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Research report

October 2015

From best to
good practice HR:
Developing principles
for the profession
The CIPD is the professional body for HR and people
development. The not-for-profit organisation champions
better work and working lives and has been setting the
benchmark for excellence in people and organisation
development for more than 100 years. It has 140,000
members across the world, provides thought leadership
through independent research on the world of work, and
offers professional training and accreditation for those
working in HR and learning and development.
From best to good practice HR:
Developing principles for the profession
Research report

Contents
Acknowledgements 2
Foreword 3
Key findings 4
Introduction 6
This report 7
Methodology 7
1 The changing nature of the HR profession 8
What is professionalism? 8
What makes an HR professional? 11
2 Why principles of the profession? 13
The principles-based approach to standards of corporate governance 13
Principles-based approach as a method of governing professional behaviour in HR 14
3 Developing the principles 17
Collecting data on practitioner value judgements 17
Who should HR serve? 19
Should people (ever) be treated as a means to an end? 20
What is fair? 22
Is long-term or short-term value creation more important? 24
How easily are values compromised? 25
4 What could the principles for HR look like? 27
The gap between ambition and current practice 27
Trends impacting the world of work 29
How will principled decision-making be challenged in the future? 33
What’s next? 35
Appendix 1 36
References 37

1   From best to good practice HR: Developing principles for the profession
Acknowledgements

This report has been written by


Ksenia Zheltoukhova and Louisa
Baczor at the CIPD. We would like
to thank all those who contributed
to this report via interviews, focus
groups, surveys and case studies.
A number of colleagues provided
the much needed support and
friendly critique in preparation
of this work, and their advice is
greatly appreciated. Special thanks
go to Dr David Beech, Dr Sam
Clark, Michelle Crickett, Edward
Houghton, Ian Neale, Paul O’Neill,
Nicola Peachey, Tasha Satara, and
Dr Wilson Wong.

2   From best to good practice HR: Developing principles for the profession
Foreword

Professionalism and ethics To answer these questions and


go hand in hand. Yet ethics support organisations of all
aren’t something that we in HR kinds, operating in a wide range
necessarily feel comfortable talking of contexts, we must evolve our
about. Perhaps we’re concerned understanding of what makes
that bringing questions of ethics is good HR. True value is delivered
at odds with winning a reputation not by following ‘best practice’
for being business-savvy. Or, alone, but by leading with a deep
perhaps ethics are considered both understanding of people, their
complex and local, dependent on relationships with their work and
individual definitions of morality, each other, as well as with the
and so too difficult to define at a business’s purpose, vision and
profession-wide or global level. strategy.

At the CIPD we believe it’s time We believe that good HR should


to start addressing ethics and be defined by broad principles,
ethical competence head on. not just by best practice.
And we’re not alone. Respected These high-level fundamental
and successful companies are priorities of the profession
questioning what makes a could provide a framework for
‘good’ business and what their situational judgement that goes
fundamental purpose is, asking beyond policy development and
whether and how they are implementation. Based on a sound
serving a range of stakeholders, professional knowledge base and
including business owners, people, ethical competence, principled
economies and communities. practice is the kind of HR that
They’re doing so because they business leaders and people
understand that in an uncertain would trust with critical issues of
and interconnected world, long-term organisational survival.
businesses are unlikely to survive We’re working on the definition of
in the long term if short-term profit these principles, and this report
persists as the sole end goal. represents the first important step
on our journey to define what it
Against this context, HR should will take for the HR profession of
ask a similar question – what is the the future to meet its full potential
end goal for the profession? Is it to to champion better work and
implement the people aspects of working lives – for the benefit of
the business strategy – efficiently individuals, businesses, economies
and with minimal risk – whatever and society.
the human cost? Or, is it to act as
a critical adviser, asserting human- Laura Harrison
centred business practice and People and Strategy Director
nurturing healthy organisational CIPD
cultures that deliver sustainable
value for all stakeholders, including
people?

3   From best to good practice HR: Developing principles for the profession
Key findings

As businesses become and beyond the legal norms. Who should HR serve? While
increasingly concerned with They require decision-makers to respondents believed that workers
developing a more balanced view become aware of the stakeholders should be treated as legitimate
of their stakeholders, the CIPD’s impacted by alternative courses stakeholders of a business, in
Profession for the Future strategy of action and make a judgement actual practice only about half
set out to define what it will take of value – for example, weighing (47%) of practitioners said that
for HR to meet its full potential public interest against increased they always apply the principle
to champion better work and profit margins. As such, principles ‘Work should be good for people’
working lives - for the benefit of exist at a higher level than in their day-to-day decisions, with
individuals, businesses, economies practice, requiring the decision- a further 35% suggesting they may
and society. maker to exercise professional compromise this principle under
judgement, but equally allowing certain circumstances.
Professional principles for variation in individual
for HR situations. Should people be treated
Some have argued ‘the true skill as means to an end? Where
of professionalism may be not so What could the professional negative outcomes for people
much in knowing what to do, but principles be? are unavoidable, at least seven
when to do it’. So, while traditional In order to develop the principles out of ten practitioners believe
standards for HR and other related of value judgement for HR, that treating people humanely –
disciplines focused on specific we first explored how existing above their legal responsibility as
“best” practices, the growing philosophy literature deals with employers – is the ‘right’ thing to
complexity and uncertainty in the the ethical issues of work (Clark do. However, the Rights Lens is less
world of work have rendered them 2015). This review identified a likely to be applied when making
unsuitable for the diverse range number of ‘lenses’, which do decisions about individuals who
of organisational and cultural not represent ‘right’ or ‘wrong’ are not part of the ‘core’ workforce
contexts. This is why, similar to judgements about the relationship – for example, temporary staff or
other professional bodies, we between people and organisations workers in a remote office location.
set out to establish the high- but describe possible perspectives
level principles, or fundamental one may consider when making Yet, just under a quarter of
priorities, that would describe ethical choices. practitioners said that the principle
what people management and ‘People should be able to influence
development professionals stand We then tested the use of the decisions that affect them’ is
for, as opposed to the activities these lenses in a series of focus one that they always apply in their
they carry out at work. groups and a survey with nearly decisions, with a further quarter
10,000 HR practitioners, business suggesting it never applies or that
Principles-based standards of leaders and line managers it is ‘nice to have’, even though they
professional behaviour have been around the world, asking believe it is ‘the right thing to do’.
enshrined in professions like them to decide whether the
medicine for centuries, and have judgements associated with the What is fair? Although markets
become a prominent feature in lenses were ‘right’ or ‘wrong’ in appear to be a powerful driver in
other professions since the global their professional opinion. We workplace decisions, particularly
review of corporate governance compared these responses with when it comes to reward, the
in the wake of several corporate the extent to which practitioners survey respondents believe that
‘scandals’. Principles represent said they actually applied these ‘right’ decisions should follow an
fundamental beliefs about what is lenses in their current practice. objective and consistent approach,
right and wrong, and, therefore, The findings provide ‘food for rather than being shaped by
incorporate ethical reasoning into thought’ around five questions: arbitrary contextual forces. Over
business decision-making above half (55%) of decision-makers

4   From best to good practice HR: Developing principles for the profession
said the principle ‘People should win–win solutions for people future. Our work continues by
have equal access to opportunities and organisations in a principled collaborating with a wide range of
in line with their ability/merit’ way, in some circumstances they stakeholders within and outside
applies in all circumstances when either deprioritise certain ethical HR to define and test a new set
they are making professional perspectives or lack the knowledge of principles that will help HR
judgements. However, only three and/or power to consider those professionals make the better
in ten practitioners said that the as part of the decision-making decisions and advise business
principle ‘For an outcome to be process. leaders on what to do, no matter
fair, the decision-maker should what the context and no matter
not leave out the factors deemed However, it is also likely that the what the future may hold.
important by the person affected ongoing changes in the world of
by this decision’ always applies in work will have a disruptive impact Join the debate on the future
their practice, while 45% thought it on the value judgements of HR. of the profession by using
could be compromised. One important shift concerns the #changingHR on Twitter, or by
dimensions of power and fairness. emailing us on pff@cipd.co.uk
Is long-term or short-term value Both talented employees and those
creation more important? In each with less negotiating power will want
of the scenarios, up to nine in ten to have a say in what happens to
practitioners chose the long-term them at work, with rising inequality
interests of the organisation over between these groups contributing
short-term gains. However, less to workplace conflict. The voices
than a quarter said that in their of employees will be increasingly
own decision-making long-term difficult for organisations to ignore,
gains always justify short-term and organisations will be challenged
sacrifices. ever more to understand and
manage diverse expectations of their
How easily are values workforce, if they are to attract talent
compromised? In current practice, and sustain productivity.
almost half of the respondents
(46%) said that the principle ‘Core Similarly, with ongoing change
values cannot be compromised being the only constant attribute
whatever the context’ always of the future world of work, it will
applies in their professional practice. be increasingly more difficult for
A further 37% said it applies but can decision-makers not to lose sight of
be compromised, and 11% said it is the long term. Creating sustainable
‘nice to have, but not imperative’. win–win solutions for people and the
The most common reasons why business will require a real strength
people management professionals of character and commitment to
compromise their principles are one’s core values, as well as deep
‘current business needs’ and expertise and creativity for managing
‘pressure from business leaders’. and meeting the expectations
of different stakeholders. Doing
Future challenges for this is extremely challenging, but
principles those who succeed in applying
Our analysis of the ‘professional their expertise without losing sight
opinions’ on the use of various of the critical values will gain the
lenses in workplace decisions trust they require to be called true
by HR practitioners, business professionals.
leaders and line managers paints
a picture of an ambition to make What’s next?
more balanced choices about This research provides an
work, but also a gap between that important insight into the priorities
ambition and current practice. currently relevant to decision-
The main concern is that while makers, and the ways in which
professionals might want to create those may be challenged in the

5   From best to good practice HR: Developing principles for the profession
Introduction

‘The remit of the The world of work is changing, and


so is the role of HR (in which we
owners, people who work for the
organisation, customers and wider
HR function is include related disciplines, such
as OD and L&D) in organisations.
society (Beer et al 2015).

expanding beyond With a growing recognition of the In order to support the HR


importance of the different types profession in delivering value
the familiar of human capital, the quality of for these stakeholders in a
areas of setting internal and external relationships,
as well as organisational culture to
sustainable way, the CIPD is
committed to ‘championing
out policies and the success of a business, there is
an appetite to define and measure
better work and working lives’ by
improving practices in people and
supporting line the value that these ‘intangible organisation development for the
assets’ help create. As a result, benefit of individuals, businesses,
managers and the remit of the HR function is economies and society. By this
expanding beyond the familiar we mean a particular manner
into the areas of areas of setting out policies and in which work is designed and
organisational supporting line managers and
into the areas of organisational
carried out. Through our research
we recognise the role of human
knowledge, knowledge, innovation and brand. capital for organisations and are
examining the ways that create
innovation and At the same time, the thinking on the most value for the business,
how HR processes deliver value or better work (Hesketh 2014). On
brand.’ from human capital is evolving, the other hand, we maintain that
too. Traditional approaches to firms have both an interest and a
organisational value-creation responsibility towards the people
focused on economic return and who work for them, contributing
transaction costs and modelled to the creation of better working
people management as a one- lives, because what’s good for
way system converting human people is ultimately good for
resources into (mainly financial) businesses, economies and society.
value for the business owners. This concept of ‘shared value-
However, scarcity of talent, creation’ holds that the success of
volatility of consumer choices an organisation and the health of
and the wider debate about the the communities it is tapping are
role of the business in society are mutually dependent.
beginning to place a premium
not just on the ability of a firm In practice, championing better
to meet the bottom line in the work and working lives is much
short term, but also on the trust more complicated. For instance,
in its capacity to maintain that one might ask – what is ‘better’
performance over time. This for organisations and the people
view requires organisations to who work for them? The diversity
recognise the interdependency of the modern world of work
of a range of stakeholders who and the continuous change in
contribute to and gain from a the way it is organised mean it’s
firm’s performance, and advocates nearly impossible to describe
management systems that are what good work and good
mutually beneficial for business people management practice

