. Case Study 1 In 2003 the UK Chartered Institute of Personnel and Development (CIPD) published a study into the HR practices, staff views and performance in 11 large UK organisations, including Jaguar Cars, the Nationwide Building Society, Selfridges (a large and successful London store) and Tesco (the UK‟s largest supermarket chain). The University of Bath in the UK had carried out the research. One of the key conclusions was that the most carefully thought through HR strategy was useless, unless it was embraced by line managers with the skills and understanding necessary to engage and motivate employees. Research had already demonstrated the powerful statistical impact of people management practices on overall business performance. In this study, they wanted to understand more about why and how these practices influenced organisational performance – to unlock what has been termed the „black box‟. The study, “Understanding the People and Performance Link: Unlocking the Black Box” confirmed the powerful relationships between HR practices, employee commitment and operating performance. It tracked organisational performance over a threeyear period and found that where effective HR practices were not in place, levels of employee commitment were up to 90% lower. Other key conclusions included: (a) An organisation needs a clear direction and purpose, beyond the bland mission statement or generic goal of financial returns, which engages, enthuses and unites people. At The Nationwide Building Society this is a commitment to mutuality. At Royal United Hospital (RUH) Bath it is saving lives. This „big idea‟ appears essential in motivating and directing people behind the strategy of the organisation.

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(b)

High performing organisations invariably employ some form of balanced performance scorecard or methodology. Be it the stakeholder value model employed at Selfridges, the sixsigma methodology at Jaguar or a quality framework at the Court Service, this demonstrates the importance of different stakeholder groups to the organisation‟s success and links individual and corporate goals. The research confirmed that there was no universal „best HR practice‟. It is all about having a broad and integrated „bundle‟, tailored to the needs of the organisation. For example, the practices employed at technology company AIT would be unlikely to go down well on the production line at Jaguar. Yet every worker there could tell you Jaguar‟s latest position in the international quality league table.

(c)

Strong attention to team working, extensive employee communications and involvement and positive perceptions of training and careers, emerged as common ingredients in the performance-driving HR mix. Leadership – not at the top of the organisation but at the front line – appeared to be holding back many UK organisations. Middle managers and supervisors set the context in which the HR/business performance relationships happened, or did not happen. For example, at the UK supermarket retailer Tesco, where 88% of staff feel loyal and share the company‟s values, a typical section manager described their role as, “mobilising the team with a goal, motivating people”. Building management capability is a core component of the UK government tax office‟s HR strategy. Another example is hospital nursing staff, describing the change after a new ward manager worked with her HR colleagues on a range of new policies, such as flexible shift working and 360 degree appraisal. Comments included: “I‟m much more motivated now, there‟s training; the atmosphere‟s totally different.” “Communication is excellent now…our manager is very approachable.” “When I came here it was unsettled. Now we have a strong team…you want to do the job to the best of your ability.” The high level of staff turnover in the ward had since fallen to almost zero. Organisations can make progress very quickly. They need to survey employee attitudes and commitment; assess, train, coach and support their first line managers and integrate HR policies with goals and values. Once these processes are underway there is a very high likelihood of transformation.

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What is the psychological contract?
Although first used in the early 1960s, this term became popular in the early 1990s. It has been defined as: „The perceptions of the two parties, employee and employer, of what their mutual obligations are towards each other'. Guest, DE. and Conway, N., Pressure at work and the psychological contract (CIPD, 2002) It is often expressed as the unwritten understandings between the two parties. Such understandings are usually informal and imprecise and may be inferred from:   History Statements made by either side, e.g. during the recruitment process or in a performance appraisal.

Like all contracts, the psychological contract contains both promises and expectations. The important thing is that these are believed to be part of the relationship. We deal with further aspects of the psychological contract in Chapter 9. Is the psychological contract the same as the legal contract of employment? No. In many cases, the legal contract will offer only a limited and uncertain representation of the reality of the employment relationship. Your employees may have contributed little to its terms beyond accepting them. The nature and content of the legal contract may only emerge clearly if and when, it comes to be tested in a court. The psychological contract, on the other hand, looks at the reality of the situation as perceived by the parties. It may be more influential than the formal contract in affecting how your employees behave from day to day. It is the psychological contract that, effectively, tells your employees what they are required to do, to meet their side of the bargain and what they can expect from their job. Although it may not be legally enforceable, a court may be influenced by it in reaching a judgement. It is often summarised as: The expectation that both sides will act fairly, in a trustworthy fashion and deliver on its promises. What happens if the psychological contract is broken? Where an employee believes that management has broken promises or failed to deliver on commitments, this has a negative effect on job satisfaction, commitment and on the psychological contract as a whole. This is particularly the case where managers themselves are responsible for breaches, for instance, where employees do not receive promised training, or performance reviews are badly handled. Managers cannot always ensure that commitments are fulfilled, for example, where employment prospects deteriorate or organisations are affected by mergers or restructuring but they may still take some blame, in the eyes of employees. Does the psychological contract change over time? Yes. For example, it will be influenced by:  The nature of jobs. More employees are on temporary contracts, more jobs are being outsourced, tight job descriptions are out and functional flexibility is in. In many countries there is an end to the concept of the traditional job for life.

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Organisations have downsized and delayered. Individual employees have to do more with less. It is no longer possible to guarantee life long employment to anyone who will simply stay out of trouble. Markets, technology and products are constantly changing. Customers are becoming more demanding, quality and service standards are constantly going up. Technology and finance are less important as sources of competitive advantage. 'Human capital' is becoming more critical to business performance in the knowledgebased economy. Traditional organisational structures are becoming more fluid. Teams are often the basic building block; new methods of managing are required. Examples of contract terms Employees are expected to: Work hard Uphold company reputation Attend and be punctual Be loyal and honest Work extra hours when required Develop new skills and update old ones Be flexible – for example, by taking on a colleague‟s work Be courteous to clients and colleagues Be honest Come up with new ideas. Employers are expected to provide: Pay according to performance Training and development Promotion opportunities Recognition for innovation or new ideas Feedback on performance Interesting tasks An attractive benefits package Respectful treatment A pleasant and safe working environment Reasonable job security.

 

Is the psychological contract the same as the employer brand? No. The employer brand is the bigger image of the organisation held by those inside or outside the organisation. As such, the psychological contract is a small part of that overall brand.

D. ROLES IN HRM
Why is there a tension between staff and employers?
Two contrasting approaches to HRM are: (a) The Pluralist Model The pluralist approach considers the interests of owners and managers as best served by getting high productivity for low cost. In this model workers are seeking high rewards for as little effort as they can get away with. Clearly, managers believing in this model will take an adversarial approach – seeing the interests of the two sides of industry in opposition.

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The Context of HRM 1: Approach, Organisation and Legal Framework

(b)

The Unitarist Model However, the unitarist approach suggests that prosperous employers produce prosperous employees and therefore, the interests of both sides are the same – the prosperity of the employing organisation.

Activity 3
Are you a unitarist or a pluralist? What are the views of the people you work with?

(We say more about this in Chapter 9 – Employee Relations) By ‘employer’ do you mean ‘owner’? Good point. The „employer‟ is the body that makes an offer of employment. It is usually the same as the organisation. So are managers employers? Not usually. Whilst managers may hire labour, in doing so they are merely acting on behalf of the employer. Hence most organisations would define who the employer was. So are owners managers? Not usually. We ought to distinguish between the owners of an organisation and those who manage it day by day. Shareholders own public companies, not for profit organisations are usually „owned‟ by a board of trustees and public bodies are owned by the State. It is not the shareholders, the trustees or the State that runs them day by day; that is the job of managers, who will remain answerable to the owners.

Are there particular models for organising HR activities?
Yes. Firstly let us separate transactional, managerial and strategic HR: Transactional HR Dealing with individual casework and predominantly administrative Managerial HR Where HR is heavily formalised and rule-bound and emphasis is on troubleshooting or staying on the right side of employment law (often strong in a public sector or unionised environment) Contracts manager HR Strategic HR Creative and innovative HR, with emphasis on vertical integration and making best use of the available human resource – added value HR HR Architect Based on: Tyson and Fell (1986) It became increasingly common, during the 1990s, for transactional HR (the left hand box) to be devolved to line managers and even the individual employee, if there was access to an intranet containing an employee portal via which the employee can manage their leave, change their hours of work, get a pay slip, apply for promotion, find out about conditions of service etc.

Clerk of works HR

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But line managers are busy and cannot be administrative experts. So a new model became increasingly popular in the early twenty-first century - the HR Strategic Business Partner Model, proposed by David Ulrich in the USA in 1997. HR Strategic Business Partner Model Shared Services A single and sometimes large unit that handles all the routine transactional HR activities for the organisation. Typically: resourcing, payroll, absence monitoring, advice on the simpler employee relations issues. Low-cost but effective HR administration. Centres of Excellence Small teams of HR experts with specialist knowledge of key areas of HR. Typically reward, learning and development, employee engagement, talent management, diversity and compliance. Strategic Partners A small number of HR professionals working closely with local business managers, influencing strategy and steering its implementation. The task of strategic partners is to ensure the business makes best use of its people. Highlights to general managers the HR issues and possibilities they may not see. It is also aims to inform and shape HR strategy, so that HR meets organisational needs.

Delivers competitive business advantages through HR innovations.

Consider the following case studies. Case Study 2 From Personnel Today magazine, 28 January 2008 BACKLASH AGAINST HUMAN RESOURCES BUSINESS PARTNER MODEL AS MANAGERS QUESTION RESULTS A backlash against the much-feted human resources (HR) business partner model appears to have begun after research revealed that more than half of managers were unconvinced by the structure. Only 47% of the managers polled by research firm Roffey Park said that business partnering was in any way successful in their organisation. One in four said the model was ineffective, while the rest were undecided on the merits of the increasingly popular system. The business partner model has been hailed as the way forward for the profession since HR academic Dave Ulrich first wrote about it in 1997. It was supposed to modernise the function, making it more valuable to chief executives, and is now the most common structure, according to the Chartered Institute of Personnel and Development (CIPD). Almost half of the 479 managers polled had business partners in their organisation. However, those critical of the model said all too often it had only involved a change in title, and had not resulted in strategic thinking, with comments

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such as: "Too much reliance on the intranet", and "Greater conflict within HR" in the survey. Gabriele Arend, HR director at beauty products manufacturer Elizabeth Arden, said she disagreed with any model splitting HR professionals into recruiting, training and employee relations experts. Her company is moving towards a more traditional structure, where HR staff are trained to develop generalist knowledge. "This encourages a trust relationship between staff and their HR partner, but also allows department heads to discuss their issues with one HR partner rather than three," she said.

Case Study 3 Job Advertisement HR Business Partner - Various locations At last, a chance to join an efficient organisation that have a modern HR strategy that works within this huge global organisation. Our client delivers an HR service focused on developing the skills of the managers, so they are truly capable of managing every aspect of the employee lifecycle - from an unhappy team member, through to under-performance to career development and beyond. The overall objective of the HR team is to skill managers in all the basic areas of HR - offering guidance - but not hand holding as happens so often in less sophisticated organisations.

HR professionals at middle and senior levels in organisations are increasingly seeking professionally qualified recruits. That is probably one of the reasons why you are pursuing an ABE qualification.

What role does the line manager play?
Aside from HR specialists, there are important roles for the individual employee and his or her line manager. The following is a useful model, with wide implications: Roles of the employee, line manager and HR specialist Individual employee To perform well in their job today. Line manager To require and enable individuals to perform well. To require and enable individuals to develop themselves. HR specialist To require and enable line managers to manage their people. To require and enable by managers to develop their people. To provide specialist services such as occupational health and training.

To develop themselves for tomorrow.

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One of the implications of this model is that the more capable the employee, the less „requiring‟ and „enabling‟ the line manager has to do. The more skilled and motivated the line manager, the less the HR specialist has to do.

Activity 4
What should be the respective contributions of the HR professional and the line manager in recruiting someone for that manager‟s unit? (a) (b) Why have you split the responsibilities between the two parties in that way? Is there any other way to split the responsibilities?

What role do governments play in HRM?
Governments have, of course, a major role to play in HRM. (a) They decide which aspects of good HRM practice should become mandatory and therefore, a legal requirement upon employers and employees; in doing so they control the boundary between ethics and the law; between voluntarism and compulsion. They control macro economic policy and so influence pay rates. They provide support to employers and employees in the form of finance, training and the hearing of employment disputes via the civil court system. They are supposed to set the standards for employment practice by being model employers.

(b) (c) (d)

E. HRM AND THE LAW
The legal system in most countries is a synthesis of various traditions and follows, somewhat belatedly, the values the ruling elite. There are times when the needs of the employer will be reflected in the employment laws that are passed. For example, during the 1980s, in the United Kingdom, there was a concern to rebalance the relationship between government, employers and trade unions in favour employers. The result was a significant amount of legislation that restricted the activities of recognised trade unions. One of the sayings at the time was that „Prosperous employers make prosperous employees‟. In the 1990s, greater emphasis was placed on fairness at work and a considerable amount of legislation was enacted to increase the role of employees in the running of larger organisations; to extend antidiscrimination laws; to provide minimum levels of pay, leave and flexible working and to protect the employment rights of part-time and fixed term workers. The motivation for this legislation was to move perceived best practices of the time into minimum legal requirements.

Does the legislation consist of only legal statutes?
No. The UK HRM legal framework is illustrated in the following figure.

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Figure 1.3: UK HRM Legal Framework Codes of practice Practical advice to employers and others. Failure to comply with a code is not an offence in itself. However, compliance with a code could be used as evidence in court if a prosecution is taken. Usually associated with a particular regulation.  More detailed legislation that can be passed through Parliament relatively quickly. Numerous.  Umbrella Act of Parliament enabling Government to make regulations etc. Rare. Approved Code of Practice on Control of Substances Hazardous to Health.

 Regulations (secondary legislation)  Primary legislation

 Control of Substances Hazardous to Health Regulations 2002.  Health and Safety at Work Act 1974.

Are there any aspects of employment law common throughout the world? No. However, most legislation will cover contracts; discrimination; trade union relations; information and consultation with employees; minimum terms and conditions of employment (e.g. leave, pay and working hours); grievances, strikes and disciplinary and dismissal processes.

What is an employment contract?
All employees have a contract of employment, whether or not it is written down. This consists of express terms (i.e. those that are spilled out, either in writing or orally) and implied terms (i.e. those which can be inferred to be present, either because they are obvious or because they can be presumed to be the clear intention of both parties). What are implied terms?   In the UK, the employer has a duty to pay wages, provide work, co-operate with the employee and take reasonable care of the employee. In return the employee should co-operate with the employer, be faithful to the employer and take reasonable care in the performance of their duties so as not to put themselves or others at risk.

What is the employer's duty of care?
In the next chapter we consider the implications for HRM of legislation and regulation in the particular areas of:    ethics health and safety equality and diversity.

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Contents
Introduction

Page
17

A.

Ethics in HRM Who must behave ethically? How should we act when stakeholders want different things? How do managers make decisions ethically? What relevance does ethics have to HRM? How are ethics applied in practice?

17 17 17 18 19 19

B.

Health and Safety Why take health and safety seriously? How big a challenge is H&S to employers? What are the health and safety responsibilities of employers? Do employees have H&S responsibilities? Is there a role for trade unions? What are the main areas of H&S covered by the law in the UK? What is risk assessment? Is substance abuse a real issue for an employer to address? What is stress?

20 20 21 21 22 22 22 23 23 24

C.

Equality and Diversity Aren‟t we all discriminating all the time? Who experiences unfair treatment? How is discrimination relevant to employment? What behaviour is outlawed by the legislation? What is in the equal pay legislation? Isn't all discrimination obvious? Who can bring a claim? What is a disability under the legislation? What should we call it – discrimination, equal opportunity, fair treatment or diversity? How do organisations promote equality and diversity?

27 27 28 30 30 31 31 32 32 33 34

(Continued over)

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D.

Whistleblowing What is the case for whistleblowing? What is the case against whistleblowing?

36 38 38

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INTRODUCTION
Having considered the organisational and legal background to HRM in the first chapter, we shall now look at some of the issues which underpin the practice of HRM and derive, at least in part, from the legal obligations on employers.

A. ETHICS IN HRM
Ethics is about morality; about right and honourable conduct. It is significantly broader than the common concept of choosing right from wrong and what is considered ethical will vary from country to country. In a general sense, it takes the Biblical dictum, „Do unto others as you would have them do unto you.‟ Whilst this is limited in business, where there is the element of competition between organisations, there must then be rules of ethical competition. In the competitive labour market, for example, it is generally acceptable for you to draw staff from other employers, but it would not be acceptable to draw them in with promises that you were not then willing to fulfil.

Who must behave ethically?
It is usually accepted that governments have a primary role to set the scene for society – internationally, nationally and locally. This is true with ethics in HRM as much as any other area of management. Owners and managers hold the key responsibility for determining and enforcing the acceptable standards within their organisations. They are expected to understand and follow the moral code prevalent within society, even if this is not expressly stated in law or company policy. Hence ethics change. To whom are organisations accountable? To various stakeholders:        Shareholders – those who own the organisation Employees and their families Suppliers Customers Society at large Local communities Elected representatives – including government (national and local) and trade unions.

Activity 1
Look at a newspaper, the Internet or TV news for items reporting on unethical behaviour by organisations. (a) (b) Who has determined what is right and wrong? What pressures are there to regulate an organisation‟s behaviour?

How should we act when stakeholders want different things?
Your organisation has to balance rewards to stakeholders with the contributions that stakeholders make to the firm. Some writers see dealing with stakeholders as an extension

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of the marketing concept: the organisation must “market” its views and values to all stakeholder groups. Sometimes conflicts that arise have no obvious solution but have to be balanced carefully. Don’t stakeholder groups often want different things? Yes. Clearly there is a tension as to which stakeholder group is the dominant force, particularly between customers and shareholders in the privatised utilities and the banks. Top managers and directors have been criticised for awarding themselves large bonuses and share options – the so-called “fat cat” debate where customers feel aggrieved. However, the blurring of the lines between various groups has further complicated the analysis of stakeholders.    Many employees are also shareholders, due largely to being given bonus shares. In the case of retail stores and supermarkets, employees may be both shareholders and customers. Many customers may be shareholders in the firms that they patronise, if not directly then through pension or insurance schemes and unit trusts.

This blurring can cause a conflict of interests for individuals. For example, as a customer a person may want lower prices, but as a shareholder the same person wants the firm to make higher profits. These developments make stakeholder analysis more problematic than when each stakeholder group had only its own interests to promote. Most organisations use the technique of “branding” to create an image of loyalty to unite the interests of stakeholders. Brands like “Virgin” give first priority to employees, because motivated staff will ensure customer satisfaction that in turn will increase sales, thus improving the return to shareholders.

Activity 2
(a) (b) (c) (d) Define unethical behaviour? To what extent do you think is it important that organisations should have a code of ethics? Who are the stakeholders for your organisation? What does your organisation do to keep its stakeholders in balance?

How do managers make decisions ethically?
The terms “accountability” and "social responsibility” refer to the way in which your organisation is run and held responsible for its actions. The word “ethics” refers to actions that are held to be right or wrong. The debate about business ethics centres on whether the only responsibility of organisations and management is to maximise profits. This is the usual driving force behind the founding of an enterprise and is an assumption of most microeconomic models used to analyse the behaviour of firms. Most decisions that organisations make will be founded upon one of four basic beliefs:  Deontology – That the organisation has a responsibility to act in ways that respect the fundamental rights of human beings (as if there is a set moral code that is larger than

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the organisation). The morality of the actions is to be considered, not just their consequences.    Utilitarianism – That the business should serve the greatest good of the greatest number. Teleology – That the end justifies the means, irrespective of the damage that is caused to people on the way to utopia. Egoism – That moral behaviour should be considered in terms of personal selfinterest.

These are wider views of management responsibility. They can and often do, conflict with the profit motive espoused by the purists.

What relevance does ethics have to HRM?
The UK's Chartered Institute of Personnel And Development has as a code of professional conduct for members. It identifies seven generic areas of ethical behaviour by HR professionals. At the time of writing these were: 1. 2. 3. 4. 5. 6. 7. Accuracy of information provided to employees and employees Confidentiality of personal information Continuous professional development is mandatory for all members. Counselling support should be available to employees, dependents and pensioners Employee development – members must promote employee self-development and helping staff to achieve their potential Equality of opportunity and non-discrimination Fair dealing in the treatment of individuals and the employer.

How are ethics applied in practice?
The following are examples:   A job advertisement should be for a real job and legal decent honest and truthful. An application form should require only information relevant to selection. (In the UK in 2010 employers required not to ask medical questions prior to a job offer. This was to reduce the number of candidate unfairly rejected on the grounds of disability.) An invitation to a recruitment interview should be made only to a candidate with the real possibility of selection. A selection test should be reasonable, valid and some reasonable feedback provided, especially where a psychometric test is involved. A job offer should normally be in accordance with the advertisement. Structured induction should be provided to minimise early wastage, along with appropriate training for job performance and career development. Pay should be reasonable, paid on time and understandable to the employee. No unapproved deductions should be made Working conditions should be safe and healthy. This includes steps taken to minimise stress and the provision of suitable training and equipment. Workloads should be reasonable. Feedback on performance should be provided.

     

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 

A line manager should be required and enabled to manage staff well. There should be a simple and well known grievance procedure. Any disciplinary action for misconduct or incapability should be in accordance with a laid out procedure, preferably agreed with employee representatives. An adequate investigation must be carried out, managers must be competent, the employee allowed to be accompanied and the hearing fair. An appeal should be provided An employee should receive communication that helps them to understand the business and how it is progressing. Selection for redundancy should be based on fair criteria. Any member of staff under threat of redundancy should be kept informed of developments; their representative given an input into decision making; suitable alternative employment offered where available; sufficient notice given for redundancy, outplacement counselling and support provided and adequate financial compensation paid.

 

Activity 3
(a) To what extent does your employment conform to these ethical standards? (i) (ii) (b) Why is it like this? How would you change it if you were in charge of your organisation?

CSR or Corporate Social Responsibility refers to companies‟ explicit or implied responsibilities for environmental, ethical and social damage/wrong arising from their activities and/or their products. (i) (ii) (iii) What CSR issues do you or your organisation face? How could organisations you know show more CSR? In your experience how good is CSR in HRM?

B. HEALTH AND SAFETY
Why take health and safety seriously?
Organisations have always experienced the tension between meeting their legitimate business aims, keeping within employment law and behaving in ways that society considers acceptable. The case for health and safety (H&S) can be made as follows: The business case Absence from work due to injury or illness is costly. Likewise, a poor internal or external reputation for safety or welfare results in poor recruitment, retention and motivation. Litigation can be costly and even result in imprisonment. Taking a stakeholder view of the organisation, it has a social duty to take care of its most valuable resource.

The legal case The ethical case

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How important is organisational culture to H&S? Very. Many organisations take health and safety very seriously and it is a part of their culture. However, there is little doubt that many employees, with the acquiescence of managers, take short cuts, endangering themselves and others, because that makes their job easier and makes them more productive. In these organisations “it is only an offence if you get caught”.

Activity 4
(a) (b) (c) (d) Does your organisation have a health and safety policy? If so, what does it contain and what would you change in it? If your organisation does not have such a policy, why not? Do you believe it should have one?

How big a challenge is H&S to employers?
The size of the issue can be judged from the following official figures for the UK (population 60m) in 2006/7: Injuries Ill health – 241 killed at work – 274,000 reportable injuries (1 worker in every 1,000). – 2.2 million people suffering from an illness they believed was caused or made worse by work – 2,037 people died of mesothelioma (a form of cancer) and thousands more from other occupational cancers and lung diseases. Working days lost Enforcement – 36 million days were lost (1.5 days per worker), 30 million due to work-related ill health and 6 million due to workplace injury. – 1,400 prosecutions brought.

What are the health and safety responsibilities of employers?
The way employers have responded to these tensions has changed over time. The treatment of workers in the early part of the Industrial Revolution in the western world is considered, by modern standards, barbaric. For many employers, workers were little more than a part of the physical machinery of production and as equally expendable. Hours were long and the work physically hard. Legislation and social pressure resulted in significant improvements. Today, in Europe at least, most of the developments in H&S are being driven by European legislation and the scope has widened to include minimum paid holiday and wages; the management of H&S; stress; welfare; harassment, bullying and even employee consultation. The quality of life of workers is seen in its widest perspective. This is understandable, given that HRM, as a profession, emerged in the first half of the twentieth century out of the work done by welfare professionals, caring for the all-round needs of employees. H&S often resides within the HR Department, even today.

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Do employees have H&S responsibilities?
Yes; to look after their own safety and that of others. Hence, failure to follow the organisational policy and procedures can be an offence for which the employee can be prosecuted.

Is there a role for trade unions?
In the UK, a recognised trade union has a legal right to appoint safety representatives and managers must consult with these representatives. They can inspect, investigate complaints, communicate with an inspector and sit on the local H&S committee. The employer is obliged to allow them reasonable time off for their activities, for training and cannot debar someone from being a representative.

What are the main areas of H&S covered by the law in the UK?
In 1974 the UK Parliament brought together various pieces of legislation into the Health and Safety at Work Act. It places all employers under a general duty „to ensure, as far as is reasonably practicable, the health, safety and welfare at work‟ of all workers and members of the public on their premises. Following this, important regulations have been created to cover:            Hazardous substances Noise Manual handling (lifting and carrying) Violence in the workplace Fire Ventilation and temperature Sanitation Signage Provision of first aid (equipment and trained staff) Risk assessment Safety management (e.g. to consult with trade unions, to establish safety committees, to maintain records and to have a written policy).

Most offences are considered under civil law, which is aimed at preventing occurrences; a few cases are brought under criminal law, with a view to compensating the victim. Who is responsible – the employer, the manager or the worker? The employer is usually vicariously responsible for the actions of their staff. However, if someone clearly acted outside what could reasonably have been expected by the employer, some liability can pass to the employee. Training and the reasonable expectation of professional behaviour by managers and professionals are both ways in which the employer‟s liability can be passed to an employee. What if an employer did not know something was a health or safety risk? This would be a defence should a claim subsequently be made, as long as the employer acted reasonably upon the level of knowledge that existed at the time. Is an employer required to make changes irrespective of the cost? No. All activities must be subject to a risk assessment and improvements made to eliminate the risk, unless that would be unreasonable e.g. beyond the reasonable means of the organisation.
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How should employers give safety training? There are, basically, three routes:    Induction – setting the scene for an organisation that is safety conscious. On the job – via colleagues and managers; at team meetings and in appraisals. Through specialist training for those moving into jobs which are particularly vulnerable (including management positions, where it should be a part of management development) and for those with special responsibilities, such as fire wardens or site safety coordinators.

How important is record keeping, monitoring and evaluation? These are key to knowing where the most vulnerable processes are carried out and also to spot trends before they become entrenched.

What is risk assessment?
A careful examination of what could cause harm to people, so that a responsible person can weigh up whether enough precautions have been taken. It involves five steps: Step 1 – Identify the hazards. Step 2 – Decide who might be harmed and how. Step 3 – Evaluate the risks and decide on precautions. Step 4 – Record your findings and implement them. Step 5 – Review your assessment and update if necessary. What is the difference between a hazard and a risk? A hazard is anything that may cause harm, such as chemicals, electricity, working from ladders, an open drawer. Risk is the chance that somebody could be harmed by that hazard and how serious the harm could be. Being struck by lightning, whilst working on a roof, is a hazard. However, the likelihood of it happening is negligible, unless the employee is working in a thunderstorm. So the risk assessment directs that staff should not work on the roof in a thunderstorm.

Is substance abuse a real issue for an employer to address?
In 2002 more than a quarter of men in the UK reported that they drank over the recommended maximum 21 units of alcohol a week, whilst 17% of women consumed over the 14 recommended units of alcohol, up from 10% in 1988. In all, 36% of 16 to 59-year-olds have used one or more illicit drugs in their lifetime, with 12% having used an illicit drug at least once in the last year. Among 16 to 24 year olds, 28% have used an illicit drug in the previous 12 months. Most of these people would be in employment. But should what employees do in their lives outside work concern employers? The answer is „yes‟ but only if the level of use has an impact on individuals‟ attendance or performance, if it could increase the risks of accidents at work or have an impact on the health and safety of the general public. What are the advantages of tackling substance abuse?     Reducing the cost of absenteeism or low productivity Creating a more productive environment by offering support to those employees who declare a drug-related problem Improving employee morale Reducing the risk of accidents caused by impaired judgement

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 

Enhancing the public perception of your organisation as a responsible employer Contributing to society‟s efforts to combat substance misuse.

Who is at risk if substances are abused? Any member of an organisation is at risk. It is a myth that managers or professionals are not affected. How can an employer spot abuse? The affects of substance abuse can manifest in a range of actions, attitudes and in work performance. Particular signs to look out for are:          Sudden mood changes Unusual irritability or aggression A tendency to become confused Abnormal fluctuations in concentration and energy Impaired job performance Poor time-keeping Increased short-term sickness absence A deterioration in relationships with colleagues, customers or management Dishonesty and theft (arising from the need to maintain an expensive habit).

Can we screen employees for substance abuse? Yes, but usually only if you have their agreement, e.g. as part of their terms of employment.

What is stress?
The UK Government defines stress as: The adverse reaction people have to excessive pressure or other types of demand placed on them You will notice this distinguishes stress from pressure. Pressure is applied to you from outside. If for you it is excessive, it is likely to result in stress. Some pressure is positive and motivates but everyone is different. One person‟s pressure is another‟s stressor. There are some myths about stress, which are outlined below. Myths about stress Myth Work-related stress is not a serious problem Comment Wrong – In the UK, as many as one in five people are suffering from high levels of work-related stress. That's about 5 million workers. An estimated 500,000 individuals report experiencing stress at a level they believe made them ill. The cost to Britain's economy is estimated at 6.7 million working days lost per year. It costs society between about £3.7 billion and £3.8 billion (1995/96 prices).

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Myth Stress is a mental illness

Comment Wrong – Stress is the natural reaction people have to excessive pressures or other types of demand placed on them. While it is not an illness, if stress is prolonged or intense, it can lead to mental and physical ill health, such as depression, back pain and heart disease.

A little bit of stress is good for you

Wrong – Ill health due to work-related stress, or conditions ascribed to work-related stress, is the second most common type of work-related ill health reported. Wrong – Anyone can suffer from stress. It all depends on the circumstances we are in at the time. Preventing stress is good for employee health and well-being and good for business.

Stress only happens to wimps

All you need to do is go for counselling to stop work-related stress.

Wrong – Counselling may help individuals who are suffering from work-related stress but it is unlikely to tackle the source of the problem. Research has found that support at work, particularly from managers for their staff, has a protective effect; front line prevention by the organisation is better than third party cure. Wrong – Employers can take steps to prevent work-related stress in their organisations. As a first step, they can consult with their staff or trade unions to identify problems and work towards agreed solutions.

There's nothing employers can do to stop work-related stress

Is stress recognised as a problem that employers should address? It is in the UK and the Government has targets for reducing stress in the population. What effects does stress have on employees? Stress manifests itself in four ways, as shown in the following diagram:

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Figure 2.1: Four aspects to work related stress Rapid pulse Sweating Pounding heart Gritted teeth/clenched jaw Headaches Backaches Restlessness Insomnia Fatigue Shortness go breath Diminished appetite Skin rashes Physical Behavioural Irritability Absent-mindedness Over-reacting Aggression Passiveness/apathy Taking longer More accidents/mistakes Dealing too much with trivia More food, coffee, alcohol/drugs, smoking Losing interest in food Relationship problems Emotional Mental Difficulty in making decisions Difficulty in concentrating Memory not as good Loss of self-confidence Racing thoughts Irrational fear or panic Denying feelings Creativity impaired Anxiety Depression Feelings of inadequacy Anger over small issues Guilt Feeling there‟s not enough time Feeling driven but decreased drive Frustration Boredom Diminished energy for caring No time for joy or laughter Sadness

What can employers do to combat stress?         Be clear where the hazards are Minimise risks by designing them out Look at the way staff are monitored and managed; do they promote stress? Provide training (including induction), to include well-being issues Offer confidential counselling for those who might need it Include management responsibilities in management development Develop a coherent overall prevention policy Look at the type and rate of change; how is it affecting staff
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    

Be aware of the nature of individuals; adapt work to individual Manage relationships at work Look at the traditional organisational culture; is it healthy? Provide professional occupational health support Offer employment flexibility where possible; flexible working hours, leave and sabbaticals.

What is work-life balance? At the end of the 20th century organisations began to pay increasing attention to work-life balance. Partly this was stimulated by legislation on issues such as stress and partly by a growing awareness of the business case for providing staff with the balance in their lives. This is particularly important for women who continue to hold caring responsibilities and effectively, can live dual lives. The initial response by employers was to provide flexible working patterns, including flexible working hours and career breaks. In the United Kingdom, legislation on career breaks was extended to cover new fathers, as well as new mothers. There has been a growing awareness, as population demographics change, that some workers have increased responsibilities for elder care. It is telling that the majority of parttime workers continue to be women. Flexible working arrangements include reduced working hours; flexible working hours; job sharing, home working and term time only working. It is important to note that the percentage of employees who think that flexible working arrangements are available to them is about half of the number of managers who say that it is available. What about limiting working hours? The UK‟s Working Time Regulations are subject to frequent revision to increase the benefits of the employee. They limited the working week to a maximum of 48 hours (unless the employee opted out), gave paid leave, limited night working hours and provided mandatory rest breaks.

Activity 5
At the time of writing the Working Time Regulations were considered to have had little effect upon the UK‟s "long hours" culture. Why do think this is?

C. EQUALITY AND DIVERSITY
Aren’t we all discriminating all the time?
We discriminate against different types of people, consciously or unconsciously, in many aspects of our life and work. This is not, in itself, a problem. For example, the process of selection is specifically concerned with discrimination between people, by making decisions about who and who not to shortlist, interview and appoint. Discrimination in this sense is perfectly acceptable as long as it is done and seen to be done, on the basis of fair treatment of the people concerned. Forms of discrimination that are not based on fair treatment have increasingly become unacceptable and in many cases have been made unlawful.

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This has a particular impact on management practice. Managers need to ensure that they do not discriminate unfairly in the decisions or actions that they may take in regard to employees, whether prior to or during employment. Here, we shall review those aspects of legislation that apply directly to these issues and also explore how organisations meet the challenge of providing equal opportunities. We then go on to consider the future of these issues, with particular reference to the move away from a concern with equality per se towards the issue of managing cultural diversity.

Who experiences unfair treatment?
There are certain groups in any society who are discriminated against for unjustifiable reasons. Members of such groups are subjected to treatment which is different from that accorded to other people, purely on the basis of their membership of that group. Such unequal treatment derives from the prejudices and preconceptions of the people with whom they have to deal and needs to be seen as a problem of those acting in a discriminatory manner, rather than a problem of the victim of the discrimination. Within the United Kingdom, the government has determined that there are certain characteristics that have resulted in unfair treatment and people with these characteristics have been given the protection of the law. The characteristics relate to:          Sex and gender Race and ethnicity Disability Age Religion or Belief Sexual Orientation Gender Reassignment Pregnancy and Maternity Marriage and Civil Partnership.

These are known as Protected Characteristics. The government has agreed that, as victims of persistent discrimination, people with these characteristics have been excluded from playing their full part in society, or in particular parts of it (for example, in employment). Recognising the basis of discrimination is the first step towards establishing equal treatment for disadvantaged groups. As we noted above, it derives from prejudice towards and preconceptions about the members of such groups. On some occasions, these attitudes are consciously and overtly displayed, but very often the people holding them are not even aware that they influence their dealings with other people. As such, many of the preconceptions are widely held, particularly in respect of certain characteristics that these groups are assumed to possess and which are then used to pass judgement on individual members. In the context of employment, this may be seen from the following list of attitudes. (a) Sex and gender This is aimed at equalising the treatment of women and men. The main benefit has been to women who have been subject to assumptions such as:     Women should not work – their place is in the home. They do not want much responsibility at work. Their home commitments (children) will impinge on their working life. Women are less mobile as they have to stay in the part of the country where their husband has a job.
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Legislation also encompasses equal pay, although this appears to have had limited effect in bringing the pay of women in line with that of men. In 2007 UK women who worked full time were paid on average between 83 and 86% of men's hourly earnings. (UK Government‟s Women and Equality Unit). (b) Race and ethnicity This is aimed at removing race and ethnicity as a reason for disadvantageous treatment. The main benefit has been to ethnic minorities who have been subject to views such as:     (c) They require time off for religious holidays that do not mesh with the needs of the employer. Qualifications gained abroad are not as good as those to be found in the UK. Workers will not want to work for a black supervisor. The ability to fill out an application form in good English is a requirement for someone who is being employed in low level manual work.

Disability This covers both physical and mental disability; the latter also including learning disability. Assumptions countered by the legislation include:     An employee with facial disfigurement will be an embarrassment to other workers or customers. A visual handicap cannot be overcome. A physical impairment affects mental faculties. Someone who has suffered mental illness will automatically not be able to take any kind of pressure that the working environment could provide.

Employers and service providers are required to make reasonable adjustments to premises and practices to compensate for someone‟s disability. What is reasonable will vary from organisation to organisation. (d) Age The law counters assumptions such as:      (e) Older people are less adaptable They are not interested in coping with new technology They will work much more slowly than younger employees They have become less interested their career development Younger workers are immature or lack skill.

Religion or belief Although much of the discrimination directed at members of religious groups was covered by the legislation dealing with race and ethnicity, in the UK discrimination against someone because of their religion or similar belief system is covered by the law, irrespective of their race or ethnicity.

(f)

Sexual orientation Whilst this is the law in relatively few countries, discrimination on the grounds of someone‟s sexual orientation is unlawful in the United Kingdom. This includes less favourable treatment arising from a belief (without any evidence) that someone might be gay, lesbian or transgender. In the UK it also covers treating someone less

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favourably because they are associated with anyone who is gay, lesbian or transgender.

How is discrimination relevant to employment?
The need for fair treatment is particularly acute in the area of employment in general and of management in particular, where decisions are constantly being made which affect the lives and opportunities of individuals. As a result, partly driven by legislation and partly driven by good practice, most organisations have adopted policies and practices designed to ensure the fair and equal treatment of those with whom they have dealings (and note that this does not just cover their own employees). There is, though, a continuing concern to ensure the effectiveness of such policies and practices in the face of the widespread existence of, particularly, unconscious prejudices and preconceptions in society at large, which will invariably be reflected, to a greater or lesser extent, within the organisation‟s own workforce. The adoption of policies, of itself, does not eradicate the problem and control over practice has become more difficult, with responsibility for more and more employee issues being devolved to line management.

What behaviour is outlawed by the legislation?
Principally: (a) Less advantageous treatment – for example, not giving a job to a woman because of her sex; dismissing a gay man because of his sexual orientation; not promoting a middle aged worker because of her age. Harassment and bullying – for example, teasing a young person because of her age or a worker with a visual impairment because of his disability. Victimisation – for example, treating someone less advantageously because they had previously complained or had supported someone else who had complained.

(b) (c)

What constitutes less advantageous treatment? It includes:      Recruitment and selection Opportunities for training and development Promotion and career development Benefits, including pay Dismissal.

What is harassment? There are several definitions. It usually means:     Unwanted actions or comments Viewed as demeaning and unacceptable to the recipient Detrimental to the recipient‟s dignity Unwarranted.

Harassment can be a one-off act (swearing at someone in front of others) or low key but persistent (repeatedly brushing up against a member of the opposite sex).

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Is this different to bullying? Bullying can happen in a variety of ways:      Physical – hoving, pushing, tripping up Verbal – personal comments, name-calling, put-downs Emotional – being left out, one's contributions ignored Gestures – gestures and pulling faces to others indicating stupidity, body odour, boredom, disdain Written – graffiti, cyber-bullying, emails, texts.

What is in the equal pay legislation?
Since 1970 the United Kingdom government has sought to address the issue of parity between the pay of men and women who were doing work of equal value in the same employing organisation. (Note that this does not necessarily mean simply doing the same job, although that was the main concern in the early days, when there were many instances of such inequitable treatment to be dealt with.) Legislation specifies the occasions when the pay of a woman should be equal to that of a man as follows. (a) Like work This is where a woman can show that she is doing the same, or very similar, work as a man i.e. where two people of different sex are doing exactly the same job. A good example of this would be two teachers, one male and one female, each teaching the same subject to children of the same age in either the same or different schools. If the work is the same, so should be the rate of pay. (b) Work rated as equivalent This where a woman can show that the job she is doing could be rated at the same level as that of different job held by a man and paid at a different level. Job evaluation schemes are normally used to compare the knowledge and skills required to do different jobs and seek to establish parities between them. Different jobs are often grouped together in 'families' where they are considered equal even though the actual tasks involved may vary. (c) Work of equal value This is concerned with work that may be shown to have an equivalence of value to the organisation, such that to pay one job less, on the basis that a woman holds it, would amount to unfair treatment. Parity on this basis would be established in a similar way to the previous category, by comparing indices of value to the organisation between different jobs. Note that either women or men may claim equal pay under this legislation, although the latter case is rare.

Isn't all discrimination obvious?
This is a common fallacy and held by those who do not know about indirect discrimination.  Direct discrimination This occurs where one person is treated less favourably than another on the grounds of their sex, race, age etc. The best example of this is in the area of recruitment advertising, where restrictions may be placed on (or implied about) the sex of the person required for the job, when it could equally be done by someone of either sex.

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There are exemptions to this for jobs where there is a „genuine occupational requirement‟ – those that can only be undertaken by a member of a particular sex for reasons of, for example, a need for authentic male or female characteristics, such as in modelling or acting. In such circumstances, direct discrimination is allowable.  Indirect discrimination This occurs where a requirement is applied equally to both sexes but one sex is proportionately less able to comply with it. For example, making a minimum number of year‟s continuous service in a particular profession a job requirement may, in certain circumstances, be held to indirectly discriminate against women because they may have had a career break for maternity, child or elder care reasons. One of the key aspects of this legislation is that it applies to all the dealings that an organisation has with individuals, not just those arising in the course of employment. So, with reference to the process of recruitment and selection, the requirements of the Act apply regardless of whether or not the person actually gets the job or, indeed, an interview for it. It is unlawful to discriminate in any part of the arrangements or decisions made as part of the process, whether in advertising, interviewing or in terms and conditions.

Who can bring a claim?
A candidate or even a potential candidate may claim unlawful discrimination from the moment they see the advertisement for the job. This means that the whole of the recruitment and selection process must be and be seen to be free from any discrimination for reasons covered by the law. It is not necessary for a claimant to demonstrate that the organisation committed unlawful discrimination. They can claim if they suspect that treatment was for unlawful reasons. In the event of a claim, the burden of evidence is upon the employer to prove that the person was treated fairly. This invariably means that documentary evidence must be produced to demonstrate not only that appropriate policies are in place to prevent discrimination but that they are applied in practice. So, for example, interview notes and individual assessments taken during a selection procedure need to be free of any bias and be kept for possible future reference. The same requirements for arrangements and decisions to be and to be seen to be free from bias, obviously apply during the course of employment. Thus, opportunities for training and development or any other benefits, must comply with the legislation on unlawful discrimination.

