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MANAGEMENT SCIENCE - THEORY AND APPLICATIONS
STRATEGIC HUMAN
RESOURCE MANAGEMENT
CAM CALDWELL
AND
VERL ANDERSON
EDITORS

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CONTENTS
Preface vii
Chapter 1 Strategic Human Resource Management: Why It Matters 1
Cam Caldwell
Chapter 2 Strategic Human Resource Management:
An Ethical Stewardship Obligation 13
Cam Caldwell
Chapter 3 Leadership and Human Resource Management:
Insights and Applications 27
Cam Caldwell and Verl Anderson
Chapter 4 Job Analysis: The Building Block of
Human Resource Management 43
Cam Caldwell
Chapter 5 Ethical Responsibilities of Human Resource Management:
A Framework for Moral Conduct 57
Chapter 6 Recruitment, Testing, and Selection:
Strategic Essentials for Successful Performance 75
Cam Caldwell
Chapter 7 Compensation and Benefits:
Attracting and Retaining Top Talent 93
Cam Caldwell
Chapter 8 Performance Management: A Strategic Perspective 109
Cam Caldwell, Verl Anderson and Sarah Smith

vi Contents
Chapter 9 Organization Change and Organization Analysis:

The Strategic Human Resources Role 127
Cam Caldwell
Chapter 10 Career and Organizational Development: The Win-Win Priority 145
Cam Caldwell and Sylivia Atwijuka
Chapter 11 High Performance Organizations and
Human Resource Management 159
Chapter 12 Wellness and Managing Risk:
The Strategic Role of Human Resources 177
Cam Caldwell
Chapter 13 Honoring Employee Relationships:
Employee Relations and Employee Law 195
Chapter 14 International Human Resource Management:
Strategic Application of Core Principles 211
Cam Caldwell
Chapter 15 The Future of Human Resource Management:
Responding to a New Context 231
About the Editors 251
Index 253

PREFACE
Human Resource Management (HRM) could very well be the key contributor to
organization profitability and competitive advantage in the 21st century. That claim is a
startling reality with a growing body of supporting evidence that affirms its truth. In a
world where less than 15% of all employees acknowledge that they are positively
engaged at work, the opportunity to capture and inspire the minds and hearts of
tomorrow’s work force is immense. Thus, there are multiple reasons for this book about
the strategic contribution of HRM in the third millennium economy.
The bad news is that the history of HRM has been disappointing, Human Resource
Professionals (HRPs) have been largely unprepared, and organization leaders have been
focused on technology and innovation – rather than the people who create value for their
companies. The good news is that there is a growing number of outstanding companies
and enlightened leaders who have recognized that people are the key to better customer
service, greater innovation, improved productivity, and higher profits.
This book serves four significantly different types of readers. First, and most
importantly, this book offers insights for top management teams who are served by the
HRPs and provides a template to hold those professionals accountable. Each of the
chapters of this book provides strategic insights into the purpose and function of HRM
systems in supporting the top management team and its organization mission. Second,
this book provides clear guidelines for HRPs in helping them to realize their key roles
and the accountability expected from them. Third, this book is a useful foundation for
students seeking to understand how HRM systems function. Fourth, the book provides
scholars and academics with fundamental principles upon which to build as they explore
the practical world of business.
The consistent theme of this book is that HRM matters and HRPs can make a
significant strategic difference in contributing to an organization’s success! The modern
organization of the 21st century has already begun to change – and those changes must be
effective if organizations are to successfully compete in a world that has become
increasingly global and complex in its focus. However, HRM and the role of HRPs have

viii Cam Caldwell and Verl Anderson
not always been fully appreciated, and top management teams can exponentially improve
the effectiveness of their organizations by rethinking HRM’s strategic roles.
This book offers a wealth of information about the contribution that HRM can make
to help organizations improve their economic and financial prospects. This book explains
how and why organizations can benefit from treating their employees as valued assets
and by honoring duties owed to those employees by helping them to fulfill their ultimate
potential. As organizations honor those responsibilities to their employees, they also
serve their own best interests and the interests of a society that desperately needs to
effectively utilize its available resources to solve its current and future problems.

In: Strategic Human Resource Management ISBN: 978-1-53613-198-7
Editors: Cam Caldwell and Verl Anderson © 2018 Nova Science Publishers, Inc.
Chapter 1
STRATEGIC HUMAN RESOURCE MANAGEMENT:

WHY IT MATTERS
Cam Caldwell
Distinguished Visiting Scholar -- Modern College of Business and Science,
Muscat, Oman
ABSTRACT
The unfortunate reality in many organizations – and probably in most organizations
– is that the Human Resource Management (HRM) function is not performed very well.
More than thirty years ago, the California Management Review published a thoughtful
and scholarly article entitled, “Why the Human Resources Management Function Fails
1.” That article enumerated a compelling list of explanations that continue to exist in
many organizations today. Despite the efforts of business schools, organization leaders,
and individuals who receive academic degrees in HRM, the roles played by most Human
Resource Professionals (HRPs) in today’s organizations fail to contribute to enabling
employees to create added value in assisting Top Management Teams to accomplish their
strategic goals.
There are three important purposes to this chapter in introducing this book and in
clarifying why HRM matters as an important staff function. The first purpose is to
identify common challenges to the success of the HRM function by citing management
experts and practitioners. The second is to present seven myths or misconceptions about
HRM and the characteristics of the HRPs who serve organizations. The third is to set
forth the contents of this book as it introduces the chapters which explain the strategic
HRM role.
By summarizing the contents of each chapter, we empower those who have a
specific HRM interest to decide where they wish to begin in their reading.
1
This interesting and insightful article is Harish, J., and Murray, V., (1984). “Why the Human Resources
Management Function Fails”. California Management Review, Vol. 26, Iss. 4, pp. 95-110.

2 Cam Caldwell
CHALLENGES TO THE SUCCESS OF HRM
Research and commentaries about HRM provide many insights as to why HRM
systems are ineffective in helping organizations to be successful.
Although the Society of Human Resource Management has been an advocate for
“best practices” in HRM since it was originally founded as the American Society for
Personnel Administration seventy years ago2, the HRM field has historically been
inconsistent in the application of those practices, HRPs have consistently
underperformed, and many organizations have opted to contract out their HRM services
in an often fuzzy-headed attempt to save money3.
HRPs struggle to make a meaningful contribution to their organizations’ mission and
purpose for a common set of reasons which make up the problems or challenges that
many incumbents in HRM departments are unable to overcome. Perhaps the most
significant of those challenges are the five issues summarized briefly below.
 HRM is underestimated in its complexity. As the profession has evolved in

scope and as the business environ has become increasingly competitive, members
of the Top Management Team in organizations have frequently misread the
important role of HRPs. Because HRM is a staff support function, it is sometimes
looked upon in terms of technical tasks and activities that it performs and those
specialized skills are not always equated with an organization’s overall success.
 The role of HRM is not spelled out clearly. As leaders frame their mission and
purpose for organizations, they frequently generalize about the HRM function
and do not communicate what they expect HRPs to contribute to the
organization. The reality is that organizational leaders and Top Management
Team members have an extremely difficult task in governing their organizations
and communicating the interrelationships of the many variables upon which
success is dependent. The assumption often is that “everyone knows what HRM
is all about” – but, unfortunately, that assumption is incorrect.
2
Society for Human Resource Management, (2016). “2015-2016 SHRM Annual Report”. Washington, D. C.:
Society for Human Resource Management found online on October 22, 2017 at https://www.shrm.org/about-
shrm/PublishingImages/Pages/default/2015-2016%20Annual%20Report.pdf.
3
Mathis, R. L., Jackson, J. H., Valentine, S. R., and Meglish, P., (2016). Human Resource Management (15th ed.).
Boston, MA: Cengage.

Strategic Human Resource Management: Why It Matters 3
Although the Society of Human Resource

Management has been an advocate for “best
practices” in HRM since it was originally founded as
the American Society for Personnel Administration
seventy years ago, the HRM field has historically
been inconsistent in the application of those
practices, Human Resource Professionals have
consistently underperformed, and many
organizations have opted to contract out their HRM
services in an often fuzzy-headed attempt to save
money.
Figure 1.
As organizations struggle to compete in

an international marketplace, global
competition has motivated many
organization leaders to adopt a “lean
and mean” approach to people
management that pushes people to
perform without providing them with
the resources that they often need to
succeed. HRM becomes an
underfunded organizational unit that
lacks the capacity to properly perform.
Figure 2.

4 Cam Caldwell
 The impact of global competition. As organizations struggle to compete in an

international marketplace, global competition has motivated many organization
leaders to adopt a “lean and mean” approach to people management that pushes
people to perform without providing them with the resources that they often need
to succeed. HRM becomes an underfunded organizational unit that lacks the
capacity to properly perform.
 The pressures of constant change. Organizations face disruptive innovation,
constant turmoil, and ongoing change in today’s fast-moving business
environment. HRM programs and policies must keep pace with the demands of
that change yet those who serve in HRM departments typically play a reactive
role in responding to organizational demands. HRPs often lack the ability to
articulate to the Top Management Team why and how HRM policies and
structures need to change in the hustle-bustle of a constantly busy work environ
and those changes are often overlooked. A 2014 study conducted by IBM
reported that only 40% of respondents believed that they possessed the skills
required to effectively manage change4.
 The evolving workforce. HRPs must work effectively within a demographically
changing work force composed of job candidates from different generations,
diverse ethnicities, and ever-widening expectations about work and careers. The
nature of contingent employment and the reality that 40 percent of employees
already work in part-time, contract, and temporary positions makes it
exponentially more difficult to identify, hire, and retain employees and get “the
right people on the bus” and in “the right seats’’5.
These five challenges affect virtually every organization and make succeeding in
today’s volatile, uncertain, complex, and ambiguous environment both challenging and
frustrating – but also exciting. It is by overcoming these challenges that HRPs are able to
make a meaningful contribution that assists their organizations to achieve a competitive
advantage – and only by maintaining such an advantage can organizations survive6.
4
See IBM Corporation, (2014). “Making Change Work. While the Work Keeps Changing.” Armonk, New York:
IBM Institute for Business Value. found online on October 23, 2017 at http://public.dhe.ibm.com/common/ssi/
ecm/gb/en/gbl03021usen/GBL03021USEN.PDF.
5
The importance of staffing organizations with highly skilled talent is emphasized in the best-selling book, Good to
Great. See Collins, J., (2001). Good to Great – Why Some Companies Make the Leap and Others Don’t. New
York: HarperCollins.
6
This point about the importance of achieving and maintaining a competitive advantage is clearly made in
Caldwell, C. and Anderson, V., (2017). Competitive Advantage: Strategies, Management, and Performance.
Hauppauge, New York: NOVA Publishing.

HRM programs and policies must keep pace

with the demands of that change yet those who
serve in HRM departments typically play a
reactive role in responding to organizational
demands. HRPs often lack the ability to
articulate to the Top Management Team why
and how HRM policies and structures need to
change in the hustle-bustle of a constantly busy
work environ and those changes are often
overlooked and underemphasized.
Figure 3.
MYTHS ABOUT HRM
HRM is often underappreciated as a contributing source of organization success and

is often the victim of dangerous myths and misconceptions about its role in the modern
organization. Despite compelling evidence to the contrary, these myths persist and are
often the cause of common errors that plague the “conventional wisdom” that is the
source of most organizational failures7.
In an effort to clarify the damning misconceptions that frequently undermine the
importance of HRM, we offer seven myths that Top Management Teams would be wise
to avoid as they consider the role of HRM in their organizations.
7
The dangers of “conventional wisdom,” the importance of creating aligned HRM systems, and the keys to
establishing an organizational culture that effectively engages employees are the major themes in Pfeffer, J.,
(1998). The Human Equation: Building Profits by Putting People First. Boston, M. A.: Harvard Business
Review Press and Beer, M., (2009). High Commitment High Performance: How to Build a Resilient
Organization for Sustained Advantage. San Francisco, CA: Jossey-Bass.

6 Cam Caldwell
HRM is often underappreciated as a

contributing source of organization success
and is often the victim of dangerous myths
and misconceptions about its role in the
modern organization. Despite compelling
evidence to the contrary, these myths
persist and are often the cause of common
errors that plague the “conventional
wisdom” that is the source of most
organizational failures.
Figure 4.
1) Because HRM is about people, any intelligent person can be an HRP. A

common error made by many organizations is to promote a clerical person or
another bright and friendly individual to a major position in HRM – assuming
that the individual can “quickly pick up” the HRM responsibilities and be
successful. That error has been made so many times that fewer than one-third of
individuals currently in HRM roles have ever had academic training in HRM8
and only 12% have been professional certified by the organization responsible
for professional HRM certification9. The HRM role is technically and
interpersonally complex and requires high levels of skill and understanding about
organizations and HRM systems.
2) HRPs who implement “best practices” from other companies’ HRM systems
help their companies achieve a competitive advantage. Implementing “best
practices” simply enables an HRP to help his or her company to catch up to
industry standards and achieves no incremental competitive advantage.
8
According to one highly regarded HRM text, only 27% of HRPs have even had a course in the discipline. See
Gomez-Mejia, L. R., Balkin, D. B. and Cardy, R. L., (2015). Managing Human Resources (8 th ed.). Essex,
UK: Pearson Education.
9
See Greengard, S., (2016). “HR Credentials: Evaluating Their Value.” Workforce June 13, 2016 found online on
October 23, 2017 at http://www.workforce.com/2016/06/13/hr-credentials-evaluating-their-value/. The Human
Resource Certification Institute (HRCI) is the professional testing and certification body that certifies HRPs
for and in behalf of the Society for Human Resource Management.

3) HRM is responsible for and in charge of employee hiring. HRM staff never
should make a hiring decision but can assist departments in their hiring process
and advise them about HRM standards and legal requirements. Extensive
evidence also suggests that HRPs often are not fully aware of the most important
criteria for employee selection.
4) HRPs are experts in setting up performance appraisal and performance
measurement systems. Measuring performance is an elusive process and most
performance appraisal systems are poorly administered and ineffective. Coaching
employees and helping them to be successful is a far better approach than
judging and critiquing employees.
5) HRPs should be considered advocates and sounding boards for employees.
As a staff function, HRPs work for their Top Management Team. They may
communicate employee concerns, attitudes, and issues to Top Management and
make recommendations for improving the organization – but their role is to
support the organization and to help it to succeed and be profitable long-term.
6) HRM is responsible for creating an organization’s culture and work climate.
The role of the Top Management Team is to articulate the values and mission of
an organization and to lead out in establishing an organization’s culture10.
7) Because people are so important, HRM plays a key role in the strategic
management of most companies.
In fact, HRPs have struggled to be recognized as contributors to the successful
operation of organizations and to be considered active participants in the strategic
management of their companies.
Each of these misconceptions about HRM systems and the HRPs who work in them
need to be understood by Top Management Team members and the personnel who staff
HRM departments.
This book provides a clear understanding of the responsibilities and obligations of
HRM, its role in organizations, and opportunities for HRPs to contribute to their
organizations’ strategic success.
SUMMARY OF CHAPTERS
This book provides a strategic perspective to the role of HRM in the modern
organization and each of its chapters focuses on a key responsibility of HRPs as they
10
For a clear statement about the responsibilities of organization leaders in creating organization cultore, please see
Schein, E. H. and Schein, P., (2016). Organizational Culture and Leadership (5 th ed.). San Francisco, CA:
Jossey-Bass.

8 Cam Caldwell
support the Top Management Team, individual departments, and the employees of their
organization. The following is a brief summary of each of the chapters of this book.
Chapter 2: Strategic Human Resource Management:

An Ethical Stewardship Approach
This chapter identifies the importance of HRM as an ethically-based obligation

fraught with duties and responsibilities that affect the success of individuals, teams, and
the entire organization. The chapter defines the obligations of HRPs as ethical stewards
and offers value-based suggestions for strategic success.
Chapter 3: Leadership and Human Resource Management – Insights and

Applications
Chapter 3 identifies the role of HRPs as leaders – noting that leadership is much more
than a position of authority. The chapter identifies ten different leadership perspectives
and equates each perspective to the HRP role. It then suggests twelve caveats to guide
HRPs in serving the organization.
Chapter 4: Job Analysis: The Building Block

of Human Resource Management
This chapter explains the important role of the job analysis, identifies common errors
made in conducting that important function, and provides information about how the job
analysis is vital to so many HRM responsibilities.
Chapter 5: Ethical Responsibilities of Human Resource Management:

A Format for Moral Conduct
Chapter 5 identifies the Hosmer model for ethical decision-making and identifies
why that model is so important in explaining HRM and management decisions. The
chapter also identifies the broad range of ethical duties associated with Transformative
Ethics and describes that model.

Chapter 6: Recruitment, Testing, and Selection: Strategic Essentials

for Successful Performance
Recruitment, testing, and selection are critical functions in a knowledge, wisdom-,

and information-based economy. The chapter identifies errors commonly made in the
selection and testing process and suggests opportunities to improve the quality of
employee selection decisions.
Chapter 7: Compensation and Benefits – Strategies for Attracting and

Retaining Talent
Chapter 7 identifies the varying philosophies used for determining employee

compensation and describes many of the employee benefit options available to
organizations. Attracting and retaining key employees and creating fair and equitable
compensation plans that reward performance are emphasized.
Chapter 8: Performance Management: A Strategic Perspective
Four of the major issues associated with performance management are the primary
focus of this chapter.
The chapter suggests specific ways to improve performance management and explain
why each of the four major issues is so important to an organization’s strategic success.
Chapter 9: Organization Change and Organization Analysis – The Strategic

Human Resources Role
For a world that is constantly changing, this chapter identifies three important models
for understanding the nature of change. The chapter also identifies ten highly practical
principles to keep in mind in managing change.
Chapter 10: Career and Organizational Development: The Win-Win Priority
This chapter explains the importance of creating a win-win commitment to

employees that not only views them as critical assets but “owners and partners” in the
success of their organizations. The chapter also identifies the roles that HRPs play in
helping to create great organizations.

10 Cam Caldwell
Chapter 11: High Performance Organizations and

Human Resource Management
Chapter 11 identifies the importance of High Performance Work Systems, High Trust
Organizations and the role of HRPs in creating organizational systems and programs that
generate extra-mile performance and high commitment. Information is provided about
the many reasons why HRPs should understand the importance of creating organizations
that treat employees as valued partners.
Chapter 12: Wellness and Managing Risk –

The Strategic Role of Human Resources
Employee wellness has become not only a responsibility of organizations but an

important economic issue for organizations as health care costs have continued to
increase. This chapter identifies key elements of employee wellness programs and also
addresses employee safety and risk management. The chapter also explains programs
offered in Employee Assistance Programs.
Chapter 13: Honoring Employee Relationships –

Employee Relations and Employee Law
Chapter 13 emphasizes the importance of creating an organizational culture that

builds high trust and honors employee relationships. The chapter also identifies specific
action steps for improving those relationships and for rethinking the role of HRPs and the
role of attorneys in preparing employee policies and manuals.
Chapter 14: International Human Resource Management –

Strategic Application of Core Principles
This chapter revisits the six strategic HRM roles and emphasizes their international
context. The chapter then identifies eight challenging issues that are commonly related to
international business and offers suggestions for addressing those issues.
Chapter 15: The Future of Human Resources:

Responding to a New Context
Chapter 15 briefly summarizes the history of HRM, identifies both predictive and
prescriptive ideas about the future of HRM, and explains the importance of organizations

and HRPs raising the bar in meeting the demanding needs of a new global business
context.
The consistent theme of this book is that “Human Resource Management matters and
Human Resource Professionals can make a significant strategic difference in contributing
to an organization’s success!”
The modern organization of the 21st Century has already begun to change – and those
changes must be effective if organizations are to successfully compete in a world that has
become increasingly global and complex in its focus. Although HRM and the role of
HRPs has not always been fully appreciated and Top Management Teams can
exponentially improve the effectiveness of their organizations by rethinking HRM’s
strategic roles.
This book offers a wealth of information about the contribution that HRM can make
to help organizations improve their economic and financial prospects.
As importantly, this book explains how and why organizations can benefit by treating
their employees as valued assets and by honoring duties owed to those employees by
helping them to become their best. As organizations honor those responsibilities to their
employees, they also serve their own best interests and the interests of a society that
desperately needs to effectively utilize its available resources to solve its current and
future problems.
Questions to Ponder
1) What is the most important priority for you in reading this new book? What do
you hope to understand and what motivates your decision?
2) How have the organizations where you have worked viewed the strategic
contribution of HRM? Are HRPs active participants in the leadership circle or do
they perform important but less significant contributing roles?
3) Which of the chapter summaries of this book most attract your interest? Where
do you want to begin?
REFERENCES
Caldwell C. & Anderson, V., (2017). Competitive Advantage: Strategies, Management,

and Performance. Hauppauge, New York: NOVA Publishing.
Collins, J., (2001). Good to Great – Why Some Companies Make the Leap . . . And Others
Don’t. New York: HarperCollins.
Gomez-Mejia, L. R., Balkin, D. B., and Cardy, R. L., (2015). Managing Human
Resources (8th ed.). Essex, UK: Pearson Education.

12 Cam Caldwell
Greengard, S., (2016). “HR Credentials: Evaluating Their Value.” Workforce June 13,
2016 found online on October 23, 2017 at http://www.workforce.com/2016/06/13/hr-
credentials-evaluating-their-value/.
Harish, J., & Murray, V., (1984). “Why the Human Resources Management Function
Fails.” California Management Review, Vol. 26, Iss. 4, pp. 95-110.
IBM Corporation, (2014). “Making Change Work . . . . .. While the Work Keeps
Changing.” Armonk, New York: IBM Institute for Business Value. found online
on October 23, 2017 at http://public.dhe.ibm.com/common/ssi/ecm/gb/en/
gbl03021usen/GBL03021USEN.PDF.
Mathis. R. L., Jackson, J. H., Valentine, S. R., & Meglish, P., (2016). Human Resource
Management (15th ed.). Boston, MA: Cengage.
Pfeffer, J., (1998). The Human Equation: Building Profits by Putting People First.
Boston, MA: Harvard Business Review Press and Beer, M., (2009). High
Commitment High Performance: How to Build a Resilient Organization for
Sustained Advantage. San Francisco, CA: Jossey-Bass.
Schein, E. H. & Schein, P., (2016). Organizational Culture and Leadership (5th ed.). San
Francisco, CA: Jossey-Bass.
Society for Human Resource Management, (2016). “2015-2016 SHRM Annual Report.”
Washington, D. C.: Society for Human Resource Management found online on
October 22, 2017 at https://www.shrm.org/about-shrm/PublishingImages/Pages/
default/2015-2016%20Annual%20Report.pdf.

Chapter 2
STRATEGIC HUMAN RESOURCE MANAGEMENT:

AN ETHICAL STEWARDSHIP OBLIGATION
Cam Caldwell
Muscat, Oman
Strategic Human Resource Management (SHRM) is about people – selecting the

right individuals who can achieve outstanding organizational results and providing
support systems to help them not only succeed but to thrive as individuals. Effective
SHRM focuses on supporting an organization at all levels to achieve those results. A
strategy addresses the processes through which the mission of an organization is
achieved, its objectives are determined, and how it will apply resources to achieve those
objectives11. Strategy articulates policies that position an organization within its external
environment as it responds to customers; fights for competitive advantage12; and
coordinates operational systems and activities which acquire, allocate, and develop
resources in the quest for excellence. SHRM is effective to the degree that its policies,
programs, and systems fully align with an organization’s values, mission, and objectives.
Without a competitive advantage every private sector organization is vulnerable to its
competitors; and every organization has the moral obligation to create value for society13.
Although leaders, managers, and supervisors acknowledge that value creation is
ultimately achieved by an organization’s employees, misguided executives and Top
11
This point is made by many scholars. See, for example, Devanna, M. A., Fombrun, C., & Tichy, N. (1981).
“Human Resources Management: A Strategic Perspective.” Organizational Dynamics, Vol. 9, Iss. 3, pp. 57-
61.
12
See Porter, M. E., (1998). Competitive Advantage: Creating and Sustaining Superior Performance. New York:
Free Press.
13
Ibid.

14 Cam Caldwell
Management Teams view employees as “cost centers” to be minimized rather than the
means by which customers are served and profits are generated14.
The purpose of this chapter is to identify six key strategic roles of Human Resource
Professionals (HRPs) and the Human Resource Management (HRM) function in helping
organizations to achieve their missions. We begin by defining Strategic Human Resource
Management (SHRM) and explaining its role as a staff support function for the multiple
stakeholders of an organization. Incorporating insights from HRM scholars, we then
identify six strategic roles of HRM and explain how HRPs can more effectively
contribute to their organizations in 1) empowering employees; 2) assisting individual
departments to achieve their goals; 3) enhancing the effectiveness of an organization’s
unique capabilities; and 4) creating a culture that builds trust, facilitates change, and
pursues constant improvement. We explain why the SHRM roles constitute an “ethical
stewardship” obligation for HRPs that needs to be understood both by the HRPs and by
their organization’s Top Management Team. We conclude the chapter with commentary
about why so many HRPs and HRM systems fail to achieve their stewardship obligations.
SHRM AND SIX CRITICAL ROLES
SHRM is a staff function focused on assisting individuals and organizational units to

achieve their missions through the optimal utilization of people. Although organization
missions vary by organizational type, sector of society, economic conditions, and other
factors, virtually every organization exists to fulfill an enduring and meaningful
purpose that simultaneously meets the needs of and creates value for society while
meeting the broad range of economic, psychological, and social needs of its member
participants and employees.
Whatever the specific mission of an organization may be, SHRM’s entire purpose is
to support the organization in the efficient and effective achievement of goals, objectives,
and activities furthering that mission. Although an HR Department’s staff requires a
specialized set of technical skills and knowledge, and though individual members may
have their own career or organizational goals and objectives, the mission of every HR
Department is to assist individuals, departments, and the Top Management Team in the
achievement of their organization’s strategic purposes. Phrased another way, “As a staff
function, HRM is ‘on tap’ to facilitate achieving an organization’s goals but never ‘on
top’ as the decision-maker that actually determines those goals.”
14
Ibid.

Strategic Human Resource Management 15
Figure 1.
The following are six strategic roles of HRM that contribute to optimal organization
success.
1. Create and sustain an organizational culture aligned with the mission and
strategy. HRPS assist an organization’s Top Management Team to integrate
aligned policies, systems, procedures, rules, and guidelines that establish the
norms, values, and priorities that define an organization’s culture. The most
effective organizations create cultures in which artifacts, core values, and
systems reinforce the achievement of values, goals, and mission15. When its
culture is aligned with an organization’s mission and strategy, an organization
reinforces the focus of goal achievement. Without alignment organizations send a
mixed message that creates uncertainty and undermines organization efforts.
2. Demonstrate excellence in performing technical and operational tasks
requiring the specialized skills and knowledge of HRM. As a formal discipline
HRM requires an understanding of best practices, methods, tools, technical
information, principles of organization behavior, and human relations that are the
building blocks of the discipline. HRPs assist other organizational units by
skillfully performing technical and operational HRM tasks that sustain
competitive advantage, comply with appropriate legal requirements, and pursue
the best interests of the organization and its membership. Incorporating best
HRM practices in technical HRM tasks provides an organization with the
foundation for efficient and effective performance.
15
This leadership role is identified in Schein, E. H. & Schein, P. (2016). Organizational Culture and Leadership.
San Francisco, CA: Jossey-Bass.

16 Cam Caldwell
3. Perform as business partners for each organizational department to assist them

in identifying how to most effectively achieve operating efficiencies in
accomplishing tasks that support the organization’s mission. Being an effective
internal business partner or in-house consultant is a multi-faceted role that
requires HRPs to develop profound knowledge and expertise about the goals,
operations, and objectives of the many departments that they serve. This
consulting role requires HRPs to become subject matter experts about the most
effective ways for managing change, engaging employees, and efficiently
achieving organizational goals. HRPs who help departments improve their
operations not only enable their organizations to constantly improve but develop
high trust. Failing to develop this strategic capability requires that organizations
call upon external resources that result in delays and expense that could
otherwise be avoided.
4. Listen to and provide an effective voice for the work-related needs of employees
to enable and empower employees to be contributors to improving the
organization. HRPs built trust when they understand and communicate employee
needs and concerns to the Top Management Team and assist the organization to
address those issues. HRPs can help organizations create high trust
organizational cultures 1) enable their organizations to enhance quality, improve
productivity, and increase profitability while they 2) build relationships with
employees that encourage those employees to innovate, grow, and thrive.
Responsive organizations with HRPs who understand and communicate
employee needs see employees respond with greater commitment and ownership
while organizations that fail to make their employees partners in the process of
improvement fail to create work environments that build trust and generate extra-
mile efforts.
5. Create organizational systems that support continuous improvement,
organizational and individual learning, the creation of new knowledge and
innovation, and the acquisition of critical information associated with outside
stakeholders. Organizational alignment, constant improvement, continuous
learning, and effectively integrating organizational information are necessities for
the optimization of successful goal achievement in today’s fast-changing world.
Effective HRPs help a constantly learning organization anticipate and respond to
constant change and build an organization-wide learning culture that encourages
innovation and creativity. Building a constantly learning organization makes it
possible for organizations to keep up with evolving customer requirements,
industry innovations, and new opportunities. Failing to invest in constant learning
and improvement makes an organization immediately vulnerable.
6. Monitor the organization climate and assist the organization to make timely
and effective changes, as required by constantly changing environmental

conditions. Tracking the evolution of the employee work climate, constantly

identifying opportunities for improving quality of life and organizational
systems, and engaging employees in change processes demonstrate a
commitment to the best interests of all of an organization’s stakeholders. HRPs
that build effective relationships throughout their organization have a clear
understanding of the internal work climate and are aware of opportunities for
making productive changes.
SHRM AS ETHICAL STEWARDSHIP
The moral obligation of leaders is to pursue long-term organizational wealth while

honoring duties owed to all its stakeholders. Stewardship is a pro-organizational
commitment to the best interests of all parties, rather than opportunistic or self-serving
behavior16. Ethical stewardship imposes upon leaders and organizations a virtuous
obligation that transcends doing that which is moral and requires the pursuit of optimal
outcomes that best serve society, benefit stakeholders, and minimize waste. As a
philosophy of governance, ethical stewardship is concerned with 1) optimizing both
performance and accountability, 2) integrating values and goals within organizational
systems and structures, 3) maintaining relationships that increase commitment and
cooperation, and 4) applying principles of management and leadership to achieve desired
results17.
As a theory of governance and leadership, ethical stewardship adopts six virtue-based
leadership characteristics18:
1. It is dyadic in creating individualized relationships with each follower. By

treating each individual as a valued end, rather than as a means to organizational
ends, ethical stewardship builds individual commitment and cooperation.
2. It is both transformational and transactional. Ethical stewardship seeks to
improve the status quo through productive change but also protects exchange
relationships that benefit individual stakeholders.
16
The nature of opportunism and self-interest are explained in Williamon, O., (1985). The Economic Institutions of
Capitalism. New York: Free Press. Stewardship as a governance theory is introduced by Davis, J. H.,
Schoorman & Donaldson, (1997). “Toward a Stewardship Theory of Management.” Academy of Management
Review, Vol. 22, Iss. 1, pp. 20-47.
17
The purposes of governance theory are identified by McClusky, J. E., (2002). “Rethinking Non-Profit
Organization Governance: Implications for Management and Leadership.” International Journal of Public
Administration, Vol. 25, Iss. 4, pp. 539–559 and in Steinberg, R. M. and D. Pojunis. (2000). “Corporate
Governance: The New Frontier.” Internal Auditor, Vol. 57, Iss. 6, pp. 34–39 and summarized in Caldwell, C.,
Hayes, L., Karri, R., and Bernal, P., (2008). “Ethical Stewardship: The Role of Leadership Behavior and
Perceived Trustworthiness.” Journal of Business Ethics, Vol. 78, Iss. 1/2, pp. 153-164.
18
These six leadership elements are explained in greater detail in Caldwell, et al., 2008, op. cit.

18 Cam Caldwell
Figure 2.
3. It honors the often unspoken social contract between leaders and followers.
Ethical stewardship recognizes that the expectations of followers are often
implicit and impose duties and obligations. Leaders who function as ethical
stewards seek to understand and honor those perceived obligations and to clarify
expectations to enhance trust.
4. It is subjectively perceived by each individual. Recognizing the subjective nature
of perceptions, ethical stewards seek to understand those perceptions and
acknowledge that interpersonal relationships are both subtle and individual in
their nature.
5. It is long-term rather than short-term in focus. Ethical stewards seek to
optimize wealth creation and recognize that short-term profits often undermine
long-term value creation. These stewards pursue options that emphasize long-
term benefits to all stakeholders in optimizing the creation of value.
6. It constantly emphasizes the management of meaning. Ethical stewardship
focuses on the values and outcomes that are virtuous and pursues adherence to
correct principles. In seeking best possible outcomes and honoring relationships,
ethical stewardship create a constantly learning relationship with others.
Stewards focus on understanding new insights, increasing mutual understanding,
and pursuing of truth.

These six elements of the leadership relationship reflect the ethical steward’s
commitment to the worth and importance of each stakeholder and the steward’s
commitment to the organization’s best interests.
As ethical stewards, HRPs have the responsibility to help organizations create work
cultures that are both human and humane and that “emphasize inclusion, shared
partnership, empowerment, and leadership trustworthiness19.” HRPs demonstrate a broad
combination of ethical insights and honor the obligations of Transformative Leadership
as they pursue the highest and best possible outcomes for their organizations in
accomplishing the mission of their organizations20. As leaders at all levels demonstrate
their commitment to the principles of ethical stewardship, they create relationships that
motivate extra-role behavior, increased commitment, increased creativity, and increased
profitability21. Although HRPs function as “servant leaders” in their staff support role,
they seek outcomes that honor relationships, keep commitments, and add value for
others.
BARRIERS TO STRATEGIC SUCCESS
Despite the potential of SHRM to contribute to an organization’s success, there are

commonly occurring barriers that inhibit the ability of HRPs to contribute to the strategic
success of a firm. The following is a list of ten barriers that may arise in organizations of
all types.
1. Management paradigms about the HRM role. One of the more common reasons
why HRM systems fail to contribute to strategic success is the perception of Top
Management Team members about the ineffectiveness of HRM as a contributor
to organizational goals22. Those perceptions may result from prior personal
experience in other organizations which had ineffective HRPs, or it may be
19
This quote comes from page 174 of Caldwell, C., Truong, D., Linh, P., and Tuan, A., (2011). “Strategic Human
Resource Management as Ethical Stewardship.” Journal of Business Ethics, Vol. 98, Iss. 1, pp. 171-182 but
the nature of effective leadership is articulated in greater detail in Kanter, R. M.: 2008, “Transforming Giants.”
Harvard Business Review, Vol. 86, Iss. 1, pp. 43–52.
20
The transformative roles of HRPs as ethical stewards is identified in Caldwell, et al. (2011) op. cit. and the nature
of Transformative Leadership is explained in Caldwell, C., Dixon, R. D., Floyd, L., Chaudoin, J., Post., J., and
Cheokas, G. 2012. “Transformative Leadership: Achieving Unparalleled Excellence.” Journal of Business
Ethics, Vol 109, Iss. 2, pp. 175-187.
21
These outcomes are identified in Xu, F., Caldwell, C., and Anderson, V., 2016. “Moral Implications of
Leadership—Transformative Insights.” International Journal of Business and Social Research, Vol 3, Iss. 6,
pp. 75-85 and are consistent with the findings of Cameron, K., (2011). “Responsible Leadership as Virtuous
Leadership.” Journal of Business Ethics, Vol. 98, pp. 25-35, and Caldwell, C., (2015). “Six Insights for
Transformative Leaders.” Graziadio Business Review published by Pepperdine University and available online
at http://gbr.pepperdine.edu/tag/transformative-leaders.
22
This perception is commonly held. See Ulrich, D., Allen, J., Brockband, W. Younger, J., & Nyman M. (2009).
HR Transformation: Building Human Resoruces from the Outside In. New York: McGraw-Hill.

20 Cam Caldwell
simply the inability of managers or leaders to recognize the important role of

employees in contributing to organizational success.
2. Selecting HRM staff who lack appropriate qualifications. Unfortunately, it is
not uncommon for individuals to be assigned responsibility for HRM functions
who lack the requisite training or insight. Only about one in four HRPs are
actually academically trained in HRM and many who function in professional
positions lack a clear understanding of basic HRM principles23.
3. Contracting out the HRM function. In an effort to avoid financial costs and to
minimize many human resource tasks, some organizations contract out HRM
functions to third parties. Although front-end cost savings may accrue in some
cases, those financial benefits are at the expense of being able to create and
manage employee relationships, establish integrated HRM systems, and develop
and monitor an organizational culture that fits a firm’s values, goals, and
priorities24.
4. Top Management failure to understand value creation. Viewing employees as
cost centers, commodities, or human resources rather than the source of
organizational value creation is a common problem25. Effective HRM systems
that empower employees to create value and engage employees as full partners
are more profitable than organizations that overlook the value of such systems26.
5. Misaligned HRM systems and policies. When an organization’s HRM systems,
policies, and practices are not aligned with each other or with its values and
goals, the result is that employees are sent a mixed message about priorities and
performance27. In contrast, extensive empirical evidence documents the value of
aligned HRM systems in increasing employee productivity and organization
profitability28.
6. Ineffective organizational leadership. Leadership focused on “command and
control” relationships with employees is increasingly considered to be less
effective than organizational relationships based upon creating high commitment
and trust29. Competence is a critical factor in generating organizational
23
According to Gomez-Mejia, L. B., and Balkin, D. B., (2015). Managing Human Resources (8th ed.), New York:
Pearson, only 27% of HRPs have actually been academically trained in the discipline. See Chapter One.
24
This point is clearly made in Pfeffer, J., (1998) op. cit.
25
Ibid.
26
Smith, S., Peters, R., and Caldwell, C., 2016. “Creating a Culture of Engagement – Insights for Application.”
Business and Management Research, Vol. 5, No. 2, pp. 70 -80.
27
This theme is the focus of Holbeche, L., (2009). Aligning Human Resources and Business Strategy (2nd ed.) New
York: Routledge.
28
This point is well documented in Pfeffer, J., (1998) op. cit.
29
The importance of creating organizations based upon high commitment and trust is well documented in Beer, M.
(2009). High Commitment, High Performance: How to Build a Resilient Organization for Sustained
Advantage. San Francisco, CA: Jossey-Bass.

commitment and creating wealth – in addition to treating employees as valued

organizational assets30.
7. Failure to honor organization values. Organizational leaders are responsible for
not only articulating the values of their organizations but for honoring those same
values31 – and it is by honoring those values that leaders establish their reputation
for integrity . . . or the lack thereof32.
8. Embracing the past, the status quo and “best practice.” Change is the constant
in every organization. Underinvesting in learning and continuous improvement,
relying on ‘common knowledge,’ and copying other companies’ methods and
processes can never create competitive advantage and doom organizations to
mediocrity and ultimate decline33.
9. Accepting and settling for mediocre. Satisficing, or settling for solutions that are
readily available but meet short-term needs, is not optimizing opportunities for
improvement. Good is never good enough34.
10. Overlooking moral responsibilities. Organizations owe a broad spectrum of
duties to their stakeholders35. Failing to honor those duties is a recipe for the loss
of public trust, the decline in customer satisfaction, the erosion of employee
commitment, and ultimate organizational collapse36.
This list of barriers to organization success is certainly not new . . . but organizations
fall prey to these causes of failure and many others. SHRM is effective only when its
leaders avoid making strategic errors that are common to many organizations. Effective
leadership requires great attention to detail, a clear understanding of a multitude of
internal and external success factors, and an uncompromising commitment to
excellence37.
30
This insight is provided in Caldwell, C. and Ndalamba, K. K. (In Press). “Trust and Being ‘Worthy’ – Barriers to
Wealth Creation.” Paper accepted for publication in the Journal of Management Development.
31
The role of leaders in creating organizational culture is the key theme of Schein, E. H. & Schein, P. (2016)
Organizational Culture and Leadership (5th ed.). San Francisco, CA: Jossey-Boss.
32
Pfeffer, J., 1998, op. cit.
33
Ibid.
34
This vital message is the key point of the best selling book Collins, J., (2001). Good to Great: Why Some
Companies Make the Leap . . . . And Others Don’t. New York: HarperBusiness.
35
The moral duties of organizations have been repeatedly addressed. See, for example, DePree, M., (2004).
Leadership is an Art. New York: Crown Publishing.
36
The moral duties of organizations have been well defined by Stephen R. Covey. See Hasan, Z. and Caldwell,, C.
2016. “’Live Your Life in Crescendo’ – Moral Insights from Stephen R. Covey.” Graziadio Business Review.
Vol. 19, Iss. 1. Available on line at http://gbr.pepperdine.edu/2016/04/live-your-life-in-crescendo/.
37
Collins, J., (2001), op. cit.