6   From best to good practice HR: Developing principles for the profession
look like across a variety of and future practitioners will be Section 3 describes and
business contexts (Marchington making decisions calls for a greater synthesises the findings of
and Grugulis 2000). What is an attention to professionalism in various research into the possible
effective people management HR, identifying and developing principles of the HR profession.
process in one country can seem individuals who are able to make
unfair or even be illegal in another. the right judgements for the Section 4 considers which of the
Cultural differences are just one stakeholders they serve, whatever principles might become more
example of that. For instance, the the circumstances. prominent under the impact
design of workplace environments of some of the changes in the
in some Middle Eastern countries This is why, similar to other broader world of work.
will need to take into account professional bodies, we set out to
respect to the cultural norms establish the high-level principles, Methodology
around gender, while Western or fundamental priorities, that This report draws on various
cultures are less likely to account would describe what people research, including:
for such considerations. management and development
professionals stand for, as opposed • a review of sociological and
A further challenge lies in to the activities they carry out at practitioner literature on
balancing the interests of different work. We believe that by clarifying professionalism
stakeholders. In a real-life scenario its professional purpose, HR will • a review of economic literature
there is rarely an obvious solution gain a firmer foundation on which on human capital and
that meets the needs of both to base professional judgements, organisational value-creation
employees and employers, or applying the body of professional • a review of moral philosophy
balances short-term gains with knowledge to find solutions that literature on the possible
long-term organisational health, support business strategy but in ways of looking at the choices
for example. Faced with having a way that reflects the societal regarding work and working
to tease out conflicting priorities, responsibility of the profession, lives (Clark 2015)
a practitioner might ask – what is integral to the long-term survival of • a series of focus groups and a
the relative importance of these organisations and societies today. survey with nearly 10,000 HR
needs? What are the rules of practitioners, business leaders
making a judgement about a ‘right’ This report and line managers in the UK, US,
way to compromise? Many firms This report underpins our Asia, the Middle East and North
would agree that the well-being Profession for the Future strategy Africa on professional decision-
of their people and society is one to ensure we continue to fulfil making at work, conducted by
of their priorities. But in pursuit of our purpose as the world of work YouGov
those outcomes, organisations are evolves. Specifically, it aims to • a review of extant literature on
unlikely to want to do themselves inform the work on defining and the future world of work, HR
out of business. So there are testing a new set of principles and other people management
choices to be made about the that will help HR professionals professions.
way in which the needs of different make better decisions and advise
stakeholders stack up against business leaders what to do, no
each other. matter what the context and no
matter what the future may hold.
These are not easy questions,
and it is nearly impossible to Section 1 sets the scene by
prescribe exactly what ‘good’ describing the changing
HR practice would look like in all remit of HR responsibilities in
business contexts and for each organisations and why this calls for
set of circumstances. But, what professionalisation of HR.
is clear is that we cannot expect
the so-called ‘best practice’ or a Section 2 introduces the principles-
static body of knowledge to act based approach to professional
as a standard of professionalism standard-setting and makes the
in people management and case for taking such an approach
development. The uncertain with the HR profession.
context in which many current

7   From best to good practice HR: Developing principles for the profession
1T
 he changing nature of the
HR profession

‘The importance This section reviews the ongoing


and upcoming needs for the
with several key attributes
which distinguish any particular
of ethical professionalisation of HR and occupational group from a profession
people management. As the HR recognised as such by society.
responsibility profession evolved from the days
of ‘welfare officers’ now branching The first, and perhaps most
comes from the into people and organisational familiar, attribute is the use of
fact that non- development, reward, recruitment,
diversity and many other
specialist, expert knowledge
necessary to perform a particular
professionals specialisms, the scope of the type of work or role. For that
practitioner’s role has changed reason professionalisation can
do not have the considerably. The megatrends be associated with increased
impacting the world of work – training, development of
unique specialist demographic and industrial change, professional knowledge standards
knowledge to the decline of the collective voice
and the impact of globalisation –
and a requirement to update
this knowledge, or continuing
check the quality have highlighted the importance
of getting people management
professional development (Gilmore
and Williams 2007).
of guidance given right and elevated the role of the
HR function to informing and Sometimes the amount of
by professionals supporting the business strategy. knowledge required to practise
and have to rely on This context sets a strong case for
professionalising HR.
as a professional means that only
an individual with a particular
their advice.’ What is professionalism?
certification will be able to ascribe
to professional membership. In
Professionalism is an ambiguous, many occupations this is enforced
evasive concept. The word through educational certificates:
‘professionalism’ is sometimes a qualification is a prerequisite to
used narrowly to describe a formal professional status.
standard of conduct at work
(for example behaving in a Other professions, such as
‘professional’ manner). It can also medicine and law, put forward
reflect individuals’ own beliefs legal requirements to protect their
about their capabilities and status. professional status. A ‘licence
For example, an individual with a to practise’ (in addition to the
particular knowledge and expertise relevant qualification) must be
may be called a ‘professional’ attained by passing an exam
regardless of whether their testing whether an aspiring
occupational group is recognised professional can apply the
formally as a ‘profession’, for acquired knowledge in practice at
example, when one describes the necessary level of standard.
themselves as a ‘professional Regular ‘re-validations’ may
seamstress’ (Farndale and Brewster be required to ensure the
2005, Willmott 1986). professional is investing in
maintaining their level of skill
However, in its formal sense, through continuing professional
professionalism is associated development (CPD).

8   From best to good practice HR: Developing principles for the profession
Another critical aspect of profession that requires acquiring a (Arnold and Stern 2006), drawing
professionalism is the use of large body of specialist knowledge both on one’s knowledge as well
knowledge for the good of the and passing rigorous exams. as sensitivity to the ethical choices.
society, implying an ethical Medical judgement is something A study of Australian health care
responsibility (Khurana et that others (non-professionals) organisations found that tensions
al 2004). This means that cannot produce or understand are experienced, for example,
professionals are able to without the specialist knowledge. by doctors working in combined
make informed choices about For that reason, entry into the management and clinical roles
their actions, but also have a medical profession is protected, (Kippist and Fitzgerald 2009).
responsibility to act, rather than but that allows recognised Their professional standards and
ignoring the necessary choice members of the profession to the organisation’s management
or complying with a potentially enjoy a status attributed to them objectives come into conflict when
harmful decision, even if this by their clients and society. requirements for patient care clash
decision is pursued by their with financial constraints. Finding
stakeholders. For example, Not all occupational groups yet appropriate solutions that fit the
engineers have a responsibility enjoy the same degree of trust organisational objective but do not
to reject an unsafe project, even that is characteristic of some compromise other values (such as
if the business deems it cost- of the established professions. societal value) requires them to
effective. Similarly, psychologists Development of large-scale apply professional judgement. One
are obliged to break the rule organisations in the twentieth HR manager in the USA said:
of confidentiality if they are century introduced the need for
concerned that their patient may new fields, including finance and ‘I think an HR professional has a
harm themselves or others. marketing, and the recognition of clear understanding of the business
these specialisms as professions context and what the big picture
The importance of ethical is growing. However, applying is for the organisation. This means
responsibility stems from the fact specialist knowledge without that they can deal with a specific
that non-professionals do not taking into account specific case but see how it fits into the
have the unique specialist insight contextual circumstances has overarching business goals – see
to check the quality of guidance led to misuse of professional where things will have a wider
given by professionals and have to judgement on occasion, as evident impact and applicability beyond the
rely on their advice. Professionals, in some of the accounting scandals specific case.’
therefore, have a certain level of of the recent past. Friedman
power over the outcomes of their (2006) described a ‘depletion of Professionalism, therefore,
activities (Duska et al 2011, Barker the moral ozone layer’ leading to connotes a commitment
2010), which they could use to a decline in trust in professionals to excellence, combining
pursue their own interests or to (Hope-Hailey et al 2012). professional knowledge and a
favour one of their stakeholders in sense of responsibility to arrive
a biased way. It is their professional While in the past the economic at an appropriate professional
responsibility not to abuse this climate drove an increased judgement. The profession (as
power to gain an unfair advantage emphasis on achieving targets and a collective of members) is, in
for themselves, or to give one to maximising profitability (Evetts turn, obliged to ensure that its
others, but to intend to do ‘good’. 2003), a renewed focus on trust representatives are worthy of
has highlighted the importance the trust of society, by setting
Through the combination of their of situational judgement as key standards of conduct and
expertise and ethical responsibility to professional behaviour, with competence (Khurana et al 2004).
professionals enjoy a degree of some pointing out that ‘the true
trust to carry out their services skill of professionalism may be not
and are granted a unique right so much in knowing what to do,
of practice and an authority to but when to do it’ (HCPC 2014,
make decisions in line with their p3). This means being able to
professional judgement (van derive practical insight applicable
Rensburg et al 2011, Fournier 1999). to specific circumstances, while
For example, medical doctors often resolving conflicts of interest
belong to a widely recognised between multiple stakeholders

9   From best to good practice HR: Developing principles for the profession
Box 1: What do professionals think about professionalism?
While the academic literature provides an impartial view on what comprises professionalism, the views of
the profession itself are likely to reveal the aspects of it that are the most salient to individuals applying
their expertise in practice. A survey of nearly 10,000 HR practitioners, business leaders and line managers
in the UK, US, Asia, the Middle East and North Africa (MENA) revealed that professional knowledge, ability
to apply it in specific circumstances and ability to add value to the organisation were among the top four
characteristics considered essential for a professional. In contrast, a qualification and number of years of
experience were considered to be less important, indicating the salience of context-specific professional
judgement.
The findings differed by geographical region, which might relate to how a particular profession is viewed
through a particular societal lens. For example, respondents in the UK and the USA were significantly more
likely to rate knowledge and ability to apply knowledge in practice as essential attributes of a professional,
compared with practitioners in Asia and the Middle East and North Africa (MENA). The latter groups were
more likely to rate experience and seniority as essential aspects of someone being called a professional than
their Western colleagues.