What is a disability under the legislation?
For the purposes of UK legislation, disability is defined as: “A physical or mental impairment that has substantial or long-term adverse effect on a person’s ability to carry out normal day-to-day activity“ Such impairments include:        Mobility Dexterity Physical co-ordination Continence Ability to lift/carry Speech, hearing, eyesight Memory

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  

Ability to concentrate Perception of risk or physical danger Learning disability such as dyslexia.

Again, the legislation applies from the moment an individual has contact with an organisation – they do not have to be in employment. The onus is also on the organisation to demonstrate fair and equal treatment in the case of a claim of discrimination. Are there circumstances when discrimination is permitted? Less favourable treatment may be justified on the following specific grounds: (a) (b) (c) That the less favourable treatment cannot be removed or made non-substantial by a reasonable adjustment on the part of either the employer or the employee. That another person who is not considered to be suffering from a disability is more appropriate for appointment. That the person with the disability is not able to fill the post.

The first point raises the question as to what constitutes “reasonable adjustment“. What is a reasonable adjustment? The legislation specifies the types of adjustment to working conditions and practices that it is incumbent upon the employer to explore to facilitate the employment of a disabled person. These include the following: (a) (b) (c) (d) (e) (f) (g) (h) Adaptation of premises Job restructuring Part time or modified work schedules Reassignment to vacant posts Acquisition or modification of equipment Adjustments to examinations and training materials and activities Provision of readers, personal assistants or interpreters Providing adequate supervision.

Where it is “reasonable" to implement these adjustments, the employer must do so. The concept of reasonableness takes account of cost, practicality and disruption, although no cost ceiling is specified. It is also possible to provide financial or other outside help to achieve these aims. It is also important to note that no adjustment is necessary should the person concerned not admit to a disability.

What should we call it – discrimination, equal opportunity, fair treatment or diversity?
Discrimination is a word that is falling into disuse, since it creates an impression that this is a negative topic. Equal opportunity has come to be associated with giving access to opportunities that were previously closed or restricted – removing barriers. It was popular in the literature of 1980s. (It has the danger of creating an impression that everyone is treated the same, which, of course, is impossible since everyone is different.) Fair or equal treatment is now more commonly encountered because it suggests that one person can be treated differently to another but that there will be an objectively fair reason for such differences in treatment. Diversity suggests that, in a healthy workplace, there will be variety in gender; age; attitudes, career aspirations etc.

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Diversity programmes tend to concentrate on encouraging workplaces to be diverse and welcoming and therefore, more creative, challenging and effective. It also encourages action to overcome the downsides of diversity (such as the need for flexible working and cultural and religious awareness). The spectrum of views runs from the negative discrimination to the positive diversity management. Most organisations deal with both, using the words „equality and diversity‟. Some progressive organisations will approach this subject from the angle of „respect and personal dignity‟ so emphasising the interpersonal aspect of the topic. The diversity movement starts from recognition of the differences between individuals in society: age; sex; race; differing abilities; background; personality, work style, etc. It accepts that an organisation should encompass them all and sets out to promote and celebrate the diversity of people in the workforce (and in the organisation‟s contacts with its environment) and to value their different contributions and needs. It recognises that these differences can be an asset to the organisation. Managing diversity enables the issues of equality to be approached within a strategic framework. This requires an organisational culture that addresses the obstacles faced by all individuals, in a climate of trust and mutual respect. In these circumstances, individuals from a whole range of different backgrounds may be encouraged and feel able to put forward their views and ideas, influencing the growth and cohesion of the organisation and so improving competitiveness. An example of diversity providing a direct organisational benefit may be seen in respect of attitudes to older people. The stereotypical image is that organisations thrive with a younger workforce. However, the average age of the population is increasing and an employer who recognises that the value of diversity in the workforce has access to a much wider pool of talent. The establishment of a culture of diversity needs commitment from the top and active encouragement throughout the organisation. It needs to be supported by appropriate management policies and practices. For example, the development of more flexibility in working conditions can be a key feature of enabling different groups to be involved in the organisation. This may be seen in the growth of more flexible and individual contracts of employment, the introduction of career breaks and the establishment of flexible working hours. Many modern organisations are also developing techniques of empowerment. This frees employees from close control and allows them to develop their skills and talents. The concept can be applied to the management of diversity; rather than fixing all employees in the straightjacket of close control and conformity, different types of diverse employees can be encouraged to maximise their particular talents and insights. In summary, it may be said that diversity will help the organisation grow and develop by opening doors to more skills and talents. This can only be of advantage to the organisation as a whole.

How do organisations promote equality and diversity?
The cornerstones of good employment practice in this area are an equality and diversity strategy based upon a firm E&D policy. Most large organisations have some form of statement of its commitment to E&D and the procedures and practices that are required of its workforce to put it into effect. The policy needs to be overt and provided to all staff. It is good practice to make it available to any prospective members of staff by sending it out as a part of the recruitment literature. The contents of an equal opportunities policy commonly follow a standard pattern, based on the model developed by the UK Equality and Human Rights Commission. The main elements are summarised below, as adapted by Torrington and Hall.

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  

Introduction – a statement of the desirability of the policy and the requirement that it is strictly adhered to. Definitions – direct and indirect discrimination defined. General Statement of Policy – a commitment to equal treatment and the belief that this is also in the interests of the organisation. Staff in the organisation should be made aware of the policy and key personnel trained in it. Possible Preconceptions – examples of preconceptions that may be erroneously held about individuals due to their sex, race, marital status or disability. Recruitment and Promotion – care to be taken that recruitment information has an equal chance of reaching all areas of the community and that it does not indicate preference for one group of applicants. Care that job requirements are justifiable and that interviews are conducted on an objective basis. An intention not to discriminate in promotion. Training – an intention not to discriminate in the provision of training, with some further details. Terms and Conditions of Service – a commitment not to discriminate Monitoring – nomination of a person responsible for monitoring the effectiveness of the policy and with overall responsibility for its implementation. An intention to review the policy and procedures. An intention to rectify any areas where employees/applicants are found not to be receiving equal treatment. Harassment – a definition followed by the organisation‟s response to allegations of harassment. Grievance and Victimisation – a commitment to deal effectively with grievances arising from unfair treatment and a note of the victimisation clauses in the legislation.

 

  

 

An E&D strategy contains the organisation‟s aspiration over, say a five-year period, the broad routes it will follow to get to that destination and the key actions to be taken. How do employers manage equality and diversity in the workplace? Most larger organisations are formally trying to integrate equality and diversity into their business strategy. Most would see a commercial business case for being an „equal opportunity employer‟. Such an approach would move beyond complying with the legislation. It involves promoting, through its employment policies, the concept of an integrated workforce and not continuing to treat the issue of equality separately. They would see a parallel between valuing diversity and promoting equal treatment to workers and doing the same for its customers.

Activity 6
(a) (b) (c) (d) (e) Where would you draw the line between fair and unfair discrimination? Why? How fair is your organisation in each of the six key areas? What would happen where you work if someone was harassed? Is that ethical? What scope is there for indirect discrimination in your organisation? What is the difference between promoting equality and promoting diversity?

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D. WHISTLEBLOWING
Whistleblowing is a practice which, whilst not entirely new, became the subject of fierce debate during the 1990s and resulted in legislation to protect whistleblowers (Public Interest Disclosure Act, 1998). It may be defined as intervention by an employee to bring the wrongs (or perceived wrongs) of the employer to the attention of the owners of the company, the Government or the public at large. The legislation is an extension of other discrimination legislation in extending protection for victimisation as a result of making a complaint. Although most workers agree on what is right or what is wrong, there are many different attitudes to whistleblowing. Some argue that the worker should have a conscience and speak out, while others are more submissive about situations that are unpalatable to them; the latter are unlikely to intervene. The debate is clouded by the conflicting obligations imposed on most workers by a duty of secrecy imposed by the contract of employment (as well as common law) and the duty to the company and the public at large. Case Study 1 From Personnel Today magazine, 17 September 2007 Whistleblowing One of our employees, a financial controller, has raised an issue with us in confidence. Part of his job is to review accounts prepared on a departmental basis, and he is concerned about a large sum of money that appears to be missing. He initially raised his concern with his line manager, who told him to ignore it. How should we handle this? Workers are protected and encouraged by the public interest disclosure act 1998 to disclose malpractice internally (in exceptional circumstances, disclosures can be made to a regulator or the media). Your employee has the right to be protected even if he is incorrect, so long as he is sincere. Whether a belief is reasonable is assessed based on the surrounding circumstances, including the personality traits of the whistleblower and the ethos of the organisation, and the relationship between the whistleblower and the person alleged to be doing the wrongdoing. Maintain confidentiality where possible regarding the identity of the whistleblower and the concerns raised. Hold an investigative meeting with him to obtain details of his concerns. Investigate these concerns and document the investigation, and take appropriate action to remedy the wrongdoing or confirm that no irregularity has taken place. If his line manager bullies him or downgrades his performance because of the disclosure, the employer will be vicariously liable, and the employee will be able to claim that he has suffered a detriment. Make sure you have a whistleblowing procedure in place that covers: – The concerns that should be raised – The procedure to raise a concern – The procedure followed to investigate a concern – Accessibility – Confidentiality.

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There are many examples of whistleblowing which demonstrate a conflict of interests between the duty of the employee to keep secrets and the duty to the company or the common good. Case Study 2 Whistleblower: Sarah Tisdall One of the highest profile examples of whistleblowing occurred in the UK Civil Service. A civil servant, Sarah Tisdall, discovered that Government policy on nuclear missiles was at odds with its public pronouncements on the issue. Apparently driven by her own conscience to do what she believed to be right, she leaked documents to the press. The consequences of her action were dismissal from the Civil Service and prosecution for offences under the Official Secrets Act. She eventually served a custodial sentence when the case was proven against her.

Case Study 3 Whistleblowing In 1993, a chief executive of a large company was found to have sold his personal dwelling house to the company, sanctioned improvements costing many thousands of pounds and then bought the house back at the original price. He later argued that this was done with the full sanction of the board of directors. In the meantime, he was suspended from duty and later dismissed. Legal action was brought against him, instigated mainly by fairly newly appointed directors. The former executive in turn counter-sued and the affair was eventually settled out of court. In this instance, it could be argued that he did nothing illegal or contrary to his terms of employment. There is no doubt, however, that he and his colleagues who sanctioned his actions failed in their fiduciary (moral) responsibility to the shareholders and the company itself.

Case Study 4 Whistleblowing In the same year, an executive in a different company was reported by members of staff for sexual harassment of female employees. Persons who had not been harassed but disapproved of the actions of their senior colleague made the report. The case resulted in the resignation of the person concerned when, as a direct result of the action of the whistleblower, several other persons came forward with additional and similar complaints making the offender‟s position untenable.

So, should an employee keep quiet about a situation that he believes to be wrong, or should he let his conscience take over and blow the whistle?

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Case Study 5 Whistleblowing A final example concerns the actions of a young bartender who became increasingly concerned about the actions of her immediate boss, who was in charge of bar and catering facilities. The manager was an alcoholic and perhaps not in the most suitable occupation. It was reported by the bartender that her manager was accepting far too much alcoholic drink from customers, when offered, to the extent that this affected his ability to manage the bar. In addition, she claimed that when he put “two gins” in the complimentary drinks book, he was in fact taking two bottles, not dispensing two measures. The consequence of this episode was that the bartender was dismissed and the manager suffered no immediate consequence, though he died two years later of an alcohol-related illness.

What is the case for whistleblowing?
An employee has a moral duty not just to their work and immediate boss but to the company and society as a whole. If a person sees a wrong, there may be other things happening which are unacceptable; it might be the “tip of the iceberg”. If unacceptable behaviour is allowed to persist without redress, others will believe they can get away with the same thing. Many whistleblowers act in the belief that the wrongdoer‟s colleagues will be pleased to hear the information and will act on it. Some consider that conscience is more important than job security and they will blow the whistle irrespective of personal consequences. In many organisations, top-to-bottom training and development programmes such as “Putting People First” and programmes focusing on the corporate mission/objectives encourage the belief that everyone will act in the best interests of the company. If this is so, anyone who does not act in this way should expect others to act against them. Sometimes whistleblowing is a statutory responsibility. A good example is policy on health and safety at work.

What is the case against whistleblowing?
Some believe that an employee should concentrate on doing their job and that the actions of others are nothing to do with them. A situation may be misinterpreted and what may be seen as a breach of company rules or policy may turn out to be perfectly legitimate. An employee can over-rate the importance of the perceived misdemeanours of others and cast themselves in a bad light or even lose their job. Some are reluctant to “blow the whistle” due to a “snitching” mentality i.e. it is considered bad to tell tales on others. It can be argued that the actions of others are none of the concern of the employee and that if there is something wrong, let others find out for themselves. Sometimes the employee can be on dangerous legal ground by “blowing the whistle”. If information is given to someone outside the organisation, this can be a breach of contract or even render the whistleblower liable to criminal action. It is common practice in many organisations for the terms and conditions of employment to bind the employee to secrecy, even after they leave. Whether to “blow the whistle” or not is usually a matter for individual judgement or conscience. As all employees are different, they will react in different ways as well as interpreting situations differently.
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Sometimes the whistleblowing can be done through a third party. For example, it is sometimes found that a trade union representative can handle a difficult situation without exposing the individual to recriminations. However, if anything, unions are becoming more aware of the need to act as moral policemen. In late 1997, one such organisation stated that it was going to compile a “rogues‟ gallery” of employers and publicise their actions. Aimed primarily at identifying bad employment practices, this initiative would appear to be an open door through which potential whistleblowers can move if they believe a case has to be answered. In an ideal world all managers and workers would behave honestly and ethically at all times. Sadly, the very existence of employment legislation, consumer protection legislation and more broadly, restrictive practices legislation, confirms that organisations and the people within them do not always behave in the way we would like. After all, if they did the legislation would not have been needed in the first place.

Activity 7
(a) (b) What cases of whistleblowing can you think of? Are there, or have there ever been, any issues in organisations which you work/have worked for which you feel should have been the subject of whistleblowing?

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Chapter 3 Workforce Planning
Contents
Introduction

Page
42

A.

Purposes and Process of Workforce Planning What value does workforce planning add? How does workforce planning fit with other strategic activities? How do we assemble a workforce plan? What are the stages of workforce planning? How do we analyse a workforce? How do we analyse labour turnover? How do we forecast demand? How do we forecast supply? How do we fill the gap between supply and demand?

42 42 43 43 44 44 45 47 48 48

B.

Hard and Soft Workforce Planning What is soft workforce planning? What is hard workforce planning?

49 49 50

C.

Importance of Workforce Planning How do we conduct workforce planning during rapid change? Should we reorganise the way we employ people? Should we change the employment relationship? What Is an external labour market? What if our employment practices need to change?

50 50 51 51 53 54

D.

Redundancy What is redundancy? What should a redundancy procedure cover?

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INTRODUCTION
By the end of this chapter you should understand the role of effective and efficient workforce planning in securing a workforce with the requisite knowledge, skills and attitudes to enable them to contribute to organisational goals. Therefore, you should be able to:   Explain the purposes and process of workforce planning Examine the relevance of workforce planning in today‟s highly competitive, globalised and increasingly unpredictable environment.

What is workforce planning? Originally called „manpower planning‟ and later „human resource planning‟, workforce planning is the way that your organisation strives to ensure that it is appropriately staffed and that your staff are able to contribute to corporate success: The right number of the right sorts of people in the right place at the right time and for the right cost. Human resources are considered by most to be the organisation‟s most valuable (and expensive) asset, so you need to deploy them with the maximum efficiency and effectiveness. Workforce planning supports this by providing you with a systematic plan for recruiting, organising, developing and retaining people. Do we need to employ staff? To employ or not to employ, that is the question. Until the 1970s it was usual, except in industries such as construction, for tasks to be performed mainly by full time employed staff. Also, because organisations were staffed to cope with peak demand, this resulted in a high headcount and overstaffing during periods of low demand. The move towards subcontracting and flexible employment practices (calling upon staff when they were needed rather than having them there all the time) forced many employers to look differently at their employed workforce. People became a "resource", rather like money, building, equipment and stock. (This is the mindset of the HR manager and distinguishes it from the somewhat more employee-orientated personnel manager.) The parallel with finance is clear – HRM calls for investment in the people who will pay back that investment with interest. The principle is one of added value. Even if you need people, you do not always need employees. Similarly, some staff are regarded as more of a disposable asset who offer only small returns on investment in their career, their learning or their engagement with the business. You either contract out these posts or regard them as peripheral.

A. PURPOSES AND PROCESS OF WORKFORCE PLANNING
What value does workforce planning add?
It makes a number of specific contributions to added value:    Integrating human resource activities into your business (vertical integration) Integrating your human resource activities with each other (horizontal integration) Strengthening your control over staff numbers and costs and to determine whether growth or reductions are necessary

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 

Profiling current levels and attributes of your staff Identifying the need for training and development.

How does workforce planning fit with other strategic activities?
It is a vital strategic activity. HR directors are increasingly members of the board and as such, they have a specific role to play in the formulation and vertical integration of HR objectives, policies, procedures, plans and strategy. These highlight the type of plans that contribute to the overall corporate and strategic plan along with the finance plan, operational plan, marketing plan, etc.

How do we assemble a workforce plan?
Workforce planning can be complex but in its simplest form, it centres on supply and demand forecasting: Forecasting (over the period covered by the plan) the numbers and attributes (knowledge, skills and attitudes) of staff that will be: Needed Available internally Available externally Demand Supply – internal Supply – external Responding to the gap between demand and supply: Recruitment Redundancy Redeployment Upskilling/Multiskilling Career development/talent management Changing contract terms/ flexible firm These activities must be proactive rather than reactive, which means that they must be planned. This requires extensive information about the:    Corporate plans for the organisation – for both numbers and types of people needed Internal labour supply – numbers, capabilities and cost of the people already in your organisation External labour supply – numbers, capabilities and cost of the people available to you from outside the organisation.

Failing to establish a correct balance between the supply and demand for labour in your organisation can lead to:  Shortage of staff or skills – If your organisation employs fewer staff than it requires, it is unlikely to be able to meet its production and sales targets, and machinery and stock will be under-used. Surplus of staff – If your organisation finds itself employing more staff than it needs, it will incur unnecessary costs for wages and administration.

These and other problems, occur regularly in organisations. Hence, you have to adjust your plans in accordance with continual changes in market place conditions. Workforce planning cannot protect your organisation from the need to adjust its personnel policies in response to changes in the market place. However, by planning, you can provide for a more orderly adjustment by attempting to identify the trends in demand and supply of staff that indicate whether future needs should be

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met by recruitment and training of new staff or by reducing the size of the workforce. The importance of workforce planning is that it provides the means of ensuring that your personnel policies and their objectives are properly integrated into your organisation‟s policies, goals and objectives.

What are the stages of workforce planning?
There are four stages.  Analysis of existing resources A profile of your workforce, based on certain characteristics that are relevant for planning purposes, supplemented, in some instances, by analysis of issues such as absenteeism or overtime working.  Workforce demand forecasting An analysis of the staffing requirements necessary for your organisation to achieve its business objectives, taking into account the requirements of the corporate plan.  Workforce supply forecasting A forecast of anticipated changes in your supply of labour. This takes account of anticipated losses from your existing workforce and the supply of suitable staff from sources outside your organisation.  Workforce plan By bringing together information obtained from the first three stages, you can make an analysis of the action required to fill the gap between supply and demand. This action may include adjustments to several personnel processes such as recruitment, retraining and redundancy. Each of these activities needs to be carried out on a continuing basis. Workforce planning is a continuous process of planning, implementing, monitoring, evaluating and re-planning. You cannot do it just once each year. To be of value it must be maintained and adjusted to take account of new trends as they emerge – both within and outside your organisation. The forecasts made at any given time can never be precise predictions of what will happen to either the demand or supply of labour. Policies based on these forecasts cannot, therefore, be maintained indefinitely, so they must be adjusted as new information becomes available.

How do we analyse a workforce?
Any effective corporate planning depends on efficient information systems, and workforce planning is no exception. An accurate picture of the composition of your workforce and analyses of important features of its deployment are essential. The information you will require includes:  Profile of the existing workforce – A profile of your employees, divided into different categories, such as: – Age – for the whole organisation and by department or specialism. This will help you spot any imbalances. As people stay at work longer this profile becomes increasingly important. Gender – for the whole organisation and by department or specialism. Ethnicity – for the whole organisation and by department or specialism. Skills – This can be obtained by the HR department conducting a skills audit to give an indication of the existing skills within the organisation and highlight any areas of skills shortage. It may lead to external recruitment to meet any shortages or the implementation of training and development initiatives to bridge the gap.

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  

Succession plans – to determine the type and calibre of managers available to succeed senior or middle managers who retire or leave. Movement of employees through the organisation – including promotions, secondments and transfers. Use of staff – In many cases, a raw headcount of numbers employed is inadequate as a basis for planning future personnel policies, which must take account of the objective of improving efficiency in the use of staff. For this purpose, information relating to one or more of the following may be needed: – – – – Overtime working Sickness absence Staff downtime Improvements in productivity.

Labour turnover – An analysis of the rates at which staff are leaving and of likely changes to this. For example, in the UK, it is now the case that compulsorily retiring staff at age 65 without good reason is unlawful age discrimination – organisations need to anticipate the likely effect of this on retirement rates. Costs – Personnel policies should, where possible, be based on information which identifies the cost implications of possible courses of action. For example, at what point does recruitment become more cost effective than overtime working?

How do we analyse labour turnover?
Labour turnover relates to the number of employees who leave your organisation. The reasons for this may include both push and pull factors: Push Dissatisfaction with the job Dissatisfaction with the organisation Inability to get on with colleagues or line managers Inability to cope with responsibility Pull Relocation Retirement Career development Domestic needs, such as caring responsibilities.

You can discover the reasons for leaving by conducting:   Exit interviews – which can be particularly valuable with voluntary leavers. A regular staff attitude survey – to establish the way individuals feel about their jobs, their colleagues, the organisation, their working conditions, etc. These surveys can pre-empt people‟s decisions to leave. Staff turnover index This establishes the rate at which employees leave your organisation. It involves the following simple calculation:
Number of leavers in a period (e.g. one year)  100  % turnover Average number of people employed in the period (e.g. one year)

There are several analytical techniques you can use to investigate your turnover rate. (a)

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So, for example, if ABC Ltd employs 3,400 people and last year, 50 people left, the labour turnover index would be:

50  100  1.5% 3,400
Calculating the staff turnover index allows you to make comparisons with other companies in the same sector and to compare the turnover of staff within different departments in your organisation. (b) Labour stability index This measures the level of employees who could have stayed with the organisation throughout the period being measured (usually a year). It is calculated by taking into account the number of employees with one full year‟s service divided by the number of employees exactly one year before. The figure is then multiplied by 100 to determine the percentage stability:
Number of employees w ith one year' s service  100  % turnover Number of employees employed exactly one year before

For example, at the start of last year, ABC Ltd recruited 150 employees. At the end of last year the organisation had 100 employees with one year‟s service. Exactly a year previously it employed 3,400 people but 50 people left during the year. The stability index would therefore be:

100  100  3% 3,400
Both the turnover and stability indices enable you to monitor the comings and goings of employees to and from the organisation. They also help with forecasting the levels of employees needed to run the organisation efficiently. HR professionals often refer to the „induction crisis‟, meaning the period of adjustment after a new employee joins an organisation, during which their likelihood of leaving is at its highest. Once the new employee is through that induction period, turnover rates drop. For casual employment the induction crisis can be short (hours or days), whereas for professional employment it can be two or three years (or even longer). (c) Cohort analysis It is increasingly common to track a cohort of people through their career within an organisation. This method is usually more descriptive than statistically analytical and often reveals rich data on which management decisions can be based. For example, a cohort of 50 people may have joined five years ago. Only 28 of these are now left in the organisation because 20 left within the first six months. Six were made compulsorily redundant and only two left for other reasons. This would tell you that there is a severe induction crisis and if staff get over that they tend to stay. You would need to do some work on the reasons for the induction crisis – is it a problem with the job that could be fixed, or problem with the people you recruited, because they were unsuitable? (d) Employee half-life This is the time taken for half of the cohort to leave the organisation. It enables simple comparisons to be made, especially over time, to determine if the half-life is increasing or decreasing. For example, if the half-life of basic grade staff joining in 1990 was 19 years, but by last year this had fallen to only 4 years, this would indicate a considerable increase in

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wastage and it was likely that the organisation had moved from offering a long-term career to one offering only a relatively short-term job. The problem with a half-life calculation is that it can be quite difficult to calculate without computer storage of employee data in the right format. (e) Census of leavers This census shows how many left the organisation during a period (usually a year), broken down to show how long they had stayed in the organisation. It is usually expressed as a bar chart, as in the following example: Figure 3.1: Analysis of leavers by years' service 350 300 250 200 150 100 50 0

Leavers

<1

1>2

2>3

3>4

4>5

5>10

Number of years service Is labour turnover always a bad thing? It is difficult to think of employees leaving an organisation as advantageous. Labour turnover has long been seen, by many, as a bad thing, signifying, for example, disloyalty or dissatisfaction. However, it does have its benefits, including:  It allows people with new ideas, attitudes and skills to join the organisation. This enables the organisation to grow and stay fresh. If new employees do not join, it may stagnate and become unresponsive to innovation, change and new processes. It allows the progression of employees through the organisation by means of promotion or specialism. It is also a way for the organisation to cope with surges in surplus staff and it reduces the need for redundancies. Disruption to the day-to-day operations, as people leave and take their knowledge and skills with them. Escalating labour turnover can affect morale and production. It can foster a belief that the employer is uncaring. So, if you do not monitor high labour turnover and take steps to reduce it, it may send a message to employees that senior management does not care about their welfare, working conditions, etc.

On the other hand, there are a number of disadvantages:  

High labour turnover is costly. You may need to work with managers to ensure that turnover is closely monitored and appropriate measures taken to prevent high turnover having a negative effect on your organisation.

How do we forecast demand?
The workforce demand forecast is an estimate of the numbers of staff you need to carry out the level of business or service that you anticipate. The basis of this should be a corporate forecast, from which staffing needs can be derived.

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The forecast takes account of predictions about the general economy and those of your specific business or organisation, to arrive at the conclusion of whether to increase or decrease staffing levels or find new patterns of employment and exactly what type of staff will be needed. This process is summarised in Figure 3.2. Figure 3.2: Workforce Demand Forecasting Stage 1 Economic forecasts Inflation Growth Savings  Stage 2 Business/service forecasts Expansion Contraction Diversification  Stage 3 Human resources demand More staff Fewer staff Skills

Such a forecast relies on quite a high degree of subjective guesswork.

How do we forecast supply?
The supply of labour will depend on the availability of suitable staff who can be recruited from outside your organisation (external supply) and the potential for developing your existing employees to meet new requirements (internal supply).

How do we fill the gap between supply and demand?
An analysis of your organisation‟s current level of staff and the likely number it will need to secure the continuation of its operations, will determine whether it has a surplus or deficiency of staff and/or skills. If demand for the organisation‟s goods/products or services falls and leads to a drop in output, a surplus of staff may be identified. You can make contingencies for both a shortage and a surplus of staff. (a) Staff/skills shortages When there is a shortage of staff and/or skills the plan should make provisions along the following lines:      Promoting existing staff – Integrated with appraisal and development schemes. Redeployment of staff – Secondments and transfers may be appropriate, particularly where surpluses exist in one part of the organisation but not another. Training – Specifying numbers of staff in various categories who will require development, what kind of training is required and what resources are needed. Getting more from existing staff – By offering employees the opportunity to work overtime and extending temporary or fixed term contracts. Job redesign – Difficulties in staffing may sometimes be overcome by redesigning jobs. For example, the established complement of staff in a category where scarcity of skilled employees is a problem may have been defined as five. It may be possible to remove routine, undemanding tasks from these jobs, reducing the complement of experienced staff to four and creating one new job for an assistant with a less demanding specification that will not present recruitment difficulties. External recruitment – Undertaking specific recruitment and selection for the vacancies identified, specifying the numbers and required. Non-establishment and part time recruitment – Increasing the number of part time staff, using subcontractors and temporary staff and hiring from agencies.

 

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(b)

Staff surpluses When there is a surplus of labour the plan will make provisions as follows:    Stopping recruitment. Natural wastage – As workers leave they are not replaced. Redeployment/transfers – Employers have a statutory obligation to seek alternative employment for employees whose jobs are threatened by redundancy. Restrictions on the mobility of staff, both geographically and occupationally, inhibit the scope for redeploying staff, but the prospects should be investigated. Early retirement – Staff inventories can indicate the numbers of staff members due to retire at normal dates and the potential number who might consider retiring earlier. This can be an expensive way of reducing staff numbers, if compensation for reduced pension entitlement is provided. Reducing overtime – A substantial amount of overtime may be worked on a regular basis. It makes good sense to reduce or even eliminate this work if there are risks that some employees will be made redundant. Trade unions may react to a threat of redundancies by banning overtime work anyway. Short-time working – This option is often used in manufacturing companies. It involves putting the workforce on a reduced working week for a limited period, in the hope that business will improve and redundancies can be avoided. It is unlikely that short-time working can be sustained for longer than a few months, but in some instances this may be all that is required to survive a lean period. Declaring redundancies and then needing to recruit staff in a few months‟ time is embarrassing and costly. Redundancy – This may be seen as a last resort. Redundancy may be either compulsory or voluntary, with the latter being preferable. Reducing subcontracted work – Some companies do not rely entirely on their own workforces, but subcontract a proportion of work that they are capable of undertaking. When the jobs of their own employees are threatened, less of this work could be subcontracted.

 

B. HARD AND SOFT WORKFORCE PLANNING
What is soft workforce planning?
Soft workforce planning involves the assessment of four categories or areas: (a) (b) (c) (d) Defining where the organisation is now Defining where it wants to be in the future Analysing its external environment, influences and trends (over which it has no control) Formulating plans to implement necessary changes.

As we have seen, these four categories are important stages in the strategic planning process. Soft workforce planning is concerned with the formulation of the mission, goals, objectives and strategy of the organisation and how variables such as growth, product, life cycle, competitive advantage and HR development will impact on its human resources.

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What is hard workforce planning?
Hard workforce planning concerns the type of activities the HR department will need to carry out to ascertain the appropriate level of human resources – whether its current level is sufficient; whether there is a deficiency in one department over another, etc. Hard workforce planning activities include:  Forecasting the number of employees required in the future to support the demand for the organisation‟s products and services. It also includes the assessment of the internal and external supply of human resources. Analysis of how current employees are being utilised throughout the organisation and how this impacts on demand. Monitoring and review to reconcile workforce plans with actual practice and facilitating any amendments needed to plans.

 

C. IMPORTANCE OF WORKFORCE PLANNING
How do we conduct workforce planning during rapid change?
What future does workforce planning have when organisations are changing so rapidly and so unpredictably? This is very important question. Students often learn the elements of workforce planning and believe they can be applied universally and in every age. Unfortunately, that is not possible. Organisations have always been changing and workforce plans have always had to be updated to take account of the unexpected. What is new is the highly accelerated pace of change – what would have taken a decade fifty years ago, can now happen in a year or even less. So the challenge for workforce planners is twofold:  Think ahead as far as possible. It is important that HR professionals are aware of and, if practicable, involved in the strategic decisions being made in their organisations. That way they can see as far ahead as anyone else and adapt their workforce plans accordingly. Keep the plan as flexible as practicable. This may seem like a contradiction. Planning is laying out what you are going to do, whereas flexibility is keeping your options as open as you can. The art, therefore, is to know what is likely to change, what may change and what is unlikely to change, and to plan accordingly.

Turbulence is brought about by the unanticipated effects of the PESTEL environment. For example:  Politics – Governments create new laws, encourage their economies and invest large amounts of public money. If any of this changes significantly, it dramatically affects employment and therefore, workforce plans. Economics – The rise and fall of local, national and the increasingly global economy affects which organisations grow and which shrink. Unstable financial markets influence profitability and therefore, growth or downsizing plans. Society – Demographics (e.g. ageing workforces) affects both labour supply and demand, as does the increasing willingness of workers to migrate within countries and across national boundaries. Technology – As work moves from manual to knowledge based, through computers and associated technology, staffing plans move from employing large numbers of low skill workers to smaller and more flexible cohorts of professional workers.

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 

Environment – Everything from „the greening of employment‟ to the implications of global climate change impact upon workforce planning. Law – The law is increasingly international and is affecting employment via human rights, labour relations and environmental legislation. Case Study Trainee doctors 'will go abroad' More than half of trainee doctors are ready to leave the UK if they fail to get a training post The UK government is responsible for estimating the need for newly trained doctors and for providing training places. In 2007 it appeared that the calculation of demand was significantly too high. As a result, up to 10,000 newly qualified doctors were unable to find a job. (Source: www.news.bbc.co.uk)

Should we reorganise the way we employ people?
The demands of employers are also changing. All organisations have various resources at their disposal: physical resources, such as land and raw materials; capital machinery, plant and equipment; and people. However, the most expensive resource to your organisation are your employees. Most organisations know what their employees are capable of producing, but a fundamental problem is that the demand for output is not constant – it will ebb and flow with the level of economic activity between booms and slumps. Therefore, an organisation can find itself with the full time workforce on overtime one year and then idle the next. Advances in technology mean that many processes formerly undertaken by human beings can now be done by machines. As a consequence, large scale, labour intensive processes are becoming a thing of the past, with greater dependence on machines and less on people. Some of the developments contributing to this are:      Robotics in manufacturing Computer aided design/manufacture (CAD/CAM) Just in time (JIT) systems reducing the need for storage and handling of stock The use of call centre operations instead of retail outlets, etc. The growth of e-commerce and other Internet applications.

One effect of this is that, as the labour market is contracting and the levels of education are rising, the demand for unskilled labour is contracting – machines and computers are replacing human beings. However, there is increasing demand for skilled employees and for greater flexibility in the pattern of work itself. We consider some of the developments in working patterns in the next section, but there is one significant development in “employment” to note here.

Should we change the employment relationship?
The establishment of an employment relationship involves creating two parties – the employer and employee – to a contract for the provision of services in exchange for some form of benefit.

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Such relationships date back to the Middle Ages and the formation of the master-servant relationship, often for just short periods. The labour market was literally a market then, with hiring fairs being held around the country. The essence of these relationships was that one person (the master) contracted with another (the servant) for services to be rendered in return for some consideration, which could be cash or in kind. The terms of the contract would be agreed verbally and cemented with a handshake, to make it binding. The law governing the framing of contracts of employment has grown enormously since then, to encompass a field of study on its own. Largely, this has been created by governments and courts intervening in the market to define what is and is not acceptable in the contract. Usually, this was to redress the in-built balance of power in favour of the employer by protecting or promoting the interests of employees. The details of employment law and the contract of employment are beyond our present purposes, but we do need to note two different types of employment relationship. The first is the traditional form of employment and the second represents a relationship that is becoming increasingly important.  Contract of service The concept of employment is taken to cover those relationships that are contracts “of service“. These exist where the individual is permanently contracted with an organisation, or another person, to provide labour. They also cover contracts for specified periods (i.e. temporary work) that may be under the same terms and conditions, albeit with some changes, as if they were permanent. This is reflected in the law, as it defines employment for the purposes of the liability for and collection of taxes and other payments to the State and for the eligibility and payment of social welfare benefits. These relationships are governed by a contract of employment that defines all aspects of the means of providing the service, the work, the remuneration and the responsibilities of both parties. The law also heavily influences it.  Contract for service This needs to be distinguished from contracts of service. They are formed between organisations and individuals on the basis of a commercial contract to provide services, rather than an employment contract. The services provided will be of a specified type over a specified period for a specified payment. The individual will probably be self employed, responsible for their own tax liability and national insurance or working through an agency. The organisation effectively buys the service, in much the same way as buying stationery from a shop. It is the end product that is being bought rather than, in the case of an employment contract, the employee. This creates a different form of working relationship, not governed by a contract of employment. The balance of power in the relationship may still lie with the organisation, but it may also be more equal, or even tilted towards the individual in some instances. This type of employment relationship is becoming increasingly significant in areas of work that demand high levels of skill. However, it is also being exploited by many other workers who want the flexibility to determine their own working patterns, rather than fit in with the pattern offered by the traditional contract of employment.

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What Is an external labour market?
If your organisation does not have within it the people that it needs to continue its operations, it must look to the external labour market. The external labour market is basically a “pool” of potential employees in which your organisation can fish. It can be local, national or international. The significant features include:  The breakdown of the population in an area (its demography). Demography is the study of the population and its movements. It takes into consideration growth of, immigration into and migration from a particular area. It also includes the socioeconomic (or class), age and gender breakdown. All these factors will have a direct effect on the types of person available for work in any area of the labour market. The availability of skills, qualifications, etc. The number of school leavers available and eligible to apply for jobs. How other companies compete for the available labour and the type of package (pay, benefits and incentives) they are prepared to offer individuals to attract them. Unemployment in a particular area – areas of high unemployment may not be a good thing as the available labour may not have the skills you need.

   

Demographic change A vivid feature of the UK economy, at present, is that the population is ageing. This is attributable to two factors:   The birth rate is declining, as families are having fewer children The death rate is declining as advances in medical science improve life expectancy.

This means that the working population, traditionally those between 16 and 65 years of age, is gradually decreasing, both as a proportion of the total population and in total numbers. The ramifications of this shrinkage of the labour market are:  Employers may be in a “seller‟s market” for labour – as the working population reduces, potential recruits may be able to “pick and choose” rather more than they could have done in a tighter labour market Skills shortages, even when there are high levels of unemployment Following on directly from the last point, conventional economics suggests that the scarcity of labour in certain parts of the market will drive up the price of labour (i.e. wages) Anticipating longer term problems in funding the state pension scheme, workers may increasingly build pension and other retirement related demands into wage bargaining situations.

 

At any given time in the economy, there is said to be “friction” in the labour market. This means that workers are not always of the right type, of the right skills or in the right place to fulfil the demand. Consequently, there will always be unfilled vacancies. Other labour market changes The labour market is also experiencing other changes:  More school leavers are entering higher or further education. In the ten years up to 2000, the numbers of school leavers staying in education rose from only three in ten to around eight in ten. The general level of education in the labour market is, therefore, rising and this may mean greater expectations in respect of types of jobs and rewards. More young people are prepared to leave home early to live on their own and become more independent, making for greater flexibility and mobility in the labour market.

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A higher proportion of people (mainly women) wish to combine being a parent with a career, implying new ways of working and living.

What if our employment practices need to change?
Our workforce plan may suggest significant changes to employment practices. The fit between different HR policies and practices and the degree to which they support or contradict one another is important. This is generally known as „horizontal integration‟. It is important in practice because a change in one area of HRM will often have implications elsewhere. For example, a move to introduce team working is likely also to require:     Training – for team members, team leaders and management Reward – to recognise, financially or otherwise, that the team is now the primary unit of activity Appraisal – to provide for the regular review of team performance and development needs Recruitment – recognising that team working is now a core competence to be tested in the selection process for new employees.

HR professionals will often talk about „best fit‟, referring to the matching of HR policies and practices with each other (horizontally) and the business and its environment (vertically). As planning precedes action, workforce planning precedes HR change. Because workforce planning involves stepping back to look at the big picture, it gives HR professionals an opportunity to examine how well HR policies and practices fit with the business and with each other.

Activity
(a) List the HR activities that take place in your organisation (or an organisation known to you). You may want to group them under the headings „resourcing, relations, reward and staff development‟. Then link them together where they are connected. Which connections are the most important?

(b) (c)

D. REDUNDANCY
What is redundancy?
Redundancy is dismissal unrelated to the conduct or capability of the individual or to retirement or resignation, but because:    As an employer, you have ceased or intend to cease, to carry on the business for the purposes of which the employee was employed, or You have ceased or intend to cease, to carry on the business in the place where the employee was employed, or The requirements of the business for employees to carry out work of a particular kind has ceased or diminished or are expected to cease or diminish, or

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The requirements of the business for the employees to carry out work of a particular kind, in the place where they were employed, has ceased or diminished or are expected to cease or diminish.

What should a redundancy procedure cover?
There may be occasions when the circumstances of a particular redundancy can be met by an ad hoc approach. However, in the interests of good employee relations, it is prudent to consider the establishment of a formal procedure on redundancy before redundancies occur. A typical redundancy procedure is likely to include the following elements:        Introductory statement of intent – with the intention to maintain job security wherever practicable Consultation arrangements – for example, with any trade union or employee representatives (see below) Measures for minimising or avoiding compulsory redundancies – such as offering redeployment (also see below) Selection criteria Severance terms Other facilities – such as relocation expenses and outplacement help Appeals.

Failure to follow appropriate and reasonable procedures could lead to you being liable for a claim of unfair dismissal even if you have potentially good grounds for dismissal. Any agreed change to a redundancy procedure should be made known to all employees and incorporated into the procedure. Agreement with trade union or employee representatives should be sought before there is any departure from an agreed procedure and where possible, the procedure should specify the circumstances in which such departure may be considered necessary. Where provision is made for the procedure to be applied flexibly, to take account of changing economic circumstances, this should also be specified. The procedure should be reviewed from time to time to ensure that it is operating fairly.  Consulting It is advisable to consult recognised trade unions or employee representatives about the staffing implications of any measures designed to improve efficiency. It is important to ensure that these are fully understood by all concerned and that uncertainty about future employment is minimised. Where they exist, this could be done through a joint consultative committee, works council or other similarly representative body, to discuss such matters as staffing levels, company expansion or rationalisation plans. Such a committee would normally meet regularly and consider information on the company's current performance, trading position and future plans, to enable trade union or employee representatives to monitor the need for changes in the size of the labour force. It is also good practice to provide appropriate information for individual employees. This is particularly important where there are no recognised trade union or employee representatives. Who should we consult In any organisation, regardless of size and the number of employees to be dismissed, you should consult with appropriate trade unions or employee representatives.

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Why should we consult? To share the problem and explore the options – ways of avoiding the dismissals, reducing the number of employees to be dismissed and mitigating the effects of dismissals. You must undertake consultation with a view to reaching agreement with appropriate representatives on these issues, and such consultation must not be pretence, even when the employees to be made redundant are volunteers. What should we consult about? (i) (ii) (iii) (iv) (v) (vi) Reasons for the proposals Numbers and descriptions of employees potentially affected How employees will be selected for redundancy How the dismissals are to be carried out Redundancy payments Other provisions such as redeployment and outplacement.