22 Cam Caldwell
CONCLUSION
HRPs owe their organizations the dedication which makes up ethical stewardship and
a commitment to unflagging excellence38. Aristotle reminded us that our commitment to
excellence must become a habit if we are to achieve worthy goals and personal
victories39. HRM systems that function effectively as a contributing resource to their
organizations demand HRPs who understand their role, are committed to organizational
excellence, and who have a rare combination of interpersonal and technical skills
developed by hard work and constant study.
Ethical stewardship also requires a deep internal awareness of one’s own capabilities,
a commitment to moral excellence, and the perseverance and passion to go the extra-mile
on behalf of others. As HRPs examine their qualifications to serve, as they reflect on the
needs of their organizations, and as they acquire the competencies to become ethical
stewards they demonstrate their worthiness to serve their organizations and to benefit a
society that increasingly demands excellence. When HRPs perform as ethical stewards
they earn the right to contribute to the strategic success of their organizations and to serve
on its Top Management Team40.
Questions to Ponder
1. What is your definition of leadership? What are its outcomes? What relationships
must leaders establish to earn the followership of others?
2. The six roles of SHRM are comprehensive and challenging. Which of these roles
do you consider to be most important – and why? Which role requires the
greatest preparation?
3. How does the concept of ethical stewardship relate to your definition of
leadership that you developed in responding to Question 1? Are you an ethical
steward? In what areas might you improve to become a better steward?
Not at the Table – Case Study – By Dr. Sarah J. Smith
Kate worked in an industry that employed 90% male to 10% female employees. The
company did not attempt to avoid diversity and attract this high level of male to female
workers. The majority of jobs were in manufacturing and required long hours during
spring and fall. Most employees were expected to work outside during the heat of
38
Caldwell, C., et al., (2010) op. cit.
39
Aristotle’s famous quote that excellence is a habit can be found at https://www.brainyquote.com/
quotes/authors/a/aristotle.html.
40
Ulrich, D., et al., (2009) op. cit.

summer as well as add value when their jobs were located in the refrigerated warehouses.
A Fortune 200 company, this organization operated 28 production plants across the
continental US.
Three HRPs at the corporate office were expected to provide support for all 28
production facilities, their employees, and the onsite management team. The plant
manager at one of the largest facilities realized the level of support from the HRPs was
less than it needed to be to support strategic goals and to build a culture of trust. The area
plant employees and management team were fortunate to see one of the corporate HRPs
once per year.
The plant made a strategic decision: convert one of the full-time salary positions from
production duties to provide for an HRP for this location alone. When Kate arrived for
her first day as the newly hired HRP, neither her computer nor her phone extension was
ready. The management team and employees wondered where their performance was
lacking to justify hiring an onsite HRP. Thus, trust was low.
Management held deeply rooted paradigms about the HRPs importance onsite as well
as what duties the HRP should fulfill. When the first management meeting was conducted
in the board room, Kate was not invited. HR was not present around the large, oval
strategy table. One long, thin sidewalk connected the warehouses and employee break
room to the front office. Two workers could not walk side by side and the majority of
employees were intimidated to make the walk up to the front office building which
housed the management team.
It wasn’t’ long until Kate realized this phenomenon. She did not feel trusted by some
of the management team and she barely had a pulse on the employees’ perceptions. Kate
decided to park in the employee parking lot each day, versus the office lot, in order to
network with employees. Upon arrival, she would see people who were leaving from
third shift and arriving for first shift. Kate timed her workday so when she left the plant at
the end of the day, she would see first shift employees as they went home and second
shift employees as they arrived to begin their workday. It wasn't long until the employees
began to feel more comfortable around Kate and the idea of having an HRP onsite. Kate
ended up taking a notebook as she traveled through the plant because employees would
voice questions and concerns. Despite her progress with the workforce, Kate never was
invited to attend a management meeting, around the large oval table in the conference
room.
1. How would you describe the employees’ and managements’ perceptions of the
HRP function when Kate arrived?
2. Kate had the credentials and experience to be an effective HRP. However, before
her arrival, payroll and employee life cycle data was input by someone in the
office without HR knowledge and experience. Payroll errors were common and
created frustration with the employees. Would you classify this situation as a

24 Cam Caldwell
barrier to strategic success? What could Kate do to restore trust about payroll
with the employees?
3. The warehouse manager had a strong command and control leadership style,
whereas the plant manager realized employees added value to the organization.
Turnover in the warehouse area was high. Of the two leaders, which person
would be best able to create high commitment and trust within the organization?
Which barrier to strategic success does success does this situation illustrate?
Who is the HRP Today? – Case Study – By Dr. Sarah J. Smith
Ann and Joan worked for a non-for-profit agency. The office and its staff had its
issues, however, for the most part employees tried to do the best they could for the
clients. Resources were limited and at times funding for programs diminished. The
agency’s HRP was quite effective: she was able to build individual commitment and
cooperation which in turn seemed to help keep turnover to a minimum. Working for the
agency was viewed as a long-term opportunity and most employees completed 20 years
to achieve a fully vested pension.
This HRP realized the importance of monitoring the agency’s culture as well as
encouraging effective communication to enhance mutual understanding. When program
shifts occurred, the HRP would gather a focus group of employees to help make
suggestions about integrating the change within the agency. The employees who
participated became change agents within the agency and would encourage others as
changes were implemented.
In addition to the positive work environment, Ann and Joan had returned for degree
completion at the area college. The tuition reimbursement program was quite unusual for
a non-for-profit agency, however, the HRP worked creatively and diligently to have
funds available to promote lifelong learning. Educational assistance helped ease the
financial burden of school as well as encouraged employees to be continuous learners.
One day, Ann and Joan walked into class. They were not their usual happy selves.
Fellow students asked why they seemed sad. Ann and Joan were consistent contributors
to class discussions. They were upbeat and positive. However, on this day, they sat in
class mysteriously quiet and removed from interaction with others. Finally, after class,
some of their colleagues asked why Ann and Joan seemed ‘down’. They explained when
they went to work the day after the last class, the HRP had been replaced with a contract
organization. Ann and Joan said the employees did not know who their HRP was
supposed to be, and HR did not answer their phone nor return messages.
1. What do you think the agency employees missed most about their trusted HRP?
Which strategic role(s) of HRM does this represent?

2. Thinking forward, how will the contractor situation affect the culture of the
agency? What could happen to employee morale?
3. How could upper management implement a policy, procedure, or strategy to
salvage the decision to outsource HR?
REFERENCES
Beer, M. (2009). High Commitment, High Performance: How to Build a Resilient

Caldwell, C., (2015). “Six Insights for Transformative Leaders.” Graziadio Business
Review published by Pepperdine University and available online at
http://gbr.pepperdine.edu/tag/transformative-leaders.
Caldwell, C. and Ndalamba, K. K. (In Press). “Trust and Being ‘Worthy’ – Barriers to
Wealth Creation.” Paper accepted for publication in the Journal of Management
Development.
Caldwell, C., Dixon, R. D., Floyd, L., Chaudoin, J., Post., J., and Cheokas, G. 2012.
“Transformative Leadership: Achieving Unparalleled Excellence.” Journal of
Business Ethics, Vol 109, Iss. 2, pp. 175-187.
Caldwell, C., Hayes, L., Karri, R., and Bernal, P., (2008). “Ethical Stewardship: The Role
of Leadership Behavior and Perceived Trustworthiness.” Journal of Business Ethics,
Vol. 78, Iss. 1/2, pp. 153-164.
Caldwell, C., Truong, D., Linh, P., and Tuan, A., (2011). “Strategic Human Resource
Management as Ethical Stewardship.” Journal of Business Ethics, Vol. 98, Iss. 1, pp.
171-182.
Cameron, K., (2011). “Responsible Leadership as Virtuous Leadership.” Journal of
Business Ethics, Vol. 98, pp. 25-35.
Collins, J., (2001). Good to Great: Why Some Companies Make the Leap . . . . And
Others Don’t. New York: HarperBusiness.
DePree, M., (2004). Leadership is an Art. New York: Crown Publishing.
Devanna, M. A., Fombrun, C., & Tichy, N. (1981). “Human Resources Management: A
Strategic Perspective.” Organizational Dynamics, Vol. 9, Iss. 3, pp. 57-61.
Gomez-Mejia, L. B., and Balkin, D. B., (2015). Managing Human Resources (8th ed.),
New York: Pearson.
Hasan, Z. and Caldwell,, C. 2016. “’Live Your Life in Crescendo’ – Moral Insights from
Stephen R. Covey.” Graziadio Business Review. Vol. 19, Iss. 1. Available on line at
http://gbr.pepperdine.edu/2016/04/live-your-life-in-crescendo/.
Holbeche, L., (2009). Aligning Human Resources and Business Strategy (2nd ed.) New
York: Routledge.

26 Cam Caldwell
Kanter, R. M.: 2008, “Transforming Giants.” Harvard Business Review, Vol. 86, Iss. 1,
pp. 43–52.
McClusky, J. E., (2002). “Rethinking Non-Profit Organization Governance: Implications
for Management and Leadership.” International Journal of Public Administration,
Vol. 25, Iss. 4, pp.539–559.
Porter, M. E., (1998). Competitive Advantage: Creating and Sustaining Superior
Performance. New York: Free Press.
Schein, E. H. & Schein, P. (2016). Organizational Culture and Leadership. San
Smith, S., Peters, R., and Caldwell, C., 2016. “Creating a Culture of Engagement –
Insights for Application.” Business and Management Research, Vol. 5, No. 2, pp. 70
-80.
Steinberg, R. M. and D. Pojunis. (2000). “Corporate Governance: The New Frontier.”
Internal Auditor, Vol. 57, Iss. 6, pp.34–39.
Ulrich, D., et al., (2009) op. cit.
Ulrich, D., Allen, J., Brockband, W. Younger, J., & Nyman M. (2009). HR
Transformation: Building Human Resoruces from the Outside In. New York:
McGraw-Hill.
Williamon, O., (1985). The Economic Institutions of Capitalism. New York: Free Press.
Stewardship as a governance theory is introduced by Davis, J. H., Schoorman &
Donaldson,(1997). “Toward a Stewardship Theory of Management.” Academy of
Management Review, Vol. 22, Iss. 1, pp. 20-47.
Xu, F., Caldwell, C., and Anderson, V., 2016. “Moral Implications of Leadership—
Transformative Insights.” International Journal of Business and Social Research,
Vol 3, Iss. 6, pp. 75-85.

Chapter 3
LEADERSHIP AND HUMAN RESOURCE

MANAGEMENT:
INSIGHTS AND APPLICATIONS
Cam Caldwell1 and Verl Anderson2

1
Muscat, Oman
2
Dixie State University, St. George, UT, US
Many would suggest that “Human Resource Management (HRM) leadership” is as

oxymoronic or self-contradictory as “jumbo shrimp.” As a staff function that exists to 1)
carry out a Top Management Team’s vision, 2) provide business partner support to line
managers, and 3) help employees to achieve their highest potential, the HRM role can
assist an organization to thrive and flourish – but some critics would argue that its role
does not truly encompass “leadership.” While conceding that a Vice President of Human
Resources or Human Resource Director may lead his or her staff, these critics would
explain that the HRM role is a support function that violates its fundamental purpose
when it “leads” in the traditional sense of “command and control.”
The purpose of this chapter is to affirm and acknowledge the fact that Human
Resource Professionals (HRPs) play a support function but to suggest that HRPs can
nonetheless play a powerful leadership role, based upon the evolving definition of
leadership in the modern organization. We begin by defining leadership and citing the
insights of widely recognized scholars and experts about the nature of leadership and the
leader’s responsibilities.

28 Cam Caldwell and Verl Anderson
Figure 1.
The chapter compares the HRM role with ten different leadership perspectives in
identifying how the duties of HRPs fit with the unique characteristics of all ten of these
perspectives. We then suggest twelve caveats for HRPs as they carry out the HRM role
and conclude with a challenge to HRPs to become powerful contributors to their
organizations in fulfilling their many leadership roles.
UNDERSTANDING LEADERSHIP
Although leadership includes the ability to influence others in the pursuit of shared
goals, the definition of leadership often assumes that a leader acts in a role where (s)he is
an acknowledged formal authority. Eight decades ago, however, Chester Barnard
observed that “authority” was more accurately a function of a follower’s willingness to
comply and cooperate with the would-be leader’s requests – rather than the formal right
of a leader to assume command. Thus, Barnard emphasized that authority is actually a

Leadership and Human Resource Management 29
decision made by a follower to relinquish his or her control to accept the leader’s
guidance41.
Although the leadership role can include positional responsibility, evolving thinking
about leaders and organizations has suggested that leadership possesses diverse
characteristics that perform a common set of functions42. In their award-winning
summation of the key roles of leaders, James Kouzes and Barry Posner summarized the
roles of outstanding leaders as consistently including five key functions43.
Figure 2.
 Challenging the process. Leaders are willing to confront past practices and the
status quo and challenge previously held assumptions – recognizing that constant
improvement is required to succeed.
 Defining a shared vision. Leaders articulate, communicate, and define in precise
terms their vision of what the future can be – and they involve other stakeholders
in developing that vision to ensure that others are engaged and committed
partners.
 Enabling others to act. Leaders play a supportive role and assist others to
accomplish critical tasks – providing resources, suggesting guidelines, and
eliminating barriers that make success difficult to achieve.
41
Barnard clearly affirmed this point in Barnard, C. I., (1938). The Functions of the Executive. Cambridge, MA:
Harvard College.
42
For a comprehensive review of the five key roles of leaders, see Kouzes, J. M. & Posner, B. Z., (2017). The
Leadership Challenge: How to Make Extraordinary Things Happen in Organizations(6th ed.). San Francisco,
CA: Jossey-Bass.
43
Ibid.

 Modeling the way. Leaders live what they espouse, demonstrate by example, and
serve as role models for others – recognizing that it is by doing what they ask
others to do that they establish trust, build commitment, and earn credibility.
 Encouraging the heart. Leaders establish effective personal relationships with
others and treat people as individuals rather than commodities – acknowledging
that employees are valued “Yous” rather than as “Its”44.
Each of these five leadership functions is critical to the success of every organization
and each of these functions is performed by effective HRPs.
In their studies of what people most want as the personal traits of leaders, Kouzes and
Posner obtained feedback about the qualities that followers considered to be most
important. From a list of dozens of traits, the top four traits were identified as most
essential in establishing leadership credibility45.
 Honesty: Nearly 90 per cent of respondents rated honesty as the most important
trait of leaders. People admire ethical leaders who know where they stand on
important principles and keep their commitments.
 Forward thinking: More than two-thirds of people want a leader with a clear
vision, an understanding of what needs to be accomplished, and how to do it.
 Competency: Followers need to know that their leader is knowledgeable and can
get the job done. Competent leaders understand the nature of their organization,
its context in a larger world, and the needs of those whom their organization
serves.
 Inspiration: Leaders make the context of work far more meaningful if they are
able to inspire people to become their best and to do their best.
Each of these traits enables leaders to accomplish the functions so important for
leadership success and organizational effectiveness. HRPs must demonstrate these traits
if they are to be perceived as credible in performing their work and in contributing to the
success of others. By honoring their relationships with employees at all levels of the
organization, HRPs demonstrate their personal trustworthiness and their understanding of
their HRM role.
44
This distinction and its valuing of each individual is the profound message of Buber, M. & Kaufmann, W. (1971).
I and Thou. New York: Touchstone.
45
The research of hundreds of thousands of respondents identified the important features of leader credibility in
Kouzes, J. M. & Posner, B. Z., (2011). Credibility: How Leaders Gain and Lose It Why People Demand It.

TEN LEADERSHIP PERSPECTIVES
HRPs demonstrate behaviors of ten important leadership perspectives that contribute

to a leader’s ability to bring out the best in organizations and in individual employees46.
Table 1 lists these ten leadership perspectives, identifies their defining characteristics,
and indicates the application of each leadership perspective to the HRM function and the
HRPs contributions to individual growth and organization success.
Each of the ten leadership perspectives in Table 1 has practical application for HRPs
– and each of those applications are fraught with a profoundly ethical implicit obligation
because leadership and ethics are inevitably interconnected47. Each ethical duty owed to
others is part of the HRM role48. Honoring those duties enables HRPs to be thought of as
stewards who serve the interests of all stakeholders, promote long-term value creation,
and assist the organization and its members to become their best version of themselves49.
Ultimately, HRPs best lead others by incorporating the ethical steward’s commitment
to helping both individuals and organizations to fulfill their highest potential50. Leaders
are most effective in achieving optimal results when motivated by a genuine love for
others and a passionate commitment to achieving their organization’s mission and
purpose51. In writing of the nature of leadership and the leader’s commitment, Stephen
Covey explained that “(l)eadership is treating others so well that they come to recognize
their greatness and strive to achieve it52.” Similarly, Covey explained that the universal
leadership mission involved optimizing organizational success by helping each employee
to become their very best53.
TWELVE LEADERSHIP CAVEATS
As the Father of Total Quality Management, W. Edwards Deming, often observed,

“There is no ‘instant pudding’ pathway to success.” For HRPs, the leadership roles that
46
Stephen R. Covey identified these two priorities as the universal responsibilities of leaders on page 99 of Covey,
S. R., (2004). The 8th Habit: From Effectiveness to Greatness. New York: Free Press.
47
The ethical nature of leadership is confirmed repeatedly by experts like Hosmer, L. T., (2010). The Ethics of
Management (6th ed.). New York: McGraw-Hill and Burns, J. M., (2010) op. cit.
48
The ethical nature of HRM is clearly articulated in Hosmer, L. T., (1987). “Ethical Analysis and Human Resource
Management.” Human Resource Management, Vol. 26, Iss. 3, pp. 313-330 and in Caldwell, C., Truong, D.,
Linh, P., and Tuan, A., (2011). “Strategic Human Resource Management as Ethical Stewardship.” Journal of
Business Ethics, Vol. 98, Iss. 1, pp. 171-182.
49
Ibid.
50
Ibid.
51
The application of this commitment is clearly identified in Caldwell, C., and Dixon, R. D. 2010. “Love,
Forgiveness, and Trust: Critical Values of the Modern Leader.” Journal of Business Ethics, Vol. 93, Iss. 1, pp.
91-101 and in Caldwell, et al., (2011) op. cit.
52
See Covey, S. R., (2004) op. cit., p. 98.
53
Ibid., p. 99.

Table 1. Leadership Perspectives Applied to HRM
Leadership Perspective’s Defining Application to HRM Leadership

Perspective Characteristic
Level 5 Personal humility and fierce Giving credit to others for their
resolve54 accomplishments, taking responsibility for
mistakes, and demonstrating an unyielding
commitment to organization success.
Covenantal Commitment to creating Creating an organization-wide learning culture,
new helping employees to learn, innovating, and
meanings55 seeking new insights.
Principle-Centered Adherence to correct Seeking to understand and apply correct
principles and universal principles and honoring those principles in
truths56 relationships and obligations.
Transformational Managing change Seeking optimal outcomes for the organization
benefiting the individual and helping individuals excel while effectively
and the organization57 responding to change.
Charismatic Sense of calling and Treating others as valued partners and viewing
personal charisma58 the organization’s work as a worthy purpose to
achieve.
Servant Placing service to others Viewing the relationship with employees as a
over personal self-interest59 sacred responsibility while seeking optimal
organization outcomes.
Transformative Creating long-term value as Honoring duties owed to all stakeholders by
ethical stewards60 striving to achieve optimal long-term results.
Transactional Exchanging employee Creating a fair exchange of compensation and
benefits for services benefits for work performed and dealing fairly
rendered61 with employees.
54
Level 5 leadership is described in Collins, J., (2001). Good to Great: Why Some Companies Make the Leap and
Others Don’t. New York: HarperCollins and in Caldwell, C., Ichiko, R., and Anderson, V., (2017).
“Understanding Level 5 Leaders -- The Ethical Perspective of Leadership Humility.” Journal of Management
Development, Vol. 36, Iss. 5, pp. 724-732.
55
Covenantal leadership is explained in Pava, M., (2003). Leading with Meaning: Using Covenantal Leadership to
Build a Better Organization. New York: St. Martin’s Press and in Caldwell, C, and Hasan Z. (2016).
“Covenantal Leadership and the Psychological Contract – Moral Insights for the Modern Leader.” Journal of
Management Development, Vol. 35, Iss. 10, pp. 1302-1312 and Caldwell, C., and Hasan, Z. (2016), “The
Covenantal Leader – Honoring Implicit Relationships with Employees.” Graziadio Business Review, Vol. 19,
Iss. 2 and available online at http://gbr.pepperdine.edu/2016/10/the-covenantal-leader.
56
For a review of Principle-Centered Leadership, see Covey, S. R. (1992). Principle-Centered Leadership. New
York: Fireside.
57
For a review of Transformational Leadership, please see Burns, J. M., (2010). Leadership. New York: Harper &
Row.
58
For a summary of Charismatic Leadership, please read Conger, J. A. & Kanungo, R. N., (1998). Charismatic
Leadership in Organizations. Thousand Oaks, CA: Sage.
59
Servant Leadership is explained beautifully in DePree, M., (2004). Leadership is an Art. New York: Crown
Publishing.
60
For a summary of Transformative Leadership, please see Caldwell, C., (2012). Moral Leadership: A
Transformative Model for Tomorrow’s Leaders. New York: Business Expert Press.
61
For a summary of Transactional Leadership, see Mountain, A. & Davidson, C., (2015). Working Together:
Organizational Transaction Analysis and Business Performance. New York: Routledge.

Leadership Perspective’s Defining Application to HRM Leadership

Perspective Characteristic
Authentic Demonstrating legitimacy, Establishing relationships based upon
honesty, and sincerity62 transparency, genuineness, and responsibility.
Values-Based Exemplifying self- Honoring responsibilities and pursuing
reflection, balance, self- outcomes that consistently reflect the
confidence, and humility63 organization and its values.
they play and the qualities that they display require a clear understanding of themselves,
the organization, their roles, and the needs of others. Becoming a great HRP requires
extensive knowledge-based preparation, impeccable character, a genuine concern for
others, and the rare ability of being able to incorporate these qualities in a vital
organization support role.
Figure 3.
The path to outstanding leadership is a journey that requires dedication, commitment,

and unflagging persistence in becoming one’s best self coupled with the willingness to
unselfishly help others to also become their very best64. Perhaps that unusual combination
is why there are so many leaders that struggle to earn the trust and followership of those
whom they seek to lead65.
For HRPs, we suggest twelve caveats, or advisory suggestions, that have practical
application and that are worth considering for all who wish to serve their organizations
and its employees.
62
For a review of Authentic Leadership, please read George, B. & Sims, P., (2007). True North: Discovering Your
Authentic Leadership. San Francisco, CA: Jossey-Bass.
63
For a review of Values-Based Leadership, please see Kraemer, H. M., (2007). From Values to Action: The Four
Principles of Values-Based Leadership. San Francisco, CA: Jossey-Bass.
64
Burns, J. M., (2010) op. cit.
65
The failure of leaders to earn the trust of followers is reported in dozens of surveys. See, for example, Gallup,
(2017). “Confidence in Institutions” found online on October 22, 2017 at http://news.gallup.com/poll/1597/
confidence-institutions.aspx.

1. Remember that leadership is always a relationship. Honor that relationship by

treating others the way that they wish to be treated (aka, “The Platinum Rule”)
whenever possible66. The Platinum Rule exceeds the standard of treating others
as you wish to be treated – as articulated by the Golden Rule67. Understand the
difference.
2. Adopt a Transformative Ethics perspective. Recognize and acknowledge the
broad range of duties owed to others. Use the Transformative Ethics model as a
tool by which to understand those many ethical duties and recognize the
importance of the subjective perceptions of others68.
3. To be trusted, first be “worthy.” Trustworthiness requires character, competence,
caring and capacity. Leaders who are trustworthy understand and demonstrate
each of these qualities69. Developing these qualities is a life-time growth process.
4. Think long-term as well as short-term. Optimal value creation requires
“sharpening the saw” as well as “cutting the wood70.” A common error made by
many would-be leaders is to focus short-term and compromise the long-term
implications of their choices71.
5. Honor your commitments. If -- due to unforeseeable circumstance -- you ever
find yourself in a position where you cannot honor a promise, immediately
communicate what has changed, why you need to amend your obligation, and
how you will make things right72.
6. Explain your rationale when making a decision. Clarify your basis for decision
making, how you assessed alternatives, and why you decided as you did73. This
important part of decision-making enables leaders to communicate their ethical
assumptions and their respect for the rights of others74.
7. Keep your personal mission in mind. Be clear about what matters most and do
not let your priorities be diverted by less important distractions. Carefully
66
See Economy, P., (2016). “How the Platinum Rule Trumps the Golden Rule Every Time.” Inc. March 17, 2016
found online on October 22, 2017 at https://www.inc.com/peter-economy/how-the-platinum-rule-trumps-the-
golden-rule-every-time.html.
67
Ibid.
68
For a review of the twelve ethical perspectives that encompass Transformative Ethics, see Caldwell, C., and
Anderson, V. “Transformative Ethics: An Integrative Model of Ethical Stewardship.” Paper presented at the
International Academy of Management and Business Conference in New Orleans, Louisiana on January 20,
2017 or Caldwell, C., 2017. “Transformative Ethics and Trust – Keys to Competitive Advantage” in
Competitive Advantage: Strategies, Management, and Performance, (C. Caldwell & V. Anderson, eds.).
Hauppauge, New York: NOVA Publishing or “Ethical Responsibilities of Human Resource Management: A
Format for Moral Conduct” in this book.
69
See Caldwell, C., and Ndalamba, K. K., 2017. “Trust and Being ‘Worthy’ – The Keys to Creating Wealth.”
Journal of Management Development, Vol. 36, Iss. 8, pp. 1076-1086.
70
The importance of this metaphor was developed in Covey, S. R., (2013). The Seven Habits of Highly Effective
People: Powerful Lessons in Personal Change. New York: Simon & Schuster.
71
See Pfeffer, J., (1998) op. cit.
72
This philosophy is clearly articulated in Thorstensen, O., (2018). Making Things Right: The Simple Philosophy of
a Working Life. New York: Penguin Books.
73
To fully understand why this principle is so important for those who seek to lead, please see Chapter 1 of
Hosmer, L. T., (2010) op. cit.
74
Ibid.

identify your personal mission and purpose and do not let what matters most be
sabotaged by that which is less important75.
8. Develop a passion that matters. Be certain that you have carefully assessed the
costs and the sacrifices required to achieve what you think matters most. Make
sure that your passion considers those whom you love and your personal mission
– including your relationship to the divine76.
9. Honor the community. Acknowledge the fact that you owe duties to others –
including others of future generations. By honoring duties to long-term results
and the world of tomorrow, you demonstrate your understanding of your moral
obligation to create a sustainable world77.
10. Rely upon others. You cannot do everything yourself and you can do much,
much more with others who share your passion and who love you. Cooperation is
the key to successful collaborative effort and building a coalition of supportive
and dedicated team members who follow correct principles allows you to expand
your influence78.
11. Balance your work and your other realities. Your family should be precious to
you and their needs must also be met. Maintain an appropriate balance in your
life and recognize the importance of the four key areas which make up your
voice: the spiritual, the intellectual, the emotional, and the physical79.
12. Live with no regrets. Learn from the past and appreciate its lessons – even the
ones that were horrific and painful. Then flourish from what you learn. Trials
teach powerful lessons, build character, and generate compassion80.
For HRPs, as with all leaders, there are no “guarantees” that following these twelve
principles will ensure success81. . . but we nonetheless advocate these principles as
guidelines for living more productive, fulfilling, and honorable lives82.
75
Covey, S. R., (1992) op. cit.
76
Covey, S. R., (2013) op. cit.
77
For insights about social responsibility and duties owed to future generations, please read Friedman, T. F., (2009).
Hot, Flat, and Crowded: Why We Need a Green Revolution -- And How it Can Renew America, Release 2.0.
New York: Picador and Anderson, V., Ndalamba, K. K., and Caldwell, C., (2017). “Social Responsibility in a
Troubled World: A Virtuous Perspective.” International Journal of Public Leadership, Vol, 13, Iss. 2, pp 98-
115.
78
For a review of the effective utilization of united teams, please see Fussell, C. & Goodyear, C. W., (2017). One
Mission: How Leaders Build a Team of Teams. New York: Penguin.
79
To understand the importance of true balance and its impact on personal fulfillment, please see Covey, S. R.,
(2004) op. cit.
80
For a review of this important advice, please read Joseph, S., (2013). What Doesn’t Kill Us: The New Psychology
of Posttraumatic Growth. New York: Basic Books.
81
Robert E. Quinn emphasizes that there are no guarantees for success. See Quinn, R. E., (1996). Deep Change:
Discovering the Leader Within. San Francisco, CA: Jossey-Bass.
82
For an explanation of the worth of these suggestions, consult Hasan, Z. and Caldwell,, C. 2016. “’Live Your Life
in Crescendo’ – Moral Insights from Stephen R. Covey.” Graziadio Business Review. Vol. 19, Iss. 1.
Available on line at http://gbr.pepperdine.edu/2016/04/live-your-life-in-crescendo/.

A CHALLENGE TO HRPS
The nature of HRM, the complexity of its roles, its demands on those who serve in
organizations, and the moral obligations implicit in HRM responsibilities make the task
of being an effective HRP daunting and difficult83. Effective HRM service requires a
profound understanding of a diverse set of facts, the skill to wisely apply information,
and the ability to serve others with energy and persistence84. There are no easy answers
for today’s organization in today’s competitive global world85. Leading people, serving
them, and helping them and the organization to achieve the best possible results are
difficult but exciting challenges86.
Those who wish to become successful HRPs in the truest sense need to carefully
develop a strategic understanding of the six roles of HRM. They must develop the
competencies to serve their organization and its individual departments. They must
command respect as business partners capable of assisting managers and employees to
achieve greater results. They must demonstrate a genuine commitment to the success of
their organization and its many members. And they must honor duties by the organization
owed to present and future stakeholders as well.
The challenge for HRPs is to raise the bar, increase their capabilities, and
demonstrate by their daily actions that they are committed partners and ethical stewards
who understand their role and who willingly and enthusiastically assist others as servant
leaders87. By developing the best attributes of the ten leadership perspectives, by
improving their ability to perform the five leadership functions, and by demonstrating the
key leadership traits desired by others, HRPS have the ability to make a profound
difference and to become valued leaders – not by their formal position but through their
contribution in helping others to achieve worthy goals.
Leadership Perspectives and the New HRP –

Case Study – By Dr. Sarah J. Smith
Sherry recently completed a Masters in Business Administration (MBA) with a

concentration in Human Resource Management. Upon employment with a local
manufacturer, she seemed as if she would be an effective leader. She studied leadership
while completing her advanced degree. Sherry was outgoing and seemed to be authentic.
83
This point is clearly made in Ulrich, D., Younger, J., Brockbank, W., & Ulrich, M. (2012). HR from the Outside
In. New York: McGraw-Hill.
84
Ibid.
85
Beer, M., (2009). High Commitment High Performance: How to Build a Resilient Organization for Sustained
86
Ulrich, D., Allen, J., Brockbank, W., Younger, J., & Nyman, M., (2009). HR Transformation: Building Human
Resources from the Outside In. New York: McGraw-Hill.
87
See DePree, M., (2004) op. cit.

At the plant, Sherry was struggling with a transactional leadership situation. The
office manager was earning less than one of the office team members. Time on the job
was about the same, and the office manager's position required additional skills and
abilities not required for the office team member. The office manager brought this
situation to Sherry's attention on several occasion, but there seemed to be no movement
nor hope for resolution.
Rumors about Sherry and the plant manager began. When traveling out of town for
business both would leave the day prior and stay a day later than necessary. Corporate
HR began to question key managers to ask if they had any evidence or knowledge of an
inappropriate relationship. This was a high-risk industry, and Sherry did roll out a
modular-style training program that was selected by corporate HRPs. The nature of the
modules covered mandatory required annual safety and environmental training. When
asked where previous training records were located, none could be found. Sherry voiced
that she did not want to maintain the safety training records and saw this as ‘not her job.’
At times, Sherry would network with other HRPs in the region from various
employers. She discovered some of the HRPs were making more than she earned and
brought this issue to the corporate HRPs and plant manager. A pay increase was granted.
Within the same year, Sherry again went to the corporate HRPs and plant manager stating
she had another job offer which paid more than her current salary. This time, corporate
HR wished her well in her new endeavor.
1. Of the Ten Leadership Perspectives, as applied to HRM select two describe

perspectives that Sherry's actions compromised. Explain how her choices or
approaches met or failed to meet the respective perspectives.
2. Do you agree with upper management’s decision to deny Sherry’s second request
for additional compensation and to pursue other career opportunities? Why or
why not?
3. Aside from possible ethical or moral breaches, what might Sherry do differently
at her next position to encourage organizational success?
Leadership Perspectives: CEO Versus Vice President of Human Resources –

Case Study – By Dr. Sarah J. Smith
In a city of 22,000 residents, the local hospital was its largest employer. While many
of the employees appeared to enjoy working at the hospital, others met their demise in
what seemed to be for mysterious reasons. One example: a nurse was terminated for
missing work. When she examined her schedule, she discovered that she was not actually
scheduled to be on duty that day. Another example: a director was sent for a psychiatric
evaluation when employees complained she was too introverted. Although the results of

the examination did not find justification, she was nonetheless escorted out of the facility
with her box of belongings and terminated.
The CEO seemed by many measures to be a pillar of the community. He was active
in civic clubs, politics, and a leader at church. The CEO was personally charismatic but
was weak with regards to his long-term commitment and had decided to sell the hospital.
The Vice President of HRM had been promoted from the office pool and had no prior HR
experience. She was known within the organization as 'the hatchet woman'. When
something distasteful was to happen, such as a questionable termination, she would be
person to execute the CEO's request.
Upon the sale of the hospital, which transformed the facility from non-for-profit to
for-profit, the hospital’s leadership changed. The new CEO had been a nurse and thus,
had previously worked in clinical settings hands-on. This experience provided him with a
high level of personal credibility with the clinical staff. He was not, however, charismatic
and in contrast to the previous CEO, was quite introverted. With his own style, he
nonetheless sincerely cared about the organization and the employees.
The new Vice President of HRM was also a stark contrast to her predecessor. As
previous director of staff development, she heavily promoted a learning culture a
commitment to constant learning and improvement. She was also personally charismatic
and showed passion for her role and the direction of the organization. Some employees
welcomed the new beginning and leadership changes with high hopes for the future.
Others, naturally, were uncertain as to how the changes would affect them.
1. If the first Vice President of HRM had been more of a charismatic leader, would
this leadership style have helped improve her acceptance by the hospital’s
employees? Why or why not?
2. For the employees who seemed to enjoy working at the hospital, do you think
some were merely happy to be gainfully employed? What would be an approach
an HRP in leadership could initiate in order to gain insight on the organization's
environment and culture?
3. At times when morale was low and the environment was changing, which of the
Leadership Perspectives would best support and encourage the employees? Do
you believe leaders can enhance their leadership capacities in certain areas, or,
are those qualities naturally predetermined?
REFERENCES
Anderson, V., Ndalamba, K. K., and Caldwell, C., (2017). “Social Responsibility in a
Troubled World: A Virtuous Perspective.” International Journal of Public
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Executive. Cambridge, MA: Harvard College.
Beer, M., (2009). High Commitment High Performance: How to Build a Resilient
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& V. Anderson, eds.). Hauppauge, New York: NOVA Publishing.
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Stewardship.” Paper presented at the International Academy of Management and
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Caldwell, C., and Dixon, R. D. 2010. “Love, Forgiveness, and Trust: Critical Values of
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Contract – Moral Insights for the Modern Leader.” Journal of Management
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Caldwell, C., Ichiko, R., and Anderson, V., (2017). “Understanding Level 5 Leaders --
The Ethical Perspective of Leadership Humility.” Journal of Management
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Collins, J., (2001). Good to Great: Why Some Companies Make the Leap . . .And Others
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DePree, M., (2004). Leadership is an Art. New York: Crown Publishing.

Economy, P., (2016). “How the Platinum Rule Trumps the Golden Rule Every Time.”
Inc. March 17, 2016 found online on October 22, 2017 at https://www.inc.com/peter-
economy/how-the-platinum-rule-trumps-the-golden-rule-every-time.html.
Friedman, T. F., (2009). Hot, Flat, and Crowded: Why We Need a Green Revolution --
And How it Can Renew America, Release 2.0. New York: Picador Gallup, (2017).
“Confidence in Institutions” found online on October 22, 2017 at
http://news.gallup.com/poll/1597/confidence-institutions.aspx.
Fussell, C. & Goodyear, C. W., (2017). One Mission: How Leaders Build a Team of
Teams. New York: Penguin.
George, B. & Sims, P., (2007). True North: Discovering Your Authentic Leadership. San
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Extraordinary Things Happen in Organizations (6th ed.). San Francisco, CA: Jossey-
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Kouzes, J. M. & Posner, B. Z., (2011). Credibility: How Leaders Gain and Lose It Why
People Demand It. San Francisco, CA: Jossey-Bass.
Kraemer, H. M., (2007). From Values to Action: The Four Principles of Values-Based
Leadership. San Francisco, CA: Jossey-Bass.
Mountain, A. & Davidson, C., (2015). Working Together: Organizational Transaction
Analysis and Business Performance. New York: Routledge.
Pava, M., (2003). Leading with Meaning: Using Covenantal Leadership to Build a Better
Organization. New York: St. Martin’s Press.
Quinn, R. E., (1996). Deep Change: Discovering the Leader Within. San Francisco, CA:
Jossey-Bass.
Thorstensen, O., (2018). Making Things Right: The Simple Philosophy of a Working Life.
New York: Penguin Books.

Ulrich, D., Allen, J., Brockbank, W., Younger, J., & Nyman, M., (2009). HR
Transformation: Building Human Resources from the Outside In. New York:
McGraw-Hill.
Ulrich, D., Younger, J., Brockbank, W., & Ulrich, M. (2012). HR from the Outside In.
New York: McGraw-Hill.

Chapter 4
JOB ANALYSIS: THE BUILDING BLOCK OF

HUMAN RESOURCE MANAGEMENT
Cam Caldwell
Muscat, Oman
The technical skills of Human Resource Management (HRM) are logical and straight
forward, but rarely fully understood by individual employees, managers and supervisors,
the Top Management Team--or even by some Human Resource Professionals (HRPs).
Although it is generally understood that the job analysis is a critical foundation element
of HRM, errors are frequently made in conducting a job analysis, documenting job
requirements, and using that information to insure that an organization is able to
accomplish outcomes that are critical to an organization’s success.
As the building block for many organizational systems and HRM programs, the job
analysis not only defines critical job elements but is an important resource in generating
management information used to guide an organization as it accomplishes its mission88.
The purpose of this chapter is to explain key elements that make up a job analysis, to
identify how and why the job analysis is so critical to organizational outcomes, and to
enumerate common errors made in conducting a job analysis. We begin the chapter by
defining the job analysis and identifying eight key steps in the job analysis process. The
chapter identifies twelve important organizational and HRM elements that utilize job
analysis information to achieve vital outcomes. We then identify seven errors that occur
in conducting a job analysis and suggest how to mitigate those errors. The chapter
concludes with a summary of the contributions of this chapter to HRM.
88
This key role of the job analysis is identified in Mathis, R. L., Jackson, J. H, Valentine, S. R., & Meglish. P. A..,
(2014). Human Resource Management (15th ed.) pp. 144-147.

44 Cam Caldwell
DEFINING THE JOB ANALYSIS
A job analysis has been described as the essential element for virtually all of the
HRM functions89 and “the basis for the solution of virtually every human resource
problem”90. The job analysis provides a means for understanding the Knowledge, Skills,
Abilities, and Other requirements (KSAOs) essential to the performance of each
organizational position
Job analysis is defined as the systematic process for identifying the nature and
outcomes of a position by determining the specific tasks and activities performed to
achieve desired results and the context in which work is performed91.
Figure 15
Typical outcomes of the job analysis include identifying the most efficient ways of
performing work tasks, the enhancement of employee job satisfaction, opportunities to
improve training, development of performance measurement systems, and matching job
requirements with individual qualifications as part of employee selection and
development92. Conducting a job analysis begins by first understanding the purpose of an
organization, its structure and design, its context within its external environment, and its
available resources93.
89
Many texts confirm this key fact. See, for example, Prien, E. P., Goodstein, L. D., Goodstein, J., and Gamble, L.
G. Jr., (2009). A Practical Guide to Job Analysis. San Franciso, CA: Pfeiffer.
90
This profound statement is found on page 1 of Brannick, M. T., & Levine, E. L., (2007). Job Analysis: Methods,
Research, and Application. Thousand Oaks, CA: Sage.
91
This definition incorporates insights from other scholars. See, for example, Brannick, M. T., & Levine, E. L.,
(2007), op. cit. page 9.
5
See the Business Dictionary definition of job analysis found online on August 5, 2017 at
http://www.businessdictionary.com/definition/job-analysis.html.
93
Ibid.

Job Analysis 45
Figure 2.
CONDUCTING A JOB ANALYSIS
Although there are differing perspectives about the steps involved in conducting a job
analysis, the job analysis typically includes eight important steps:
1) Determine the Job to be Analyzed and its Contribution to Organization

Mission. Every position in an organization exists to further the mission and
objectives of an organization. The outcomes and results of each position must be
defined in measurable terms94.
2) Identify Subject Matter Experts and Participants to Include in the Process. A
job analysis is best conducted by individuals who have a clear understanding of
the expectations, requirements, and outcomes associated with the position being
analyzed. Internal and external “customers” of the position have valuable
insights, as do colleagues who work with and are interdependent with the
position. Relationships developed are often critical to the effective performance
of any position and should be considered, along with task-related outcomes and
expectations95.
94
Ibid.
95
Many varied studies have been conducted about participants participating in generating job analysis information.
One such study is Truxillo, D. M., Paronto, M. E., & Collins, M., (2004). “Effects of Subject Matter Expert
Viewpoint on Job Analysis Results.” Public Personnel Management, Vol. 33, Iss. 1, pp. 33-46,

46 Cam Caldwell
3) Systematically Collect Information about the Job. There are many sources of
job information, ranging from such resources as a previously developed job
description, classification standards, established performance measures, and
specialized job audits96. Identifying job tasks, relationships, performance
outcomes, required skills, specialized abilities, necessary knowledge, and other
job-related criteria form the foundation of the job analysis97.
4) Matching Job Content with Competencies and Requirements. Each source of
job information can be useful in identifying the factors that are necessary in the
successful achievement of job outcomes. Carefully matching job content with
those competencies and requirements results in a detailed list of qualities
essential for performing successfully98.
5) Identifying Critical Tasks and Results. Subject Matter Experts and other
stakeholders who are involved should rank the importance of those tasks and
results which are most important and essential for achieving organizational
priorities for the position being analyzed99. Often these critical tasks and
outcomes require collaborative effort with other organizational personnel and the
nature of that cooperation should be clearly described and included100.
6) Identify Competencies Matching Tasks and Results. Ranking critical
competencies is essential in order to identify the most important capabilities
required to achieve desired outcomes101. The ability to translate KSOAs into
specific competencies demands that each of those outcomes and their antecedents
be clearly enumerated.
7) Formally Confirm the Overall Job Elements. Compile and review all of the
information generated in the job analysis process and reaffirm that the job tasks
and competencies accurately match the purposes of the position and their
contribution to desired organizational outcomes102.
8) Document the Final Result. Publish the job analysis, identify and document
when it was conducted, and formally adopt it as a summary of the purposes,
tasks, and requirements of the position being analyzed103.
96
See Prien, E. P., et al., (2009) op. cit. for examples of various methods of generating job content information.
97
Brannick, M. T. & Levine. E. L., (2007) op. cit.
98
rien, E. P., et al., (2009) op. cit.
99
Truxillo, D. M., et al., (2004) op. cit.
100
he importance of behavioral skills and relationship competencies are documented in sources such as Van Scotter,
J. R., & Motowidlo, S. J. (1996). “Interpersonal Facilitation and Job Dedication as Separate Facets of
Contextual Performance. Journal of Applied Psychology, Vol. 81, Iss. 5, pp. 525-531.
101
Prien, E. P., et al., (2009) op. cit.
102
Involve stakeholders, managers and supervisors, and Subject Matter Experts, as noted in Truxillo, D. M., et al.,
(2004) op. cit.
103
Documentation and formalization of the process provides a formal record which can be used as an organization
resource. See Brannick, M. T. & Levine. E. L., (2007) op. cit.