Table 1: Essential characteristics of a professional, by region (% rating as essential)

North Africa
Aspect UK USA Asia and Middle East

Up-to-date knowledge relevant to the profession 63 55 46 48

Ability to apply knowledge in context 61 59 42 46

Ability to communicate with staff of all levels 57 58 47 50

Ability to add value to the organisation 51 54 44 47

Operational experience 39 35 38 49

Ability to lead 37 47 44 51

Guiding principles 34 43 35 31

Understanding of the commercial function 34 28 35 50

Qualification 25 46 35 42

Ability to add value to the community 20 26 33 32

Number years of experience 15 15 28 31

Expertise drawn from outside of the professional area 14 15 30 29

Being a member of a professional body or association 14 11 25 17

Level of seniority achieved in the profession 12 13 28 33


Source: YouGov

10   From best to good practice HR: Developing principles for the profession
What makes an HR
professional?
contribution that the discipline
makes to the different business
‘The profession
As the field of HR management functions, as opposed to the should build its
(HRM) has evolved, the question more operational ‘personnel
of professionalism has increasingly management’ function it used credibility and
moved into the foreground to and continues to perform.
(Wooten 2001). At the early stages There is an ongoing interest in
trust by showing
of its development, the practice
of ‘personnel management’ was
how HR creates value exactly,
and an emphasis on aligning
its capability
not associated with particular with business issues and gaining and courage to
professional requirements or commercial acumen. However,
status. With the development as the range of business-specific challenge accepted
of the body of professional activities that would define ‘good’
knowledge – and the role of HR HR at the strategic level has not practice and offer
professionals in organisations –
there is now more clarity around
been defined, challenges to the
extent of HR’s contribution in the
business leaders
the standards expected of business continue (Boudreau 2014; a range of critical
practitioners (Wooten 2001, Ulrich Cappelli 2015).
et al 2013). perspectives on
In this context of activities that
Gilmore and Williams (2007) would describe good practice in how to create
illustrated that the HR profession
has established a body of distinct
this new area of thinking is simply
unproductive. While commentators
sustainable
specialist expertise concerned continue to challenge the organisational
with designing, implementing and functional responsibilities of HR
managing personnel processes. in organisations and the range of value through
While that knowledge continues skills required by the profession
to be valuable, it is increasingly to fulfil its duties, it is increasingly people.’
insufficient to define HR or to unlikely that a single standard
practise it effectively. One reason of HR practice will ever provide
for that is that effective ‘HR’ a guaranteed best result for
does not rely only on a fixed set establishing and running complex
of policies and practices, nor is knowledge management systems,
it contained in a single business delivering value for the business,
department. For example, line its people, customers and the
managers are responsible for a wider society. Moreover, prevalent
large bulk of people management definitions of ‘alignment with
activities in organisations, even the business’ and ‘commerciality’
though they might be designed assume a narrow definition of
and implemented by HR (Farndale value-creation, limited to generation
and Brewster 2005, Guest and of short-term financial profit.
Conway 2012). Secondly, a growing
knowledge base in psychology The latest thinking on the
and neuroscience suggests that value of intangible assets in a
policies on their own cannot shape business and the ways in which
performance effectively, requiring organisational value chains operate
practitioners to form a far deeper provides a useful opportunity
level of understanding of businesses for reframing the contribution of
and people and drawing on a range HR to the business. Specifically,
of behavioural disciplines. external pressure is mounting for
organisations to ensure that the
A couple of decades ago the way their business model operates
debate on professionalisation creates so-called ‘shared value’, by
of HR, therefore, moved into enhancing the competitiveness of
the space of the ‘strategic’ a company ‘while simultaneously

11   From best to good practice HR: Developing principles for the profession
advancing the economic and social work for them are assumed
‘The shared- conditions of the community in to engage in a quid pro quo
value approach which it operates’ (Porter and
Kramer 2011). Rather than focusing
(as opposed to a one-way)
relationship, those responsible for
challenges HR on discrete business activities, this deploying and managing human
view interrogates the capability of capital in organisations will require
to look beyond higher-level organisational systems an understanding of how to design
to enable the flow of various and maintain these relationships
practices of types of human capital within to create shared value. Inevitably,
human capital those systems and to generate
different types of value beyond
these practitioners will encounter
conflicts of interest between the
management as short-term financial profit (Hesketh parties and will have to make
2014). In turn, individuals do not choices about the outcomes they
well as expand act solely as contributors to the seek for people and organisations,
organisational business model, but the ways in which they treat these
the range of also benefit from organisational stakeholders and, ultimately,
stakeholders that investments in human capital.
One leader in the Middle East
the beliefs that guide their
choices about the employment
their contribution explained: relationship.

serves.’ ‘When managing the company after Rather than focusing on the
acquisition, we were concerned activities it delivers, the profession
with balancing the short-term should build its credibility and
and long-term perspectives on trust by showing its capability and
value-creation. Culturally, people courage to challenge accepted
feared that jobs would be cut, so practice and offer business leaders
they were demotivated. We had to a range of critical perspectives
promise that within the first year on how to create sustainable
there would be no shake-up. And organisational value through
we asked the existing CEO to stay people, underpinned by a body of
on for a year to manage people and fundamental and internationally
their expectations before he left. relevant knowledge rather than
anecdotal ‘best practice’. We
‘Commercially, it made sense propose that a principles-based
to remove a lot of people fast. approach to HR practice can
However, that created a risk that elevate the definition of ‘good’ from
good people will leave or become practice to the systems level, while
demotivated. We did not know the giving freedom to individual people
business so well as to make that management professionals to apply
decision quickly. Our approach their professional judgement in
was about creating a smooth designing bespoke ‘good’ practices
transition; even though it took in real-life scenarios.
longer to create value, we needed
to establish trust and buy-in. We
were reducing the element of fear
and doubt of the future. That drives
performance.’

The shared-value approach


challenges HR to look beyond
practices of human capital
management as well as expand
the range of stakeholders that
their contribution serves. If
organisations and people who

12   From best to good practice HR: Developing principles for the profession
2 Why principles of the profession?

While the CIPD Profession Map


sets out the current standard
highlighted a failure of regulation
to address organisational values
‘Principles are
for HR, this research aims to and culture (ref FASB 2002, Wong general statements
respond to the future needs of 2014). Instead, principles provide
the profession outlined in the a solution to individuals working which influence
previous section and identify ‘around the rules’ by incorporating
higher-level principles that may norms of ethical reasoning into
the way we view
underpin ‘good’ professional
judgement in people management
corporate governance. Harre
(1970) writes:
phenomena and
and development. Such principles the way we think
would signal what an individual ‘Principles are general statements
should take into account when which influence the way we view about problems.’
deciding how to act in practice. phenomena and the way we think
This section describes the about problems.’
principles-based approach to
professional standards and Principles require decision-
explains how such an approach makers to become aware of
would help define the purpose of the stakeholders impacted by
HR’s contribution to the business. alternative practices, for example,
weighing public interest against
The principles-based increased profit margins. This
approach to standards of approach, therefore, covers ‘softer’
corporate governance aspects of governance such as
Principles-based standards of culture and behaviours, appealing
professional behaviour have been to the decision-maker to do the
used by some professions, like ‘right’ thing, which is typically not
medicine, for a long time. However, accounted for in legal norms.
in the context of the global
review of corporate governance, Several organisations weighed the
which intended to introduce advantages and disadvantages
considerations of public interest of the approach to standard-
into business decision-making, setting against the rules-based
there is a renewed interest in governance, albeit specifically for
this approach applied to new accounting (FASB 2002, SEC 2003;
occupations prevalent in modern ICAEW 2006; ICAS 2006, FRC
organisations: accountancy, 2010). These are summarised in
marketing and others. Table 2.

The principles-based approach The debate around the principles-


to corporate governance is based over rules-based approach
contrasted with the regulation- signals two important shifts in
based approach that outlines corporate governance. First, there
detailed procedures that a is an increased emphasis on
business should implement. The organisational continuity through
origins of the principles-based improved trust and greater societal
approach are in the enquiries responsibility. While adherence to
into ‘creative accounting’ in rules ensures the organisation’s
the financial industry, which compliance with law, it does not

13   From best to good practice HR: Developing principles for the profession
Table 2: Summary of the advantages and requirements for successful implementation of a principles-based approach to
standards of corporate governance

Advantages of a principles-based standard

• A principles-based standard describes the ethical aspects of governance, incorporating the interest of both the business
and the public. As such, it aims to support a ‘true and fair’ practice, communicating the intent of the standard, not just
enforcing the letter of law.

• A principles-based framework prevents auditors form interpreting legalistic requirements narrowly to get around ethical
requirements.

• Principles-based standards are more generally compared with regulation that gives a specific instruction, albeit on a
limited number of circumstances. This, however, allows a principles-based standard to be broader in scope, allowing
for variation in individual situations, with fewer exceptions and eliminating complexity of some rules.

• A principles-based standard is quicker to adapt to the changing business context than statutory regulation.

Effective implementation of a principles-based standard requires…

• Professional judgement: a more general scope of a principles-based standard means an expert interpretation or judgement
is needed. The quality of interpretation is assessed on the expert’s demonstration of how a conclusion has been reached.

• Common language to ensure comparability of the decision-making processes.

• Universal acceptance: the standard on its own cannot prevent dishonest practice, and breach of standard is likely to
be driven by a demand for expediency on behalf of a powerful player (ICAS 2006). Adherence to standard requires a
behavioural change on behalf of all parties, as well as enforcement of the standard by a regulator or similar.

• Prohibitions: a principles-based standard does not have to be principles only. Some rules can be incorporated to constrain
the decision-makers.

• Attention to application in specific cultural contexts, where a preference may be expressed for rules over principles.

always meet the interests of a Secondly, the need for an responsibility, as well as
wide range of organisational interpretation of principles professional obligations and the
stakeholders (such as employees highlights the role of professionals, ethical guidance that should be
and society). Yet, the premium is who have unique expertise to considered as part of the process
increasingly placed not just on the understand the intent and the of professional decision-making.
ability of an organisation to meet ethical considerations associated There are different approaches
the bottom line in the short term, with the principles. This expertise to setting professional standards,
but on the trust in its capacity to will allow professionals to which may comprise one or a
maintain that performance over navigate the relative importance combination of a code of ethics,
time. For instance, the financial of stakeholders and values to act a code of conduct, a standard of
reporting council (2014) states: on the principles in the specific professional competence and/or a
situational context. statement of principles.
‘The effectiveness with
which boards discharge their Principles-based approach Principles-based approaches to
responsibilities determines Britain’s as a method of governing setting standards of professional
competitive position. They must professional behaviour in HR behaviour are designed
be free to drive their companies Professional standards typically specifically for guiding choices in
forward, but exercise that freedom describe responsibilities for situations of uncertainty, where
within a framework of effective competent and ethical practice professional judgement (based
accountability. This is the essence that members of that profession on knowledge, experience and
of any system of good corporate must demonstrate. These systems ethical responsibility) is required.
governance.’ set out the knowledge and skills Principles exist above technical
required to fulfil a professional and behavioural competence and

14   From best to good practice HR: Developing principles for the profession
Box 2: Examples of organisations taking a principles-based approach
The laws of robotics have been created by Isaac Asimov to govern the relationship and power between
robots and humans, incorporating an indication of the relative priorities of each law. They have since been
expanded and built upon (EPSRC 2010):
0 A robot may not harm humanity, or, by inaction, allow humanity to come to harm.
1 A robot may not injure a human being or, through inaction, allow a human being to come to harm.
2 A robot must obey the orders given it by human beings, except where such orders would conflict with
the First Law.
3 A robot must protect its own existence as long as such protection does not conflict with the First or
Second Law.

The King Report on Corporate Governance of South Africa (IoDSA 2009) puts forward a non-legislative
code built on the key elements of leadership, sustainability and good corporate citizenship. The principles
cover the board’s ethical foundation, its composition, as well as accountability and reporting. In contrast to
the laws of robotics, all 75 principles are of equal importance. For example, some of the principles are:
1 The board should act as the focal point for and custodian of corporate governance.
2 Companies should remunerate directors and executives fairly and responsibly.
3 Sustainability reporting and disclosure should be integrated with the company’s financial reporting.