When should we consult? In time for the whole process to be completed before any redundancy notices are issued. In the UK, there are statutory minimum time limits. The consultation process should precede any public announcement of the redundancy programme. Notices of termination should not be issued until consultation has been completed. What about consulting directly with the staff affected? Employees threatened with redundancy should be are made aware of the contents of any agreed procedure and the opportunities available for consultation and to make representations. What would happen if we failed to consult? Each case is judged on its particular circumstances, but a complaint may be made to an employment tribunal.  What do we do if we are considering redundancies You must follow a standard dismissal procedure involving written notification, hearing and appeal. Step 1 Step 2 Write to the employee notifying them of the reason for the redundancy and invite them to a meeting to discuss the matter. Hold a meeting with the employee to discuss the redundancy, at which the employee has the right to be accompanied. Notify the employee of the decision and the right to appeal. Step 3 Hold an appeal meeting (if the employee wishes to appeal) at which the employee has the right to be accompanied and inform the employee of the final decision.

Avoiding redundancies Management is responsible for deciding the size and most efficient use of the workforce. By carefully developing a strategy for managing human resources, disruption to company performance can be minimised, job losses minimised and the process of change eased. Effective workforce planning can help to determine existing and future staffing needs. In turn, this can lead to an improvement in job security for

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employees and to the avoidance of short term solutions that are inconsistent with longer term needs. It is especially important to ensure that the balance of skills and experience within the remaining workforce is appropriate to the company's future operating needs. What can be done to minimise or avoid compulsory redundancies? (i) (ii) (iii) (iv) (v) (vi) Natural wastage Restrictions on recruitment Retraining and redeployment Reduction or elimination of overtime Short time working or temporary lay off (where contracts allow) Early retirement or voluntary redundancy.

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Chapter 4 Recruitment and Selection
Contents
Introduction

Page
61

A.

The Recruitment and Selection Process What stages should we go through? Do recruitment and selection practices ever change?

61 62 62

B.

Defining the Vacancy When should we recruit? Is recruitment always necessary? What about internal recruitment? What is job analysis? What is a job description? What is an accountability profile? What is a person specification?

63 63 63 63 63 65 68 69

C.

Advertising How do we fill a post internally? How do we fill a post externally? What should a recruitment advertisement contain?

71 71 71 74

D.

The Application Process What form should applicants use when applying? Should we monitor applications? What is positive action?

75 75 78 78

E.

The Selection Process What is shortlisting? Is there anything else we should do at this stage? How do we grade candidates to identify those who are best fitted for the post?

79 79 79 80

(Continued over)

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F.

Different Ways to Gather Data on a Candidate What is the purpose of selection interviews? What types of interviews are there? How do we conduct a selection interview? What are the problems with interviews? Should we use assessment tests? When should we use group assessment? When should we take up references?

82 82 82 83 86 87 88 89

G.

Making the Job Offer What do we put in an acceptance letter?

89 90

H.

Employer Branding Why should we be concerned about our employer brand? How do we influence our employer brand?

91 91 91

I.

E-Recruitment

92

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INTRODUCTION
By the end of this chapter you should understand the processes of recruitment and selection, including e-recruitment. Therefore, you should be able to:       Distinguish between recruitment and selection and explain the steps leading to the appointment of a new member of staff Define a vacancy and explain how to prepare a job description and an accountability profile, a person specification and a competency framework Advise on how to advertise a vacancy Explain the characteristics of an application form Explain the significance and some of the practicalities of e-recruitment Explain the significance and operation of employer branding.

You should also understand the significance of reliability and validity of selection activities and the suitability of different selection methods for different organisations and different jobs. Therefore, you should be able to:     Choose suitable ways of gathering and analysing data on candidates, including e-selection Explain the significance of authenticity, reliability, sufficiency, validity and cost, with special reference to selection interviewing Explain the purpose and operation of references Make a job offer.

A. THE RECRUITMENT AND SELECTION PROCESS
People are the most important part of your organisation and you need to make every effort to get the right people in the right jobs at the right time. For your company to stay competitive it must recruit and retain employees who are able to provide quality, productivity and innovation. Thus, recruitment and selection are crucially important to the organisation – just think about the implications of getting it wrong.

Activity
Consider an employee who you work with, or used to work with, who is not very effective in his or her job. (a) How much money do they cost the organisation each year – salary, pension, accommodation and the bad effect they have on other employees and possibly customers? How long before they will leave the organisation? Could their shortcomings have been identified at the selection stage?

(b) (c)

We have already mentioned recruitment and selection together several times, but it is important to realise that there is a difference between the two:  Recruitment involves the attraction of suitable candidates to vacant positions from both inside and outside the organisation.

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Selection involves the choosing of one (or more) person from the suitable candidates to fill the vacancy.

What stages should we go through?
Recruitment and selection is a systematic process. It has a number of stages, each of which needs to be completed for the outcome to be a success. This process is outlined below. Figure 4.1: Stages in the Recruitment/Selection Process Determine the vacancy

Complete the job analysis

Write the job description

Draft the personnel specification

Advertise in suitable sources of recruitment

Receive applications and pre-select candidates

Hold interviews (and/or other selection method)

Make a job offer

Implement an induction programme

Do recruitment and selection practices ever change?
Although the basic process as outline above remains essentially the same, the increasing complexity of organisations, and the changing nature of both working and social life, has encouraged companies to re-design their recruitment and selection practices. They whole process can be very complex and many variables need to be taken into consideration – in particular, the following considerations have become more important in recent years:   The use of the Internet and even social networking in allowing organisations to carry out their recruitment in different ways The increasing complexity of employment status (full-time, permanent part time, temporary part time, subcontractor, self employed, etc.) and the state of the external labour market

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The need to ensure that the process is undertaken fairly, to get the most appropriate candidate, to keep on the right side of the law and to behave ethically towards potential candidates.

B. DEFINING THE VACANCY
When should we recruit?
Generally, we should recruit when either an existing employee leaves or a new position is created, either because new work needs to be done or there is a growth in existing work. Whatever the reason, initially, there should be an assessment of whether there really is a vacancy or whether the work could be done in some other way. Reorganisation of work or training/development could solve the problem and there is also the possibility of overtime or internal secondment to cover the work.

Is recruitment always necessary?
When a vacancy does exist, there are a number of alternatives to undertaking the full recruitment and selection procedure, which can be expensive and time consuming. It might be better to fill the vacancy through:  Subcontracting – Your company might subcontract certain jobs to avoid on-costs such as National Insurance contributions and sickness pay. Also, subcontracting means you are not paying for people when you do not need them. Agencies – The use of temporary staff is another option. Temporary staff can cover for long term sickness, maternity leave or a temporary need for additional staff. Although in some countries the law on this is becoming increasingly complicated, your company generally does not directly employ agency workers.

What about internal recruitment?
This is usually cheaper than external recruitment and has the advantage of ensuring the appointment of someone already accustomed to your organisation‟s culture and values, as well as being somebody who you know more about. Some will argue that it is fairer to advertise all posts externally. This is true and you may increase the quality of applicants by external advertising. However, there is a point at which it is not cost effective to advertise any wider. No organisation would consider advertising in every newspaper in every country across the world, so we all instinctively draw a line somewhere. You may find yourself flooded with applications that you cannot reasonably process. So, if internal advertising provides a suitable candidate and that person can be spared from the job they're already doing, you need to consider if there is any cost-benefit advantage of advertising externally.

What is job analysis?
Job analysis is the process of collecting and analysing information about the tasks, responsibilities and the context of jobs. The objective is to provide the information on which the job description and person specification will be based. It is one of the most important, yet neglected, parts of recruitment. A job analysis exercise has three stages:    Deciding what data you need about the job Collecting that data Recording it in words.

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(a)

Data required You need to be systematic about data gathering and a checklist can be useful. The following sample checklist contains the headings under which you would need to collect the necessary information: Figure 4.2: Job Analysis Checklist Job Analysis Checklist Title of Job In easy to understand words. Organisational Context Including location of job in whatever department or division; line manager (if appropriate); reporting relationships; number of subordinate staff. Purpose of Job This is important because it shows the contribution that the post makes to the organisation. Why does it exist? Content of the Job The tasks to be carried out and, even more, the outputs and outcomes that the post holder will be required to produce. These are often called „accountabilities‟ – i.e. the things that the post holder will be held accountable for achieving. Physical Working Environment Location; working conditions (office or shop floor); hours of work; etc. Rewards Financial rewards (salary, performance pay and pension, etc.) and nonfinancial rewards (such as leave allowance and flexible working hours). Other Information For example, whether or not this is a training post that will lead on to further advancement, either by promotion or lateral transfer. Performance Standards How performance will be monitored and what feedback the post holder can expect. Person specification The profile of the person who will be able to do the job.

(b)

Data collection There are many different ways of gathering this data, including:     Observing the job – although you need to be careful that you understand what you are observing, and you may need to ask questions. Interviewing the current job holder. Work study techniques – including measuring and timing actions. Diary method – getting the current job holder to complete a diary, recording all actions.

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 

Critical incident technique – observing the key incidents in the job, such as when a teacher has to deal with a child who is behaving in a very challenging way. Desk research – looking at paper or computer records relevant to the job.

These all relate to examining the job itself but a complete job analysis will also make reference to the perceptions of others to whom the job relates: (i) Line manager/supervisor – They should have had day to day contact with the current job holder and know what is required. If the vacancy is a new job that has just been created, the line manager/supervisor should know the details of the activities the post holder will be doing. Colleagues/peers – These people can provide details of how the job holder should integrate with others and perform in group tasks. They can often point to the strengths and weaknesses of past post holders and this can be very helpful in designing the selection process for the future post holder. Obviously, you will need to be aware that colleagues and peers are not always totally objective and may have their own agendas. Customers – In some instances it will be both desirable and possible to get a customer perspective on the post you are trying to fill. This would be quite common in senior public appointments.

(ii)

(iii)

What is a job description?
This is the first thing that job analysis produces. A job description simply describes the job in terms of its duties, responsibilities and purpose. It sets the parameters of the job, by covering all of the requirements – the who, what, where, when and why. The key elements are:        The job title To whom the job holder reports (possibly including an organisation chart to show where the job fits in) Purpose of the post Key tasks How the responsibilities are to be carried out Extent of responsibility Key contacts and basic conditions of work.

Why do we need a job description? The job description is the foundation of the recruitment and selection building that you are about to construct. If the foundation is poor, the building will be unstable. It will provide essential information to both the potential candidate and the organisation: (a) (b) Essential information to potential candidates     So they can decide whether or not to apply Enabling the person specification to be written Giving the organisation an in-depth overview of the job Providing the basis for a training needs analysis and appropriate training to be planned, implemented and evaluated Essential information to the organisation

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Providing an additional source of information during performance appraisals or professional development interviews. Often, appraisal discussions are based around the appraisee‟s job description. Providing the information necessary for grading the post by job evaluation, where applicable.

What if the job description changes? You can consider a job description as an authoritative document or the blueprint to guide the individual through their day to day work. However, job descriptions must be flexible enough to allow for changes that may occur. Therefore, the job description will often end with a clause indicating that the job description may be subject to reasonable change later on. How detailed should a job description be? Job descriptions may vary in length and content, depending on the duties, responsibilities and seniority of the post. However, there are some basic rules for writing job descriptions. A job description should be:  Unambiguous and written in simple, straightforward terms and language. Jargon and semantics should be avoided at all costs, as this can lead to both job and role ambiguity. Succinct and should not ramble on or contain unnecessary information. A simple rule is that a job description that covers one side of A4 is probably the right size for recruitment purposes. Hierarchical, so that readers can discern the most important aspect of the job perhaps by putting these first. Sufficient – i.e. it covers the key points. Valid – i.e. everything can be justified.

  

A sample job description follows.

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Figure 4.3: Example of a Job Description for a Human Resources Manager JOB DESCRIPTION Job Title: Reports to: Human Resources Manager Human Resources Director

Immediate Subordinates: Human Resources Officer Safety Officer Training and Development Officer Occupational Health Nurse Purpose of the Job: Within the limits of human resources policies, to provide a full human resources service to line management and to provide a framework for maintaining good relationships between management and staff (including staff representatives). Activities: 1. 2. 3. 4. 5. 6. 7. 8. Ensuring the efficient recruitment and selection of suitable and sufficient employees to meet vacancies identified by line managers. Implementing the company‟s remuneration policy and procedures. Advising line managers on employee relations and legal matters during negotiations with trade union representatives, at branch and local level. Establishing and maintaining a regular programme of joint consultation with employee representatives and senior management. Providing adequate training programmes for the induction of new recruits and training and development for managers and employees. Advising department managers on management development programmes. Maintaining adequate records of employees. Providing a routine health and welfare service for all employees including arrangements for giving first aid.

Economic Conditions: Salary will be commensurate with the grade and scope of the post, as laid out in the contract of employment. 37 hours per week with five weeks‟ holiday per year. Company car will be provided. Qualifications Required: Over 3 years‟ experience in human resources management. Previous experience of negotiating with trade union representatives. Professional qualifications (including membership of the Chartered Institute of Personnel and Development) essential.

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What is an accountability profile?
You should be aware of the increasing popularity of the „accountability profile‟ as a significant enhancement of the traditional job description or even as a complete replacement for it. Job descriptions tend to describe activities or processes followed by the job holder. They can be quite specific and therefore lack flexibility. They also focus attention on the relatively unimportant „what the job holder does‟ rather than the outputs he or she is paid to achieve. Often, both are needed to make clear what the job entails. Here is an example of such an accountability profile using the activities from the job description at Figure 4.3. Activities in the job description Recruiting and selecting new staff to fill vacancies identified by line managers Implementing the company‟s remuneration policy and procedures Accountabilities Ensuring that the organisation fills vacant positions with appropriate people Structuring financial and non financial reward to recruit and retain the right people, provide the best value for money, get the best performance out of our people and maximise the control managers have over staff Ensuring that line managers are best able to negotiate with trade union representatives

Advising line managers on employee relations and legal matters during negotiations with trade union representatives, at branch and local level Establishing and maintaining a regular programme of joint consultation with employee representatives and senior management

Ensuring that there are structures for effective communication between management and trade unions on both strategic and day-to-day operational issues

Providing adequate training programmes for the induction of new recruits and training and development for managers and employees Advising department managers on management development programmes Maintaining adequate records of employees Providing a routine health and welfare service for all employees including arrangements for giving first aid

Ensuring that staff across the organisation are appropriately trained to carry out their responsibilities

Providing staff information that the organisation requires Ensuring that staff are healthy because they work in safe and healthy conditions, and have first aid and emotional support when things go wrong

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What is a person specification?
A person specification is a document providing those responsible for selection with a clear picture of the candidate your organisation wishes to attract. It is worth remembering that the candidate is also responsible for self selection, so he or she will be equally interested in the person specification. It is a description of the attitudes, knowledge, skills, qualifications and experience necessary to do the job described in the job description. What does a person specification look like? There are numerous headings used by recruiters and your own organisation may use several different sets of headings. A simple structure is as follows: Heading: 1. Knowledge 2. Skills 3. Experience 4. Qualifications 5. Attitudes The candidate needs to:      Know about or understand … Be able to do … Have done in the past … Be qualified in … Behave in this way…

What about distinguishing between essential and desirable characteristics? Your person specification should probably distinguish between characteristics that are:   essential – i.e. the minimum you require from the person in order to perform the work effectively., such as, for example, the ability to learn how to use a spreadsheet; and desirable – i.e. those characteristics which are above the essentials and will enable the successful candidate to perform beyond the basic minimum standards required, such as, for example, the ability to create a spreadsheet.

The desirable characteristics will be determined from the job description; the essential characteristics will be determined by your knowledge of the labour market. In other words, if there are lots of good people out there, you might want to pitch the desirable characteristics quite high. Figure 4.4 below, provides an example of a person specification, which distinguishes between essential and desirable characteristics required against specified criteria.

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Figure 4.4: Example of a Person Specification ABC AIRLINES PERSON SPECIFICATION Position: Cabin Staff Based: Criteria Knowledge Skills Southwest Airport Essential Basics of air travel Quick thinking Alert. Calm in a crisis Firm and confident manner Experience Customer service Experience in hospitality industry, nursing Has travelled extensively Qualifications Five GCSE A-C including English and Maths (or equivalent) Ability to work long periods under pressure Lives within one hour of airport Attitudes Neat and clean Outgoing personality and sense of humour Willing to work irregular hours and be away from home for long periods of time Interested in travelling Manual handling Desirable World geography Fluency in one or more language

What if we have a competency framework? This will be a very useful starting place for your person specification. You may even include it in its entirety in the package of materials that goes out to potential candidates.

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C. ADVERTISING
Once you have a job description, person specification and authority to recruit, you need to decide how wide you can cast your net. You may decide that it is appropriate to advertise only internally or you may instantly go to external recruitment by advertisement or an agency.

How do we fill a post internally?
The mechanics of contacting internal candidates are quite straightforward – details can be put on a physical or electronic notice board, or published by means of a circular in any organisation that employs staff in a number of different offices. (a) Advantages of internal recruitment    It is cheap and can be quick. You can get references from line managers you know and who know the candidate. You may also have access to performance appraisal information. Offering promotion opportunities to your existing staff is a good policy. It helps to satisfy their ambitions, encourages them to seek to develop themselves and may help to motivate people to greater effort. For many jobs, particularly those that are highly specialised, the number of applicants from internal sources may be limited. If recruitment is only internal, the organisation may have to accept a candidate who is less well qualified than one from outside the organisation. Delays sometimes result from the fact that a whole series of replacements have to be recruited, starting from a vacancy at the lowest level. Somebody outside the organisation may be available immediately, for example having been made redundant by previous employer. Although there may be a motivational effect from offering promotion to some staff, there may also be a sense of grievance in those who are unsuccessful, particularly where there is an expectation that you cannot fulfil.

(b)

Disadvantages of internal recruitment 

How do we fill a post externally?
There are several external recruitment sources you may use, either on their own or in combination. No single source is better or worse than the others and you need to evaluate each on its merits for your particular vacancy.  Casual enquiries Potential candidates who have written, called or have sent an electronic curriculum vitae (CV) are a free source and can be identified as quickly as it takes you to get their information out of your records system.  Recommendations Existing employers and other stakeholders are often a free and quick source of new staff. However, there is a potential problem here as the people recommended are likely to be of the same social or ethnic groups as existing staff or have a similar background – for example, having the same work history. Therefore, you will tend to be recruiting in your own image. An individual who could do the job, but who is from a different social, ethnic or other group could claim that they have suffered unfair and unhelpful discrimination if recruitment is mainly by way of personal recommendation.

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This practice will vary from country to country. In the UK, it is said that the majority of jobs are filled without being advertised and that means recruitment is being carried out through casual enquiries or recommendations. Case Study 1 „(UK Deputy Prime Minister) Nick Clegg was forced to admit it was "wrong" that his own career had been boosted by parental connections when he was starting out, getting him time at a bank and his first job in politics. The revelation that the deputy prime minister had been helped by his father's influence cast a shadow over the government's announcement of a drive to end unpaid internships. As the government put more accessible internships in desirable professions at the centre of a drive to give poorer children better opportunities, it also emerged that eight coalition MPs were continuing the practice of employing unpaid interns.‟ Source Guardian Newspaper 05/04/2011 (http://www.guardian.co.uk/politics/2011/apr/05/ nick-clegg-parental-job-boost)

Advertising To be successful, your advertisement should be well worded and placed in a medium appropriate for the nature of the job, – i.e. basic grade clerical jobs in local daily or weekly newspapers, more specialised jobs in regional or national papers and sometimes in trade and professional journals. The cost and delay will be greater for these higher grade positions. Emphasis is moving from printed to online advertising (see Internet below).

Job Centres These government offices are located in town centres and they act as an intermediary, introducing prospective applicants to employers who have notified vacancies to the job centre. The service is provided free of charge. In the UK almost all jobs advertised by Job Centres are also placed on a Government website.

Agencies Private employment agencies may operate on a nationwide or local basis and usually work on a “no placement, no fee” basis. Introductions are made to employers and if and when applicants are employed on a permanent basis, a fee is charged which is usually a proportion of the starting salary. The service can be quick and effective at finding suitable candidates, but is expensive. Most agencies specialise in a particular type of vacancy. Agencies have grown in importance in recent years and have the advantage of reducing costs in the recruitment process and providing specialist recruitment staff. However, the disadvantage is a loss of control over who is shortlisted and selected.

Executive search consultants (headhunters) Headhunters are specialist individuals or organisations who develop and maintain a network of high level or specialist people so that they can, for a fee, recommend them to organisations seeking such people. Hence, headhunters operate in their own niches. This type of agency is much more expensive and is used for more demanding and high-ranking positions. The service provided may include advertising and preparing a

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profile. Preliminary discussions are carried out and a small number of applicants, well matched to the profile, are presented to the client. Headhunting is often about persuading the candidate to consider the organisation who might be interested in recruiting them.  Universities and colleges When the recruitment is for recently qualified graduates, it makes sense to contact the educational establishments directly. Because universities and colleges are concerned about the employability of their graduates, most operate free careers services, providing introductions to employers free of charge.   Careers offices These are a good source of school-leaver applicants for appropriate vacancies. The Internet Countries where a significant number of people have access to the web now have a large number of web-based job advertisement sites, almost all paid for by employers or recruitment agencies when they place advertisements on the site. This method will considerably extend your potential pool of candidates. However, the advantage of the Internet in opening up access to information, can be a problem for Internet advertising, since you have little influence over who can see the information and it can result in a large number of inappropriate, speculative applications. Some employers advertise direct on commercial job seekers‟ sites, others will go through an agency that will then place the advert on-line (for example, www.monster.com), whilst others will have specialist sites for their own sector (especially in the public sector – www.jobs.ac.uk for jobs in higher education and www.jobs.nhs.uk for the health service). Your organisation may also have a section on its own website for advertising vacancies. How do we choose where to advertise? The choice of recruitment sources for particular vacancies should take account of the following factors. (a) The speed with which it is necessary to fill the vacancies Time is a difficult element to manage in the recruitment process and how long it will take to fill your vacancy can be a critical factor. The length of time taken to complete the whole process will depend on various factors such as:  The method you have chosen for attracting candidates: (i) If advertising a vacancy, the time which can elapse between booking advertising space in the next edition and the advert appearing can vary significantly depending on the publication chosen – for example, daily, weekly, monthly. If internal recruitment or word of mouth is used, the replacement can be found almost instantly. A single interview. A series of different interviews or tests.

(ii) 

The interview procedure used: (i) (ii)

The period of notice that the successful candidate is required to work at their current place of employment.

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It is possible that no suitable candidates apply at the first attempt and you have to wait until you can find a suitable person for the job. Note too, that in some industries, there are only certain times of the year when people change jobs – for example, in education, where term-time is static, and in travel and hospitality, where jobs are seasonal, etc. (b) The costs involved Cost is an important element in effective recruitment. At one end of the scale, word of mouth methods of attracting candidates cost nothing, whilst using headhunters or recruitment consultants costs a percentage of salary (and as this method is only likely to be used for hard to fill, top positions, this means a considerable amount of money). Once candidates have been attracted, time must be spent screening, selecting for interview, interviewing and testing them. There is a significant time cost tied up in these procedures. There is also the cost of work which is lost or productivity which falls when staff are tied up with the selection process. The position that is being filled may be empty for a time during the recruitment process and this may cause problems. (c) Making sure you attract a number of suitable applicants Quality should not be compromised without careful consideration. It is not always possible to employ the perfect person for the job, but it is definitely a mistake to limit the possible applicants because the pressure of time or money constraints.

What should a recruitment advertisement contain?
The two most important decisions you must make when advertising a position are where to place the advertisements and what to put in them. If advertisements are wrongly placed or badly worded they can be costly and ineffective at attracting the right candidates. You also want to avoid receiving a flood of replies from unsuitable candidates due to an advertisement being misplaced or a misunderstanding of the job‟s requirements. The following guidelines will help in the design of effective recruitment advertisements. (a) Style The look of the advert may be the first impression of the company that the reader has. Use the company logo for identity and choose a clear, easily read typeface and layout. Think about whether you want to use the job title itself as a heading or prefer something else, such as an attention grabbing catch line. (b) Content The list below gives the essential information that a good recruitment advertisement should include.  Job title – The title should be attractive, yet describe the job accurately and be specific about terminology (a “supervisor” in one company may be called a “manager” or “team leader” in another) Employer and location Salary. Job description – very brief outline of key responsibilities Any unique elements to this particular job – such as travel, wider responsibilities, likely prospects, etc. Person specification – again, a very brief outline of the key points

    

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What to do next – for example, website details, phone number or address for further information and applications.

If you are careful, it is possible to include all this information in a surprisingly small amount of copy. There is no need to go into great detail about the job or the rewards at this stage. It is important to make the advertisement stand out from others in the same publication. As well as using design and layout to do this, the content should also contain some kind of USP (unique selling point) to make good applicants want to apply for your position first. The USP may be that the salary is good, that there are good prospects, lots of responsibility, security, a nice location, etc. It does not matter what it is, but you should try to find something special to say about the job. The number and quality of respondents to an advertisement depend not only on it being well written and laid out, but also the way in which a response is invited.

D. THE APPLICATION PROCESS
It is still not unusual for applicants to be asked to contact the organisation for further details of the job. Such details can include the full job description and personnel specification, details of the application process (and form, if used), as well as information about the organisation itself and the way in which the job fits into it. It is increasingly common for this information to be available from the organisation's website, which is quick and easy for most people. In other circumstances, interested candidates may be given a telephone number and contact name, so that they can make initial enquiries as well as getting any additional information they need prior to applying formally. Alternatively, they may be asked to write off for it, although this makes for a slow and drawn out process, with extra work involved on both sides. Providing further information helps to minimise the number of applications from candidates who do not fit the requirements. If no further information is provided, the advertisement should state the way in which an application for the job may be made.

What form should applicants use when applying?
There are three common methods of application:    (a) Curriculum vitae (CV) Application form Online. Curriculum vitae (CV) This is a résumé or review of the applicant‟s history and provides an account of an individual‟s qualifications, past working history, etc. It is, however, difficult to accept as a definitive document as it is open to manipulation and fabrication. Because of this, your interview questions should be particularly probing, to identify any candidates who may have been economical with the truth! A CV should be two to three sides in length – any longer and it runs the risk of not being read. Advantages of the CV include:   They give candidates the opportunity to detail their experience in previous jobs There is no standard format so a certain degree of “flair” can be used their design.

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Disadvantages include:   They are open to fabrication, manipulation and covering up problems It can take longer to “study” a CV than an application form.

Remember that every CV is different and as there is no set format. They can take on a variety of guises. (b) Application Form An application form is a data gathering tool specifically designed to match candidates to the person specification in a structured way. (It may also provide information about a candidate that will be used later on if the candidate is successful.) Unlike a CV, where the candidate determines the content and layout, the content and layout of the application form are determined by the recruiting organisation. In this way it can control (to a certain extent) the information candidates submit. Application forms vary from organisation to organisation, but the type of information required is often very similar. Some organisations even prefer application forms to be completed in the candidate‟s own handwriting. This allows the company to assess the candidate in terms of structure, neatness, comprehension, flair, etc. The advantages of using application forms include:      They can help to speed up shortlisting They allow information to be submitted in a structured way They can assess neatness, sentence construction and creativity They give the opportunity for graphology (handwriting analysis) to be used They help the selectors to structure questions for the interview, to obtain information that may be ambiguous or absent from the form. Like a CV, they can be open to manipulation Candidates may be restricted in the information given so that it fits into the boxes provided, particularly where there is no provision for continuing on a separate sheet.

Disadvantages include:  

As with a CV, a covering letter or letter of application should accompany application forms. This will usually show the applicant‟s claims to match the person specification. The UK Chartered Institute of Personnel and Development have produced a set of guidelines on application forms, to encourage and assist HR departments and recruiters to adopt best practice standards in recruitment and selection. They recommend that application forms should:      Be realistic and appropriate to the level of the job Not request detailed personal information unless it is relevant to the job Use clear language Be accompanied by details of the job and clear information about the application and selection procedure State the procedure for taking up references, how these will be used and at what stage in the recruitment process they will be taken.

It is usual to ask a candidate to address particular abilities or experiences when submitting an application, as in the following example.

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Case Study 1 THE UK PRISON SERVICE SKILLS ASSESSMENT FORM Applicants for work in a UK prison are asked to answer a series of questions in their application, and are given the following guidance.  For each of the competencies try and give us an example of something YOU have done in the past that will help us to assess your suitability to work in the Prison Service. In each example, tell us what the situation was, what did you do and what the outcome was You can use examples not just from work you have done, but also from things you have done in your spare time or with friends and family. You can also gives examples from any voluntary work you have done, or from aspects of any education or training you might have had. Complete the application form in your own words making clear in each example you give, of what YOUR contribution was. Avoid using the word „we‟ and concentrate instead on what YOU did. Keep your answers to the point and try to avoid going into too much detail. You may type your answer but always keep within the space provided. Remember the information you provide will be used as the basis for deciding whom to short-list for the next stage of the selection process. All sections must be completed, or your application will be unsuccessful.

 

Adopting a systematic approach Please give an example of how you have introduced a new system, reviewed its effectiveness and relayed these changes to others. Team building liaison Please give an example of when you have been part of a team, improved the team‟s performance and promoted this to others. Planning and reviewing Please give an example of when you have put a plan into action and how you reviewed its effectiveness. Security awareness Please give an example of when you have had to consider security. Concern for prisoner care Please give an example of showing concern / care for another person.

(c)

Online applications Your organisation is free to choose how it would format it online application form. The cheapest solution is to allow the candidate to print off a blank form and submit this via the post. Some organisations allow the candidate to fill in and submit the application

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online, although the design of such forms can be problematic in terms of allowing applicants to enter the information required in the way that they want. Where there are a large number of potential applications for standard posts, it is possible to carry out initial shortlisting of applications electronically. This then gives the candidate an almost instant initial response.

Should we monitor applications?
Your organisation may claim to be an equal opportunities employer and have policies and procedures in place to minimise any discriminatory practices. One aspect of this is the monitoring of applications to ensure that recruitment procedures are in line with such policies. To this end, separately from the application form that will be seen by the panel, you may want to ask candidates about their age, nationality, ethnic origin, gender and whether they have a disability etc. This information can then be used to:  Monitor the number of people with these protected characteristics that apply for jobs in your organisation. The main discrimination act in the UK outlaws selection based upon sex, race, disability, religion, sexual orientation, marital status and age. Monitor the balance or ratio of the above groups in the organisation so that positive action programmes can, if necessary, be implemented to increase their representation.

In the UK, it is illegal to make a decision, prior to making the job offer, to reject a candidate because of his or her physical or mental disability. Disability must only be taken into account after a job offer has been made. This is to reduce the number of instances when a candidate with a disability is rejected because of that disability ,but the selectors are either not aware of their subconscious decision making or claim that they rejected the candidate on some other specious grounds, rather than saying that it was the candidates disability. This will mean that in some instances, i.e. where reasonable adjustments for disability cannot be made, a job offer will be withdrawn after having been made.

What is positive action?
It is where you can demonstrate that members of a certain group are less well represented in your organisation and you are, therefore, taking action to encourage members of that group to apply. For example, an advert might say, „women are under represented in this area and we welcome applicants from female candidates‟. An organisation may also provide support, such as additional education, if it can demonstrate that members of this group have suffered a disadvantage in society because they are less well educated or trained. Case Study 3 In the USA positive discrimination comes under the title „affirmative action‟. The American Association for Affirmative Action website says: Affirmative Action refers to positive steps aimed at increasing the inclusion of historically excluded groups in employment, education and business. Such steps are not designed to offer preferential treatment to, or exclude from participation, any group. To the contrary, Affirmative Action policies are intended to promote access for the traditionally underrepresented through heightened outreach and efforts at inclusion. Source: www.affirmativeaction.org

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Note that the selection process itself must select on merit, because positive discrimination, as opposed to positive action, is unlawful. Hence, additional training may be given to candidates from disadvantaged ethnic minority groups or for male or female candidates, but the same selection criteria must be used for all candidates.

E. THE SELECTION PROCESS
The selection process begins when the applications have all been received, usually by a specified closing date and there are three stages to it:   Initial selection, or shortlisting – choosing the most suitable candidates from the information in the written applications Testing – gathering further information about each of the shortlisted candidates by observing their performance in interviews or other forms of assessment, and reviewing their references Final selection – choosing the most suitable candidate from the information obtained during the testing stage of the process.

What is shortlisting?
It is the first stage of selection. It involves assessing the candidates‟ applications to determine their suitability for your post, with some being rejected and others being retained to go forward to the final selection process. The key to the process lies in assessing the candidates‟ match with the person specification. It is common to use a grading system for this, marking each candidate's suitability against the criteria specified. If the person specification has been prepared properly the task of shortlisting is made considerably easier. (Grading and marking systems are considered below.) Who should do the shortlisting? The most appropriate people to carry out the shortlisting are those who will subsequently be involved in the final selection procedure. This provides continuity in the application of assessments and comparisons with the person specification and builds up knowledge and understanding about the candidates that can be valuable at the later stage. Usually, it is the line manager for the post you are seeking to fill and an employee resourcing specialist (an HR specialist or line manager) who would be involved at both stages. It may be appropriate to include other people with an interest in the job in the shortlisting process. This may be the case where team working is an essential feature of the post and the inclusion of some or all of the existing team on the shortlisting panel may add value. What if we don't have enough information to shortlist candidates? Preliminary interviews are also sometimes used as a means of narrowing down numbers, where there are a large number of apparently suitable applications or you are short of information. You can do these by telephone. This approach provides the opportunity to meet a wider range of candidates and explore their applications in greater detail, before narrowing the field down further for the final selection.

Is there anything else we should do at this stage?
It is important that you adopt good practices, even before you invite any candidate for interview. It not only promotes professionalism, but also suggests to the candidates that they are a real person and not just a number. There are a number of such practices, including:

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Acknowledge all applications (many companies send a postcard with the application form and ask candidates to add their details to it (plus a stamp) if they want their application to be acknowledged). Some companies, because of expense, state on the application form that if candidates do not hear from them within four weeks of the closing date, they can assume that they have not been successful – i.e. not made the shortlist. If application is made online, it should be relatively simple for an electronic acknowledgement to be issued. Treat candidates‟ details in strict confidence and only those who are directly involved in the selection process should have access to them. Avoid leaving applications lying around on a desk. They should be filed appropriately in a locked filing cabinet or cupboard or subject to password protection if they are held electronically. Use only selection criteria contained in the person specification. No other criteria should be used to select candidates for interview. A marking scheme is the best way to achieve this.

 

Adopting best practice standards portrays a good corporate image to candidates.

How do we grade candidates to identify those who are best fitted for the post?
Normally, a marking scheme is used for both shortlisting and final selection. Like job descriptions and person specifications, there are many different marking scheme formats, but they all have the following purposes:     To inject a degree of objectivity into your selection process To force the selection panel to agree what it is they are looking for To support a defence should there be a legal challenge to your selection decision To make it easier for you to choose questions and to communicate them to other panel members.

One such grading/marking scheme is shown by the following form, based upon the person specification we used earlier. It tries to increase objectivity in selection by adding to the person specification.   Weightings to show which are the most important aspects of the job The marks awarded to each candidate under each heading.

If a candidate fails to meet any of the essential criteria you would enter „F‟ in this column – for example, a candidate who did not demonstrate some experience of customer service might fail the whole selection process, because that is essential. This means that you can use the marking scheme at the initial selection stage, to aid shortlisting. Note that if you do fail candidate in this way, it is important that you record your reasons. Each panel member should give their own marks and record them in the „Mark‟ column. (The panel must, of course, have agreed the weightings before they started marking.) The differences between panel members can then be discussed and a collective agreement reached. The selected candidate is the one who passes on all the essential criteria and who scores the highest mark overall.

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ABC AIRLINES ASSESSMENT FORM FOR ……………………………… (name) Position: Based: Cabin Staff Southwest Airport Essential Basics of air travel Desirable World geography Fluency in one or more language /35 Experience in hospitality industry, nursing Has travelled extensively Qualifications Passes the medical requirements Five GCSE A-C including English and Maths (or equivalent) Ability to work long periods under pressure Lives within one hour of airport Attitudes Neat and clean Outgoing personality and sense of humour Willing to work irregular hours and be away from home for long periods of time Interested in travelling /15 Manual handling /10 Pass/Fail Mark

Competence Knowledge

/10

Skills

Quick thinking Alert Calm in a crisis Firm and confident manner

Experience

Customer service.

/30 /100

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F. DIFFERENT WAYS TO GATHER DATA ON A CANDIDATE
The second round of data gathering – i.e. that using observation, the first being the written information gained from the application process – will use one or more of the following methods:       Interviewing – the most usual method Psychometric testing of various sorts Group activities, such as problem solving or creating something Practical tests, such as teaching a class of children or wiring up an electrical plug A portfolio of work from education or previous employment, to show the sort of work the candidate has already done A role play to test candidates‟ interpersonal skills in the sorts of situations encountered at work.

In addition, the taking up of references will be used as the final element. What are the criteria for choosing which methods to use? Your selection process should provide you with:  Sufficiency – The methods used should cover, together, all of the important aspects of the person specification. Some really important aspects may warrant being assessed in more than one way – i.e. using more than one method. Validity – The data gathering methods you use should be assessing for what you think they are looking for and not something completely different. This is a regular complaint with psychometric tests. It is common to believe a psychometric test is exploring for a particular capability, when in fact it is demonstrating a completely different capability. Another illustration would be asking candidates to give a presentation. Are you testing for their subject knowledge or their ability to present? Authenticity – You need to ensure that the method used shows the candidate for what he/she really is. For example, is this the candidate's own work, or is the candidate pretending to be something he or she is not? Reliability – If we used this method with the candidate on another day would we get the same result?

What is the purpose of selection interviews?
Basically, an interview is a face-to-face meeting between you and the candidate. The interview is intended to be an exchange of information, not an interrogation. The objectives are:    To confirm the important information that you already have To fill in the gaps where your information is missing To allow the candidate to assess the suitability of the post and the organisation.

What types of interviews are there?
There are a variety of different methods of selection interviewing.  One-to-one interviews Traditionally, this has been the most common form of selection interviewing, although it is open to criticism over its ability to guarantee fair and equal treatment where just one

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person is responsible for the process. As such, in most organisations, this type of interview has declined in importance, although it may still form a part of sequential interviewing, as described below.  Paired interviews These are interviews conducted by two interviewers, usually the line manager in respect of the job concerned, together with a member of the employee resourcing function. This resolves the problem of ensuring fair and equal treatment, associated with one-to-one interviews, whilst retaining their friendly and relaxed atmosphere and not overwhelming the candidate.  Appointments boards and panel interviews These types of interview are very common in the public sector and are growing in importance in the private sector. They usually involve between three and six interviewers questioning the candidate, with each often concentrating on a different aspect of the person specification. There is only limited time available for each member of the panel to ask questions, but they do offer the opportunity to listen to and observe the candidate, whilst others are questioning them. The panel approach is used where there are a number of different areas needing to be explored in the selection process. This is normally only necessary for more senior appointments.  Sequential interviewing Under this process the candidate moves through a series of one-to-one or paired interviews with different interviewers. Each interview will usually concentrate on different aspects of the person specification. All the interviewers come together at the end of the process, each having seen all the candidates. They discuss the performance of each candidate before arriving at a collective decision. This collective approach overcomes any problem of bias in a single one-to-one interview. Sequential interviewing may offer you a number of advantages over panel interviews. The same variety of interests can be involved in the selection process, but more indepth questioning can be pursued. With each interview lasting perhaps 20 minutes, there is a lot more opportunity to explore the candidate‟s responses than in a panel of five people with the whole interview lasting about one hour. (That sort of interview gives each panel member only about ten minutes.) Each interview is also much less intimidating for the candidate, although the whole process of having several such interviews can be stressful.

How do we conduct a selection interview?
There are a number of aspects to successful interviewing. How should the interview be structured? All interviews need a structure. The structure of a typical interview would be:  Opening If this is the first time you have interviewed anyone you are quite likely to be nervous. Being well prepared will minimise this problem. Candidates are also often nervous to start with so, your first task is to encourage them to get over their nerves, relax, speak freely and perform to the best of their ability. It is usual to begin gently, perhaps with some informal comments about the candidate‟s journey, the weather or some other current, but non-challenging subject. Then explain how you are approaching the interview, its format, when the appropriate time for their questions will be (as they come

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up or when you give the candidate a specific opportunity to ask questions) and how long the interview will take.  Give information Give some background information about the organisation, the position you are interviewing for and your own position in the organisation. This information is important to the candidate and it will also allow him/her a bit of time to settle down before they have to contribute. Be careful not to overdo the detail at this stage – outline information is sufficient to begin with. A lot of information about the background to the job will either already be known to the candidate or will merely make him or her nervous.  Collect information Start talking to the candidate about areas with which they are familiar and comfortable, such as their current job, then work backwards to explore their previous experience and finally, forwards to find out their ideas about their future, their thoughts on the job for which they have applied and their reasons for applying. The importance of appropriate questioning during this stage cannot be stressed too highly. It is usual for there to be a list of set questions that the interviewer will ask of all candidates. The questions should be prepared in advance, to ensure complete coverage of all aspects of the job description/person specification. Remember that the task is to confirm the important information you already have and to explore the areas about which you do not have enough information.   Allow questions and queries Provide an opportunity for the candidate to ask questions. Closing Ask the candidate how they feel about the job now that they have had the chance to meet you and find out more. Confirm that they are still interested and close the interview by telling them when they will hear from you about the outcome. Once the interview is over, make notes. It is wise to note your reasons for either selecting or not selecting a candidate at this stage, so that they are available for future reference, if any query, such as a complaint about unlawful discrimination, arises. What is behavioural questioning? This is the recommended methodology for asking questions. A hypothetical question (the opposite of behavioural questioning) – for example, "what would you do if …?" – will get a hypothetical answer – i.e. it will tell you whether or not the candidate knows a "right" answer to your question. Hypothetical questions will not necessarily tell you what the candidate would do if faced with that situation. A behavioural question on the other hand – for example, "tell me about a situation in which you have …" – will elicit an answer that shows what the candidate has actually done in a similar situation in the past. This is likely to provide much more valid information about what the candidate will do in the future in a similar situation. It is not always possible to ask behavioural questions but they are usually much better. What other rules are there on questioning? There are three such general rules:  Use open questions – i.e. those which have more than a yes or no answer. For example: – – Is this a closed question? (Answer: yes) What is an open question? (Answer: that is)

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 

Avoid multiple part questions – they can be confusing for the candidate and he/she may not answer all the parts. Avoid leading questions – these are any question that might imply a particular answer or lead a candidate to know what answer you are expecting.