Job Analysis 47
Although there are several ways of conducting a job analysis in the process of
gathering and verifying job content information and job requirements, these eight steps
are applicable and necessary in order to confirm that job analysis information generated
is both complete and correct104.
Figure 3.
HRM SYSTEMS AND PROCESSES
Utilizing the information generated by the job analysis, many HRM functions depend
upon that information in serving the organization. Brannick and Levine have identified
twelve distinct HRM systems and processes, which they describe as HRM “purposes or
uses,” that are directly affected by the job analysis105.
1) Preparing Job Descriptions. The job analysis enables HRPs to prepare a job
description which includes a job title, an overall job summary, duties and tasks,
and job qualifications.
2) Establishing Job Classifications. A job classification is a cluster or family of
related jobs based upon similar duties, responsibilities, and authority. The job
analysis provides information then confirms or disconfirms the linkage between
positions.
104
Ibid.
105
These twelve important technical HRM tasks are all accomplished more effectively with the aid of a high quality
job analysis. See Ibid., pp. 3-5.

48 Cam Caldwell
3) Job Evaluation. Because a job analysis documents the work to be performed and
the qualifications required for a position, it enables an organization to establish a
pay range for that position and to help insure internal equity of compensation
among positions within an organization.
4) Job, Team, and System Design, and Redesign. Job design bundles tasks into a
position. Team design bundles an integrated set of tasks to a team. Systems
design assigns tasks to equipment and people associated with the same
organizational system. Redesign is about improving job, team, or system
efficiency.
5) Human Resource Requirements and Job Specifications. The job analysis
identifies the KSAOs required that are necessary for the effective performance of
a position. Job specifications refer to the years of required experience. This
information is essential for hiring, promotion, and compensation issues.
6) Performance Appraisal. Performance appraisal identifies the standards of
quantitative and qualitative performance of positions in achieving organizational
goals. Performance reviews are conducted by managers and supervisors to
communicate expectations, coach employees, and provide regular feedback.
7) Training. The job analysis enables an organization to identify types of training
needed by employees in various positions. Training improves individual
performance, stimulates workplace learning, and facilitates constant
improvement.
8) Worker Mobility. The job analysis can aid organizations in identifying qualified
candidates as positions change, as promotional opportunities arise, and as
employees consider career opportunities beyond their current positions.
9) Workforce Planning. Information about employee qualifications and capabilities
can assist organizations as they consider the impacts of organization growth,
succession planning, and technological impacts on the organization.
10) Efficiency Identification. The job analysis can be a useful tool in identifying the
need for better tools, eliminating tasks which add little or no value, and
developing quality-related work aids.
11) Safety. The job analysis can help to identify opportunities to reduce risk or the
causes of accidents or injuries. Work tools, the work environment, and work
processes can be improved using job analysis data.
12) Legal and Quasilegal Requirements. Several HRM functions and processes
must comply with legal guidelines and the job analysis can play a major role in
confirming the legal nature of many of those functions and processes. For
example, a job analysis can identify Bona Fide Occupational Qualifications
required in selection and testing candidates.

Job Analysis 49
All twelve of these HRM functions, systems, and processes are directly benefited by
the information generated by the job analysis, confirming its importance as the
fundamental building block of HRM106.
JOB ANALYSIS ERRORS TO AVOID
Despite the fact that the job analysis is a vital part of every HRM system, a recurring
set of errors are frequently made in conducting a job analysis. The consequences of
making one or more of these mistakes not only undermine the ability of an organization
to perform the twelve HRM functions listed herein but challenge the credibility of HRPs
and the entire organization. Nonetheless, these errors recur from time to time in
organizations of all types.
1) Failure to Focus on Contribution to Mission. Each organizational position

exists to contribute to the organization’s mission and purposes. The focus of a job
analysis requires identifying tasks performed but those tasks sometimes get out
of balance with the organization’s fundamental goals. Conducting the job
analysis must always be done with the organization’s mission and purpose
clearly in mind107.
2) Overlooking Key Stakeholders. The value and credibility of the job analysis
demands that key stakeholders -- both internal and external customers – have
input in either developing the job analysis or reviewing the final product. Inviting
departmental or union employees into job analysis development meetings and
explaining the process for developing the job analysis can increase employee
trust in the HRM role and build credibility108.
3) Imposing Unnecessary Job Requirements. Occasionally, managers and
supervisors who participate in a job analysis make the mistaken but well-
meaning assumption that it is in the interest of their organization to establish
higher standards for job qualifications than are actually needed to perform the
required job tasks. Imposing such qualifications that are not required is in
conflict with the law and job requirements must be validated as Bona Fide
Occupational Qualifications. HRPs must sometimes be especially tactful in
explaining the difference between legal requirements and qualifications that a
106
Prien, E. P., et al., (2009) op. cit.
107
Ibid.
108
One of the co-authors of this chapter chose to involve union employees as both observers and participants in the
development of a job analysis in an organization rife with political conflict and a history of employee
dissatisfaction. The outcome was that the employees in that union bought into the testing and selection process
ultimately developed for the first time in the organization’s ten-year history

50 Cam Caldwell
supervisor views as “desirable” to include as a requirement for performing a

position109.
4) Failing to Update Old Analyses. Jobs change over time. Technology evolves.
Yet organizations continue to act as if job requirements and job content are
unchanging. It is not unusual for organizations to pull out an old job description
or job analysis and “short-cut” the job analysis by substituting old information
that no longer applies110.
5) Overlooking Team Collaboration and Interpersonal Skills. Focusing on
technical job requirements can help insure that individuals are qualified to
perform job functions that are absolutely necessary for successful performance.
At the same time, individuals in organizations must also work effectively as
members of a team and must cooperate effectively with others within their
department and within their organization. Overlooking key interpersonal skills
can be an expensive mistake in conducting a job analysis and can result in hiring
technically skilled individuals who are ineffective in working with others111.
6) Missing Critical “Flair Factors”. Flair factors are those difficult-to-define
qualities that individuals possess that make the difference between a performer
that “looks good on paper” and one that is able to get a job done extraordinarily
well112. Although individual personal factors, like perseverance and passion, are
often difficult to articulate in a job analysis, those factors are often critical
differentiating qualities of a successful versus an unsuccessful performer113.
7) Skipping Steps. Although conducting a job analysis may seem to be a detail-
oriented and time consuming process, with effective planning the process can be
conducted both quickly and correctly. Unfortunately, a common error made in
many organizations is the skipping of steps in the process due to the press of time
and other responsibilities. The result of skipping steps is often the costly error of
developing an inaccurate job analysis – a mistake which can create a negative
domino effect throughout many parts of an organization114.
109
The Griggs vs. Duke Power Case clearly identified the importance of Bona Fide Occupational Qualifications and
struck down an artificial and discriminatory requirement that employees needed a high school degree to
perform job tasks. See Mathis, R. L., (2014) op. cit.
110
This common mistake was made by a large municipality in which the Police Chief wanted to utilize a thirty year-
old job analysis as the basis for developing a selection process for new police officers.
111
Increasingly, organizations have recognized the importance of team collaboration and interpersonal
qualifications for many positions which involve cooperative effort to achieve vital tasks. See Goleman, D.,
(2007) Social Intelligence: The New Science of Human Relationships. New York: Bantam.
112
The concept of “flair factors” was written about in Irish, R. K., (2011). “Focusing on the Flair Factor.”
America’s Civil War Magazine. Sept. 22, 2011 found online on August 7, 2017 at
http://www.slideshare.net/Talentplus/the-flair-factor,
113
This powerful truth is the subject of Duckworth, A., (2016). GRIT: The Power of Passion and Perseverance.
New York: Scribner.
114
This point is powerfully made in the outstanding book, Russo, J. E., & Shoemaker, P. J. H., (2001). Winning
Decisions: Getting it Right the First Time. New York: Currency.

Job Analysis 51
As with any important task, conducting a job analysis requires a thorough

understanding of its key components, thoughtful attention to detail, and a commitment to
excellence in producing a product that has profound implications throughout every
organization.
CONTRIBUTIONS OF THE CHAPTER
The job analysis is a building block of HRM because it focuses on the important
tasks upon which competitive advantage, service to customers, and constant improvement
are based. Although there are many useful methods for conducting a job analysis, the
focus of this chapter has been on understanding the job analysis role, identifying its
organizational significance, and articulating errors to avoid in the job analysis process.
Thus, there are three major contributions of this chapter.
1) Explaining the importance of the job analysis. As we have noted, the job
analysis has ramifications organization-wide and can be a powerful tool for
HRPs in serving other departments.
2) Clarifying the scope and significance of the job analysis. Identifying twelve
important functions that are dependent upon the job analysis help to clarify the
need to conduct a job analysis that is accurate, valid, and complete. The
significance of a job analysis is profoundly personal for each employee because,
when done correctly, it provides the organization with information that properly
frames the expectations for each employee’s performance.
3) Cautioning regarding common job analysis errors. The seven common errors
identified in this chapter are important for HRPs, Subject Matter Experts,
managers, and supervisors to review as they prepare to participate in the job
analysis process. Avoiding these errors enables participants to create an end
product that will truly add value to the organization.
The job analysis, like so many key foundational tasks, must be done correctly and
efficiently if it is to be a valuable tool for effective HRM. As HRPs review the key steps
required in conducting a job analysis, the insights from this chapter are a helpful resource
with ramifications organization-wide.
Questions to Ponder
1) As you reflect on the key steps required in conducting a job analysis, which of
these steps do you consider to be most critical? Which step do you think is most
frequently overlooked?

52 Cam Caldwell
2) In what way is preparing a job analysis a task that requires extensive preparation?
How should the importance of job requirements and job outcomes be decided?
3) How do you think HRPs should resolve questions about differences of opinion
regarding the contents of a job analysis and the requirements for a position?
A Shocking Termination – Case Study – by

Dr. Sarah J. Smith
At a manufacturing corporation, Ben was hired as the new Vice President of

Operations. During the interview process the C-level suite was impressed with his
credentials and experience. They felt comfortable with selecting Ben and looked forward
to his arrival. One of the technical units Ben would be responsible for was New Product
Development. The team included highly capable, well educated subject matter experts.
This team had a long history of product development success through innovation and
formulated powerful suggestions for new creative solutions to today's and future
challenges.
Michael had worked in product development for ten years. He was revered for his
work ethic, coupled with a high level of intelligence and creativity. Michael was known
to work six hours at the home plant and then drive two hours to another facility. He
worked into the night and put in long hours. Coworkers on the New Product
Development team were under the impression Michael's work was well respected and
had value. What happened next shocked the conscience of members on Michael's team.
Everyone in the organization received an email that Michael had been terminated,
effective immediately. With the number of hours he dedicated to the company and the
creative solutions he contributed, this seemed to be an irrational decision on the part of
Ben. After all, Ben had only served as Vice President of Operations for three weeks. The
nature of a sudden and unanticipated termination left many organizational members with
questions.
1) What role could the HRM staff have played in this process? Would HRM staff
have been able to assist the Vice President of Operations in only three weeks?
2) When matching job content with competencies and requirements, Michael
definitely met the requirements of the job. Do you think Michael could have been
perceived as overqualified or overzealous?
3) Could Ben have gone back to Michael's job description or performance review
for more information about Michael's roles, responsibilities, and job
expectations? If he did not do so, do you think Ben assumed organization risk
with Michael's seemingly sudden termination?

Job Analysis 53
Outdated Job Descriptions Lead to a Creative Solution – Case Study – by

Dr. Sarah J. Smith
In a growing organization that does not have its own in-house HRM staff, the
decision was made to reevaluate the budget. With cooperation from various department
heads, budgets were rearranged and Julie was hired. She came to the organization with a
proven track record for successful HR office start-ups and everyone was happy to have an
HRP full-time, on staff.
Prior to the decision to create an HRP position, the company’s HR functions were
outsourced. This outsourcing created several issues because, although the relationship
with the vendor began positively and company representatives visited the location
frequently, over time this relationship changed. Department heads saw an HR vendor
representative only about once per year. Simultaneous with decreased service, the vendor
consistently increased the billing price for services.
When Julie came on board as Director of Human Resources, she was surprised how
outdated many HR functions had become. There was a 4 inch red binder in Julie's office
containing the organization's job descriptions. Unfortunately, the job descriptions were
ten years old. There were no records to clarify if and how job analysis was conducted.
Further, the performance review form was a template that did not 'fit' many of the jobs
within the organization.
The department head for transportation asked Julie to place an ad for a new driver.
Knowing how outdated the job descriptions were, along with the sheer number of job
descriptions which were in need of review and likely revision, Julie formulated a plan.
She was a one-person office and knew it would take time to gather input from key
stakeholders and structure a review of all job descriptions. Julie also felt uncomfortable
posting an open position without an accurate job description in place.
Julie decided prior to posting an open position, she would assist the department head
to create a focus group and review the needed knowledge, skills, abilities and other
conditions necessary for job success. This process worked well because
a) Julie inched toward the ultimate goal: quality job analysis producing accurate job
descriptions, and
b) The hiring department head did not want to leave an open position for an
extended period of time. The organization was lean, and every worker was
important to fulfillment of the mission and delivery of services.
From the updated job description, Julie drafted a job posting and had the department
head approve what would be advertised. When it came time for interviews, Julie used the
revised job description to formulate an interview guide of job-related questions for the
interview panel.

54 Cam Caldwell
1) If you were the transportation department head, how would you decide who to
involve in the job analysis? (Your department runs three shifts and in addition to
drivers, dispatch personnel are employed at the facility)
2) Who would be key external stakeholder participants? This department provides
much needed transportation in an area without other public transportation. Riders
travel to various destinations. Fares are based on ridership and input costs of
operation.
3) How should Julie work with the department heads to design a system for the job
analysis and job description revision process?
4) If employees feel they are not equitably compensated for their work, could they
look at the job description to see if the knowledge, skills, and abilities indicated
still describe what is needed to successfully achieve the job duties? What other
indicators could be helpful for a strategic compensation review?
5) Upon revision of the job descriptions, how would you proceed with updating the
performance review process?
REFERENCES
Brannick, M. T., & Levine, E. L., (2007). Job Analysis: Methods, Research, and
Application. Thousand Oaks, CA: Sage.
Duckworth, A., (2016). GRIT: The Power of Passion and Perseverance. New York:
Scribner.
Goleman, D., (2007) Social Intelligence: The New Science of Human Relationships. New
York: Bantam.
Irish, R. K., (2011). “Focusing on the Flair Factor.” America’s Civil War Magazine. Sept.
22, 2011 found online on August 7, 2017 at http://www.slideshare.net/Talentplus/the-
flair-factor.
Mathis, R. L., Jackson, J. H, Valentine, S. R., & Meglish. P. A.., (2014). Human
Resource Management (15th ed.) pp. 144-147.
Ployhar, R. E., and Moliterno, T. P., (2011). “Emergence of the Human Capital Resource:
A Multilevel Model.” Academy of Management Review, Vol. 36, No. 1, pp. 127-150.
Prien, E. P., et al., (2009) op. cit. for examples of various methods of generating job
content information.
Prien, E. P., Goodstein, L. D., Goodstein, J., and Gamble, L. G. Jr., (2009). A Practical
Guide to Job Analysis. San Franciso, CA: Pfeiffer.
Russo, J. E., & Shoemaker, P. J. H., (2001). Winning Decisions: Getting it Right the First
Time. New York: Currency.

Job Analysis 55
Truxillo, D. M., Paronto, M. E., & Collins, M., (2004). “Effects of Subject Matter Expert
Viewpoint on Job Analysis Results.” Public Personnel Management, Vol. 33, Iss. 1,
pp. 33-46,
Van Scotter, J. R., & Motowidlo, S. J. (1996). “Interpersonal Facilitation and Job
Dedication as Separate Facets of Contextual Performance. Journal of Applied
Psychology, Vol. 81, Iss.5, pp. 525-531.

Chapter 5
ETHICAL RESPONSIBILITIES OF
HUMAN RESOURCE MANAGEMENT:
A FRAMEWORK FOR MORAL CONDUCT

1
Distinguished Visiting Scholar, Modern College of Business and Science,
Muscat, Oman
2
Over thirty years ago, the University of Michigan’s LaRue Hosmer explained that
Human Resource Management (HRM) involved a multitude of moral and ethical
responsibilities that were both explicit and implicit in an organization’s obligations to its
multiple stakeholders. Hosmer’s work at that university laid the foundation for the Ross
School of Business’ commitment to ethics in leadership and the importance of values in
the modern organization. Hosmer wrote, “All of the basic human resource processes have
some ethical content.” Moreover, he added that Human Resource Professionals (HRPs)
have a critical ethical role whenever organization policies can or do harm individual
employees.
The purpose of this chapter is to provide a framework for examining the nature of the
ethical duties and benefits obtainable when leaders and organizations honor the
responsibilities both explicit and implicit in the HRM relationships created in
organizations. By the very nature of this subject, it is neither possible nor appropriate to
attempt to articulate all of the ways in which organizations, leaders, and HRPs may
misstep in failing to honor those ethical duties. Nonetheless, this chapter will focus on
guiding principles which can aid leaders and professionals as they reflect on their ethical

Figure 1.
and moral responsibilities. We begin the chapter by presenting a summary of the ethical
and moral responsibilities owed by HRPs to their respective stakeholders. We provide a
model for assessing ethical responsibilities which Hosmer developed and a virtuous
moral continuum for examining individual and organizational conduct. We then
introduce twelve ethical perspectives of Transformative Ethics and describe their
importance in interpersonal relationships. After listing six principles which scholars have
identified as HRM-related ethical guidelines, we conclude the chapter with a summary of
the chapter’s contributions to the HRM literature.
Ethical Principles
of Human
Resource
Management
Figure 2.

Ethical Responsibilities of Human Resource Management 59
ETHICAL RESPONSIBILITIES OF HRPS
In context with the six strategic roles of HRM identified in Chapter Two of this book,
we suggest that organizations and HRPs owe a complex set of ethical responsibilities to a
multitude of stakeholders115. Table 1 summarizes seven ethical responsibilities116
associated with those six strategic roles.
There are multiple stakeholders to whom HRPs owe ethical obligations, and in many
organizations these responsibilities are performed less than effectively.
The following is a list of seven of those stakeholders and a description of obligations
owed to each of them.
New Employees – Special responsibilities are owed to newly hired employees to

assist them in their transition into an organization117. The challenges facing new
employees are properly addressed in a well-planned and administered onboarding
process. The effective socialization of new employees benefits not only those individuals
but also the colleagues with whom they work, as well as the productivity and profitability
of their work divisions and the entire organization118.
All Employees – HRPs have the obligation of helping employees to achieve their
potential, within the framework of the organization’s mission and purpose119. Creating an
environment that empowers and engages employees and providing opportunities for
constant learning and growth enable employees to become their best and honor the
covenantal obligations of leaders120.
Top Management Team – As an important staff function, the HRM staff serves the
mission of the organization and the goals and purposes defined by its Top Management
Team. HRPs serve as valuable resources when they accomplish the six HRM roles
outlined in Chapter Two of this text.
115
The duties of HRPs to stakeholders have been addressed by many scholars and seven duties owed to
stakeholders are addressed in Caldwell, C., Gruys, M. L. & Thornton. “Public Safety Assessment Centers: A
Steward’s Perspective.” Public Personnel Management, Vol. 32, Iss. 2, pp. 229-249.
116
These seven duties or responsibilities come directly from the previously cited article and have also been
identified as key elements of organizational trustworthiness. See Caldwell, C. (2004). Organizational
Trustworthiness: A Developmental Model. Pullman, WA: Washington State University and Caldwell, C. &
Clapham, S., (2003). “Organizational Trustworthiness: An International Perspective.” Journal of Business
Ethics, Vol. 47, Iss. 4, pp. 348-364.
117
Unfortunately, these obligations and responsibilities are frequently overlooked in many organizations. See, for
example, Caldwell, B. G., and Caldwell C., 2016. “Ten Classic Onboarding Errors: Violations of the HRM –
Employee Relationship.” Business and Management Research, Vol. 5, No. 4, pp. 47-55 and available online at
http://www.sciedu.ca/journal/index.php/bmr/article/view/ 10672/6501.
118
See also Caldwell, C. and Peters, R. (In Press). “New Employee Onboarding – Psychological Contracts and
Ethical Perspectives.” Paper accepted for publication in the Journal of Management Development.
119
See DePree, M., (2004). Leadership is an Art. New York: Crown Publishing for an articulation of this moral
responsibility.
120
These obligations are set forth in Pava, M., (2003). Leading with Meaning: Using Covenantal Leadership to
Build a Better Organization. New York: St. Martin’s Press and Caldwell, C., and Hasan, Z. (2016). “The
Covenantal Leader – Honoring Implicit Relationships with Employees.” Graziadio Business Review, Vol. 19,
Iss. 2 and available online at http://gbr.pepperdine.edu/ 2016/10/the-covenantal-leader.

Table 1. Ethical Responsibilities and Strategic HRM Roles
Align Culture Technical HRM Business Partnering Listen & Empower Constant Improvement Responding to Change
Tasks
Competence Understand cultural Demonstrate skills Aid departments to Monitor and support Align training and Understanding and
factors and their in performing all. address needs for employee concerns and learning and assist anticipating
impacts. improvement as help management best departments in environmental factors.
internal resources. use employees. achieving their goals.
Legal Honor the spirit of the Understand all legal Help departments meet Balance employee and Go beyond what is Identify and resolve
Compliance law rather than just the implications. obligations. company interests. legally required to honor legal issues related to
letter. covenantal duties. changes.
Need to Clarify cultural Serve as technical Assist departments in Share employee Identify and Explain how HRM can
Inform elements to employees resources for understanding best concerns with top communicate learning facilitate change
and their implications departments as practices available. management and advise opportunities. management.
to management. needed. management.
Procedural Establish policies and Ensure that Assist departments to Clearly communicate Provide opportunities Implement changes by
Fairness systems that reinforce technical tasks are create procedurally and provide for individuals and communicating clearly
values and that are procedurally fair fair improvements. opportunity for input departments at all levels to parties affected and
communicated and and communicated. and discussion. to become their best. encourage input.
fair.
Interactional Treat all parties with Ensure that HRM Help departments to Demonstrate a Pursue solutions that Seek to optimize the
Courtesy dignity, courtesy, and tasks performed create win-win commitment to best create win-win long-term stewardship
respect. achieve best solutions. interests of employees opportunities for all interests of
interests of all. and the organization. parties by optimizing stakeholders.
results.
Financial Establish realistic Provide resources to Identify most effective Recognize the value of Assist in identifying Assist in identifying
Balance goals and provide perform tasks ways to optimize making employees behavioral implications realistic financial
adequate resources to correctly. return on investment. partners in organization of decisions and their implications of options
achieve them. success. long-term impacts and decisions.
financially.
Quality Focus on creating a Perform all HRM Assist departments in Help create systems Focus training on Recognize the
Assurance culture based upon tasks at the optimal identifying best and programs that treat opportunities to improve importance of creating
excellence and model level and options rather than employees as systems that reinforce and maintaining a
that standard. demonstrate merely empowered partners. values and ensure best competitive advantage.
expertise. “satisficing.” results.

Figure 3.
The Human Resource Profession – As HRPs demonstrate high competence,

personal integrity, and leadership insight they add value to the image of their profession
and contribute to its ability to add value in a world where HRM is not always viewed as a
strategic contributor to organization success1.
Society at Large – HRPs and their organizations have the moral duty to create both
short-term and long-term wealth, to add value to society, and to do no harm2. By
honoring their responsibilities in helping their organizations to be globally competitive,
HRPs simultaneously honor their obligations to a society struggling to deal with
problems of environmental pollution and a host of other global problems3.
Themselves and Their Families – HRPs owe a moral duty to discover their own
greatness and to become the best possible version of themselves4. They owe this duty to
their families for whom they are responsible economically, to themselves, and to their
higher power – as well as to a world struggling to deal with difficult economic and social
issues5.
1
See, for example, Mathis, R. L, Jackson, J. H., Valentine, S. R., & Meglish, P. A. (2016). Human Resource
Management (15th ed.). Boston, MA: Cengage Learning for their insights about the important role of HRPs
and the HRM function.
2
This obligation to society is clearly articulated in Lennick, D. & Kiel, F., (2011). Moral Intelligence 2.0:
Enhancing Business Performance and Leadership Success in Turbulent Times. Boston, MA: Pearson
Education.
3
This obligation is set forth in such highly regarded works as Friedman, T. L., (2009). Hot, Flat, and CrowdedWhy
We Need a Green Revolution -- And How it Can Renew America Release 2.0. New York: Picador.
4
This set of personal obligations is clearly articulated in Covey, S. R., (2004). The 8th Habit: From Effectiveness to
Greatness. New York: Free Press.
5
Social responsibility in today’s world is well articulated in Anderson, V., and Ndalamba, K. K., and Caldwell, C.,
2017. “Social Responsibility in a Troubled World: A Virtuous Perspective.” International Journal of Public
Leadership, Vol, 13, Iss. 2, pp 98-115 and by other well-regarded scholars such as Harvard’s Paine, L. S.,
(2003). Value Shift: Why Companies Must Merge Social and Financial Imperatives to Achieve Superior
Performance. New York: McGraw-Hill.

Recognizing and honoring each of these moral responsibilities and the stakeholders
to whom they are owed is an ethical obligation of each HRP in serving others and in
enabling their organizations to best serve society.
A MODEL FOR ETHICAL RESPONSIBILITY
The University of Michigan’s LaRue Hosmer provided a model to assist individuals

and organizations in the complex task of evaluating their responsibilities, and this model
has direct application for HRPs and the HRM function. Diagram 1 portrays that model
and its key elements6. Hosmer’s model is widely accepted as a rational model for
explaining moral and ethical decisions and represents a leader’s obligation to others
regarding the justification for decisions that have consequences on stakeholders7.
Diagram 1. Hosmer’s Decision Making Model.
Every decision that impacts stakeholders must be viewed based upon ethical and
moral criteria and the benefits, harms, and rights associated with moral decision-making.
Only by understanding these moral and ethical consequences and the legal and economic
effects of decisions can leaders fully define and asses the moral problem to be addressed
and propose a moral solution that addresses the consequences on affected stakeholders.
6
This model is found in Chapter 1 of Hosmer, L. T., (2010). The Ethics of Management (7th ed.). New York:
McGraw-Hill.
7
See, for example, Anderson, V., Ndalamba, K. K., & Caldwell, (2017) op. cit.

A VIRTUOUS CONTINUUM
Assessing moral and ethical consequences requires that clear standards for ethical
decision-making are understood by those who make decisions, as well as those who are
affected by them. An ethical continuum has been defined by several authors over the past
several decades which provides insights about the impacts and consequences of decisions
that are made. Diagram 2 is a Virtuous Continuum which portrays four possible
consequences along that ethical continuum8.
Diagram 2. The Virtuous Continuum.
For HRPs, the virtuous position on this continuum enables them to honor the moral
duties of ethical stewardship in the pursuit of the long-term best interests of all
stakeholders. Although the moral position does not violate ethical duties owed and
complies with the letter of the law and professional standards, that position does not
optimize value creation and duties owed. The amoral position may avoid illegalities but
fails to honor duties and responsibilities in the pursuit of self-interest. The immoral
position pursues self-interest, destroys trust, and fails to honor ethical obligations9.
8
This continuum reflects the work of several authors that were integrated by Caldwell, C., Carter, E., and Floyd, L.
A., (2015). “Coaching for Improved Teaching: A Virtuous Model for Improving Performance and Increasing
Commitment.” Business and Management Research, Vol. 4, No. 4, pp. 54-65 in their paper. The concept of an
ethical or moral continuum was originally developed by Carroll, A. C. & Buchholtz, A. K., (2014). Business
and Society: Ethics, Sustainability, and Stakeholder Management. Stamford, CT: Cengage Learning and
addressed by David A. Whetten (1996) in a presentation made to the 25th Year Class Reunion at Brigham
Young University in October of that year and later by Kim S. Cameron in Cameron, K. S., (2003). “Ethics,
Virtuousness, and Constant Change” in N. M. Tichy & A. R. McGill (Eds.) The Ethical Challenge: How to
Lead with Unyielding Integrity. San Francisco, CA: Jossey-Bass, pp. 185-194.
9
Ibid.

HRPS AND TRANSFORMATIVE ETHICS
The unfortunate reality of the modern organization is that trust and confidence in
leaders is low and that ethical violations persist at all levels10. Employees report that they
not only lack confidence in their leaders but that the organizations in which they work
underutilize their potential, fail to honor commitments, and seem to lack a moral
compass. Historically, nearly half of HRPs indicated that they had felt pressured to
compromise professional ethical standards within their organizations11. The figure
following depicts just a few of the dilemmas within the work environment.
HRPs have the opportunity to help their organizations to change that perspective
about organizations and their leaders12.
Figure 4.
10
The 2017 Gallup survey, “Confidence in Institutions,” reveals this lack of confidence in leaders and organizations
of all types and was found online on August 24, 2017 at http://www.gallup.com/poll/ 1597/confidence-
institutions.aspx .
11
These survey results were reported in Schumann, P. L., (2001). “A Moral Principles Framework for Human
Resource Management Ethics.” Human Resource Management Review, Vol. 11, pp. 93-111.
12
According to research about employee engagement, 70% of US employees indicated that they were not engaged
at their work and 23% reported that they were actually negatively engaged. See the Gallup (2017) study, “The
Engaged Employee” found online on August 24, 2017 at http://www.gallup.com/services/190118/ engaged-
workplace.aspx?gclid=Cj0KCQjw8vnMBRDgARIsACm_BhKW0Qy0FSiaj42l6xfLyR7Ley0iqPFglsq7ZC
kovqUvOQbb3xHT8DsaAs-yEALw_wcB.

TRANSFORMATIVE ETHICS AND

ITS CONTRIBUTING PERSPECTIVES
A new model of Transformative Ethics has recently been developed which expands
the responsibilities of those who lead in organizations13. This model suggests that leaders
owe others a broader set of ethical responsibilities than are found in narrower ethical
perspectives and encompasses the ethical assumptions of twelve frequently cited ethical
frameworks. Table 2 summarizes the ethical obligations of Transformative Ethics as it
incorporates all twelve of these ethical frameworks.
Transformative Ethics blends a commitment to relationships, ethical duties,
individual rights, and moral principles that demonstrate the ability to meld with the
ethical perspectives embraced by all twelve of the ethical models included in Table 2.
Although Transformative Ethics is a challenging ethical standard of personal and moral
integrity that demands that individuals treat others with the highest personal regard for
their best interests, it is a standard which HRPs should seek to achieve if they hope to be
trusted by employees, peers, and organizational leaders as they carry out their
responsibilities. HRPs who adopt a Transformative Ethics perspective as they relate with
all organizational stakeholders build relationships that earn the trust and support of all
levels of their organizations.
SIX PRINCIPLES OF ETHICAL HRM
Incorporating the concepts of Transformative Ethics enables HRPs to demonstrate

their commitment to the highest standards of ethical stewardship in serving stakeholders
throughout an organization. The following are six principles of ethical HRM that are a
useful guide for HRPs as they strive to earn the trust of others. These principles
incorporate standards articulated from a variety of sources, including the Society for
Human Resource Management Code of Ethics, scholarly articles about ethical human
resource management, and other HRM publications.
13
To read more about Transformative Ethics, we recommend Caldwell, C., (2017). “Transformative Ethics and
Trust – Keys to Competitive Advantage ” in Competitive Advantage: Strategies, Management, and
Performance, (C. Caldwell & V. Anderson, eds.). Hauppauge, New York: NOVA Publishing and Caldwell,
C., and Anderson, V. “Transformative Ethics: An Integrative Model of Ethical Stewardship.” Working paper
presented at the International Academy of Management and Business Conference in New Orleans, Louisiana
on January 20, 2017.

Table 2. Twelve Contributing Ethical Perspectives to Transformative Ethics
Ethical Perspective Contributing Ideal Ethical Virtue Value to Transformative Ethics

Ethic of Self- “Pursue outcomes which have the Balanced Self- Acknowledges that value creation is
Interest greatest positive benefit for oneself Interest important and self-interest is beneficial,
and one’s organization without but that others have rights that must
infringing upon the rights of others.” also be honored.
Virtue Ethics “Constantly pursue excellence, make Commitment to Confirms that to be honorable and to
that pursuit a habit, and treat others Excellence develop habits of excellence are
with integrity.” requisites as personal standards.
Ethic of Religious “Always treat others with dignity, Authentic Demands that others be treated with
Injunction respect, and kindness – as valued Understanding kindness, compassion, and empathy at
‘Yous’ and never as anonymous all times.
‘Its.’”
Ethic of “Live by both the letter and the spirit Genuine Confirms that the purpose of rules must
Government of the law in honoring duties owed to Compliance always be taken into account and that
Regulation others, but remember that the law by the intent of those rules is as critical as
itself is a minimal moral standard.” or more important than the letter.
Utilitarian Ethics “No actions should be engaged in Value Affirms that this greatest good is both
which do not result in the greatest Optimization outcome-oriented and rights-oriented in
good for that community of which creating value – with an obligation to
you are a part.” minimize any possible harm.
Ethic of Universal “Act according to universal Just Action Treats others as they wish to be treated
Rules principles and rules which you and complies with universally-
would have others apply if they were understood principles that benefit
in your similar situation and your mankind.
positions were reversed.”
Ethic of Universal “No one, including governments, Guaranteed Honors basic human rights and ensures
Rights may take action that infringes upon Rights that those rights may not be infringed
the legitimate rights of any other upon – even under color of claim for a
individual.” public benefit.
Ethic of Economic “Achieving an efficient use of Efficient Use Conserves and efficiently uses scarce
Efficiency resources to create value for society resources and acknowledges that
is a virtuous goal.” efficient and effective value creation
benefits society.
Ethic of “Act only in ways that acknowledge Honor Everyone Recognizes that, though justice is a
Distributive Justice the rights, liberty, and equality of all multi-faceted construct, no actions
and take no actions that harm the should be taken that harm those who
least among us.” are disadvantaged in society.
Ethic of “Take no actions which impede the Self-fulfillment Promotes the liberty which allows all
Contributing self-development or self-fulfillment of individuals to pursue self-development
Liberty others.” and self-fulfillment and acknowledges
that society benefits thereby.
Ethic of Self- “Seek to discover your innate Discovered Emphasizes the innate talents, gifts,
Actualization greatness and fulfill that potential to Greatness and highest potential of individuals and
create a better world.” their responsibility to use those talents
productively to make a better world.
Ethic of Care “Respect others as valued Care Affirms the responsibility to care for
individuals, share concern for their Authentically others’ best interests and to treat them
welfare, and honor the responsibility with love and with demonstrated
to treat each person with empathy concern for their welfare and
and compassion.” wholeness.

1) Always honor commitments. Do what you say you will do. If you are uncertain
about the ability to keep a commitment, be cautious in making a promise. If
conditions change after you commit yourself, immediately contact the party to
whom the commitment was made, explain what has happened, and honor the
spirit of what you committed to do to the best of your ability14.
2) Never break a confidence. The role of HRPs often requires honoring confidential
information provided by or about employees, job candidates, or the organization.
The Code of Ethics of the Society for Human Resource Management (SHRM)
requires HRPs to “consider and protect the rights of individuals, especially in the
acquisition and dissemination of information while ensuring truthful
communications and facilitating informed decision-making15,”
3) Treat others as valued “Yous” and never as anonymous “Its.” Trust and
commitment are established and maintained when organizations treat employees
as valued “owners and partners16.” Organizations owe others the moral duty of
treating them as valued individuals or “Yous” rather than as objects or
depersonalized “Its17.” HRPs build trust and commitment by treating each
employee as important contributors to organization success.
4) Learn constantly and never stop improving. The SHRM Code of Ethics
declares that HRPs “must strive to meet the highest standards of competence and
commit to strengthen our competencies on a continuous basis18.” Creating a
learning culture and setting an example of personal improvement is an obligation
of HRPs19.
5) Always think “Win-Win.” As ethical stewards, HRPs should strive to achieve the
best possible outcomes for all stakeholders20. Constantly striving for optimal
outcomes enables organizations to best serve all of their stakeholders in the long
term and also honors duties owed to society21.
14
This key principle is identified in Kouzes, J. M. & Posner, B. Z., (2017). The Leadership Challenge: How to
Make Extraordinary Things Happen in Organizations (6th ed.). San Francisco, CA: Jossey-Bass.
15
See the SHRM Code of Ethics (2014) found online on August 24, 2017 at https://www.shrm.org/about-
shrm/pages/code-of-ethics.aspx,
16
This key relationship is clearly enumerated in Block, Pl, (2013). Stewardship: Choosing Service Over Self-
Interest. San Francisco, CA: Berrett-Koehler Publishers.
17
This differentiated relationship was identified by Buber, M. (Kaufman, W. [Translator]). (1971). I and Thou. New
York: Touchstone.
18
SHRM Code of Ethics, (2014.) op. cit.
19
The obligation to create a learning culture and HRM systems that sustain continuous improvement are set forth in
Pfeffer, J., (1998). The Human Equation: Building Profits by Putting People First. Boston, MA: Harvard
Business School Press and Beer, M., (2009). High Commitment High Performance: How to Build a Resilient
20
The role of HRPs as ethical stewards is described in Caldwell, C., Truong, D., Linh, P., and Tuan, A., (2011).
“Strategic Human Resource Management as Ethical Stewardship.” Journal of Business Ethics, Vol. 98, Iss. 1,
pp. 171-182.
21
This obligation to society is addressed in five HRM-related ethical codes reviewed in Wiley, C., (2000). “Ethical
Standards for Human Resource Management Professionals: A Comparative Analysis of Five Major Codes.”
Journal of Business Ethics, Vol. 25, No. 2, pp. 93-114.

6) Honor both the letter and the spirit of applicable laws. HRPs have a moral
responsibility to honor the letter of the law as it applies to HRM policies,
procedures, and practices but their obligation also extends to honor the spirit and
intent of those laws as well22. Building trust and commitment requires doing far
more than simply complying with the law but requires that organizations treat
employees with dignity and respect23.
HRM systems that incorporate these six principles demonstrate a concern for both the
success of the organization and the obligations that organizations owe to their
employees24. HRPs who honor these principles and treat employees with fairness and a
commitment to their welfare, growth, and wholeness create the high trust cultures that
have been empirically shown to generate increased employee commitment and
ownership; greater innovation and creativity; and higher productivity, profit, and
customer satisfaction25.
CONTRIBUTIONS OF THE CHAPTER
As organizations develop aligned HRM systems and as HRPs interact with

employees and managers, the ability of those organizations to compete in today’s
complex global marketplace increases. This chapter contributes six important insights
about the ethical nature of HRM.
1) It confirms the importance of seven ethical responsibilities and the six strategic
roles of HRPs. As HRPs develop the skills associated with those roles and
responsibilities, they create organizations that merit the trust of stakeholders at all
levels of the organization.
2) It identifies the moral and ethical duties owed to seven important stakeholders.
Identifying each of those stakeholders is important in enabling HRPs to
constantly monitor the nature and breadth of their obligations.
3) It reinforces the importance of a comprehensive model for assessing ethical
decision-making. The Hosmer model presented in this chapter emphasizes the
importance of understanding the impacts, consequences, and rights of
22
The importance of legal compliance as a key element of organizational trustworthiness is clearly set forth in
Caldwell, C., and Clapham, S., (2003). “Organizational Trustworthiness: An International Perspective,”
Journal of Business Ethics, Vol. 47, Iss. 4, p. 349-364 and is confirmed in context with the Virtuous
Continuum discussed herein in. Caldwell, C., Carter, E., & Floyd, L. A., (2015) op. cit.
23
See Pfeffer, J., (1998) op. cit. and Beer, M., (2009) op. cit.
24
As DePree, M., (2004) op. cit. has noted, these two responsibilities encompass covenantal obligations of
organization leaders.
25
These outcomes are identified in many sources, including Pfeffer, J., (1998) op. cit. and Beer, M., (2009) op. cit.

stakeholders as well as the value of clarifying and explaining the moral basis for
actions taken by leaders and organizations.
4) It verifies the value of a Virtuous Continuum for evaluating ethical conduct.
Striving to pursue the best possible long-term and short-term outcomes is morally
superior and honors the responsibilities of ethical stewardship.
5) It identifies the complex duties in building relationships encompassed in
Transformative Ethics. By incorporating Transformative Ethics as a personal
standard for their conduct, HRPs can exponentially increased their ability to build
trust and commitment.
6) It presents six principles of Ethical HRM. These six principles are a useful
standard for HRPs as they monitor their own actions on a daily basis in the
pursuit of an organization’s mission and purpose.
Each of these contributions affirms the importance of understanding the ethical

responsibilities, roles, and values which affect the HRM function and the roles of HRPs.
Each contribution also merits thoughtful consideration by both practitioners and
academics.
As HRPs thoughtfully assess their ability to serve employees and their organization,
as they reflect upon the importance of creating a culture of high trust, and as they
examine the explicit and implicit assumptions of employees about duties owed to them,
they come to appreciate the importance of raising their own ethical standards. The
Virtuous Continuum and Transformative Ethics approach to HRP duties and the Hosmer
model for decision making and for explaining management actions are powerful
resources in helping organizations to build the employee commitment, the extra-mile
behavior, and the dedication required for those organizations to create the competitive
advantage essential for long-term survival, profitability, and economic success. Because
so many of the HRM policies, practices, and programs have an ethically-related impact
on employees, wise HRPs will seriously reflect on how they interact and the importance
of being highly ethical if they wish to help their organizations achieve their intended
purposes and if they seek to help their employees achieve their highest potential.
Questions to Ponder
1. How does the model of Transformative Ethics enable HRPs to build trust with
stakeholders?
2. Why does the Hosmer model for moral decision-making make so much sense as
a tool for leaders to use in explaining decisions?
3. Is the Virtuous Continuum a practical standard for ethical HRM? Why or why
not?