More closely to people management practice, several organisations developed values or principles (of
varying degree of detail) that govern their operations. For example, Nestlé has a set of management and
leadership principles (Nestec Ltd 2011) based on a set of values that include:
1 Focusing on long-term business development without losing sight of the necessity to continuously
deliver sound results for our shareholders.
2 Committing to environmentally sustainable business practices to protect future generations.
3 A contextual approach to business rather than a dogmatic one. This implies that decisions are pragmatic
and based on facts.

apply with no exceptions. For Principles effectively describe Accounting Principles is


that reason the real principles are moral choices about what is ‘Stewardship builds trust’, which
often surfaced during conflicts considered ‘right’ and ‘wrong’ – protects the long-term reputation
of interests, where value for in the absence of an appropriate and value of an organisation,
one stakeholder is created at law or a rule prescribing a certain with an underlying moral value
the expense of another party. course of action. The moral of preservation. This can mean
For example, a business may be foundation of principles, however, strategies geared towards
faced with a dilemma of paying doesn’t mean that they deny the sustainability of a business, but
fair wages to suppliers or making need of organisations to make a also difficult tactical decisions that
better deals – and increasing profit profit. Rather, principles explain are sometimes necessary for mere
– in the short term. A decision to how alternative options should be survival.
commit to fair trade would indicate weighted with regard to all of the
that the decision-maker attaches stakeholders that a professional One line manager in the US said:
a higher degree of importance has an obligation to, including
to progressing local communities the business owners as well as ‘The one thing I learned from
and the long-term health of the individuals and society, in the being a manager was that it wasn’t
business than to the pursuit of current context. For example, always “the manager” creating the
immediate financial interest. one of the Global Management take-advantage situation, but more

15   From best to good practice HR: Developing principles for the profession
‘This need for the company taking advantage
of that manager and holding him
be a temptation; however, such
practices, most likely set in large
principles to accountable for getting things Western organisations are based
done. So it filters down [onto on assumptions irrelevant to those
guide decisions staff]. That really made me think businesses that are attempting to
how important it was to retain my copy it. One example of this is the
is particularly humanity as a manager regardless varying interpretation of ‘fairness’
salient for of what the company pressured me
to do.’
by employees from different
cultural backgrounds – despite
practitioners in ‘fair’ working relationships being of
This need for principles to guide global importance.
regions where the decisions is particularly salient for
practitioners in regions, where the Principles-based standards can
HR profession is HR profession is still developing, support HR professionals in making
still developing.’ and perhaps does not yet have
the credibility necessary for the
independent value judgements –
although informed by the body of
practitioners to make independent knowledge and experiential ‘best
judgements that the business practice’. By providing overarching
trusts unconditionally. For example, criteria of what ‘good’ looks like
while some countries provide a they will guide professionals
legal minimum of how people to create HRM systems that
should be treated at work, other create shared value for all of
regions do not yet have the same the organisational stakeholders.
legal base, and require a different In turn, such capability would
mechanism of resolving the limit entry into the profession to
‘rights’ and ‘wrongs’ of treating those who can demonstrate the
human capital in a business model. knowledge and skill necessary to
Appealing to ‘best practice’ might make a principled judgement.

16   From best to good practice HR: Developing principles for the profession
3 Developing the principles

As explained in the previous


section, principles represent
lead to the ‘right’ judgements
regardless of circumstances.
‘There are a
high-level judgements of value number of
that practitioners make when First, we explored how the existing
considering alternative courses philosophy literature deals with distinct ways
of action and the range of the ethical issues of work (Clark
consequences resulting from their 2015). This review identified a
of approaching
decision. This process of value
judgement – or ethical choice –
number of ‘lenses’, which do
not represent ‘right’ or ‘wrong’
ethical choices,
in a business goes beyond the judgements about the relationship which apply
questions of legality or adding between people and organisations
to the organisational bottom but describe possible perspectives regardless of the
line. Instead, it is founded on one may consider when making
fundamental beliefs concerning ethical choices (see Box 3). These context.’
the relative importance that lenses relate to different aspects
the decision-maker attaches to of decision-making, and while
the different types of value in a some may co-exist, others cannot
particular situation. This section be applied at once. This is why to
explains the evidence we gathered develop a set of principles for the
to establish such beliefs currently profession we are continuing work
prevalent in people management to understand how they relate to
and development practice. and interact with each other.

Collecting data on Secondly, we tested the use of


practitioner value judgements these lenses in a series of focus
Because ethical choices are in groups and a survey with nearly
essence subjective judgements 10,000 HR practitioners, business
of relative value or importance, leaders and line managers in UK,
it is fairly difficult to determine US, Middle East and North Africa
the principles that would be (MENA) and Asia asking them to
universally applicable to a decide whether the judgements
group of people (for example, a associated with the lenses were
profession). Some might argue ‘right’ or ‘wrong’. The survey,
that these judgements are to conducted by YouGov, provided
a large extent informed by the two types of information:
specific situation, the cultural
context and the personal values of 1 First, it asked the respondents
the decision-makers. On the other whether (and how often) they
hand, philosophical ethics suggest use these lenses when making
that even though the actual decisions in their professional
judgements may be circumstantial, capacity at work. This allowed
there are a number of distinct us to gauge how prominent
ways of approaching ethical each lens is in professional
choices, which apply regardless judgement, as well as the
of the context. The challenge for practical challenges of doing
the current work was in finding the ‘right’ thing within the
such high-level ways of thinking organisational context.
about work and working lives that

17   From best to good practice HR: Developing principles for the profession
Box 3: Lenses
Philosophy offers decision-makers a number of ways to reflect on options and become aware of what the
outcome might look like by interrogating alternatives from one or another perspective, neither of which is
‘right’ or ‘wrong’ on its own. With regard to work, there are eight perspectives or ‘lenses’ that can be used
to inform decision options:
1 Well-being Lens: workplaces should promote well-being in its broad sense, not because it increases
employee engagement or productivity, but as an outcome in itself. Work should provide individuals with
autonomy and happiness. When there is a choice of providing bad and providing good (for example,
when the interests of different stakeholders conflict), the decision should provide as much good and as
little bad overall as possible (even though some might be worse off as a result of this).
2 Rights Lens: the rights of people should not be violated just to improve the outcomes for someone else,
so individuals shouldn’t be treated simply as means to an end. People have a right to be protected from
harm and to have a choice over what happens to them. In the workplace, this means the right to be
treated with dignity and respect, to exercise autonomy and control.
3 Merit Lens: workplaces should be designed to guarantee equal opportunities based on individual talent
and hard work, rather than irrelevant characteristics such as gender, race, sexuality and social class.
4 Fairness as Justice Lens: in practice not every individual is able to compete based on their merit –
people have unequal access to education and development, for example, and don’t have the same
‘power’ to argue their cause independently. Workplaces should be designed with an eye to those who
might end up being the worst off as a result of the decision.
5 Markets Lens: rather than distributing benefits based on ability and need, people should get what they
can freely negotiate. Some people are lucky enough to have scarce qualities and ability to negotiate
freely to command higher wages, for example. Others are unfortunate to end up with less, even though
they might be no less worthy.
6 Democracy Lens: people should be able to influence the decisions that affect them. Workplaces should
give a right of voice to everyone whose interests are at stake and implement procedures for agreeing
decisions collectively.
7 Character Lens: decision-makers should demonstrate integrity, despite circumstances that might require
compromising the principles. Making choices in a difficult situation is about not about following a rule,
but doing the ‘right’ thing, something a ‘decent person’ would do.
8 Handing Down Lens: the long-term interests of people, organisations and society are more important
than short-term gains. Workplace decisions should look to preserve the past and support the future
interests of the people, the business and the communities.

2 In addition, it presented the of the lenses was ‘right’ to Of course, the choices made
respondents with a set of apply in that particular set by these practitioners don’t
abstract scenarios dealing with of circumstances. Comparing automatically mean that particular
people management dilemmas the responses about the judgements should be the
across a range of organisational practitioners’ own use of standard for the profession. First,
contexts, including growth, lenses with the choices made these are responses not necessarily
cost management, business in the scenarios, we were able submitted by professionals, but
change and a sustainable to gauge whether specific individuals occupying certain
business context (see Appendix situations make particular roles in the business – HR
1). In each of the scenarios perspectives more or less practitioners, leaders of business
the respondents were asked relevant to making professional functions and supervisors.
to decide whether in their judgements. Secondly, the responses
professional opinion each describe the current perceived

18   From best to good practice HR: Developing principles for the profession
standard (and the ambition) of interests, would they still exist if employees indefinitely, they work
professional judgement, rather they did not have an effect on the towards shared value-creation,
than the standard as it should business? designing people processes in
be. Nevertheless, they provide such a way that also creates value
an important insight into the The Well-being Lens advises that for other groups of stakeholders,
fundamental beliefs held by people in resolving this dilemma two including employees (Lepak et al
management and development aspects are important. One is 2004, Monks et al 2013).
practitioners. that workplaces should actively
pursue positive outcomes for A commitment to a two-way
The next sections consider what workers regardless of the business relationship between people and
might be important to professional case, but just because they are the business (beyond the formal
decision-makers in HR and in the interests of people, who contract) was evident in the
related professions across each are just one of the organisational YouGov respondents’ beliefs about
of the aspects of ethical decision- stakeholders. Secondly, when how the interests of different
making. The findings provide food faced with choices about doing stakeholders should be managed.
for thought on five questions, some good and some bad – for For example, in a scenario
representing different aspects of example, foregoing some of the describing a growing company in
decision-making (Schumann 2001): business value to invest into the a new market, competing on value
welfare programme – the decision- with other low-cost providers,
• Who should HR serve? Who are maker should choose to produce 63% of HR leaders and business
the stakeholders that it needs to the most good and the least bad leaders recommended that the
consider in making judgements overall. This might involve trade- business looks to ensure financial
about how work should be offs, and the welfare programme well-being of workers when
organised? might not be put into place after considering the appropriate pay
• Should people (ever) be all, if on balance it takes too much levels for temporary staff. Similarly,
treated as means to an end? away from the business without in a business change situation,
What are the respective rights providing valuable returns. tasked with the organisational
and responsibilities of the imperative to improve workforce
stakeholders in the workplace? Stakeholder outcomes is an performance as soon as possible,
• What is fair? How should inherent issue to HRM, positioned 61% of decision-makers suggested
the outcomes of decisions between serving the business as that the organisation should
be distributed among the any other organisational function complement performance policies
stakeholders? and satisfying the needs of people, with line managers’ support
• Is long-term or short-term which is necessary for attracting and development opportunities,
value creation more important? talent into the organisation instead of simply setting stretching
How can the competing time and achieving organisational performance targets and
perspectives be reconciled? priorities. The traditional view encouraging competition. The US
• How easily are values of organisations considered sample stood out for being less
compromised? Do they feel employees as resources rather likely to apply the Well-being Lens
empowered to make the ‘right’ than stakeholders of the business, in the scenarios, consistent with the
choices? with their interests met to the ‘hard’ HRM tradition in the region.
extent that was required for the
Who should HR serve? organisation to function effectively. However, while practitioners may
From the Well-being Lens The latest thinking on human believe that workers should be
perspective work should be ‘good’ capital management challenged treated as legitimate stakeholders
for people, not just because it is that assumption, suggesting that of a business, in actual practice a
advantageous for an organisation, although people (or rather their smaller proportion of practitioners
but as an outcome in itself skills and knowledge) represent might be applying the Well-
(Clark 2015). To understand one of the most important sources being Lens in making day-to-day
this distinction it is helpful to of organisational value, they are decisions at work. About half
consider the ‘business case’ also investors – of knowledge, skills (47%) of respondents to the survey
that supports some employee and engagement – and, therefore, said that they always apply the
welfare programmes. While have a ‘share’ in the value created principle ‘Work should be good for
these initiatives ultimately meet by the organisation. While firms people’ in their own role, with a
both employees’ and employers’ should not pursue the good of further 35% suggesting that they