An interview checklist The success of the interview will depend on the skills of the interviewer(s). The tips set out in the Figure 4.5 should help. Figure 4.5: Interviewing checklist INTERVIEW CHECKLIST Do:    Introduce yourself. Say what position you hold and how it is relevant to the position for which you are interviewing. Explain the format of the interview. Listen. Listen to what the candidate is not saying as well as to what he/she is saying. Encourage the candidate by your body language: look interested, nod, etc. Ask open ended questions, keeping them short and specific. Offer the chance to ask questions and take notes. Explain that you will be taking notes during the interview. Press the interviewee for a specific answer if he/she appears to be avoiding a question. Pause. If there is a gap after an answer, don‟t rush to fill it. If you remain silent the candidate will often go on to offer further information that may not otherwise come to light. Ask “Yes/No” questions. Take notes immediately after the candidate has made a slip up. It is best to put your pen down if you are being told about something difficult or personal. You may wish to note it later. Ask for information that is on the CV unless you need the candidate to expand on it. Make assumptions or guess answers. Patronise the interviewee. Ask leading questions. Criticise. Be aggressive – you will rarely see the best side of a candidate by being aggressive. Ask overtly complicated or gimmicky questions.

    

Don’t:  

      

Remember the 80:20 rule A good interviewer will be listening for 80% and talking for 20% of the time.

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What are the problems with interviews?
However objective you believe you are being, there are times when things go wrong in interviews. Sometimes this is due to the inexperience of interviewers, their lack of training or errors of judgement.  Asking discriminatory questions The CIPD has made the following suggestions to avoid this: (i) (ii) (iii) (iv) (v) Ensure a clear job description has been defined and clear criteria set. Check that there is undisputed justification for any absolute criteria. Ensure the interviewing staff have been trained or otherwise briefed. Ensure that interviewers are aware of the criteria being used. Ensure all candidates are asked the same questions about matters that might create a problem – for example, overtime or travel commitments. Do not ask questions which are based on stereotyped assumptions.

Additional problems may arise in respect of the way in judgements are formed by the interviewer(s). In particular, the following issues need to be avoided.  Fear A candidate who is different in any significant way to you has the potential to create fear, even if it is fear of offending them because you do not understand their sensibilities. The natural reactions to fear are fight, flight and fright: – – Fight – you may concentrate excessively on the ways in which the candidate is different to you. Flight – you may reject the candidate at sift stage because that avoids any potential for conflict or may find ways to justify rejecting the candidate to avoid imaginary problems later on. Fright – you may become consciously or subconsciously uncomfortable with the result that the candidate is treated disadvantageously.

– 

The halo effect You see the person in an “exalted” way because they have the same hobbies or interests, belong to the same golf club, went to a highly-rated school, are smartly dressed, pretty, etc. These perceptions can cloud your perception and judgement and the candidate gains a halo, irrespective of how well fitted or not they are for the job for which you are interviewing.

The horns effect This is the opposite of the halo effect. You take a dislike to the candidate, their personality, the way they dress, etc. This alters your perception of the candidate and no matter how good that candidate may be at doing the job, they gain a set of “horns”. If you adopt this perception of the candidate, it is very difficult to shake off. This is why it is often important to have more than one person interviewing; it helps to avoid scenarios such as the halo and horns effects happening.

Stereotyping Your perception of a candidate alters because the individual is a woman, black, Asian or disabled, etc. Some societal stereotypes are: – That a woman‟s place is in the home

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– – –

That it will be difficult to get a group of white workers to work under a black or Asian boss That disabled people will present more problems than non disabled employees That an older worker will be less motivated and less creative.

Interview training will help to remove some or all of these preconceptions but it very much depends on the individual interviewer and their perceptions about society and the groups that live within it.

Should we use assessment tests?
A growing number of recruiters are using a variety of testing techniques as part of the selection procedure. These tests supplement the traditional interview as a selection method and include a variety of styles and content. Of particular importance are psychometric tests, designed to test an individual‟s mental capacity and process. What sort of assessment tests are there?  Intelligence tests These test an individual‟s intelligence quotient (IQ) or their capacity to think logically, quickly and/or in a problem solving situation. You must use these tests in the right context and view them as part of an holistic process and not as a stand alone measure of intelligence. This is because a high IQ does not necessarily mean that the individual has the ability to carry out the tasks and responsibilities of the job or the personality to get on with people at all levels within your organisation.  Personality tests You might use these to gauge the candidate‟s capacity to relate to and get on with other people, what motivates him or her and how ambitious they are. These tests include the 16PF test (16 scales which measure factors that influence behaviour) and the OPQ (occupational personality questionnaire – a series of questions which test the individual‟s attitude to certain situations). As with intelligence tests, these should be used in conjunction with other tools.  Aptitude tests These are useful if you want to assess a candidate's ability to do some aspect of the post you are trying to fill. Aptitude tests include spatial reasoning and manual dexterity tests.  Proficiency tests Like aptitude tests, proficiency tests assess the ability of the individual to do the tasks involved in the job. The best known example of this is a keyboard skill test for typing speed and accuracy. How should we use assessment tests? Although recruiters are increasingly making use of psychometric tests as part of the selection process, they cannot always be relied upon to be valid and reliable. You should be aware of the following points:   Scoring highly on the tests above does not mean that the candidate will necessarily be good at carrying out the tasks and duties of the job. Use such tests with care. You should be qualified and trained to carry out the tests. In some cases you may need to be a member of a professional body – for example, the British Psychological Society – which regulates the use of tests.

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 

Tests are not always reliable, as a candidate can try to choose answers that will give the best results. This can leave the tests open to manipulation. The nature of the tests often makes it difficult to remove bias. Women and some ethnic minority candidates tend not to perform well in some tests because of the way some of the questions are designed. This infringes equal opportunities legislation that was brought in to protect individuals against race and sex discrimination.

To promote best practice standards in administering selection tests, the CIPD have produced a guideline document on psychological testing. This includes the following points about the way in which they should be used. You should:  Train everyone responsible for the application of tests, including evaluation, interpretation and feedback, to at least to the level of competence recommended by, for example, the British Psychological Society. Satisfy yourself that it is appropriate to use the particular tests before incorporating them into your decision making process. Satisfy yourself that a test actually measure factors that are directly relevant to the job. Satisfy yourself that all tests have been rigorously developed and that claims about their reliability, validity and effectiveness are supported by valid statistical evidence. Take care to ensure equality of opportunity among all those individuals required to take tests. Use more than one test before making a decision, particularly if you are relying on a personality test.

    

In summary, although psychometric tests have their place and can be useful in helping to select the candidate for the job, they must be used holistically, taking into account the entire recruitment and selection process. You must be qualified and trained to apply the tests and you should ensure that bias and subjectivity do not cloud your judgement.

When should we use group assessment?
One way of assessing certain characteristics is to apply group assessment (or selection) methods. Group assessment methods are used to assess how the candidate:     (a) (b) Behaves in a group situation and how he or she interacts with others Responds to a realistic situation Thinks and reacts to problems Allows strongly held opinions to affect his or her judgement. Leaderless groups – This is where you ask six to eight candidates to discuss a general topic of interest. The discussion is usually recorded and/or observed by assessors. Command or executive exercises – Here, you give the group a real case study and each candidate is assigned a role they must fulfil. Each candidate then outlines their views on the situation and how the particular problem can be solved. Group problem solving – Here, you give the group a task to do. The group does not have a leader and must organise its own activities to reach an effective solution to the problem.

There are broadly three types of group assessment method:

(c)

These activities are usually undertaken within an assessment centre – a structured set of activities, tests and interviews with trained observers.

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The advantages of group assessments include:   It can be used for a variety of jobs, and is particularly suited to senior management positions and other roles which involve team working It can be used as an additional selection tool to support interviews and psychological tests. Individuals may be unwilling to take part Individuals may not perform to the best of their ability in such a competitive situation An individual‟s contribution can be difficult to measure, particularly if all candidates contribute equally It is expensive and time consuming Assessment can take a couple of days and candidates may find it difficult to be available for this length of time.

The disadvantages are that:     

When should we take up references?
All forms of application require candidates to supply references, usually two and including at least one from the candidate‟s current or last employer. You will probably take up references once the preliminary selection has been made, as a way of confirming the choice and obtaining independent information about the candidate‟s suitability. However, some organisations insist that they are taken up before the interview, so that any issues arising from reference can be explored during the interview. References can be helpful, but again, they must be treated with caution. There is usually an unknown factor with references because you do not know the precise relationship between referee and candidate. Many references are impartial and accurate, but there is the possibility that they may be biased:   in favour of the candidate due to a personal friendship, or because the referee wants to get rid of them! against the candidate due to a personal dislike, or because the referee wants to keep them!

You may get a more informative reference if you telephone the referee. In this way you may be able to form a better impression of the referee‟s true opinion of the candidate. Note that you need the applicant‟s consent before taking up a reference. This is usually stated on the application form and the candidates signature on the form provides the necessary consent.

G. MAKING THE JOB OFFER
Your selection task is to compare each candidate against the person specification and decide who offers the best fit. It is important to wait until you have seen all the candidates before making a decision. However, the decision should be made without delay, as a good candidate may receive another offer or may go cold. It is common to place candidates in three categories: 1. 2. 3. The preferred candidate The other acceptable candidates in order of preference The candidates who did not meet the essential criteria.

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First get in contact with the preferred candidate. If he or she wants time to think about the offer, you can contact the Category 3 candidates whilst you are waiting. You contact the Category 2 candidates only when you have negotiated an agreement with the preferred candidate. If you cannot reach an agreement with the preferred candidate the first of your Category 2 candidates then becomes the new preferred candidate. You want to keep good relations with the Category 2 candidates, just in case the arrangement with your preferred candidate falls through – for example, because they turn out to be unsuitable on medical grounds. You may know from your discussion with the candidate what pay and conditions package is likely to be acceptable. If there are any qualifying conditions these must be made clear, – for example, subject to references, health check, etc.

What do we put in an acceptance letter?
Once an offer has been made and the successful candidate has accepted the position, send a letter giving all the information the new employee needs. This is likely to include the following, (a) Starting instructions     Time – Usual start time or a little later to be sure that those necessary will be available to meet the new employee? Place – Which entrance? Report to reception or go to a specified office or department? Transport – Where can you park? What public transport is available? Appearance – Is there a uniform required? If so, from where should this be collected? If not, is there any particular dress code that the employee should know about? Documents – Are there any specific documents that the employee will need to bring? Starting salary and when it will be due for review Overtime arrangements (if applicable) Leave allowance Details of car, health insurance, pension, etc. and any other “perks” to be included in the package. Medical – Is the employee expected to have a medical? Catering – What facilities are available? If most employees bring their own lunch as there are no facilities either nearby or on the premises this should be mentioned.

 (b)

Package details    

(c)

Other requirements  

A lot of written information can be provided with the formal offer of employment and the above information, in documents such as:    Statement of particulars of employment which must be provided to new employees; this is a statutory requirement in many countries Employee handbooks or intranet site, which some companies provide Safety policy statements (another statutory requirement)

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 

Pension scheme booklets Job description.

H. EMPLOYER BRANDING
The marketing process of „branding‟ is well established, but it has now become a significant aspect of 21st-century HR management for many large organisations, particularly those working in tight labour markets.

Why should we be concerned about our employer brand?
Employer branding is concerned with the image of the organisation and how attractive it is to work for – and this will have a significant impact on the type of candidates who apply for jobs. Your organisation has an employer brand whether you like it or not. Some organisations have a very poor employer brand image as a result of their treatment of existing staff, potential staff and their generally poor reputation in the community. You may wish to position yourself as an „employer of choice‟ because you wish to become more attractive to certain sorts of candidates. This should increase the number and quality of applications, although it may also increase the number of unsolicited applications you receive.

How do we influence our employer brand?
Clearly, if your organisation is already well known and has a good brand image, branding yourself as an employer of choice will be easier. There are several stages: (i) (ii) Establish your current image in the labour market. Identify how your employment offering is different to that of other organisations. Yours may be a dynamic and creative organisation or you may offer high reward, friendly working conditions or fantastic staff development. Many public sector organisations have emphasised the job security element of their brand or the positive impact that their employees can have on the lives of other people. Then repeatedly emphasise these unique selling points in advertisements, in your recruitment materials, on your recruitment website and in all your other public facing recruitment activities. Stories are going to be particularly important, so small case studies of individual employees are very valuable in reinforcing your employer brand image (see the following case study).

(iii)

What it we can't live up to an employer brand image we would like? As with commercial branding, it is pointless trying to establish an employer brand that is clearly false. Even if you were to convince people, when they joined your organisation they would find out the truth and either become difficult members of staff or leave. Clearly neither outcome is desirable. It would be a breach of the psychological contract. The answer is to change the reality of the way your organisation treats its people but that is for another chapter.

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Case Study 4: Employer Branding Extract from graduate recruitment website for engineering company Balfour Beatty Name: Fowad – Civil Engineering MEng (Hons) Graduate Design Engineer, University of Birmingham, UK Employer: Balfour Beatty Rail, UK Working for Balfour Beatty Rail, I get involved in a lot of different projects. The main thing I'm working on at the moment is an overhead line electrification system. So far this has seen me designing specialist foundations and small part steel work, as well as carrying out structural assessments and producing computer based models. At the same time as this, I'm working on a track sectioning location project at Farringdon, foundations work at Bow Junction and some Portal Protection Structure Design in Scotland. I'd say that this variety is the best part of my job – not only in the design work that I do, but also in terms of visiting sites, dealing with customers and working with other operating companies across the group. The training that I've received has been excellent. The older members of the design team are pretty envious! I've taken a lot of courses about the industry, as well as some learning development modules that will eventually count towards an MSc. But the courses I've found the best have been the ICE training days. These are designed to help us meet our development objectives and they also provide a great day out. There's also a lot of support to help us reach chartered status. The direction I feel my career taking is more towards liasing with the customer and other operating companies onsite. And I can see myself as a well-rounded design engineer, managing my own project and working far more independently. Source: http://graduates.balfourbeatty.com/employee-stories.aspx

I.

E-RECRUITMENT

Like many aspects of e-business, e-recruitment expanded significantly during the first decade of the 21st-century and continues apace in the second decade. A significant proportion of European employers now use some form of electronic recruitment. There are many different ways you can advertise through the Internet. Your organisation‟s own corporate website may have a vacancies page or you may choose to use one of the huge online vacancies databases. E-recruitment does not necessarily mean that you even have to advertise online yourself. There are many recruitment websites which store large numbers of candidate CVs which, for a fee, can be searched and will link you to candidates who have posted their CVs with a view to finding new employment of the type you are offering. There are a number of advantages to using e-recruitment, but these can come at a cost, as the following table demonstrates.

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You should obtain      Cheaper advertising Better corporate image Easier recruitment administration Faster recruitment A wider reach for your advertisements

However you may get      Large set-up costs A somewhat impersonal process The need to retrain staff handling applications An unrealistic expectation of how fast the process will go Missing some candidates who do not favour online recruitment, some of whom may be in naturally disadvantaged social groups Too many unsuitable applications Technical problems Concerns about the security of personal data.

  

Better targeting of your advertisements An easier process for potential applicants Security of candidate information.

  

If you use an online application system, some of the improvements could be quite significant. However, as long as you are still reaching the same people, the quality of applicants will remain the same – you are just fishing in the same lake, but with different fishing gear.

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Chapter 5 Learning and Development
Contents
Introduction

Page
97

A.

The Value of Learning What is the purpose of learning? What motivates adults to learn? Is learning always an individual activity? How important is feedback?

97 97 97 98 99

B.

Domains of Learning How do we develop skills?

100 100

C.

Learning, Training, Development or Education?

101

D.

Learning Theories How do people learn? What is the experiential learning cycle? Do we all have a preferred learning style?

102 102 102 104

E.

The Training Cycle Why is Learning Needs Analysis important? How do we assess learning needs? What do we do at the design stage? How does a training plan fit with other HR planning?

106 106 107 108 108

F.

Training and Development Methods What are the on the job methods? What are the off the job methods? What one-to-one methods are available? Which are the most effective methods? How do we evaluate learning?

109 109 110 112 117 118

(Continued over)

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G.

Employee Induction

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H.

Roles in Training and Development

119

I.

Management and Development

120

J.

Personal Development What goes into a personal development plan? What is continuous professional development?

120 120 121

K.

The Learning Organisation What is a „learning organisation‟? What is knowledge management?

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INTRODUCTION
People need to be motivated and given the opportunity to perform. However, they will not perform well without ability as well. Ability is not just natural talent; it is mostly learned. An appropriately trained and developed workforce can mean the difference between success and failure. Organisations are always changing – technology improves, organisational values change, processes are streamlined, business strategies change and customer needs change. If knowledge, skills and attitudes are not updated, employees will not perform well. By the end of this chapter you should:   Understand the theory and practices of learning and development in organisations Be able to apply learning theories to the design and delivery of cost effective induction and occupational training/development events.

A. THE VALUE OF LEARNING
Learning is one of the key factors ensuring the effectiveness of your organisation. For the present, you need employees who have the necessary knowledge, skills and attitudes to do the things you need them to do, in the way you need them to do it. For the future, you need a supply of these same attributes, tailored to future needs, which will enable your organisation – or by extension, the whole economy – to meet its medium and long term goals.

What is the purpose of learning?
From your organisation‟s point of view, the purpose of learning is to maximise:   Efficiency and effective performance – by getting the most productivity out of each employee. Innovation – sharing of best practices and developing the adaptability of your workforce and the organisation as a whole. Promoting problem solving and creativity. Knowledge sharing and knowledge management. Quality – providing goods and services that are fit for purpose. The use of existing resources and equipment to that end. Motivation – job satisfaction, engagement and morale. Health and safety at work.

  

However, not only are you looking for learning at the level of the individual, but also from teams and the organisation as a whole. Note that learning is not necessarily the solution to all problems, although it can certainly be applied to resolve problems of effective performance. However, such problems may need to be addressed by alternative courses of action, such as organisational change, the application of new technology or working practices or even the redeployment of some staff.

What motivates adults to learn?
If you ask yourself why you are studying this course, you may use terms such as “want”, “wish” or “need”. In other words, you see it as a means to an end. We each want things that provide us with satisfaction or pleasure and we turn away from things that are offensive and cause us displeasure or pain. We can see then that motivation is a key factor in the learning process.

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What this means for a teacher is that it is necessary to provide conditions that will lead people to want to direct their efforts towards the objectives which have been set. For a learner it means looking for a good reason to learn. Motivation to learn can take two forms: (a) Intrinsic Intrinsic motivation does not depend on a reward outside the activity, but just the successful completion of the activity itself. Examples of intrinsic motivation include:   The satisfaction of our curiosity over something that is unclear or unfinished, such as the completion of a crossword puzzle. The achievement of competence. Generally, we become good at those things that interest us, for example, we set ourselves targets to achieve, such as a “personal best” time for a race or other sporting event. A means of knowing how well we are doing – watch the players around a pinball machine.

 (b)

Extrinsic An extrinsic reward is supplied from outside the activity. Examples include:   Praise or criticism. Financial rewards at work. Note, though, that the motivational value of this type of reward is not easy to assess – many surveys on why people stay with a particular organisation and work hard while they are there, have found the pay factor is commonly placed 6th or 7th, after such rewards as security, interesting work, welfare and co-workers.

Is learning always an individual activity?
Not necessarily. (a) Individual learning In developing individuals, the teaching role is rather that of coach or counsellor. One-to-one training is usually carried out on the job by someone expert at a task instructing someone else who is trying to learn it (often referred to as “sitting next to Nellie”). To carry this out successfully we need to consider what this involves. Coaching is essentially the process of setting tasks, monitoring performance, reviewing and learning from experience:    Setting tasks involves having a learning target, or objective, which is appropriate to the learner‟s current ability and needs. Monitoring progress entails having regular meetings to discuss progress being made towards achieving the target. Reviewing and learning from experience includes reviewing when tasks have been completed and carrying out a post-mortem to decide: (i) (ii) (iii) Why things went well How it might be possible to improve performance in the future How anything that did not go well might be avoided in the future.

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(b)

Group learning In group learning, the process is generally controlled by a professional teacher or trainer. It invariably takes place “off the job”. Methods that encourage learning in the group situation include:  Discussions – It is vital that people should learn to express themselves orally, in a controlled manner, within a working group. In a discussion group the experience of members is regarded as important. The group functions to encourage members in speaking, listening and clarifying thinking. The role of the group leader is to inspire, guide, involve and summarise. Syndicate work – For this, the group is divided into small sub-groups, each of which is given a definite task or topic to explore and to report back on later to the whole group. This can involve reading, discussing, interviewing, role playing and the provision of a written report. An extension of this method is project work, where a project is undertaken by the group, with each member performing some specific task(s), their respective findings being co-ordinated before the completed project is presented. Case history methods – A situation or incident is described up to the point where action is about to be taken by one or more key people. At this point the group is asked to decide what they would do in this situation. Role playing – Group members are given particular roles to play and are then required to act out their parts, behaving in the way they think their given characters would. Following this, points arising are discussed. This type of activity is particularly useful in the development of interpersonal skills. Tutorials – Where small groups are allowed a good interchange of questions and answers in an informal setting.

How important is feedback?
You need feedback to know whether you are getting things right. You can give yourself feedback – if the thing you are trying to do does not work, then this constitutes negative feedback and you have to try again. Sometimes, though, we need feedback from others, to know if what we are doing is working and, in some instances, to know how to improve (although, strictly, this is then more than feedback). Without this, we can incorporate mistakes into our performance, which can then be very difficult to unlearn.  Intrinsic feedback is that which the learner obtains through their own actions. For instance, when you carry out a cross-total check on a table of figures and find that it is correct you do not need someone else to tell you it is right. Extrinsic feedback is information that the teacher gives to the learner about the effectiveness of their performance. If, for example, you were teaching someone oral presentation skills, it might be necessary to tell them to speak more slowly or to restrict the movement of their hands.

In skills learning, as we move, say, from the stage where a typist knows the positions of the keys and which fingers to use on which parts of the keyboard, to where they reduce their errors to less than 1% and begin to increase their typing speed rapidly, they need to rely less on extrinsic feedback and more on intrinsic. At this point, learning becomes self-evaluative. Is feedback a motivator? It should be. It ought to increase your desire to continue on your learning journey. When you submit a report, for example, you expect to get a quick and useful response, giving you an assessment of your efforts and encouragement.

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Is feedback always negative? It does have to be. Positive feedback is reassurance that we are getting things right, even if we have not totally mastered the whole skill at the time. Those talented in giving feedback will often have learned how to turn negative language („you are getting this wrong‟) into positive language („there is a way to make that better‟). What is the difference between formative and summative feedback? Formative feedback shows how far the learner has progressed with his or her learning journey and gives ideas on areas to improve. Summative feedback certifies that the learner has reached an important place in the learning journey, usually the conclusion. Thus, tutor feedback on a written assignment would be formative feedback, whereas passing the end of course examination would be summative feedback.

B. DOMAINS OF LEARNING
Learning is concerned with bringing about a change in three areas, often known as KSA:  Knowledge – things that the employee must know about or understand, such as what electricity is and how electrical components work. Apart from the value of the knowledge in itself, this may be underpinning knowledge for a skill – for example, knowing how electrical components work would be necessary for someone to become a skilled electrician. Skills – behaviour which can be seen at work, such as the ability to wire up a house. Attitudes – underlying values or feelings, such as towards health and safety or customer care.

 

These three attributes can be drawn together under the more holistic term „competence‟. A competency framework describes the behaviours that an employee must have, or must acquire, to achieve high levels of performance.

How do we develop skills?
A skill is the ability to do something at a certain level of performance – quality, quantity or creativity. It is often used to describe specialist movements or techniques, such as dancing, operating machinery or horse riding. However, it is not confined to such practical activities. It can also mean mental reasoning skills; skills with the senses (such as perceiving) or interpersonal skills, such as social interaction, working in groups, presenting information and asking questions, etc. Initially, skills are usually learned by following a set of instructions. For example, if you have learnt to drive, consider how the instructor talked you through the process. These instructions may be written down or spoken, or they may be learned simply by watching others perform the same activity, as a demonstration. Young children acquire skills constantly by watching, mostly, their parents – sometimes deliberately, as when learning to use a pencil or tie shoelaces; sometimes just from general observation, as in learning to use a knife and fork. However, there are two important elements that lead to the improvement in performance necessary to fully develop a skill.  Practice We need to try and retry to become proficient at most skills. It can take a lot of practice over a long time to master some skills. Some we may never learn completely, no matter how hard we try, such as playing the piano, so whilst we may be able to do it to some level of performance, we might not claim it as one of our skills. It is also

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invariably the case that, if we do not practise the skill for a while, our technical proficiency decays.  Feedback As noted in the previous section, receiving feedback on performance is essential.

C. LEARNING, TRAINING, DEVELOPMENT OR EDUCATION?
What is the difference between training, learning, education and development? The distinctions are not clear cut. However, the following gives a broad picture: Training Why Employer needs Achieve fairly specific changes in behaviour determined by employer Learning Competencies Defined either formally by the employer or informally by the learner Education Certification Usually recognises a growth in intellectual capability, conceptual and social understanding Largely classroom Syllabus based Combination of all methods Development Releasing of potential

How

Various Depends upon content

Various

Conscious Conscious/ unconscious Led by Instructor

Conscious and unconscious Learner

Conscious

Conscious and unconscious No-one – it is too all-encompassing to be led Everywhere

Lead or awarding body

Where

Away from the workplace At the times determined by employer

Workplace or closely linked Ad hoc

Educational establishment At key points in employee‟s career

When

Continuous and long term

Which is the best? Each has its place. Organisations are increasingly favouring employee led learning over mechanistically provided traditional formal training programmes. Learners are increasingly being encouraged to take more responsibility for their own learning with efforts being made to develop a climate within the organisation that supports effective and appropriate learning.

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Likewise, once an employee is qualified, the employer often requires the employee to practice continuing professional development (CPD) to keep up to date with changes.

D. LEARNING THEORIES
Learning results in a relatively permanent change in an individual‟s knowledge, skills or attitudes and it can usually be observed by changes to a person‟s behaviour or capability. Examples of learning include operating a piece of machinery, such as a computer (manipulative skills), knowing the disciplinary process of the organisation (knowledge) or having the ability to negotiate a change in working practices with staff representatives (interactive skills).

How do people learn?
There have been a number of different approaches taken to answer this question.  Behaviourism developed through experimentation with animals. Pavlov advocated the stimulus-response theory (or classical conditioning) (1927). He observed the way dogs salivated at the sight of food and found that the dogs could be conditioned (taught) to respond to a ringing bell. Skinner developed his ideas on operant conditioning (1953). His research into rats showed that positive and negative reinforcement could change their behaviour. Positive reinforcement (reward) was given to the rat to promote responses and negative reinforcement (taking the food away) was applied when the rat displayed non compliant behaviour.  Cognitive theory (Gestalt theory) is based on the belief that learning is a holistic process involving the mind, body and spirit. Cognitive theorists or humanists believe that humans have the ability to learn and think, store this learning and thinking and then apply it to specific situations. Experiential learning was developed from the work of Carl Rogers (1967). He also believed in learning as a holistic process and advocated the importance of experiential learning (learning by doing) being adopted in the workplace because it is one of the most powerful ways in which individuals learn. Kolb (1974) built on the work of Rogers and formulated the experiential learning cycle.

What is the experiential learning cycle?
Kolb‟s cycle reflects the fact that learning is a continuous process and the approach is now used widely as a means of managing learning. It stresses the need to learn from practice and feedback, so that the process comprises a continual series of circles based on experience, rather than a sequential linear series of events. Figure 5.1 below illustrates this process.

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Figure 5.1: Kolb’s experiential learning cycle

Application

Experience

Conceptualisation

Reflection

Experience Concrete experience is the basis of the cycle. We use experiences that we have had in the past or take experiences that are new to us, to further our learning. These experiences may be structured and planned or may be "accidental", in that they happen to us in the course of our work or our everyday living. They may be experiences which happen to us on our own or involving others.

Reflection Having been through an experience, the next stage of the cycle is about examining it to identify what actually happened, what we became aware of and how we felt about it. It is also at this stage that we begin to make an attempt to understand what the experience might mean for us, in terms of its significance, whether good or bad – if the experience seems to be something which tends to happen to us frequently and what this means in terms of our learning to deal with it. Sometimes you will be able to go through this stage by thinking things through, consciously or unconsciously, on your own. At other times, you may find it helpful to talk your ideas over with someone.

Conceptualisation Having made the experience "coherent" through reflection, we then go into the phase of conceptualisation. Here we generalise from the individual experience to start to look at how it can be used in other ways, perhaps identifying principles or trends. Can any of the ideas that emerge be applied to similar situations? What common behaviour patterns might we begin to see emerging?

Application We are now ready to test out our analysis of the experience by applying the ideas and principles identified. Application is active experimentation by modifying our behaviour after making decisions about how this might best be done and then beginning the learning cycle again, by putting ourselves in the position of experiencing a situation afresh.

This cyclical process needs to be completed in full for effective learning to take place. If, for example, one is tempted to jump from experience to application, without fully analysing and conceptualising the experience, it is unlikely that any new behaviour will be effective or

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helpful, as there will be no true understanding of why things happened as they did and no sense will be made of the data, which the experience generated. A fundamental underlying principle in the Kolb model is the responsibility of the learner to identify what stage of the process they are at and hence, to consider what seems to work best before moving forward. The answer to this is going to be very different for each of us, as our individual personalities, strengths and weaknesses are brought to bear in the learning situation.

Do we all have a preferred learning style?
Kolb and others assert that: "As a result of our hereditary equipment, our particular life experience, and the demands of our present environment, most people develop learning styles that emphasise some learning abilities over others." Consider your own learning styles; they will provide you with a useful tool for your own personal growth and enable you to set up the best possible learning experiences for yourself. You may also be able to develop strategies that help you to become stronger in styles that are less natural to you. The work of Kolb has been refined by Honey and Mumford (1986) to develop four categories of learning styles:     The activist The reflector The theorist The pragmatist.

The four styles are described below in terms of the general characteristics associated with people of each type. Note that these are “ideal types” – generalised statements applying to persons who might fit the style perfectly. Such ideal types can rarely be applied to individuals in their entirety. Rather, you will probably find that different aspects of each apply to you as an individual. The value of this methodology lies in its ability to develop understanding of behaviours (in this case, learning) by classifying them into broad groups. Honey and Mumford also developed a comprehensive "learning styles questionnaire", designed to enable individuals to identify their preferred natural learning style. However, even without completing this, it is possible to give careful consideration to the four styles and to consider yourself in relation to each one. (a) Activist Activists absorb themselves fully in new experiences and tend to jump in at the deep end. They are open minded; enthusiastic; gregarious, flexible and thrive on challenge. The down side to this approach is that they act first and consider the consequences afterwards. They have “butterfly” attention spans, get bored quickly and want to move on to the next activity. (b) Reflector These people like to stand back and take it all in. They may take a minor role in discussions but will assimilate other people‟s ideas readily. They are likely to be thoughtful and methodical and will demonstrate good listening skills. The weaknesses of this approach are that they are reluctant to participate, may be cautious and are endlessly revisiting the past.

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(c)

Theorist These people are able to integrate their observations into theories or patterns. They will be logical; rational, objective and disciplined. The disadvantages of this style are that theorists will have a low tolerance for chaos. They will probably have a tendency towards perfectionism and an intolerance of intuition and subjectivity.

(d)

Pragmatist Pragmatists like to apply theories and concepts to practice. They like new ideas and seek them out and test them. These people are likely to be practical and realistic. The weaknesses could be that these types are task oriented and like to get on with things without always testing the options.

So can you identify your preferred natural learning style, and how can this help you? The first thing to note is that there is no "best" style. Each has its merits and they relate to different aspects of the learning process. For example, you may have already begun to make some connection between the four learning styles and the four stages of the experiential learning cycle:     The activist will be most comfortable and derive most learning, from the experience stage of the cycle. The reflector will be effective in the reflection stage. The theorist will be most able to generalise and draw conclusions in the conceptualisation stage. The pragmatist will be most effective in taking action in the application stage.

People develop by building on their strengths and tackling their weaknesses. Understanding your strengths and weaknesses, in how you learn, enables you to identify those situations in which learning is most naturally effective and those where you need to work harder at ensuring that learning takes place. For example, as you work through this course (or any other studies or new experiences) you will encounter knowledge and skills that have to be learned. Appreciating your learning style means that you should be aware of what approach works best for you and which methods and opportunities best facilitate your learning. So, if you are a pragmatist, you may want to think constantly about what things mean in terms of their application, whereas if you are a reflector, you need to sit back and analyse the experience you have gone through. You may also want to reflect on the types of learning opportunity which best suit you. Pragmatists will learn best by actually applying their knowledge and skills at the first opportunity, so on the job training may be most appropriate, whereas reflectors may gain more from courses where there is time to take in and reflect on new experiences. You also need to be aware of the learning styles with which you are not so comfortable, but which may, nevertheless, be necessary from time to time. For example, as part of this course, there is obviously going to be a need to understand theoretical approaches to particular topics. If you are not naturally a theorist, you need to consider how you can accommodate that style of learning when necessary – perhaps by setting yourself clear and manageable targets that enable you to absorb theoretical concepts in digestible pieces. In addition, you may now or at some time in the future, be involved in facilitating learning for others. This may be in the formal role of a trainer, but it can also be an almost unconscious part of management. It is important, therefore, that you are able to identify the way in which others learn most comfortably, so that you can provide the best learning opportunities for them.

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For example, you may be in the position of advising someone on the kind of training or further study they could undertake. There is a range of options about the types of programme available and a key question will be about how the programme is delivered; the bias towards theory or practice, the degree of research necessary, the amount of interaction involved, etc. Awareness of learning styles can help in considering the most appropriate approach.

E. THE TRAINING CYCLE
The Training Cycle is a model of structured learning that suggests we need to start by finding out precisely what we need to learn and any other characteristics of the learner or their situation that might be relevant to the design of learning, such as motivation, time constraints and resources. Then we design one or more learning activities to meet that learning need. Thirdly, we implement the learning activities and finally, we evaluate whether the learning needs have been met. If they have not been fully met, the cycle starts again by identifying what learning needs are still outstanding. Although life is not always this simple, the Training Cycle model is an extremely useful starting place and has been widely used in learning and development. Figure 5.2 : The Training Cycle

Evaluation of learning

Learning needs analysis

Delivery

Design of learning intervention

Why is Learning Needs Analysis important?
Misdirected training will waste time and resources and detract from the credibility of learning as an activity in organisation. Training needs must be carefully researched because:     Training can be expensive and a faulty analysis of what is required can result in a significant waste of your organisation‟s resources An accurate training needs analysis enables limited training budgets to be directed towards activities which will achieve maximum benefits for the organisation Accurate information about training needs is essential to the specification of learning objectives and the design of appropriate training programmes Your organisation‟s training plan should be based upon the assessment of training needs and their prioritisation.

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How do we assess learning needs?
You have a choice between two approaches to the identification of training needs:   Assessing the needs of the individual Assessing the needs of the organisation.

These are not mutually exclusive and most organisations will have procedures in place to assess the needs from both perspectives. (a) Individual needs Within any group of employees doing the same work, there will be differences in individual needs for training, influenced by differences in aptitude or previous experience. These differences need to be identified if resources are not to be wasted on a “scatter gun” approach to training programmes, based solely on generalisations about the whole workforce or particular occupational groups. The main methods of assessing these needs on an employee by employee basis are:    The performance appraisal process – each of your employee‟s individual learning requirements being identified and discussed at the annual appraisal interview. In the absence of a formal appraisal process, by examining an employee‟s individual output and quality records. By questionnaires, usually with a checklist of training topics, which ask employees individually whether they feel their work would benefit form further training. Supervisors or managers are also usually asked to complete a similar questionnaire for each member of their work group.

In both the initial analyses and in subsequent training plans, it is helpful to distinguish between immediate training needs within the employee‟s current job and longer term development needs. Employees‟ suggestions about their own training often focus on the latter, citing courses and wider experience, which might assist them in gaining a promotion or general professional qualifications. Supervisors‟ views about their staff usually concentrate on training to improve current job performance. An effective training analysis takes both types of need into account and produces a training plan that strikes an acceptable balance. (b) Corporate needs By corporate needs, as opposed to individual needs, we are concerned with learning designed to meet organisational objectives – at section, departmental and whole organisation levels. The focus is on groups of staff and their common needs, as defined by management. There are three particular aspects to this:  A concern to improve performance, whether derived from problems of effectiveness or not, which may require a corporate response, such as time management or team building A concern with consolidating or introducing new core values, such as quality management or customer service orientation A concern to ensure the effective introduction of new products/services and/or working practices, such as the introduction of a new line in a shop, a new financial management system or the use of new equipment.

 

Another way of viewing the corporate/individual distinction is to consider it as the separation of job-centred or occupational needs, as opposed to employee centred needs.

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The corporate approach focuses purely on the needs of the job, irrespective of the individual filling it. The individual is, therefore, viewed collectively with others doing the same job. For example, it may be determined that time management should be an obligatory programme for all staff in the finance department, regardless of their age, experience and actual performance (and whether or not they had attended a similar programme with a previous employer). Some participants might, therefore, consider it money unwisely spent, but the needs of the department as a whole are considered to outweigh that. Recognition of the corporate dimension to learning in this way, locates it as an integral part of management, at all levels in the organisation. It is a process, central to the achievement of organisational goals and cannot, therefore, be sidelined as the concern of the personnel department or its training section. Both the identification of individual needs and the consideration and identification of corporate needs are the responsibility of those with the responsibility for the performance of employees, as individuals and collectively.

What do we do at the design stage?
Once a learning need has been identified, the particular form of activities that will enable the need to be met must be considered. To do this, it is important to be clear about exactly what outcomes are expected – i.e. what are the knowledge, skills, attitude or behaviours which need to be changed. The relevant questions are:  What do employees need to know to perform their jobs well? This may range from background information about the organisation to very detailed technical knowledge about the individual work tasks. It should consider the future as well as present needs.  What skills or competences are required and to what level? In many instances, knowledge by itself (for example, the theory of a technical process) is not enough to secure acceptable performance and there is a need to develop the necessary practical skills to be used in the job.  What behavioural characteristics are needed? Although the general attributes of interest, commitment and enthusiasm are important for all jobs, for a training needs analysis this aspect needs more specific attention. There may, for example, be a need for some employees to develop a particular type or set of attitudes towards customer service, technical standards, work flexibility, cost consciousness or even working together effectively.

How does a training plan fit with other HR planning?
Training programmes should be implemented under a human resources plan that has identified both present and future needs on the demand side and matched them to resources on the supply side. The result of the match is identification of the training gap, which has to be bridged through a mixture of training existing staff and the recruitment of new staff with the necessary skills (see Figure 5.3). The training gap is the difference between what is actually happening and what should be happening.

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Figure 5.3: Human Resource Development Plan Present and future needs HUMAN RESOURCE PLAN

Present resources

Business plan

IDENTIFICATION OF TRAINING GAP

Human resource stock take

TRAINING PLAN AIMED AT BRIDGING GAP

F. TRAINING AND DEVELOPMENT METHODS
The choice of various methods of training is a key feature of effective employee development and needs to be built into the plan. Some skill and experience is required in identifying which method or combination is best suited to your situation. The basic distinction is between on the job methods and off the job methods.

What are the on the job methods?
Learning on the job provides learners with experience that is a combination of work-based knowledge and the development of skills. As the learner gains experience, the range and complexity of tasks they can undertake without detailed guidance increases. This process of learning can be delivered by several means. (a) Demonstration A preliminary to much learning by experience is for an experienced instructor to demonstrate to learners how to carry out a particular task. Demonstration is an essential preliminary to operating most machines and equipment. Such training is sometimes referred to as “sitting with Nelly” and the attachment of trainee managers to a more senior manager to observe negotiations or interviews, etc. is a similar approach. This approach has the disadvantage of not always providing the “learner” with an understanding of why something is done. “Nelly” often has no skills as a trainer and so is often unable to facilitate the learning process very effectively. In addition, the “learner” is prone to pick up bad habits as well as good ones. (b) One to one instruction Understanding and speed of learning can be improved substantially with effective instruction by an experienced instructor. This used to be called “coaching”. However, that term has been redefined to mean a much less directive means of one to one learning than instruction. Through one to one instruction, a trainee learns by carrying out tasks under guidance from an experienced person. The instructor gives guidance

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and feedback to the learner and provides encouragement and assistance in overcoming difficulties. A great deal of this one to one learning is provided on the job and, as such, is hard to distinguish from routine supervision. An ability to train employees is a basic supervisory skill, and staff who have supervisory responsibilities have a training need to acquire such skills. Learning to drive is usually done in this way. (c) Project work Assigning to learners the task of investigating a problem and analysing potential solutions to that problem is a popular method of learning in the office. Considerable knowledge of work practices and procedures can be gained, analytical and problem solving skills can be developed and, in some cases, the opportunity to apply knowledge gained at college is available. The advantages of this type of activity are that it is distinct from routine work, performance can be more easily monitored, and relevant and specific feedback may be provided Management training programmes frequently entail such project work. (d) Job rotation This can take the form of a series of relatively short term training sessions in a number of predetermined positions in different parts of a company. It is more likely as part of a programme for staff in junior positions who have been recruited recently. An alternative form is to transfer experienced staff to positions in functions or departments with which they may not be familiar, to widen the scope of their experience at later, rather than earlier, stages in their careers. This can provide a useful introduction into other functional areas of the business – for example, operational staff working with marketing staff. Head office staff often benefit from an understanding of operational level activities and vice versa. International companies often use this system to develop a cultural awareness that can be generated by working in different parts of the organisation. Job rotation can also offer staff the opportunity to develop management skills by running a smaller profit centre or strategic business unit. These activities are often vital to succession planning. (e) Attachment or secondment An alternative method of broadening the experience of staff who are undergoing development programmes is to provide for their attachment or secondment to other divisions of the same business or, in some cases, to other organisations. One advantage of this method is that it should go some way towards overcoming one of the drawbacks of relying on “home-grown” talent, which is that the organisation may lack an influx of new ideas brought in by staff who are recruited externally. Secondment to charities, other sectors, or work with suppliers or intermediaries can provide similar advantages. (f) Committees/quality circles Membership of these formal groups enables employees to interact with more experienced or more senior staff. Individuals can be encouraged to contribute, compile reports, etc.