Legal Compliance at A municipality – Case Study – by Dr. Sarah J. Smith
As the HRP for a city, Tom found himself challenged by the department managers.
Tom had been studying OSHA regulations and gaining certifications. He had learned
there were seven written required programs with an annual training requirement that
applied to his organization. At a department managers' meeting, Tom informed everyone
about his findings. The response was surprising: "We are a municipality and do not need
to do OSHA".
Tom debated as to his next steps and how to resolve this potential dilemma. He
decided to ask for guidance from a trainer who was employed by OSHA. The trainer was
shocked. He said, "Tom, why would the rest of employers have to provide a safe and
healthy workplace for their employees, but it's acceptable for municipal workers to work
in unsafe conditions?" In addition to designing and implementing the required safety
modules and providing annual training, an environmental issue was brewing.
Rob worked at the city’s wastewater treatment plant. He had recently witnessed a
coworker, who had leaky boots. Management allowed this worker to continue his shift in
the leaky boots, exposing him to wastewater. The employee developed a nasty case of
impetigo and could not return to work for two weeks due to this skin condition. Rob also
observed that run-off from the wastewater treatment plant was entering a nearby lake and
popular beach area. When Rob reported the conditions to management, they suspended
him and soon after terminated his employment.
OSHA has a whistleblower protection rule: employees who report unsafe conditions
cannot be terminated nor disciplined. Rob could not get local management to listen and to
resolve the wastewater run-off situation, so he filed a whistleblower complaint with
OSHA. He understood there are risks any time someone chooses to involve an
authoritative agency, however, Rob felt this was the right thing to do. Rob was awarded
the largest settlement for a whistleblower case in the state, $215,000 for being wrongfully
dismissed.
1. What approach might have been most effective for Tom in serving his
organization regarding OSHA compliance?
2. Do you agree or disagree with the whistleblower settlement this employee
received? Explain your position.
3. How could aligning the organization's culture and being a business partner
support legal compliance in this organization? What role could the HRP take in
leading these initiatives?

The Realistic Job Preview – Case Study – by Dr. Sarah J. Smith
Ethical obligations of HRPs impact a variety of organizational stakeholders. The

recruitment and hiring process are two examples of how important HRP ethical
obligations can be for applicants, new hires, the company, and work colleagues. Jenny
applied for an outside sales position with an innovative printing company. The job
posting stated some travel was required. During the interview process, Jenny discovered
'some travel' included commuting to and from Chicago in order to promote and sell
printing services in The Loop. Since the company was located two hours from Chicago,
this travel requirement of the job was far more than Jenny had anticipated.
As Jenny pondered the required travel requirement, she was met with an additional
surprise. The HRP administered a math test to Jenny. She did not feel challenged by the
test because she had strong math skills. However, not knowing this would happen on the
initial interview day caused the day to be longer than Jenny had anticipated. Jenny had a
young baby at home and knew she would be approaching the time when the sitter was
supposed to be going home. Jenny also wondered how she would balance working in The
Loop with care for her young son.
Jenny was selected for the sales position. During her onboarding process, Jenny did
not receive information which she had hoped to learn more about in that process. She had
hoped to meet and become acquainted with other sales colleagues and had envisioned a
supportive team environment. On the contrary, colleagues seemed to avoid having
anything to do with the onboarding of a new sales representative as if they viewed any
new person as a threat to their territory and profitability. The HRP mainly focused on
completion of mandatory forms. The benefits information packet was not available and
for the most part, the HRP spent a great deal of time talking about the benefits of the
company swimming pool.
Upon completion of her first day, onboarding, Jenny felt uninformed, frustrated with
the HRPs lack of preparation, and the company's shortcomings in providing a realistic job
preview. Certainly, Jenny had a lot to think over and decisions to make.
1. Jenny eventually changed her mind and decided not to work for this employer.
What could the employer have done to more effectively prepare Jenny for the
position?
2. How does a weak onboarding program affect an entire company? What are the
ethical duties owed to incoming employees as part of any reasonable onboarding
process?
3. As you reflect on your own onboarding process in your present position, how
could it have been more effective in helping you to have been more successful as
a new employee?

REFERENCES
Anderson, V., and Ndalamba, K. K., and Caldwell, C., 2017. “Social Responsibility in a
Troubled World: A Virtuous Perspective.” International Journal of Public
Leadership, Vol, 13, Iss. 2, pp 98-115.
Block, Pl, (2013). Stewardship: Choosing Service Over Self-Interest. San Francisco, CA:
Berrett-Koehler Publishers.
Buber, M. (Kaufman, W. [Translator]). (1971). I and Thou. New York: Touchstone.
Caldwell, B. G., and Caldwell C., 2016. “Ten Classic Onboarding Errors: Violations of
the HRM – Employee Relationship.” Business and Management Research, Vol. 5,
No. 4, pp. 47-55 and available online at http://www.sciedu.ca/journal/index.php/
bmr/article/view/10672/6501.
Caldwell, C., (2017). “Transformative Ethics and Trust – Keys to Competitive Advantage
” in Competitive Advantage: Strategies, Management, and Performance, (C.
Caldwell & V. Anderson, eds.). Hauppauge, New York: NOVA Publishing and
Caldwell, C., and Anderson, V. “Transformative Ethics: An Integrative Model of
Ethical Stewardship.”
Caldwell, C. (2004). Organizational Trustworthiness: A Developmental Model. Pullman,
WA: Washington State University
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Perspective.” Public Personnel Management, Vol. 32, Iss. 2, pp. 229-249.
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Issue 1, pp 73-88.
Caldwell, C., Carter, E., and Floyd, L. A., (2015). “Coaching for Improved Teaching: A
Virtuous Model for Improving Performance and Increasing Commitment.” Business
and Management Research, Vol. 4, No. 4, pp. 54-65.
Caldwell, C. & Clapham, S., (2003). “Organizational Trustworthiness: An International
Perspective.” Journal of Business Ethics, Vol. 47, Iss. 4, pp. 348-364.
Caldwell, C., and Hasan, Z. (2016). “The Covenantal Leader – Honoring Implicit
Relationships with Employees.” Graziadio Business Review, Vol. 19, Iss. 2 and
available online at http://gbr.pepperdine.edu/2016/10/the-covenantal-leader.
Caldwell, C. & Peters, R. (In Press). “New Employee Onboarding – Psychological
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Management Development.
171-182.

Cameron, K. S., (2003). “Ethics, Virtuousness, and Constant Change” in N. M. Tichy &
A. R. McGill (Eds.) The Ethical Challenge: How to Lead with Unyielding Integrity.
San Francisco, CA: Jossey-Bass, pp. 185-194.
Carroll, A. C. & Buchholtz, A. K., (2014). Business and Society: Ethics, Sustainability,
and Stakeholder Management. Stamford, CT: Cengage Learning.
Press.
DePree, M., (2004). Leadership is an Art. New York: Crown Publishing for an
articulation of this moral responsibility.
Friedman, T. L., (2009). Hot, Flat, and Crowded Why We Need a Green Revolution --
And How it Can Renew America Release 2.0. New York: Picador.
Gallup (2017) study, “The Engaged Employee” found online on August 24, 2017 at
http://www.gallup.com/services/190118/engaged-workplace.aspx?gclid=Cj0KCQ
jw8vnMBRDgARIsACm_BhKW0Qy0FSiaj42l6xfLyR7LEy0iqPFglsq7ZCkovqUvO
Qbb3xHT8DsaAs-yEALw_wcB.
Gallup survey, “Confidence in Institutions,” reveals this lack of confidence in leaders and
organizations of all types and was found online on August 24, 2017 at
http://www.gallup.com/poll/1597/confidence-institutions.aspx .
Goldstein, H. W., Pulakos, E. D., Passmore, J. & Semedo, C. (Eds.), (2017). The Wiley
Blackwell Handbook of the Psychology of Recruitment, Selection, and Employee
Retention. West Sussex, UK: Wiley & Sons.
Hosmer, L. T., (2010). The Ethics of Management (7th ed.). New York: McGraw-Hill.
Kouzes, J. M. & Posner, B. Z., (2017). The Leadership Challenge: How to Make
Extraordinary Things Happen in Organizations (6th ed.). San Francisco, CA: Jossey-
Bass.
Lennick, D. & Kiel, F., (2011). Moral Intelligence 2.0: Enhancing Business Performance
and Leadership Success in Turbulent Times. Boston, MA: Pearson Education.
Mathis, R. L, Jackson, J. H., Valentine, S. R., & Meglish, P. A. (2016). Human Resource
Management (15th ed.). Boston, MA: Cengage Learning for their insights about the
important role of HRPs and the HRM function.
Paine, L. S., (2003). Value Shift: Why Companies Must Merge Social and Financial
Imperatives to Achieve Superior Performance. New York: McGraw-Hill.
Pava, M., (2003). Leading with Meaning: Using Covenantal Leadership to Build a Better
Organization. New York: St. Martin’s Press.
Boston, MA: Harvard Business School Press and Beer, M., (2009). High
Commitment High Performance: How to Build a Resilient Organization for
Schumann, P. L., (2001). “A Moral Principles Framework for Human Resource
Management Ethics.” Human Resource Management Review, Vol. 11, pp. 93-111.

SHRM Code of Ethics (2014) found online on August 24, 2017 at

https://www.shrm.org/about-shrm/pages/code-of-ethics.aspx.
Wiley, C., (2000). “Ethical Standards for Human Resource Management Professionals: A
Comparative Analysis of Five Major Codes.” Journal of Business Ethics, Vol. 25,
No. 2, pp. 93-114.
Whetten, D. A., (1996) in a presentation made to the 25th Year Class Reunion at Brigham
Young University in October of that year.

Chapter 6
RECRUITMENT, TESTING, AND SELECTION:

STRATEGIC ESSENTIALS FOR SUCCESSFUL
PERFORMANCE
Cam Caldwell
Muscat, Oman
Much has been written about the critical importance of identifying and hiring top
talent as a key factor for organization success1. According to a Department of Labor
Study, 30% of business failures are due to poor hiring decisions2. Yet understanding the
importance of highly skilled, knowledgeable, and interpersonally effective individuals is
not always fully appreciated and can be difficult to measure3. Moreover, Human
Resource Management (HRM) staff may lack the requisite skills to 1) assess organization
needs correctly, 2) identify factors critical for performance success, and/or 3)
demonstrate the abilities to develop valid measures of those important factors4. Although
it is increasingly acknowledged that “getting the right people on the bus” and “getting
1
See, for example, Edenborough, R., (2007). Assessment Guides in Recruitment, Selection, & Performance: A
Manager’s Guide to Psychometric Testing, Interviews, and Assessment Centers. London, UK: Kogan Page
Limited and Highhouse, S., Doverspike, D., & Guion, R. M. (2016). Essentials of Personnel Selection and
Assessment. New York: Routledge.
2
This critical fact is cited in the Introduction on page one of Thompson, D., and Greif, B., (2010). No More Rotten
Eggs: A Dozen Steps to Grade -AA Talent Management. Tucson, AZ: T & G Associates.
A comprehensive empirical study conducted by Boselie, Dietz, and Boon identified “careful recruitment and
selection” as one of the four most essential strategic functions of Human Resource Management. See Boselie,
P., Dietz, G., and Boon, C., (2005). “Commonalities and Contradictions in HRM and Performance Research.”
Human Resource Management Journal, Vol. 15, Iss. 3, pp. 67-94. Despite that fact, connecting HRM practices
with performance outcomes can often be difficult.
4
See, for example, Guion, R. M., (1998). “Some Virtues of Dissatisfaction in the Science and Practice of Personnel
Selection.” Human Resource Management Review, Vol. 8, Iss. 4, pp. 351-365.

76 Cam Caldwell
people in the right seats” are two critically essential factors for organization success5, it is
nonetheless true that selecting the right employees is a difficult task that is often done far
less well than necessary to ensure organization success – and ineffective recruitment,
selection, and testing are often the root causes of organization decline and eventual
failure6.
The focus of this chapter is on the strategic tasks of recruitment, testing, and selection
in HRM.
The chapter begins with a discussion of current practices in recruitment in the digital
age and identifies strengths and weaknesses associated with those practices. The chapter
then identifies important issues associate with testing and selection and identifies ten
common errors associated with selection. Incorporating a Resource-Based View of the
firm the chapter identifies six important reasons why Top Management Teams (TMTs)
and their Human Resource Professionals (HRPs) need to carefully reassess their
recruitment, testing, and selection processes if they wish to compete successfully in an
increasingly challenging world.
Figure 1.
RECRUITMENT IN THE DIGITAL AGE
The purpose of recruiting is to identify and attract a group of well-qualified

applicants for a position that an organization needs to fill to accomplish its mission7. The
5
This critical reality was declared in Collins, J., (2001). Good to Great: Why Some Companies Make the Leap . . . .
And Others Don’t. New York: Harper Collins.
6
Ibid.
7
Noe., R. A.. Hollenbeck, J. R., Gerhart, B., and Wright, P. M., (2017). The Fundamentals of Human Resource
Management (7th ed.). New York: Irwin Management.

Recruitment, Testing, and Selection 77
advent of the World Wide Web has exponentially changed recruitment from a primarily
local to a national and international process8. In their assessment of modern recruitment
practices, Baum and Kabst declared unequivocally that “(s)uperior human resources are
beneficial to the creation of competitive advantage” and that online personnel recruitment
is more effective than traditional printed advertisements9. Digital recruitment enables
employers to reach a far greater number of qualified applicants and international
recruiting to fill vacancies is now commonplace for business and education10.
Web sites for advertising and recruiting positions are virtually everywhere online and
can be accessed with the use of nearly any computer. In addition, positions advertised in
local newspapers may also be accessed via computer. Candidates can immediately access
information to hundreds of potential job vacancies for which they are qualified and HRPs
can recruit to literally thousands of potential applicants across the globe.
The challenge for employers in the recruitment process is often in screening the large
number of job candidates and accurately determining whether a potential match exists.
Traditional recruitment sources continue to be utilized, especially by large companies
with substantial HRM resources. Hiring from competitors often occurs in a world which
is rife with aggressive competition.
TESTING CANDIDATES
One of the realities of HRM is that the purpose of the testing and selection process is
to eliminate every candidate for a position except for the person or persons actually hired.
However, in that elimination process, HRPs sometimes overlook key factors that make an
important difference in the selection process11. The unfortunate result is that the testing
and selection process often rejects outstanding candidates that meet unique organizational
needs – needs not always well understood but that are critical for an organization’s
success12.
A test is any job-related criterion used to screen candidates to determine whether they
are properly qualified for a position. Testing validity is about whether a test measures the
criteria or competencies--the purpose for which a test is actually intended13. Validity
8
See Bondarouk, T. V., Ruel, H. J. M., (2009). “Electronic Human Resource Management: Challenges in the
Digital Era.” International Journal of Human Resource Management, Vol. 20, Iss. 3, pp. 505-514.
9
Baum, M., and Kabst, R., (2014). “The Effectiveness of Recruitment Advertisements and Recruitment Websites:
Indirect and Interactive Effects on Applicant Attraction.” Human Resource Management, Vol. 53, Iss. 3, pp.
353-378.
10
Ibid.
11
See for example, Irish, R. K., (2011). “Focusing on the Flair Factor.” America’s Civil War Magazine. Sept. 22,
2011 found online on September 25, 2017 at https://www.slideshare.net/Talentplus/the-flair-factor
12
Ibid.
13
The concepts of testing are essential elements of psychometrics, the field of study that covers test construction
and measurement. For a complete discussion, see Furr, R. M. and Bacharach, V. R., (2013). Psychometrics:
An Introduction (2nd ed.). Thousand Oaks, CA: Sage.

78 Cam Caldwell
should apply to the population to be tested and the scale used to measure the quality or
criterion being assessed should differentiate the candidates based upon their relative
ability to meet those standards. Test reliability is the degree to which a test produces a
consistent result if administered multiple times. Validity and reliability are critical
measures of testing in evaluating the qualifications of candidates for a position14.
Figure 2.
The job analysis enables HRPs to identify the relative importance of selection criteria
and to design a testing process that improves the predictive ability to identify a qualified
candidate15. When done properly, the job analysis will identify “flair factors,” or selection
criteria that are especially important in filling a position16. Unfortunately, the concept of
flair factors is not well understood by many HRPs and testing processes often fail to
adequately identify Variance Accounted For, the measure of variance that a testing
process can actually predict in identifying the probable success of a job candidate, based
upon the candidate’s test performance17.
From the job analysis process comes the identification of knowledges, skills,
abilities, and other qualifications (KSAOs) that have been identified as important job
factors. In formulating a valid testing process, HRPs have the responsibility to identify a
process for evaluating these KSAOs and to provide hiring decision-makers with sound
information for evaluating the respective job candidates. The validity of a testing process
also involves confirming that successful incumbents of the position or positions filled
possess the capabilities for which candidates are being tested18.
14
Ibid.
15
See Brannick, M. T., & Levine, E. L., (2007). Job Analysis: Methods, Research, and Application. Thousand
Oaks, CA: Sage.
16
Irish, R. K., (2011) op. cit.
17
Thornton III, G. C., Rupp, D. E. and Hoffman, B. J., (2014) op. cit.. Assessment Center Perspectives for Talent
Management Strategies (2nd ed.). New York: Routledge.
18
Brannick, M. T., & Levine, E. L., (2007) op. cit.

Assessment centers, or job simulations that match job content criteria that are
evaluated by trained assessors, can significantly improve the quality of the testing and
selection process – particularly for positions requiring interpersonal skills, decision-
making qualities, and the ability to deal with stress and uncertainty19. Unfortunately,
many HRPs choose not to utilize this valuable selection and testing tool, lack the skills to
conduct an assessment center properly20, or apparently lack an understanding of the
benefits that can accrue from using this important testing resource21.
Figure 3.
SELECTION AND HIRING

Employee selection is far more complex than the answers to the two questions, 1)
“Can the candidate do the job?” and 2) “Does the candidate fit the organization?22” The
19
Thornton III, G. C., Rupp, D. E. and Hoffman, B. J., (2014) op. cit.
20
Caldwell, C., Thornton, G. C. III, and Gruys, M. 2003 “Ten Classic Assessment Center Errors: Challenges to
Selection Validity.” Public Personnel Management, Vol. 32, Issue 1, pp 73-88. This paper is cited as a
reference at the Office of Personnel Management website explaining the appropriate use of Assessment
Centers for selection and testing and can be found at https://www.opm.gov/policy-data-oversight/assessment-
and-selection/other-assessment-methods/assessment-centers/.
21
Thornton III, G. C., Rupp, D. E. and Hoffman, B. J., (2014) op. cit.
22
These two important questions are noted in Murphy, J. P. (2016). “Quality of Hire: Data Makes the Difference.”
Employee Relations Today, Vol. 43, Iss. 2, pp. 5-15.

80 Cam Caldwell
selection and hiring process for positions involves incorporating information generated
about the requirements of a position, comparing that information with the identified
qualifications of the available candidates, and then using that information to determine
whom to hire. According to a report by Korn Ferry, a major executive search firm, 90%
of executives opined that retaining newly hired employees is a major concern in the
selection and hiring process23. Although candidates who have the strongest qualifications
ought to logically be appointed24, the selection and hiring process does not always result
in that outcome – nor does it mean that a candidate who is hired will be successful, add
value, and stay with the organization over time.
Assessing whether a candidate can perform a job is a subjective determination based
upon the selection criteria established25. Unfortunately, these criteria do not identify 1)
whether an individual will use those skills and capabilities properly, 2) whether a
candidate is highly committed and dependable in performing, or 3) whether the candidate
has the passion and persistence to perform job tasks at a consistently high level –
including in situations requiring an extra-mile commitment. The latter quality, often
called “grit26,” is a measure of a person’s personal drive and his or her desire to engage as
a full partner in achieving the success of an organization27.
A relatively common error associated with candidate selection is related to what is
known as “person-organization fit.” The term applies to the degree to which a candidate
matches or does not match the cultural and environmental values and characteristics of an
organization and includes the degree that an organization fulfills that candidate’s needs
and/or matches his or her values28. One of the limits of this perceived fit is that hiring
authorities may translate that fit means “hiring people like me.” For example, a hiring
authority may opt to select the candidate who is most like himself or herself but who may
not necessarily best meet the needs of the organization. Hiring based upon this perceived
fit may result in excluding minority candidates or candidates who would offer a diverse
perspective that can actually be extremely valuable29.
23
This report is available online. See Choo, S., (2017). “Motivation and Retention in the Gig Economy.” Korn
Ferry Report found online on September 27, 2017 at http://focus.kornferry.com/employee-
engagement/motivation-and-retention-in-the-age-of-the-gig-economy/.
24
See Dobos, N., (2017). “Networking, Corruption, and Subversion.” Journal of Business Ethics, Vol. 144, pp. 467-
478.
25
Unfortunately, psychometrics and the identification of Variance Accounted For only identifies a probability of
success of a candidate and is not a perfect predictor of future job performance. See Furr, R. M. and Bacharach,
V. R., (2013) op. cit.
26
The importance of grit for individual or organizational success is identified in Duckworth, A., (2016). GRIT: The
Power of Passion and Perseverance. New York: Scribner.
27
The degree of personal commitment of individuals is explained in Hayes, L., Caldwell, C., Licona, B. and Meyer,
T. E., 2015. “Follower Behaviors and Barriers to Wealth Creation.” Journal of Management Development,
Vol. 34, Iss. 3, pp. 270-285.
28
Kristof-Brown, A. L., (2017). “Person-Organization Fit.” Encyclopedia of Industrial and Organizational
Psychology (2nd ed.), S. G. Rogelberg (Ed.) Thousand Oaks, CA:Sage and found online on September 25,
2017 at http://sk.sagepub.com/reference/ organizationalpsychology/n254.xml.
29
Perryer, C. and Scott-Ladd, B., (2014). “Deceit, Misuse, and Favours: Understanding and Measuring Attitudes to
Ethics.” Journal of Business Ethics, Vol. 121, Iss. 1, pp, 123-134.

Hiring candidates whose personal style, adaptability, emotional intelligence, and

attitudes match an organization’s culture can be vital to the success of the candidates as
well as the persons with whom they would be working30. At the same time, psychometric
testing and test construction is an imperfect science and can be misused when applied by
decision-makers for purposes for which those tools were not intended31. The reality is
that any individual test is but a single data point that needs to be triangulated by someone
who understands the instrument used, how it should be applied, its limitations, and how
its information fits with other job-related data32.
The struggle to match job candidates with available positions is often viewed as
difficult both for interested applicants and potential employers. According to a 2017
survey conducted by the Society for Human Resource Management, 68% of HRPs cited
finding and recruiting qualified candidates was “a top priority33.” In addition, 78% of
HRM leaders indicated that finding good people is harder today than it was a year ago34.
Figure 4.
TEN COMMON ERRORS IN RECRUITMENT,

TESTING, AND SELECTION
Despite the acknowledged importance of hiring and retaining good people, HRPs and
organizational leaders tend to make a repeating set of errors in the recruitment, testing,
30
This key reality is addressed in Murphy, M., (2012). Hiring for Attitude: A Revolutionary Approach to Recruiting
and Selecting People with Both Tremendous Skills and Superb Attitude. New York: McGraw-Hill.
31
For more information about this important topic, see Daltner, B. (2013). “How to Use Psychometric Testing in
Hiring.” Harvard Business Review Digital Articles, 9/12/2013, pp. 2-4.
32
Ibid.
33
See SHRM, (2017). 2017 Employee Benefits: Remaining Competitive in a Challenging Talent Marketplace.
Washington, D. C.: Society for Human Resource Management found online on September 27, 2017 at
https://www.shrm.org/hr-today/trends-and-forecasting/research-and-
surveys/Documents/2017%20Employee%20Benefits%20Report.pdf.
34
Ibid.

82 Cam Caldwell
and selection of new employees – especially in the light of the fact that replacing an
employee commonly costs a company at least one-third of an employee’s annual salary in
lost productivity and related replacement, supervision, and training expenses35. The
following is a brief summary of ten of the common errors made in the recruitment,
testing, and selection of new employees.
1. Failing to update the job analysis. Despite the fact that the job analysis is the
single most critical element in determining the qualifications and job
requirements of a position to be filled36, many organizations fail to update and
confirm the important criteria to be included in hiring to fill an employee
vacancy. For example, a city in Utah used a twenty-five year old job analysis in
the development of a selection process for a Police Department promotional
exam.
2. Failing to understand job validation. Candidate testing is often conducted by
HRPs who are busy with many tasks. As a result of time pressures, or simply
because they do not understand the importance of confirming the validity of
testing, literally hundreds of municipal Police Departments continue to use a
exam for testing entry-level police officers without reviewing that test’s validity
study37. That study makes it absolutely clear that the test was not validated by
gender or ethnicity – making the municipalities vulnerable if the test is
challenged by women or minorities.
3. Misusing test scores in evaluating candidates. Often psychometric studies are
conducted that validate a testing instrument for a specific purpose. For example,
many tests are developed to establish a “hurdle score” or minimum passing score
beyond which all candidates may be considered equally qualified. Using these
scores to differentiate among candidates as more or less qualified is a misuse of
the testing instrument, does not correctly differentiate the relative
competitiveness of the candidates, and is unfair to candidates who pass the test
but who are given fewer points in the selection process than candidates who
scored higher on the test38.
4. Underrating interpersonal skills. The abilities of an individual to fit within an
organizational culture, to work effectively with others, to craft a response to
situations that demand emotional intelligence, and to work with others as part of
35
Ibid.
36
See, for example, Prien, E. P., Goodstein, L. D., Goodstein, J., and Gamble, L. G. Jr., (2009). A Practical Guide
to Job Analysis. San Franciso, CA: Pfeiffer.
37
Furr, R. M. and Bacharach, V. R., (2013) op. cit.
38
Ibid.

a team are important for key positions in organizations but tend to be overlooked
in the job analysis process39.
5. Overrating external applicants. Candidates from outside an organization are often
rated more highly than equally qualified but known internal candidates40.
However, Collins found that companies that successfully evolved from “good” to
“great” had promoted internal candidates who understood the culture, were less
flashy than external counterparts, but were deeply committed to the organization
and its success41.
6. Overlooking “Flair Factors.” For many organizational positions, “flair factors”
are critical to the performance of a position and are often the key to organization
success or failure42. Recognizing the importance of flair factors requires a clear
understanding of how these factors determine organizational outcomes – one of
the key reasons for involving organizational subject matter experts in the job
analysis process43.
7. Overrating technical qualifications. A common error made in employee selection
is in assuming that a person with strong technical knowledge and experience is
automatically better qualified than someone with less experience and a different
combination of interpersonal skills44. HRPs must distinguish between
requirements suggested by subject matter expert recommendations for hiring
“people like me” and the needs of a specific position.
8. Incorrectly assessing related experience. Related work experience and years
working within an industry are not always the same thing and must be clearly
distinguished45. In addition, some people tend to actively learn from time served
in a position while others simply perform the same tasks year after year with little
incremental learning acquired.
9. Overrating formal education. Formal education can complement work
experience but a graduate degree from an excellent school is no guarantee that a
candidate is well qualified or able to perform in a new role46.
10. Relying on personal interviews. One of the classic errors made in the selection
process is in the frequently held but empirically false assumption that
interviewing a candidate improves the quality of the selection decision47.
39
This tendency is identified in Gatewood, R. D., Field, H. S., and Barrick, M. R., (2015). Human Resource
Selection (8th ed.). Boston, MA: Cengage Learning.
40
Ibid.
41
Collins, J., (2001) op. cit.
42
Irish, R. K., (2011). See also Caldwell, C., Converse., P., and Beverage, M., 2017 “Selecting for ‘Flair Factors’ --
Improving the Selection Process.” Paper accepted for publication in the Journal of Management Development.
43
See Truxillo, D. M., Paronto, M. E., & Collins, M., (2004). “Effects of Subject Matter Expert Viewpoint on Job
Analysis Results.” Public Personnel Management, Vol. 33, Iss. 1, pp. 33-46.
44
Gatewood, R. D., Field, H. S., and Barrick, M. R., (2015) op. cit.
45
Ibid.
46
This insight is provided by Mintzberg, H., (2005). Managers Not MBAs: A Hard Look at the Soft Practice of
Management and Management Development.
47
See Thompson, D., and Greif, B., (2010) op. cit.

84 Cam Caldwell
Carefully constructed structured interviews can improve the quality of

interviewing, but managers and supervisors overestimate their ability to identify
good candidates and the predictive value of most interviews is typically no better
than flipping a coin48.
Improving the recruitment, testing, and selection process requires HRPs to become
truly skilled about the nuances identifying the critical factors essential for effective
performance – beginning with a well-crafted job analysis but including psychometrics,
test construction, and validation49. Unfortunately, many HRPs lack both the professional
training in HRM and an understanding of the strategic importance of human resources50.
Figure 5.
RETHINKING HRM
Firms today compete in their markets based upon their ability to provide a product or
service, a less expensive product or service, or a product or service that others are unable
to provide as conveniently51. Increasingly, from a Resource-Based View of organizations,
that superior performance is based upon the quality of a company’s employees and their
48
See, for example, Miles, A. and Sadler-Smith, E. (2014). “’With Recruitment I Always Feel I Need to Listen to
My Gut’: The Role of Intuition in Employee Selection.” Personnel Review, 2014 pp. 606-627.
49
See Edenborough, R., (2007) op. cit.
50
This point is clearly made in Gomez-Mejia, L. R., Balkin, D. B., and Cardy, R. L, (2015) Managing Human
Resources (8th ed.). New York: Pearson.
51
This point is clearly made in Porter, M. E., (1998). Competitive Advantage: Creating and Sustaining Superior

differentiated ability to understand customer needs and deliver services that more
perfectly addresses those needs52. Essentially, then, all elements of an HRM system and
the effectiveness of an organization are dependent upon the people who execute them53. It
is the superiority of the people who make up an organization and their ability to perform
their jobs that generally determines the success of a firm. This resource-based perspective
of HRM makes recruiting, testing, and selecting incredibly important for virtually every
organization – especially in the knowledge-, information-, and wisdom-based economy
that typifies the current global marketplace54.
With this resource-based view of managing today’s organizations clearly in mind,
there are six compelling reasons why Top Management Teams and HRPs must carefully
reexamine their organizations’ recruitment, testing, and selection systems.
1. The Demand for Excellence is Increasing. Customers are rarely dependent upon
a single firm to provide them with quality products. As a result, customer
expectations are increasing and will continue to raise the bar55.
2. The Speed of Change is More Rapid. The world is moving faster and will
continue to do so. Employees with the comfortability to deal with change and a
mindset of continuous improvement are necessities in the new economy56.
3. The Influence of Technology has Increased. That technology change demands
that employees with much more sophisticated technical skills be hired, trained,
and retained by their organizations57.
4. Disruptive Innovations Redefine Competition. Employees must demonstrate the
commitment, the creativity, and the understanding of conditions in a constantly
evolving marketplace to respond to innovation58.
5. Cooperation is Increasingly Necessary. The behavioral skills to move quickly,
to adapt to change, and to work with others effectively has become a necessity in
a world where teams are more common and collaboration is critical59.
6. Hiring for Values Is a Necessity. Although competence, cooperation, and
capacity are necessary variables for success, character is equally important in
wealth creation60. In today’s transparent world environment, employees must
52
This key point is emphasized by Toulson, P. K., (2016). “Recruitment and Talent Management.” Human
Resource Magazine. Vol. 21, Iss. 2, pp. 34-35.
53
Ibid.
54
The changing economy demands this clear insight. See Covey, S. R., (2004). The 8th Habit: From Effectiveness to
Greatness. New York: Free Press.
55
Christensen, C. M., (2016) op. cit.
56
See, for example, Mercer Bing, C., and Wingrove, C., (2012). “Mergers and Acquisitions: Increasing the Speed
of Change.” Employee Relations, Vol. 39, Iss. 3, pp. 43-50.
57
Christensen, C. M., (2016) op. cit.
58
Pfeffer, J., (1998) op. cit.
59
Goleman, D., (2007). Social Intelligence: The New Science of Human Relations. New York: Bantam.
60
That is the message of Caldwell, C., and Ndalamba, K. K., 2017. “Trust and Being ‘Worthy’ – The Keys to
Creating Wealth.” Journal of Management Development, Vol. 36, Iss. 8, pp. 1076-1086 and Harvard’s Lynn

86 Cam Caldwell
have a commitment to high personal standards and values and the integrity to be
trusted by their peers, their customers, and their leaders.
The organizations of today and tomorrow will be held accountable to a higher

standard. They will navigate in a world fraught with challenges that have never before
been encountered to the same degree.
Figure 6.
The reality of today and tomorrow is a world that will demand employees with
commitment, loyalty, talent, and integrity. Wise employers will recognize that it is the
people with whom they work who will determine their success or failure. Recruiting,
assessing, and hiring the right people and then retaining them will be critical tasks that
TMT members and HRPs must perform especially well in a world that will only become
more difficult and more competitive.
Questions to Ponder
1. What do you consider to be the most common error made in assessing candidates
for a vacant position?
2. Why is hiring the best possible employee for a vacancy increasingly important?
3. How should organizations assess candidates for qualities like commitment,
loyalty, passion, persistence, and character?
Paine in Paine, L. S., (2002). Value Shift: Why Companies Must Merge Social and Financial Imperatives to
Achieve Superior Performance. New York: McGraw-Hill.

Did the HRP See My Application? -- Case Study – By Dr. Sarah J. Smith
In a digital era, applicants typically are directed to a company’s website to apply

online. The human resource information system (HRIS) which is used to collect and
analyze applicant information has provided beneficial support for many HRPs. The HRIS
can be configured so that the applicants who best fit the knowledge, skills, abilities and
other conditions for the open position are selected from the applicant pool.
The HRIS can also create challenges for the HRPs. At a large manufacturer, well
known for its stability, growth, and outstanding benefits, the coordinating HRP was
overwhelmed when 1,500 applicants submitted their information for twelve open
positions. In his role as an HRP, Steve was responsible for the job postings. This task
only required about an hour of Steve’s time, which he felt was quite efficient. Within two
days, Steve realized the magnitude of applicants and felt overwhelmed. Would the hiring
criteria selected be sufficient to identify the best applicants? How could he be sure that
highly qualified applicants were not ignored by the system?
One applicant who lived near the company decided to phone human resources to
enquire as to the status of his application. The administrative assistant, thinking she was
doing him a favor, said if she were him, she would not talk to an HRP. She had noticed
when a call was received, the applicant moved down in the applicant pool ranking.
Directions as to the preferred design of résumés for electronic submission was sparse.
Steve did not specify a font nor size of font. Additionally, he did not specify if an
electronic résumé or traditional design would be best. Some automated HRIS selection
criteria read nouns rather than verbs. If a traditional résumé was submitted, key word
searches could miss some of the desired KSAOs. An HRIS can also distort characters,
such as lines, bullets, italics and indentations as often seen on a traditional résumé. Steve
felt as if he would lose some sleep that night, thinking about all of the factors that could
influence his HRIS selection and thus, applicant search.
1. What might have been the results of applicant analysis if Steve had more open
communication with potential applicants?
2. Many organizations have turned to hiring from an intern pool in which interns
work with colleagues in the actual work environment and become known to the
organization and its members. Do you think hiring interns into full-time regular
positions provides a feasible strategy for the HRPs in an era of technology? How
could this approach be beneficial to the company, human resources, and the
intern?
3. With 12 open positions and 1,500 applicants, what criteria do you think HR
should use to make the ‘first cut’?

88 Cam Caldwell
The New HRP -- Case Study – By Dr. Sarah J. Smith
Kari’s first job as an HRP included responsibilities for recruitment and selection. She
had somehow successfully navigated through the company’s electronic application
process; however, at times she wondered how she actually landed her job. She has now
been requested to assist with the recruitment and selection for a technical position in the
company.
The company’s information services (IS) staff are quite efficient and knowledgeable.
Thus, Kari feels comfortable with the design of the HRIS. Surely IS had configured the
HRIS properly inasmuch as it has been in use for three years. Kari’s company is an
employer of choice and thus, she assumes that she does not need to reach out to industry
or trade organizations about the job opening. Job seekers generally monitor the company
website to keep tabs on open positions that are available.
The individual to be hired to flll this technical position will need to travel to Mexico
on occasion to provide oversight and support for production there. The technical team is
tight-knit and works in close proximity to each other. Kari must decide how to assess
organizational fit of the applicant while balancing technical expertise. As a recent college
graduate, Kari highly values education and the academic degrees that an applicant has
achieved.
1. Could Kari’s affinity for education affect her decisions during the selection
process? Is more education ‘better’?
2. If Kari recommends only the applicants who appear to be most technically
qualified, what might she be leaving out of the selection decision process?
3. Some of the managers have expressed to Kari that they would prefer to hire
someone who did not have experience and train them, rather than risk hiring a
person who comes in with pre-conceived thoughts about ‘how things are done.’
Some applicants with work experience make statements in front of colleagues
about the ‘way it was done’ at the other company. Do you think the managers’
concerns are valid? How should Kari respond to this request?
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Recruitment Websites: Indirect and Interactive Effects on Applicant Attraction.”
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Brannick, M. T., & Levine, E. L., (2007). Job Analysis: Methods, Research, and
Application. Thousand Oaks, CA: Sage.
Caldwell, C., Converse., P., and Beverage, M., 2017 “Selecting for ‘Flair Factors’ --
Improving the Selection Process.” Paper accepted for publication in the Journal of
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Issue 1, pp 73-88.
Caldwell, C., and Ndalamba, K. K., 2017. “Trust and Being ‘Worthy’ – The Keys to
1086
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found online on September 27, 2017 at http://focus.kornferry.com/employee-
engagement/motivation-and-retention-in-the-age-of-the-gig-economy/.
Others Don’t. New York: Harper Collins.
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Daltner, B. (2013). “How to Use Psychometric Testing in Hiring.” Harvard Business
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Ethics, Vol. 144, pp. 467-478.
Duckworth, A., (2016). GRIT: The Power of Passion and Perseverance. New York:
Scribner.
Edenborough, R., (2007). Assessment Guides in Recruitment, Selection, & Performance:
A Manager’s Guide to Psychometric Testing, Interviews, and Assessment Centers.
London, UK: Kogan Page Limited
Furr, R. M. and Bacharach, V. R., (2013). Psychometrics: An Introduction (2nd ed.).
Thousand Oaks, CA: Sage.
Gatewood, R. D., Field, H. S., and Barrick, M. R., (2015). Human Resource Selection (8th
ed.). Boston, MA: Cengage Learning.
Goleman, D., (2007). Social Intelligence: The New Science of Human Relations. New
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Gomez-Mejia, L. R., Balkin, D. B., and Cardy, R. L, (2015) Managing Human Resources
(8th ed.). New York: Pearson.

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Guion, R. M., (1998). “Some Virtues of Dissatisfaction in the Science and Practice of
Personnel Selection.” Human Resource Management Review, Vol. 8, Iss. 4, pp. 351-
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Highhouse, S., Doverspike, D., & Guion, R. M. (2016). Essentials of Personnel Selection
and Assessment. New York: Routledge.
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Listen to My Gut’: The Role of Intuition in Employee Selection.” Personnel Review,
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Report.pdf.
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pp. 33-46.

Chapter 7
COMPENSATION AND BENEFITS: ATTRACTING AND

RETAINING TOP TALENT
Cam Caldwell
Muscat, Oman
Employee compensation has been the source of many disagreements as a critical

motivator of human performance. Despite differing opinions about the significance of
extrinsic rewards, there is little argument about the importance of an organization’s
compensation and benefits philosophy as a key element of its strategic approach to
attracting and retaining the employees who create organizational value. Compensation
and benefit systems are widely recognized as important Human Resource Management
(HRM) building blocks and are typically viewed in terms of their ability to fairly and
equitably reward employees for their contribution to an organization’s successes.
The purpose of this chapter is to address the importance of an organization’s
compensation and benefits package and the underlying assumptions upon which a
compensation system is based. The chapter begins by enumerating the basic elements
which make up compensation and benefits and identifying commonly utilized methods to
reward performance. The chapter then addresses why so many organizations have
restructured their philosophy about the employer-employee relationship and assumptions
about compensation due to the nature of a globally competitive marketplace. After
presenting six cautionary caveats about compensation and benefits based upon the
changing nature of the workplace, the chapter concludes with ten recommendations about
employee compensation and benefit administration as organizations strive to achieve
their strategic mission.

94 Cam Caldwell
COMPENSATION IN A “GIG” ECONOMY
Today’s knowledge-, wisdom-, and information-based economy is far different from

the economic world of yesteryear1. According to a 2015 article in Forbes magazine and
the U.S. Government Accountability Office, 40.4% of U.S. workers work in the
contingent economy – with the number rising at a rapid rate2. The “gig” economy (with a
gig meaning a short-term project), has grown exponentially with 51% of all employers
indicating that they intend to hire more temporary workers in 20173. At the same time,
68% of employers recently surveyed claim that they cannot find qualified people to fill
positions4 - perhaps, in many cases, because those who are qualified are unwilling to
work for low salaries and without benefits. Based upon the current growth rate of
contingent jobs, by 2020 as many as 45% of the US workforce will be in part-time,
temporary, or contract positions5. Despite the alarming nature of these statistics, they
reflect the status of the economy that is not new and that has been acknowledged by
business experts for the past twenty years.
Plainly, the employer-employee relationship has changed and there has been a
profound shift in the “contract” between employers and employees about the nature of
work, the role of employees, and the philosophy of compensation that now drives many
employers6. Essentially, the message of the new employment contract says to today’s
worker, “You are a commodity providing me a service which I seek to obtain as cheaply
as possible and with little regard to creating a relationship that suggests that I care
about your long-term welfare.”
Ironically, a growing body of empirical research has confirmed that employers who
treat employees as trusted partners and who establish more permanent relationships with
employees are more profitable than comparable organizations that lack this commitment
to their employees7. Apparently, today’s organization leaders are badly conflicted –
1
See Covey, S. R. (2004). The 8th Habit: From Effectiveness to Greatness. New York: Simon & Schuster.
2
Polfeldt, E., (2015).”Shocker: 40% of Workers Now Have ‘Contingent’ Jobs, Says Government.” Forbes May 25th
found online on October 16, 2017 at https://www.forbes.com/sites/elainepofeldt/
2015/05/25/shocker-40-of-workers-now-have-contingent-jobs-says-u-s-government/#6748695814be.
3
Braun, K., (2017). “Temporary Hiring Trends in 2017 and Beyond.” CareerBuilder, January 26th found online on
October 16, 2017 at https://resources.careerbuilder.com/news-research/temporary-hiring-trends-in-2017-and-
beyond.
4
Sipek, S., (2017). “68 Percent of Employers Can’t Fill Open Positions.” CareerBuilder, April 24 th found online on
October 16, 2017 at https://resources.careerbuilder.com/news-research/employers-cant-fill-open-positions?
ref=bomborec&recotrk=6883fZIEhEfVuoCvPXR.
5
Braun, K., (2017) op. cit.
6
These issues were addressed in detail by Stanford University’s Jeffrey Pfeffer in Pfeffer, J., (1998). The Human
Equation: Building Profits by Putting People First. Boston, MA: Harvard Business Review Press.
7
For a summary of this more effective approach to employee relations, see Beer, M., (2009). High Commitment
High Performance: How to Build a Resilient Organization for Sustained Advantage. San Francisco, CA:
Jossey-Bass or Caldwell, C., and Floyd, L. A., (2014). “High Performance Work Systems: Building
Commitment to Increase Profitability.” Graziadio Business Review, Vol. 17, Iss. 3, found online at
http://gbr.pepperdine.edu/2014/12/high-performance-work-systems/.