19   From best to good practice HR: Developing principles for the profession
may compromise this principle profitability and its ability to that where negative outcomes
under certain circumstances. contribute to the local community for people (such as redundancy)
Further, one in seven (15%), by creating jobs to justify lower pay were unavoidable, at least seven
thought it didn’t apply or was rates for a group of employees in a out of ten practitioners believe
‘nice to have but not imperative’. new regional office. that treating people humanely –
Professionals working in voluntary above their legal responsibility as
sector organisations and those The need to choose between employers – is the ‘right’ thing to
characterised by family culture stakeholders raises the question do. However, in other scenarios
were more likely to apply the about the minimum obligation that HR leaders and business leaders
principle in all circumstances, practitioners perceive they have to in particular were much more
perhaps reflecting the alignment the individual worker, and whether pragmatic about their use of the
of the Well-being Lens with the they are prepared to use people Rights principle. For example,
organisational values in those as a means to the ends of the talking about the rights of staff in a
business contexts. business. Although laws protect new office opening in a developing
most employees from exploitation country 37% of business leaders
Should people (ever) be and discrimination, other rights, and 43% of HR practitioners said
treated as means to an end? such as treating people with that the company’s decisions are
Respondents’ choices around the dignity and respect, or the right to justified as long as they follow the
principle of well-being also revealed have control over what happens laws of the country they operate in,
that some organisational priorities to you, are at the discretion of the while the remaining respondents
– such as cost management and employer. However, with growing believed the organisation had
downsizing – make it more difficult emphasis on the commercial moral responsibility for its
for practitioners to find solutions acumen of practitioners, this employees. This finding suggests
that are ‘good’ both for the people humanistic aspect of decision- that some groups of staff may be
and the business. Where a mutually making is not widely ‘fashionable’ treated differently from the core
beneficial solution was not obvious with the HR profession (Winstanley workforce, simply because they
to decision-makers, they often and Woodall 2000). are perceived solely as a resource
applied the principle of ‘greater aiding the business in achieving its
good’, maximising the benefits for When YouGov survey respondents objectives.
the majority of the stakeholders were asked whether organisations
involved. For example, nearly six should recognise individual rights Interestingly, line managers
in ten (57%) HR practitioners and beyond the minimum protected were more likely than other
business leaders organisational by law, their choices indicated respondents to apply the Rights

Isos: Achieving greater business and societal outcomes through investing in people
‘To enable our staff to be the best they can be’ is one of the four strategic priorities of Isos, a housing
association in the north-east of England, alongside business efficiency and growth, and customer
satisfaction. This is evident in the way the organisation is run day to day, as well as in the approach taken to
develop the vision and values under the ‘Better as One’ campaign.
Richard Fryer, Executive Director for Business and People, adds:
‘We wouldn’t apologise that there is an ethical dimension to this as well. We know that if we are really good
at employee engagement, our performance and productivity will improve. The work that we’ve done with the
Best Companies organisation demonstrates that win-win approach.
‘But if somebody produced a piece of research tomorrow that said, “What you need to do is get all your
people in a room every day and whip them. That’s the way to get productivity,” that’s not the kind of employer
we would want to be.
‘One of the choices that we still wrestle with is between commercialism and social purpose, and that
definitely was a debate in setting out our vision. We could’ve settled to be much more commercial, focusing
on profitability. We made a deliberate decision that we are going to do some commercial activity to create
subsidy for the social purpose, but we’re going to keep it proportionate to our social ethos.’

20   From best to good practice HR: Developing principles for the profession
principle when making choices individuals to have control over as a mechanism to redress the
across a range of scenarios, and what happens to them at work, negative outcomes affecting
less likely to choose the ‘greater consistent with the Democracy workers (for example, in the
good’ over the interests of the Lens. However, in the YouGov situation of redundancy), rather
minority, suggesting that workers survey, the prominence of this than a proactive way of including
should be treated as individuals. perspective was one of the lowest. employees in the decision-making
This finding is indicative of the Less than a quarter of practitioners process. It was less likely to be
closeness of line managers to the said that the principle ‘People given to temporary staff and
day-to-day needs and concerns should be able to influence the the call centre staff in a new
of employees, and the increased decisions that affect them’ is one company’s office, with both groups
likelihood that the needs of people that they always apply in their potentially perceived as means to
will be taken into account as decisions, with a further quarter an end.
part of their decisions. A similar suggesting it never applies or
finding concerns Asia and MENA that it is something that is ‘nice The ways in which the Democracy
respondents, who were more to have’, while almost half said it lens was applied by survey
likely to express responsibility applies in what they do but can respondents is a particularly
for staff welfare, compared with be compromised under certain relevant example of the difference
UK and US samples. This finding circumstances. Giving people a between principles and ‘best
may be a reflection of the cultural voice was more likely to be always practice’. Despite employee
differences between these regions, applied by practitioners in the voice being one of the pillars of
but also differences in the legal Middle East and Asia. Business employee engagement (MacLeod
rights base and the definition leaders were the least likely to and Clarke 2009) only few
of human rights (which is likely always apply this principle. practitioners always apply it
to differ from the one in the UK when making decisions at work.
and US). When making choices in the Thus, while the ‘best practice’
scenario situations the respondents of employee engagement has
Giving employees an effective were far more likely to indicate become widely popular, the
voice is one example of treating giving people a voice is the ‘right’ principles underpinning the
them as legitimate stakeholders thing to do, even if they didn’t concept do not seem to be applied
in the employment relationship apply this principle currently. in current orgnaisational practice.
and providing mechanisms for However, voice was still seen

Defence School of Personnel Administration: Managing multiple stakeholders through transformational change
The Defence School of Personnel Administration (DSPA) is a training, development and education
establishment for military personnel. A transformation programme is currently taking place to merge with
other elements of the parent organisation (the Defence College of Logistics, Policing and Administration)
with the aim of centralising services to deliver a greater range of innovative and efficient training for the
three armed forces – British Army, Royal Air Force and Royal Navy – on a single site.
The transformation programme comprises three strands of improving training delivery: engaging and
developing staff to support the new ways of working, as well as updating the infrastructure, including
replacing nearly all of the school’s buildings. Such a major change presents the organisation with the
challenge of moving towards the future state while keeping the school operational, delivering the usual
volumes of training and to the required standard. The military concept of ‘mission command’ – setting
defined high-level objectives while allowing individuals to deliver on those to the best of their ability – is
central to the model of delivering the transformation programme.
The leaders aim for the mission, team and individual to ‘meet in the middle’, but there are times when one
has to be given more weight:
‘We talk about the three circles so you’ve got mission, team and individual. What you’re trying to do is keep
everything in the intersection of all those three circles. There are times when you would flex your priorities
within that model when the mission is the most important thing because it has got to be done. But generally
speaking you try and meet the needs of your individuals on the team to get the mission done.’

21   From best to good practice HR: Developing principles for the profession
Even though the Democracy Where before the quality of the One view suggests that the
Lens is currently likely to be employment was understood in distribution of benefits and
compromised in practice, terms of the formal contract, there is burdens should be regulated by
respondents working in now a deeper understanding of the market forces. This approach
organisations with customer- additional mutual expectations of does not pursue any particular
oriented cultures were more likely employees and employers towards outcome for those impacted by
to apply this lens, as were those one another. If employees perceive the decision, nor does it aim to
in firms that experienced growth the promises to be broken, they ensure that the decision rewards
in the previous two years. While might experience deep feelings of the most deserving or those who
these types of organisations may unfairness and dissatisfaction, even are in need. Instead, it allows any
find it easier to involve people though the terms of the exchange distribution of outcomes as long
in decision-making, it is also haven’t been officially agreed. as they are ‘within the rules’. For
possible that giving people a example, distributing training
voice contributes to a particular At the same time, understanding opportunities on a first come, first
type of culture and organisational fairness is complicated by its served basis is an example of a
success, although the exact causal highly subjective nature. People market-based view on fairness. In
relationship cannot be established. have different interpretations a less obvious example, the current
of what’s fair and unfair, and market wages of nurses and
What is fair? their perceptions of whether the CEOs reflect what the market is
Fairness is an increasingly important situation is fair to them are not the prepared to pay, not the degree of
topic for HR management, same as the situation being fair talent and hard work required by
given the shifting nature of the overall (Wong 2014). In our review, individuals to fulfil those particular
relationship between people and three lenses offered contrasting roles (Clark 2015).
the organisations they work for. advice on ‘fair’ decision-making.

Cougar Automation: Creating effective voice mechanisms


Involvement of staff in the decisions that impact the organisation is a distinctive feature of the way Cougar
Automation, a medium-sized software engineering company, is run. This way of working was demonstrated
at a particularly difficult time during the recession. At the time, the company was struggling to maintain
cash flow and was forced by the creditor to make more cuts to remain in operation. One of the current
employees said:
‘When the recession came, we were at the lowest point of the spend cycle in the water industry [that the
business relied on] so it hit us quite heavily financially. And the management team put a proposal together:
“Either the whole company sinks or we have to make some changes.” The two options were making
colleagues redundant or everybody tightening their belts and we ride it through.
‘It was put up for a vote, and everybody decided that they would take a salary sacrifice. I think that was the first
big vote that we had in the organisation, where it could affect the business as a whole. It was spelled out that
everybody has to vote, and unless it was unanimous, unfortunately we’d have to go down the redundancy route.’
Since then transparency and employee involvement in decision-making is one of the principles for Cougar
Automation. The leadership team commented on the value that employee voice brings to making the right
decisions for the organisation:
‘This doesn’t mean we always give a “yes” answer on the suggestions that are made. But we must explain why
we’re taking the decision we’re taking, and how we came to that decision. The question might get referred to
the company council, so a selection of employees across the company will discuss it, and then there might be
a resounding “no”. So we have to be consistent.
‘There have been a couple of occasions where things were put on for discussion at the company council [and
the leadership team thought] people were going to love this, but the discussion showed they didn’t. So, had
we decided as a leadership team to go ahead with that, without asking the staff, it would have been hated
within the company.’

22   From best to good practice HR: Developing principles for the profession
According to the YouGov survey that organisational decision- (Merit Lens) or need (Fairness as
responses, decisions should makers are concerned with the Justice Lens).
follow an objective and consistent outcomes of the processes for
approach, rather than being driven individual employees. On the other The Merit Lens suggests that
by chance and other market forces. hand, the survey showed that in people should get what they
For example, in determining staff actual practice it is not always deserve in accordance with
wage levels, the majority of HR possible to develop a robust and their talent and hard work,
practitioners and senior leaders fair approach against the market providing individuals with equal
believed that the organisation forces, particularly when it comes opportunities to demonstrate
should pay its employees the to reward. For example, where the their ability and rewarding merit.
wage that represents the value respondents compared the wages This is a principle familiar to the
they add to the organisation, of staff in the head office and those respondents in the survey, who
rather than paying them the in the call centre in a developing indicated that it is already used in
market rate. Similarly, in designing country, just over a quarter of HR the current practice, as well as the
a performance management and senior manager respondents one that should be used in their
process, an objective process for said that ‘Employees should be professional opinion. For example,
determining performance ratings paid the same for doing the same in situations dealing with individual
is preferred over creating a league jobs’, while nearly three-quarters performance or behaviour at work,
table and letting the individuals suggested that ‘Pay differences are large proportions of respondents
negotiate their positions in justified by the different context in recommended basing decisions on
performance review. the two regions’. the principles of equal opportunity
and rewarding ability. Similarly, over
On the one hand, these views In contrast with the Market Lens, half (55%) of decision-makers said
reflect a pastoral approach to two other lenses on fairness the principle ‘People should have
managing the employment suggest a particular pattern for equal access to opportunities in
relationship, consistent with the how the outcomes of the decision line with their ability/merit’ applies
high priority attached to the should be distributed between in all circumstances when they are
Well-being Lens above, indicating individuals – one based on ability making professional judgements.

Example: Impact of market conditions on pay decisions


Market rates can both inflate and dampen the pay that an individual can command for a particular role, with
inequalities often emerging between groups of workers performing similar jobs.
In one example a business leader explained that the rates paid by a competitor can dictate the average
salaries in a particular locality, requiring the organisation to increase its pay levels to be able to compete for
key talent:
‘We benchmark jobs and we try to pay people versus their equivalent role and local conditions. I mean, we
may have to pay more for a call centre in one city than we pay in another because our call centre is right next
to another call centre that’s hiring a load of people. We have to pay more of a mid-market rate than in others,
where we may pay at the second quartile, or something like that.’
A different example, however, highlighted that individuals in the support functions are rarely paid above the
market rate, as the skills required for these roles are not as scarce as those needed in customer-facing roles:
‘The nature of their job is different, and as a result [the deal doesn’t work] in quite the same way. For example,
our people make their hours as they wish. As long as the work is done, they come late, leave late, come in
early, leave early, work from home, it’s their choice as long as it doesn’t adversely impact their colleagues or
their customers. Now somebody that’s employed here to meet and greet visitors and answer the phones has
to be here pretty rigidly between this hour and this hour.
‘Similarly with pay, ultimately we can only pay them the going rate. There’s a market which determines all of
our salary levels but with the engineering staff it’s much easier to differentiate the critical value they add to
the company. And the market pays more for high-skilled specialists than it does for admin staff.’