What are the off the job methods?
Off the job development takes place away from the workplace, often in a specialist centre such as a college or training centre, but it may at the learner's own place of choosing (for example, at home) and his/her own time. The types of programme may vary from one day

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(or even part of a day) to a week or may be spread over much longer periods, up to several years to complete a major qualification. Again, there are a number of types of such types of training and development. (a) Short courses These courses are generally concerned with the development of specific skills. They may be:  Open – made up of course members from a variety of organisations. Whilst the content may not be tailored to the needs of your own organisation or even the industry, there is the advantage of exposure to other ideas and experiences, which helps to stimulate creativity and new approaches. Closed – courses that are developed for a specific organisation. The quality and inputs are controlled, so that the content of the course and the approach are tailored to the needs of the business. Company culture and team building can be valuable indirect benefits. Case studies – Here, trainees are presented with the task of solving simulated business problems described as case studies. Case studies can help to illustrate points that are difficult to explain by other means and they contribute to the development of problem-solving and analytical skills. In-tray exercises – Here, students are provided with such things as letters from customers, memos from staff, requests for information, etc. and they are observed working out how best to deal with this workload. Management games – The students are presented with business situations and data that they are required to analyse before making decisions. Their decisions are fed into a computer that gives a report that forms the basis for a new situation, which must then be analysed. Role playing – Here, trainees act out situations from prepared briefs. This is the technique most suited to developing skills in dealing with people. Feedback can be provided by means of video recording and replay. These exercises are timeconsuming, but are valuable because they recognise the importance of interpersonal and technical skills.

Particular techniques associated with short courses are: 

(b)

Longer education courses Courses like the ABE Diploma, MBAs and professional education are popular ways of developing technical and management know-how and skills. Usually open in nature, such courses are increasingly available in a variety of modes:      Distance learning, especially online Evening classes Intensive blocks Full time Day release.

(c)

Conferences, seminars and workshops Usually short, sharp inputs based on current topics, latest developments and updating sessions, conferences and seminars can be very valuable, though not always directly relevant to the organisation. They usually have the added advantage of offering the opportunity to network with others in your industry or profession.

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(d)

Programmed instruction Under this form of learning, there is no direct involvement of an instructor but programmed instruction is provided through a combination of:      Books, binders or prepared notes Audio cassettes or discs Video cassettes or discs Television programmes Online.

Learners can use these courses when they have time available, whereas other methods require programme attendance. However, there is restricted feedback from a human instructor, unless the instruction is provided at an Open Learning Centre where a facilitator may be available to give some assistance and answer queries. Developments in online learning are dramatically extending the topics, quality and variety of training materials available. (e) Outdoor/outward bound programmes Some organisations have included outdoor schemes to assist individual and group development. The essence of these programmes is to place individuals in unfamiliar situations, such as rock climbing or facing the rigours of outdoor living where they will face new and challenging tasks – for example, navigating over rough country, crossing rivers, building shelters, finding food, etc. So that development can take place, expert “enablers” guide the employees on these courses. Individuals and groups develop as they meet new challenges, and confidence grows as problems are faced and overcome. Supporters of outward bound courses argue that team building, leadership and problem solving skills developed “in the field” are readily transferred to the work situation.

What one-to-one methods are available?
There are also a number of approaches to development which involve a close one-to-one relationship between the developer and the trainee. These are usually of quite an intensive nature. (a) Coaching Although people disagree about precise definitions, coaching can be distinguished from other methods of learning because it is:       Essentially a non directive form of development, unlike others above Usually one to one, using a skilled coach Focused on improving performance and developing individuals‟ skill For the benefit of both the organisation and the individual Assumed that the individual is capable of learning Heavily reliant upon feedback and personal reflection on both strengths and weaknesses.

Coaching can be a specialist activity and the coach needs training in order to carry out the role effectively. Managers often take on this role, either in relation to their own staff or to others who are outside of their direct line responsibility.

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Many managers accept this as sound commonsense and have a genuine desire to play their part but for a variety of reasons, including time and work pressures, the disapproval of others or a lack of willingness to break new ground, the desire is not always converted into reality. However, there are advantages to managers in persevering to master the technique because it encourages them to assess their own attitude and practices towards the development of others. If we look at the relationship between sports teams or individuals and their coach, it becomes apparent that a successful team is associated with an effective coach. If the relationship between the team and the coach is poor then bad results follow. The same may be said of the relationship between a manager acting in the role of coach and their work team.  The coaching process The process of coaching can be considered under the following headings: (i) Setting tasks Tasks should be set that have a specific learning target, which is capable of being monitored; for example, dates for completion of identifiable parts of the task, the submission of reports etc. These targets should be appropriate to the learner‟s ability, experience and development needs. (ii) Monitoring progress Regular meetings should be arranged to discuss what progress is being made towards achieving the learning targets. (ii) Reviewing performance When tasks have been completed, a review should be carried out which addresses questions such as: – – – – What went well? What went wrong? How could we improve on this? What should we do differently another time?

By coaching in this way, trainees should learn how to improve their own performance in the future.  What are the coaching skills required? The attributes needed in the manager/coach are a friendly approach, an informed attitude and an acceptable level of experience, to obtain and retain the necessary respect and loyalty from their team. Coaching is a process of two way communication with its emphasis not on providing information, but on enabling recipients to achieve. The skills that are required of a coach include: – – – – – The ability to listen to and take notice of, others An awareness of the feelings and needs of others The ability to set clear, attainable goals The ability to help others identify their own strengths and weaknesses A willingness to be supportive at all times.

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(b)

Mentoring Traditionally, mentoring in the workplace has tended to describe a relationship in which a more experienced colleague uses his or her experience, greater knowledge and understanding of the work or workplace to support the development of a more junior or inexperienced member of staff. It does not usually focus upon essential technical job skills and is most often used for new or aspiring managers. The process is voluntarily entered into by both the mentor and the learner, and places the prime responsibility for learning clearly upon the learner, with the mentor guiding the learner in applying what they have learned and giving feedback on their performance. It differs from coaching because it is considerably less structured and less focused on a clearly defined set of behavioural objectives. The mentor can also act as a role model for the trainee and become a symbol of what they could achieve in the future. Thus, mentoring involves supporting the employee in a broad sense. The mentor‟s role includes being involved in:    Counselling Guidance and support Assistance with sources of information. Managing – by helping trainees to manage themselves Encouraging – trainees to achieve their targets Nurturing – their trainees Training – where appropriate Openness – between trainees and themselves Responsibility – by being responsive to trainees. Mentoring can provide benefits for both the trainee and the mentor and for the organisation. It helps trainees to find their feet more quickly and to establish a clear sense of their career path. Some of the benefits include: For the Trainee Improving self confidence For the Mentor The challenge of guiding a less experienced employee Gaining a different perspective on the organisation A greater knowledge and understanding of what is available.

The activities performed include:

Advice and guidance

Access to sources of information.

The mentor can help the trainee in a number of different ways, including: (i) (ii) Regularly reviewing the trainee‟s progress Providing opportunities for development, where there are gaps in the trainee‟s experience, knowledge or understanding

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(iii)

Providing contact with other people or sources of information, or other help for the trainee.

Mentoring need not take up a lot of time; about half an hour or so per week can be very productive but it provides an important link between training and the workplace, hence the mentoring role is a very important one. (c) Counselling Counselling focuses especially on feelings, and addresses predominantly personal problems or needs such stress, anxiety, anger management, career development, etc., usually on a one to one basis with a qualified counsellor. Such feelings can block rational decision-making and personal growth. They may be generated by incidents at work or at home. These feelings dissipate our energy as, for example, we have a need to understand the direction of our career, or we struggle with financial problems. Counselling is also a key tool for managing change. Counselling allows individuals to work through and come to terms with changes. The British Association of Counselling defines counselling as “helping people to help themselves”. A way of interpreting this is to see counselling as a means of helping individuals with personal problems. A personal problem that overwhelms one person may be only an irritation to another, but the problem is a “gap”. Counselling helps to bridge the “gap” between the current situation and the desired one. Often problems are more felt or imagined than real but if they are felt to be a problem then they are a problem.  Themes Three themes identified by Vaughan on counselling are: (i) (ii) (iii)  Counselling is a person to person form of communication marked by the development of a subtle emotional understanding, often called “empathy” It is centred upon one or more problems of the person being counselled (the “client”) It is free from authoritarian judgments and coercive pressures by the counsellor. It is a process that helps people deal realistically with actual and/or imagined problems that are reducing performance or a sense of well being Counselling can be preventative in that it can be a way of alleviating or preventing stress It helps clients identify feelings, emotions or misconceptions that prevent them from understanding their situation realistically It enables people to make appropriate choices between strategies.

Advantages to managers of using counselling techniques (i) (ii) (iii) (iv)

Counselling techniques Different approaches to counselling exist and the approaches of the key schools of thought are: (i) (ii) Psychoanalytical – Concentrating on the past history and the internal dynamics of the “psyche”. Client centred – Non directive counselling which places more faith in, and gives more responsibility to, the client in problem solving.

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(iii) (iv)

Behavioural – Applying principles of learning to the resolution of specific behaviour. Cognitive – A belief that people‟s problems are created by how they conceptualise their world. Change the concepts and the feelings will change too. Affective – This is the Gestalt approach. Pain and distress accumulate and have to be discharged before the individual can become “whole” again.

(v) 

Counselling Continuum A continuum of counselling styles can then be seen. The two extremes are directive and non directive counselling. Figure 5.4: Counselling Continuum Manager identifies problem Directive Manager solves problem Subordinate solves problem Subordinate identifies problem Non directive

Gerald Egan in a book entitled “The Skilled Helper” approaches this as person centred rather than problem centred. It is often only after trust has been established that a client will discuss what is really bothering them. The good helper respects the client for themselves and not for the problems they brings. (i) Directive counselling The process may be seen in terms of three phases. Throughout, the helper must attend to the client, both physically and psychologically and be “for” the client. Phase 1: Responding Client objectives: – – – To explore their own behaviour To examine their problem Empathy, concreteness, respect, genuineness.

Helper skills: Phase 2: Stimulating Client objectives: – – – To seek action orientated self understanding To own the consequences of self-exploration Advanced empathy, self-disclosure, confrontation, and immediacy.

Helper skills: Phase 3: Helping to act Client objectives:

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– – (ii)

To act on their understanding Suggesting new directions, behavioural support, action programmes.

Helper skills:

Non directive counselling Non directive counselling operates by the client reaching their own decisions. The counsellor establishes a relationship of trust by empathy and being authentic. The counsellor can give relevant information about their credibility and reacts honestly without imposing their own opinions. The counsellor‟s task is to facilitate the client‟s own abilities and strengths so that they can experience the satisfaction of having defined and solved their own problems. The counsellor can provide additional information on points of fact or in situations where the client is incapable of generating alternative strategies. The two phases of nondirective counselling are: – Phase 1: Establish rapport Reduce anxiety, listen, show empathy, show respect, increase the client‟s self confidence; be “for” the client. – Phase 2: Explore the situation See world through client‟s eyes, explore underlying problems, reflect, clarify and summarise, sensitively confront; if necessary, explore alternative solutions, allow the client to select the best solution, agree a realistic action plan.

Which are the most effective methods?
Note that many of the methods described above overlap. We should not be surprised at that because human beings are complicated and simple, single solutions to real human needs are unlikely to be effective. The most popular method is on the job training. The status of other methods is indicated in the following chart: Figure 5.5.: The most effective ways people learn Other Informal help from colleagues Coaching and mentoring By experiencing work itself Formal training courses On the job training 4% 7% 10% 15% 21% 41%

Source: CIPD Learning and Development Annual Survey Report, 2007

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How do we evaluate learning?
Evaluation is essential in ensuring that learning and development is relevant, integrated and continuous. However, evaluation is often patchy or even totally absent. It is difficult to carry out evaluation and there is a school of thought that says that learning is always going to be a good thing and therefore, evaluation is an unnecessary expense. Evaluation often includes end of activity informal feedback rather than formal testing and evaluation of the transfer of learning to the workplace. Kirkpatrick (1967) differentiated between four levels of evaluation: reaction, immediate, intermediate and ultimate.  Level 1 – learner reaction. This is common at the end of courses because it assesses the learner‟s immediate reaction to the event, which may or may not be any indication of the quality of the learning that has taken place. It is often affected by the learner's personal chemistry with the trainer or the organisation delivering the training.  Level 2 – learning This is less common and attempts to measure the knowledge, skill or attitude levels reached and may involve tests, examinations, projects or a viva voce (oral) examination.  Level 3 – transfer to the workplace This measure tests how effectively learning has been applied. It may entail line manager feedback or can be measured by an interview, self reporting, a learning log or direct observation by an assessor.  Level 4 -strategic impact on the organisation This is the ultimate measure and attempts to assess the impact on organisational success as a result of the learning. It is, though, often difficult to separate out the different inputs that may have led to success at this level and, as a consequence, level 4 evaluation is rare. What about return on the investment made in training? It is relatively easy to calculate the costs of a training intervention; it is extremely difficult to calculate its benefit. A list of general benefits gained from learning is easy to assemble, but it is less easy to quantify the benefits in financial terms.

Activity
How would you calculate the financial benefit to your organisation of your participation in this ABE programme? Search „training ROI‟ on the Internet. What conclusions can you reach about how to calculate ROI?

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G. EMPLOYEE INDUCTION
What is the purpose of induction? Induction gives both sides the chance to make sure that the selection decision was correct and to get the employee socialised, settled and effective as soon as reasonably practicable. Induction begins where recruitment and selection leave off. In the UK some 20% of new starters leave an organisation within six months (the induction crisis). Formal induction ought to be designed to keep this figure to an absolute minimum. Yet only two thirds of organisations provide formal induction training. How do we carry out induction? Induction usually involves a process of gradually passing over the responsibility for learning from the HR Department, to local managers and finally to the employees themselves. Hence induction tends to have certain features:       Basic orientation (short and intensive; sometimes delivered centrally by HR staff) followed by a longer and more personalised programme. Induction is structured and the structure is well known to all parties. Line managers take responsibility for ensuring that learning takes place and are required and enabled to do that. New staff may be required to keep a reflective learning log alongside their induction plan. Induction is integrated with other training such as the equality and diversity or health and safety. Induction is regularly updated and is evaluated.

H. ROLES IN TRAINING AND DEVELOPMENT
Who is responsible for the training and development function? Training was originally one of many activities within the personnel for human resources department. As a consequence, many organisations recruited trainers to work directly for the human resources manager. This link with HRM continues today, though most accept that learning is of such importance to an organisation that there may be a fairly high level executive, with influence around the organisation and perhaps even a board member, responsible for learning and development. Some organisations recognise the value development adds to the organisation and are proactive about it. However, training has always been a “Cinderella” activity in many businesses – extremely vulnerable to cuts in budgets and other resources during times of financial crisis. The reasons for this are clear. Most managers would consider both training and marketing to be vital activities, but many of the outcomes are difficult or impossible to quantify in terms of tangible benefits. Training is also costly and in times of financial constraint, presents an easy target for savings in ways that do not immediately impact on production.

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I.
  (a)

MANAGEMENT AND DEVELOPMENT
Developing the knowledge, skills and attitudes of individual managers, particularly at the key stages of their managerial career. Developing „management„ as a process within the organisation. Personal – The continuous acquisition of the skills and abilities necessary for the management of oneself and others, allied at more senior levels, to effective performance in team working, high level communication skills (both within and outside the organisation) and importantly, working with boards and committees in both formal and informal structures in the interplay of policy and decision making. Team – The need to build and consolidate strong, innovative working relationships, which provide for mutual respect and allow for individual abilities and aptitudes to be recognised and brought to bear in corporate decision making. Organisational – The definition and development of the purposes and ethos of management itself within the organisation, and the structures and processes through which these may be effected.

Management and development is about:

There are three dimensions:

(b)

(c)

Management development is concerned, then, with the totality of managing (running) the whole organisation. It is not just about improving the knowledge, skills and attitudes of managers. It is about effective management behaviour; the development of appropriate management styles and practices from the top down, in the search for improved performance in meeting the challenges facing the organisation. It is an integral part of planning and organising to meet corporate goals. Management development activities focus on:     Every manager within the company Future and present needs Self-development and performance – knowledge, experience, attitude and skills Team development and team working.

J. PERSONAL DEVELOPMENT
Personal development is the process of preparing yourself to meet the future requirements of your career, either with your current organisation or elsewhere. In a rapidly changing environment, your personal development will widen the opportunities open to you and help you to progress. Increasingly, your adaptability to change to meet new needs and your range of appropriate skills, are valuable personal attributes. This demands that you take responsibility for yourself and for your career.

What goes into a personal development plan?
Career development is an important aspect of personal development planning. This involves formulating your own personal development plan (PDP) which outlines your objective and timescales for your career development activities. Action plans/development plans should be reviewed on a regular basis to see if objectives have been achieved. The process of personal development is very much the same as general learning and development – self-audit, the identification of gaps and plans for filling those gaps.

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The context, within which a great deal of your personal development takes place, is the organisation in which you work. The mechanism for this is often the formal appraisal system, with its emphasis on two-way communication and the appraisee raising issues relevant to personal development. Many employees take a paternalistic view of their employer and believe that it is the employer's responsibility. However, the emphasis is also often on you to take responsibility for your own development – that the development process should be individual-led as much as organisational-led. The function of management should be to encourage this self development and channel it for the benefit of you and your organisation. Personal development also includes elements of employability; knowledge, competencies and skills that enhance your employment portfolio. It also encompasses desirable experience that can be transferred to another job. This very much places an emphasis on you organising your own development activities. It is also a way of improving motivation and morale.

What is continuous professional development?
If you are a member of a professional Institute you may be required to undertake continuous professional development (CPD) to keep your knowledge skills and experience up to date. CPD should follow the learning cycle: learning needs analysis, design, learning and evaluation. Evaluation is about reflecting on learning from experiences so that the learning can be transferred to subsequent similar situations. Questions such as „what went well?‟, „what didn't go so well?‟ and „why?‟ can be helpful. Many professional institutions expect their members to keep a CPD record, and some require a set number of formal learning hours each year. Why is CPD important? The UK Chartered Institute of Personnel and Development suggest that the benefits of CPD include:       Becoming a better learner Profiting best from learning opportunities Becoming an reflective practitioner Managing your self-development Helping you with your career advancement Upgrading your level of professional membership of the Institute.

What makes CPD effective? It should:       Be continuous Be owned and managed by the individual learner Be driven by the needs of the learner and the organisation (in balance) Have clear learning outcomes Evaluate learning rather than simply describing what learning has taken place Be an essential part of being a professional.

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K. THE LEARNING ORGANISATION
What is a ‘learning organisation’?
‘An organisation which facilitates the learning of all its members and continually transforms itself.’ (Pedler, Boydell and Burgoyne). In other words, one which is keen to promote learning, promotes the sharing of that learning and is prepared itself to change as a result of the learning of its employees. Several of the following would be needed to qualify as a „learning organisation‟:    Knowledge is managed Strategy formulation is used as an opportunity for learning and all stakeholders are involved „Informating‟ (using technology to empower and inform); designing accounting, budgeting and reporting systems to assist learning; internal exchange (seeing everyone else as an internal customer) and rewarding flexibility Organisational structures that fit with customers to promote experimentation Environmental scanning and learning from other organisations Risk taking – opportunities for experimentation and feedback mechanisms, where mistakes are valued rather than criticised Managers support rather than control in the solution of problems A high priority placed on self development because it increases the flow of information and ideas and develops skills such as mentoring Personal mastery New mental models to challenge traditional thinking Shared visions across the organisation Team learning.

        

What is knowledge management?
It is not always clear what is meant by knowledge management (KM). The best definition probably is: "A discipline that promotes an integrated approach to identifying, managing and sharing all of an enterprise's information assets. These information assets may include databases, documents, policies and procedures, as well as previously unarticulated expertise and experience resident in individual workers." (Gartner Group Inc, October 1996) Some dismiss KM as a management fad and others as nice in theory, but impossible to implement in practice. KM practices are not new, but have arisen from existing well established practices for sharing learning. However, it involves taking a more holistic view of the flow of information around an organisation. What is meant by knowledge? There is an important distinction between 'explicit' and 'tacit' knowledge: "Explicit knowledge is formal and systematic. For this reason it can be easily communicated and shared, in product specifications or a scientific formula or a computer program. Tacit knowledge is highly personal. It is hard to formalise and therefore difficult, if not impossible, to communicate." (Ikujiro Nonaka) Tacit or implicit or experimental knowledge is both unrecorded and unarticulated.

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How would we implement KM? KM initiatives usually entail:   Identifying the most important areas of knowledge. Capturing explicit and tacit knowledge so they can be made available to everyone. Tacit knowledge may be held by groups of people with experience in that area. KM may involve identifying who are in those expertise groups. Creating databases of frequently asked questions (FAQs) and analysing projects to identify lessons to be learned. Giving staff just-in-time access to knowledge, allowing the need to know to be determined by the information user, not the owner.

 

Activity
What organisation can you think of that might be considered to be a learning organisation?

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Chapter 6 Performance Management
Contents
Introduction

Page
126

A.

The Performance Management Process How does my organisation manage people‟s performance? Is performance management about more than managing individual employees? What aspects of performance are we concerned with? How should we go about monitoring performance?

126 126 127 127 128

B.

Appraisal – Context and Role What is appraisal? What are the purposes of appraisal? How does appraisal fit in with performance management? What is the organisational context for appraisal?

129 129 130 133 133

C.

The Appraisal Process How does appraisal work? Who should do the appraisal? How often and when? What is the process for an appraisal interview? What about monitoring and follow up action? What are the potential problems in the process? Aren‟t managers carrying out appraisals all the time? What is self appraisal? What is 360-degree appraisal?

135 135 135 135 136 138 138 139 140 140

D.

Objective Setting What is the purpose of managing people by objectives? How do we set objectives? What is the MBO process? How useful is MBO?

142 142 143 144 146

E.

High Performance Working Why move towards HPW? What does HPW work in practice?

147 148 148

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INTRODUCTION
By the end of this chapter you should be able to evaluate suitable methods for promoting the best performance from employees. Therefore, you should be able to:    Evaluate methods of performance management (including objective-setting and systematic performance and development review (appraisal)) Evaluate 360-degree appraisal Evaluate the degree to which an organisation has High Performance characteristics.

A. THE PERFORMANCE MANAGEMENT PROCESS
“How I get my people to do what I want them to do, in the way I want them to do it!”

How does my organisation manage people’s performance?
Organisations that take this seriously manage performance via a set of inter-related techniques that fall under the headings Plan, Act, Monitor and Review: (a) Planning         (b)     (c) (d)       Mission – purpose, or what your organisation is trying to achieve Vision – what things will look like in the future Strategy – a long term sense of direction that will lead to the vision Business plans – immediate targets and plans for reaching towards the vision Values – the things we value, especially how people should behave Culture – especially in which improving performance is valued and developed Clear goals – at corporate, unit and individual levels A set of competencies – to describe what good performance looks like. Good job design –creating jobs that satisfy Team working – interaction and mutual responsibility Personal development – anything that would help people perform better including off the job training, coaching, reading, „sitting with Nellie‟, etc Management development. Monitoring of performance – at individual, unit and corporate levels. Feedback of monitoring to staff Appraisal discussions Intrinsic rewards – the satisfaction of doing a worthwhile job Extrinsic reward and recognition – basic pay, performance pay, awards, saying „well done‟ Effective remedies for under performers.

Taking action

Monitoring Review and Reward

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Is not each of these a subject on its own? Yes and many of them are dealt with elsewhere in this manual (for example, in the chapter on learning and development). The beauty of performance management is that it is a way of uniting a wide array of seemingly unrelated topics, so that you can deal with them in a coordinated fashion. This is a horizontal integration. Is there a connection between performance management and leadership? They are very closely linked.  Performance management deals with the more tangible aspects of getting the best out of your people – systems, techniques, team working, structures, etc. It concentrates on the ways to organise your people, and is, therefore, about management. Leadership concentrates on the inter-personal dynamics of your relationships with individuals and groups.

Clearly the two intertwine.

Is performance management about more than managing individual employees?
Yes. It must take place at several levels: Figure 6.1: Performance Management Levels

Organisation Department Unit Team Individual

That means that performance management needs to be vertically integrated. For example, an organisational objective to take more care of the environment might translate into:     A departmental plan to reduce transport miles by x% A unit plan to reduce their transport miles by an equivalent proportion A team initiative to car share An individual plan to reduce unaccompanied car miles by y%.

Likewise, an organisational goal to penetrate new markets in China might cascade down to an individual‟s development plan as an objective to learn Chinese.

What aspects of performance are we concerned with?
You need to monitor and gather management data in four areas, as shown in Figure 6.2.

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Figure 6.2: Management Data – Areas Inputs Staff time Money Raw data Consumables Energy Equipment

Processes Give support Sell things Teach Research Process data Purchase items

Outputs Bills paid Items sold

Outcomes

Profit

Students taught Degrees awarded Research written up Information provided

Customer satisfaction Repeat business

Within each of these areas you will need to choose the most appropriate measures of performance available for monitoring – for example: Figure 6.3: Performance Data Inputs

Processes

Outputs No of bills paid

Outcomes

No. of clients supported Productivity Budget spent Items used up Energy costs

No. of items sold No. of students taught Profit

No. of items sold Quality of teaching Quality of research

No. of degrees awarded No. of research publications Amount of information provided

Customer satisfaction Repeat business

How should we go about monitoring performance?
The process of monitoring performance, at whatever level it is done, can present difficulties. It needs to be done with sensitivity as well as having a clear focus and openness if it is to be have a positive effect on the organisation's results. There are, therefore, a number of "rules" which underpin the process, as follows. (a) Have a clear purpose Introduce monitoring as part of a bigger drive to improve customer experience. Monitoring is a means to a bigger end and never an end in itself. If you try to do it without the bigger purpose in mind, it will fail. (b) (c) Be positive You are seeking to improve performance and not to gather data to blame people. Involve Get those responsible to work on the monitoring, as a part of their drive to improve the customer experience. If you choose items to monitor and impose them, your staff will

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probably be demotivated and performance may drop. Treat your staff as professional, responsible and well motivated. (d) Focus on outcomes Measure outputs and outcomes in preference to inputs and processes. Governments get obsessed with processes – numbers of patients treated; lengths of hospital waiting lists; numbers of students receiving degrees, numbers of children who can read and write, etc. – because these are easy to measure. However, these are not the reasons for providing services. Outputs and outcomes are more important. Input and process monitoring have their places, but remember that if you monitor these with a view to driving them up or down, your staff will focus on that to the detriment of other things. People do what you inspect, not what you expect. (e) (f) Go for clarity Challenge those who like the fuzziness of not knowing how things are going. Be choosy Pick only the most important factors to monitor as too many measures will be counterproductive. If you are measuring the customer experience you will usually be able to keep the number of questions low. (g) Count numbers Measure performance numerically where you can – for example, by getting the customer to grade customer satisfaction on a scale 0 to 5. (h) Benchmark Use the results as your baseline (or benchmark) from where you can improve – for example, you are aiming to raise this year‟s customer satisfaction index of 3.5 to 4.0 next year. (i) Communicate progress Make sure the targets are known, understood and accepted. Place the results somewhere where everyone can see them. (j) Get valid and reliable data Validity is that you are measuring what you are purporting to measure. Reliability is the extent to which you can rely on the accuracy of the data you are capturing.

B. APPRAISAL – CONTEXT AND ROLE
What is appraisal?
The competent manager will constantly monitor staff performance and make realistic and considered comments on a day-to-day basis to assist and develop their effectiveness. A staff appraisal scheme should capture the essence of that relationship and record comments from both sides at an annual or twice yearly meeting. It is a snapshot of progress and achievement as seen at a particular time, with ideas about improvement and development for the coming period. Before going on to examine the role and nature of staff appraisal in organisations, it is important to note that there is considerable disagreement and conflict surrounding the entire concept of appraisal. There are two main reasons for this.  There is a substantial lack of understanding concerning the overriding principles behind appraisal and about the best ways to carry it out. As a result, appraisal is viewed with distrust in some organisations and has lost credibility in others. It may be seen as

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alternatively a heavy-handed tool of management on the one hand or an administrative chore with little value on the other.  It is impossible for a good appraisal scheme to address more than a few of the various purposes for which appraisal may be used, although many organisations try to address them all. Some purposes sit happily together, whereas others are bound to conflict. All the purposes need to be addressed by a caring and developmental organisation, but different approaches need to be taken according to the desired result.

In contrast to these two gloomy viewpoints, it must be said that there are many organisations that have first class appraisal schemes. They serve their purposes admirably and are well thought of by all concerned because they are seen to be of value. These two observations about the problems with staff appraisal do, though, provide us with a framework for considering the concept – looking at the various purposes and the organisational context – before going on to review the process of appraisal itself.

What are the purposes of appraisal?
Staff appraisal schemes are all concerned with taking stock of the present situation, reviewing past performance and planning for the future. Within this very general description, though, there are a number of different specific purposes and outcomes of the appraisal process. (a) The assessment of past effectiveness and setting of new performance targets The assessment of performance is a task that can and should be carried out at every level in an organisation, from the chief executive to the newest office junior. Although the criteria for judging will be different at those extremes, the principle is the same. Standards for top managers will probably be based on corporate objectives whilst standards for clerical staff will be based on task performance. These standards of performance may be found in job descriptions, procedural manuals, professional codes of practice or other organisational statements describing what is expected from a competent employee. Appraisal can only address the achievement of standards or objectives if they have been clearly defined and understood by all concerned. It must be clear what levels of performance are acceptable, that the standards are valid and attainable, and that allowance will be made for factors outside the control of the individual. It should be remembered too that not all aspects of a job can be assessed against objectives and targets. Unless productivity is actually quantifiable, which is more likely at the lower ends of the hierarchy, measuring success is difficult and open to misinterpretation. Frequently, the display of certain personality traits, such as reliability, integrity, creativity and judgement, needs to be considered and with the difficulty of setting measurable standards for such characteristics, final evaluation may be open to the subjective perceptions, views and biases, etc. of the appraiser. The setting of performance targets for the forthcoming period, in the shape of an action plan, is not just a case of imposing objectives. In the context of appraisal, it must be seen as a two way exercise that locates the individual‟s own objectives in the context of those of the organisation and the organisation‟s support. Thus, this would include:  Agreement about the overall objectives of the department/section and of the individual within that context, ideally as embodied in an accurate, current and developmental job description. The establishment of the individual‟s major priorities over the next period and the extent of managerial support needed for success.

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 

The identification of the individual‟s key tasks within those priorities and the appropriate standards of performance in terms of quantity, quality, time and costs. The identification of, and agreement about, the level of support and guidance, which should be offered by the manager to aid the individual to perform to those standards.

(b)

The assessment of present salary levels and setting of new levels and/or relation of performance to pay Increasingly, in many organisations, pay is being linked to performance. To establish that link and measure performance, as a basis for determining merit pay or bonuses, there needs to be some form of performance assessment. Many organisations use staff appraisal for this purpose, but this is fraught with difficulty. The main problem lies in the impossible marriage of a process concerned with improving the quality of performance with one that aims to provide information for salary review. It is clearly difficult to have a frank discussion about performance standards and achievements when there is an overriding implication that the discussion will be used to set salary levels. The employee is hardly likely to expose and discuss weakness at the risk of perhaps being penalised by the withholding of pay increases, and will probably try to over emphasise achievements, in compensation, to qualify for the performance related pay element. Linking the two inevitably means that the pay issue will distort what should otherwise be an honest and truthful exchange about performance. It is generally considered best practice to try and divorce the two purposes and address them separately by different schemes at different times. However, surveys have shown that a substantial proportion of organisations do link them together. This may explain some of the distrust and lack of credibility associated with staff appraisal systems in some organisations. (We shall examine performance related pay as part of the discussion of reward in Chapter 8.)

(c)

The assessment of training and development needs, and identification of strategies for meeting them Whenever an assessment of performance is made there will be invariably an identified need for further training or development, unless the performer is excellent in every respect. Staff appraisal offers an ideal opportunity to managers and supervisors to discuss training needs and identify possible routes to achieving new knowledge and skills. Any action plan should include a commitment to enable the individual to acquire these new abilities and the appraiser should set time scales for the achievement of specific objectives. Any plans for training or development should encompass the needs of the section or department as well as the individual, now and well into the future. The appraiser should capitalise on strengths, seek to remedy weaknesses and consider the individual‟s career aspirations. In some situations, or in certain organisations, training needs appraisals may be a completely separate exercise from appraisal related to performance, although it is difficult to envisage either one being discussed without reference to the other. These approaches stem from a distrust of performance appraisal, a point we shall consider below.

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(d)

The assessment of potential for promotion and development of succession planning Organisations need to be clear about their future and part of that clarity includes people who are going to run the show in years to come. Appraisal may help to identify those employees who show great potential (talent spotting) and groom them for future higher roles in the organisation. In terms of the major public services – for example in respect of local government – this is often seen less as a parochial concern about the organisation itself than to the wider service as a whole, with high flyers being marked out as being potential chief officers for any local authority in the future. Succession planning should be a continuous process, based on a sound knowledge of the employee group, their collective and individual abilities and the future needs of the unit. To be effective, a succession plan should address organisational needs over a two, five or even a ten year period. However, the complexities of setting future staffing targets must be mentioned here. Many variables are in play and the task is made more difficult by unexpected shifts in the national economic scene, in political demands, the availability of materials and funds and the changing nature of service provision. Hence the personalisation of such activities, by endeavouring to identify and develop individuals for specific posts in the future, is fraught with problems. A key difficulty is finding an acceptable yardstick against which to measure “potential”. The excellence of present performance can be measured, as can an ability to analyse and address problems associated with the present post. However, any assessment of ability to tackle tasks in a possible job, some time in the future, can only be speculative and hypothetical. Clearly, though, some people will stand out from the crowd as being likely to climb higher. They need to be given every opportunity to develop their skills and knowledge, ready for eventual promotion and increases in responsibility. Likely high flyers may become evident at appraisal meetings, although the effective manager will notice latent ability as part of everyday supervision, but labelling people as potential top managers can be dangerous if anything more than two or three years‟ development is envisaged. Disappointments can occur from both sides and plans can be spoiled or careers accelerated too fast.

(e)

The assessment of individual progress and assistance with career planning decisions Staff appraisal schemes focus attention on the individual‟s performance in the job. As well as discussing improving performance in the job in the future, the process provides a natural forum for considering where they may be going in the future, from both the organisation‟s perception and in the context of the employee‟s own aims and objectives. Such discussion can inform both planned adjustments in job role and hence performance targets and training and development plans. This is an example of the creative use of appraisal to meet compatible purposes within a single framework.

(f)

The enhancement of motivation and communication Rather than being a specified purpose of staff appraisal, this is a by-product of an effective scheme. It can generate an enormous amount of goodwill and respect for the organisation, and provide significant gains in the development of internal communication and individual motivation. The appraisal process should encourage a greater sense of belonging and a feeling of co-ownership; it should foster better communications between colleagues, upwards, downwards and sideways; it should stimulate dialogue about successes and failures, hopes and aspirations, fears and excitements. Above all, it should give the

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organisation a powerful forum for individual and team development, personal growth and greater job satisfaction. From the individual employee‟s point of view, four elements are worthy of note:  Most people are pleased to have their work performance evaluated – to have their strengths emphasised and developed, to have the opportunity to discuss improving areas in which they are less effective, and to recognise the relevance of the part they play in the overall pattern of the enterprise. Opportunities to discuss career development are often quite rare – the chance offered in appraisal can stimulate personal growth and set new targets for the future. A creative appraisal will allow the appraisee to make constructive comments about the level and quality of supervision received. This is an unusual and often very powerful opportunity for frankness and openness, although few personnel/ management texts mention the desirability of the appraisal meeting being as much about the employee appraising the manager as vice versa, with the attendant increase in worth and mutuality. The act of completing a careful and thorough appraisal is a source of motivation, with a consequent enhanced enthusiasm and commitment to the job and the organisation.

How does appraisal fit in with performance management?
We suggested earlier that performance appraisal is only one tool in the management toolkit of " Plan, Act, Monitor and Review" that organisations can use to direct performance and raise standards. It can, though, if properly used, cover a great many of the elements listed there.

Activity
Take a look back at the elements listed under Plan, Act, Monitor and Review (page 126) and suggest which of those elements can be addressed within an appraisal system.

Few employees, including managers, see it in this context. This is one reason why staff appraisal is so often criticised as providing no added value and is merely a bureaucratic imposition from the personnel department. Appraisal needs to be horizontally integrated into the other HR topics on this list – for example, linked with processes for personal and management development and reward – as well as vertically integrated with the organisation‟s mission, vision and business plans.

What is the organisational context for appraisal?
We noted above that some of the disagreement and conflict about appraisal derives from the organisational context within which it is operated. In this section we explore some of the issues involved. (a) Organisational culture Appraisal schemes will only flourish in an organisation where there is a culture for personal growth and corporate development. This is not easy to achieve and to some extent, the older the organisation and the further its roots go back to less enlightened times, the more resistance is likely. There must also be a climate of comfort, encouragement and nurture.

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Where is appraisal most likely to fail? Where there is a bureaucratic structure that relies heavily on control and administrative complexity and perfection, appraisal schemes will be found to be paperbound and rigid. A pluralist, „them and us‟ culture will see appraisal as a „big brother‟ operation, seeking scapegoats and finding faults.

Where is appraisal most likely to succeed? The organisation espousing concepts such as team work, creativity, clarity of mission, innovation, growth and empowerment will cultivate and nurture appraisal as a critical factor in their achievement. Where there is a sense of mutual learning and shared values and perceptions, in an open and fair environment, appraisal will flourish to the great benefit of all concerned.

Appraisal needs to be seen as an integral part of the organisation‟s life and culture, not as an isolated, self contained exercise. To that end, any scheme must be designed to reflect that culture and be consistent with internal practices and procedures. (b) Commitment and ownership At the heart of all appraisal schemes is a highly personal interaction between the appraiser and the appraisee. This interaction needs to be supported by a commitment from the organisation to make it a meaningful and relevant process in which both parties can put their trust. A necessary precondition for such a situation is that the scheme is not imposed from above, but is developed and implemented with the full support, co-operation and understanding of management and employees throughout the organisation. All of the following groups must be fully aware of their roles in the scheme and their involvement in its planning and design, in particular, will help create a sense of ownership and commitment:   Senior management – who must be seen giving the scheme the stamp of approval and participating fully themselves as both appraisers and appraisees. Managers and supervisors, as appraisers – who must be committed to the success of their sections and the individuals within them, and to the operation of a fair and objective appraisal system, including consequent support for and monitoring of action plans, to achieve that success. Employees, including managers and supervisors as appraisees themselves – who must be committed to the open exchange of the appraisal process and to the implementation of action plans, given the fairness and objectivity of the system. Personnel and training administrators – who are responsible for the co-ordination and control of the process and implementing aspects of action plans which lie outside the scope of line managers. New employees – who need to be informed about the scheme and its benefits, and to be involved in it at an early stage.

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C. THE APPRAISAL PROCESS
How does appraisal work?
Organisations tend to promote one of five broad approaches to appraisal: (a) Tell – The manager writes a report and then tells the subject what is in it. If the manager believes the subject can read, the subject might get to see the report and sign to say they have seen it. Tell and share – The manager writes a report and then discusses it with the subject. Share –The subject and manager work together and decide what should be recorded. You do it first – The subject carries out a preliminary self-assessment and this is then the basis for discussion with the manager. Let’s all have a go – 360-degree appraisal. The appraisal interview itself Follow up action and monitoring.

(b) (c) (d) (e)  

There are basically two elements to the appraisal process:

However, before considering the nature of the interview itself, there are two other aspects of appraisal schemes to note – who should conduct the appraisal and the frequency of appraisals.

Who should do the appraisal?
There are a number of possibilities, with the option of using individuals or combinations of people:  The immediate line manager (the “parent” approach) – clearly the one in the best position to have observed the individual and come to conclusions about their work, although superior-subordinate relationships are sometimes too strained to form an effective basis for appraisal. The line manager’s line manager (the “grandparent”) – being one hierarchic level removed, this person may have a more detached viewpoint, but may not have the dayto-day experience of working with or knowing the individual. A non-line manager specialist (the “step-parent”) – an effective approach where technical or very specialist activities take place, which may be outside the professional understanding of the line manager (and which may include personnel specialists where more or extra expertise in inter-personal communication and behaviour is required). A combination of the immediate line manager, with one or both of the other people above as a team to provide a comprehensive, but balanced view. Self – often used amongst very senior people, self assessment is becoming more popular, especially where there is an opportunity to propose personal development programmes and to choose whether or not any further appraisal discussions should take place and if so, by whom. It has been found that senior people who do not wish to be appraised, may accept the idea of self appraisal and will pursue it objectively and creatively.

 

How often and when?
Appraisal should be carried out to cover specific periods; the organisation deciding on the intervals. Most schemes are annual, although six-monthly schemes are effective in smaller

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organisations. Any interval is valid, provided the employees know what it is and recognise the importance of the interviews when they occur. Ideally, the whole organisation should conduct appraisals within a set time, say six weeks, to focus attention on the process and ensure that everyone is covered at roughly the same time. Spreading it out over the year is not conducive to goodwill and commitment.

What is the process for an appraisal interview?
An appraisal interview needs to cover three main areas:   A review of past performance in the job during the preceding period – from both the appraiser and appraisee‟s point of view. Building an action plan for the next period – identifying realistic aims and targets, together with the necessary actions and support required to achieve them and dates for their achievement. A look into the future – enabling longer term plans to be formulated in respect of the individual‟s aims and objectives and considering any steps that can be taken to develop the individual‟s potential.