Compensation and Benefits 95
Figure 1.
feeling pressure to reduce costs and minimize expenses by hiring employees to whom
they are not willing to make a commitment, yet facing a growing body of research that
suggests that their most effective long-term strategy is to create an organizational culture
that treats employees as valued partners8.
For many employers, the attempt to hire contingent employees to cut costs becomes a
lose-lose relationship. Employers cut costs by hiring contingent employees to avoid
paying for benefits like health insurance and employee training to lower their short-term
costs of operation. . . but in doing so they lose employee loyalty and hire individuals who
are likely to lack adequate skills to perform at a world class level. In turn, employees are
unable to earn what they need to succeed financially, protect their families’ interests, and
become truly proficient at their jobs.
Short-term thinking and hiring contingent employees may save a company money
temporarily but can mortgage a company’s long-term future and its ability to succeed in
the competitive global marketplace9.
8
This conflict is addressed in many publications, including Caldwell, C., (2012). Moral Leadership: A
Transformative Model for Tomorrow’s Leaders. New York: Business Expert Press and in Block, P., (2013).
Stewardship: Choosing Service Over Self-Interest. San Francisco, CA: Jossey-Bass.
9
This point was powerfully made in Pfeffer, J., (1998) op. cit. and in Beer, M. (2009) op. cit.

96 Cam Caldwell
In today’s highly competitive economic market the

tendency for organizations is often to “low ball” job
candidates, not fully acknowledging the value of well-
qualified external candidates and offering salaries
below the compensation rate for current employees –
even when those external candidates have better
skills than incumbents in the position being filled. The
consequence, of course, is that top candidates choose
to work for competitors who adopt a more realistic
perspective about the relative work of highly qualified
individuals.
Figure 2.
COMPENSATION PHILOSOPHIES
The compensation systems that are used in determining salaries in organizations

reflect implicit Top Management Team assumptions about the role and contribution of
employees and the underlying philosophy of organization leaders. Compensation
decisions also reflect perceptions about the comparable market rate, the availability of
qualified applicants, the state of the economy, and the relative importance of individuals
and/or positions in meeting the needs of an organization to ensure its success10.
The following are commonly used compensation methods and the assumptions and
philosophy that are the basis for each method.
1) Factor Assessment – Factor assessment assigns value to positions based upon the
degree to which the person in the position possesses specific qualifications. For
10
For a comprehensive review of compensation systems and their foundations, see Milkovich, G., Newman, J., and
Gerhart, B., (2013). Compensation (11th ed.). New York: McGraw-Hill.

In developing a Compensation and Benefits program,

HRPs should always focus on creating an action plan
that aligns with the mission and goals of their
organization – as articulated by the organization’s
Top Management Team. That plan should also be
aligned with other HRM policies and their
organizations’ articulated values. Although
compensation and benefits are not the primary
motivator of most employees, a company’s
compensation system is always considered to be a
priority for employees – often because of employee
concerns for internal and external equity.
Figure 3.
example, education or training completed is commonly considered as a

determining factor. Other factor examples are the value of business or resources
for which a person is responsible, variety of job tasks that a person can perform,
and number of persons supervised. The assumption is that persons are capable of
adding value and worthy of higher compensation based upon the amount of each
factor that they possess.
2) Ranking – Ranking is a comparative method that measures the relative
importance of each individual in the organization in contributing to
accomplishing its mission and goals. This method ranks each employee
according to his or her comparative contribution. The underlying assumption is
that persons who are ranked higher should receive greater compensation than
those ranked lower in relative contribution.
3) Benchmark – This method compares individual positions based upon job duties
performed in comparison with pre-determined benchmark positions. An
organization’s positions are then ordered in relative comparison with the
benchmark positions and compensation is assigned relative to that ordering. The
assumption is that the established benchmarks are fairly compensated in the
market place and reflect the comparative worth of each job within the
organization.
4) Guide Chart – A guide chart is a complex method of comparing individual
employees and positions based upon a detailed set of behavioral descriptions for
such general responsibilities as Know How, Problem Solving, Accountability,

98 Cam Caldwell
and Additional Compensable Elements11. The assumption is that these guide

chart factors are the appropriate criteria for determining compensation, based
upon the research of the company conducting the study.
5) Market Comparison – This method is used to identify the current range of
salaries offered by what have been identified to be “comparable” organizations
with similar positions. The assumptions of this method are that 1) the positions
are comparable, 2) the organizations are actually similar, and 3) the market is a
fair indicator of appropriate compensation.
6) Longevity and Seniority – This method is used to adjust compensation within a
salary range, based upon length of time working within the organization. The
assumptions are 1) that seniority and tenure equate with familiarity about the
organization and 2) the capacity which that familiarity contributes adds value to
an incumbent’s worth.
7) Productivity – Compensation based upon volume of sales, units of production, or
significance of a specific accomplishment are often used. NUCOR Steel, for
example, pays its employees a base wage with a bonus each quarter which is
based upon the value created by the team with which the employee works12. The
assumptions are that the team members have contributed evenly to the value
added and that compensation is a function of the team contribution.
8) Contract-Based – When a union or employee negotiates a contract, that contract
becomes the basis for the compensation paid. The assumptions are that the
employees in positions all contribute equally and that the labor-management
contractual relationship fairly determines what employee contributions are worth.
9) Gainsharing – Gainsharing is a compensation philosophy based upon the
acknowledgement that value added is generated by achieving time-targeted goals.
Profitability may not yet be fully achieved by a company but a firm may
nonetheless make significant progress not measured by its profits. The
assumption is that the value added can be accurately measured based upon goals
achieved and that individual employee contributions to goals also may be
identified.
10) Combined Methods – Compensation systems may integrate several of the
methods of compensation listed herein to confirm that the respective methods
achieve the same, or approximately the same, outcomes. The assumption of this
approach is that determining compensation is an imperfect science but should be
rational and reliable by generating multiple data points and integrating
information obtained therefrom.
11
These guide chart elements are commonly used in the Hay System and were found on October 18, 2017 at
https://www.haygroup.com/downloads/au/Guide_Chart-Profile_Method_of_Job_Evaluation_Brochure
_web.pdf.
12
The NUCOR Steel compensation philosophy is well described in Anderson, S. C., Finley, R. L., & Sparks, W.,
(2009). “NUCOR: Values and Transition.” Business Case Journal. Vol. 16, Iss. 2, pp. 64-72.

In today’s highly competitive economic market the tendency for many organizations
is to “low ball” job candidates, not fully acknowledging the value of well-qualified
external candidates and offering salaries below the compensation rate for current
employees – even when those external candidates have better skills than incumbents in
the position being filled. The consequence, of course, is that top candidates choose to
work for competitors who adopt a more realistic perspective about the relative work of
highly qualified individuals.
Treating employees as valued partners has

been identified as an important priority in
repairing distrust and lost confidence in
employers. Although the trend to hire part-
time, temporary, and contract employees is
likely to continue in an attempt by many
companies to reduce labor costs and save
money, it has not yet been determined that
such an approach actually helps those
companies to increase their long-term
profitability.
Figure 4.
Organizations are increasingly recognizing the importance of compensation systems

that that reflect the contribution of a team to organization results. This approach to
compensation is often prevalent in organizations that establish High Performance Work
Systems which seek to treat employees as trusted partners in the achievement of
organizational goals13. A growing body of evidence has suggested that such systems
result in greater employee innovation, increased customer satisfaction, higher
productivity, and greater profitability14. Notwithstanding that evidence, the trend towards
creating an “arms-length” relationship with employees, hiring contingent workers, and
treating employees like commodities rather than people often occurs – resulting in high
13
See Caldwell, C., and Floyd, L. A., 2014. “High Performance Work Systems: Building Commitment to Increase
Profitability.” Graziadio Business Review, Vol. 17, Iss. 3, found online at http://gbr.pepperdine.edu/
2014/12/high-performance-work-systems/.
14
See Beer, M., (2009) op. cit.

100 Cam Caldwell
turnover rates, low employee trust in management15, decreased employee engagement16,

and questionable organizational results.
Because of the challenges of competing in a global market, organizations have
downsized, outsourced, offshored, and contracted out for employees in an effort to save
dollars and improve their ability to compete. The rationale for such changes has been that
labor costs are too high for many American businesses to compete successfully with
foreign companies that pay their employees exponentially less than US employers.
THE STATUS OF EMPLOYEE BENEFITS
Employee Benefits have been cut drastically with the rise of contingent workers,
largely to avoid the costs of employee benefits. According to the Bureau of Labor
Statistics, employee benefits for full-time private sector employees are about 30.4% of
total compensation17. The substantial increase in permanent part-time, contract, and
temporary employees generally enables employers to avoid the costs of health insurance
which have risen faster than inflation and have increased the cost per hour of full-time
employees. Forbes magazine reported in 2015 that “the average annual premiums for
employer-sponsored health insurance were $6,251 for single coverage and $17,545 for
family coverage” with that amount rising incrementally annually18. Because contingent
employees rarely receive health insurance benefits, cost savings accrue when full-time
employee positions are replaced with part-time, temporary, and contract employees who
often struggle to become insured.
According to the Bureau of Labor Statistics, part-time employees average only 37
cents per hour for retirement and savings benefits in private industry, compared to $1.73
per hour for full-time employees19. For other benefits, contingent employees are also
typically excluded, whereas full-time employees cost private employers $2.30 per hour
work for paid leave, $1.18 per hour for supplemental pay, and $2.66 per hour for
insurance benefits20. Both part-time and full-time employees cost employers for legally
required benefits (e.g., Social Security), although part-time employees typically cost
employers less due to their lower salaries.
15
See Gallup, (2017). “Confidence in Institutions” found online on October 19, 2017 at
16
See Gallup, (2017). “Employee Engagement” found online on October 19, 2017 at http://news.gallup.com/
topic/employee_engagement.aspx,
17
Bureau of Labor Statistics, (2017). “Employer Costs for Employee Compensation – June 2017.” September 8,
2017 press release found online on October 20, 2017 at https://www.bls.gov/news.release/pdf/ecec.pdf.
18
See Evans, M. & Fleming, K., (2017). “What We Can All Do About Rising Healthcare Costs.” June 28, 2017
found online on October 20, 2017 at https://www.forbes.com/sites/allbusiness/2017/06/28/what-we-can-all-do-
about-rising-healthcare-costs/#1bdf201c2f37.
19
Bureau of Labor Statistics, (2017) op. cit.
20
Ibid.

Employee Benefits have been cut drastically with

the rise of contingent workers, largely to avoid the
costs of employee benefits. According to the
Bureau of Labor Statistics, employee benefits for
full-time private sector employees are 30.4% of
total compensation. The substantial increase in
permanent part-time, contract, and temporary
employees generally enables employers to avoid
the costs of health insurance which have risen
faster than inflation and have increased the cost
per hour of full-time employees.
Figure 5.
Roger Lowenstein’s profoundly important book, While America Aged, identified the
impact of “defined benefit programs run amok” that have undermined major corporations
like General Motors and put governmental units like the City of San Diego in “near
bankruptcy” status21. Although many governmentally-related organizations and union
companies still retain defined benefit programs, most organizations have evolved to
defined contribution programs that cap financially-related pension liability costs. For
those companies that continue to offer any pension benefits, the employer contribution to
Individual Retirement Accounts (IRAs) is typically limited to an annual employer
contribution that caps a company’s financial obligation.
Benefit programs in organizations can encompass a broad variety of individual and/or
group benefits. In acknowledgement of the fact that not all employees need the same
combination of benefits, many firms have instituted what is often called “cafeteria” or
“flexible” benefit plans. Such plans are able to determine the cost of benefits offered and
allow employees to select from a menu of benefit options within a pre-determined
percent or dollar amount – often based upon the employee’s salary. For example,
cafeteria plans may offer reimbursement for gym memberships for an employee and his
or her family, reimbursement for professional development or education, daycare for
employees with young children, and/or parent care for employees with dependent parents
with special needs. Flexible benefit plans acknowledge that a company or organization
21
For a review of this important topic, read Lowenstein, R., (2009). While America Aged: How Pension Debts
Ruined General Motors, Stopped the NYC Subways, Bankrupted San Diego, and Loom as the Next Financial
Crisis. New York: Penguin Books.

102 Cam Caldwell
recognizes that each employee may be uniquely different and may prefer a different
combination of benefits than others.
Employers of all types have avoided hiring full-time staff to reduce costs. For
example, many colleges and universities hire adjunct faculty who lack terminal degrees
and limited teaching experience rather than hiring full-time faculty in an attempt to cut
costs. The cost savings for these colleges or universities is a short-term savings.
Meanwhile, students are taught by less qualified individuals and the overall quality of
education provided by the hiring institution then erodes. The same loss in quality occurs
in other organizations when less qualified and competent contingent employees are
hired22.
RECOMMENDATIONS FOR COMPENSATION AND BENEFITS
In developing a Compensation and Benefits program, HRPs should always focus on

creating an action plan that aligns with the mission and goals of their organization – as
articulated by the organization’s Top Management Team23. That plan should also be
aligned with other HRM policies and their organizations’ articulated values24. Although
compensation and benefits are not the primary motivator of most employees, a
company’s compensation system is always considered to be a priority for employees –
often because of employee concerns about internal and external equity25.
Figure 6.
22
This point is made in Pfeffer, J., (1998) op. cit.
23
Caldwell, C., Truong, D., Linh, P., and Tuan, A., 2011. “Strategic Human Resource Management as Ethical
Stewardship.” Journal of Business Ethics, Vol. 98, Iss. 1, pp. 171-182.
24
Ibid.
25

The following are ten general recommendations that HRPs should consider as they
develop a new compensation and benefits plan, or as they assess their current plan26.
1) Develop a philosophy of total compensation that attracts the best available

employees. The “best” employees, of course, are those that match the
organization’s short-term and long-term needs in creating value, generating
profit, and honoring duties owed to society. Focusing short-term is often a critical
mistake that impairs the ability of an organization to succeed over time.
2) Compensate based upon team performance when value is created by teams.
When value is created for an organization by collaborative effort, compensation
should reflect that cooperation and should benefit all of the participants who
contributed to achieving the desired outcome.
3) Create gainsharing programs when metrics are measurable. When an
organization has developed the capacity to measure performance and the
incremental value added by an employee group, the organization should consider
creating a compensation system that recognizes the accomplishment. Rather than
implementing an across-the-board increase in all employees’ compensation rate,
it is often appropriate to institute a performance bonus tied to the achievement of
specific outstanding result.
4) Discontinue longevity and seniority-based compensation and reward results. In
today’s knowledge-, wisdom-, and information-based economy, determining
compensation based upon years of service rather than other more performance-
related criteria is inconsistent with an organization’s needs and/or the ability to
create added value for the organization.
5) Hire a core group of highly-committed full-time employees and use part-time
employees only if workload is cyclical. Although cyclical work can justify hiring
contingent employees, hiring a core group of skilled and highly-committed full-
time employees can not only reward that commitment but generate greater long-
term profits for an organization.
6) Involve employees in identifying productivity improvements and reward teams
for improved outcomes. Creating a highly engaged employee work force and
involving them in constantly improving the organization enables an organization
to share gains with the persons responsible for lowering costs, increasing
productivity, or otherwise enabling the organization to increase short-term and/or
long-term profits27.
26
These ten general recommendations are insights derived from three primary sources: Pfeffer, J., (1998) op cit.,
Beer, M., (2009) op. cit., and Covey, S. R., (2004) op. cit.
27
See, for example, Smith, S., Peters, R., and Caldwell, C., 2016. “Creating a Culture of Engagement – Insights for
Application.” Business and Management Research, Vol. 5, No. 2, pp. 70 -80 available online at
http://www.sciedupress.com/journal/index.php/bmr/article/view/9734/5891.

104 Cam Caldwell
7) Identify critical employee positions and pay employees in those positions well
enough to retain them. Often there are extremely critical positions in
organizations where an outstanding employee makes it possible for a company to
exceed the performance of competitors in meeting the needs of customers or in
performing certain value-creating tasks. HRPs should identify such positions and
recognize the need to retain these key employees, even if doing so requires
paying this employee in a manner that is otherwise inconsistent with a company’s
pay plan28.
8) Avoid status barrier differentials for benefits and treat benefit recipients
equally. Creating benefit differentials for a select group of employees has been
identified as a counter-productive decision and is recommended against for
organizations seeking to create a culture of high trust. Providing “special
benefits” sends a message to employees that the organization is elitist in the way
that employees in that select group are treated.
9) Avoid tying raises to performance evaluation systems if supervisors are not
properly trained. Performance evaluation systems are notoriously ineffective and
are often a cause of substantial discord in organizations. When salary increases
are tied to performance evaluation, the credibility of an organization can be
seriously impaired and trust can be undermined. Training supervisors effectively
can remediate this problem, but performance evaluation systems are often
perceived by employees as unfair and poorly administered29.
10) Provide “cafeteria” options for employee benefits to respond to unique
employee needs. Cafeteria, or flexible benefit programs, empower employees to
choose a benefit package within specific dollar limits that best meet their
individual and family needs. Organizations should consider the advantages of
such programs, consistent with the costs of benefits that they can afford to
provide.
These ten recommendations should be considered in context with the mission and
goals of an HRPs organization. The proper role of HRPs, of course, is to present their
Top Management Teams with information about these recommendations – including their
costs, benefits, advantages, and disadvantages – so that the Top Management Team can
make the ultimate decisions. By taking the position that their role is to advise and assist
the management team, HRPs strengthen their credibility in helping their organization to
achieve its purposes and to optimize long-term value creation.
28
For a discussion of “flair factors” and the critical importance of key employees, see, for example, Caldwell, C.,
Converse., P., and Beverage, M., 2018. “Selecting for ‘Flair Factors’ - Improving the Selection Process.”
Paper accepted for publication in the Journal of Management Development.
29
W. Edwards Deming is particularly critical of performance evaluation systems and their inefficiencies and
inaccuracies. As administered, many such systems generate ill will and are problematical. See Deming, W. E.,
(2000). Out of the Crisis. Cambridge, MA: MIT Press.

CONCLUSION
In the modern organization the employer-employee relationship has changed

markedly. Unfortunately, that change has resulted in a decline in employee loyalty and
trust and has redefined the employer-employee relationship as a transactional exchange.
A growing body of research confirms that organizations need to thoughtfully reconsider
the direction in which this relationship is headed. Scholars like Harvard’s Lynn Paine
have emphasized the importance of organizations integrating social and financial values
to succeed in tomorrow’s complex world30. Treating employees as valued partners has
been identified as an important priority in repairing distrust and lost confidence in
employers31. Although the trend to hire part-time, temporary, and contract employees is
likely to continue in an attempt by many companies to reduce labor costs and save
money, it has not yet been determined that such an approach actually helps those
companies to increase their long-term profitability.
Questions to Ponder
1) What do you personally think are the biggest shortcomings of compensation and
benefit programs?
2) What criteria do you think are most important in developing a compensation
plan?
3) Why is compensation equity such an important issue for employees?
The Resource Pool - Case Study - by Dr. Sarah J. Smith
An area employer who employs more than 1,300 employees had a problem. Hiring
temporary workers to fill a void showed limited success. Although some safety training
was provided by the temp agency, the nature of this industry required extensive safety
and compliance training. Before an employee or temp worker is allowed to actually
perform work, all of the additional training must be completed.
When temporary workers arrive, significant time is required to acquaint the person
with the culture, mission, vision, and goals of the organization. Even when this training is
complete, coworkers knew this employment relationship would be temporary and team
cohesiveness and productivity suffered. In an attempt to remedy this situation, the
organization decided to develop its own temporary worker program: The Resource Pool.
30
Paine, L. S., (2002). Value Shift: Why Companies Must Merge Social and Financial Imperatives to Achieve
Superior Performance. New York: McGraw-Hill.
31
Block, P., (2013). Stewardship: Choosing Service Over Self-Interest. San Francisco, CA: Jossey-Boss.

106 Cam Caldwell
The Resource Pool workers are employees of the organization. Their paychecks
come from the company, not a temp agency. Resource Pool workers do not receive
benefits: Their primary benefit is the option to accept or reject an assignment request.
The Resource Pool has been comparatively more successful. Some people who are in
work/life balance situations can remain in the workplace environment, yet have more
flexibility to attend to personal or family needs.
A benefit to the organization of The Resource Pool is that participating employees
were up to date on required training. There was no 'down time' to fill a training gap. The
Resource Pool workers understood the organization's culture, mission, vision, and goals.
1) The Resource Pool employees were paid a higher hourly wage than similar full-
time benefits eligible colleagues. Do you think this was fair? Is this equitable?
2) The primary benefit for resource employees is the ability to ask for flexible
scheduling and to accept or reject a work request, without repercussions. Should
full-time benefits eligible employee be awarded the same opportunities? Why or
why not?
3) When a company has a temporary employee they would like to hire, it must
negotiate a contract buy out with the temporary agency. Do you think The
Resource Pool helps alleviate this cost? What do you believe the likelihood
would be for a resource employee to accept a full-time position offered?
The Three-Legged Stool - Case Study - by Dr. Sarah J. Smith
In addition to the transition toward defined contribution plans from defined benefits
plans, other retirement situations continue to evolve. In past years, retirement income was
thought to consist of Social Security and income from the employer's retirement plan.
Today, a “Three-Legged Stool” approach has added the employee's own personal savings
to long-term retirement funding.
A two-legged stool, just like relying on Social Security and an employer's retirement
plan alone, is not adequate for many employees facing retirement. To help HRPs better
understand The Three-Legged Stool, local HRPs met together with a financial analyst.

Diane, a member of that group attended this training session and confirmed some of what
Diane already knew as well as provided some new ideas. One area, which she always
thought was important, is that HRPs should refrain from offering employees financial
advice. Poor advice from HRPS has at times had lasting effects for an employee or
retiree. To help employees make their own best decisions, Diane decided she should
encourage employees to meet with a financial advisor. Diane also learned there were
several online retirement income calculators available. She decided she would also like to
pass this information along to her employees.
1) What training, if any, should organizations offer their employees early in their
careers about long-term financial planning?
2) If Diane promotes web sites that feature retirement income calculators is she
overstepping the boundaries of her position as an HRP? Could such a
recommendation be considered giving financial advice?
3) Diane learned that Americans, as a whole, are generally poor at generating
personal savings. Many other countries workers have high rates of personal
savings. How could a company effectively promote personal savings and long-
term financial planning?
REFERENCES
Anderson, S. C., Finley, R. L., & Sparks, W., (2009). “NUCOR: Values and Transition.”
Business Case Journal. Vol. 16, Iss. 2, pp. 64-72.
Block, P., (2013). Stewardship: Choosing Service Over Self-Interest. San Francisco, CA:
Jossey-Bass.
Braun, K., (2017). “Temporary Hiring Trends in 2017 and Beyond.” CareerBuilder,
January 26th found online on October 16, 2017 at https://resources.careerbuilder.com/
news-research/temporary-hiring-trends-in-2017-and-beyond.
Bureau of Labor Statistics, (2017). “Employer Costs for Employee Compensation – June
2017.” September 8, 2017 press release found online on October 20, 2017 at
https://www.bls.gov/news.release/pdf/ecec.pdf.
Leaders. New York: Business Expert Press
Caldwell, C., and Floyd, L. A., (2014). “High Performance Work Systems: Building
Commitment to Increase Profitability.” Graziadio Business Review, Vol. 17, Iss. 3.

108 Cam Caldwell
Caldwell, C., Converse., P., and Beverage, M., (2018). “Selecting for ‘Flair Factors’ --
Caldwell, C., Truong, D., Linh, P., and Tuan, A., 2011. “Strategic Human Resource
171-182.
Covey, S. R. (2004). The 8th Habit: From Effectiveness to Greatness. New York: Simon
& Schuster.
Deming, W. E., (2000). Out of the Crisis. Cambridge, MA: MIT Press.
Evans, M. & Fleming, K., (2017). “What We Can All Do About Rising Healthcare
Costs.” June 28, 2017 found online on October 20, 2017 at https://www.forbes.com/
sites/allbusiness/2017/06/28/what-we-can-all-do-about-rising-healthcare-
costs/#1bdf201c2f37.
Gallup, (2017). “Confidence in Institutions” found online on October 19, 2017 at
Gallup, (2017). “Employee Engagement” found online on October 19, 2017 at
http://news.gallup.com/topic/employee_engagement.aspx,
Hay System and were found on October 18, 2017 at https://www.haygroup.com/
downloads/au/Guide_Chart-Profile_Method_of_Job_Evaluation_Brochure_web.pdf.
Lowenstein, R., (2009). While America Aged: How Pension Debts Ruined General
Motors, Stopped the NYC Subways, Bankrupted San Diego, and Loom as the Next
Financial Crisis. New York: Penguin Books.
Milkovich, G., Newman, J., and Gerhart, B., (2013). Compensation (11th ed.). New York:
McGraw-Hill.
Boston, MA: Harvard Business Review Press.
Polfeldt, E., (2015).”Shocker: 40% of Workers Now Have ‘Contingent’ Jobs, Says
Government.” Forbes May 25th found online on October 16, 2017 at
https://www.forbes.com/sites/elainepofeldt/2015/05/25/shocker-40-of-workers-now-
have-contingent-jobs-says-u-s-government/#6748695814be.
Sipek, S., (2017). “68 Percent of Employers Can’t Fill Open Positions.” CareerBuilder,
April 24th found online on October 16, 2017 at https://resources.careerbuilder.com/
news-research/employers-cant-fill-open-positions?ref=bomborec&recotrk=
6883fZIEhEfVuoCvPXR.
-80 available online at http://www.sciedupress.com/journal/index.php/bmr/article/
view/9734/5891

Chapter 8
PERFORMANCE MANAGEMENT:
A STRATEGIC PERSPECTIVE
Cam Caldwell1, Verl Anderson2 and Sarah Smith3

1
Muscat, Oman
2
Dixie State University, St. George, Utah, US
3
Purdue University Northwest, Hammond, Indiana, US
ABSTRACT
Among the most challenging tasks of managers and supervisors is managing
individual and departmental performance. Stephen R. Covey urged organization leaders
and managers to “Treat your employees exactly as you want them to treat your best
customers.” Although motivating others is often considered to be an important task of
managers and supervisors, other research suggests that people are ultimately internally
and intrinsically motivated if they are to achieve superior performance.
The purpose of this chapter is to identify the critical task of performance
management in the 21st century. We begin by defining performance management and
identifying the four- factors which make up this vital organizational concept. Examining
each of these four parts, we identify the difficulties associated with defining desired
outcomes, identifying what to measure, coaching individuals and teams, and improving
performance results. We conclude the chapter with suggestions for implementing aligned
performance management systems.
DEFINING PERFORMANCE MANAGEMENT
Performance management is the ongoing process of providing communication and

guidance to employees to efficiently and effectively achieve strategic goals of an

110 Cam Caldwell, Verl Anderson and Sarah Smith
organization. Its fundamental purpose is to bring out the best in people while optimizing
long-term value for the organization and its stakeholders1. Performance management is
an iterative, or frequently repeated, process of shared learning, coaching, and support by
which managers and supervisors engage and empower individuals and teams in the quest
to add value that meets present and future customer needs2. Managing performance
properly provides accountability, resources, documentation, and guidelines for tasks and
projects that are essential for effective organizational and personal performance.
As a management tool, performance management had its roots in scientific
management, job design, and work studies in manufacturing chronicled by Frederick
Winslow Taylor and Frank and Lillian Gilbreth at the turn of the 20th century3. Both
Taylor and the Gilbreths examined improving manufacturing efficiency and both were
also aware of the importance of human motivation and the psychology of teams4.
Industrial organizational psychology and management have typically studied
performance management with a focus on individual performance.
Figure 1.
1
The goal of performance management is articulated in Daniels, A. C. & Bailey, J. S. (2014). Performance
Management: Changing Behavior that Drives Organization Effectiveness (5th ed.). Atlanta, GA: Performance
Management Publications.
2
Compare the definition in Aguinis, H., (2014). Performance Management (3rd ed.). Essex, UK: Pearson
International, p. 1.
3
Taylor’s work is recorded in Taylor, F. W., (1911). Principles of Scientific Management. New York & London:
Harper & Brothers. The Gilbreths wrote several books and among them is Gilbreth, F. B. & Gilbreth, L. M.,
(1917). Applied Motion Study: A Collection of Papers on the Efficient Method to Industrial Preparedness.
New York: Sturgis & Walton.
4
Although the scientific approach to efficiency is a primary focus of many who study Taylor and the Gilbreths,
insights about their behavioral acumen are found in Kanigel, R., (1997). The One Best Way: Frederick
Winslow Taylor and the Enigma of Efficiency. Boston, MA: MIT Press and in George, C. S., (1068). The
History of Management Thought. New York: Prentice Hall.

Performance Management: A Strategic Perspective 111
Despite a century of research about improving performance, a Deloitte survey

identified nearly 60% of executives surveyed indicated that current performance
management methods neither drove employee engagement nor resulted in higher
performance5. In fact, performance improvement efforts have often been criticized as
being counter-productive to achieving better organizational results and even for
undermining relationships between supervisors and employees6. According to a 2017
Gallup survey, only 33% of US employees and 13% of employees worldwide feel
engaged at work7 and only 15% of employees feel that their organization’s leadership
makes them feel enthusiastic about the future. In contrast, 70% of employees at the
world’s best organizations report that they are positively engaged at work8. This evidence
confirms that Human Resource Management (HRM) systems that address performance
management are a wise investment for the modern organization.
Figure 2.
FOUR COMPONENTS OF PERFORMANCE MANAGEMENT
Performance management consists of four important components that enable

organizations to achieve their strategic purposes.
5
These findings were reported in Deloitte Consulting LLP & Bersin by Deloitte, (2014). “Global Human Capital
Trends: Engaging the 21st Century Workforce.” New York: Deloitte University Press.
6
For example, W. Edwards Deming strongly criticized traditional performance appraisal systems in Deming, W. E.,
(2000). Out of the Crisis. Boston, MA: MIT Press.
7
This figure is reported in Gallup, (2017). “The Engaged Workplace” found online on August 29, 2017 at
http://www.gallup.com/services/ 190118/engaged-workplace.aspx?gclid=Cj0KCQjwoZTNBRCW
ARIsAOMZHmFyv_6YWwIWiiG9EfCh0VHrE_dWow_A2KyarZHrbE9S7C9iFhcn0xMaAmcPEALw_wcB.
8
Gallup, (2017). State of the American Workplace. Washington, D. C.: Gallup Inc.

1) Defining Desired Outcomes – Organizational mission drives each organization

and that mission can be defined according to increasingly specific results.
Outcomes begin with a clear statement of an organization’s mission and purpose.
That mission is articulated according to performance objectives which contain
time-targeted results in measurable terms. Performance objectives are similarly
established based upon specific implementation objectives consisting of tasks to
be accomplished, resources provided, and accountability assigned9. The difficult
part of defining desired outcomes is the challenge of dealing with unanticipated
variables, such as economic factors, that impact hoped for results. For example,
double-digit inflation substantially affected every organization during the early
years of the 1980 decade, just as the 2008-2009 fiscal crisis impacted
organizations as part of the crisis facing mortgage companies, financial
institutions, and the stock market10.
2) Identifying What to Measure – A common error in measurement occurs when
organizations measure the wrong indicators of performance11. Measurement
errors often result by focusing on what can be easily counted, rather than on
outcomes that are actually most important but that are more difficult to assess12.
The result is that organizations later recognize that they “have their ladder
leaning against the wrong wall” or are accomplishing the wrong objectives13.
Factors that should be measured must align with goals associated with achieving
the organizational mission14, but identifying measurable factors that accurately
reflect mission accomplishment is often challenging – despite its absolute
necessity15.
3) Coaching Individuals and Teams – HRM systems commonly rely on a variety
of methods to assess individual performance, despite the fact that a growing body
of evidence confirms that traditional performance appraisal systems are
9
This process of defining desired outcomes is summarized effectively in the work of George L. Morrisey. See, for
example, Morrisey, G. L., (1976). Management by Objectives and Results in the Public Sector. New York:
Basic Books.
10
Economic and other problems are addressed in Friedman, T. L., (2009). Hot, Flat, and Crowded: Why We Need a
Green Revolution – And How it Can Renew America Release 2.0. New York: Picador Press.
11
This problem often results in achieving outcomes that are not true measures of the intended purpose. This
frequently occurring error was beautifully articulated by the classic article, Kerr, S., (1995). “On the Folly of
Rewarding A While Hoping for B.” Academy of Management Executive, Vol. 9, Iss. 1, pp. 7-14.
12
Stephen R. Covey cites this common mistake in Covey, S. R. (1992). Principle-Centered Leadership. New York:
Fireside.
13
Ibid.
14
Morrisey, G. L., (1976) op. cit and Kerr, S., (1995) op. cit.
15
See Covey, S. R., (1992) op. cit.

ineffective16. The following are typical reasons why performance appraisals are
unsuccessful17.
a. Employees are Skeptical – Their experiences with performance appraisals are

typically negative18. As the 2017 Gallup report confirms, employees often
have negative experiences in organizations and the majority do not feel
engaged19. Those who have the responsibility to rate employees through
performance appraisals are often not provided with adequate training in how
to accomplish this task. Additionally, first-hand familiarity between the
employees with the rating supervisor is expected, yet due to organizational
change, inefficiencies, and lack of training or understanding by performance
raters this dynamic is not always upheld20.
b. Rater Bias – Employees who have experienced the performance appraisal
have also experienced rater bias. Rater bias may be either positive or
negative and typically occurs when raters show favoritism to individuals who
are most like themselves.
c. Tying Individual and Team Goals to Organizational Goals is Difficult. Often
individual and department goals are only indirectly related to the
organization’s ultimate mission. Supervisors, managers, and HRPs not only
must understand how individual and team performance adds value in
achieving organizational mission but must be able to convey that information
to employees21.
d. Goals are Rarely Reliable Long-term. Short-term performance goals rarely
match long-term objectives. Measuring performance based upon the
achievement of short-term performance can distort performance outcomes
and emphasize factors that actually impair long-term success. For example,
creating inventory that requires storage and handling conflicts with Just-in-
Time principles of efficiency and effectiveness22.
e. Metrics Fail to Tell the Story. Few jobs have behaviors and outcomes that
may be precisely measured and that correlate with organization outcomes.
16
This assessment is the message that management experts have addressed for more than fifty years and is
reaffirmed by experts such as Deming, W. E., (2000) op. cit. See also Ferguson, R., (2013). Finally!
Performance Assessment that Works: Big Five Performance Management. Seattle, WA: Amazon Digital
Services.
17
Ibid.
18
See Deming, W. E., (2000) op. cit. for a summary of the detrimental effects of traditional performance appraisal.
19
Gallup, (2017) op. cit.
20
Kane, J., Bernardin, H., & Wiatrowski, M., (2013). Performance appraisal. In N. Brewer & C. Wilson (Eds.),
Psychology and Policing (pp. 257-275). Hillsdale, NJ: Lawrence Earlbaum Associates, Inc.
21
Kerr, S., (1995) op. cit.
22
This point is clearly made in Monden, Y., (2012). Toyota Production System: An Integrated Approach to Just-in-
Time (4th ed.). Boca Raton, FL: Productivity Press.

Only when employees and supervisors understand this relationship will they
identify and focus on the correct measures of performance23.
f. Metrics Can be Manipulated. Control over what is to be counted is often
subjective and can be manipulated by both managers and employees.
Understanding how metrics can best be used, recognizing both the value and
the limits of statistical analysis, and monitoring metrics carefully can help an
organization to identify true performance results24 – and identify
manipulation that can distort real performance and impact goal setting25.
g. Annual Feedback is Inappropriate and Out of Date. Tasks and goals often
require much more timely feedback than is available from an annual
performance review. Despite this fact, many organizations persist in the
annual ritual of performance appraisal even when employees and supervisors
recognize its limitations26.
Despite these recurring problems, most organizations use traditional annual

performance reviews which are often met with resentment, frustration, and the
lowering of morale27. Performance coaching, wherein supervisors and managers
become resources and advocates to help employees to achieve shared goals, has
been identified as a superior process compared to traditional performance
appraisal systems28.
4) Improving Performance Results – Continuous learning and constant
improvement are essential for every organization in the global environment29.
“Bottom-up” efforts to engage and empower employees have proven to be
effective in increasing customer satisfaction, productivity30, and employee
commitment31. Ultimately, performance management is a behavioral process
involving employees in understanding and learning more about performance
23
Ferguson, R., (2013) op. cit.
24
Deming, W. E., (2000) op. cit.
25
Kerr, S., (1995) op. cit.
26
Ferguson, R., (2013) op. cit.
27
Deming, W. E., (2000) op. cit.
28
For a well-written description of performance coaching, see Whitmore, J., (2009). Coaching for Performance:
GROWing Human Potential and Purpose – The Principles and Practice of Coaching and Leadership (4th ed.).
Boston, MA: Nicholas Brealey Publishing.
29
This message is the reality facing modern organizations, as explained in Christensen, C. M., (2016). The
Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Boston, MA: Harvard Business
School Press.
30
These improvements are documented in Terziovski, M., (2002). “Achieving Performance Excellence through an
Integrated Strategy of Radical Innovation and Continuous Improvement.” Measuring Business Excellence,
Vol. 6, Iss. 2, pp. 5 -14.
31
The correlation between engagement and employee commitment is explained in Vance, R. J. (2006). “Employee
Engagement and Commitment: A Guide to Understanding, Measuring, and Increasing Engagement in Your
Organization.” SHRM Foundation found online on August 29, 2017 at https://www.shrm.org/foundation
/ourwork/initiatives/resources-from-past-initiatives/Documents/Employee%
20Engagement%20and%20Commitment.pdf.

goals, causes of problems, and alternatives to the status quo32. In a world where
global competition impacts virtually every private sector organization, the
struggle to be competitive and to constantly learn and improve are challenges
facing every organization33.
Performance management is a constant and never-ending challenge to leaders and

organizations and each of these four elements or components has difficult features to
resolve – especially in a world that is constantly changing and where competition is
increasing on a global scale.
SUGGESTIONS FOR IMPROVING

PERFORMANCE MANAGEMENT
There are no magic formulas for implementing organizational improvements, no

instant solutions, and no dot-to-dot steps to follow that guarantee performance success34.
Figure 3.
However, we have identified twelve principles that we suggest are useful in

implementing an aligned HRM-related performance management program.
1) Integrate the HRM system with the organization’s strategic goals. HRM’s most
powerful contribution to performance management is its commitment to creating
32
The relationships and factors which impact performance improvement are identified in Hedde, R. T. & De Wall,
B., (2015). “What Are the Relationships in Human Oriented Performance Management?” Proceedings of the
European Conference on Management, Leadership, & Governance, pp. 150-159.
33
See Christensen, C. M., (2016) op. cit
34
This point is clearly made in Deming, W. E., (2000) op. cit.

an organizational climate and work culture that supports the organization’s

strategic mission and purpose35.
2) Clarify, formalize, emphasize, and exemplify organizational values. HRPs play
a key role in modeling organizational values as they establish relationships with
employees throughout an organization36. Those relationships confirm or
disconfirm the validity of an organization’s commitment to employees37.
3) Create empowered and engaged partnerships throughout the organization.
HRPs have the opportunity to work with Top Management to establish policies
and practices that engage and empower employees at all levels38 and make them
true “owners and partners”39 and committed stewards40 of the organization’s best
interests.
4) Focus the entire organization on the creation of added value. The creation of
value requires understanding how customer needs are met and how an
organization’s products and services meet those needs better than competitors.
When individuals and teams understand value added, the focus of the
organization narrows and each individual is more aware of their role in creating
that wealth41.
5) Treat everyone with caring, courtesy, and respect – or like “Yous” rather than
“Its.” The ability of organizations to treat people at all levels with caring,
courtesy, respect, and trust is a commodity that is essential to improving
performance, competitive advantage, and organization commitment42. People
who are treated as valued individuals or “Yous”, rather than as commodities or
“Its” demonstrate greater organization commitment and loyalty and are both
more innovative and more prone to going the extra-mile43.
6) Invest in win-win opportunities to increase the value of each employee. A
Transformational or Transformative Leadership approach that honors the best
35
Beer, M., (2009). High Commitment High Performance: How to Build a Resilient Organization for Sustained
36
This relationship is emphasized in Caldwell, C. & Ndalamba, K., (2017). “Human Resource Professionals as
Strategic Leaders – A Behavioral Opportunity for Improving Information Management.” Journal of Values-
Based Leadership, Vol. X, Iss. 1, pp. 44-53.
37
The importance of validating organizational values is explained in Schein, E. H. & Schein, P., (2016).
Organizational Culture and Leadership. San Francisco, CA: Jossey-Bass.
38
This important HRM role is described in described in Mitchell, R., Obeidat, S., & Bray, M. (2013). “The Effect
of Strategic Human Resource Management on Organizational Performance: The Mediating Role of High
Performance Human Resource Practices.” Human Resource Management, Vol. 52, Iss. 6, pp. 899-921 and in
Caldwell, C., Truong, D., Linh, P., and Tuan, A., 2011. “Strategic Human Resource Management as Ethical
39
Block, P., (2013). Stewardship: Choosing Service Over Self-Interest. San Francisco, CA: Berrett-Koehler.
40
This point is clearly made in Hayes, L., Caldwell, C., Licona, B. and Meyer, T. E., 2015. “Follower Behaviors
and Barriers to Wealth Creation.” Journal of Management Development, Vol. 34, Iss. 3, pp. 270-285.
41
Kuehnl, C., Furst, A., Homburg, C., & Startitz, M., (2017). “Toward a Differentiated understanding of the Value-
Creation Chain.” British Journal of Management, Vol. 23, Iss. 3, pp. 444-463.
42
Mitchell, R., et al., (2013) op. cit. and Beer, M., (2009) op. cit.
43
Hayes, et al., (2015) op. cit.

interests of the individuals and the organization has been proven to produce
outstanding organizations like Herman Miller Furniture and NuCor Steel44.
7) Train everyone about decision-making, risk-taking, and experimenting.
Empowered and engaged employees that are provided with training understand
how they can use their talents to constantly improve the organization, contribute
to innovation, and improve customer service45. The HRM role is a vital element
in creating this learning and improvement culture through organization-wide
training46.
8) Reward and hold supervisors and managers accountable for developing their
people. Developing human capital is an ongoing obligation of HRPs, managers,
and supervisors if an organization is to constantly learn and improve. Creating
compensation systems that hold supervisors and managers accountable for
employee development reframes the importance of the coaching role of
supervisors, empowers employees, and creates increased commitment47.
9) Constantly monitor and share information about progress toward strategic
goals. Creating management systems that track performance for individuals,
teams, departments, and the entire organization is a critical part of the value
chain and is a process that HRPs must fully understand and embrace as they
perform their jobs. Sharing this information and creating a transparent
organization helps keep employees aware of the value creation process and their
role in creating wealth48.
10) Acknowledge and celebrate individuals and teams that excel in adding value.
Building into organizations the recognition of outstanding performance builds
organization commitment and morale and is recognized as a key HRM
function49. This celebration should emphasize the contribution made to added
value and wealth creation50.
11) Utilize project teams to study opportunities for improvement and ensure their
success. Creating teams that are endorsed by Top Management and that are fully
44
This point is clearly made in Pfeffer, J., (1998). The Human Equation: Building Profits by Putting People First.
Boston, MA: Harvard Business School Press. See also DePree, M. (2004). Leadership is an Art. New York:
Crown Publishing and Caldwell, C., Dixon, R. D., Floyd, L., Chaudoin, J., Post., J., and Cheokas, G. 2012.
“Transformative Leadership: Achieving Unparalleled Excellence.” Journal of Business Ethics, Vol 109, Iss. 2,
pp. 175-187.
45
The importance of training focused on improving organizational results is explained in Baraldi, S. & Cifalino, A.,
(2015). “Delivering Training Strategies: The Balanced Scorecard at Work.” International Journal of Training
and Development, Vol. 19, Iss. 3, pp. 179-198.
46
See Pfeffer, J., (1998) op. cit. and Mitchell, et al., (2013) op. cit. as examples of the HRM role in employee
training to achieve organization mission.
47
The importance of employee development and a culture of engagement are addressed in Smith, S., Peters, R., and
Caldwell, C., (2016). “Creating a Culture of Engagement – Insights for Application.” Business and
Management Research, Vol. 5, No. 2, pp. 70 -80.
48
The importance of creating this performance monitoring role and its relationship to HRM are addressed in
Pfeffer, J., (1998) op. cit. and Caldwell, C. & Ndalamba, K., (2017)., op. cit.
49
This important point is fundamental to the HRM role but is also addressed in Sholtes, P., Joiner, B. L., & Streibel,
B. J., (2003). The TEAM Handbook (3rd ed.). Madison, WI: Oriel, Inc.
50
Ibid.

focused on specific opportunities to improve performance can be a major

contributor to successful organization improvement. HRM plays a key role in
helping these project teams to function effectively51.
12) Emphasize the demand for constant improvement and the reality of constant
change. Modern organizations face pressures for constant improvement,
continuous learning, and constant52. Creating a culture that supports this change
enables organizations to keep pace with a global marketplace that is constantly
evolving53.
Figure 4.
Managing performance is an ongoing challenge for every organization and requires

the ability to manage technical, interpersonal, and financial skills that impact virtually
every organization and every stakeholder54. As HRPs develop their competencies and
their ability to assist their organizations in the performance management process, they
demonstrate their strategic effectiveness and their potential as powerful resources in an
organization’s success55.
51
Ibid.
52
This reality is clearly addressed by Christensen, C. M., (2016) op. cit.
53
See Smith, S. et al., (2016) op. cit.
54
See Kuehnl, C. et al., (2017) op. cit.
55
To review the HRP roles in strategic HRM, see Mitchell, R., et al., (2013) op. cit., Caldwell, C., (2011) op. cit.
and Caldwell, C., (2012). Moral Leadership: A Transformative Model for Tomorrow’s Leaders. New York:
Business Expert Press. To review the HRP roles in strategic HRM.