23   From best to good practice HR: Developing principles for the profession
‘While professionals According to the Fairness as
Justice Lens, individual ability is
organisations operating globally,
having to recognise the cultural
may believe something that people cannot
control or improve on – talent is
differences in what employees and
business across the world may
that sustainable largely innate and capacity to work consider ‘fair’.
harder might result simply from
operation is the positive childhood experiences. Is long-term or short-
term value creation more
‘right’ thing to do, Instead, work should be organised
in a way that everyone would important?
in their current role agree to. In other words, the
decision-maker might ask: ‘How
The Handing Down Lens considers
the responsibility of the decision-
they are likely to be would I design this procedure if maker to the long-term interests
I knew I was going to be in the above short-term priorities. It is
impacted by a range worst position as a result of it?’ concerned with the future world
that a decision-maker is creating
of factors requiring In contrast with the Merit Lens, the by choosing particular courses
prioritisation of Fairness as Justice Lens was one
of the least likely to be applied
of action today (Clark 2015).
Applied to HR, it deals with the
current needs.’ both when making decisions about impact of people management
organisational dilemmas and in and development activities on
their own professional practice. the sustainability of stakeholder
Only three in ten practitioners said outcomes.
that the Fairness as Justice Lens
– ‘For an outcome to be fair, the The YouGov survey revealed an
decision-maker should not leave interesting difference between the
out the factors deemed important attitudes to the Handing Down
by the person affected by this Lens in an ideal scenario and in
decision’ – always applied in their the current practice. In each of
practice, while 45% thought it the scenarios up to nine in ten
could be compromised. The low practitioners chose long-term
priority attached to this principle is interests of the organisation over
evident across all of the scenarios, short-term gains. However, when
in particular the situation dealing the respondents were asked about
with redundancies, where only a putting long-term interests above
quarter (26%) of HR practitioners short-term gains in their own
and business leaders thought the decision-making, only less than a
decision should take into account quarter of the respondents applied
individuals’ expectations of the corresponding principle in
what’s fair, perhaps reflecting the all circumstances, with over half
inevitable negative consequences suggesting it applies but can be
for the individuals affected by the compromised. This means that
redundancy decision. while professionals may believe
that sustainable operation is the
Comparing the responses ‘right’ thing to do, in their current
by geographical regions, the role they are likely to be impacted
decision-makers in MENA, and by a range of factors requiring
even more so in Asia, were more prioritisation of current needs.
likely to say they always apply the This is confirmed by the fact that
Fairness as Justice Lens in their professionals in organisations
professional practice, compared that experienced growth in the
with the respondents in the US previous two years were more
and UK, even though the Merit likely to apply the Handing
Lens remained more important Down Lens in their own practice,
overall. This finding is both of perhaps recognising the value of
interest and of challenge for sustainability.

24   From best to good practice HR: Developing principles for the profession
The lack of long-term focus in the the intentions of the practitioner change process. And as a manager,
current practice of managing work deliberating between alternative she is still an employee and is
relationships is likely to stem from courses of action. Because principles affected by the changes as much as
difficulties in measuring the long- provide a high-level standard of anybody else, including the risk of
term value of people management behaviour, they also leave room redundancy. The board seem to be
and development practices (such for contextual interpretation. abdicating their legal responsibilities
as reputation, brand and societal Application of principles, therefore, as well as their moral duties.
progress) (Hesketh 2014). The relies on the responsibility of the They are the ones who should be
‘rational’ approach of the Handing individual professional for their taking some of these decisions.
Down Lens may not be possible if actions and a strength of character They shouldn’t be being left to the
the long-term perspective cannot to do the ‘right’ thing. manager to take, because she’s
be adequately measured against impacted by some of them as well.
the more visible short-term needs. For example, one individual we
Furthermore, insights on decision- interviewed talked about the ‘Now this situation caused me to
making from behavioural science challenge of giving professional think about the choices I make,
indicate a presence of bias towards advice to a peer responsible for because, on the one hand, I’m
satisfaction of short-term needs managing an organisational change contracted to work for an employer,
and desires over long-term goals process. The way the change was not a specific individual employee.
(Kahneman 2012). As a result, managed led him to reflect on his At the same time, I’m having to
current business needs – with a values and distinguish between advise the manager about things
readily attached financial value – personal and professional interest in that could be disadvantageous to
may appear to be more important that situation: her personally. So in everything I do
for all of the stakeholders. I am questioning myself whether
‘In this organisation the board of I am doing the right thing for the
How easily are values trustees have not quite abdicated organisation as a whole, or whether
compromised? their responsibility but they’ve left I work with the manager and try to
One perspective critical for it to the manager of the charity get the best situation for her on a
principled decision-making concerns to deal with the organisational personal level.’

JRI Orthopaedics: Balancing long-term strategy with short-term demands


Gaining staff buy-in to ensure service delivery and protect the sustainability of the business relied on
effective communication, mutual respect and a focus on the long-term ambitions of JRI Orthopaedics, a
British manufacturer of orthopaedic implants and surgical instrumentation. The leaders strive to achieve this
through two-way conversations, discussing and reviewing changes with the production teams, based on
mutual respect. One leader said:
‘It would be so easy for me to walk in and say, “This is what we’re going to do,” and implement it, but as soon
as I walk away, [the supervisor and the team] have to keep that going, and if they’ve had no input into it, they
don’t feel as though they own it. That’s where we pass it over to them: “Guys, this is what we need. How are
you going to get there, how are you going to deliver that?” That’s where you get the buy-in and that’s where
when you walk away from it, it still remains in place.’
However, the tension between capturing hearts and minds and driving business-as-usual means that a
top–down approach must be employed at times. While staff recognise that the new organisational strategy
is positive in supporting its long-term goals, the short-term demands require a swift mindset change. One
manager described the impact of the China project on the business model:
‘[Previously it was] our own product and we make it, we glaze it, we coat it, we clean it and it was in a box
with JRI on it. Then in the last six months, the work is mainly about being competitive and making money and
keeping up. We’re not selling JRI products, but we are contracted to make parts for them.
‘It’s all changed drastically. When you’re a contractor, you don’t have an input in the product, you’re making
it to someone else’s design and standard. In the last six months the amount of work we’ve all had increased
considerably, and it will generate money in the long term. However, in the short term the effects of it are not
seen, and it feels [as if] we are going down a different avenue.’

25   From best to good practice HR: Developing principles for the profession
Clearly organisational power across scenarios. In the business business needs’ and ‘pressure from
dynamics may make it challenging dilemma dealing with increasing the business leaders’ in particular
to apply their professional organisational productivity 7 in (see Figure 1).
obligations in practice. For 10 business leaders and 74% HR
example, lack of formal power practitioners believed that the While acting with integrity
(‘seat at the table’) organisation should be mindful of is difficult in the context of
or scepticism towards HR its values through the process of organisational dynamics, strength
may be some of the reasons improving performance. Yet, the of character is an important
why practitioners feel unable remaining respondents thought attribute underpinning trust
to influence others in their that the right thing to do would and credibility of an individual
organisations to make principle- be to reward high-performing practitioner and the profession as
led choices. Consistent with these individuals regardless of the values a whole. Moreover, it is necessary
propositions, the YouGov survey they demonstrate. to be able to objectively consider
results show that the Character the other ‘lenses’ relevant to
Lens is one that is likely to be In other contexts even lower decision-making and arrive at an
compromised by professionals proportions of decision-makers impartial value judgement. One HR
struggling to balance the needs chose to stick to the organisational practitioner in the UK explained:
of the business with the needs of values. For instance, when making
the employees. In current practice decisions about a new office ‘Many of the decisions are not nice
almost half of the respondents opening in a developing country, for the individual but are right
(46%) said that the principle ‘Core only 55% of leaders were willing to for the organisation. Recessions
values cannot be compromised retain consistency of value across make life harder and mean harder
whatever the context’ always markets, while 45% said that some decisions and harder consequences.
applies in their professional compromises were permissible Nevertheless, we have to do what
practice. A further 37% said it taking into consideration the we believe to be right even if
applies but can be compromised, business need. sometimes it is at great personal
and 11% said it was ‘nice to have, cost to ourselves.’
but not imperative’. The survey indicated that people
management professionals feel
Interestingly, the choices around they have to compromise on their
this principle were inconsistent principles because of ‘current

Figure 1: Reasons why principles might be compromised (%)

30
No reason – I always hold true to my principles 27
33
28
30
I have to compromise on my principles to meet the 34
current business needs 29
27
I have to compromise on my principles when they affect 22
my ability to succeed in this organisation (e.g. pay rises, 22
21
promotions, keeping my job) 22

I have to compromise on my principles under pressure from 22


24
the business leaders 20
22
I have to compromise on my principles under pressure 17
19
because they are different from the principles of my 17
colleagues/peers 17
16
I have to compromise on my principles under pressure 15
from my line manager 13
20
12
I’m not always clear how to apply principles in practice 11
12 All
12
HR
4
Don’t know 3
4 Senior Leaders
5
% 0 5 10 15 20 25 30 35 40 45 Line Managers
Source: YouGov

26   From best to good practice HR: Developing principles for the profession
4W
 hat could the principles for HR
look like?

This final section synthesises the by HR practitioners, business as reported by the survey
evidence on the types of value leaders and line managers paints respondents. The data shows that
judgements currently relevant a picture of an ambition to make at a maximum, only about half of
to people management and more balanced choices about practitioners always apply each of
development practitioners, as well work, but also a gap between that the principles in their practice and
as the ways in which they believe ambition and the current practice. as few as one in four apply the
decisions should be made. It also The main concern is that while least prominent principle (Handing
summarises the trends impacting professionals might want to create Down).
the world of work and considers win–win solutions for people
whether any of the principles that and organisations in a principled This is in contrast with what the
are not prominent to practitioners way, in some circumstances they practitioners think is the ‘right’
at the moment will become more either deprioritise certain ethical thing to do when asked about
important in the future. perspectives or lack knowledge good professional practice, as
and/or power to consider those as opposed to their current practice.
The gap between ambition part of the decision-making process. For instance, in balancing the
and current practice interests of the business and
Our analysis of the ‘professional Figure 2 and Table 3 summarise its people, the respondents
opinions’ on the use of various the current application of recognise individuals as legitimate
lenses in workplace decisions principles in professional practice, stakeholders in the work

Figure 2: Application of principles by practitioners (%)

Merit: People should have equal access to opportunities, in line with


1 10 32 55
their ability/merit

Wellbeing: Work should be good for people 2 13 35 47

Character: Core values cannot be compromised whatever the context 2 11 37 46

Markets: Rewards should be in line with the value of people to the organisation 3 12 40 42

Rights: People have moral rights above and beyond legal rights 3 17 38 38

Minimise harm, maximise benefits: Harm/injustices done to individuals 7 17 36 34


cannot be justified by the possibility of benefits to a lot of other people
Fairness: For an outcome to be fair, the decision-maker should not leave
3 19 45 30
out factors deemed important by the person affected by the decision

Democracy: People should be able to influence the decisions that affect them 2 23 48 24

Handing down: The long-term interests of people, organisations, and 4 17 51 23


society justify sacrifices in the short term

Never apply in what I do Apply but can be compromised under circumstances


Source: YouGov
Nice to have but are not imperative Apply in all circumstances

27   From best to good practice HR: Developing principles for the profession
Table 3. Current and future priorities of people management and development practitioners

Ambition Reality

• Obligation both to the business and the people who • Obligation to the business needs, and supporting people
work for it. needs where it is additive to the business needs.