It is usual for action plans to be formally recorded so that they can be reviewed and referred to in gaining support for development resources, such as training programmes. It is also usual that such documentation needs to be agreed by the appraisee and signed to that effect. As with all interviews, preparation is essential and there are particular requirements relating to the interview itself, as we discuss below. (a) Preparation Both the appraiser and member of staff should prepare in advance for the interview. New employees should be fully informed of how the appraisal system works, its scope and limitations. In particular, new employees who are expected to appraise others should be trained fully in how to carry out appraisal effectively and in a manner consistent with the organisation‟s own methodology. It is always necessary to send the right signals about the appraisal exercise, allowing sufficient time for it and stressing its importance to both the individual and the organisation as a whole. Stating that the appraisal interview will be fitted in when each party has “a few minutes to spare” sends the wrong signal entirely and betrays the appraiser‟s attitude to the process. Before the appraisal is carried out, the appraiser should gather all necessary information so that constructive feedback on performance can be given. Having a look at the previous appraisal is essential, so that both parties can check progress against aspirations. Some systems operate by getting both parties to complete a pre prepared questionnaire – essentially both the manager and the subordinate appraise the subordinate. This can provide a useful guide to differences in perception between the two parties. If they differ radically, the appraisal will require the two to explore why this is so and what can be done about it. The appraiser should prepare fully and in writing, even if this is only in bullet point form. Preferred outcomes will exist for both parties, so there is some advantage in getting them to make pre-appraisal notes. The logistics of the appraisal are important. It is psychologically bad to have telephone interruptions or a noisy room. Absolute privacy is a minimum requirement as there may

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be sensitive issues to be discussed. Some managers insist that appraisals are conducted outside the work place. (b) The interview The face-to-face meeting between the appraiser and the appraisee is the central part of the appraisal system. This is a formal interview in that it must comply with a number of procedural requirements for documentation, but there is no reason why it should be formally conducted – indeed, the reverse is probably better. The best appraisals are those where there are as few barriers as possible, and remember that the physical environment can itself be a barrier. The purpose of the appraisal should be stated. The appraiser might also wish to give an indication of duration, though this should not imply that they are in a hurry to get it over with. A two way exchange of ideas should be encouraged from the start. Most appraisers try to get the other person talking as quickly as possible. This can be highly effective to gauge early signals from the subordinate. This having been said, the appraiser must control the interview throughout, to ensure that the objectives are met in full. The focus should be on strengths, not weaknesses, wherever possible. Good salespeople may, for example, be awful administrators, but the latter shortcoming might be tolerated as long as minimum standards are met and excellent sales performance continues. The message should be clear that everyone has weaknesses which must be acknowledged, but playing primarily to strengths can attain really effective performance. If a scoring system is used in the appraisal interview, this should be open so that both parties are aware of scores given and why this is so. Quantitative systems will often create differences between people, but those differences are not eliminated by covering over the information recorded. Whilst focusing on strengths, it is important to bring any perceived shortfalls in performance into the open so that strategies can be agreed to tackle them. Targets or standards should be agreed, with frequent less formal review if necessary. The interview should highlight future expectations of the person in their job over the next period and also training and development requirements. This provides vital input in identifying training gaps, some of which will be unknown to the appraiser. It can also give clues on wider training implications as what affects this worker might also affect others. Action points should be recorded and agreed throughout, then summarised at the end of the interview. The meeting should not conclude until the appraisee has had the opportunity to raise any other matters. If there is insufficient time to deal with the main appraisal or the extra matters raised, a further interview can be arranged. (c) Giving praise or blame Praise must be earned. Continuous enthusiasm soon loses its effect. If you expect and get continuous high performance, the occasional comment acknowledging it is sufficient. What you must do is to praise the exceptional effort, ingenuity, initiative or whatever contribution it is which merits the extra recognition, and make sure that you do so at the time and not weeks or months later or worse, not at all. This kind of appraisal loses nothing by being given informally, rather the opposite. The recipient gains something in self respect and the usually the respect of their fellow workers, if it is overheard. You will gain in status as your people come to know that you are prepared to recognise and acknowledge good work openly.

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The other aspect of routine appraisal, blame or criticism, needs more careful handling. Work which is not up to standard also deserves and should be given prompt recognition. You will only be storing up trouble for yourself if you allow it to continue and then, much later, start raking up the past. The first thing you must do is to get this into proper perspective. Mistakes, carelessness, accidents, errors of judgment, below par performance do occur. Sometimes they are wilful or due to a “couldn’t care less” attitude. More often they arise from ignorance, lack of training or experience or some maladjustment in the person concerned. In most cases, simply to blame or to criticise, however natural it may seem, is not going to be your best approach. It will only produce feelings of resentment, possibly injustice and even fear. What the individual really needs is your help – help to see what was wrong, why it was wrong and how to avoid it in future. This may mean that you will have to probe to find out why things went wrong. For the simple, routine correction of performance that you do as the occasion arises and which you can handle informally, there is one very significant difference from recognising good performance. You can usefully do the latter in public; correction, as far as possible, should always be done in private

What about monitoring and follow up action?
Having made an action plan, it is important that it should be followed through. This will involve action on the part of both the employee and the supervisor. This latter point should not be lost sight of, since the absence of action by management can render the whole process ineffective. Employees often need support, advice and guidance to achieve new targets, particularly where they are especially challenging, and it is management‟s role to ensure that that support is available. It is better if this is proactive rather than reactive to problems; this implies monitoring progress on a formal and informal basis, rather than leaving everything until the next appraisal in perhaps a year‟s time. The action plan may also require management to take action themselves – for example, to provide training, to make adjustments to job descriptions, to obtain new equipment, etc. Again, it is important that this action is taken promptly so that management is seen as carrying out its side of the bargain.

What are the potential problems in the process?
(a) Personal conflict, bias and non communication Appraisal as we have considered it here will only succeed where there is a mutually trusting, respectful and developmental relationship between the appraiser and the appraisee. Unfortunately, the two parties are human beings, with all the faults, preconceptions and idiosyncrasies of individual personality and subject to the normal problems of being able to communicate effectively. The problems that may arise from this must be clearly recognised and addressed within appraisal schemes. Of particular concern is that, where distrust or antagonism exists between the appraiser and appraisee, there is the potential for partiality, bias, prejudice, enmity, unfairness and devaluation. Whether such problems actually exist, or are just perceived to exist, the result is that the process will be effectively negated. In such cases, there must be the option of allowing the appraisee to be appraised by someone else; by a “grandparent” or “step parent” (see above) and for training to be provided for one or both parties to try and resolve the problems.

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The other main area of difficulty arises from personal perceptions, which we examine elsewhere as barriers to effective communication. The principal problems in terms of both the interpersonal communication itself and the recording of outcome are: receptivity, stereotyping, the halo effect and individual misperceptions such as projection, perceptual defence and self serving bias. It is not easy to avoid some of these problems but we can and should be aware of them and the problems they can create for the effectiveness of appraisal. Every effort should be made to make clear, rational assessments of people as complete individuals. (b) Problems of ineffectiveness The most common grumble levelled at appraisal schemes is that nothing ever comes of them; no actions are taken, the papers are just filed away and forgotten and it was all a waste of time. Unfortunately, many schemes do not have any follow-up and such criticisms are valid. What a waste of effort and energy! The good scheme will be active, even proactive, dynamic, progressive, developmental and used. Appraised staff must be given the training and development identified (compatible with opportunity and funding). New experience must be offered, projects completed and additional responsibilities allocated. Opportunities to meet personal and operational objectives must be created.

Aren’t managers carrying out appraisals all the time?
We have already looked at the frequency of appraisal, but why not make it a continuous process, with no particular structure? As issues come along the appraiser and appraisee would: Set objectives, provide resources and review   Identify and assess work related and development related problems Discuss and settle upon solutions Operational example: Manager wants a coffee Manager: „Chris, is there any coffee left in the machine out there?‟ Chris: „Of course. Would you like me to get you one now, or do you want it after your meeting?‟ Manager: „Oh, now please – milk no sugar.‟ Chris: „Do you have any tokens?‟ Manager: „They‟re on my desk.‟ Chris: „I have put the coffee on your desk.‟ (Later) Manager: „That was a great cup of coffee – thanks for getting it for me.‟

   

Agree objectives

Provide resources needed

Monitor progress Give feedback and a reward.

In other words, managers continuously set objectives, provide resources and give feedback. In which case, why do we need an appraisal scheme? This is one of the objections to appraisal voiced by managers; „I do these things all the time; I don‟t need you to impose a load of paperwork on me to make it happen!‟ Others will say, „My staff know what I think of

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them without us needing an appraisal scheme!‟ (This usually means the staff loathe the manager.) The answer lies in distinguishing operational decision making from strategic decisions. Managers use appraisal skills and techniques all the time; otherwise they are unlikely to be good line managers. The value of the annual, bi-annual or quarterly appraisal is to step back from the day to day decision making and take a wider look at what is happening and what needs to happen in the future if things are to be done better. In that sense, continuous appraisal is operational whilst annual appraisal is strategic. Case Study UK social workers and those in similar roles in not-for-profit organisations have regular 1:1 meetings with their managers. These are called „supervision meetings‟ (usually just „supervision‟) and can take place as frequently as every second week or as far apart as every eight weeks. As long ago as 1926 the purposes of such „supervision‟ were defined as Administrative – the promotion and maintenance of good standards of work, co-ordination of practice with policies of administration, the assurance of an efficient and smooth running office; Educational – the educational development of each individual worker on the staff in a manner calculated to evoke him/her fully to realise his/her possibilities of usefulness; and Supportive – the maintenance of harmonious working relationships, the cultivation of esprit de corps. Based on John Dawson (1926)

What is self appraisal?
So far, we have tended to talk about appraisal as if it is something a manager does to you. The alternative approach is to see the appraisee as the most important person in the process and to empower them to carry out the appraisal. In other words, the manager becomes facilitator, asking questions rather than providing all the answers. The advantages of self appraisal include:      It breaks down the appraisee‟s inhibitions It promotes positive discussion It makes the appraisee active rather than passive It reduces defensive behaviour by the appraisee and promotes openness Ideas will come from the bottom up rather than just top down.

What is 360-degree appraisal?
Normal appraisal involves feedback from only one other person apart from the appraisee – the manager. 360-degree appraisal attempts to provide additional feedback from both colleagues at the same level as the appraisee and from subordinates. Some schemes also draw feedback from customers.

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How does 360-degree appraisal operate? Normally up to 10 people are asked to fill in questionnaires about the appraisee‟s performance. These usually include questions using a behaviourally anchored rating scale plus the opportunity for free text. These questionnaires are then collated by someone independent, such as a consultant or a specialist HR officer. The results are shared with the appraisee in ways which are developmental and anonymous.

What are the advantages? 360-degree appraisal should give new and different perspectives.

In order to make 360-degree appraisal work, the following requirements need to be met:     Purpose Planning Question design Training – – – – – – –   Confidentiality Evaluation – – – The process is used for developmental purposes and not for reward Staff are consulted on the design of the system Nobody is forced to take part Questions are derived from the key areas of the appraisee‟s job and are simple and properly phrased Those writing assessments can be trusted to give valid feedback They understand how their assessments will be used The feedback process is managed by those trained to give constructive feedback Confidentiality is maintained and feedback is carried out in such a way that no individual can be identified Pilot studies are carried out before implementation The process is adequately monitored, evaluated and adapted as necessary.

Activity
In your organisation (or one with which you are familiar): (a) (b) (c) (d) Who takes the lead in appraisal? What would happen if more responsibility were passed to the appraisee? How good are line managers at facilitating rather than directing the review and the forward planning? How would you improve the arrangements?

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D. OBJECTIVE SETTING
What is the purpose of managing people by objectives?
The clue to the wide range of functions performed by management by objectives (MBO) is to be found in the varied ways in which it has been defined.  J W Humble defines MBO as: “A dynamic system which seeks to integrate the company’s need to classify and achieve its profit and growth goals with the manager’s need to contribute and develop himself.”  George Odiorne defines MBO as: “the superior and the subordinate managers of an organisation jointly define its common goals, define each individual’s major areas of responsibility in terms of the results expected of him and use these measures as guides for operating the unit and assessing the contribution of each of its members”.  Koontz et al define MBO as: “a comprehensive managerial system that integrates many key managerial activities in a systematic manner, consciously directed toward the effective and efficient achievement of organisational and individual objectives”. If we draw out the key elements of these definitions we can see the links between MBO and the key management activities. (a) Planning Humble stresses the spread of corporate planning down through the organisation by the use of MBO techniques. Planning has to take account of individual as well as corporate objectives if it is to be implemented effectively (Koontz stresses this). (b) Leadership and direction Odiorne stresses the contact between superiors and subordinates that sets objectives and assesses how well a given manager is achieving them. This interaction calls for leadership and direction skills on the part of the superior. (c) Communication The MBO process is essentially one of communication between senior and more junior managers. If the process is to be successful, communication skills have to be developed and used by both parties. (d) Control MBO may be seen as a control device in that standards are set, results are monitored and feedback reaches superiors. (e) Motivation Drucker made an important link between MBO and motivation by stressing the selfcontrol, self-directing and self-motivating nature of MBO. In addition MBO has links with:   Performance appraisal – Properly used, MBO allows appraisal as part of an integrated process, rather than something outside normal managerial roles. Co-ordination – MBO forges links between managers at various levels in the organisation, so increasing vertical integration.

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How do we set objectives?
The bedrock of MBO is the setting of objectives, so we will begin with a review of their key characteristics. (a) Types of objectives We can identify three basic types of objective:  Time specific This places a timetable on the achievement of the objectives; a given objective is to be achieved by a specific time.  Benefit specific This specifies the benefits that will accrue to the organisation, the section and the individual when an objective is achieved.  Description specific The aim should be to describe objectives in as precise terms as possible. Quantitative objectives should be set in exact figures; qualitative objectives should be described as accurately as possible. (b) Formation of objectives There are three theories about the manner in which objectives are formed in an organisation:   Traditionally it is held that the company‟s objectives are those set by the chief executive, or at the most, the top management team. However, it is also argued that the information on which objectives are set comes from subordinates, who place very firm constraints on action. You can see this in a conventional base-up planning system, where each section sets its own targets that are then integrated with the next level above. The third view is a combination of these two, namely that an organisation‟s objectives are the result of a compromise, a “negotiated consensus of its influential participants” (Ansoff, “Corporate Strategy”).

MBO is a technique that stresses the negotiation of objectives between manager and subordinate. (c) Scope of objectives Objectives should be attainable and wherever possible measurable. Drucker argues that there are certain key areas in which objectives should be set:         Market standing Innovation Productivity Physical and financial resources Profitability Manager performance and development Worker performance and development Public responsibility.

These are all appropriate areas for the application of MBO techniques.

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(d)

How objectives change Objectives may change deliberately, or because of changed circumstances. The change may be permanent or temporary. Objectives may change because:    The aspirations of senior management change, either due to the past performance of the organisation or comparison with some outside body. Pressure applied from inside the firm, for example, from a union or from new members of staff, can force change. From time to time some objectives will be more important than others – one of the facts of business life is that objectives are often conflicting and the easiest way to overcome this is to tackle each within individual time periods. Naturally, objectives are attained and must therefore be changed – an extreme example being the dissolution of a project team after reaching its objective. Organisations work in a dynamic environment over which they have only limited control. Environmental changes can have sudden and significant effects on objectives prepared under different circumstances. Objectives may have to change quickly. Where there is a tall hierarchy, this can be a slow and perhaps costly process.

 

(e)

Using objectives To be of practical use, objectives should be:        Clear, concise and understandable Set with the subordinate, to get commitment Obtainable, but challenging enough to provide motivation Non-conflicting, where possible Quantified as much as possible, so that they may be used for control purposes Not too numerous, to avoid confusion Allotted to an individual, with each employee having a set of objectives and each objective clearly the responsibility of an individual.

What is the MBO process?
The importance of MBO lies in the way it ensures that managers and subordinates focus on the end results of their activities rather than the activities themselves. This is a valuable contribution to effective management because it reduces the danger of all concerned becoming so caught up in day-to-day operations that they lose sight of their objectives. To implement MBO it is essential to follow a set of steps in logical order. (a) Overall objectives Each person covered by the scheme works out with their superior a clear definition of their job. In doing this, the exact purpose of the job is identified and the way each job fits into the overall structure of the organisation is recognised. This process pinpoints the key areas crucial to the organisation achieving its objectives. This stage is a time for setting objectives and targets. However, objectives and targets are not passed down as orders from the top, but are negotiated between subordinates and their managers. It is vital that all concerned accept that the objectives set are realistic. Objectives and targets should be precise and wherever possible, measurable.

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(b)

Key Results Analysis Having identified the objectives and targets, the manager and subordinate undertake an analysis of the job, identifying the key tasks entailed. These are the most crucial tasks for achieving the set objectives. This exercise should be completed by the subordinate and constitutes the basis of an MBO form, which is used for analysis. An example of a simple MBO form is as follows: Key Task Performance Standard Measure Controls Feedback Improvement Suggestions

The key tasks of the job are listed in the first column. Into the performance standard measure section go details that show measures of how well a given task should be performed to achieve targets. If we take the example of a sales manager, the key tasks may be to increase sales and cut expenses in the selling of a given product in a given area. In this case, the sort of information likely to be found in the performance standard measure section would be target sales and expenses figures and a time deadline to achieve these results. These would constitute a precise measure of success, put into numerical terms. The controls feedback column is where the actual results achieved are recorded. Here our sales manager would put the actual sales and expenses for the given time period. The improvement suggestions column is self-explanatory. However, remember that these must be the subordinate‟s own ideas on how their performance can be improved. These ideas will be most crucial when the objectives of the performance standard section are not being met by the results in the controls feedback section. However, even when targets are being met there may be room for improvement. When the key result analysis has been completed, this information must be discussed with an immediate superior. This should be an in-depth discussion that goes into the analysis of the key jobs, the measures of success, including the levels of the targets, for example, conditions may have changed in the period since the targets were set and of course, the improvement suggestions. The subordinate and manager then prepare an improvement plan, which they set out in another MBO form, the improvement form. (c) Improvement plan Below is a typical layout of an improvement plan. This takes the form of an MBO diary, consisting of a restatement of the objective; then a column devoted to the personal action, planned and agreed by the subordinate and manager; a target date is agreed and then the diary records the date the target is achieved. The comment column records how the improvement came about or any new problems that arose. Objective Personal Action Planned Target Date Date Achieved Comment

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(d)

The review system This is the stage of MBO where there is a regular review of the objectives set and how well these are being achieved. The purpose of the review system is not to criticise or threaten those who are not achieving targets, but rather to help them to make their own improvement suggestions more effective. The review system may reveal the need for training. It can also help to identify potential and assist in the selection of candidates for promotion.

It is easy to see from this how close the MBO process is to the appraisal process, and, indeed, it may be seen as a more structured version of the same thing. It stresses the vertical integration we considered earlier as shown by the following Figure. Figure 6.4: The MBO Cycle Corporate Plan Strategic Objectives Training and Development Promotion

Operating Plan Tactical Objectives

Review of potential

Improvement Plan Section Plan Specific Objectives

Performance Review

Individual Objectives

Key Results Analysis Performance Standards

How useful is MBO?
We have already described the multifunctional nature of MBO that confers considerable versatility on the technique. However, there are other, specific, advantages that can accrue from the use of MBO. (a) Advantages of MBO  Individual objectives are integrated with the objectives of the organisation. Everyone concerned feels that they are pulling in the same direction, so MBO encourages team building and team spirit. Suggestions for improvements come from those close to the problems that arise, rather than from more remote management. MBO ensures that all concerned know how well or badly they are doing in achieving their objectives. MBO can identify training needs when help is needed to achieve objectives. MBO puts the focus on planning for results rather than merely planning how work is to be done. Koontz puts great emphasis on using results as the arbiter of the effectiveness of planning. If results are not up to standard, there should be an

   

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overhaul of the role of the manager, the structure of the organisation and how it is controlled and all other relevant areas. (b) Problems of MBO Despite its many advantages some experts have reservations about MBO, which include the following points:  The process of MBO, and the ideas that lie behind it, must be fully understood. If top management introduces MBO without proper understanding, it can degenerate into just another means of checking up on people. Great care has to be taken in setting objectives – they must be realistic and precise. Realistic means that they must be attainable, taking account of the resources available. Precision means that wherever possible they should be measurable. Vague targets are useless. Objectives have to be constantly reviewed and updated to cope with changing situations and environments, so MBO is an on-going technique. This, combined with the work involved in the process itself, makes MBO expensive in management time. Some critics argue that time spent setting objectives, filling in records and consulting with superiors, would be better spent getting on with the job itself. So, care must be taken to ensure MBO does not get too bureaucratic. Efforts to get measurable targets may mean certain important, unmeasurable objectives – for example, the good name of the firm – tending to be overlooked and neglected. Criticism has been levelled at MBO on the grounds that it has its roots in scientific management and tends to ignore the personal objectives of the staff. Not all objectives can be harmoniously integrated. A good manager will appreciate that individuals have their personal aspirations and would not ignore the human factors involved. Management must appreciate that organisational goals can be in conflict with those of the staff and should seek ways to achieve compatibility. This will encourage the full commitment sought from the staff.

To sum up, despite certain dangers and problems MBO, when properly deployed, can be a useful management technique for managing performance. However, it cannot be introduced “on the cheap”, and needs adequate resources and the full commitment of all concerned.

E. HIGH PERFORMANCE WORKING
The UK Commission for Employment and Skills, in May 2010, defined HPW as “A general approach to managing organisations that aims to stimulate more effective employee involvement and commitment in order to achieve high levels of performance." The precise form HPW takes within an organisation will vary depending on the individual circumstances, but Belt and Giles note that it will include activities in the areas of human resource management (including pay and incentives, appraisal, workforce development), work organisation (such as team working and job design), employment relations, management and leadership (including strategic management and business development as well as line management), and organisational development. "The HPW approach is specifically designed to enhance the discretionary effort employees put into their work and to fully utilise the skills that they possess. It needs to be underpinned

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by a philosophy of people management that emphasises autonomy, participation and learning." (Belt and Giles, 2009)

Why move towards HPW?
It is intended as a conscious move to drive up organisational performance by the application of a range of practices (see below). According to research in 2004 by the Engineering Employers‟ Federation and Chartered Institute of Personnel and Development, HPW explains about 20% of increases in productivity and profit in manufacturing organisations that have adopted such practices In particular, HPW aims to:  Increase staff motivation, job satisfaction and commitment – including increased earnings potential for employees and making employees more likely to say „a great place to work‟ Improve quality, quantity and innovation Develop customers' loyalty, maintain prices and hold off competition.

 

What does HPW work in practice?
There are, then, four elements of HPW: (a) (b) (c) (d) Employee autonomy and involvement in decision making Support for employee performance Rewards for performance Sharing knowledge and information (learning).

Details will vary from organisation to organisation, but these are the sorts of things that high performing organisations do: Employee autonomy and involvement Support for employee performance    Develop flexibility of skills Team working to give variety and responsibility Appropriate selection and recruitment processes (finding staff at all levels who will support a high performance culture) Comprehensive induction programmes Sophisticated and wide training Integrated and wide ranging performance management Emphasis upon work-life balance Offer a career not just a job Harmonised terms and conditions Pay that is competitive with other employers Rewards linked to individual and team performance Plenty of effective communication Quality improvement teams Spending on training.

    Rewards for performance     Learning   

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How do we go about implementing HPW? You may need to address the following issues:            Getting top management‟s commitment, particularly to resource, to communicate and to demonstrate the required behaviours (managers are the key) Getting the resources HPW needs – both financial and risk taking, including for example, new reward structures Carrying out team and individual appraisals that make a real difference Seeking and rewarding discretionary behaviour (Ability x Motivation x Opportunity = AMO) Allowing employees to redesign jobs to maximise interest and challenge Changing existing strong cultures, especially to promote local discretion Increasing levels of trust between management and employees Getting staff to understand about organisational performance, so they see where they fit in and „ratchet it up‟ Involving employees in design and implementation of HPW Not regarding HPW as one simple solution, but rather a number of themes woven together Integrating initiatives, so they reinforce each other, so that: – – – – Implementation is in bundles Staff understand it and show commitment Other organisations are used as benchmarks Continuous improvement is developed.

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Activity
(a) Tick the relevant boxes where the following practices are present in your organisation:

Employee autonomy and involvement Support for employee performance

      

We develop flexibility of skills Teamworking gives variety and responsibility We look for staff at all levels who will support a high performance culture We have a comprehensive induction programme Training is wide and appropriately sophisticated Performance management is wide ranging and integrated into our operations We provide work-life balance We offer a career not just a job Terms and conditions are harmonised Pay is competitive for the sorts of work we do Rewards are linked to individual and team performance There is plenty of effective communication We have quality improvement teams We have lean systems We invest adequately in training our people

Rewards for performance

   

Learning

   

(b)

Where they don't exist, to what extent could they be applied and what problems would you envisage?

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Chapter 7 Discipline and Grievance
Contents
Introduction

Page
153

A.

The Need for Rules and Procedures What might the rules cover? How should we go about preparing our rules and procedures? What are the principles underlying disciplinary and grievance procedures? Are there legal minimum standards for procedures? How far should we go in providing access to the rules and procedures? What training should be given to our managers? Isn’t informal prevention better than formal cure?

153 153 153 154 154 154 155 155

B.

Disciplinary Procedures What should a disciplinary procedure contain What is gross misconduct?

156 156 156

C.

Investigations How should we carry out a disciplinary investigation? When should we suspend an employee? How do we decide whether or not disciplinary action is necessary?

157 157 157 157

D.

Disciplinary Hearings What preparation should we make for a disciplinary hearing? How should the disciplinary meeting be conducted? What if other issues arise during the hearing?

158 158 159 160

E.

Disciplinary Penalties What should be considered before deciding any disciplinary penalty? What are the levels of disciplinary penalty? How do warnings work? How can an employer dismiss an employee? How should an employee be informed of a disciplinary decision? What disciplinary records should we keep?

161 161 161 162 163 163 164

(Continued over)

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F.

Appeals What should be in our appeals procedure? How should an appeal hearing be conducted? Can an employee take an appeal against dismissal to an external tribunal?

164 164 164 165

G.

Grievance Procedures What is the process for handling a grievance? What happens in a grievance hearing?

165 166 166

H.

Attendance Why do staff fail to attend for work? How much does poor attendance cost an organisation? What can we do to improve attendance? What is the Bradford Points System?

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INTRODUCTION
By the end of this chapter you should be able to propose ways to deal with under performing, misbehaving or absent employees. Therefore, you should be able to:     Define, state the purpose of and outline the content of disciplinary and grievance policies and procedures and outline the principles behind them Define gross misconduct Differentiate between formal and informal disciplinary action Evaluate methods of monitoring and controlling employee attendance.

Discipline and grievance are often dealt with together because they are the opposite sides of the same coin. Discipline is where the employer is unhappy with the employee; grievance is where the employee is unhappy with the employer or those under the control of the employer.

A. THE NEED FOR RULES AND PROCEDURES
In the UK the Advisory, Conciliation and Arbitration Service (ACAS) has published guidelines that say organisations should have standards of performance and conduct, supported by formal rules. In a well managed organisation, disciplinary and grievance procedures may not be needed very often, but when a problem does arise they are vital. A good procedure can help your organisation to resolve problems at the lowest possible level and avoid legal claims. Clear rules benefit employees and employers. Rules set standards of conduct and performance at work and make clear to employees what is expected of them. There should not be different rules for different groups or levels of employees unless this is unavoidable – for example, for health and safety reasons. All rules and procedures should be clear and in writing.

What might the rules cover?
Any or all of the following:        Timekeeping Approval of holidays Personal appearance Alcohol, drug or other substance abuse. Discrimination, bullying and harassment Use of social networking sites Sub standard performance       Attendance Health and safety Smoking at work Use of organisation facilities Misconduct. Use of the Internet at work.

How should we go about preparing our rules and procedures?
You should aim to secure the involvement of employees and any recognised trade union or other employee representatives when rules and disciplinary procedures are introduced or revised. You should review them from time to time and revise them if necessary. To be fully effective, rules and procedures should be accepted as reasonable by those covered by them and those who operate them. It is, therefore, good practice to develop rules in consultation with employees (via their representatives if appropriate) and those who will have responsibility for applying them.

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Where a rule has fallen into disuse or has not been applied consistently, you should always tell employees before there is any change in practice – so, for example, you should publicise any revision of the rules and issue employees with a revised written statement within one month of the change.

What are the principles underlying disciplinary and grievance procedures?
It is important to remember that discipline and grievances are about real people not just processes. In most cases, then, you should aim to improve and not to punish – the purpose should be positive. In addition, the rules of natural justice apply, so an employee should be:    Informed of any allegation against them, together with the supporting evidence, in advance of any formal hearing Given the opportunity to challenge the allegations before any decision is reached Provided with a right to appeal.

Are there legal minimum standards for procedures?
Although your organisation can be flexible about how formal or extensive procedures need to be, in the UK there is a statutory procedure you must follow as a minimum if you are contemplating dismissing an employee or imposing certain kinds of penalty short of dismissal, such as suspension without pay or demotion – i.e. those which would be a detriment to the employee. The statutory procedure involves you taking three steps, and these apply to both disciplinary and grievance matters:    Giving a statement in writing of what the employee is alleged to have done Arranging a meeting to discuss the situation Allowing an appeal.

Note that these three stages reflect the need to follow the rules of natural justice. This is the minimum standard and a court would expect of an employer. The employer and employee should start talking to each other long before the dismissal stage – for example, through counselling or working out an improvement plan for an employee's performance. Penalties or dismissal are only used when the procedure has failed to result in the necessary improvement or where gross misconduct has taken place.

How far should we go in providing access to the rules and procedures?
All employees must have ready access to the rules and procedures and they should be understandable to all. The rules should be made clear to employees and ideally they should have their own copy. Writing them down helps both you and your employees to know what is expected of them. If yours is a small organisation, it may be sufficient for rules to be displayed in a prominent place. In large organisations, it is good practice to include a section on rules in the organisation's handbook or on the organisation's staff website and to discuss them during the induction programme. Special attention should be paid to ensure that rules are understood by any employees with little experience of working life (for instance young people or those returning to work after a lengthy break) and by those for whom the rules are not in their first language.

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Rules are more readily accepted and adhered to if people understand the reasons for them. For instance, if an employee is required to wear protective clothing, it is sensible to explain if this is for a particular reason, for example, because of corrosive liquids or staining materials.

What training should be given to our managers?
You should ensure that those responsible for applying the rules and operating disciplinary and grievance procedures fully understand them and receive appropriate training. If your managers ignore the procedures when, for example, dismissing an employee, that will count against you in any subsequent legal action. Good training helps managers achieve positive outcomes, reducing the need for any further disciplinary action. If your organisation recognises a trade union (or has some other form of employee representation) it can be useful to undertake training on a joint basis, so everyone has the same understanding and has an opportunity to work through the procedure, clarifying any issues that might arise.

Isn’t informal prevention better than formal cure?
Yes. Although it is important to deal with discipline and grievance issues fairly and effectively, it is more important that you prevent problems arising in the first place. The first step is to understand that discipline and grievance problems may be avoided by communication, consultation, induction and training. For example, if managers and staff are in the habit of talking to each other openly about what' is happening at work, specific problems like lack of training or poor motivation can be resolved before disciplinary action becomes appropriate. Equally, if staff are given contracts of employment when they start work, including rules for attendance, timekeeping and discipline, as well as details of pay, holidays, etc. there will be less opportunity for the sort of ambiguity that can produce problems later. So, the formal disciplinary and grievance procedures should be considered a 'last resort'. Informal action is often all that is needed to put the employee on the right road. What is informal action? In many cases a quiet word at the right time and in the right way may be all that is needed and will often be a far more satisfactory way of dealing with a problem than a formal meeting. As a follow up, some training, coaching and advice may be needed. In which case, both sides should be aware that formal processes would start if there is no improvement or if an improvement is not maintained. How should we take informal action? Talk to the employee in private. This should be a two-way discussion, aimed at pointing out the shortcomings in conduct or performance and encouraging improvement. Criticism should be constructive, with the emphasis being on finding ways for the person to improve and for the improvement to be sustained. The ‘praise sandwich’ may be helpful – starting and ending on a positive note about the employee’s contribution to the organisation. Listen to whatever the employee has to say about the issue. It may become evident there is no problem and, if so, make this clear. Where improvement is required, make sure the employee understands what needs to be done, how their performance or conduct will be reviewed and over what period. The employee should be told that if there is no improvement then the next stage would be the formal disciplinary procedure. It may be useful to confirm the agreed action in writing. What if it becomes clear during the informal discussion that the matter may be more serious? Be careful that any informal action does not turn into a formal disciplinary hearing as this may, unintentionally, deny the employee certain rights, such as the right to be accompanied. If during the discussion it becomes obvious that the matter may be more serious, end the

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meeting and tell the employee that the matter will be continued under the formal disciplinary procedure. Again, it is important that managers should keep notes of any agreed informal action.

B. DISCIPLINARY PROCEDURES
A disciplinary procedure will cover issues of both misconduct and incapability. Your organisation may have a separate procedure for each.

What should a disciplinary procedure contain
A good disciplinary procedure helps employees keep to the rules and helps you as a manager to deal fairly with those who do not. ACAS suggests your disciplinary procedure should:               Be in writing Say who is covered Be non-discriminatory Provide for matters to be dealt with speedily Allow for information to be kept confidential Tell employees what disciplinary action might be taken Say what levels of management have the authority to take the various forms of disciplinary action Require employees to be informed of the complaints against them and supporting evidence, before any meeting Give employees a chance to have their say before management reaches a decision Provide employees with the right to be accompanied Provide that no employee is dismissed for a first breach of discipline, except in cases of gross misconduct Require management to investigate fully before any disciplinary action is taken Ensure that employees are given an explanation for any penalty Allow employees to appeal against a decision.

What is gross misconduct?
An action generally regarded as serious enough to destroy the trust between the employer and the employee, making any further working relationship impossible and therefore, effectively ending the contract. It is normally restricted to very serious offences such as physical violence, theft or fraud, but may be determined by the nature of the business or other circumstances. Except in very exceptional circumstances, the full three-step statutory procedure (written statement, hearing and appeal) should still be used before deciding whether to dismiss.

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C. INVESTIGATIONS
Prior to any formal disciplinary hearing, you should appoint an investigating officer to gather the evidence. That investigation may reveal that the problem is not a disciplinary issue at all; in which case the problem should be dealt with in some other way.

How should we carry out a disciplinary investigation?
The basic procedure is as follows:     Act promptly – the supervisor or manager should clarify what the problem is and gather information from witnesses before memories fade. Statements should be obtained from these witnesses. Copies may need to be given to the subject of the allegation if the matter progresses further. Gather other supporting documents or information. The investigating officer should then submit these things with a covering report. This evidence can then be considered and a decision made on whether to proceed to a formal hearing.

Relevant personal details such as previous performance, length of service and any current warnings will need to be checked before a decision is made on whether or not to proceed.

When should we suspend an employee?
Where there appears to be serious misconduct, or risk to property or other people, or the possibility that evidence could be tampered with, you should consider a period of suspension with pay while the case is being investigated. This allows tempers to cool and hasty action to be avoided. Any suspension must be with pay, unless the contract of employment allows otherwise, whilst the period of suspension should be as short as possible. Tell the employee exactly why they are being suspended and that they will be called in for a meeting as soon as the investigation has been completed and a decision made on whether or not to proceed to a disciplinary hearing. Do not use suspension as an informal punishment.

How do we decide whether or not disciplinary action is necessary?
Having gathered all the facts, you need to decide whether to:    Drop the matter – There may be no case to answer or the matter may be regarded as trivial. Arrange counselling or other informal action. –This is an attempt to correct a situation and prevent it from getting worse without using the disciplinary procedure. Consider using an independent mediator – In some cases, where you consider that formal disciplinary action is not appropriate, an independent mediator may help solve disagreements over disciplinary issues. A mediator won't take sides or judge who is right, but can help the parties reach their own agreement where the employer and employee are unable to solve a disagreement alone. The mediator may also recommend a way forward if both parties agree that they want this. Arrange a disciplinary hearing – This will be necessary when the matter is considered serious enough to require disciplinary action.

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D. DISCIPLINARY HEARINGS
A disciplinary hearing is a formal meeting to hear the evidence about the issue. Although it may be held on a one-to-one basis, it is more usual for it to be held before a small panel of senior managers, with the manager of the person being disciplined presenting the case (often with assistance from HR specialists). The employee has a right to be accompanied at the meeting, and the person accompanying him/her (who may often be their trade union representative) may ask questions. There is a danger that the panel deciding the case may prejudge it before the hearing – for example, because of the employee's past record. It is important, therefore, that the hearing is heard in good faith and with an open mind. Also, where the facts are in dispute, no disciplinary penalty should be imposed until the case has been carefully investigated and there is a reasonably held belief that the employee committed the act in question. Whilst maintaining satisfactory standards and dealing with disciplinary issues requires firmness, it also requires fairness. Be as objective as possible. Notes of the proceedings at the hearings must be made at the time as a complete record, and these should be kept in case of any subsequent dispute over the case.

What preparation should we make for a disciplinary hearing?
As with any interview, the key is in planning.  Get the records – Ensure that all the relevant facts are available, such as disciplinary records and any other relevant documents (for example, attendance or sickness records or written statements from witnesses). Establish what disciplinary action was taken in similar circumstances in the past. When and where? The employee may offer a reasonable alternative date if their chosen companion cannot attend. Of the complaint, the procedure to be followed, and that they are required to attend a disciplinary meeting. That they are entitled to be accompanied at the meeting, and that they are allowed speak and to call witnesses at the hearing, or to submit witness statements. The timing of the meeting should allow sufficient time for the employee, and the person accompanying him/her, to be fully prepared for the hearing. It may be useful, and save time at the meeting, if copies of any relevant papers and witness statements are made available to the employee in advance. Arrange for a second member of management to be present wherever possible, to take notes of, and act as a witness to, the proceedings. Are there are any special circumstances to be taken into account? For example, are there personal or other outside issues affecting performance or conduct? Is this employee being unfairly singled out?

–  – 

Organise the domestics

Tell the employee – –

Allow the employee time to prepare – –

Get a management colleague –

Check – –

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– 

If there may be understanding or language difficulties, arrange for an interpreter or facilitator (perhaps a friend of the employee, or a co-employee). Be careful when dealing with evidence from an informant who wishes to remain anonymous. Take written statements, seek corroborative evidence and check that the informant's motives are genuine. If the employee concerned is a trade union official discuss the case with a trade union representative or full-time official after obtaining the employee's agreement. This is because the action may be seen as an attack on the union. Make a list of points you will wish to cover.

Protect anonymity – –

Protect trade union officials –

Plan the structure of the meeting –

Note that, if the employee fails to attend the meeting through circumstances outside their control, such as illness, you should arrange another meeting.

How should the disciplinary meeting be conducted?
It is important to keep the approach formal and polite and encourage the employee to speak freely with a view to establishing the facts. Remember that the point of the meeting is to establish the facts, not catch people out. Establish whether the employee is prepared to accept that they may have done something wrong. Then agree the steps that should be taken to remedy the situation. A properly conducted disciplinary meeting should be a two-way process. Use questions to clarify the issues and to check that what has been said is understood. Ask open ended questions, for example, 'what happened then?' to get the broad picture. Ask precise, closed questions requiring a yes/no answer only where there are only two possibilities, for example, ‘Were you there at the time?’ Do not get involved in arguments and maintain the dignity of the employee. Avoid any body language that could be misinterpreted or misconstrued as judgemental. Meetings rarely proceed in neat, orderly stages, but the following guidelines may be helpful.  Introduction – – – –  – –  Introduce those present to the employee and explain why they are there. Introduce and explain the role of the accompanying person if present. Explain that the purpose of the meeting is to consider whether disciplinary action should be taken in accordance with the organisation's disciplinary procedure. Explain how the meeting will be conducted. State precisely what the complaint is and outline the case briefly by going through the evidence that has been gathered. Ensure that the employee and their representative or accompanying person are allowed to see any statements made by witnesses. Give the employee the opportunity to state their case and answer any allegations that have been made. They should be able to ask questions, present evidence

State the case

Employee's reply –

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and call witnesses. The accompanying person may also ask questions and should be able to confer privately with the employee. Listen carefully and be prepared to wait in silence for an answer as this can be a constructive way of encouraging the employee to be more forthcoming. –  If it is not practical for witnesses to attend, consider proceeding if it is clear that their evidence will not affect the substance of the complaint Use this stage to establish all the facts. Ask the employee if they have any explanation for the misconduct or failure to improve, or if there are any special circumstances to be taken into account. If it becomes clear during this stage that the employee has provided an adequate explanation or there is no real evidence to support the allegation, stop the proceedings. Summarise the main points of the discussion after questioning is completed. This allows all parties to be reminded of the nature of the offence, the arguments and evidence put forward and to ensure nothing is missed. Ask the employee if they feel that they have had a fair hearing, and whether they have anything further to say. This should help to demonstrate to the employee that they have been treated reasonably. It is generally good practice to adjourn before a decision is taken about whether a disciplinary penalty is appropriate. This allows time for reflection and proper consideration. It also allows for any further checking of any matters raised, particularly if there is any dispute over facts. If new facts emerge, consider whether to reconvene the disciplinary meeting. Inform the employee of the decision and the right of appeal.

General questioning and discussion – – –

Summing up –

Adjourn –

–  –

Make the decision

What if other issues arise during the hearing?
Meetings do not always go to plan, and the best organised disciplinary hearings can encounter problems – for example:  The employee becomes upset or distressed during the hearing Allow time for them to regain composure before continuing. If the distress is too great to continue, adjourn and reconvene later – perhaps on another day. However, the issues should not be avoided. Clearly, during the meeting there may be some 'letting off steam' and this can be helpful in finding out what has actually happened. However, do not tolerate abusive language or conduct.  A grievance is raised during the hearing If it relates to the case, it may be appropriate to suspend the disciplinary procedure for a short period until the grievance can be considered.  Further investigation is necessary before you can proceed A proper investigation should have gathered all the information you need before the formal hearing. However, if you become aware of a need for further investigation,

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adjourn the hearing. You can also do this at the request of the employee or their accompanying person if they make a reasonable request for a further investigation.

E. DISCIPLINARY PENALTIES
What should be considered before deciding any disciplinary penalty?
The disciplining of a worker is a serious matter and should never be regarded lightly or dealt with casually. It should be the outcome of properly conducted enquiries, investigations and proceedings, not the result of a snap decisions or action in the heat of the moment. Thus, you have to be careful to follow the disciplinary procedure, and anyone handling the case should never exceed the limits of his or her authority. If the employee is dismissed or suffers a disciplinary penalty short of dismissal, such as suspension without pay, the statutory minimum procedures must have been followed. If they have not been followed and the employee makes a claim to a tribunal, the dismissal in many countries will automatically be ruled unfair. In determining the action to be taken, the following factors should be taken into account:      Whether the rules of your organisation indicate what the likely penalty will be as a result of the particular misconduct The penalty imposed in similar cases in the past The employee's disciplinary record, general work record, work experience, position and length of service Any special circumstances which might make it appropriate to adjust the severity of the penalty Whether the proposed penalty is reasonable in view of all the circumstances.

It should be clear what the normal organisational practice is for dealing with the kind of misconduct or unsatisfactory performance under consideration. This does not mean that similar offences will all call for the same disciplinary action. The attitude and conduct of employees may be seriously affected if you fail to apply the same rules and considerations to each case. You should try to ensure that all employees are aware of your organisation's normal practice for dealing with misconduct or unsatisfactory performance, but at the same time, consider each case on its merits. That said, it is also essential to take account of the circumstances and people involved. Personal details such as length of service, past disciplinary history and any current warnings will be relevant to such considerations, as may be health or domestic problems. Any provocation or other mitigation also needs to be taken into account – such as ignorance of the rule or standard involved or inconsistent treatment in the past. Any decision to discipline an employee must be reasonable in all the circumstances and must not discriminate on grounds of age, race, sex, disability, sexual orientation, religion or belief.

What are the levels of disciplinary penalty?
There is a sliding scale of action, essentially based on the employee's record and the seriousness of the issue.  First formal action – unsatisfactory performance The employee should be given an 'improvement note' setting out: – – The performance problem The improvement that is required

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– – –

The timescale for achieving this improvement A review date Any support the employer will provide to assist the employee.