Figure 5.
Questions to Ponder
1) Based upon what you know, why do so few employees feel engaged at work?
2) What has your personal experience been with performance evaluations and
performance appraisal? Why are performance appraisals often considered “the
task everyone hates”?
3) What skills do HRPs most need to develop to improve their capacity to help their
organizations to measure performance more effectively?
Disillusioned
Case Study -- by Dr. Sarah J. Smith
Assistant Managers Steve and Barry sat at their desks, each with a generous stack of
manila folders in front of him. The organization's performance management system had
derailed. Performance appraisals were to be completed twice a year, at 6 months and 12
months. According to company policy, the employee's immediate supervisor was

responsible for coordinating the appraisal process and scheduling a review session twice
a year with each of the employees he or she was to evaluate.
The manager of this 90-person company was so frustrated with the current
performance measurement system that he engaged the services of Shelly, a consultant
well-versed in performance management. Shelly had successfully reinvigorated
performance management for several area companies in the area. The manager was
hopeful she could do the same for his organization. In order to better understand the
situation at hand, Shelly decided to begin a conversation with the assistant managers. She
asked what frustrated them about performance management at the current time. Both
Steve and Barry shared that they did not like the fact that the department's performance
appraisal folders ended up on their desks. Both were fine with putting in extra time if
their efforts could improve the organization, but they told Shelly that the current
performance management system seemed to add little value.
The company had struggled this year, and everyone anticipated there would be no
raises. With that performance a reality, any financial incentive for superior or satisfactory
performance was not available to employees. As assistant managers, both Steve and
Barry voiced concern to Shelly about the fact they had not worked on second or third
shift for quite some time. Therefore, the assistant managers had not observed shift
employee behavior at all during the past appraisal year. As their jobs were administrative
in nature, the assistant manager's interaction with first shift production employees was
also limited.
1. Should pay be tied to performance, as measured through performance appraisal at

this company? What else could possibly motivate employees and their
supervisors to set goals and make plans to add value to the organization?
2. Some employees change shifts or move in or out of a specialty assignment during
the year. When work reassignments occur, the affected employee typically has
more than one direct supervisor during the year. What approach could be taken to
accurately represent the employee's performance in this situation? Who should
coordinate the appraisal?
3. Some performance evaluations include goals while others do not. Should goals
be included? How could performance goals be used to allocate training and
development funds for employees who need additional training?
360 Degree Feedback, FMLA, and Termination

-- Case Study -- by Dr. Sarah J. Smith
Dave had been demoted from a plant manager position because the location he
oversaw had exceeded its allocated budget. He was not well liked by the employees

because he had limited continuous learning opportunities and halted a long-anticipated

compensation equity study. Rather than terminating Dave, the parent corporation decided
to reassign Dave to a sister facility as a safety manager. Prior to his promotion to plant
manager, Dave had served as a safety manager within the organization and had
performed that role effectively.
Other personnel were also reassigned within the network of the corporation while
some were terminated. Seeing a potential trend, corporate leadership decided to introduce
a 360 degree feedback appraisal. Their thought was that if the organization did not rely
strictly on one rating supervisor's opinion of the employee's performance, perhaps
performance ratings would be different. At each location, for an employee's 360 degree
performance review, five to seven coworkers, leaders, customers, or vendors were asked
to rate the employee.
Corporate leadership was somewhat surprised when even with a 360 degree
evaluation, results of performance appraisal did not markedly affect the organization.
When the performance evaluation form was reviewed by corporate, several
organizational leaders commented about the ambiguous language from which to choose
in order to rate a person's performance.
In an effort to improve performance appraisal, the HRM Department asked five
supervisors to use the form to rate personnel. Each person was asked on a scale of 0 to
100 to identify the percent of time an employee could perform to justify the rating. Five
words indicated performance levels: Always, Usually, Sometimes, Rarely and Never.
Since the evaluation included 360 degree feedback from various sources, skills and traits
that transcended organizational silos were selected.
An example for the trait 'Ability to work well with others'
Focus Group
Percent of Time for each descriptive word, 0 = low, 100 = high
Member
Always Usually Sometimes Rarely Never
Bob 99% 78% 50% 30% 0%
Betty 85% 51% 30% 15% 5%
Tom 75% 40% 25% 10% 2%
Laura 90% 80% 70% 60% 59%
Janet 87% 65% 43% 27% 10%
Range 75-99% 40-80% 25-70% 10-60% 0-59%
Prior to reassignment, Dave's performance reviews were not favorable.

Unfortunately, this trend continued even after his reassignment to safety manager. Dave
needed a knee replacement and contacted his HRP to arrange for a Family Medical Leave
Act (FMLA) leave of absence. Two days before his request, upper management had

planned to terminate Dave due to his performance. The decision was made to allow
Dave's FMLA request, however, the day after his return, his employment was terminated.
1. What suggestions would you offer this company to improve its performance
management system?
2. What would you have done with regard to advising the corporate leadership
about Dave’s situation?
3. Corporate leadership, the plant manager, and the HRP were concerned about the
ambiguity discovered in identifying differences about rating categories. With
such a large range of perceptions, how could 360 degree ratings be consistent?
How could the organization address the situation of ambiguous terminology and
consistency for future performance evaluation sessions?
Case: Rater Bias or Systems Failure?

A performance management consultant arrived as scheduled at the C-suite offices for

an organization who requested performance appraisal assistance. After meeting with the
head of the department for a briefing, the consultant was introduced to two organization
leaders. The first oversaw the shift workers (Manager 1). The second was responsible for
office, clerical, special assignment employees and oversight of the department's budget
(Manager 2).
Manager 1 and Manager 2 each had a stack of manila folders, approximately 1 1/2
feet high, on their desk. They explained to the consultant how each file contained an
employee's performance appraisal form for the year. The department head instructed
Manager 1 and Manager 2 to complete all performance appraisals within the next two
weeks, as the due date for the performance reviews had already passed by. The managers
were uncomfortable with this request. Manager 1 stated he had not worked 2nd or 3rd
shift all year and that he had no first-hand knowledge of performance of those employees.
Manager 2 stated that he had been heavily tasked with budget issues and had not
anticipated being the rating manager for any employees.
Both managers said they would complete the employees' performance appraisals
because their department head had asked them to do so. However, the level of frustration
and discomfort was evident and permeated the office environment.
Questions:
1. What is the proper time frame to provide feedback to employees?

2. What rating biases might be involved in this performance assessment?

3. How could the lack of direct supervisory observation and input be corrected?
4. What suggestions do you have for an improved performance management policy
in this organization?
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Block, P., (2013). Stewardship: Choosing Service Over Self-Interest. San Francisco, CA:
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“Transformative Leadership: Achieving Unparalleled Excellence.” Journal of
Business Ethics, Vol 109, Iss. 2, pp. 175-187.
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HRM.
Caldwell, C. & Ndalamba, K., (2017). “Human Resource Professionals as Strategic
Leaders – A Behavioral Opportunity for Improving Information Management.”
Journal of Values-Based Leadership, Vol. X, Iss. 1, pp. 44-53.
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Christensen, C. M., (2016). The Innovator’s Dilemma: When New Technologies Cause
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Daniels, A. C. & Bailey, J. S. (2014). Performance Management: Changing Behavior
that Drives Organization Effectiveness (5th ed.). Atlanta, GA: Performance
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https://doi.org/10.1080/19416520.2014.873178
DePree, M. (2004). Leadership is an Art. New York: Crown Publishing.
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MA: Nicholas Brealey Publishing.

Chapter 9
ORGANIZATION CHANGE
AND ORGANIZATION ANALYSIS:
THE STRATEGIC HUMAN RESOURCES ROLE
Cam Caldwell
Muscat, Oman
Organization change is a constant reality in today’s challenging, competitive, and

chaotic world. Strategic management has borrowed the acronym, VUCA, - the
abbreviation originally developed by the U S Army War College in the 1990’s, labeling a
world that is volatile, uncertain, complex, and ambiguous – to describe a business environ
that constantly struggles to manage change. Despite the ever-present reality of change,
leaders struggle today just as they did nearly six centuries ago when Machiavelli
observed that “There is nothing more difficult to take in hand, more perilous to conduct,
or more uncertain in its success, than to take the lead in the introduction of a new order of
things”1.
The purpose of this chapter is to describe the role of strategic human resource
management (SHRM) in the analysis and implementation of organization change in the
modern organization. Although the relevance and importance of managing change is
universally acknowledged, there is nonetheless a diversity of thinking about the most
effective means of guiding organization transitions, as well as the contributing SHRM
role in the change process. We begin the chapter by presenting three widely respected
models for managing change, integrating those perspectives with the problems of
1
This famous quote comes from Machiavelli, N. & Marriott, W. K., (2017). The Prince. New York: CreateSpace.

128 Cam Caldwell
Figure 1.
organization change in today’s business context. We identify six critical SHRM factors
essential in the organization analysis process associated with managing change and
explain how the SHRM role contributes to the entire organization in its staff support
relationship. We conclude with a brief summary of change management principles to
guide Human Resource Professionals (HRPs).
KOTTER’S CHANGE MODEL
One of the most frequently cited models for managing organizational change is John
Kotter’s eight-step change model. Kotter emphasized the importance of creating a culture
in organizations that recognizes and embraces the importance of episodic change – the
change associated with a specific project or innovation – and continuous change – the
fact that we live in a world of constant turmoil that is rapidly evolving2. Beginning with
the importance of creating such a culture, Kotter’s model is briefly summarized3.
2
The importance of creating a culture of change is found in the interview of John Kotter found in Kotter, J. P.,
(2008). “Developing a Change-Friendly Culture.” Leader to Leader, Vol. 2008, Iss. 48, pp. 33-38.
3
Kotter, J. P. (2012). Leading Change, With a New Preface by the Author. Boston, MA: Harvard Business Review
Press.

Organization Change and Organization Analysis 129
1) Create a Sense of Urgency. The need for constant change is rarely fully
understood in organizations. Leaders must not only recognize this need but create
a compelling story that convinces others4. People must be prepared to change and
creating a sense of urgency is required for them to believe that change is
necessary.
2) Build the Guiding Team. Team members of this team selected to oversee and
guide change must be carefully chosen and must combine the ability to not only
influence others with a commitment to constantly improving the organization and
responding to the need to change. Top Management Team and employee leaders
should be participants in this leadership process.
3) Develop the Change Vision and Strategy. Not only must leaders define the vision
of what the future will be like but they must adopt a realistic and specific action
plan – identifying the resources required to facilitate the change process and
making the commitment to providing those resources throughout that process.
Without that vision and strategy, change is unlikely to occur.
4) Communicate for Understanding and Buy-in. Employees at all levels must
understand the change that is required, the rationale behind that change, its
consequences for key stakeholders, and their role in the change process5.
Communication must make it clear why changing is superior to the status quo
and the direction that an organization is headed if the required change does not
occur.
5) Empower Action. A plan without the accompanying resources to implement the
required action is destined to not only fail but to create organizational resentment
and frustration6. Change requires resources, commitment, and the ability to carry
out a well-conceived plan of action.
6) Create Short-term Wins. Identifying areas in which change can be immediately
successful inspires participants and creates credibility for the change process.
Building in short-term wins requires an investment of resources but enables an
organization to sustain morale and employee momentum.
7) Don’t Let Up. One of the classic errors in change management efforts is the
premature assumption that the change has occurred. The Guiding Team must
continue to reinforce the change process and insure that systems are in place to
make the change permanent.
4
Kotter, J. P., (2008) op. cit.
5
The importance of clearly communicating the moral and ethical implications of change and the options considered
is explained well in Hosmer, L. T., (2010). The Ethics of Management (8th ed.). New York: McGraw-Hill.
6
Pfeffer, J., (1998). The Human Equation: Building Profits by Putting People First. Boston, MA: Harvard Business
Review Press.

130 Cam Caldwell
Figure 2.
8) Create a New Culture. Change requires new assumptions, new beliefs, and a new
perspective about the organization and its identity7. The nature of organizational
culture is that those underlying assumptions must be reinforced by sustained
action for a culture to be adopted by organization members8. Guiding Team
leaders must model the values and behaviors of that new change culture for it to
take hold.
7
Schein, E. H. & Schein, P., (2016). Organizational Culture and Leadership (4 th ed.). San Francisco, CA: Jossey-
Bass.
8
Ibid.

Figure 3.
The SHRM role is to assist the Top Management Team at each step in the change
process, in supporting organizational efforts, and in creating a culture that supports
change. For each of these eight steps Kotter also identifies a common error that must be
avoided in order to successfully implement his model9. To be successful, Kotter suggests
that organizational leaders recognize the importance of avoiding each of those eight
errors to enable their organizations to achieve each of the eight steps of the model10.
Kotter’s model for change is both widely cited and highly respected and has been applied
successfully in many organizations. Figure 3 identifies Kotter’s eight-step model.
KURT LEWIN’S ACTION RESEARCH
Kurt Lewin, one of the pioneers of organizational development and organization

psychology11, developed the concept of Action Research (AR) seventy years ago12, and
9
Kotter, J. P., (2012) op. cit.
10
Ibid.
11
Lewin is cited as the eighteenth most eminent psychologists of the century In Haggbloom, S. J., Warnick, R.,
Warnick, J. E., Jones, V. K., Yarbrough, G. L., Russell, T. M., Borecky, C. M., McGahhey, R., Powell III, J.
L., Beavers, J., Monte, E., (2002). “The 100 Most Eminent Psychologists of the 20 th Century.” Review of
General Psychology. Vol. 6, No. 2, pp. 139–152.
12
Lewin, K., (1946). “Action Research and Minority Problems.” Journal of Social Issues, Vol. 2, Iss. 4, pp. 34-46.

132 Cam Caldwell
his model for managing organizational transitions has been adopted by the highly-
regarded Peter Block as the consultants’ guide for organization change13. AR is an
iterative cycle of planning an experimental change, implementing that change, observing
its impact, and assessing its significance. Thus, the process involves both a purpose-
related core action and a learning process in which an organization is able to assess the
validity of its assumptions about planned change14. The repeating nature of the Plan-Act-
Observe-Reflect cycle of AR is the basis for constant learning and managing change15.
Figure 4.
Lewin had developed the concept of a force field in which both driving and
restraining forces influence the balance which determines the current status quo.
Managing change requires understanding each of those forces, determining which forces
most influence current conditions, and identifying how reducing restraining forces or
increasing driving forces can result in change to a desired state16. Figure 4 explains
Lewin’s force field analysis concept.
The SHRM role helps a Top Management Team to understand each of the driving
and restraining forces and to identify how to successfully achieve the desired change in a
manner that will be sustainable.
Gardner identified twelve separate steps in the AR process, which he labeled “Action
Training and Research.” Gardner described the process as highly participative and
13
Block, P., (2011). Flawless Consulting: A Guide for Getting Your Expertise Used (3rd ed.). San Francisco, CA:
Pfeiffer.
14
This point about the two levels of Action Research is clarified in Zuber-Skerritt, O. and Perry, C. (2002). “Action
Research within Organisations and University Thesis Writing.” The Learning Organization, 9(3), 171–179.
15
Coghlan, D. & Brannick, T., (2010). Doing Action Research in Your Own Organization (3rd ed.). London: Sage.
16
For a review of force field analysis see Swanson, D. J. & Creed, A. S., (2014). “Sharpening the Focus of Force
Field Analysis.” Journal of Change Management, Vol. 14, Iss. 1, pp. 28-47.

comprised of the ongoing training of participants17. The twelve steps of Gardner’s AR

model include the following:
1) Orientation. This step involves the creation of a partnership between an

organization’s Top Management Team and either an internal or an external
consultant who will facilitate the change process.
2) Contract Setting. The contract setting process typically calls for the consultant to
be neither “a pair of hands” working solely under the direction of the Top
Management Team nor a “project leader” directing and taking responsibility for
the change18. Block explained that a project worked most effectively when the
consultant and the Top Management Team shared a partnership in the change
process19. At this stage the parties agree to work together to gather data and learn
more about change that is needed.
3) Reconnaissance. This step involves the identifying of important information
associated with opportunities and threats facing the organization and narrowing
the focus of the change project. Employees at multiple levels of the organization
are typically asked to participate in this assessment.
4) Problem and Opportunity Identification. Based upon the previous step,
information is gathered based upon perceived problems or opportunities. That
information continues to focus the nature of the change project. Involving
employees in this data collection process is of critical importance, particularly for
those who are most affected by a potential change.
5) Aspirations. In the aspiration step the Top Management Team and consultant
identify generalized goals that could be achieved by successfully instituting
organizational change. Input from those who might be affected by a potential
change is also sought and their aspirations are included.
6) Analysis. Using the data collected the specific nature of a problem to be resolved
or opportunity to create is identified and factors germane to improving the status
quo are determined. The analysis process provides the opportunity for the
organization to improve its understanding of the root causes and the symptoms of
problems or opportunities.
7) Experimentation. In this step an experimental change is implemented on a
micro-level to determine whether assumptions are correct about the problem or
opportunity being considered. Once again, key participants are asked to play a
significant role in the design and implementation of this experiment.
17
Neely Gardner’s training focus reflected his commitment to group ownership of the change process and is
summarized in Gardner, N., (1974). “Action Training and Research: Something Old and Something New.”
Public Administration Review, Vol. 34, Iss. 2., pp. 96-115.
18
This distinction is clearly articulated and emphasized as critical to the success of a change process in Block, P.,
(2011) op. cit.
19
Ibid. This partnership creates appropriate ownership for both parties.

134 Cam Caldwell
8) Results Analysis. A careful review and assessment of the experiment is then

conducted to measure the expected outcomes. Those outcomes are compared
with the aspirations articulated in Step 5. Results are examined in enough detail
to determine how and why changes occurred or did not occur.
9) Program Design. If the aspirations for the experiment prove to be on target and
achieve an improved outcome, information is then used to develop the most
effective means of implementing a proposed improvement. Those affected are
involved in developing the nature and timing of this transition.
10) Implementation. In cooperation with those affected, the implementation of a
change is then conducted within the organization according to the program
design. The implementation includes clear communication to internal downline
divisions affected and customers outside the organization about the anticipated
change and how it will improve existing conditions.
11) Evaluation and Feedback. Careful documentation of expected results is made
and feedback from all affected parties is obtained to confirm or disconfirm the
expected outcomes and anticipated benefits.
12) Recycle. The process of identifying additional opportunities to improve or
problems to resolve is again considered and the need for constant improvement is
emphasized.
These twelve steps of AR expand and clarify the four-stage model initially developed
by Lewin and provide an opportunity for change to occur organization-wide20. The focus
of Gardner’s training approach to AR emphasizes the importance of sharing ownership,
creating a culture of participation and partnership, and constantly improving the
organization by empowering and engaging its participants at all levels – while
maintaining ultimate control and direction provided by the Top Management Team21.
THE TEAM APPROACH
A third model for managing change is the TEAM model developed by Scholtes,
Joiner, and Streibel22. Incorporating a quality improvement approach to managing
change, the TEAM model provides a framework for organizations that offers insights into
the reasons why teams succeed or fail23. The following is a brief summary of the TEAM
process for managing organizational changes24.
20
Gardner, N., (1974) op. cit.
21
Ibid.
22
Scholtes, B. L., Joiner, P. R., & Streibel, B. J., (2003). The TEAM Handbook (3rd ed.). London: Oriel.
23
Ibid.
24
Ibid. These nine steps are incorporated in The TEAM Handbook and are well explained. This book is an
outstanding resource for organizations that struggle with teams that are often ineffective.

1) Top Management Team determines need for a project and appoints Guidance
Team. The failure of many teams lies in the fact that they lack top management
support and are created haphazardly. But when leaders formally create a
“Guidance Team” to oversee and assist a team to accomplish a specific purpose,
those teams are exponentially more effective.
2) Guidance Team prepares a Team Charter. With the support of the Top
Management Team the Guidance Team creates a “charter” which defines what is
expected to be accomplished by the newly formed team – including an expected
timeframe for achieving desired results.
3) Guidance Team identifies and appoints a Sponsor, Team Leader, Coach, and
Team Members. Key roles are identified to support each team. The Sponsor is
typically a Guidance Team member who closely monitors the project team and is
an advocate for its success – taking timely action and keeping the Guidance
Team fully informed about resources needed for the project team to accomplish
its goals. The Team Leader focuses on coordinating the agenda, seeing that
members are informed of meetings, and providing minutes of the meeting that
are published. The Coach focuses on the team’s process, follows up with
members to assist them in accomplishing between-meeting assignments, and
keeping the Team Leader informed if progress on assigned tasks is not being
made. Team Members with requisite skills are appointed and supported – and
their project team assignment becomes as important as the responsibilities of the
position they were hired to fill.
4) Project Team Members meet and employ data collection, analysis, and
research. Team members incorporate a fact-based approach to assess their
assigned task, identify resources needed to complete their assignment, and
engage others within the organization to obtain critical information about the
Team assignment. Team Members formally report on between-meeting
accomplishments and much of the Team’s work is performed outside of the
meetings with the monitored support of the Coach who is often a technical
expert.
5) Team Leader periodically reports progress to Guidance Team and obtains
support as needed. The Team Leader works directly with the Guidance Team,
keeping it informed about the Team’s progress in achieving time-targeted goals
and identifies when the team needs additional resources to achieve its chartered
responsibilities. If necessary, the Guidance Team is called upon to intervene on
behalf of the project team to ensure that cooperation, resources, and support for
the project are obtained within the organization. The Sponsor keeps the Top
Management Team well informed if their action is required to keep the team on
track in meeting the goals set forth in its charter.

136 Cam Caldwell
6) Project Team proposes solutions, tests assumptions, and evaluates results. The
project team typically will design an experiment to address a problem or
opportunity. That experiment will test assumptions about the team’s purpose and
goals. The team will evaluate results and assess the best course of action –
including additional experiments, as necessary.
Figure 5.
7) Project Team reports results and recommendations formally to Guidance Team

and Top Management Team. Throughout its tenure, the team’s progress is
reported to the Guidance Team and Top Management Team so that immediate
corrective action can be taken if the project team is not on track. Minutes of each
team meeting – including a report of progress on time-targeted goals – are shared
with the Guidance Team and Top Management Team every time the team meets.
Figure 6.

8) Top Management Team evaluates report and recommendations and takes

appropriate actions. With the assistance of the Guidance Team and the Sponsor,
the Top Management Team keeps informed about project team progress and
provides appropriate resources and support to keep the project on track to achieve
its chartered purposes.
9) Project Team celebrates completed responsibilities. A formal celebration of the
team’s achievements is built into the creation of each team, with the expectation
that the team will complete its assignment within a specific timeframe and its
team members will then return to their normal duties on a full-time basis.
The reality about teams is that they are often ineffective25. The TEAM Handbook
approach is nonetheless not only a much superior way of managing team activities and
responsibilities but is useful as a resource for managing change.
Each of these three models emphasizes the importance of having a clear vision of
what is required in the change process. All three models are data driven, involve
employees affected by change, and emphasize the critical importance of top management
support. But all three models also acknowledge the behavioral nature of change and the
importance of involving employees throughout an organization in the change process.
SIX SHRM ROLES IN ORGANIZATION ANALYSIS
Because organization change encounters so much natural resistance, Human

Resource Professionals (HRPs) play a key role in helping the Top Management Team to
understand and design a change management process that engages and empowers
employees. As HRPs contribute to the organization analysis process associated with
managing change, they engage in six important roles.
1) Identifying and documenting employee attitudes. HRPs are not only attuned to
the perceptions and priorities of employees at all levels but they monitor
employee attitudes via periodic surveys of employee opinions. Employee surveys
complement and provide detailed information about employee concerns and
perspectives26.
25
According to many scholars more than half of all teams should never have been created in the first place and as
many as 75% of all teams are ineffective. See Whetten, D. A. & Cameron, K. S., (2015). Developing
Management Skills (9th ed.). New York: Pearson.
26
The importance of monitoring employee attitudes about an organization and its culture is well documented in
Aragon, R., Basson, J., Burton, A., Schneider, J., Yang, W., Holman, R., & Downing, G. J., (2017). “Impact of
Innovation Initiatives in a Federal Government Agency: Measuring and Understanding the Influence of
Culture and Employee Attitudes.” Innovation Journal, Vol. 22, Iss. 1, pp. 1-51.

138 Cam Caldwell
Figure 7.
2) Serving as a resource in organization analysis training. Employees in

organizations typically lack polished skills in knowing how to conduct
organization analysis. Although these skills may be developed by employees
throughout the organization, training in the process of carrying out an accurate
assessment of organization conditions, the root causes of problems that occur,
and the impact of those problems can exponentially improve the ability of
employees and managers in analyzing systems, processes, and organization
outcomes27.
3) Implementing programs enhancing employee empowerment and engagement.
HRPs can play a major role in the development of employee empowerment and
employee engagement programs that promote employee ownership, increase
commitment, and support a change-oriented culture28.
4) Creating metrics for assessing driving and restraining forces. If they are to be
valuable strategic resources for the organization, HRPs must develop the ability
to accurately measure the value added by employees and departments and to
assist the Top Management Team to assess the critical factors essential to create
organizational change29.
27
Scholtes, B. L., Joiner, P. R., & Streibel, B. J., (2003) op. cit.
28
The impact of empowerment on engagement and organization culture are addressed in Smith, S., Peters, R., and
Caldwell, C., 2016. “Creating a Culture of Engagement – Insights for Application.” Business and Management
Research, Vol. 5, No. 2, pp. 70 -80.
29
The strategic role of HRM is well documented in Caldwell, C., Truong, D., Linh, P., and Tuan, A., (2011).
pp. 171-182.

5) Providing research on best practices. To effectively assist an organization to

manage change HRPs must become Subject Matter Experts about organization
analysis and managing change. The nature of change can be ambiguous,
uncertain, and difficult to achieve and HRPs must not only understand best
practices but the underlying principles upon which they are achieved30.
6) Developing programs that support a culture of change. HRPs play an important
role in the development of a productive and supportive work culture by
developing aligned programs that support change31.
Each of these six roles enable HRPs to establish credibility with employees at all
levels of the organization, develop programs and policies that fit with the organization’s
strategic mission and goals, and engage and empower employees to enable them to
become full owners and partners in the ongoing processes of organization change,
organization learning, and organization improvement.
PRINCIPLES OF CHANGE MANAGEMENT
For successful organization improvements to occur, organizations must comply with

the underlying principles associated with effective change management. Change demands
aligned programs, a comprehensive approach, and a systematic framework that fits with a
supportive organizational culture and that reinforces the organization’s mission and
purpose. The following are ten highly practical principles of change management32.
1) Address the “human side” systematically. Change is always a human issue.

2) Start at the top. Organization change demands resources and financial support.
3) Involve every layer. The entire organization is impacted by change.
4) Make the formal case. Stakeholders deserve to know the rationale for change
and its impacts.
5) Create ownership. Ownership comes when people are given input and participate
in identifying problems, issues, and the implementation of change.
6) Communicate the message. The message must be timely, inspirational, practical,
and repeated.
30
For a review of the important role of HRPs and HRM in contributing to organization successes associated with
managing change, see Becker, B. & Gerhart, (1996). “The Impact of Human Resource Management on
Organizational Performance: Progress and Prospects.” Academy of Management Journal, Vol.. 39, No. 4, pp.
779-801.
31
Edmonds, S. C., (2017). “Crafting a Purposeful, Positive, Productive Work Culture: Why Don’t Leaders Make
Culture a Priority?” Leadership Excellence Essentials, Vol. 34, Iss. 2, p. 47.
32
Jones, J., Aguirre, D., & Calderone, M., (2004). “Ten Principles of Change Management.” Booz & Company
Resilience Report found online on September 12, 2017 at https://www.k4health.org/
sites/default/files/10%20Principles%20of%20Change%20Mgmt-04-15-04.pdf.

140 Cam Caldwell
7) Assess the cultural landscape. Analyzing the culture and identifying issues that
must be addressed is crucial in understanding employee needs.
8) Address culture explicitly. Identify the behaviors, values, and assumptions that
must be understood and reward those behaviors consistently.
9) Prepare for the unexpected. Recognize that no change process goes precisely as
planned and develop contingency responses that may be required.
10) Speak to the individual. Acknowledge that change is a highly personal process
and prepare managers and supervisors to respond to employees at the individual
level.
CONCLUSION
As HRPs develop their skills associated with organization analysis and organization
change, they develop the ability to contribute to the strategic purpose of their companies.
They demonstrate their value in helping their organizations to adapt to a constantly
changing and chaotic world that demands resilience, competence, and the capacity to
evolve quickly and effectively in meeting the needs of customers. The HRP roles in
managing change enables organizations to effectively respond to external demands while
building a culture that reinforces change-related values that sustain today’s organizations.
The change models provided herein and the HRP’s roles described can be of great
value as HRPs strive to demonstrate their ability to add value, to assist their
organizations’ Top Management Teams to achieve their strategic objectives, and to
maintain credibility at all levels of their organizations. Although managing change
requires that HRPs develop a complex set of sophisticated skills, those skills are vital to
the success of the modern organization.
Questions to Ponder
1) The resistance to change is paradoxical because we all acknowledge that change

is a necessity. What ways do you think are most effective for helping people to
change?
2) Which of the three change models resonates most with you? What about that
model makes it seem superior to the other two?
3) One of the biggest issues associated with change is the struggle about control?
How can organizations help employees to retain a sense of control and security
during the course of change?

Employee Benefits in Changing Times --

For the past 15 years, MetLife has surveyed thousands of people in its US Employee
Benefits Survey. Recently work-life balance has taken center stage; however, medical
(health) benefits remains at the top as the highest rated 'must have' employee benefit.
Prescription drug coverage ranked second, while dental and vision moved around some,
yet remained consistently somewhere in the top 10 of must have benefits.
Due to rising costs and increased government intervention, HRPs and company
leaders face an ever-changing benefits environment. The changing nature of health care
has been a focus for the Institute of Medicine's (IOM) annual conference. In addition to
rising health care costs, the Institute named the following reasons for rapidly occurring
changes: new diagnostic and treatment tools, emerging genetic insights, and
developments in information technology. If the IOM is addressing changes in health care,
certainly organizations are also experiencing change.
One organization with 8,000 employees wanted to take a strategic approach to
benefits redesign prior to the annual open enrollment in November. As a result of their
research, it became evident changes were needed in order to protect the benefits available
for the employees. The strategic team worked with SHRPs to evaluate how to shift cost
of benefits to achieve this goal. As an example, dental and vision had historically been
their own plans. The strategic evaluation placed these under the health care plan
umbrella. The maximum amount to be reimbursed for dental and vision care dropped
markedly to a minimum. With regards to prescription coverage, a new alliance with a
national pharmacy chain was negotiated. The result was reduced costs for employees who
chose to fill a three-month prescription via the pharmacy network's mail order option.
Once health-related benefits changes were decided upon, the leadership team and
SHRPs were charged with determining how to introduce new concepts to a steady,
experienced workforce.
 Dates for open enrollment were shifted from their historic past. Some employee
frustration was voiced; however, the intention was to encourage a new focus on
the benefits enrollment process.
 Employee information sessions were increased in number and offered via HRPs
at various times and locations.
 The frequency of email reminders was increased to remind employees to enroll
and to invite attendance at the information sessions.
For the most part despite change, open enrollment went rather smoothly.
1) What is your opinion of the leadership and SHRPs' approach to change? What
went well, and what could have been better?

142 Cam Caldwell
2) Which steps of Kotter's change model were represented by this organization's

approach to change?
3) What were steps not included from Kotter's change model? Would these steps
have further assisted the employees with this organizational change?
They Moved My Cheese! -- Case Study --

by Dr. Sarah J. Smith
Two organizations merged as the result of a parent corporation mandate. The reason
provided for this change was to conserve financial resources by eliminating upper
administrative positions for both organization and operating under a model of one high-
ranking administrator for the two locations. One organization was twice as big as the
other. This caused concerns for the smaller entity: would this be a hostile takeover?
Would all of 'their' policies, procedures, and forms be forced on the employees?
Meanwhile, both organizations had very distinct organizational cultures and the larger
organization perceived potential threats from their smaller counterpart and the merger
itself.
It seemed as if no one at either organization was embracing the idea of change.
However, there was no choice: the merger decision had been made. There was no turning
back. Employees were given little notice of the merger. Timelines for implementation
were extremely aggressive and people felt pushed and rushed. Most programs differed
and the two organizations would have to find common ground. Coming to consensus
when the employees are deeply invested in their own programs would not be an easy
task.
Programs, policies and procedures also varied between the two organizations.
Corporate chose not to introduce and mandate their version of policies and procedures
but to empower employees from both merger locations to develop their own, yet mutual
solutions. One year after the merger, not one job description had been reviewed and
subsequently, employees did not have a current job description. Many people thought
development of mission, vision, and goals were rushed and could have benefited from
greater employee involvement. The smaller organization lost most of its social rituals and
employees were forced to accept the traditions of the larger organization.
Looking back at the merger, the SHRP team wondered what could have been done to
make the change process more positive and palatable. Both organizations employed a
high percentage of technical employees who had experience or had knowledge about the
quality management TEAM approach. SHRPs from both organizations agreed to try the
TEAM approach moving forward in order to increase employee involvement in
subsequent changes that were to come.

1) How could a team charter have assisted with the merger? Could this be a
valuable tool moving forward?
2) Some changes seemed to have come from behind closed doors with only a few
decision makers. Do you agree that the TEAM approach would be beneficial for
navigating subsequent change in the merged organization? How could this be
accomplished?
3) Identification and development of a merged organizational culture would be
required. Thinking of the six SHRM roles in organization analysis, what
suggestions could you make? Would all six roles apply to the merged entity? If
not, which of the six do you think would be most effective?
REFERENCES
Aragon, R., Basson, J., Burton, A., Schneider, J., Yang, W., Holman, R., & Downing, G.
J., (2017). “Impact of Innovation Initiatives in a Federal Government Agency:
Measuring and Understanding the Influence of Culture and Employee Attitudes.”
Innovation Journal, Vol. 22, Iss. 1, pp. 1-51.
Becker, B. & Gerhart, (1996). “The Impact of Human Resource Management on
Organizational Performance: Progress and Prospects.” Academy of Management
Journal, Vol..39, No. 4, pp. 779-801.
Block, P., (2011). Flawless Consulting: A Guide for Getting Your Expertise Used (3rd
ed.) . San Francisco, CA: Pfeiffer.
171-182.
Coghlan, D. & Brannick, T., (2010). Doing Action Research in Your Own Organization
(3rd ed.). London: Sage.
Edmonds, S. C., (2017). “Crafting a Purposeful, Positive, Productive Work Culture: Why
Don’t Leaders Make Culture a Priority?” Leadership Excellence Essentials, Vol. 34,
Iss. 2, p. 47.
Gardner, N., (1974). “Action Training and Research: Something Old and Something
New.” Public Administration Review, Vol. 34, Iss. 2., pp. 96-115.
Haggbloom, S.J., Warnick, R., Warnick, J. E., Jones, V. K., Yarbrough, G. L., Russell, T.
M., Borecky, C. M., McGahhey, R., Powell III, J. L., Beavers, J., Monte, E., (2002).
“The 100 Most Eminent Psychologists of the 20th Century.” Review of General
Psychology. Vol. 6, No. 2, pp. 139–152.
Hosmer, L. T., (2010). The Ethics of Management (8th ed.). New York: McGraw-
Hill.Kotter, J. P., (2008). “Developing a Change-Friendly Culture.” Leader to
Leader, Vol. 2008, Iss. 48, pp. 33-38.

144 Cam Caldwell
Jones, J., Aguirre, D., & Calderone, M., (2004). “Ten Principles of Change
Management.” Booz & Company Resilience Report found online on September
12, 2017 at https://www.k4health.org/sites/default/files/10%20Principles%20of%20
Change%20Mgmt-04-15-04.pdf
Kotter, J. P. (2012). Leading Change, With a New Preface by the Author. Boston, MA:
Harvard Business Review Press.
Lewin, K., (1946). “Action Research and Minority Problems.” Journal of Social Issues,
Vol. 2, Iss. 4, pp. 34-46.
Machiavelli, N. & Marriott, W. K., (2017). The Prince. New York: CreateSpace.
Schein, E. H. & Schein, P., (2016). Organizational Culture and Leadership (4th ed.). San
Scholtes, B. L.,, Joiner, P. R., & Streibel, B. J., (2003). The TEAM Handbook (3rd ed.).
London: Oriel.
-80.
Swanson, D. J. & Creed, A. S., (2014). “Sharpening the Focus of Force Field Analysis.”
Journal of Change Management, Vol. 14, Iss. 1, pp. 28-47.
Whetten, D. A. & Cameron, K. S., (2015). Developing Management Skills (9th ed.). New
York: Pearson.
Zuber-Skerritt, O. and Perry, C. (2002). “Action Research within Organisations and
University Thesis Writing. “ The Learning Organization, 9(3), 171–179.

Chapter 10
CAREER AND ORGANIZATIONAL DEVELOPMENT:

THE WIN-WIN PRIORITY
Cam Caldwell1 and Sylivia Atwijuka2

1
Muscat, Oman
2
Uganda Management Institute, Kampala, Uganda
ABSTRACT
As Human Resource Professionals (HRPs) examine their priorities in the mind-
numbing world in which their companies compete, a commitment to constant learning
and continuous improvement is always in focus for the organization and its employees.
Wise HRPs recognize that an organization is most likely to be successful long-term when
its leaders are committed to the best interests of all its stakeholders in creating long-term
wealth1. The ability of HRPs to serve the entire organization and to establish a culture of
high trust is correlated with the mutually-beneficial objectives of achieving ongoing
organizational development and personal growth2. This transformative priority3 has
frequently been described as a “covenantal” duty by a number of scholars who have
addressed the obligations of leadership4.
The focus of this chapter is on the role of HRPs in striving to achieve both the
development of the entire organization and the growth of its individual employees. The
chapter begins with a brief review of the Human Resource Management (HRM) roles in
honoring duties owed to an organization and its employees. The chapter then identifies
1
The foundations of ethical stewardship are discussed throughout this book and are fully described in Caldwell, C.,
Hayes, L., Karri, R., and Bernal, P., (2008). “Ethical Stewardship: The Role of Leadership Behavior and
Perceived Trustworthiness.” Journal of Business Ethics, Vol. 78, Iss. 1/2, pp. 153-164.
2
This principle is the theme of Pfeffer, J., (1998). The Human Equation: Building Profits by Putting People First.
3
The transformative nature of leadership is addressed in Caldwell, C., (2012). Moral Leadership: A Transformative
Model for Tomorrow’s Leaders. New York: Business Expert Press.
4
See, for example, DePree, M., (2004). Leadership is an Art. New York: Crown Publishing and Covey, S. R.,
(2004). The 8th Habit: From Effectiveness to Greatness. New York: Free Press.