• People should be given effective voice. • Employee voice is a disruption, and is only used to
alleviate negative consequences of decisions.

• Long-term interests justify short-term sacrifices. • Pursuit of current business need, with an eye to long-
term where possible.

• Making fair decisions, based on merit and individual • Merit as a dominant lens for fair decision-making,
needs. frequently challenged by the market forces.

• Professional values as a sense check of organisational • Professionals do what the business needs them to do.
needs.

relationship and a significant The first is professionals’ attitudes regard to people’s welfare at work.
proportion of the decision-makers towards specific workforce Line managers are more likely to
actively pursue ‘good work’ segments. Our findings suggest be concerned with individuals’
for people. In situations where that practitioners may express a well-being and rights, and believe
the interests of the parties are different approach towards groups it is right to minimise the negative
conflicting, while the practitioners of staff who might not have been outcomes, recognising individual
are understanding of the need to considered as part of their ‘core’ circumstances when they make
maximise overall value, there is a workforce, including temporary decisions. On the other hand, HR
limit to which they are prepared staff or workers in a new office in a and business leaders appear to
to do so, recognising individual different region. These individuals take a more impartial perspective,
rights. Similarly, a large proportion might be perceived as ‘removed’ willing to maximise the greater
of respondents recognise it from the decision-maker and it good for the organisation and the
is ‘right’ to pursue long-term is likely that some groups would majority of the workforce. Clearly
interests at the expense of short- be disadvantaged by the decision these practitioners have different
term gains. simply through the failure of views on the ‘right’ approach,
a professional to consider the which should be taken into account
So, while the recognition of the interests of these individuals on a in developing the principles.
‘right’ thing to do is there, the gap par with the rest of the workforce.
with the current practice shows The growing focus on metrics The third consideration concerns
that if professional principles are and analytics – while critical for the current paternalism in how
set at the level of high ambition, generating reliable evidence for decisions are made in practice.
they must be complemented people management decisions – is Overall, the decision-makers
by mechanisms that help likely to exacerbate these attitudes, prefer to remain impartial, making
practitioners overcome challenges potentially reducing people to ‘good’ and ‘fair’ choices without
around applying these principles ‘numbers on a spreadsheet’. involving people in deciding what
in practice. Given the prominence Professional principles need might be ‘good’ and ‘fair’ for
of current business need to clarify responsibilities of them. For example, in distributing
considerations in the decision- practitioners to these less visible benefits, decision-makers prefer
making process, practitioners will stakeholders. to use criteria they perceive to be
require greater knowledge-based objective (such as the Merit Lens)
and improved metrics to rationally Secondly, varying importance rather than subjective (such as the
weigh future value-creation might be attached to particular Fairness as Justice Lens). Equally,
against current priorities. principles at different levels in an the Democracy Lens, advising on
organisation. This is evident in giving people a voice, is the one
Three additional challenges would the contrasting attitudes of line least likely to be always applied in
have to be resolved in defining managers compared with HR and current practice. In other words,
professional principles. senior leaders, in particular with these decision-makers pursue their

28   From best to good practice HR: Developing principles for the profession
own definition of what is good
and fair rather than getting the
contexts, we need to understand
how the relationship between
‘In making
individuals’ agreement to it. people and organisations might decisions,
evolve in the future and whether
However, in making decisions, specific aspects of it will be practitioners
practitioners might be less challenged more by changes
objective and exercise less control in the world of work. Ulrich et
might be less
than they would like. For example,
the survey showed that they are
al (2015) state in their recent
publication, ‘HR professionals need
objective and
likely to conflate the Merit and to be increasingly aware of global exercise less
Market Lenses when thinking about business and social trends because
pay in particular, possibly assuming they create the context and set control than
that market exchanges provide the criteria for doing effective HR
a true reflection of individuals’ work’ (p13). they would like.’
ability and hard work. Ignoring the
voice of people carries a danger of Many scholars and practitioners
creating working relationships that have pondered over the future of
appear sustainable to the people work, imagining what the world
management professionals, but might look in 10 or 20 years’ time.
aren’t acceptable to the workforce. These studies tend to consider
Professional principles need to the key forces affecting the nature
provide an indication of how ‘fair’ of work and describe a set of
working relationships are defined, scenarios or the possible future
including both the nature of worlds of work, depending on
fairness (meritocracy, justice, and how the impacts of the forces
so on), as well as the mechanisms stack up against each other. For
of establishing fairness (top–down the purposes of the current paper
approach or a democratic process). we provide an overview of the
eight most common ‘drivers of
These research findings describe change’, what the world of work
the current application of principles might look like should the trend
and the recommendations of HR, become more prominent and
business leaders and line managers consider the implications of this
on what the ‘right’ thing to do force for organisations, people and
might be. However, it is likely that skills, and the people management
changes in the world of work will professions (see Table 4).
highlight some of the ways of
looking at the working relationship
more than others. For example,
increasing workforce diversity has
already brought the question of
fairness to the forefront more than
ever before (Wong 2014). In the
next section we reflect on how the
relevance of the lenses in making
workplace decisions might be
further challenged by the changing
world of work.

The trends impacting the


world of work
As we are looking to develop
professional principles which
would describe ‘good’ HR practice
across business and cultural

29   From best to good practice HR: Developing principles for the profession
Table 4: Trends impacting the world of work and implications for the profession

Predictions for the trend becoming more Implications for people management and
Trends prominent Risks development

Utilisation of • Automation of transactional and routine • Low social acceptance of • Innovative job and organisational design
technology tasks, and an increased demand for high- skills obsolescence and necessary to make the most of the
level cognitive skills and ability to deal inequality in access to emerging opportunities, and engage
with complex interactions, demonstrate a work, raising questions workers who have limited face-to-face
‘human touch’ and manage ambiguity. over corporate social interaction with their employer.
responsibility.
• Increased cross-discipline and cross- • Fast multiskilling and reskilling of
sector collaboration. Breaking tasks • Threat to traditional employees, whose skills become
down into small individual contributions, employment models in obsolete.
allowing organisations to tap into the favour of technology-enabled
• New ways of working, facilitated by
wider pool of talent. short-term service delivery
the technology.
by individuals.
• Greater discretion over how, when and
• Developing line manager skills and tools
where people work, with the focus • Disengagement of remote
to ensure tasks are completed but not
shifting onto the actual outcomes that and dispersed workforce.
in a way that damages sustainability of
employees produce, rather than the
• Trust issues associated with individual performance.
number of hours they spend in the office.
wider use of personal data by
• Easier access to organisational data organisations.
contributing to sophistication of systems
and processes, while creating greater
transparency and autonomy.

Workforce • Growing competition for entry-level jobs, • Leadership void in the labour • Harnessing the opportunities to improve
diversity as more young workers enter the labour market as older workers – business performance, drawing on the
market. who can afford not to work potential of various workforce segments.
– retire.
• Growing demand for flexibility of how, • Focus on in-work progression to fill leadership
when and where individuals work, as well • Over-supply of those gaps and free up entry-level jobs.
as for transparency in pay, progression continuing work without
• More flexible approaches to talent
and development opportunities. having the necessary skills
attraction, development and retention.
or requiring adaptations to
• Growing cultural diversity within Developing individualised relationships
working times and patterns
workplaces, as more individuals wish to with employees at line management
due to health concerns.
gain experience of working abroad. level.
• Increasingly diverse employee
• Opportunities of tapping some of the • Taking greater responsibility for
expectations and needs, which
benefits of diversity (such as knowledge- upskilling young people to catch up with
cannot be adequately met with
sharing and creativity). employers’ needs for particular skills.
standard value propositions.

Globalisation • Integration of the ways talent from • Rebalancing availability • Harmonising labour practices due to
different markets is treated into the of jobs will create greater national variations in labour legislation;
overall corporate approach and culture. competition for work in for example, negotiating the local laws
Western markets and greater for contracting temporary staff or
• Offshoring of jobs that can be performed
competition for talent in those concerning the rights of different
more efficiently in developing countries,
emerging markets. population groups.
alleviating skills shortages.
• Migration laws introduced • Managing perceptions of fairness across the
• Mass movement of populations due to
to manage the flows of workforce segments.
political instability and environmental
workers disrupt quality and
change dramatically increases the talent • Reviewing the operating model of HR, which
availability of talent.
pool, with rising demand for low-skilled is becoming more project-oriented and aimed
migrant labour in particular. • Lack of agility and efficiency at improving organisational effectiveness,
in large multinationals where an intervention is needed.
• Emergence of geographically alternative
prevents knowledge-sharing.
centres of excellence and relocation of • Prioritising communication and dialogue
production. • Growing workplace conflict. to avoid conflicts, maintain a sense of shared
purpose and common corporate culture.

30   From best to good practice HR: Developing principles for the profession
Table 4 continued

Predictions for the trend becoming more Implications for people management and
Trends prominent Risks development

Industrial • Steady growth in the proportion of jobs • Increase in social and • Managing knowledge capital rather
change that require degree-level or professional economic divide between than people as units of workforce, with
skills is driven by consumer demand for an intellectual well-paid elite an increased focus on leadership and
high value-added services. and a large volume of low- culture, and organisational development.
value, poorly paid roles. Developing alternative models of creating
• Evolution of business operating models
value through people.
to provide demand-led services, • Growing social mobility
matching customers with (often challenges, spurred on by • Weighing cost-effectiveness
independent) contractors. lack of mid-level jobs. considerations against the responsibility
of the business for the people they
• Normalisation of 24/7 services, • Lack of skills and motivation
employ.
with more people connecting to the for knowledge-based work.
workplace remotely and outside of • Continuous updating of workforce
traditional working hours. knowledge and skills.
• Ongoing organisational change, as the • Developing performance management
business responds to the repercussions processes that assess and reward softer
of the external context across multiple aspects of service delivery, as well as
geographical areas. redress the impact of emotional labour
on workers.

Individualism • Demand for better work–life balance with • Growing need to understand • Providing a broad spectrum of
a pattern that suits workers’ individual and cater for the needs of employment ‘deals’, including both work-
circumstances. specific segments of the related fulfilment as well as support of
workforce, for example personal life goals.
• High-skilled employees expressing
through flexible company
their personal ambitions, rather than • Balancing personalisation of the working
benefits.
negotiating working conditions via relationship with cost-saving priorities.
traditional collective channels, such as • Decreasing loyalty to
• Managing the increasing prominence of
trade unions. organisations, resulting in
individual voice in determining how the
more expensive retention
• Both customers and employees expect employment ‘deal’ is set and developed.
packages.
systems to flex to meet their needs and
are happy to switch between brands or • Voices of disgruntled workers
employers that don’t adapt. with less bargaining power
become more difficult to
• Social media becomes an effective voice
control as they use external
mechanism.
channels to negotiate their
relationship with employers.

Social • Greater alignment between society • Job losses and skills • Increasing focus on brand management,
responsibility and business agendas, with sustainable obsolescence in resource- internal and external communications in
business models becoming the norm. intensive industries, while people management and development
different skills and innovation activities.
• Pressure to introduce technologies for a
will be demanded to
more efficient use of resources, such as • Developing a greater knowledge base
generate new economic
with reducing carbon footprint through and improved skills to find solutions that
growth paths.
smart working initiatives. meet and manage the expectations of
• Exposure of corporate social multiple stakeholders, while influencing
• Core focus on managing reputation and
responsibility (CSR) activities the business to act in a responsible way.
building trust to attract both customers
that are little more than a
and talent. • Ensuring consistency of ethical
brand enhancement exercise.
codes across the global markets in
which businesses operate, presenting
businesses with multiple ethical
considerations, and lead the change
towards a more responsible operation.