The employee should be informed that the note represents the first stage of a formal procedure and that failure to improve could lead to a final written warning and, ultimately, dismissal. A copy of the note should be kept and used as the basis for monitoring and reviewing performance over a specified period, for example,, six months. However, if an employee's unsatisfactory performance or its continuance is sufficiently serious – for example, because it is having or is likely to have, a serious harmful effect on the organisation – it may be justifiable to move directly to a final written warning.  First formal action – misconduct The employee should be given a written warning setting out the nature of the misconduct and the change in behaviour required. The warning should also inform the employee that a final written warning might be considered if misconduct is repeated. A record of the warning should be kept, but it should be disregarded for disciplinary purposes after a specified period, for example, six months.  Final written warning If the employee has a current warning about conduct or performance then further misconduct or unsatisfactory performance (whichever is relevant) may warrant a final written warning. This may also be the case where 'first offence' misconduct is sufficiently serious, but would not justify dismissal. Such a warning should normally remain current for a specified period, for example, 12 months, and contain a statement that further misconduct or unsatisfactory performance may lead to dismissal.  Dismissal or other penalty If the employee has received a final written warning further misconduct or unsatisfactory performance may warrant dismissal. Alternatively the contract may allow for a different disciplinary penalty instead. Such a penalty may include disciplinary transfer, disciplinary suspension without pay, demotion, loss of seniority or loss of increment. These penalties may only be applied if allowed for in the employee's contract. Any penalty should be confirmed in writing and the procedure and time limits for appeal set out clearly.

How do warnings work?
Except in agreed special circumstances, any warning given should be disregarded for disciplinary purposes after a specified period of satisfactory behaviour. (After this point it is regarded as ‘spent‘.) When drawing up your disciplinary procedure, establish the length of time before the warning is regarded as spent. Normal practice is for different periods for different types of warnings, for example,:   First written warning – valid for 6 months Final written warning – valid for 12 months (more in exceptional circumstances).

If a pattern emerges and there is evidence of abuse – as, for example, where an employee's behaviour is satisfactory during the period of the warning, but lapses immediately thereafter –

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the employee's disciplinary record should be borne in mind in deciding how long any future warning should last. Exceptionally, there may be circumstances where the misconduct is so serious, verging on gross misconduct, that it cannot be realistically ignored for future disciplinary purposes. In such a circumstance, make it very clear that the final written warning can never be removed and that any recurrence of serious misconduct will lead to dismissal. These instances will probably be very rare, as it is not good employment practice to keep someone permanently under threat of dismissal.

How can an employer dismiss an employee?
Employees should only be dismissed if, despite warnings, conduct or performance does not improve to the required level within the specified time period. Dismissal must be reasonable in all the circumstances of the case. Unless the employee is being dismissed for reasons of gross misconduct, he or she should receive the appropriate period of notice or payment in lieu of notice. Such payment should include payments to cover pension contributions and holiday pay, as well as the value of any non cash benefits such as a company car, medical insurance and any commission that the employee might otherwise have earned. Law in the UK lays down minimum periods of notice. Can an employer dismiss without notice? You should give all employees a clear indication of the type of misconduct that, in the light of the requirements of your business, will warrant dismissal without the normal period of notice or pay in lieu of notice. So far as possible, the types of offences which fall into this category of 'gross misconduct' should be clearly specified in your rules, although such a list cannot be exhaustive. No dismissal should be instant. A dismissal for gross misconduct should only take place after the normal investigation and disciplinary meeting to establish all the facts. The employee should be told of the complaint and be given the opportunity to state their case and be accompanied by a person of their choice, as in any other disciplinary meeting.

How should an employee be informed of a disciplinary decision?
You should give the details of any disciplinary action to the employee in writing as soon as the decision is made, including the reasons for the decision. The period that any warning is to remain in force should be clear, as should the possible consequences of any further misconduct or continuing unsatisfactory performance. The written notification should specify:      The nature of the misconduct Any period of time given for improvement and the improvement expected The disciplinary penalty and, where appropriate, how long it will last The likely consequences of further misconduct The timescale for lodging an appeal and how it should be made.

You may wish to require the employee to acknowledge receipt of the written notification, for example, by signing and returning a second copy. In the UK, you have to give written reasons for dismissal within 14 days.

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What disciplinary records should we keep?
Consistent handling of disciplinary matters will be difficult unless simple records of earlier decisions are kept. These records should be confidential, detailing the nature of any breach of disciplinary rules; the action taken and the reasons for it; the date action was taken; whether an appeal was lodged, its outcome and any subsequent developments. Note that an employee in the UK has access to personal and personnel records about them. In each case, copies of the relevant records should be given to the employee concerned without him or her needing to request them, although in certain circumstances some information may be withheld, for example, to protect a witness.

F. APPEALS
All disciplinary (and grievance) procedures should include a right of appeal against the decision of the hearing on the part of the employee. This is likely be because either    There is a dispute as to the proper conduct of the hearing – including that certain information was not heard or was not sufficiently considered; and/or There is new evidence available; and/or The penalty imposed was not reasonable in the circumstances.

Note that an appeal may result in a previous decision be overturned if it becomes apparent that it was not soundly based. This does not undermine authority, but rather makes clear the independent nature of the appeal. If this is the case, consider if you need to train managers, clarify the rules or if there are other implications.

What should be in our appeals procedure?
The exact manner in which an appeal may be made should be specified. It should:    Specify a time limit within which the appeal should be lodged, usually five working days Provide for appeals to be dealt with speedily, particularly those involving suspension or dismissal Wherever possible, provide for the appeal to be heard by someone more senior in authority to the person who took the disciplinary decision and, if possible, who was not involved in the original meeting or decision Spell out what action may be taken by those hearing the appeal Set out the right to be accompanied Afford the employee and their companion, if the employee so wishes, an opportunity to comment on any new evidence arising during the appeal before any decision is taken.

  

Note that, in a small organisation, it may not be possible to find someone with higher authority than the person who took the original disciplinary decision. If this is the case, that person should act as impartially as possible when hearing the appeal and should use the meeting as an opportunity to review the original decision. Some disciplinary procedures provide for someone outside the organisation to hear an appeal.

How should an appeal hearing be conducted?
 Introduce – – Welcome and introduce those present Explain their roles as necessary

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– – 

Explain the purpose of the meeting and how it will be conducted Explain the powers of the person/people hearing the appeal – for example, to come to a different conclusion to first hearing or to vary any penalty imposed. Ask the employee why they are appealing. Thoroughly explore the relevant issues Pay particular attention to any new evidence that has been introduced and ensure the employee has the opportunity to comment on it. Summarise the facts. To consider the decision. Inform the employee of the results of the appeal and the reasons for the decision Make it clear, if this is the case, that this decision is final.

Hearing – – –

  

Summarise – – – – Adjournment Announce result

Confirm it in writing

Can an employee take an appeal against dismissal to an external tribunal?
Provided the employee has sufficient service (currently one year in the UK) they may make a complaint to an employment tribunal if they believe they have been unfairly dismissed. The tribunal must normally receive such complaints within three months from and including, the person's last day of employment. It would then be for the employer to show the reason for the dismissal and that it was a fair reason. The tribunal will vet that decision and will take into account the size and administrative resources of the employer in deciding whether you acted reasonably or not. The tribunal, if it finds in favour of the employee, may recommend that the employer reinstates the employee or, failing that, that compensation for the unfair dismissal is paid by the employer. An employment tribunal will find a dismissal unfair if the statutory procedure has not been followed where it applies. In such circumstances, they may also increase compensation for the employee by between 10 and 50%. However, if the employee had failed to cooperate in the procedure – for example, he/she failed to attend the disciplinary hearing without good cause – then compensation may be reduced.

G. GRIEVANCE PROCEDURES
A grievance is a concern, problem or complaint that an employee raises with their employer, such as in respect of:      Terms and conditions of employment Health and safety Work relations Bullying and harassment New working practices

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  

Working environment Organisational change Discriminatory practice.

The purpose of the grievance procedure is allow an employee the opportunity to bring forward a grievance which might otherwise worsen. It also allows managers to know how they should respond. It will encourage fairness, consistency and speed.

What is the process for handling a grievance?
The same three stage process as for discipline – notification by employee, hearing and appeal:   Step 1 – The employee informs you of their grievance in writing. Step 2 – You can invite the employee to a meeting to discuss the grievance where the right to be accompanied will apply. – You notify the employee in writing of the decision and of the right to appeal.  Step 3 – The employee informs you if they wish to appeal. – You must invite them to a meeting and following the meeting inform the employee of the final decision. (Employees must take all reasonable steps to attend meetings.) As with discipline, though, wherever possible we should be looking to settle grievances informally. Most are settled informally and quickly with a line manager. This has advantages for all workplaces, particularly where there might be a close personal relationship between a manager and an employee. It also allows for problems to be settled quickly. Again, like discipline, a neutral mediator can help sort out a grievance and maintain working relationships. Mediation is often most effective if used early. If more than one person brings the grievance, the employer may wish to consider whether it should be resolved with any recognised trade union.

What happens in a grievance hearing?
It is likely to proceed as follows:  Preparation – It should be held in private and without interruption. As with discipline, you may find it useful to have someone to take notes and act as a witness to the proceedings. You will normally already have a written statement of the grievance, and should find out before the hearing whether similar grievances have been raised before, how they have been resolved and any follow up action that has been necessary. This allows consistency of treatment. Introductions as necessary. The employee re-states their grievance and usually how they would like to see it resolved. Care and thought should go into resolving grievances. They are not normally issues calling for snap decisions and the employee may have been holding the grievance for a long time.

Hearing – –

Seeking resolution –

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–  

Make allowances for any reasonable 'letting off steam' if the employee is under stress.

Summing up Adjourn – You may need to explore possibilities with other managers about the resolution of the grievance, or they may themselves wish to take advice on how to proceed further. Tell the employee when they might reasonably expect a response if one cannot be made at the time, bearing in mind the time limits set out in the procedure. Confirm the decision in writing, with information on the right to appeal.

– 

Communicate decision –

H. ATTENDANCE
Why do staff fail to attend for work?
There are two basic reasons for absence – medical and domestic – although within this there are many possible underlying causes. Absences may be classified as short, medium or long term:    short term absence may be for domestic emergencies (such as dealing with burst pipes) or for minor illnesses or operations and their recovery medium term absence usually arises from domestic responsibilities or more substantial illnesses or other medical problems such as back pain. long term absence may be the result of recurring medical conditions or mental health problems

Stress, bullying and harassment at work are also responsible for sickness absence. Many regard staff absence as an indication of low morale or conflict at work, and it is certainly linked to low retention of staff. It is generally assumed that long term sickness absence is more likely to be genuine than short term absence. Therefore, there is greater pressure on the employers to reduce short term absences.

How much does poor attendance cost an organisation?
It is hard to calculate because no one is sure how much sickness absence is genuine and how much is absenteeism – i.e. unjustified sickness absence. In the UK, it is said to cost the economy in excess of £10 billion a year. However, financial costs are only one of the costs resulting from regular absence. For example, other workers often feel aggrieved and it has a direct effect on customer service and therefore repeat business.

What can we do to improve attendance?
A survey by the Chartered Institute of Personnel and Development in 2007 identified the most popular and successful actions. These were:  Establish processes and targets – – Publish an absence management policy and procedure Set an absence rate as a target for teams, departments and the organisation as a whole

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Monitor – – Gather absence data that is accurate, consistent and sufficiently detailed to allow proper analysis Distinguish between factors that push the employee away from coming to work – for example, stress, harassment, lack of job satisfaction, job insecurity, long hours, poor organisational culture – and the pull factors, such as domestic commitments and travel difficulties. There is usually more that can be done to address the push factors than the pull factors. Carry out a meaningful analysis of absence data Highlight short-term absences – for example, using the Bradford points system (see below) and trigger points for initiating action Provide line managers with local absence data about individuals Publish analyses by unit so that comparisons can be made, but without allowing any individual to be identified Carry out return to work interviews, where the line manager is required to speak to the employee on their return to work Take decisive action against those whose attendance is poor Restrict sick pay, as long as that does not encourage people who are genuinely sick from coming to work Provide short notice leave and other flexibilities for domestic crises Improve occupational health to prevent absence – for example, the provision of counselling and anti-stress initiatives Help those returning to work – for example, by allowing them to return gradually, on reduced hours or on light duties.

Review – –

Publish – –

Create the right culture – – – –

Provide professional occupational health support – –

What is the Bradford Points System?
It is founded on the principle that that the effect on your organisation of a single long term absence is less significant than several short absences. This would hold true even if those short absences total to less days off than the single long absence. It works by calculating a score for an individual employee over a one year period (although any period of time can be used) which can quickly enable the identification of those staff who are causing the most disruption by their persistent short term absences. The formula for the calculation is: Bradford factor  (Number of absences)2 x (Total number of days absent) Some examples of how the system works are shown below.

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Examples Absences 1 absence of 5 days Calculation  Bradford points score
2  1 x5 2

 5  40  125  250

2 absences of 5 days  2 x 10 5 absences of 1 day
2  5 x5

5 absences of 2 days  52 x 10

10 absences of 1 day  102 x 10  1,000 Whilst it is a matter of subjective opinion to say that two absences of five days are equally disruptive to the organisation as one absence of 40 days (both scoring 40 points), the Bradford system does highlight the cumulative effect of short term absence and is widely used as a measure for monitoring and managing absence in many organisations.

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Chapter 8 Employee Reward
Contents
Introduction

Page
173

A.

Employee Motivation What is motivation? Why do people go to work? So what motivates us? How do employers influence their staff‟s behaviour?

173 173 173 173 175

B.

Needs Theories of Motivation What is Maslow‟s Hierarchy of Needs? What other needs theories are there? How does Hertzberg's two factor theory differ? Are needs theories still relevant? What does McGregor's Theory X and Theory Y offer management? How does participative management relate to this?

178 178 180 181 182 182 185

C.

Process Theories of Motivation What is expectancy theory? What is equity theory? What is attribution theory? What is Handy‟s motivational calculus?

185 185 186 186 187

D.

Purposes of Reward What are employers and employees looking for in employee reward? How do theories of motivation link to employee reward?

188 188 188

E.

The Elements of Reward What is the reward mix? What determines the level of reward?

189 189 190

(Continued over)

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F.

Financial Reward Are we talking about wages or salary? How might financial reward be calculated? Are reward levels becoming fairer? What is a pay structure?

190 190 191 191 192

G.

Flat Rate Pay Systems

193

H.

Performance Related Pay What types of performance related pay systems are there? How do we implement performance related reward?

194 194 195

I.

Other Financial and Non-Financial Reward

196

J.

Total Reward What are the components of total reward? Why adopt total reward? What might be included in a total reward scheme? What might be considered in a flexible benefits package? What are the perceived problems with total reward?

197 197 197 198 199 199

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INTRODUCTION
By the end of this chapter you should be able to describe alternative approaches to reward and recognition in organisations, including „total reward‟. Therefore, you should be able to:    Explain employee reward and recognition, including how people are motivated to work Evaluate the mix of financial and non financial rewards Explain the total reward package.

A. EMPLOYEE MOTIVATION
What is motivation?
People are an organisation‟s most valuable and expensive resource, but they are the most difficult element of an organisation to manage. They possess a variety of talents and each will react differently in different circumstances. In fact, in many ways people are unpredictable. This means that, unlike machines, they are not interchangeable. This creates problems for organisations – for example, a person may work well one day, but not the next, or may cope well with pressures one day, but fail to cope the next day. Motivation is concerned with why people do (or refrain from doing) things. A “motive” is a need or a driving force within a person. The process of motivation involves choosing between alternative forms of action to achieve some desired end or goal. Goals can be:   Tangible – such as higher earnings Intangible – such as personal reputation or prestige. Motives or needs

Selected behaviour

Goals or desired ends (tangible or intangible)

Human behaviour can be a complicated. Your motives may be clear to you, but quite puzzling to others (and vice versa). On other occasions everyone understands what the motives are. It is important for those of us in management and supervisory positions to understand such alternatives and to adapt our leadership style accordingly.

Why do people go to work?
Work has become an accepted part of the way of life of almost any society. To survive, modern man must “labour by the sweat of his brow” and he has settled for what Dunlop describes as “the inevitable and eternal separation of industrial man into managers and managed”. We have various wants, desires and orientations to work. To satisfy basic human wants, we must earn money and consequently, we offer our skills in return for work and reward. We might assume that we also endeavour to sell our knowledge, skills and expertise for the greatest reward. However, some value other factors more highly than financial reward and will accept lower pay in exchange for perhaps status or a more “worthwhile” job.

So what motivates us?
Many things have been suggested as motivators, including:   An overriding sense of purpose in what we do Material rewards

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      

Mastery of a subject or skill Recognition from others – status A desire for control (although note that autonomy can be both healthy and unhealthy) Security of various sorts A better environment Socialisation Learning and growth.

We shall explore these factors in greater detail shortly, but for now let's continue with the concept of motivation in general. Are these things inside us or outside us? We can divide motivation at work into internal and external motivation. (a) Intrinsic (internal) motivation – This is related to the work itself, where there is a close relationship between the task itself and the satisfaction of human needs – for example, where a carpenter or an engineer derives satisfaction from a job well done. Extrinsic (external) motivation – This is independent of the task – i.e. the task is merely a means to an end, such as when a person works on an assembly line to get high wages.

(b)

But I thought money is the great motivator It is a fact that most people go to work because they get paid to do so. However, this basic need for money will generally only make a worker turn up and do the acceptable minimum. Money is, nevertheless, often cited as a prime motivator to improve performance in certain situations – for example, salespeople are motivated to go that extra mile if it will close one more sale and earn an extra 5%, or workers on the factory line work that bit faster where performance related bonuses are used to maintain productivity. However, it is not always clear to what extent the incentive of additional monetary reward does influence performance. (Note that there are a range of other “carrots” – or positive incentives – offered as an incentive to come to work, or to particular types of performance, including welfare amenities, holidays, etc.) Isn't fear a big motivator? Where there is much to fear, fear can be a motivator. However, if you know that you will be supported by the State, even if you are made redundant, or that you will easily be to get another job, you will have a lot less to fear. If, though, the future of your company is in jeopardy there is more at stake than having enough money to food and clothes yourself. You may invest a lot of emotional capital in the status your job gives you and may fear that loss. Likewise, if a project is not completed on schedule, you may fear the consequences to your reputation or self image. But is that not negative motivation? Yes. Here we have another important distinction in motivation – motivation to move towards something you desire versus motivation to move away from something you do not want. Are you motivated to leave your current job because you do not like that job? Or are you attracted by something that another job offers you? The distinction is between push and pull. Is there also a distinction between short and long term motivation? Yes. You may be motivated to do something because it gives you a short term benefit but you dislike the long term consequences. You may agree to do the job by lunchtime because your boss asks you and you cannot face saying no. However, the consequence will be that

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you will fail to meet another deadline and you will feel bad about yourself for having not stood up for yourself. The opposite, of course, can be true – you are prepared to sacrifice short term comfort for long term greater benefit. This is the principle of deferred gratification.

How do employers influence their staff’s behaviour?
When you set out to get things done through people you have to ensure that employees perform their work roles effectively and efficiently. The starting point of this effort is basic behaviour modification. (a) Carrot and stick This approach has a simple base, which has been expanded by management theorists. The starting point is that most human beings are influenced in their work performance by the desire for reward and the fear of punishment. An organisation is in the position both to reward and punish its employees. In this simple behaviour model, the organisation does not need to take much account of human differences because most people react similarly to the promise of the rewards for compliance with work rules and the threat of punishment for breaking them. Management theorists have tended to emphasise the reward side of this model because individuals can be encouraged to become increasingly better workers, while the ultimate punishment is dismissal and the worker is lost to the organisation. The term used for encouraging workers to meet the expectations of the organisation is positive reinforcement. How does positive reinforcement work? The objective is to modify behaviour for the advantage of the organisation, so you have to take account of the following points:     The desired behaviour must be defined and explained to the employees so that they know what you expect of them The rewards and punishments need to be defined and explained to the employees A decision must be made whether to use extrinsic or intrinsic reinforcements or a combination of these There must be adequate monitoring of employee behaviour to see whether the reinforcements are having the desired effect.

However, this approach does have some weaknesses: Behaviour in human beings arises from attitudes – i.e. it is how people see the situation that guides their behaviour. For example, employees may see a reward as a bribe so it may have the opposite effect to the one you desire. Behaviour is the external expression of the internal thought processes of the individual, so in order to effect change, we must address these internal forces.. (b) Attitude change This is the root of behaviour modification and is a far more complex and difficult task than simple carrot and stick. Consulting employees, involving them and creating an atmosphere of reasonableness and caring in the organisation, may encourage more favourable attitudes. Furthermore, negative attitudes can be reduced if you deal swiftly with complaints and try to make work life interesting and satisfying for employees. While the positive reinforcers (rewards) tend to work well, the negative reinforcers (punishments) may make your employees hostile and create unfavourable attitudes that persist long after the punishment is over. Resentful workers may, on the surface,

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appear to be complying with your wishes whilst not really giving of their best at work. Furthermore, when fellow workers see an individual punished it can make them resentful of the organisation and may adversely affect their behaviour. The principles behind behaviour modification take too little account of individual differences of personality – people are not like cogs in a machine. The criticisms of behaviour modification show that the relationship between individuals and their work lives is a complex one and can be problematic. Is this the way managers have always viewed motivation? No. At the beginning of the 20th century, the proponents of scientific management saw the problems of people at work as resulting from a failure of management properly to integrate workers into their roles in the organisation. F W Taylor was an early proponent of the dictum that workers should have the same goals as the organisation. The way to achieve this was through the application of „scientific management‟ principles. He felt that the „scientific‟ approach to organisation and management would be accepted by all as the best way to operate and it would result in everyone getting what they wanted – higher output, higher pay, higher profits. Thus, management and labour would co-operate and this would give the best results. So how does scientific management work? The basic assumptions are: (a) Plan – Many problems with employees arise because their work is not properly planned for them and workers do not know the best way in which their jobs should be done. We can see that this could give rise to anomie – the confusion of the individual in relation to their job. This in turn can generate excessive stress. To combat this situation, Taylor and the other advocate of scientific management put forward their view that management should plan the jobs of workers and should establish the best way in which each job should be performed. Carry out time and motion study – Many work related problems arise because workers do not realise the one best way of performing a task. Management must use time and motion study to establish best practices. Incentivise – Bonus payments and incentive schemes give good workers a sense of making progress, even if it is not possible to promote them. Provide good working conditions – So that workers can achieve their full production potential. Train – Taylor and his followers believed that many of the problems of individuals at work arose because they had not been trained properly, so scientific management emphasises the importance of proper training. Good training not only improves production performance, but also builds up the confidence of employees.

(b)

(c) (d) (e)

Has scientific management always ruled our thinking? No. The dehumanising effects of „Taylorism‟ gave rise to a counter movement towards the middle of the 20th century – the Human Relations School. Many of the ideas of Elton Mayo can be deployed to assist the integration of individuals into their work roles. Important among these are:   Socialisation – Individuals are social beings just as much as economic beings and will only perform well in organisations if their social needs are met. Human values – Individuals expect to be treated as human beings in the workplace, with dignity and politeness.

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     

Autonomy – Individuals like to feel that they have some control over their own work situation and they appreciate being consulted over matters that affect them. Communication – Good communications are crucial. People have a right to know what is going on in the organisation. Grievances – Grievances should be dealt with quickly. If not, people may brood and discontent festers. Human recognition – Individuals value praise when they feel that they have earned it. Security – Individuals perform well in a secure environment, but react against uncertainty and threats. The informal organisation – Within enterprises there is an informal organisation of friendship groups, gossip and generally accepted norms and values. Management should take account of this – for example, when changing a worker from one job to another.

The major breakthrough of the human relations approach was the realisation that people, unlike machines, are not passive instruments of your organisation who will always pursue organisational goals. In fact, they often pursue goals which conflict with those of your organisation. The essence of the practical application of the approach is to try to reconcile the needs of your organisation and the needs of the employee. So how do we reconcile both needs? Figure 8.1 shows the two sets of needs that must be reconciled. Figure 8.1: Individual and Organisational Needs INDIVIDUAL NEEDS Physical well-being Job satisfaction Personal development Achievement Respect from work group ORGANISATIONAL NEEDS High productivity Low absenteeism Co-operation Industrial harmony Constructive disagreements Low labour turnover

If needs are met

If needs are met

Contented, productive workforce

Contented, efficient workforce

Motivating workers involves inspiring them to contribute to the goals of the organisation. How you go about this will depend, to some extent, on what you believe people want from their work. You must set about finding out what motivates the people you are managing. There is no simple answer to the mystery of human motivation. Look to ways of going beyond the simplistic views based on the punishment and reward models, although these may still feature, to some degree, in any motivation model that you may use. For people to behave in

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the way your organisation demands there must be an integration of the needs of the people and the demands of the organisation. Motivating others means giving them a reason to want to do something and there is a better way than bribes and punishments. Create an environment where they will become selfmotivated; help them find the impetus from within themselves to work towards their own goals and rewards. To become a successful motivator of other people you must learn to concentrate on certain factors that make an employee feel good about themselves, their role and the organisation. These are the factors that improve an employee‟s level of job satisfaction and include such things as:      Responsibility Challenge Self improvement and personal growth Recognition Sense of achievement.

To get the best out of those you are working with you must first appreciate the needs of the staff and their motivation to work. It is a mistake to think that everyone feels the same about the job or your organisation. What role does employee morale have? Morale is the state of the individual‟s or group‟s complex of attitudes, judgements and feelings about their work situation. We can view morale as covering job satisfaction or dissatisfaction. It is also a person‟s attitude towards voluntary co-operation to the full extent of their ability in the best interests of your organisation. Morale is not the same as “happiness”. Research shows that not all high producing workers are happy and that not all low producing workers are unhappy.   High morale exists when employees‟ attitudes are favourable towards their jobs, their fellow workers and the undertaking – i.e. the total work situation. Low morale exists when employees‟ attitudes are antipathetic to the attainment of the undertaking‟s objectives.

B. NEEDS THEORIES OF MOTIVATION
Each human being is an individual and each individual's behaviour is not entirely rational – i.e. not always prompted by his or her conscious mind. However, psychology makes a basic assumption that all behaviour has a cause. A person does something because of a basic underlying reason, which itself may be irrational, perhaps unconscious, and might be denied if it were suggested as the motivator. There is a cause and effect process at work in human behaviour., and the most commonly encountered theory about the causation of human behaviour is ‟need‟ or content theory.

What is Maslow’s Hierarchy of Needs?
The American psychologist, Abraham H Maslow, is particularly associated with “needs” theory. In 1954 he published his classification of five overlapping needs. This has found wide acceptance, to the point where the phrase “hierarchy of needs” is now commonly used without explanation.

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Maslow suggested that people are in a continuous state of motivation and that the nature of that motivation is variable and complex. Furthermore, people rarely reach a state of complete satisfaction, except for a short time. As one need is satisfied, another overlapping need assumes prominence and motivates further effort until satisfied, when yet another clamours for satisfaction. Hence, we should think of a sequence or hierarchy of needs, rather than a simple list of human needs driving us on. Read the following from the base upwards: Figure 8.2: Maslow's Hierarchy of Needs 5. PROGRESS 4. 3. 2. 1. Self-actualisation Secondary needs

Ego needs

Social needs Primary needs

Safety needs

Physiological needs

Now let us look at each of these in turn, beginning with the most basic. (a) Physiological needs. The obvious basic needs arise from your instinct to stay alive and reproduce – the need for food, water, sleep, sex, etc. In all except the most primitive communities, these needs largely take an intermediate form of a need for money. (b) Safety or security needs These are a subdivision of the material needs above and cover food, warmth, and shelter. You need protection from the physical environment – housing, clothing for warmth or protection from the sun, defence against natural dangers (animals, insects, germs). In a developed country, security of employment is the intermediate need covering the basic ones. (c) Social needs These are the need to belong or affection needs. They include the need to love and be loved, the need to give and receive affection and a need for company and association with other people, extending to co-operation in joint effort. Is this not a powerful factor in the cohesion of work groups? (d) Ego needs These are the need for social status, esteem and self respect. You want to feel a certain pride in yourself; that your abilities are tested and proved adequate, that you are achieving something and that you are a useful person. Complementary to this is a need for the respect of others, overlapping the need for belonging and affection. We want appreciation, a measure of acclamation, to be noticed among all the others and at least, some degree of prestige and status. We all wish to enjoy the feeling of our worth among others. (e) Self-actualisation This is the need for personal status, self-realisation and accomplishment. Maslow places this need at the top of the hierarchy since the person fortunate enough to satisfy the first four needs is still driven on by an urge to accomplish the potential of their

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ability, to “reach the top” and, once there, to achieve complete success. Maslow describes this need as: “Man’s desire for self-actualisation … to become everything that one is capable of becoming”. What are the implications of Maslow’s hierarchy? There are three key implications in respect of motivation: (a) (b) The critical feature is the hierarchy – i.e. his suggestion that, as a lower level need is satisfied, another assumes major importance in your life. The various needs are interdependent – the urges for accomplishment and growth emerge only when the most basic needs have been satisfied: “Man is a perpetuallywanting animal”, said Maslow. When the fortunate few get to the ultimate need – self fulfilment – it seems this is the hardest to satisfy, which means it can be a most powerful motivator.

(c)

The important elements in the motivation to work are, therefore, unsatisfied or under-satisfied needs. To be effective, an incentive should be designed and presented in such a way that the person to whom it is offered will see it as a means of satisfying one or more of their needs and be their motive for working. Empirical research, carried out since Maslow developed his theory, substantiates the existence of the various needs identified in the model. However, there is little evidence that the needs function in a rigid hierarchy. Was Maslow right? The model provided a useful conceptual framework for over half a century, but by the twenty first century it has been widely rejected as a fully adequate theory of human behaviour.

Activity
(a) (b) To what extent have you found Maslow‟s hierarchy to be true in your experience? Using Maslow‟s hierarchy, how would you explain the motivation of someone who was willing to give his or her life for a cause they believed in?

What other needs theories are there?
Other theorists have developed different approaches based on the satisfaction of needs as being what motivates individuals. (a) Clayton Alderfer‟s ERG theory collapsed Maslow‟s hierarchy into three headings: Existence – Relatedness – Growth In this approach, Maslow's lower order needs of physiological and safety are in the existence category, love and self esteem needs in the relatedness category, and the growth category contains the self actualisation and self esteem needs. This less prescriptive approach increases the validity of the ERG model. (b) D C McClelland, writing in the early 1960s, concentrated on what he saw as three key needs:  Need for affiliation – The need of human beings for friendship and meaningful relationships

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 

Need for power – Some people seek power in their work situations and wish to make a strong impression on people and events. Need to achieve – To many people, the sense of “getting on”, progressing or being promoted, is very important.

These three points relate to the functioning of people at various levels of authority in an organisation. If you are “high up”, you will have a strong drive for power and making an impact. If you are in the middle reaches, you will have considerable achievement needs and these compete with each other. At the lower levels, the drive for affiliation should be strong.

How does Hertzberg's two factor theory differ?
Frederick Herzberg, writing in the late 1950s and early 1960s, identified two distinct sets of needs in individuals working in organisations: the need to avoid pain and discomfort and the need to develop psychologically as a person. These may be translated into two areas of concern for an organisation employing people: (a) Hygiene factors (or extrinsic factors) These include working conditions, company policy and administration, status and security of job, supervision, interpersonal relations and pay and salary. If these are not adequate, there will be dissatisfaction and work output will suffer. Drawing an analogy between a healthy organisation and a healthy person, Herzberg called these “hygiene” factors, in the sense that they prevent the “disease” of job dissatisfaction. (b) Motivators Under this heading, Herzberg included achievement of work tasks, recognition by supervisors for achievement and quality of work, giving of increased responsibility as a reward for successful work efforts, and the opportunity for psychological development in the work role and growth. Since these are the characteristics that people find intrinsically rewarding, people will work harder to satisfy them through their job. We can present Herzberg‟s two factor theory in the following table: Hygiene Factors (Dissatisfiers)       Pay Fringe benefits Quality of supervision Company policy and administration Working conditions Interpersonal relationships. Motivators      Achievement Recognition for achievement Meaningful, interesting work Advancement Psychological growth.

It is important to understand that the hygiene factors and motivators are not mutually exclusive in their effects. Herzberg acknowledged the short term motivational impact of a pay rise or an improvement in working conditions. However, these are short lived. Once hygiene factors are enhanced, the worker will return to their original level of output. In Herzberg‟s words, “a reward once given becomes a right”. To achieve genuine long term motivation, it is necessary for you to focus on the motivators. Herzberg proposes several ways in which a higher level of motivation might be promoted:

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    

Training – The more a person can do, the more that person can be motivated Communication – The focus should be on the quality of communications, rather than quantity, and communication should be direct whenever possible Job rotation – Improving the variety of tasks and responsibilities Job enlargement – Making a person capable of more Job enrichment – Creating meaningful, interesting work. Herzberg believed that it is difficult or impossible to achieve if the job is basically dull, repetitive or uninteresting.

In Herzberg‟s model it is possible to avoid job dissatisfaction without achieving job satisfaction. This is possible where your organisation meets a high level of hygiene factors, but fails to provide a high level of motivators. Plausible though it sounds, in recent times Herzberg‟s theory has been somewhat discredited, for two main reasons – his own data, which was limited, did not support it and other data does not support it. Despite its shortcomings, though, the theory continues to attract a great deal of attention and it has stimulated developments in work structuring.

Are needs theories still relevant?
Although they are held to be inadequate as full explanations of human behaviour, these approaches continue to be relevant because they give different and complimentary perspectives on the seemingly impossible – to capture the meaning of what it is to be human. In the twenty first century, psychologists have tended to settle upon a typology of four human needs:     Security – To be safe from both physical and emotional hurt Community – To give and to receive from family, neighbours, friends and workmates To feel competent – To feel that we have a contribution to make and that, however humble our tasks, we are competent in what you do. To be autonomous and authentic – To feel that we are masters of our own destinies and not be at the whim of others. We are happy that other people see who we really are, so we do not need to live behind a mask.

These four needs are not in any order of priority. A shortfall in any one area would tend to create discomfort and therefore prompt action – consciously or unconsciously.

Activity
(a) (b) Apply these four needs to your life. Are they appropriate to you? Now take a look at this webpage: http://www.youtube.com/watch?v=u6XAPnuFjJc (You can find it by searching YouTube for "„Drive – the surprising truth about what motivates us") (c) What implications do Dan Pink‟s ideas have for your organisation?

What does McGregor's Theory X and Theory Y offer management?
Douglas McGregor developed a typology of two opposed views about employee behaviour, related to Maslow‟s categories of need and considered their implications for management and motivation. The two views are known as Theory X and Theory Y.

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(a)

Theory X The starting point of McGregor‟s approach was to postulate a view of employee behaviour based on managers and industrial theorists who saw workers as totally rational economic individuals. This perception rested on two key assumptions:   Firstly, that workers were rational beings, able to gather information about and assess their work situations. Secondly, that having assessed the work situation, workers would be economically activated to optimise their position in the labour market by selling their labour at the highest unit labour price. Workers would aim to obtain the highest possible pay for the least possible input of work effort. Hence, the economically rational worker would seek to push up wages and/or cut down hours of work – ideally they would try to do both.

This traditional approach of management, which accepts the worker as a lazy, grasping individual, who must be bribed or coerced into working, McGregor called Theory X. Underlying it are the following assumptions:       That the average human being dislikes work That the average human being will avoid work whenever possible That not only is the average employee lazy, but they also lack ambition and do not wish to take on responsibilities That, because of the above characteristics, employees must be strictly controlled and directed That control of employees must be backed by coercion and threats if the objectives of the organisation are to be achieved That the average person prefers to be directed and not to have to think deeply for themselves in the work situation.

McGregor took issue with the Theory X view of management and motivation on the following points: (i) Complete rationality of thought is rare in human beings, so it is a mistake to view the average worker as “rational economic man”. Social science research has revealed that many other influences play a part in shaping behaviour in the workplace. There are considerable individual differences between workers, and feelings, attitudes, norms and values all influence the conduct of employees. Any meaningful models of employee behaviour should be drawn from the work of modern social scientists and not from the traditional views of management. McGregor disputed the need for strict controls backed by threats. He argued that in many cases persuasion, consultation and discussion between management and workers are far more effective ways of achieving organisational goals. He went on to argue that modern organisations are characterised by interdependence between management and workers and that this has to be recognised if the organisation is to prosper. Because management‟s view of the nature of man is wrong, much of the action taken by management is also wrong. Frequently management‟s policies run counter to the human nature of employees, as revealed by social science research and this can have disastrous results for the organisation. Because management is convinced of the laziness and irresponsibility of the workforce, it places most of the blame on the workers when things go wrong. McGregor argues that once this blinkered view of the nature of workers is broken,

(ii)

(iii)

(iv)

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managers can begin to question the efficiency and appropriateness of their own methods and styles of management. To sum up, McGregor sees as the basic fault of Theory X the fact that it is based on a false idea of human nature. All the rest of the theory follows logically if the human nature model is correct, but research proves the model to be wrong, therefore, the whole theory is wrong. (b) Theory Y McGregor then put forward the set of assumptions that modern managers should act upon. He called this Theory Y.  That the physical and mental effort people put into work is a natural human response, similar to the effort individuals make in games and sport. Hence, work can be enjoyable. That employees do not have to be controlled or threatened. Rather, they have reserves of self control and self motivation once they feel committed to the objectives of the organisation. That given the opportunities and training, employees will not only take, but also desire and seek responsibilities. That employees have reservoirs of imagination, creativity and ingenuity and given the right environment and encouragement, they will use these to help solve problems in the work situation.

 

In some organisations the potential of employees is not fully utilised. Not only is this a waste of resources, but it also causes employees to be frustrated. Hence, when workers do not co-operate to achieve organisational goals, the fault may lie in the structure of the organisation rather than in the employees. To sum up Theory Y, McGregor argued that management should assume that, in many cases, employees will contribute more to the organisation if they are treated as responsible, valuable and industrious people. Management should reduce controls, but retain accountability – i.e. they should replace direction and threats with the giving of responsibility. The workplace should allow the worker to gain satisfaction in the pursuit of objectives to which they are committed. To what extent is Theory X-Theory Y accurate? Critics of McGregor have argued that some aspects of Theory Y are not practical and that there is more truth in Theory X than McGregor cares to admit. However, many management theorists have pointed to the growing amount of evidence from research by social scientists that supports Theory Y. We can say that McGregor has made an important contribution to our understanding of management and workers in modern organisations. Let us for a moment relate McGregor directly to Maslow. To satisfy social, egotistic and self fulfilment needs, management should apply Theory Y in the organisation. The four most basic elements of Theory Y are as follows: (i) Decentralisation and delegation – This should take place in organisations where there are too close controls, and it would give employees a degree of freedom to direct their own activities and assume new responsibilities. Job enlargement – This should be introduced to encourage the acceptance of responsibility at the lower end of the organisation. Participation and consultative management – This should be used to encourage people to direct their creative energies towards organisational objectives and to give employees some voice in decisions that affect them.

(ii) (iii)

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(iv)

Performance appraisal – This should be carried out for all levels of management to find out how consistent management practice is with Theory Y. It will encourage the individual in management to take greater responsibility for planning and appraising their own contribution to organisational objectives. The effect of this on egotistical and self fulfilment needs is said to be quite substantial.

How does participative management relate to this?
The culmination of human relations and human behaviour approaches is presented by McGregor as participative management style. Under this style of management employees feel valued and are treated as individuals in the workplace. McGregor argued that if employees do not feel valued, some of them will spend more time and effort in attempting to defeat management‟s objectives than they would in achieving them. Participative management style is directed towards encouraging workers to be self motivated as far as possible in a given work situation – management tries to create an atmosphere of co-operation rather than merely depending on rules and regulations. William Ouchi agreed with the basic ideas put forward by McGregor‟s Theory Y and related these to certain of the ideas he detected in Japanese organisations. Ouchi‟s Theory Z argues that participation is a crucial motivator. Employees will be motivated to higher levels of performance if they are involved in meaningful participation in decision making in their organisation. Employees should participate in groups and enter into consultations with management to sort out problems and put forward ideas. Ouchi took the idea of quality circles and developed it far beyond a concern for the quality of goods and services produced by the organisation (important though this is). He said that the circles should be a forum for employees‟ ideas and a way in which employees could really influence the running of the organisation. He concluded that a participating employee would be a well motivated employee. Participative management tries to involve employees in decision making, following the ideas of Ouchi and techniques like quality circles. The whole basis of the participative style of management is to do away with the “them and us” mentality in an organisation.

C. PROCESS THEORIES OF MOTIVATION
Content or need theories suggest that there are universal needs that all humans have (security, socialisation, self respect, etc.). They try to identify the integral desires that influence behaviour and are concerned with the nature and context of motivating factors. By contrast, “process” theories concentrate on elucidating the thought processes through which individuals determine their courses of action. They attempt to show how individuals determine the amount of effort that needs to be exerted. There are four main groups of process theories:     Expectancy theory Social exchange or equity theory Attribution theory Handy‟s motivational calculus.

What is expectancy theory?
It is a cognitively based motivational theory, initially put forward by Victor Vroom in 1964. According to this theory the strength of a tendency to act in a certain way depends on the strength of our expectation that the act will be followed by a given outcome and on the

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attractiveness of that outcome to us. We need to understand three aspects to this which, in the context of work, are as follows:  Attractiveness – This is the importance we place on the potential outcome or reward that can be achieved from the job. It will take into consideration the unsatisfied needs of the individual. Performance-reward linkage – This is the degree to which we believe that performing at a particular level will lead to a desired outcome. Effort-performance linkage – This is the probability we perceive that exerting a given amount of effort will lead to the particular level of performance.

 

Expectancy theory may sound complex, but it is useful as a framework for diagnosis and identification of changes needed to increase motivation. The strength of people‟s motivation to perform (effort) depends on how strongly they believe that they can achieve what is attempted. If they achieve the goal (performance), there is the question of whether they will be adequately rewarded. If rewarded by the organisation, will the reward satisfy their needs? The theory can be expressed by the formula: Motivational force (F)  Valency (V)  Expectancy (E) Valency is the value of the outcome to the person, and expectancy is the perceived likelihood of the outcome. To understand this best, think what happens if either valence or expectancy are equal to zero. The importance of this approach is the emphasis that it places on the individuality and variability of motivational forces, as distinct from the generalisations implied in the theories of Maslow and Herzberg. Porter and Lawler further developed expectancy theory in the 1970s. They suggested that the amount of effort (motivation and energy exerted) put into work depends on:    The eventual reward The amount of effort necessary to achieve that reward How probable it is that the reward will be forthcoming.

In turn, the perceived effort and probability of getting a reward are influenced by past experience of whether such rewards have materialised.

What is equity theory?
Adam‟s social exchange or equity theory suggests that the evaluation of rewards is based partly on comparisons with others. If we perceive our ratio to be equal to that of others with whom we compare ourselves (referents), a state of equity is said to exist. If the ratios are unequal, inequity exists. We then see ourselves as under-rewarded or over-rewarded. Equity theory is not without its problems. There are still some key issues that are unclear, such as:    How do employees select who is included in the other referent category? How do they define inputs and outputs? When and how, do factors change over time?