146 Cam Caldwell and Sylivia Atwijuka
the importance of HRP’s commitment to the personal growth of its individual employees.
Linking the success of employees with that of the organization, the chapter briefly
describes the HRP role in achieving organizational development outcomes that enable the
entire organization to improve. The chapter concludes by identifying four important
factors associated with successful individual and organizational development.
Figure 1
COVENANTAL COMMITMENT AND HRP ROLES
Organizations that honor their commitment to enhancing employee welfare and

growth build trust, commitment, and loyalty and earn extra-mile performance and the
enthusiastic employee ownership that inspires creativity and innovation5. In performing
the six key roles of the HRM function, HRPs contribute to the constant learning and
improvement of the organization. Table 1 briefly summarizes those six roles and their
relationship to this individual and organizational improvement.
As stewards of their organization’s improvement and progress, HRPs who address all
six of these important roles enable their companies to demonstrate commitment to
honoring duties owed to employees and to optimizing long-term wealth and value6.
5
See Beer, M., (2009). High Commitment High Performance: How to Build a Resilient Organization for Sustained
6
This stewardship role conforms with the strategic objectives of their organizations and enables HRPs to
demonstrate their important contribution to the achievement of organization mission. See Mello, J. A., (2014)
Strategic Human Resource Management (4th ed.). Boston, MA: Cengage Learning and Caldwell, C., Truong,
D., Linh, P., and Tuan, A., (2011). “Strategic Human Resource Management as Ethical Stewardship.” Journal
of Business Ethics, Vol. 98, Iss. 1, pp. 171-182.

Career and Organizational Development 147
Table 1. HRP Roles and Contribution to Improvement
HRP Role Brief Summary Organization Betterment Individual Improvement

Align Culture, Mission, Create policies, systems, Build high-trust Empower and engage
and Strategy and practices that relationships that promote employees as full owners
support culture and extra-role behavior, and partners in achieving
promote the mission. innovation, and creativity. organization goals and
promote their development.
Perform Technical HRM Ensure that job analyses, Select, hire, and provide Identify training, coaching,
Tasks selection and testing, training for employees mentoring opportunities and
compensation, and other based upon highest resources required to help
HRM tasks and systems standards and compensate employees to constantly
meet state-of-the-art to retain employees who learn and improve related to
standards. are key to adding value. their job roles.
Partner to Achieve Serve as internal Provide resources and Create cost savings that
Efficiencies business consultants to analysis to identify enable the organization to
help departments to opportunities for put resources into improving
achieve cost savings and improvement and assist individual capacities. Align
productivity. department improvement training and development
teams. opportunities to support
employees and
organizational goals.
Advocate for and Identify employee needs Create a commitment to Listens to employees,
Empower Employees and concerns, improve employees that responds to surveys their attitudes and
the work climate, and their concerns, builds trust, develops an appropriate
support employee and engages and response, and engages
development through empowers employees, employees in improving the
financial investment as organization.
well as creating a
supportive work
environment.
HRM Systems Supports improvement Staffs department project Assists individual
Supporting Improvement teams, creates learning teams as a facilitator and employees to achieve their
programs, and identifies resource. Conducts highest and best potential.
improvement training programs focused Creates system
opportunities. on organization as well as improvements that build
individual needs. trust.
Monitor Climate to Gather information Maintain an upbeat and Assist employees to discern
Support Needed Change about competitive forces positive relationship with how to make decisions
and provide resources departments and respond about risk-related initiatives
supporting change. on a timely basis to their and support innovation.
needs.
COMMITMENT TO INDIVIDUAL EXCELLENCE
By demonstrating their support of individual employee growth and development,

organizations make an investment in their employees’ long-term ability to contribute to
their firm. Wise organizations offer a broad range of job-related training opportunities in-

house, support outside professional development, pay for their employees’ advanced
education, and utilize assessment tools like assessment centers to provide their employees
with opportunities to improve their skills and capabilities7. Effective employee training
and development programs possess nine common characteristics8.
1) Centralized responsibility. They are directed by a champion or program manager

for whom the responsibilities of training and development are his or her priority.
2) Based upon needs assessment. Needs are based upon identified gaps between
desired performance and current performance and identify who needs to be
trained in specific performance areas.
3) Aligned with organizational outcomes. The importance of those outcomes is
communicated as part of the training and development activities that are created
and focused on achieving the organization’s mission.
4) Identified with goals and metrics. Specifying the purposes of training and
development increase the ability to establish clear and measurable results.
5) Supported by leadership. Training and development supported by the Top
Management Team is not only provided with adequate resources but assures that
participants know that leaders consider the activities to be important.
6) Application-oriented and relevant. Programs should be developed that have
immediate application and that can be translated to current job responsibilities as
well as for employees’ future development in order to support organizational
success.
7) Attention getting and creative. Training programs capture the attention of
participants and are interesting and attractive events, activities, or programs that
spark participant interest.
8) Communicated and explained. Information about the programs is communicated
effectively and details about the programs and events are clearly identified.
Learning objectives are clear, concise, communicated, and measurable.
9) Reinforced and followed-up. The expectations to be achieved are carefully
monitored and evaluated to ensure that the training and development achieves its
intended purposes and information about results is shared throughout the
organization. Assessment of performance in the workplace assures skills are
transferred to the employee’s work and integrated within the organization.
Each of these nine characteristics demonstrates a commitment to the growth and

development of participating employees while delivering training and development that
further an organization’s mission and purpose. Because only 32% of workers report that
7
Noe, R. A., (2016). Employee Training & Development. New York: McGraw-Hill.
8
These nine characteristics are found in Kluczny, S., (2017). “9 Characteristics of Top Employee Training
Programs.” Biz Library Blog found online on October 1, 2017 at https://www.bizlibrary.
com/article/employee-training-9-characteristics-of-top-programs/.

they are engaged at work most employers have much to do in order to unlock the full
potential of their workforce9. Engagement and productivity can be affected when
employees are supported by supervisor mentoring, social cohesion, common goals,
information sharing, and personalized training. Investing in employee development helps
employees to feel valued and respected, to know that their work is meaningful, and to
identify their input and suggestions as an important assess in improving the
organization10.
Quantum Workplace – the research firm behind the “Best Places to Work” programs
– has identified five key factors that set organizations with higher engagement scores
apart from others11.
 Setting a clear, compelling direction that empowers each employee

 Encouraging open and honest communication
 Maintaining a focus on career growth and development
 Recognizing and rewarding high performance
 Providing employee benefits that demonstrate a strong commitment to employee
well-being
Figure 2. Best Places to Work
9
Adkins, A., (2016). Employee Engagement in the U.S. Stagnant in 2015.” Gallup found online on October 1, 2017
at http://www. gallup.com/poll/188144/employee-engagement-stagnant-201.aspx.
10
Employee development and high commitment are related constructs, as noted in Beer, M., (2009). High
Commitment High Performance: How to Build a Resilient Organization for Sustained Advantage. San
11
Hastings, R., (2009). “The ‘What’ and ‘Why’ of Employee Engagement.” Found online on October 1, 2017 at
http://www.shrm. org/resourceandtools/hr-topics/employee-relations/pages/ whatandwhy.aspx.

Developing employees and investing in their success increases the probability that
employees will remain with the organization, particularly when that training is directly
related to organization job requirements12. Creating individualized employee
development plans, providing performance metrics, creating opportunities outside of the
current job function, giving helpful personalized feedback, removing barriers that inhibit
employee success, providing links to professional networks, and setting a personal
example are all ways that HRPs can strengthen employee commitment and feelings of
empowerment. By personally engaging in their own professional development behaviors,
leaders also encourage employees to participate in professional development activities.
ACHIEVING AN ORGANIZATION’S POTENTIAL
The HRM responsibility recognizes that the development of employees is an

investment from which an organization also expects returns. When employees have the
space to be creative and are free to focus on areas where they can be most valuable and
can best contribute to creating a more successful and sustainable organization.
Below are four ways that an organization’s contribution to employee success can
positively impact an organization’s bottom line and make a business more sustainable.
1. Improve morale: When people feel good about going to work because it’s a
place where they can grow and achieve, that feeling elevates the energy of the
entire organization.
Figure 3.
12
Ibid.

2. Increase retention: When employees are doing something they love, working
with other creative people, and feeling supported to do their best work, retention
automatically follows. Retention of employees can be an expensive challenge for
an organization when individual employees feel isolated13.
3. Drive loyalty: Very few people perform well if they are in an unsafe or
unsupportive environment. When employees feel unsafe, they revert to a more
primitive and less productive mindset. When employees feel safe and supported,
they become more adept problem solvers and team members. Additionally, when
employees feel supported personally and professionally, they are more engaged
and accountable.
4. Boost reputation: Being a “great place” to work is a significant
accomplishment–and it also receives consistent word-of-mouth and media
coverage. As word travels that an organization supports employee growth and
fulfillment, that reputation attracts the most competitive candidates.
Unfortunately, many managers have sought to improve employee productivity and

job satisfaction by addressing problems in a negative manner14. Beer explained that
organizations seeking high performance and high employee commitment create
organizational systems that valued employees as the source of value creation – and
demonstrate that perception by establishing integrated high performance and high trust
systems, policies, and practices that affirm each employee’s individual worth15.
Because change is occurring at an exponential rate, a key task of every HRM
department is to create a culture that supports constant change16. The changing dynamics
of the workforce, the exponential increase in data, and the innovative ways that
companies are organizing work have created five important trends.
 Emphasis on Dynamic Structures over Products. Organizations are focusing on

being flexible and adaptive, rather than focusing primarily on products. For
example, eBay emphasizes its internet space as its customer interface, rather than
the specific products that it sells.
 Movement to a Digital World. The evolution of digital technology provides
organizations with more information faster and requires companies to require
their employees to become more knowledgeable and competent in the use of
digital information. Federal Express is an example of a company that has
13
Waggoner, J., (2013). Do happy workers mean higher profit?, USA Today. Retrieved from http://
www.usatoday.com/story/money/personalfinance/2013/02/19/treating-employeeswell-stock-price/1839887/.
14
Beheshtifar, M., & Nazarian, R., (2013). Role of Occupational Stress in Organizations. Interdisciplinary Journal
of Contemporary Research in Business. Vol. 4, pp. 648-657.
15
Beer, M., (2009) op. cit.
16
Church, A. H., and Burke, W. W., (2017). “Four Trends Shaping the Future of Organizations and Organization
Development.” OD Practitioner, Vol. 49, Iss. 3, pp. 14-22.

increasingly developed this capability and has used it to improve

communications with customers about the status of packages.
 Interpreting Information Correctly. Developing the ability to correctly identify
the meaning of data and digital information is increasingly an Organizational
Development priority. 3M is known for its ability to innovate new products and
focuses on not only giving its employees free time for that purpose but creates
support systems that provide them with consumer information which they can
use in those innovations.
 Identifying Talent Competencies. Organization development efforts that
implement programs like 360 degree feedback to enable people to improve have
become a priority rather than simply selecting top quality employees. According
to the Society of Human Resource Management (SHRM) Foundation, succession
planning is a high priority at 3M. Keeping key talent in the pipeline and
providing opportunities to develop tomorrow’s leaders today ensures fluid
transfer when key employees retire or assume a new leadership role for the
organization17. Providing employees with positive feedback, coaching, and
specialized training based upon individual needs enables top performers and
potential future decision-makers to constantly improve. Companies like IBM
have also used tools like assessment centers as a training and assessment resource
to provide that feedback to high potential employees.
Integrating efforts to help organizations to excel and working to assist individuals to

become their best are complementary priorities for the modern organization. Stephen R.
Covey noted that the universal purpose of every organization was to optimize the ability
of the organization to achieve its best possible results by enabling its members to achieve
their highest potential18.
HRP CONTRIBUTIONS
In honoring their roles as strategic partners, HRPs contribute specialized knowledge

that substantially impact employee and organizational improvement. Some of those
contributions include designing or selecting effective training programs, suggesting
redefined work roles to fit changes in technology, identifying quality improvement
programs, conducting precise job analyses to ensure the best possible hiring and
17
See Society of Human Resource Management, (2015). Engaging in Succession Planning. Washington, D. C:
Society of Human Resource Management and found online on October 18, 2017 at https://www.
shrm.org/resourcesandtools/tools-and-samples/toolkits/pages/ engaginginsuccessionplanning.aspx.
18
This universal mission is articulated in Covey, S. R., (2004) op. cit. p. 99.

promotion decisions, and consulting with department members to make other

organizational improvements.
Decisions about who to hire, promote, and train; the compensation philosophy and its
application; and the most effective way to assist employees who are struggling in their
roles must be made with fairness in mind. As specialized staff resources whose primary
role is to help individuals and organizations to achieve their highest potential, HRPs
become experts about the organization, its members, and its mission. The organizational
development role becomes an opportunity to help both employees and the organization to
become their best possible versions of their potential. By helping the organization to
constantly learn and to improve, HRPs create win-win opportunities that serve
employees, stakeholders, and society.
FOUR ESSENTIAL FACTORS
For organizational development programs to be optimally effective, four essential

factors must be present that directly affect the HRM function and the roles of HRPs.
1) Top Management Commitment – Although HRPs are resources for their

organizations, it is the Top Management Team that not only identifies the
direction of the organization but that define its mission, goals, and priorities –
and the ongoing changes necessary for the organization to compete in a
competitive world19.
2) HRPs with Technical Competence – The evolving nature of today’s rapidly
changing world demand that HRPs be not only extremely skilled in areas of
HRM specialization but must also be highly effective team facilitators, superb at
analyzing statistical information, and effective at understanding the nuances of
organization effectiveness20. The complex nature of organizational development
at both the individual and organizational levels demands that HRPs raise the bar
in their technical and behavioral expertise.
3) Willingness to Adapt – The pressures of a constantly changing world demand
that HRPs support a culture of flexibility, adaptiveness, and a willingness to
change21. Creating a work climate and culture that supports change, that
promotes innovation, and that empowers employees at all levels is essential for
success in a global marketplace22.
19
The importance of this role is clearly established in Caldwell, C., et al., (2011) op. cit.
20
Ibid.
21
22
See Christensen, C. M., (2016) op. cit.

4) A Commitment to Values – Good is no longer good enough23. A constant

commitment to improvement; to learning and to technological excellence; to
treating stakeholders as valued partners; and to honoring duties owed to a
troubled world will motivate employees to pursue excellence and build trust,
loyalty, and commitment24.
These four qualities are vital to motivate individuals and organizations to achieve
their optimal potential, to succeed in an exciting but challenging world, and to develop
people and their companies to achieve their highest potential25.
Questions to Ponder
1) What should employers do with regard to sponsoring employees pursuing a

graduate degree? What provisions should apply if an employee leaves
immediately following completing that degree?
2) Why do so many companies take the position that personal improvement is an
individual employee’s personal responsibility?
3) Do you believe that organizations should be committed to helping employees to
become the best possible version of themselves? Why or why not?
An Ethical Conundrum?– Case Study –

Jerry worked for an organization that offered a generous tuition reimbursement plan.
For the first years of his career, Jerry did not take advantage of this benefit. At one point,
Jerry realized that by not utilizing this employee benefit, he was losing out on an
opportunity that not all organizations offer to their employees. In essence, there was an
opportunity cost of choosing not to return to school for an advanced degree. He went to
staff development to ask about details of tuition reimbursement.
This organization partnered with a university to offer an MBA program partially on
site. Jerry enrolled and began his journey to a master’s degree. Employees could attend
their university or college of choice, however, the onsite option supported career
development via convenience and time savings. Requests for tuition reimbursement had
to be approved for programs that were or could be job-related. However, the versatility of
the MBA applied to most leaders and potential leaders in the company. Training,
23
Collins, J., (2001) op. cit.
24
25
See Covey, S. R., (2004) op. cit.

designed to support current job duties, was shorter in duration (sometimes a half-hour
session) and training sessions were held in-house. Internal trainers qualified as presenters
if they were subject matter experts, but at times an external vendor was needed. When
employees attended training, the staff development department provided movie-sized
candy bars. One external trainer was surprised when the very first question of the session
was "Is the candy closet open?"
Although Jerry intended to stay with the organization until his retirement, recent
ethical breaches and a looming acquisition had tested his resolve. Because Jerry was quite
effective at his job another company recruited him. After personal reflection, Jerry
decided this opportunity was one he should accept. He did not want to lose his MBA
tuition opportunity and the new company had a policy for employees to wait one year
after their start of employment to be eligible for tuition reimbursement. Jerry did not want
to discontinue the MBA program. He decided to ask his hiring manager if an exception
could be made to the company policy as a condition of his employment. Jerry was happy
he asked, as the corporate leaders granted the exception.
1. Jerry had listened to negative feedback from others about the tuition
reimbursement program. Comments such as “I can’t believe the company pays
for this - these people are just going to increase their skills and then leave for
greener pastures.” Do you agree with the skeptical coworkers? Was Jerry
unethical when accepting tuition reimbursement and then left his company for a
new opportunity?
2. Jerry’s new company offered an additional tuition reimbursement opportunity.
Company leaders believed in developing a new generation of workers and
dedicated $40,000 in tuition reimbursement per employee per dependent for their
child’s higher education. Although never a requirement of the dependent tuition
reimbursement program, several of the students interned at the company over
summer and on break. The company held a celebratory reception for employees’
dependents in the program. A slide show featured their picture and introduced
their major and career goals. What could this program do for employee morale,
retention, and loyalty?
The Learning Center – Case Study –

The corporate Learning and Development department of a Fortune 500 company was
thrilled. The corporation was recognized by Forbes’ Best Companies to Work For annual
recognition list for another year. Jane, the SHRP who led Learning and Development
wanted to see what the Top 10 were doing that their organization could implement or

improve upon. She had the Learning and Development team review what was noted for
each of the Top Ten.
At number 9, Acuity, workers felt a great sense of responsibility and purpose.
Number 8, Salesforce, credits the CEO because he leads by example and truly believes
making the world a better place. Ultimate Software employees, at number 7, credits
supportive management. Employees at Edward Jones (#5) receive more than 100 hours of
training per year. According to the ATD State of the Industry report, across
organizations, employees averaged only 33.5 hours of training. Colleagues at The Boston
Consulting Group (#3) can qualify for think sabbaticals which are designed to foster
innovation and creativity.
Google, who has held the #1 place on the list for six years in the row, offered unique
perspectives on learning and development. "Googler to Googler" features employees as
trainers (rather than HRPs who are referred to as People Operations). Google discovered
with employees as trainers, people attended sessions because they wanted to learn from
others, versus listening to what an HRP had to say. Creative Skills for Innovation and
other career building classes taught by Googlers accounted for 55% of the training
offered at Google. With employees as trainers, Google believes promoting a culture of
learning comes from within.
According to the Wall Street Journal, GoogleEDU is a learning and leadership
program that has upper management support. The Google program is credited for
creating loyalty and developing a ‘more Googley environment’. To create classes,
Google relies on company statistics and employee input. Classes are developed for
various branches within Google and for different levels of an employee’s career.
Naturally, Google wants its employees to stay. However if employees do leave Google,
leadership wants them to leave with a good feeling about the company.
The review of these Top 10 companies provided the Jane and her staff with several
thoughts regarding Learning and Development. The team could not wait to get started!
Their plan was to formulate a plan for the best ideas that could provide competitive
advantage through their employees’ enhanced knowledge base and seek upper
management approval for implementation.
1. How could enhancing Learning and Development boost the company’s

reputation? Would this be evidence that the company was an advocate for
employees with a desire to empower them?
2. Establishing the link between employee training and development to
organizational development can be elusive. How could the use of company
statistics illustrate the positive outcomes of training and development as a
supportive initiative for organizational development? How could employee input
be captured to measure the organizational culture pre- and post- training and
development activities?

3. Leadership support of training and development is a common characteristic of

effective training and development programs. How can corporate leadership
illustrate their support to employees? Offer one example of successful leadership
support of training and development from real life or via review of a company
who is successful in this area.
REFERENCES
Adkins, A., (2016). Employee Engagement in the U.S. Stagnant in 2015.” Gallup found
online on October 1, 2017 at http://www.gallup.com/poll/188144/employee-
engagement-stagnant-201.aspx.
Beheshtifar, M., & Nazarian, R. (2013). Role of Occupational Stress in Organizations.
Interdisciplinary Journal of Contemporary Research in Business. Vol. 4, pp. 648-
657.
Leaders. New York: Business Expert Press.
Caldwell, C., Hayes, L., Karri, R., and Bernal, P., (2008). “Ethical Stewardship: The Role
Vol. 78, Iss. 1/2, pp. 153-164.
171-182.
Church, A. H., and Burke, W. W., (2017). “Four Trends Shaping the Future of
Organizations and Organization Development.” OD Practitioner, Vol. 49, Iss. 3, pp.
14-22.
Press.
DePree, M., (2004). Leadership is an Art. New York: Crown Publishing
Hastings, R. (2009). “The ‘What’ and ‘Why’ of Employee Engagement.” Found online on
October 1, 2017 at http://www.shrm.org/resourceand tools/hr-topics/employee-
relations/pages/whatandwhy.aspx.
Kluczny, S., (2017). “9 Characteristics of Top Employee Training Programs.” Biz
Library Blog found online on October 1, 2017 at https://www.bizlibrary.com/
article/employee-training-9-characteristics-of-top-programs/.
Mello, J. A., (2014) Strategic Human Resource Management (4th ed.). Boston, MA:
Cengage Learning
Noe, R. A., (2016). Employee Training & Development. New York: McGraw-Hill.

Society of Human Resource Management, (2015). Engaging in Succession Planning.
Washington, D. C: Society of Human Resource Management and found online on
October 18, 2017 at https://www.shrm.org/resourcesandtools/tools-and-samples/
toolkits/pages/engaginginsuccessionplanning.aspx
Waggoner, J. (2013). Do happy workers mean higher profit? USA Today. Retrieved
from http://www.usatoday.com/story/money/personalfinance/2013/02/19/treating-
employeeswell-stock-price/1839887/.

Chapter 11
HIGH PERFORMANCE ORGANIZATIONS AND HUMAN

RESOURCE MANAGEMENT

1
Muscat, Oman
2
Because the strategic goal of virtually every organization and organization leader is
to perform more efficiently and effectively in pursuing their organization’s mission, it is
logically consistent that Human Resource Professionals (HRPs) and Human Resource
Management (HRM) departments and staff will similarly be committed to helping their
organizations and employees to be high performers1. Research about high performance
work systems (HPWS) and high trust organizations (HTO) has confirmed that
organizations with aligned HRM systems which adopt practices, programs, and policies
that engage and empower employees are more profitable than comparable organizations
that lack such alignment in their HRM systems2.
The purpose of this chapter is to describe the key characteristics of HPWS and HTO
organizations and to explain why aligned HRM systems are so important to the
competitive advantage and long-term success of modern organizations. We begin the
chapter by citing the research and academic literature which documents the
1
The logic of effective Strategic Human Resource Management (SHRM) has been articulated by many scholars,
including Ulrich, D, Allen, J., Brockbank, W, Younger, J., & Nyman, M. (2009). HR Transformation:
Building Human Resources from the Outside In. New York: The RBL Institute.
2
This research is documented in many scholarly publications, including Beer, M., (2009). High Commitment High
Performance: How to Build a Resilient Organization for Sustained Advantage. San Francisco, CA: Jossey-
Bass.

characteristics and profitability of such systems – clarifying the nature of such systems as
HRM-related and behaviorally important in creating relationships with employees. We
then examine the underlying reasons why aligned HRM systems based upon creating
high trust are so effective as a governance model in the 21st century. We conclude the
chapter with ten recommendations for HRPs in creating and implementing HPWS and
HTO cultures in their organizations.
Figure 1.
HIGH PERFORMANCE ORGANIZATIONS
Organizations that are successful meld both economic and financial imperatives with
organizational and values-based priorities3. An HPWS involves patterns of organizational
work structures, systems, and practices that align HRM policies and programs4.
The underlying philosophy of HPWS is that people make up the critical competitive
asset of an organization and that aligned HRM practices “enhance employee skills,
knowledge, motivation, and flexibility5.” HPWS organizations typically incorporate
seven similar HRM practices.
3
This integration of values and financial objectives is the clear message of Beer, M., (2009) Ibid. and Paine, L. S.,
(2003). Value Shift: Why Companies Must Merge Social and Financial Imperatives to Achieve Superior
Performance. New York: McGraw-Hill.
4
See Van Buren, M. E. & Werner, J. M., (1996). “High Performance Work Systems.” Business and Economic
Review, Vol. 43, Iss. 1, pp. 15-23.
5
Ibid., p. 16.

High Performance Organizations and Human Resource Management 161
Figure 2.
1. Ensuring Employee Security – By demonstrating a commitment to employee

security, companies like Lincoln Electric guarantee employment to workers after
they complete three years on the job. Ensuring job security has been found to
increase employee commitment and performance.
2. Selective Hiring – By adopting hiring practices that carefully evaluate new hires
based upon critical job skills and attributes, companies like Enterprise RentACar
pay close attention to bringing people into their organizations that fit the
requirements of key job tasks and that match organizational culture.
3. Decentralized Decision-Making. By delegating decision-making and
empowering employees, organizations build employee trust and commitment and
enable employees to deliver better services to customers. Ritz-Carlton empowers
its employees at all levels and is a great example of this practice.
4. Results-Based Compensation. Companies like NuCor Steel create compensation
systems that reward employees working in work teams, based upon the value
added and profitability created by their work units. This practice builds both
accountability and team esprit.

5. Training by Commitment. Training by commitment includes teaching employees

how to take responsibility for outcomes, how to resolve work problems, and
when and how to initiate changes in work systems to improve efficiency and
productivity. The Men’s Wearhouse exemplifies this approach to employee
training and development in creating a collaborative and supportive work culture.
6. Reduced Status Barriers. Kingston Technology typifies the reduction of status
barriers amongst its employees. Reducing status barriers and universalizing
rewards throughout an organization send the message that all employees are
valued.
7. Sharing Key Information. Companies like Springfield ReManufacturing share
information with employees throughout their organization and promote an “open
book management” philosophy that demonstrates high trust in employees and the
recognition that sharing information improves employee effectiveness.6
Figure 3.
6
These seven HPWS factors were identified in Caldwell, C., and Floyd, L. A., 2014. “High Performance Work
Systems: Building Commitment to Increase Profitability.” Graziadio Business Review, Vol. 17, Iss. 3, found
online at http://gbr.pepperdine.edu/2014/12/high-performance-work-systems/ and in Pfeffer, J., (1998). The
Human Equation: Building Profits by Putting People First. Boston, MA: Harvard Business School Press.

It is the integration and synergy of an HPWS organization that aligns a culture and
that makes it effective7. It is this HPWS alignment that enables a firm to achieve its
potential “as an inimitable resource supporting the effective implementation of corporate
strategy and the attainment of operational goals8.”
HIGH TRUST ORGANIZATIONS
HTOs, also called High Commitment Organizations, are known for their high
involvement of employees, the decentralization of decisions and employee
empowerment9. HTOs are created by leaders who earn the confidence of followers that
their organization will honor express and implied duties to treat employees both ethically
and humanely10. In response to how they are treated under such systems, followers
respond with a commitment to the organization’s goals in various degrees.
Diagram 1 reflects follower behaviors that vary from reluctantly indifferent
compliance to stewardship ownership of an organization’s goals and is presented as a
continuum, based upon the level of trust of followers11.
Each of the zones in this continuum reflects the willingness of followers to cooperate,
comply with, or trust a leader12. Chester Barnard had identified the Zone of Indifference
as the broad range of leader directives which employees were willing to accept without
reservation or judgment as part of the employees’ jobs13. Herbert Simon suggested a
related Zone of Acceptance in which employees were influenced by leaders and willing
to comply with leader requests with unquestioned acceptance14. Caldwell and Hansen
proposed a similar continuum, suggesting that acceptance required trust and the willing
relinquishment of personal control -- identifying a Zone of Trust which reflected a higher
7
Van Buren, M. E. & Werner, J. M., (1996) op. cit.
8
See Becker, B. E. and Huselid, M. A., (1998). “High Performance Work Systems”. Research in Personnel and
Human Resource Management , Vol. 16, pp. 53-101.
9
This idea is the key message of Boxall, P. and Macky, K., (2009). “Research and Theory on High Performance
Work Systems: Progressing the High-Involvement Stream.” Human Resource Management Journal, Vol. 19,
Iss. 1, pp. 3-23.
10
This trust is articulated clearly in Hurley, R. F., (2011). The Decision to Trust: How Leaders Create High-Trust
Organizations. San Francisco, CA: Jossey-Bass, p. 25.
11
This continuum was developed in Hayes, L., Caldwell, C., Licona, B. and Meyer, T. E., 2015. “Follower
Behaviors and Barriers to Wealth Creation.” Journal of Management Development, Vol. 34, Iss. 3, pp. 270-
285 and reflects research about trust and follower commitment over the past eighty years.
12
The nature of trust as a behavior, rather than simply an attitude or intention is clarified in Gullett, J., Canuto-
Carranco, M., Brister, M., Turner, S., and Caldwell, C. (2009). “The Buyer-Supplier Relationship: An
Integrative Model of Ethics and Trust.” Journal of Business Ethics, Vol. 90, Supp. 3, pp. 329-341.
13
Chester Barnard’s work on cooperation and human behavior identifies this zone in Barnard, C. I., (1938). The
Functions of the Executive. Boston, MA: Harvard College, pp. 167-170
14
Nobel Prize winner, Herbert A. Simon, acknowledged his reliance upon Barnard’s work and relabeled the Zone
of Indifference in his book, Simon, H. A., (1997). Administrative Behavior: A Study of Decision-Making
Processes in Administrative Organizations (4th ed.). New York: Free Press.

degree of individual commitment15. Hayes and colleagues built upon this same idea and
defined both a Zone of Commitment and a Zone of Stewardship16 – reflecting increasing
levels of employee commitment to the extent that employees acted like full “owners and
partners17.”
Figure 4.
The continuum reflects the degree to which individual employees trust and fully
embrace the goals of an organization and their commitment to its mission in embracing
and pursuing its objectives. Research suggests that this commitment or level of employee
trust is responsible for 60% of the criteria in which HTOs earned “four times the return of
the broader market” over a seven-year period18.
Distrust leads to destructive organization behaviors and creates “we versus them”
relationships that undermine cooperation19. Distrust generates the withholding of personal
commitment and cooperation out of a desire to avoid being hurt or taken advantage of by
another party20. A growing body of research confirms that trust and elements of justice
15
See Caldwell, C., and Hansen, M., (2010). “Trustworthiness, Governance, and Wealth Creation.” Journal of
16
These two zones were identified in Hayes, L. et al., (2015) op. cit. indicated above.
17
This term comes from Block, P., (2013). Stewardship: Choosing Service over Self-Interest. San Francisco, CA:
Berrett-Koehler.
18
This powerful insight is found on page 38 of Shockley-Zalabak, P. S. and Morreale, S. P. (2011).”Building High-
Trust Organizations.” Leader to Leader, Vol. 2011, Iss. 60, pp. 39-45. The authors are citing a 2005 Russell
Investment Group Annual Report.
19
Ibid.
20
Caldwell, C. & Hansen, M. (2010) op. cit.

are closely related, that both profoundly impact employee commitment, and that trust and
fair treatment are essential elements in creating high involvement organizations21.
The alignment of HRM practices is a critical element that sends a consistent message
and that reinforces a common set of organizational values that reflect an organization’s
commitment to treating employees as valued partners22.
Figure 5.
Creating successful HTOs requires a commitment to five predictors, or key elements

essential to establishing a culture based upon trust.
1. Competence – Trustworthiness in organizations is fully dependent upon the

competence, knowledge, and demonstrated ability of leaders, the organization,
and coworkers23. Technical and interpersonal competencies are absolutely
necessary for creating a culture of trust and are essential for competing
successfully in the modern economy24. Ironically, however, technological
expertise is necessary yet insufficient to achieve organizational success and must
be coupled with interpersonal effectiveness, vision, and the capacity to integrate
organizational resources in achieving a worthy purpose25.
21
See, for example, the work of Searle, R., Hartog, D. N. D., Weibel, A., Gillespie, N., Six, F., Hatzakis, T., &
Skinner, D., (2011) “Trust in the Employer: The Role of High-Involvement Work Practices and Procedural
Justice in European Organizations.” International Journal of Human Resource Management, Vol. 22, Iss. 5,
pp. 1069-1092.
22
See Beer, M. (2009) op. cit.
23
Shockley-Zalabak, P. S. and Morreale, S. P. (2011), op. cit.
24
Elements of trustworthiness are addressed in many studies, such as Caldwell, C., and Ndalamba, K., (In Press).
“Trust and Being ‘Worthy’ – The Keys to Creating Wealth.” Paper accepted for publication in the Journal of
25
Christensen, C. M.,

2. Openness and Honesty – Extensive leadership research confirms the importance

of honesty and integrity26. Honoring commitments, telling the truth, and sharing
important information are essential to creating a high-trust culture27. Integrity is
also well established as a key antecedent to building trust28. Treating others with
openness and honesty demonstrates a leader’s willingness to trust others as well
and breeds two-way cooperation29. Keeping confidences and making certain that
important information is shared and critical factors to openness and honesty30.
3. Concern for Employees and Stakeholders – Genuine concern for others is
perceived as authentic and necessary for building high-trust relationships31.
Leaders who listen to and act upon employee and stakeholder concerns
demonstrate that they are worthy of high trust32. Ethical stewards demonstrate a
commitment to the welfare, growth, and wholeness of stakeholders and ethical
stewardship has been identified as both a key element of leadership and
perceived trustworthiness33. Organizations that demonstrate this commitment to
their stakeholders and employees build trust, increase productivity, and are more
innovative than other organizations34.
4. Reliability – Reliability is acknowledged as a key element of both trust and
quality35. The ability to be consistent and to perform according to established
standards is the fundamental characteristic of reliability and predictability that
builds trust36. Keeping commitments and explaining the rationale for decisions
enable leaders to build confidence in their trustworthiness37. The correlation
between organizational culture, high trust, and firm performance is a key element
of HPWS and acknowledged to be dependent upon aligned HRM practices38.
26
Kouzes, J. M. and Posner, B. Z., (2011). Credibility: How Leaders Gain and Lose It, Why People Demand It. San
27
The importance of honesty and openness in building trust are identified repeatedly in Beer, M., (2009) op. cit. and
28
The most-cited paper about Mayer, R. C., Davis, J. H., & Schoorman., (1995). “An Integrative Model of
Organizational Trust.” Academy of Management Review, Vol. 20, Iss. 3, pp. 709-734.
29
Kouzes, J. M. & Posner, B. Z., (2011) op. cit.
30
31
This relationship is well developed in the research about authentic leadership and is found in Gardner, W. L.,
Cogliser, C. C., Davis, K. M., & Dickens, M. P.., (2011). “Authentic Leadership” A Review of the Literature
and Research Agenda.” The Leadership Quarterly, Vol. 22, Iss. 6, pp. 1120-1145.
32
33
For a thorough description of these relationships related to ethical stewardship, see Caldwell, C., Hayes, L., and
Long, D., 2010. “Leadership, Trustworthiness, and Ethical Stewardship.” Journal of Business Ethics, Vol. 96,
Iss. 4, pp. 497-512.
34
See Beer, M., (2009) op. cit.
35
See Rita, S. & Ganesan, V., (2012). Quality Enhancement in Prime Service Sectors: SERVQUAL-Based
Approaches. Saarbrucken, Germany: Lambert Academic Publishing.
36
This point is emphasized in Mayer, R. C., Davis, J. H., & Schoorman., (1995) op. cit.
37
38
These relationships are identified in Tzafrir, S. S., (2007). “The Relationship between Trust, HRM Practices, and
Firm Performance.” The International Journal of Human Resource Management, Vol. 16, Iss. 9, pp. 1600-
1622.

5. Identification – Organizational identity is a function of that which is central,

distinctive, and enduring in organizations39. Employee identification comes when
employees believe that their values are not only reflected in what the
organization says but in how it performs40. Organizational climate and
identification are highly correlated with ethical decision-making and employee
trust41. When organizational identification is high, employees are able to more
effectively relate to their organizations’ mission, purpose, values, and priorities –
and that connection inspires increased effort and personal commitment42.
When employees relate to these five driving forces, not only does their trust increase
in organizational leaders but their personal identities also are enhanced as they identify
with their organizations’ mission and match it with their own values and identities43.
WHY HIGH PERFORMANCE/HIGH TRUST MAKES SENSE
As a model of organizational governance, HPWS and HTO systems help

organizations to address five major issues that characterize the modern organization and
the world we know in the 21st century. Those issues have a profound influence on the
global economy, the environmental and political factors that affect organizations of all
types, and the individual needs of a world population that has become increasingly
competitive – yet less capable of addressing these five issues.
1. Resources are Increasingly Scarce – In a world wherein organizations are

struggling to do more with less and where concerns are being increasingly placed
on the conservation of natural resources44, aligned and efficient organizations
have a natural competitive advantage45.
2. World Competition Has Exponentially Increased – The speed of change has
increased, disruptive innovation has become commonplace, and global
competition has become the status quo for virtually all types of organizations –
39
The key elements of organizational identity are defined in the classic article, Albert, S. & Whetten, D. A. (1985).
“Organizational Identity.” Research in Organizational Behavior, Vol. 7, pp. 263-296.
40
41
This relationship is found in Gils, S., Hogg, M., Quaquebeke, N., & Knippenberg, D., (2017). “When
Organziational Identification Elicits Moral Decision-Making: A Matter of the Right Climate.” Journal of
42
Ibid.
43
This matching of one’s actions with personal self-image, or one’s comparator, is explained in Burke, P. J. &
Stets, J. E., (2009). Identity Theory. Oxford, UK: Oxford University Press.
44
This decline in available resources is addressed by many experts, including Pullitzer Prize Winner, Friedman, T.
L., (2009). Hot, Flat, and Crowded: Why We Need a Green Revolution – And How it Can Renew America,
Release 2.0. New York: Picador Press.
45

including many organizations that have historically been considered

invulnerable46.
3. Governments Have Failed to Respond Effectively – Despite the fact that many
of the problems of society have been well-documented for the past thirty years,
governments throughout the world have been largely ineffective in dealing with
the economic, political, and social problems that face a world that seems to be
increasingly conflicted yet damnably ineffective in forging meaningful long-term
solutions47.
4. Self-Interest Undermines Confidence – The problems of the world of today and
tomorrow are rarely acknowledged by a modern society that is myopically
focused and lacking in moral intensity – or the inability to perceive the problems
of a world beyond one’s own horizon48.
5. Unrealistic Expenditures Reflect in Responsibility. We live in a society wherein
debt is deferred and individuals in many communities live far beyond their
means49. The problem transcends the $19.9 trillion debt owed by the United
States50, although that approach to borrowing that some economists consider to
be impossible to pay off, serves as a symbol of financial self-deception and
irresponsible economic thinking51.
Organizations that adopt a HPWS or HTO model of governance have the opportunity
to unlock the potential of their employees and to succeed in a world that must survive,
despite these five difficult issues.
46
The evolving and rapid nature of change and its profound competitive impacts have been cited by scholars like
Christensen, C. M., (2016). The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail.
47
The inability of modern leaders to address today’s problems is well documented by Friedman, T. L. (2009) op.
cit. and by Reich, R. B., (2013). Aftershock: The Next Economy and America’s Future Updated. New York:
Random House.
48
This failure to see the long-term nature of problems or to recognize their potential global impact was articulated
by Jones, T. M., (1991). “Ethical Decision Making by Individuals in Organizations: An Issue-Contingent
Model.” Academy of Management Review, Vol. 16, Iss. 2, pp. 366-395.
49
This reality is documented in Friedman, T. L., (2009) op. cit.
50
This debt was documented by the Concord Coalition, an independent US research firm and found online on
August 28, 2017 at https://www.concordcoalition.org/? gclid=Cj0KCQjw_o7NBRDgARIsAKvAgt3Igd-
GkWXMTV_la5AbiJ0EXnw26JWstxdBtARMAHXWmA2Z1F5ttloaAoJoEALw_wcB#id-13829. The
Concord Coalition is a political advocacy group in the United States, formed in 1992. A bipartisan
organization, it was founded by U.S. Senator Warren Rudman, former Secretary of Commerce Peter George
Peterson, and U.S. Senator Paul Tsongas.
51
Among the many who have expressed concern about the world and US financial picture, is Reich, R. B., (2012).
Beyond Outrage: Expanded Edition: What Has Gone Wrong with Our Economy and Our Democracy and How
to Fix It. New York: Random House. Reich is a former Rhodes Scholar and currently works as the
Chancellor's Professor of Public Policy at the University of California at Berkeley and Senior Fellow at the
Blum Center for Developing Economies. He served as Secretary of Labor in the Clinton administration, for
which Time Magazine named him one of the ten most effective cabinet secretaries of the twentieth century

RECOMMENDATIONS FOR IMPLEMENTING

BETTER ORGANIZATIONS
The challenge for today’s organizations is to create organizational cultures that align
their values to build employee commitment, increase trust and cooperative behavior, and
empower employees to become the best possible versions of themselves52. Although
there is no “instant pudding” in creating HRM systems that support HPWS and HTO
systems, the following are ten recommended steps for HRPs to consider in implementing
such systems53.
1. Benchmark Current Performance – Documenting current performance

establishes a benchmark for identifying opportunities for improvement and
provides a comparison for employees and managers to use to identify areas of
focus54.
2. Document the Challenges – Identify critical problem areas that are barriers to
achieving desired organizational outcomes. Distinguish between symptoms and
root causes55.
3. Articulate the Benefits – Projecting the expected benefits and outcomes provides
an opportunity for focusing participant efforts and helps to identify realistic
goals.
4. Obtain Top Management Ownership – The HRM function serves the Top
Management Team and they must own any change process56.
5. Develop an Action Research Approach – The Action Research Model for
problem formation, data collection, and analysis is a logical and practical model
for implementing change that is high-involvement and empowering for
employees57.
6. Partner with Employees – Involving employees as key partners in the
assessment and change process utilizes their input and generates their
ownership58.
7. Develop an Action Plan – Involve the Top Management Team in framing an
action plan to identify changes needed to achieve desired goals. The Top
52
The challenge facing organizations in achieving organizational and individual greatness is articulated in Covey,
S. R., (2004). The 8th Habit: From Effectiveness to Greatness. New York: Free Press.
53
These ten steps mesh with the improvement process articulated by Block, P., (2011). Flawless Consulting: A
Guide to Getting Your Expertise Used. San Francisco, CA: Pfeiffer.
54
55
Distinguishing between symptoms and causes is a key skill identified by Covey, S. R., (2013). 7 Habits of Highly
Effective People: Powerful Lessons in Personal Change. New York: Simon & Schuster.
56
This important point is fundamental to the HRM role but is also addressed in Sholtes, P., Joiner, B. L., & Streibel,
B. J., (2003). The TEAM Handbook (3rd ed.). Madison, WI: Oriel, Inc.
57
Block, P. (2011) op. cit.
58
in Sholtes, P., Joiner, B. L., & Streibel, B. J., (2003) op. cit.