31   From best to good practice HR: Developing principles for the profession
Table 4 continued

Predictions for the trend becoming more Implications for people management and
Trends prominent Risks development

Quality of • Improvement of educational standards • Continued misalignment • Developing mentoring schemes and
education worldwide, stimulated by governments between education and other forms of workplace support,
seeking to boost their competitive business-required skills. required to help new employees catch up
position in the global marketplace. quickly.
• Increase in numbers of
• Greater onus on continued individual overqualified workers, • Investing more in developing talent in
development, lifelong learning, retraining expressing discontent with the absence of appropriate government
and multiskilling. unrealised ambitions. programmes.
• Rise in accessible educational • Greater onus on individuals • Managing the expectations of
opportunities, open universities and to invest in their own overqualified individuals, thinking
peer-to-peer learning. development may discourage creatively about alternative forms of
students from participating in employee engagement and utilisation of
higher education, leading to available skills.
an unbalanced talent supply
with shortages in critical skill
areas.

Diversity of • Diversity of working patterns, as well • Controls imposed by • Planning the alignment of workforce
employment as the types of employment contracts, governments concerned with availability with the customer demand for
relationships driven by the changing needs of the security of some of the services.
organisations in when and how they non-standard arrangements.
• Transforming organisational culture
want to provide services, as well as by
• Long-term service may to embed flexible performance
the evolving expectations of individuals
become more desirable management processes.
about the ways of working.
once again, challenging
• Managing inequality of terms and
• Two-tiered workforce, with the traditional organisations to focus
conditions between different categories
core comprising permanent staff, their value proposition on
of workers.
complemented by a large group of appropriate rewards and career
contractors and freelancers. pathways. • Giving a voice to contingent workforce in
when and how they work.
• Fragmentation of organisations into • Hierarchical and control-driven
smaller ‘businesses’, representing organisational structures and
collaborative networks of contingent management approaches are
workers. slow to adapt to employee
expectations.
References: Intuit 2010; Heldrich, Zukin and Szeltner 2012; Lacy 2012; PWC 2012, 2015; van Wanrooy et al 2013; The Economist Intelligence Unit
2014; Hay Group 2014; Adams 2015; Beatson 2015; CIPD 2015; Cunningham 2015; The Economist 2014, 2015; Everett 2015; Ulrich, Schiemann and
Sartain 2015).

32   From best to good practice HR: Developing principles for the profession
How will principled decision-
making be challenged in the
these multiple perspectives.
Considering the current challenges
‘Creating win–
future? in making the ‘right’ choices win solutions
The drivers of change in the world in their decisions about work,
of work indicate both a challenge three themes from the impact for people and
and an opportunity for a number of the drivers of change appear
of professionals involved in to be of particular importance.
the business
managing people in organisations
today. On the one hand, these
The principles of the people
management profession need to
will require a
trends are likely to change the help practitioners reflect on these real strength of
shape of the workforce, the themes and guide appropriate
reasons people come to work choices to ensure sustainability of character and
and the contribution they will organisations in the future.
be willing and able to make. On
commitment
the other hand, this means that
businesses will most certainly
The first perspective concerns the
dimension of power that various
to one’s core
require professionals with the players have in the workplace. values, as well
expertise necessary to understand Talented employees are now firmly
the needs of the organisations of a stakeholder in work relationships as deep expertise
the future and create appropriate and want to have a say over their
ways for attracting and deploying careers. They also demand such and creativity
human capital for greater
competitive advantage. One report
work that supports their personal
goals and work–life balance,
for managing
on the future of HR suggests that relying on employers to support and meeting
people management will become their needs beyond pay.
‘fully embedded in how work gets the expectations
done throughout an organisation, This trend raises questions about
thereby becoming an everyday the duty of care the organisations of different
part of doing business’ (Good et al
2015).
have towards people that
work for them, as well as the
stakeholders.’
communities they operate in. It
In creating the relationships also challenges the assumption
between people and organisations of control that businesses
in the future, professionals will wish to exercise over people
be tempted to look at the world processes. In making decisions
of work through a single lens, about work, professionals will
adopting the perspective that increasingly have to account for
the powerful trends highlight the the responsibility they have for the
most. For example, the ‘war for welfare of various groups if they
talent’ once labelled the world are to attract and retain talent,
a global marketplace where the as it may no longer be supported
‘deals’ were governed by the rules by governments. Increasingly,
of supply and demand of labour effective employee voice will
(McKinsey Global Institute 2015). not be a matter of choice, but a
Today management is aware that requirement for organisations to
the expectations of people at work attract and retain talent.
are far more nuanced, evidenced
by the new generations opting for The second – and related – theme
work that is meaningful to them is one of fairness. While some
over fast-moving global careers. individuals will be able to apply
their talent and luck to secure
To prepare for the changes in the better ‘deals’, there are also
world of work practitioners must workforce groups that do not
develop their ability to understand have the same degree of influence
and evaluate their choices from nor negotiating power to have a

33   Principles of championing better work and working lives


say in what happens to them, as ‘The long-term and short-term departments (Good et al 2015).
the skills of these individuals are gains have always been a problem While the future of the function
becoming obsolete, they have for business as well. When I is questioned, it is clear that the
to continue working to provide first started, we [had] strategy need for professionals – experts
for their livelihoods or simply roadmaps where we like to talk in various aspects of people
because they are competing about where we will be in five to management – will continue,
against many others with similar ten years’ time. To me, we never or even grow. It is true, though,
profiles. So while the power of seem to get there despite the five- that the specific task of these
some is growing, that of others is to ten-year plan. So I repositioned professionals might evolve with
in decline. my team to look at the next one new professional areas shifting
to three years. Is that short term away from the traditional HR
While practitioners may wish or long term? I am not quite sure practice areas – particularly at the
to continue making decisions but we are able to project out what basic process level (for example
based on the value they see in a we want to do on a much more payroll management) – and
particular type of talent, the voices crystallised level. towards finding tailored business
of those disadvantaged by this solutions drawing on the emerging
approach are likely to contribute ‘For the next 12 months, for areas of HR expertise: people
to instability and conflict in example, we go month by month in analytics, fairness, knowledge
the workplace. Instead, the detail. For years 2–3, we state some management and others.
expectations of various workforce bullet points on the objectives. That
groups will have to be understood is short to mid-term in my view. Similarly, the role of line
and carefully managed, taking into Long-term wise, we are unfocused managers is likely to shift away
account the subjective perceptions as there are a lot of questions from monitoring work, with
of workers, rather than arbitrary which are difficult to answer at decision-making being dispersed
rules of the market or the this point in time. In that sense, I’d across large cross-functional
seemingly objective criterion of like my HR workforce to be more project teams. Already some
merit, which are likely to lead flexible in nature as well because if companies distinguish between
to dissent, low engagement and everyone is on a fixed pay contract, project managers (responsible
productivity. The evidence of it will be difficult to resize or right- for tasks) and people managers
current decision-making practice size when the need comes.’ (responsible for employee
indicates that line managers are development and well-being). In
already experiencing the impact In this context of assumed the future managing people will
of some of these trends and are flexibility and agility, with the be even more about trust, flexible
far more likely to focus on the business need ever changing approaches to individual needs
questions of justice and voice in under pressure from external and leadership capability. In the
the workplace. factors, it will be increasingly more same way, business leaders and
difficult to keep an eye on the long businesses as a whole will rely on
The final theme concerns the term. Professional decision-makers more responsible approaches to
long-term success of people, willing to protect the long-term achieving organisational outcomes
organisations and societies. With interests of society will have to (ILM 2014).
ongoing change being the only take responsibility for balancing
constant attribute of the future the sustainability view with the Despite this ambitious view of the
world of work, the ability of demands of today, as well as for world, challenges of balancing the
professionals to apply the long- convincing others to assume a day-to-day priorities with ever
term view in making decisions at similar approach. tightening competition will mean
work is likely to be continuously that creating win–win solutions
challenged. Principled decision- Such stewardship will be ever for people and the business will
makers will constantly have to more difficult as the future face require a real strength of character
ask themselves what type of and the status of the profession and commitment to one’s core
workplace they would want to itself is undefined – many have for values, as well as deep expertise
create in the future and how some time suggested that HR as a and creativity for managing and
far their future horizon spans function will cease to exist and will meeting the expectations of
exactly. A business leader in be dispersed across organisational different stakeholders – something
Singapore said: that describes a professional.

34   From best to good practice HR: Developing principles for the profession
What’s next?
This research into the ways people
Our work continues by
collaborating with a wide range of
‘To gain credibility
management and development stakeholders within and outside and trust, the
practitioners make value HR to define and test a new
judgements about how work is set of principles that will help profession
organised provides important HR professionals make good
insight into the priorities currently decisions and advise business
must define the
relevant to decision-makers. It
also highlights some challenges
leaders on what to do, no matter
what the context and no matter
principles that
into gaining agreement on a what the future may hold. We it stands for and
universal set of principles across expect the principles to be broad
different groups of practitioners and ambitious – they’ll describe develop capability
and different geographical regions. desired outcomes rather than
Specifically, it highlights that the prescribe a specific course of
in interpreting
questions of fairness and employee
voice – although being the ‘right’
action. Applying them in practice
will take professional judgement
those principles for
things to do at face value – are backed up by specialist expert specific business
incredibly complex when applied knowledge about people and
in practice and can be interpreted organisations as well as a models without
differently depending on context. thorough understanding of the
business context. That’s what losing sight of the
It is also clear that future
challenges of the world of
we think will define the HR
professional of the future and
core values.’
work will put more pressure on that’s what we think it will take
professionals to apply these for HR to remain a trusted and
principles, as they will have less credible profession that can
control over how people want to have a real impact on work and
work and the contributions they working lives.
choose to make in an organisation.
If practitioners are to be effective Join the debate at cipd.co.uk/pff
in creating sustainable value
through people management and
development processes, they will
have to embrace the different
stakeholders that contribute to and
benefit from organisational success
and understand the type of value
that they expect to gain from their
relationship with a business.

The answers to these challenges


will vary across organisational
and cultural contexts, and so
it is becoming more and more
difficult – and insufficient – to
define HR in terms of its practice,
or the activities that professionals
carry out in organisations. To gain
credibility and trust, the profession
must define the principles that it
stands for and develop capability
in interpreting those principles for
specific business models without
losing sight of the core values.

35   From best to good practice HR: Developing principles for the profession
Appendix 1
Scenarios used in the survey

• Growth of market share • Change to increase productivity


scenario described a premium scenario described a
quality airline company, growing technology company under
its position in the market, but new management, which set
having to watch its cost base out to grow performance by
to remain competitive. Senior transforming the organisation
leaders and HR practitioners from a culture of stagnation to
were ask to consider whether one of quality and innovation –
the new temporary workers a change that led to low morale
recruited by the company and a drop in performance
should be paid a minimum wage among staff. All three groups
(a cost-effective decision for of respondents were asked
the business), or a wage that to consider whether the
is more in line with the pay of management should tighten
permanent staff. Line managers its performance management
were asked to make a decision process, looking to dismiss
about employees’ holiday underperforming staff, or
sacrifice to deal with increased to invest time and money in
demand in services. developing and motivating
employees.
• Cost management scenario
described a public sector • Sustainability scenario
organisation, a major employer described a global FMCG
in the community that has to company, which moved one of
cut its costs by 30%, and is, its call centres to a developing
therefore, making redundancies market. Senior leaders and
and service cuts. Senior HR practitioners were asked
leaders and HR practitioners to reflect on the ethical issues
were asked to consider where of the decision to pay people
savings could be best made: job in developing nations a lower
losses and service reductions wage for doing the same job,
would allow the organisation to driven by cost-effectiveness
better support the remaining considerations. Line managers
staff, while fewer jobs and were asked about dealing
fewer service cuts would also with unethical behaviours of
mean no improvement to the several team members, where
employment conditions dismissing the employees would
have led to financial losses by
the company.

36   From best to good practice HR: Developing principles for the profession
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40   From best to good practice HR: Developing principles for the profession
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