What is attribution theory?
Kelley‟s attribution theory examines the way in which people explain success or failure and the impact on subsequent motivations. Four variables are frequently used:

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   

Ability Effort Task difficulty Luck.

For motivational purposes, effort is the key factor. If success or failure is explained in terms of the level of effort, then it is possible that high motivation may follow. On the other hand, failure to obtain promotion, say, may be attributed to difficulty and luck. Since it is out of their individual control, people may give up trying to perform well. Attributions may be subject to distortions to protect or enhance their self esteem. Attribution theory is extremely relevant when we consider how people judge others.

What is Handy’s motivational calculus?
Handy looks at motivation as though when a person takes a decision, they give attention to three sets of factors: (a) (b) (c) The individual‟s personal needs The desired outcome or results The E factors:       (i) (ii) (iii)   Effort Energy Excitement in attaining the desired outcome Enthusiasm Emotion Expenditure.

The motivation decision will depend on: The strength of the person‟s needs The expectation that by contributing one of the Es, the individual will achieve one of the desired results The extent to which the result will contribute to satisfying the person‟s needs. You must be made aware of the intended results; you will then know what has to be done and the commensurate rewards, as well as how much E is necessary. If actual results are not known, you will not know whether the E output was justified, so feedback on performance is vital.

There are certain prerequisites for the calculus to be completed:

Handy‟s theory can be accused of gimmickry but it does help us understand that we need to set specific goals, preferably on a mutually agreed basis. The theory also suggests that rewards can be tied to standards. These standards can be variable, so a lesser expenditure of E will lead to lesser standards and hence rewards. The theory also goes some way to taking elements of the simpler content theories, such as needs, derived from Maslow and the more contemporary process theories of Vroom and others.

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D. PURPOSES OF REWARD
What are employers and employees looking for in employee reward?
There are four principal objectives to an organisation's reward system:  Recruitment Attracting a steady flow of new employees into the organisation, but without breaking the bank.  Retention Keeping staff happy and loyal, so that they will not normally want to leave (which would, in effect, be a cost to the organisation).  Motivation There are a number of factors in this, including: – – – Providing incentives for achieving desired levels of performance Developing employee commitment. This is slightly different from retention and is an element of the psychological contract of a fair day‟s work for a fair day‟s pay. Ensuring fairness in the treatment of employees, or at least a sense of „felt fairness‟ (i.e. it may be hard to justify objectively that it is fair, but employees sense that it is). Developing the organisation's image. Some employers want a reputation as the best payers around. Others want to emphasise the importance of flexibility or creativity.

Control (of costs and people) Clearly the main objective here will be controlling cost. Pay is usually the largest element of an organisation‟s budget and it is, therefore, the area that offers scope for the largest belt tightening when needed. In addition, a reward system can be used to achieve other forms of control: – – Strengthening the hierarchy of power within the organisation by maintaining internal relativities. Supporting organisational change. Reward systems can be linked to different forms of organisation and different priorities – for example, linking pay to performance focuses attention on that performance, or creating a broad banded structure draws attention to career development. Reducing the power of trades unions by, for example, devolving pay determination to local managers or, particularly, by individualising pay Increasing the power of line managers, especially through local pay determination.

– –

How do theories of motivation link to employee reward?
Many people associate motivation with pay. They see it as providing a direct link between increasing or maintaining their standard of living, buying goods to satisfy their wants and desires, etc. However, when talking about motivation and pay, we need to ask ourselves a simple question that may provide an answer to whether pay is a motivator. This question is “Do we work to live, or live to work?” We can take both parts of the question and answer them separately.

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(a)

Do we work to live? Many see work as a means to an end – to provide them with the financial resources to live their lives as they see fit outside of the workplace. If this is the case, the money they earn enables them to buy the things they want, live in the area they want and buy the car that they want, etc. This suggests that motivation is strongly linked to pay because, in many cases, the harder we work (such as overtime), the more reward we get (in terms of money), the more we have available to spend (disposable income).

(b)

Do we live to work? In this case, the work is seen as the end in itself and, whilst pay may be important, it may be no more than a need for providing just enough money to “keep them alive and keep a roof over their heads”. People in this category are often motivated by intrinsic rewards, such as praise and recognition, rather than extrinsic rewards, such as pay and other associated benefits.

Herzberg stated that money is not a motivator but a hygiene factor. As long as the level of pay is deemed satisfactory, other factors are more important as motivators. Note, though, that he suggested that hygiene factors are also "dissatisfiers", so that when people become used to a certain level of salary, they may become dissatisfied with it and want more. Instinctively, we feel that that pay should be a motivating force. Why, then, do relatively few organisations deliberately use pay as a motivator? Most organisations see pay as compensation and many managers are rewarded not for particular results, but for seniority and experience. Seniority is the reward for success and pay follows seniority. Rarely does a boss earn less than subordinate(s). This fits with most of the process theories of motivation. It implies that there must be large differentials in levels of pay as, otherwise, pay will not work as an incentive. However, in their worry over differentials, organisations are very secretive about pay levels, which can be self defeating. Lacking knowledge of pay, individuals make estimates of other people‟s wages and may feel they are less well paid. Under equity theory, this would be demotivating and, in a sense, it is not money that is a hygiene factor, as Herzberg argues, but equity.

E. THE ELEMENTS OF REWARD
Financial reward is clearly the most significant element, and it represents a major cost to an organisation – for most organisations it is their largest cost. However, reward is about more than simply pay. As we have seen, people look to work for more than money – they want other elements as well. Many forces are at work here – economic, legal, social, etc. – and the reward mix is always changing.

What is the reward mix?
It is the total package that takes account of all the benefits that an employee gets from work:       Financial – wages or salary, pension, bonus, expenses etc. Benefits – leave, accommodation etc. Social – work relationship and social status Developmental – professional and personal Intrinsic job satisfaction – doing something considered worthwhile and an additional purpose for living A structure to daily life.

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What determines the level of reward?
There are a number of factors affecting the particular reward mix that is associated with a particular job or a particular employee:  The job itself This is the rate for the job, usually based on responsibility – complexity and impact of decisions-made, numbers of staff managed, size of budget, etc. – but also the knowledge, skills and experience required.  Individual characteristics This will include the job holder's knowledge, skills, experience, qualifications, external contacts, level of performance, etc. It may also include age and even personal image.  External labour market Supply and demand and the going rate. Here we can note the practice of offering "golden handshakes" – essentially financial inducements to come and work in a particular job or a particular location where it is hard to recruit qualified staff.  Internal labour market This is the need to maintain pay differentials between different jobs in the organisation's hierarchy. It often pushes up middle and senior level reward, particularly in a highly hierarchical organisation.   Affordability What the organisation can afford Organisational philosophy The organisation's policy in respect of staff in general (for non-financial benefits) and it's attitude to remuneration as being a good, inter-quartile or bad payer.  History Pay structures and the type of reward mix are often a reflection of the past or tradition. Note, too, jobs traditionally done by males tend to be more highly remunerated.  External pressure This would include equal pay legislation and other social pressures.

F. FINANCIAL REWARD
Are we talking about wages or salary?
Wages have traditionally been associated with manual workers and manual wage structures usually reflected the fluctuating need for manual labour. Salaried posts were more for managers and professionals in more secure jobs with less fluctuation of demand. This resulted in two different pay structures. The divide between manual and salaried staff in terms of fluctuating demand and the enhanced status of salaried jobs has largely disappeared as organisations have harmonised terms and conditions. In response, organisations are moving towards „single status‟ pay deals.

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How might financial reward be calculated?
It depends on the payment system in place. There are two basic types: (a) (b) Time, or flat rate systems, in which pay is expressed as an hourly, weekly or annual rate and Performance related systems, where pay is linked to performance, with higher levels of performance leading to increased pay.

The two systems are not mutually exclusive and are often combined in some way. We shall examine these in more detail below, but first we should explore the significance of payment systems to the organisation. What different systems have in common is that they allow for different employees to be paid at different rates. The rates at which individuals, or groups of employees are paid and the "differentials” or "relativities” between individuals and groups, are important issues for an organisation and indeed, for an economy as a whole. They need to be addressed as part of the holistic design of a system. The establishment of a payment system clearly involves balancing your organisation‟s interests with those of its employees. For the system to be effective, it needs to meet the following three criteria: (a) (b) (c) Take account of the needs of the organisation and of its employees Have the commitment of all sections and levels of management in the organisation Have been developed, installed and maintained with the participation of employee representatives.

To your organisation, the payment system must support the cost effective achievement of its goals. Labour is almost always one of its highest costs, particularly in the service sector, and the overall cost needs to be balanced against other aims. These general aims are that the payment system should:       Be an integral part of the business strategy Be linked to human resource planning Facilitate rather than hold up change and development within the organisation Ensure that suitable staff may be recruited into the organisation Facilitate the deployment of staff to ensure maximum productivity Relate to the continued attainment of high performance.

In influencing recruitment, deployment and performance levels, the payment system is clearly horizontally integrated with other aspects of HRM.

Are reward levels becoming fairer?
This is very difficult to assess and there are some structural reasons why fairness is unlikely to be attained: (a) Those who sell products or services which are in high demand will achieve good results, irrespective of their skill or diligence but a very able salesperson may achieve bad results if the product or service is inherently poor. It is difficult to quantify the value of the impact of many workers, such as those in management support functions and service industries. The economics of the organisation may not be able to afford fair levels of reward for all staff.

(b) (c)

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(d)

With different economic situations in different areas of each country there has always been a pressure to pay higher wages in places where it is harder to get staff. Government organisations have particularly had to wrestle with this problem. With organisations being increasingly global, a fair pay structure in one part of the world may be completely out of line with that in the same company‟s overseas subsidiaries.

What is a pay structure?
A pay structure is a collection of grades, levels or bands which link related jobs within a hierarchy or series. It provides a structured framework within which the pay system sits and has a number of advantages:    It reflects the reward strategy of the organisation, such as encouraging high performance levels It brings order and clarity to an organisation and its employees in managing pay increases and career progression It help ensure fairness and lawfulness, for example by adopting an approach that avoids gender discrimination in pay.

While some smaller organisations manage without any form of pay structure at all, larger or growing organisations, typically once they have reached around 200-250 employees, usually find such arrangements essential as a framework for reward management. To produce a structure for the pay associated with jobs it is necessary to compare their worth to the employer. Usually this calls for job evaluation of one form or another. What is job evaluation? Job evaluation is a systematic comparison of jobs, to assess their relative worth for the purpose of establishing a rational pay structure. It replaces arbitrary decision making with more objective ways of analysing the demands of a job. However, evaluation is at best systematic rather than scientific because it still depends upon human assessment. There are two types of job evaluation: (a) Non analytical – As the name suggests, this does not attempt to analyse the job in any detail but instead compares whole jobs with other whole jobs to come up with a ranking. Analytical – Jobs are divided up into their constituent parts, each of which is assessed and graded. Job ranking This is the simplest method. The whole job is considered and, subjectively, all jobs are placed in hierarchical order. It has the lowest claim to fairness.  Paired comparison This is similar to ranking except that every job is compared with every other job, resulting in a league table. It is slightly fairer than job ranking.  Job classification This is the reverse of paired comparison. The number and nature of grades is decided first, and then posts are slotted into the right one. This has some claims to fairness if the initial pay and grading structure is well designed.

(b)

Within analytical evaluation, there are a number of techniques used: 

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Points rating This is the most popular technique. Jobs are broken down into standard factors (knowledge, skill, effort, etc.) and each element is weighted in respect of its importance to the job. A score is given for each factor. and the total points for the job determines its position in the hierarchy and the pay levels associated with it. Although it is the most complex of the JE techniques, this is the one generally regarded as producing the fairest results.

Factor comparisons This technique ranks jobs and then attaches monetary values to each element (knowledge, skill, effort, etc.). It is an unpopular system which may have a claim to fairness, but because of its complexity, has a low level of felt fairness.

What is an incremental scale? Different types of pay structure are linked with varying types of pay progression arrangements. Thus, your organisation, rather than having one single rate of pay for each job, may have scales of pay for that job. You may then progress up that pay scale or pay spine, according to one or more factors:   Performance – Receiving additional pay as a result of assessments of your performance. Either consolidated into your pay or as one-off bonuses. Length of service – Incremental progression up a pay spine; usually awarded annually. Rewards your loyalty for staying with the organisation. It also has the psychological benefit of creating a sense that you are continually becoming better off. Experience – Rewarding you for an (assumed) improvement in your skill, acquired through your growing experience. Qualifications – Again recognising an (assumed) greater level of skill, as evidenced by the holding of relevant qualifications.

 

Incremental scales tend to be associated with large organisations, particularly in the public sector, with fixed rates applying throughout the organisation or even to whole occupational groups, such as teaching or nursing. A process of collective bargaining between employers and employees representatives agrees the details of pay rates for each group and the conditions for receiving incremental increases. There are a number of advantages to collective bargaining in that it involves employees, through their trade unions, in the process and thereby gains their commitment, it produces nationally binding agreements and also takes the process of determining pay rates away from individual managers. However, it also tends to produce very inflexible schemes, which do not allow for individual circumstances to influence pay rates, particularly in respect of the (local) market for skills and labour in general.

G. FLAT RATE PAY SYSTEMS
Virtually all organisations use flat rate systems to some extent. The basis of these systems is a rate of pay attached to particular jobs. Jobs will be graded to differentiate between them on the basis of factors such as the difficulty of task, skills required, level of responsibility, etc. Pay rates will then be expressed as an hourly, weekly or annual rate for the performance of the duties and responsibilities of the job. Note that incremental scales are often associated with flat rate pay systems, providing for a regular increase in the rate for individuals without recourse to negotiation. Part time employees will be paid a proportion of any weekly or annual rate in respect of the hours/days worked. Overtime – time worked over and above the hours specified for the job – will be paid at a different rate, for example, 50% extra.

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The advantages of a flat rate system are that:     They are relatively easy to administer once the overall rate and differentials have been agreed and established They are easily understood by employees and are less likely to lead to disputes, other than over basic rates They help the forecasting of labour costs since salaries are a known factor and do not change, other than across the board in respect of, say, cost of living increases Employees find it easy to check to see that they had been paid correctly.

However, flat rate systems do not provide for incentives to improve productivity as everyone is paid the same for the job, regardless of performance. Time or flat rate systems are most appropriate where:     The volume of work is difficult to measure Work flow over a period is uneven The volume or pace of work is outside the control of the employee Considerations other than output are more important.

H. PERFORMANCE RELATED PAY
Performance related pay has been an accepted payment system in many occupations for a long time – for example, salespersons earning commission on sales or manual workers being paid according to output (”piece work”). Generally, such pay does not form the whole of the jobholder‟s pay but the proportion may vary from being the largest part of their earnings to only a minor addition to flat rate play.

What types of performance related pay systems are there?
In the past, it has usually been targeted at individuals, but increasingly performance pay may be related to team performance or the performance of the organisation as a whole. We sometimes use the more general term „contingent pay‟. (a) Systems related to individual employees These would reward individuals for performance against agreed, measurable standards. This provides a strong incentive to meet such performance targets, but can be expensive to maintain, through the need to consistently measure performance and calculate consequent payments and may lead to disputes about the standards themselves or the ability of individuals to meet them. (b) Systems related to teams This has a number of benefits in improving team performance through encouraging co-operation, flexible working and multi-skilling and the development of increased autonomy and hence, reduced supervision. In addition, it may be a lever for organisational change, through an emphasis on team working. On the other hand, it may diminish the role of the individual, forcing conformity and stifling creativity and possibly having a negative effect on expectancy theory. (c) Systems related to the organisation as a whole? These types of bonus schemes are based on the performance of the organisation in meeting its objectives, as measured by a variety of indices such as profit, share price, etc. They may be applied to the whole workforce or to particular sections of it – often

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they are confined to rewards for senior management because they are deemed to be responsible for performance at the organisational level. The basis of these systems is that employees have a direct stake in the overall performance of the organisation. This is enhanced where the bonus is paid as a distribution of shares, rather than monetary bonuses, thus tying the value of the award to the continuing success of the organisation (remembering that share values may go down as well as up). For the organisation, such schemes are attractive in that they are only paid out of profits and do not represent a permanent, on-going cost.

How do we implement performance related reward?
Ideally, it should have a scientific basis, so that there is some measurement of the value of the work in terms of economic contribution to your organisation. This can be done through various techniques such as standard setting and appraisal systems. Some of the methods of implementing performance related rewards are:  Profit centres Here, the system is based on the contribution of each part of the business to overall performance. This is quite easy in an organisation with dispersed outlets, such as retail shops and financial institutions. Accounts can be produced for each unit and rewards apportioned to individuals accordingly. It is more difficult and sometimes impossible, to implement a reward system on this basis where employees are in a management services or support role. This inevitably creates conflict in businesses where sales performance is rewarded directly on results achieved, but support staff are remunerated on a flat salary basis. A computer operative, for example, might reasonably argue that their indirect contribution is as valuable, if not more so, in terms of sales database management than the front line salesperson.  Points systems Points systems tend to be more flexible. The employee is set targets of achievement which results in points being awarded on an incremental basis. These can be tied in to annual performance review and appraisal systems. Also, as the focus of the business changes, the points awarded may be changed to reflect different priorities.  Totally results/commission driven In some sectors it is common to reward people entirely on results attained. Examples include some life assurance companies and double glazing salespeople. There may or may be some flat rate salary, but this is often a very small element of the remuneration package. This system rewards consistently high performers well, but has many disadvantages: (i) (ii) (iii)  A downturn in the market for the product or service can create hardship and in Maslow‟s parlance, anxiety about basic physiological and safety needs Again it is difficult to reward those in service and support functions fairly Turnover of personnel tends to be high due to the low level of long term security afforded by the system.

Equity/profit share It is common practice in some organisations to reward employees through giving them equity in the business (free shares) or a stated share of the profits earned each year. Whichever method is used here, the consequence is that the worker obtains a direct reward from the overall earnings of the enterprise. Supporters of such systems stress

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the greater sense of “ownership” of the business, which theoretically at least, should result in more money for better results and hence greater overall commitment to goals. Several privatised utilities have introduced these systems in the recent years.  Subjective awards Many of the more traditional businesses reward effort based on the subjective judgement of executives or managers. The person responsible for the individual or team decides what they think the person is worth in terms of additional remuneration each year. Many of these systems work remarkably well, despite the inevitable criticisms which can be levelled. The main problem is that some managers are more naturally grudging or demanding than others. These systems also depend on being able to decide the overall size of the financial payment to be set aside for reward. Once decided, it is almost certain that some managers will fight harder for their people than others.

I.

OTHER FINANCIAL AND NON-FINANCIAL REWARD

The benefits of employment are not solely confined to pay, although this is likely to be the most contentious aspect to both employers and employees. Most organisations provide a package of benefits beyond pay to attract and retain staff, including both monetary and non financial rewards. Examples include: Financial benefits Sickness pay Pension Season ticket loan Removal expenses Lease car or car allowance Clothing allowances Private medical insurance Non financial benefits Leave entitlement Flexible working hours Career breaks Additional maternity/paternity leave Crèche Education facilities and study leave Sports and social club facilities

In addition, certain organisations provide incentive schemes linked to non-monetary rewards, such as additional leave for long service. Some businesses which suffer cost pressures are more able to offer non-financial benefits. For example, a health authority introduced a system whereby older, more expensive medical consultants could put in less time as they moved towards retirement. This approach fits well with Vroom‟s expectancy model – if the doctors want more money, they could generate outside work, whereas if their preference was for more time off, that was equally available.

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J. TOTAL REWARD
„Total reward‟ considers all the components of the reward package as one total reward offering. If it is possible to offer the employee some choice of flexibility within that reward package there is the potential for improved employee commitment.

What are the components of total reward?
Base pay Variable pay Share ownership Benefits Recognition Opportunities to develop Career  opportunities Quality of working life

Financial rewards

Total remuneration

Nonfinancial rewards

Total reward

Source: New Dimensions in Pay Management, CIPD 2001 By recognising that pay is not the only motivator and acknowledging the importance of tangible and intangible rewards, total reward has wide reaching implications for both the employer and employees. Total reward is potentially very powerful in helping you to align your HR and business strategies with employee needs. As a concept, total reward is not new. However, a survey in 2007 by the UK Chartered Institute of Personnel and Development found that only around 4 in 10 UK employers had adopted total reward.

Why adopt total reward?
Because it is:  Holistic – It focuses on how employers attract, retain and motivate employees to contribute to organisational success using an array of financial and non financial rewards. Best fit – It adopts a contingency approach whereby total reward programmes can be tailored to the organisation's own particular culture, structure, work process and business objectives. Integrative – It delivers innovative rewards that are integrated with other human resource management policies and practices. Strategic – It aligns all aspects of reward to business strategy. Total reward is driven by business needs and rewards the business activities, employee behaviour and values that support strategic goals and objectives. People centred – It recognises that people are a key source of sustainable competitive advantage and focuses on what employees‟ value in the total work environment. Customised – It identifies a flexible mix of rewards that offers choice and is better designed to meet employees' needs, their lifestyle and stage of life. Distinctive – It uses a complex and diverse set of rewards to create a powerful and idiosyncratic employer brand that serves to differentiate the organisation from its rivals. Flexible – It is a long term approach based on incremental rather than on radical change.

 

   

Both new and old economy companies have to rethink their reward strategies. Traditional companies had a paternalistic approach to reward, one benefit of which for employees was that they could be relatively confident of staying with the same employer for as long as they wished, possibly for their entire working careers. Newer companies, particularly those in the

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hi-tech sectors, rewarded employees with exciting and challenging surroundings, but with no guarantee of job security. They also offered significant financial rewards, in the form of stock options. Now that stock options have to be shown as expenses in the accounts and the traditional companies have stopped providing a job for life, both have to look at new ways of attracting and retaining key personnel. Demographic changes have resulted in a more diverse workforce demanding different returns from work. Total reward is a mindset that enables employers to look at the bigger picture. Flexible benefits (see below) are important but are seen by many as little more than an extension to the existing salary package and, therefore, something that can be matched by rival companies. To obtain maximum effect from these benefits, they have to become part of a bigger business strategy. At present, pay and benefits may be covered under a single and controllable, flexible benefit scheme but the employer is still faced with the prospect of having to meet demands for a wide range of other benefits, including better office accommodation or more training. In a fully integrated total reward package, all the elements of the employee's work become part of a single flexible package. It is only when all the elements of the reward package – that is, total rewards – are considered within the context of business and HR strategies that the total cost of each employee's job can be evaluated in terms of the most valuable return to the organisation. Thus, total reward links cost control with the demand by employees for greater choice and flexibility in the workplace. It also offers employers the opportunity to differentiate and create cultural brand and, thence, competitive advantage; it is hard to replicate.

What might be included in a total reward scheme?
Total reward encompasses all pay and benefits, generally in the form of a flexible benefits scheme, the working environment and career and personal development; any benefit an employee gets in exchange for his or her labour. It may include some or all of the following elements:              Flexible benefits Access to professional and career development A challenging role at work Freedom and autonomy at work Opportunity for personal growth Recognition of achievements Preferred office space Being able to raise matters of concern Being involved in decisions that affect the way work is done Preferred office equipment and mobile phone Flexible working hours Home or teleworking Secretarial support.

Clearly some of these rewards are more easily provided than others and some are more easily quantified than others. One difficulty in a total reward package, beyond the challenge of supplying these less tangible rewards, is attempting to balance them one against another; equivalences can be hard to determine.

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What might be considered in a flexible benefits package?
Flexible benefits schemes enable employers to allow staff to select the benefits that suit them. Known as cafeteria benefits in the USA, they can include a wide range of options for staff to select from, including tax-efficient benefits such as childcare vouchers and mobile phones or salary sacrifice pensions contributions. Bespoke flexible benefits plans have become increasingly popular as a means of offering more tailored employee choice. The contents of any scheme depend on local circumstances, but core benefits that appear on many flexible benefits schemes are:     Holidays Life assurance Private medical insurance Personal accident insurance.

The number and type of additional benefits in a scheme is a compromise between offering employees a wide choice and keeping the administration manageable. Benefits appearing in existing schemes include:        Season ticket for travel Cars (for eligible staff) or employee vehicle schemes Childcare vouchers Phone package Personal computers Retail vouchers Travel insurance         Pension Health screening Financial planning Give-as-you-earn charitable contributions Legal expenses insurance Dental insurance Pet insurance Bicycles

What are the perceived problems with total reward?
Total reward may be regarded as the next logical step after flexible benefits have been implemented. As only relatively few companies in the UK are successfully operating flexible benefits schemes at present, though increasing numbers are considering such schemes, the number that could even contemplate introducing a total reward scheme is even smaller. As with other reward solutions, no off the shelf package is available for companies simply to plug into their operation. To develop an appropriate programme would be enormously complex and would not be without risks in its implementation, so it is an area that would almost certainly benefit from help provided by consultants. Within the field of total reward, there is currently serious debate over where to draw the line between choices related to personal needs, such as life assurance, and choices that are strictly business related, such as the choice of computer. Clearly, existing flexible benefits schemes already have grey areas, such as holidays, where the employee's decision is not without an impact on the rest of the organisation. But when it comes to choosing, say, a computer, some employers and experts believe that this is not an appropriate area for employee choice, but should be a purely business decision. Similarly, the choice of office accommodation may occasionally lend itself to a trade off where limited office space is rationed according to who is prepared to sacrifice other benefits in order to obtain it, but unlike, for example, life assurance, office accommodation is a finite and not particularly flexible resource. In this case, it would often be very difficult to meet everyone's requirements, regardless of how much they were prepared to sacrifice by way of other benefits.

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Chapter 9 Employee Relations
Contents
Introduction

Page
202

A.

The Nature of the Employer-Employee Relationship What binds the two parties together? Do employers and employees both have the same objectives? What problems do employees have in their relationship with their employer? Does this have any connection with the psychological contract?

202 202 202 203 205

B.

Trade Unions and Collective Bargaining What is the role of a trade union? Do all employers recognise trade unions? What is collective bargaining?

206 206 206 207

C.

Employee Involvement In what ways are employee relations changing? How do we get our employees engaged?

207 207 208

D.

High Commitment HRM What is high commitment HRM? What are we trying to get from our employees? What are excellence theories? How do we get a high performance, high engagement culture?

208 208 209 209 210

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INTRODUCTION
By the end of this chapter you should be able to explain the methods for and the benefits to both the employer and employee of promoting positive employee relations and a high „engagement‟ culture. Therefore, you should be able to explain:    Methods for promoting positive employee relations The nature and significance of employee engagement and a „high engagement‟ culture Methods for promoting engagement.

It is impossible to produce a chapter for this study manual which adequately reflects employee relations in each country and how it has developed over time. For example, trade unions have been very influential in some countries but not in others, in controlled economies, governments have had the dominant role, and in the European Union there is an employment relations role for government even at continental level. The text is, therefore, written from the UK perspective, but you should also consider the principles and practices as they apply in your own country.

A. THE NATURE OF THE EMPLOYER-EMPLOYEE RELATIONSHIP
The employer and the employee are the parties to employee relations. Third parties also hold a stake in the relationship and so get involved; they include trade unions, governments, shareholders and the courts.

What binds the two parties together?
The parties are bound by the employment contract – i.e. a contract of service between the employer and the employee. This consists of an offer and an acceptance. Under the contract the employer agrees to provide work and wages and to care, support and keep the employee safe. In exchange, the employee agrees to cooperate, exercise reasonable care and skill, and act in good faith toward the employer. Note that a verbal contract will usually suffice, although it should be followed up in writing. In the UK that is a legal responsibility of the employer.

Do employers and employees both have the same objectives?
The answer depends on your perspective. Here is one view: „The employer wants as much quality work for as little cost as possible. The employee wants as much money for as little effort as possible.‟ This is the basis of the (left wing) pluralist approach („pluralist‟ simply indicates that the objectives of the employer and employee are opposed – i.e. plural). If you take this position you will require strong rules and a referee to control the relationship. Governments who take the pluralist approach tend to enact employment legislation and create organisations to referee the two parties. Those mechanisms may include courts and mediation services. This perspective tends to promote adversarial employee relations. The (right wing) unitarist approach is: „Prosperous employers make prosperous employees.‟ Here both parties are said to benefit from organisational success, the theory being that this is the more harmonious of the two approaches.

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The reality, of course, is somewhere in between these two views, helpfully expressed as common goals, but diverging interests. Thus „employee relations‟ involves both conflict and cooperation. Your organisation is sustained by both parties balancing their needs through negotiation. The result is a psychological contract.

Activity
1. 2. Which perspective is strongest in your organisation – pluralist or unitarist? To what extent do different people have different views?

What are an employee’s objectives? This will vary from person to person. Work published by Guest and Conway (2001) on the psychological contract suggested the most common objectives were:         To have a reasonably secure job To receive fair pay for the work done To have a career To have interesting work To receive fair treatment by managers To receive equality of treatment To be kept informed about changes affecting them To be involved and consulted about changes affecting them.

What problems do employees have in their relationship with their employer?
Psychologists have identified two factors: (a) Alienation These are the feelings you have when you are estranged from your situation at work. You feel surrounded by obstacles that prevent you from being fulfilled or making progress. You can feel alienated from the organisation you work for; from management or from fellow workers. At its extreme you may become alienated from your true self; when your work role is not a true expression of yourself – for example, if you are selling something in which you have little belief or confidence. Alienation arises from the work situation, as shown in the following table: Environment (objective) A lack of power and influence over work. Strict controls. Not consulted over decisions that affect you. Inadequate understanding of the purpose of the work Resulting (subjective) state of mind Autonomy – Feelings of being powerless and loss of control over life. Purpose – Feelings that working life is meaningless.

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Environment (objective) Situations which separate workers from each other – noise, inability to move about the workplace or any factor which inhibits communication among workers, for example, modern technology in a contact centre. Situations that inhibit the use of the whole range of a person‟s abilities and talents.

Resulting (subjective) state of mind Socialisation – Feelings of isolation and of being alone in a hostile environment.

Authenticity – Feelings of selfestrangement and of not being one‟s true self. Feelings of putting on an act.

(b)

Anomie Anomie has certain similarities with alienation in that it is a state of mind arising from an unsatisfactory work situation. However, the causes of anomie are to be found in the confusion that arises in large organisations: Objective work condition Not properly integrated into a social or work group. The norms that govern social behaviour are unclear, breaking down or contradictory. Unclear values and beliefs. Resulting subjective state of mind Socialisation – Loneliness and a sense of isolation. Insecurity – Confusion and no clear idea of how to behave. Values – Difficulty in recognising right from wrong.

If you are suffering from anomie you will not be an effective employee. At the individual level, anomie is a deep personal disturbance; if whole groups become anomic, there may be a breakdown of cohesion within the organisation. However, alienation and anomie are not the only unhelpful responses to poor employee relations. There are also issues such as: (c) Status Social status is the respect you receive at work. This may come from your job itself, from your reputation in that job or status symbols such as salary, title of job, work surroundings, dress or company car. However, status can be very divisive in an organisation – for example, management dining rooms, car parks, toilets, etc. can cause resentment in those workers not allowed to use these facilities. Hence organisations are generally moving away from such symbols by creating harmonised terms and conditions. (d) Stress Psychologists define stress as strain experienced by an individual over a period of time, which impairs the ability of the individual to perform their role. Stress can produce physical or mental symptoms and can be generated by pressures and problems in the work situation. Furthermore, symptoms of stress such as tiredness, headaches and

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irritability, can lead people into other problems like heavy drinking or excessive smoking, which set up a vicious circle by creating even worse physical problems. Stress in the work situation has many causes, important among which are:  Anomie – Here we have one occupational problem, stress, arising from another occupational problem, anomie. When people are confused as to just what is expected of them and just how to go about their organisational goals they are likely to suffer from stress. Alienation – Again, stress arises from a work problem. Frustration about an individual‟s place and worth in the organisation or blocked progress, can give rise to stress. Role conflict – If a person finds certain aspects of their work role unattractive, while being quite happy with other parts of the job. Personality clashes – Stress may arise from conflicts with supervisors, subordinates and/or fellow workers, particularly if these conflicts are left unresolved. Poor communications – A lack of good communications can give rise to frustration and feelings of isolation at work and these can cause stress. Conflicting loyalties – If an individual has too many bosses, all calling for attention to their instructions, this can give rise to stress.

 

 

The above summary of the causes of stress tells us that we are dealing with a complex problem. it is widespread and can affect people at all levels of an organisation. However, we must remember that we are talking about stress rather than pressure, which can be both necessary and healthy. (We have said more about stress in Chapter 2: Behaving Responsibly.)

Does this have any connection with the psychological contract?
Yes. We introduced the psychological contract in Chapter 1: Approach, Organisation and Legal Framework. Here we shall develop that a little further. A psychological contract is the perceived relationship between you and your organisation and involves the various factors that bind you to the enterprise. It relates to the way you feel about the organisation for which you work. The concept is essentially a dynamic one; the nature of the contract will change over time and will be influenced by many variables. It will also influence the factors that will motivate you. Three examples of psychological contracts are: (a) A coercive psychological contract exists when a person works because they are forced to do so. You may be tied into the job because the salary and fringe benefits prevent you from moving elsewhere. You might not be able to achieve the same package from another employer and would have to lower your standard of living. Alternatively, your age may make you less mobile. A remunerative psychological contract exists when you work for the money. You may tolerate the job to attain the lifestyle it provides. This differs from the coercive contract as the remunerative contract may bind the person in the short term, only to be severed if a better deal is available elsewhere. A collaborative psychological contract is one in which the worker is bound to the organisation by a belief that personal objectives can best be attained by enabling the organisation to fulfil its objectives. From an employer‟s point of view, this is more likely to result in having a highly motivated workforce. The person‟s desire to achieve can facilitate the company‟s performance objectives.

(b)

(c)

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Psychological contracts can change radically. In managerial and clerical professions, “delayering” and “down sizing” have become common features, with middle managers being sacrificed in pursuit of greater cost efficiency. Large scale redundancies in hitherto “safe” jobs can change the nature of the forces that bind the person to the organisation. A study in 1994 by the Working Transitions outplacement consultancy suggested that redundancy programmes not only affect the values, beliefs and drives of those who lose their jobs, but also those who remain – the so-called „survivor syndrome‟. Managers, therefore, have to be conscious of these changes and manage in an increasingly volatile environment. Professions which have been affected in this way include many branches of the public service, banking institutions and many organisations that have been through mergers and acquisitions.

B. TRADE UNIONS AND COLLECTIVE BARGAINING
What is the role of a trade union?
A trade union is an organisation of workers, united to protect and promote their common interests. They have a number of roles in the workplace:       To negotiate wages and working conditions with the employer (in a small number of cases with the employers' representative body, such as employers' federation) To regulate relations between workers (particularly its members) and the employer, principally by being a channel of communication To take collective action to enforce the terms of collective bargaining To raise new demands on behalf of their members To promote learning and development To help settle staff grievances.

Who pays for the union? Principally the members – they pay a subscription to the union to get its benefits.

Do all employers recognise trade unions?
No, but your employer may choose to recognise a union because it is believed that giving employees a voice via a trade union will be good for the organisation. In the UK, in an organisation of more than 20 employees, if a properly conducted ballot shows that more than 40% are in favour of union recognition, that union is automatically recognised, even if the employer opposes.  What advantage would an employee get from recognising a union? It may help communication and allow decisions to be made and implemented, even if some employees object, as long as the trade union is in agreement. It may smooth collective bargaining – for example, on pay – and the presence of a trade union can reassure employees that their interests are being looked after. It also provides clarity over who should be involved in disciplinary and grievance procedures.   Is it possible for an employer to de-recognise a union? Yes, but it is rare. Do employers sometimes pride themselves on being non-union? Yes, particularly some large private sector businesses – for example, Hewlett-Packard and IBM. They take a manifestly unitarist approach and often „buy‟ commitment by

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providing above average pay and conditions and closely involving employees in the business. There is nothing unethical about this and it is clearly consistent with their unitarist perspective.

Activity
Do you believe that your organisation would be better with or without a recognised trade union?

What is collective bargaining?
It is exactly what its name implies – negotiating and pay, conditions of service or procedures for a group of staff rather than on an individual basis.  What sort of things can we negotiate by collective bargaining? The main items are procedures for dealing with pay and conditions of employment, including how discipline and grievances will be handled. It will usually also cover substantive issues such as a particular pay settlement or grievance outcome.  Would a collective agreement therefore apply to everyone? No. It will only apply to the group for whom it was negotiated. For example, an agreement may be national or regional. In large organisations such as those in the public sector and multi-site manufacturing or service organisations such as retail banks, agreements are often reached at organisational level. This promotes the free flow of people around the organisation and means that the employer need concentrate on only one negotiation rather than many smaller, but almost identical negotiations. Agreements can also apply only to certain levels within the organisation. People to be covered by a collective agreement will usually be called the „bargaining unit‟.

C. EMPLOYEE INVOLVEMENT
In what ways are employee relations changing?
This will vary from country to country. In the UK, from around 1990, there has been a movement towards increasing employee involvement, emphasising the importance of an individual relationship between the employer and the employee. This is natural given the declining importance of trade unions. The strategy adopted by the employer can be at one of five levels: Figure 9.1: Degree of employee participation Control Co-determination Consultation Communication Information giving Increasing participation

Source: Marchington and Wilkinson, HRM at Work (CIPD, 2008)

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The various degrees of involvement in the decision making processes of the organisation are as follows: (a) Information – Management tell employees of their decisions on a „need to know‟ basis, so there is limited participation, with the flow of information being predominantly one way. Staff briefings, intranets and staff publications. Communication – Some „nice to know‟ information is provided and there is some ad hoc or tightly controlled upward communication. Team briefings. Consultation – Management come up with the ideas and take them to employees or their representatives for their views. In the end, the decision making power remains with management. (Consultation may be pretence if management have already made up their minds.) Formal consultation exercises. Co-determination – Problems are solved jointly and management will proceed only with the agreement of the workers. Suggestion schemes, quality circles, works councils, continuous improvement teams. Control – Employees have significant controlling power in the organisation. Workers‟ co-operatives and places for workers on the corporate board. At lower levels, workers can have more control through autonomous team working.

(b) (c)

(d)

(e)

In addition, many organisations provide opportunities for financial involvement through profit sharing and employee share ownership schemes. These assume that employees with a financial stake in the enterprise are more likely to be committed to its success.

How do we get our employees engaged?
Communication is the key to creating a positive psychological contract in which each employee feels part of the organisation. Common techniques for this include:    Cascading information via publications, email or corporate intranet. Upward communication via attitude surveys. Cascaded and upward information via team briefings, which provide information at regular times in a personal format. These provide the opportunity for employees to ask questions or raise concerns about matters. Quality circles, where operational problems can be solved by those at the working level in the organisation directly affected by the problem. Team working and job redesign.

 

D. HIGH COMMITMENT HRM
What is high commitment HRM?
There has been much interest in the relationship between HRM and organisational performance. How can organisations improve attitudes and behaviours among its employees, reduce absenteeism and labour turnover, and increase productivity, quality and innovation? Much research has been done in this area and yet the link between certain HRM practices and organisational success remains unclear. In 1989 Prof David Guest proposed that HRM policies should have four goals: (a) Strategic integration to ensure that our people management and development is properly linked with organisational strategic planning (vertical integration) and is internally consistent (horizontal integration) Commitment of employees to the organisation

(b)

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(c) (d)

Flexibility of organisation structure and the employees working within it Quality of goods and services provided to customers.

What is clear is that there is no one single package of HRM practices that generates high commitment from every workforce.

What are we trying to get from our employees?
Principally, an employer wants three things from employees: (i) (ii) (iii) (iv) Quantity – productivity Quality – producing good work with low wastage Innovation – finding new and better ways to get the work done. Control – of cost and of the employees.

There is also a management issue:

What are excellence theories?
Excellence theories largely originate from the works of writers in the early 1980s, principally Tom Peters and Robert Waterman in the US. The nature of these ideas is essentially one of observing successes and failures in actual business scenarios and attempting to draw universal lessons, which can then be applied elsewhere. In other words, they purported to be „empirical‟ studies. Peters and Waterman did not set out to write specifically on motivation, but their work comments much on the ability of successful companies to get a high level of commitment from their workers. What did they suggest? (a) That ingenuity of employees was grossly under exploited Drucker‟s idea of the “entrepreneur” (the original thinker and innovator) was extended to suggest that if such people are employed, their gifts should be harnessed for the benefit of the organisation. They use an example where a company developed a successful product when it was discovered that a manager was working on it privately on an „out of hours‟ basis. For this to be done successfully, with the commitment of the person concerned, the individual has to see the benefit of putting all their energy into the organisation. (b) Managers needed to get out of their offices Peters and Waterman claim that they originally wanted to call their book “Management by Wandering Around”. To motivate workers, it is necessary to get close to the workers and understand the issues affecting them as well as their drives and motivations. (c) Autonomy They believed that workers respond more positively when they feel more in control of their destiny. In one control group experiment, two teams were given the task of proof reading some text material against a noisy background of a tape containing foreign speech, loud music and other distractions. One group had a button to cut off the noise whilst the other did not. The group with the button made far less errors than the other group. However, it was found that no one had pressed the button! The fact that the workers felt in control made them work more effectively. Peters and Waterman record a direct application of this in a Ford Motor Company plant whereby any worker could (temporarily) stop the assembly line. This had stunning results in terms of increased productivity and reduced defect rates.

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There are obvious lessons to be drawn from empirical theories, even though some of the ideas are really just common sense codified. For example, Peters and Waterman noted that companies who treat their staff and customers with respect and decency tend to do better than those who do not, though it is surprising to note the extent to which the authors feel that the latter are common today. By applying the lessons of the successful companies, others can usually benefit to some degree. Are excellence theories right? What is successful today may not be so tomorrow. Of the 43 excellent companies identified by Peters and Waterman, at least 11 did not fit the “excellence” criteria five years later. Also, it is not always possible to translate successful practices across cultures. Successful US motivation techniques may not apply in the UK and vice versa, while some of the techniques used in the Far East and continental Europe would be totally incompatible.

How do we get a high performance, high engagement culture?
We now talk about „discretionary behaviour‟ – i.e. the voluntary effort people put in, over and above the bare minimum, below which they will get into trouble. Employers seek discretionary behaviour and good organisations will establish performance management processes to generate it. It is normally expressed as: Discretionary behaviour  ability  motivation  opportunity    Ability is the assumption that people want to apply for jobs, have their attributes recognised and are willing to learn new skills. Motivation assumes that people can be motivated to use their ability in a productive manner. Opportunity assumes people will perform well, engage in high quality work and participate in wider activities, such as team initiatives or problem solving, if they are given the opportunity to do so.

If the value of any component on the right is zero there will be zero discretionary behaviour.

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