Management Team’s ownership is essential, consistent with their role, and

necessary for any successful change process to occur59.
8. Formalize Management Support – Communicate the implementation plan
throughout the organization and the Top Management Team’s endorsement of
the plan60.
9. Implement Aligned Changes – HPWS and HTO systems that are implemented
should be implemented as an aligned system, as opposed to being implemented
piece-meal61.
10. Monitor the System – Monitoring and following up on implemented changes and
comparing results with initial benchmarks enables an organization to constantly
learn and improve62.
There are, of course, no guarantees that implementing HPWS and HTO HRM
systems will ensure that organizations will survive in today’s competitive global
economy. Notwithstanding that reality, a growing body of evidence confirms that aligned
and complementary HTO and HPWS practices improve productivity, customer service,
and profitability for organizations of all types63.
Questions to Ponder
1. What do you think would be the primary difficulties in convincing a Top

Management Team to consider a HPWS or HTO system?
2. What content should an HRP provide a Top Management Team in encouraging
them to consider implementing an HPWS program?
3. What implicit values are involved in creating an HTO or HPWS system?
Will We Be Here Tomorrow? -- Case Study

-- By Dr. Sarah J. Smith
In an attempt at transparency, employees of a local manufacturer were briefed by

corporate leaders: the plant was up for sale. Although corporate profits had declined,
plant workers did not imagine the situation would lead to this! Corporate had already
59
Ibid.
60
Ibid.
61
The importance of complementary and aligned HRM practices is documented in Foss, N. J, Pedersen, T.,
Forsgaaard, M. R., & Stea, D., (2015). “Why Complementary HRM Practices Impact Performance: The Case
of Rewards, Job Design, and Work Climate in a Knowledge-Sharing Context.” Human Resource Management,
Vol. 54, Iss. 6, pp 955-976.
62
Block, P. (2011) op. cit.
63

closed three unprofitable plants. Employees were under the impression that their location
was profitable and that they were holding their own despite tumultuous times. The
employees thought corporate simply wanted to divest their particular product line as it no
longer fit with the corporate mission. When potential buyers began to tour the facility,
workers were not alarmed. The founding owner of this location had retired and sold the
plant to the current corporation. During that transition, plant employees remained
unaffected.
The plant HRP and corporate HRM staff gathered to evaluate what had happened and
to formulate potential solutions to present to corporate leaders. The HR team did not want
to go through another plant closure. Results-based compensation had become
nonexistent. Lack of financial resources had actually led to zero raises over the past three
years. Employees who understood cost of living allowances (COLA) and inflation, as
measured by the consumer price index (CPI), realized the result of zero raises was
actually an annual pay cut of 2%. The zero raise decision affected everyone at the plant.
Plant supervisors were proud of their hiring history. They were successful at selective
hiring, with only one unsuccessful hire in the past five years. The work culture was
collaborative and supportive. Plant employees shared, used effective communication, and
were comfortable with each other. Status barriers did not exist.
The only person at the plant who was privy to detailed financial information was the
Brian, the plant manager. Month by month he watched profits plummet. The magnitude
of this negative trend was significant. Brian was instructed by corporate to keep this
information to himself. The plant HRP did not know the particulars of the financial
situation. She had witnessed the three previous closures and naturally was concerned.
During recent weeks Brian had been recruited by a large and successful company
client. He was very impressed with this organization when he personally conducted client
product training at the client’s job site. Although Brian thoroughly enjoyed being plant
and the people with whom he worked, he had a daughter in college and bills to pay. If the
plant was sold, there was no guarantee of his own job security. So . . . Brian decided to
leave and take the new job offer.
The day before his last day Brian personally funded an employee pizza party for first
and second shift. He treated third shift to breakfast. Brian thanked each employee for his
or her contributions to the plant and communicated how he thoroughly enjoyed working
with them. When Brian put in his notice, corporate management directed him not to share
financial information at the plant until instructed to do so. Employees did not have much
time to internalize the plant manager's departure decision.
One week later Brian started his new career with the client company who recruited
him. He hoped he had made the right decision.

1. Did centralized decision-making optimize the situation for this facility or

compromise its future? Specifically, what were some of the results of this
corporate practice?
2. In High Performance Work Systems (HPWS), HRPs typically incorporate seven
common practices. Which of the seven seemed to be compromised in this case?
Based on information in this case, what evidence supports your conclusions?
3. Despite a potentially dismal situation, plant employees succeeded at some of the
seven common practices of HPWS. Name two of the seven practices that
remained successful and explain what information from the case supports your
conclusions.
Success, Vision, and Dedication to Growth = Trust -- Case Study -- By Dr.

Sarah J. Smith
An organization with 2,000 employees announced a plan to hire additional staff.

Corporate shared with local media that over the past 10 years, the organization had
invested $100 million dollars in this facility. The current public announcement reviewed
this information and added that currently there are 200 open positions available, with
more to be added during the coming year. One of the reasons for so many open positions
was an aging population and the need to replace retirees with highly skilled talent. The
other primary reason was growth in the demand for its products in the global market. Jobs
were designed for creative thinkers and doers who desired to not only want to design
their own future through ample promotion possibilities but also to make a positive
difference for society.
One large manufacturer across town, a household name in most every kitchen, also
recently a plant closure which made available 223 experienced and talented workers.
Recruiters from the expanding firm hoped to capture some of that talent.
Because of its proven track record, vision for future growth, and dedication not only
to the employees but also the community, the expanding company is regarded as a high
trust organization (HTO). Building trust begins even before an employee is on the
payroll. During the interview stage, candidates learned about significant opportunities for
career growth. Interested candidates also learned that an ample bonus structure was in
place. The company had performed so well during the previous three years that the
performance bonus was paid at 150% of its forecasted projection.
1. HPWS organizations share seven common practices. Many were illustrated in

this case. Choose three, and provide evidence which supports each practice.
2. HTOs are known for high involvement of their employees. Would you consider
this organization as a high involvement workplace? What practices from the case
support your conclusion?

3. What are the three most important qualities of an organization for which you
would like to work?
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Block, P., (2013). Stewardship: Choosing Service over Self-Interest. San Francisco, CA:
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Boxall, P. and Macky, K., (2009). “Research and Theory on High Performance Work
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vAgt3Igd-GkWXMTV_la5AbiJ0EXnw26JWstxdBtARMAHXWmA2Z1F5ttloaAoJo
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Iss. 6, pp 955-976.
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Chapter 12
WELLNESS AND MANAGING RISK:

THE STRATEGIC ROLE OF
HUMAN RESOURCES
Cam Caldwell
Muscat, Oman
In honoring their multiple responsibilities to their organizations and their employees,

Human Resource Professionals (HRPs) play a variety of behavioral and technical roles
that address both macro- and micro-issues that affect both corporate success and
individual welfare. Two of those somewhat related responsibilities deal with keeping
their employees healthy and on the job – working productively for the company and its
customers. According to a 2012 study by the Integrated Benefits Institution – an
organization which represents major U.S. employers and business coalitions – U.S.
workforce illness cost businesses $576 billion annually, and much of those costs are
preventable1.
The purpose of this chapter is to identify the role of HRPs in helping their employers
to increase employee wellness and reduce accident risks which result in time off and
worker compensation claims. The chapter begins by briefly describing the role and
purpose of employee wellness programs and the impacts of wellness programs for
employers and employees.
1
Japsen, B., (2012). “U. S. Workforce Illness Costs $575 Billion Annually from Sick Days to Workers
Compensation.”

178 Cam Caldwell
Figure 1.
After identifying eight factors essential for implementing successful wellness

programs, the chapter then describes the Human Resource Management (HRM) role in
risk management and employee safety.
UNDERSTANDING WELLNESS
Wellness is far more than absence of disease, but encompasses a philosophy of life
encompassing achieving physical, mental, and emotional good health. Honoring the
obligation to help employees attain that good health is a part of the responsibility of
HRM programs and is included in the role of HRPs2. Wellness programs encompass a
broad variety of physical, mental, behavioral, and financial health and can extend beyond
an employee to include his or her family3. Wellness programs began to be an important
part of corporate Human Resource Management (HRM) systems in the 1980s and have
increasingly been recognized as a benefit to both employees and their companies4.
2
Parks, K. M., and Steelman, L. A., (2008). “Organizational Wellness Programs: A Meta-Analysis.” Journal of
Occupational Health Psychology, Vol. 13, Iss. 1, pp. 58-68.
3
See, for example, Burjek, A., (2017). “Weighing the Value of Workplace Wellness.” Workforce, Vol. 96, Iss. 2,
pp. 30-48.
4
Ibid.

Wellness and Managing Risk 179
Although many companies contract out their wellness program activities, other
companies run these programs in-house to a large degree and work in partnership with
providers5. As with any HRM program, employee wellness programs are established to
serve the twin goals of benefiting employees and helping the company. Business
magazines like Fortune have examined employee wellness programs from the
perspective of reduced health care costs and lost time due to Workers Compensation
claims and sickness as well as for their benefits in helping employees to live longer,
healthier, and more productive lives6.
Figure 2.
Employee Wellness Programs (EWPs) include a wide variety of health-related

programs to promote employee good health, improve productivity, and reduce the rising
costs of health-related expenses7. EWPs have been found to not only improve morale,
reduce the incidence of employee smoking, and reduce employee turnover but have also
drastically reduced the use of sick leave, workers compensation claims, and health care
premiums8. A review of sixty-two different studies about EWPs and their impacts found
that “companies with wellness programs had an average reduction of 25 percent in costs
related to sick leave, health plans, workers compensation, and disability insurance9.”
5
Ibid.
6
See Fry, E., (2017). “Corporate Wellness Programs: Healthy . . . Or Hokey?” Fortune, March 15. Vol. 175, Iss. 4,
pp. 99-100.
7
Otenyo, E. E., and Smith E. A., (2017). “An Overview of Employee Wellness Programs (EWPs) in Large U.S.
Cities: Does Geography Matter?” Public Personnel Management, Vol 46, Iss. 1, pp. 3-24.
8
These results were reported in the Harvard Business Review article, Berry, L. L., Mirabito, A. M., and Baun, W.
B., (2010). “What’s the Hard Return on Employee Wellness Program?” Harvard Business Review, Vol. 88,
Iss. 12, pp. 104-112.
9
These outstanding results were reported in Baldwin, N., (2016). “Navigating Employee Wellness Programs.”
Workforce, Vol. 95, Iss. 3, pp. 24-25.

180 Cam Caldwell
Figure 3.
EWPs are varied in their content from company to company and from region to
region10. Although EWPs are typically focused on a company’s specific needs, its history
of expenses, and its financial position, the variety of programs and services included in
EWPs typically is made up of a mix of the following elements.
1) Employee Assistance Programs (EAPs) – EAPs are interventions provided by an

employer to assist employees undergoing a personal or family problem that is
affecting job performance11. These confidential interventions are provided on a
contract basis by trained mental health counselors. A wide range of services from
eating disorders to gambling addiction and from divorce or marital problems to
elder care are included in these services12. EAP services are provided to help an
employee to address a problem affecting work productivity or performance
directly or indirectly.
2) Smoking Cessation – Employee smoking is an issue for both the health of the
employee and the financial interests of the employer13. Although establishing a
Smoke Free workplace is one option for improving employee health, many
10
Otenyo, E. E., and Smith E. A., (2017) op. cit.
11
Cooper, C., Dewe, P., and O’Driscoll, M., (2003). “Employee Assistance Programs” in Quick J. and Tetrick, L.
(Eds.). Handbook of Occupational Health Psychology. Washington, D. C.: American Psychological
Association, pp. 289=304.
12
Pascarella, A., (2015). “The Importance of Employee Assistance Programs.” Lawley, October 15th found online
on October 11, 2017 at http://www.lawleyinsurance.com/wellness/the-importance-of-employee-assistance-
programs-eap/.
13
See Burroughs, A., (2015). “Smoking Cessation.” Smart Business Cleveland, Vol. 26, Iss. 12, pp. 62-63.

companies also offer employees financial incentives for quitting smoking and
improving their personal wellness14.
3) Weight Loss – Weight loss incentives are also offered, often in the form of cash
rewards or as a decrease in the employee portion of the premium for health
insurance15. There is some evidence, however, that extrinsic incentives are not
effective in motivating employee weight loss16. Unfortunately, adult Americans
have significant problems with excessive weight and obesity with 35.0% of men
and 40.4% of women classified as obese, according to a report from the National
Center for Biotechnology Information17. Obesity is also related to other chronic
health problems.
4) Fitness Programs –Fitness and overall good health are correlated and firms that
have implemented EWPs with fitness programs have seen cost savings as a
result18. Work-sponsored fitness programs benefit a society in which only one in
five Americans gets the recommended amount of daily exercise19. Major
employers have initiated fitness programs as part of overall health care
gainsharing agreements with employees in acknowledgement of the correlation
between fitness, better health, and reduced health care costs20. Although fitness
programs may be job-related, as is the case with some professions (e.g.,
firefighters), they also promote good health and overall wellness – benefiting
individuals and decreasing their companies’ health care costs, time lost from sick
leave, and workers compensation expenses.
5) Health Screening – Health screening, including fitness analysis, is offered by
employers as part of many EWPs. Those screenings can identify employees who
are at risk for chronic health conditions, in addition to providing valuable
information to employees about their general health and opportunities available
to improve overall health21. More than 141 million Americans have one or more
chronic health conditions22. Blood pressure testing and a Body Mass Index
analysis can be helpful for every employee and the makeup of an employee
14
Ibid.
15
Ruhl, L., (2016). “Wellness Programs Shift Focus Away from Weight Loss.” Central Penn Business Journal
February 19th, Vol. 32, Iss. 9, pp. 14-15.
16
Ibid.
17
Flegal, K. M., Kruszon-Moran, D., Carroll, M. D., Fryar, C. D., and Ogden, C. L., (2016). “Trends in Obesity
among Adults in the United States, 2005-2014.” Bethesda, MY: National Center for Biotechnology
Information.
18
Greene, J., (2011). “Employee Wellness Proves Its Worth.” Trustee, Vol. 64, Iss. 2, pp. 8-12.
19
This statistics is identified by the Center for Disease Control in a May 2, 2013 Press Release: “One in Five Adults
Meet Overall Physical Activity Guidelines.” Atlanta, GA: Center for Disease Control Prevention found online
on October 11, 2017 at https://www.cdc.gov/media/releases/2013/p0502-physical-activity.html.
20
Levitt, C., (2015). “New York City’s Health Care Cost Savings Plan.” Benefits Magazine, Vol. 52, Iss. 9, pp. 11-
15.
21
Desai, P., (2017). “Getting MORE from Health Screenings.” Benefits Magazine, Vol. 54, Iss. 9, pp. 45-51.
22
Ibid.

182 Cam Caldwell
population can be taken into account to conduct other health screening tests
appropriate for that population23.
6) Financial Health Counseling – Many organizations have acknowledged the
importance of including financial health counseling in their EAPs24. A research
study conducted by Washington University affirmed that financial health and
physical health were directly correlated25. Financial counseling services
demonstrate to employees their companies’ commitment to their economic health
but also have a positive overall impact on employee wellbeing26. With the high
incidence of individual debt that is prevalent in society, financial counseling and
financial stress management have practical relevance for many of today’s
employees27.
7) Catastrophic Event Counseling – Often, as part of the services provided by
EAPs, firms offer employees with counseling and emotional support during times
of personal emergency or after the occurrence of a catastrophic event. Such
counseling service acknowledges the needs of employees as a group or as
individuals and enables persons who have undergone a catastrophe to adjust to its
traumatic consequences. Individual and family emotional support during times of
special need can be of great benefit to struggling employees and demonstrate to
the entire employee group that a company is committed to its employees’
welfare28.
EWPs are most effective when they are developed in partnership with employees and
are focused on the unique characteristics of the organization and its mix of employees.
Understanding employee needs and identifying opportunities to involve employees in
programs that improve employee health and wellbeing and improve the financial position
of the organization are major responsibilities of HRPs and can have substantial positive
benefits for all parties.
23
Dugmore, D., (2011). “A Wider View of Wellness.” Employee Benefits, September, pp. 6-8.
24
Butler, K., (2015). “Today’s Wellness: Sound Body, Mind & Finances.” Workforce, Vol. 4, Iss. 11, pp. 38-42.
25
Gubler, T., and Pierce, L., (2014). “Healthy, Wealthy, and Wise: Retirement Planning Predicts Employee Health
Improvements.” Psychological Science, Vol. 24, Iss. 9, pp. 1822-1830.
26
Ibid.
27
This important point is made in “Promoting Financial Wellness in the Workplace.” Employee Benefit News, Vol.
27, Iss. 13, Special section, pp. 3-11, Oct. 2013.
28
This point is made in O’Brien, E., and Tepper, T., (2016). “The High Cost of Coping.” Money, December, Vol.
45, Iss. 11, pp. 72-81.

Figure 4.
IMPLEMENTING WELLNESS PROGRAMS
Based upon the experiences of many organizations, EWPs can be successfully

implemented by both small and large businesses at a reasonable cost29. Although larger
businesses typically have EWPs and EAPs, smaller companies also provide this service
for their employees and the cost of the service can be as low as $6 per employee per
month30.
The following eight factors should be considered by HRPs as they consider
implementing an EWP program as part of their organization’s HRM function.
1) Identify the unique needs that characterize the organization. Understanding the
health status and demographics of employees that are unique to an organization
enables HRPs to identify where to best invest organization resources to meet
those needs.
29
Neely, M., (2012). “Wellness Strategies for Smaller Businesses.” Benefits Quarterly, Vol. 28, Iss. 3, pp. 16-19.
30
See “Employee Assistance Programs.” Inc. BrandView found online on October 11, 2017 at
https://www.inc.com/encyclopedia/employee-assistance-programs.html.

184 Cam Caldwell
Figure 5.
2) Research program elements that meet organization priorities. Although EWPs

have been beneficial to many firms, HRPs need to fully understand the nuances
of wellness efforts and be aware of the time required and the “hidden costs” of
implementation31.
3) Obtain the Top Management Team commitment and support. Top Management
Team buy-in and commitment is essential to the success of any HRM program32
and such programs should be focused on achieving an organization’s strategic
goals33. For best success, Top Management should be active participants in EWP
activities.
4) Promote wellness as part of the organization culture. Making wellness an
important organizational value and incorporating it into the organization’s culture
strengthens employee commitment and program success.
5) Incorporate elements that include employee families. EAPs should be available
to employee family members inasmuch as family problems often affect employee
productivity.
6) Establish metrics for assessing individual and organization wellness. Metrics
should be based upon relevant historical data for the organization, as well as
individual information for employees.
31
Bray, E., (2011). “Moving Beyond the Buzz.” Employee Benefit News, Vol. 25, Iss. 7, pp. 15-16.
32
For a discussion of the importance of Top Management Team support for new initiatives, see Scholtes, P. R., and
Joiner, B. L., (2003). The TEAM Handbook (3rd ed.). Madison, WI: Oriel Inc.
33
This relationship is clearly enumerated in Caldwell, C., Truong, D., Linh, P., and Tuan, A., 2011. “Strategic
Human Resource Management as Ethical Stewardship.” Journal of Business Ethics, Vol. 98, Iss. 1, pp. 171-
182.

7) Track individual and organizational goals set and goals achieved. Keeping
accurate and up-to-date records reinforces the importance of the EWP and
enables HRPs to document program results and individual accomplishments.
8) Celebrate individual and organizational successes. The evidence suggests that
EWPs are typically successful in reducing the incidence of time off work and the
costs of health insurance and Workers Compensation. Celebrating individual and
organizational successes and publicizing that information strengthens the
reputation of an EWP and builds organization commitment to program goals.
These eight factors are elements of successful EWPs and enable organizations to
build employee ownership of the program and commitment to its goals. As HRPs interact
with employees about EWP activities, they also build interpersonal relationships and
improve the reputation of the HRM program.
RISK MANAGEMENT AND THE HRM FUNCTION
Risk involves uncertainty about an outcome which may result in a negative result, a
loss, or a failure to achieve a desired goal. In HRM, risk management is associated with
the goals and objectives of an organization involving its personnel and their
achievements. HRPs seek to achieve the objectives of an organization’s Top Management
Team In minimizing risk and achieving the priorities essential for successful
organizational performance. With regard to HRM, risk management involves a multitude
of potential issues34.
 Loss of Key Employees. The inability to retain employees who play a major role
in creating value can be a disastrous problem for organizations.
 Retention of Unwanted Workers. Employees who do not contribute value at
least equivalent to their compensation need to be identified and remediated or
assisted in finding a better fit for themselves and for their employer.
 Loss of Skilled Manpower to Competitors. Investing in employee development
and enhancing an employee’s skills is counterproductive if that employee
subsequently is lost to a competitor.
 Reputational Risk of Dishonest Staff. As was the case with the Arthur Andersen
accounting firm with the ENRON debacle, a firm’s reputation can be destroyed
by the actions or inactions of staff.
34
The risks identified in this list come from Shastri, P. P., and Shastri, J. P., (2014). “Risk Management in Human
Resource Management Domain.” Journal of the Insurance Institute of India. Vol. 2, Iss. 2, pp. 124-128.

186 Cam Caldwell
 Non-transparent Communication. Communication that fails to disclose key

information undermines an organization’s credibility, erodes morale, and
impedes progress.
 Migration of Employees to Other Countries. The loss of employees to other
countries where better opportunities exist can be a significant issue for
multinational companies.
 Inefficient and Incompetent Employees. Employees who perform ineffectively
damage a company’s effectiveness and raise questions about the competence of
its management.
 Regulatory and Legal Risks. The failure to comply with legal requirements – as
well as the intent of those laws and regulations – not only can create financial
vulnerability but erode confidence in an organization and its integrity.
 Infrastructure Inefficiencies. The inadequacy of a company’s infrastructures can
be the root cause of perceived “employee performance” problems and need to be
addressed in a timely manner.
 Technical Competence Shortcomings. In an increasingly competitive global
marketplace, employees must be able to demonstrate the ability to consistently
utilize technical resources in performing their jobs. Monitoring this competence
and providing proper training are essential.
 Inappropriate Political Activities. Employee involvement in political activities
can create image problems for organizations and must also be monitored to
protect employees with differing political preferences.
 Ambiguity of Language. Unclear personnel policies and rules and/or inconsistent
enforcement of ambiguous language can create problems of perceived inequity as
well as potential legal action.
 Coordination of Response. The unique characteristics of individual departments
or divisions of a company may affect how personnel policies are administered
and coordinated. These differences should be understood, monitored, and
addressed so that fairness and equitable treatment prevail.
HRPs must develop a refined understanding of the nuances of all of these potential
HRM risks and demonstrate the ability to address and mitigate such risks. By
understanding the complex implications of each of these risks, HRPs prepare themselves
to assist their organizations to most effectively utilize employees to achieve strategic
goals and assist employees to become successful partners in that process.

EMPLOYEE SAFETY AND ACCIDENT PREVENTION
Employee safety is a practical problem associated with saving companies money and
involves moral obligations to the individuals hired to perform company tasks35. HRPs
play a variety of roles in helping to define safe work behaviors; providing training for
employees, managers, and supervisors; involving employees in ensuring that hazards and
risks are minimized; and keeping track of employee safety and accident information
which can help a company to know where to focus its loss prevention efforts36.
Workplace safety is governed by state and federal laws which set forth the importance of
working conditions free from predictable causes of harm or accident37.
HRPs often play an important role in their organizations in not only providing safety
training and inspections but in coordinating Safety Committees. Those committees are
typically made up of representatives from the ranks of employees. Employees meet on a
regular basis to discuss safety issues, identify problem areas, determine whether incidents
are preventable or not preventable, and develop suggestions to eliminate causes of
incidents and accidents38.
Employee Safety Committees can be an effective way of communicating to
employees a company’s commitment to safe work practices. According to the Society for
Human Resource Management, successful committees operate with Top Management
Team support, are adequately staffed and funded, and made a priority to employees and
supervisors39. As is the case with any well-planned committees, Safety Committees work
best when members are adequately trained, when the committee meets regularly and
publishes minutes of its accomplishments, and when employees are engaged as full
owners and partners in the committee’s role40.
In creating a viable Safety Committee program, the most effective models have a
common set of characteristics. Kevin Druley, Associate Editor of Safety + Health
magazine, offered seven tips for creating a successful Safety Committee41.
1) Put Progression before Perfection. Identify realistic goals and work toward
accomplishing what matters first.
35
Mathis, R. L., Jackson, J. H., Valentine, S. R., and Meglich, P. A., (2016). Human Resource Management
(15th ed.). Boston, MA: Cengage Learning.
36
Ibid.
37
Ibid.
38
Ibid. See also “Committees Put Employees in Control of Safety, Health.” Workers Compensation Monitor,
Vol. 18, Iss. 7, p. 7. April, 2005.
39
Human Resource Management found online on October 13, 2017 at https://www.shrm.org/resourcesandtools/hr-
topics/risk-management/pages/workplace-safety-committees.aspx.
40
Ibid.
41
Druley, K., (2017). “7 Tips for an Effective Workplace Safety Committee.” Safety + Health, February 26th found
online on October 13, 2017 at http://www.safetyandhealthmagazine.com/articles/15308-tips-for-an-effective-
workplace-safety-committee.

188 Cam Caldwell
2) Embrace Variety. Include representatives from both the employee group and
management. Members should be selected to serve who consider safety to be an
important priority.
3) Incorporate a Basic Training Curriculum. Train members about the key
principles involved in creating a safe work environment and make the training a
requirement of all committee members.
4) Plan Meetings Carefully. Meetings should be planned ahead of time and staffed
by a Committee Leader who prepares and follows a meaningful agenda, prepares
and distributes needed information before the meeting, and keeps the committee
focused on important work.
5) Maintain a Reasonable Member Rotation. Members should remain on the
committee long enough to become qualified decision-makers and participants but
should rarely be appointed on a permanent basis so that other interested
personnel can also become involved.
6) Make Meetings Fun. The meetings should avoid wasting time, include useful
and interesting information related to the organization’s needs, and should
involve members in meaningful tasks that have real value to the organization and
its members.
7) Occasionally look outward. Explore what other organizations have done
successfully. Do the necessary research and analysis to be able to take advantage
of programs that have worked effectively elsewhere.
HRM departments traditionally play a major role in supporting Safety Committees

and provide important background information for the Committee Leader to help that
person to be effective in leading the committee’s work. When information about
incidents, accidents, and their causes are used to make improvements, the credibility of a
safety program and a Safety Committee are enhanced and can help an organization
reduce the incidence of accidents and their associated costs and loss of time at work.
CONCLUSION
Although employee wellness and risk management are not always considered to be
the most important elements of HRM systems, they make an important strategic
contribution to organizations by keeping employees healthy, safe, and productive. In
addition, wellness and risk management activities demonstrate to employees the values of
a company’s culture in benefiting employees and their families long-term. Wellness and
safety programs help employees to understand how they can take better care of
themselves, develop better lifestyle habits, and become more conscious of how they can

live healthier and happier lives42. For companies the benefits of these programs transcend
reduced health care premiums, lower workers compensation costs, and less employee
time off work. Well-conceived wellness and safety programs enable companies to
maximize their productivity and profitability while honoring their commitment to helping
employees to become the best version of themselves43.
HRPs who understand the benefits of wellness and safety programs and who engage
employees in protecting their self-interests by being healthy and safe contribute a
valuable strategic benefit to their employers and to the employees that they serve. In the
many roles that HRPs play to serve the organization and to assist a company to achieve
its strategic mission, they reinforce the importance of the partnership between a company
and its employees and help to create an organizational culture where employees not only
succeed but flourish. As they implement programs that contribute to employee well-
being and good health and address the multitude of risk-related and safety needs of
employees, HRPs also strengthen the credibility of the HRM function and their own
value as part of the company’s management team44.
Questions to Ponder
1) In today’s complex world, which EWP programs do you think have the most
value for employees?
2) Do you think committees have a vested interest in the family of an employee?
Can today’s companies afford that investment in the competitive global
environment? Why or why not?
3) What are the advantages of having employees serve as decision-making members
of a company Safety Committee? How about overseeing an EWP?
Do I Want Apples? - Case Study - by Dr. Sarah J. Smith
Grace was conducting a seminar to assist area employers with enhanced management
skills. Her topic was hiring, training, and retention of a transient workforce. After her
session concluded, she went to the back of the room to listen to the other speaker. Bruce
approached her and said he had heard she was an effective presenter. He offered Grace an
opportunity to present at a seminar he would coordinate in a few months. Bruce and
42
For a summary of the benefits of wellness and safety programs for employers and employees, see Becker, E.
(2017). “The Benefits of a Health and Safety Program.” Concentra found online on October 14, 2017 at
https://www.concentra.com/resource-center/articles/the-benefits-of-a-health-and-safety-program/.
43
These two goals are part of the universal mission of every organization identified in Covey, S. R., (2004). The 8th
Habit: From Effectiveness to Greatness. New York: Simon & Schuster, p. 99.
44
The importance of the strategic contribution of HRPs is addressed in Caldwell, C., et al., (2011) op. cit.

190 Cam Caldwell
Grace worked for the same employer: he was at the main location and she was located at
a satellite facility two hours away.
Corporate had determined a need to increase wellness offerings and to raise
employee awareness of the many available programs that would undoubtedly enhance the
employees' knowledge of his or her own health. Grace has worked as an HRP in
organizations that administered a Health Risk Appraisal (HRA) through a third party
vendor in order to protect confidentiality. Bruce was surrounded by employees who had
never completed an HRA. They were shocked at some of the questions that asked about
family health history, frequency that individuals exercised, smoking status, and alcohol
consumption. Most employees, despite the assurance of confidentiality, refused to
complete the HRA because they became increasingly uncomfortable with its questions.
Simultaneously, this organization had created a wellness Apple a Day program.
Employees would earn virtual apples for activities such attending informative seminars
about wellness, eating the “healthy choice” menu option in the employee cafeteria, or
taking a walk. When a preset number of apples were earned by the program deadline,
apples were converted to a cash bonus. Bruce said at the main location, this created a
group of regular walkers who participated on a daily basis. Some participants were so
overweight that they lumbered along the walk.
As he thought about the Apple a Day program, Bruce went to his neighborhood
YMCA and became a member. He was pleased to learn his employer offered a 10%
membership discount. Bruce was not adverse to wellness and protecting good health, but
he just wanted to do it his way rather than joining the Apple a Day walkers.
1) What could the HRPs do in the future to dispel employee concerns about the
HRA and confidentiality?
2) Some employees 'missed the memo'. They did not realize An Apple a Day was
underway and lost out on an opportunity to participate. How could HRPs develop
a communication strategy to eradicate this issue for the next wellness program?
What types of media could be included in the plan?
3) Do you think An Apple a Day was a success? What clues in the case support your
stance?
A Family Struggle - Case Study - by Dr. Sarah J. Smith
Bill had a son who recently demonstrated volatile behavior. He wondered if drugs
could be involved and if this was a situation that might benefit from his company's
Employee Assistance Program (EAP). At this company, the EAP provided for eight visits
per employee or eight family member per year. A desirable feature of this program was
that visits could be totaled and combined. For Bill, this meant he could see an EAP

mental health provider, his son could also visit on his own, and both could go together.
Between them, there would be 16 complementary sessions.
The company understood that employees who never accessed EAP programs could
have several questions in addition to concerns about confidentiality. The HRP invited the
EAP vendor to conduct employee knowledge sessions. Although these were available at
each department, if time date, or employee preference were factors, an employee could
attend any information session. The presenter ensured each employee had a pamphlet in
hand, including the phone number to call. The initial call service was available 24/7, 365
days a year. The EAP speaker made sure to tell employees that their needs could be
monitored over the phone, or, they could be referred to an area mental health care
provider. For this EAP provider, confidentiality was a competitive advantage. With
complete assurance of confidentiality, when an employee was facing a situation that
impacted his work and or family life, 99% of the time the employee would voluntarily
seek EAP services on his own. Employer (supervisory) referrals were uncomfortable for
most, but fortunately the assured high level of confidentiality resulted in a mere 1%
supervisor referral rate.
HRPs listen to employees and seek solutions to support the workers and their
organization. When asked, the employees at Bill's workplace stated they would like
multiple locations from which to choose to see a counselor in person. The community
was small, and everyone knew everyone. In addition, a local medical clinic had converted
and sublet its second floor to an EAP vendor. Employees said “If I go to that building and
press 2 in the elevator, everyone knows why I am there.” Child care availability was
another feature employees requested for their EAP.
1) Bill decided to call the EAP number. He was pleasantly surprised with the level
of professionalism. Confidentiality was again assured and he and his son would
be seeing a care provider in the near future. In your opinion, what did the HRP do
to establish a program that employees would be comfortable utilizing?
2) The HRP was consulted by a supervisor who had an employee with an increased
number of days absent. She was concerned the employee could jeopardize his job
if the absences continue. The HRP coached this supervisor as to what to say to
the employee. She also volunteered to be present, mainly for moral support. Once
the program was accessed and the employee was in counseling, the supervisor
wanted to know why she was not provided with a report. The HRP explained that
for a supervisory referral, the only documentation provided from the EAP vendor
answered two questions: Was the employee attending, and were he or she making
progress. What is your opinion of how the HRP handled this inquiry?
3) Your organization decides to implement an EAP. As the HRP, what lessons
could you take from this company's example that would be helpful to vendor
selection and EAP implementation for your company and its employees?

192 Cam Caldwell
REFERENCES
Baldwin, N., (2016). “Navigating Employee Wellness Programs.” Workforce, Vol. 95,
Iss. 3, pp. 24-25.
Becker, E. (2017). “The Benefits of a Health and Safety Program.” Concentra found
online on October 14, 2017 at https://www.concentra.com/resource-
center/articles/the-benefits-of-a-health-and-safety-program/.
Berry, L. L., Mirabito, A. M., and Baun, W. B., (2010). “What’s the Hard Return on
Employee Wellness Program?” Harvard Business Review, Vol. 88, Iss. 12, pp. 104-
112.
BrandView “Employee Assistance Programs.” Inc. BrandView found online on October
11, 2017 at https://www.inc.com/encyclopedia/employee-assistance-programs.html
Bray, E., (2011). “Moving Beyond the Buzz.” Employee Benefit News, Vol. 25, Iss. 7, pp.
15-16.
Burjek, A., (2017). “Weighing the Value of Workplace Wellness.” Workforce, Vol. 96,
Iss. 2, pp. 30-48.
Burroughs, A., (2015). “Smoking Cessation.” Smart Business Cleveland, Vol. 26, Iss. 12,
pp. 62-63.
Butler, K., (2015). “Today’s Wellness: Sound Body, Mind & Finances.” Workforce, Vol.
4, Iss. 11, pp. 38-42.
171-182.
Center for Disease Control in a May 2, 2013 Press Release: “One in Five Adults Meet
Overall Physical Activity Guidelines.” Atlanta, GA: Center for Disease Control
Prevention found online on October 11, 2017 at https://www.cdc.gov/media/releases/
2013/p0502-physical-activity.html
Cooper, C., Dewe, P., and O’Driscoll, M., (2003). “Employee Assistance Programs” in
Quick J. and Tetrick, L. (Eds.). Handbook of Occupational Health Psychology.
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Covey, S. R., (2004). The 8th Habit: From Effectiveness to Greatness. New York: Simon
& Schuster.
Desai, P., (2017). “Getting MORE from Health Screenings.” Benefits Magazine, Vol. 54,
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Druley, K., (2017). “7 Tips for an Effective Workplace Safety Committee.” Safety +
Health, February 26th found online on October 13, 2017 at http://
www.safetyandhealthmagazine.com/articles/15308-tips-for-an-effective-workplace-
safety-committee
Dugmore, D., (2011). “A Wider View of Wellness.” Employee Benefits, September, pp.
6-8.

Employee Benefit News. “Promoting Financial Wellness in the Workplace.” Employee

Benefit News, Vol. 27, Iss. 13, Special section, pp. 3-11, Oct. 2013.
Flegal, K. M., Kruszon-Moran, D., Carroll, M. D., Fryar, C. D., and Ogden, C. L.,
(2016). “Trends in Obesity Among Adults in the United States, 2005-2014.”
Bethesda, MY: National Center for Biotechnology Information.
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15. Vol. 175, Iss. 4, pp. 99-100.
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8-12.
Gubler, T., and Pierce, L., (2014). “Healthy, Wealthy, and Wise: Retirement Planning
Predicts Employee Health Improvements.” Psychological Science, Vol. 24, Iss. 9, pp.
1822-1830.
Japsen, B., (2012). “U. S. Workforce Illness Costs $575 Billion Annually from Sick Days
to Workers Compensation.”
Levitt, C., (2015). “New York City’s Health Care Cost Savings Plan.” Benefits Magazine,
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Mathis, R. L., Jackson, J. H., Valentine, S. R., and Meglich, P. A., (2016). Human
Resource Management (15th ed.). Boston, MA: Cengage Learning.
Maurer, R., (2013). “Making Workplace-Safety Committees Work.” Society for Human
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resourcesandtools/hr-topics/risk-management/pages/workplace-safety-committees.
aspx
Neely, M., (2012). “Wellness Strategies for Smaller Businesses.” Benefits Quarterly,
Vol. 28, Iss. 3, pp. 16-19.
O’Brien, E., and Tepper, T., (2016). “The High Cost of Coping.” Money, December, Vol.
45, Iss. 11, pp. 72-81.
Otenyo, E. E., and Smith E. A., (2017). “An Overview of Employee Wellness Programs
(EWPs) in Large U.S. Cities: Does Geography Matter?” Public Personnel
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Parks, K. M., and Steelman, L. A., (2008). “Organizational Wellness Programs: A Meta-
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Oriel Inc.

194 Cam Caldwell
Shastri, P. P., and Shastri, J. P., (2014). “Risk Management in Human Resource
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Health.” Workers Compensation Monitor, Vol. 18, Iss. 7, p. 7. April, 2005.

Chapter 13
HONORING EMPLOYEE RELATIONSHIPS: EMPLOYEE

RELATIONS AND EMPLOYEE LAW

1
Muscat, Oman
2
Although the Human Resource Management (HRM) exists to optimize an

organization’s long-term and short-term value1, that purpose is best achieved by honoring
the obligation to assist employees to improve themselves and achieve their highest
potential2. Human Resource Professionals (HRPs) are not the advocates of employees per
se, but they should nonetheless pursue employee best interests long-term -- for it is by
honoring these employee interests that HRPs demonstrate commitment to long-term
sustainability, competitive advantage, and success3. HRPs best serve employees, not by
advocacy of their articulated interests, but by establishing the best possible environ for
1
This moral duty is articulated by Lennick, D. & Kiel, F., (2011). Moral Intelligence 2.0: Enhancing Business
Performance and Leadership Success in Turbulent Times. Boston, MA: Pearson Publishing.
2
This obligation of leaders and organizations is clearly suggested by a multitude of highly regarded scholars and is
a moral duty. See, for example, Burns, J. M., (2010). Leadership, New York: Harper & Row and Covey, S. R.,
(2004). The 8th Habit: From Effectiveness to Greatness. New York: Free Press, and Beer, M., (2009). High
Commitment High Performance: How to Build a Resilient Organization for Sustained Advantage. San
3
This HRM responsibility is clearly the focus of Atwijuka, S. and Caldwell, C., 2017. “Human Resource
Management and Strategic Management” in Competitive Advantage: Strategies, Management, and
Performance, (C. Caldwell & V. Anderson, eds.). Hauppauge, New York: NOVA Publishing and Caldwell,
C., 2017. “Transformative Ethics and Trust – Keys to Competitive Advantage” in Competitive Advantage:
Strategies, Management, and Performance, (C. Caldwell & V. Anderson, eds.). Hauppauge, New York:
NOVA Publishing.

employees to succeed and to flourish, and that virtuous outcome is the emphasis of
employee relations4.
Figure 1.
The purpose of this chapter is to explain the importance of HRM employee relations
– linking it with current employee laws. Employee relations (ER) are intended to build
and sustain high trust, employee growth, innovation, and creativity. Unfortunately,
current elements of employee law often erode those noble objectives and this chapter
identifies how fuzzy legal thinking can undermine successful ER implementation.
We begin by identifying key elements of effective ER and describe many of its
defining characteristics. We then identify both positive and negative features of employee
law related to legal realities affecting employees. We conclude the chapter with five
practical ER applications for HRPs in today’s highly competitive global environment.
CHARACTERISTICS OF EMPLOYEE RELATIONS
ER “covers the whole range of interactions and communications between employers

and employees, and also the processes by which they adjust to the needs and wants of
each other”5. ER is based largely upon the idea that employees and employers
acknowledge their interdependence and the advantages of cooperation to achieve shared
4
This virtuous purpose is explained beautifully in Cameron, K., (2011). “Responsible Leadership as Virtuous
Leadership.” Journal of Business Ethics, Vol. 98, pp. 25-35.
5
Found on page 80 of Seth, R. C., (2014). “What Influences Harmonious Employee Relations?” International
Journal of Research in Commerce & Management, Vol. 5, Iss. 2, pp. 80-82.

Honoring Employee Relationships 197
goals6. Although ER is sometimes thought of in terms of the labor union context, the term
encompasses far more than that formalized relationship7.
Figure 2.
Implicit in the employer-employee relationship are the complex but often unwritten
psychological contracts that exist between the parties8. For every organization that
psychological contract is subjectively perceived by each individual employee9 – and is
based upon each employee’s unique individual experiences10. Mutually held agreements
between the parties may vary simply because of subtle differences in their interpretation
of the agreement’s provisions and unity in perception is actually the exception rather than
the norm11. Accordingly, one of the most common realities of ER is that it is subject to
differences in perception about the precise nature of the relationship – differences that
may nonetheless be strongly held and may be perceived as an ethical breach if not
honored12.
6
Ibid.
7
Aylott, E., (2014). Employee Relations. London, UK: Kogan Page Limited.
8
Ibid.
9
For a comprehensive review of the subjective nature of psychological contracts, see Rousseau, D. M., (1995).
Psychological Contracts in Organizations: Understanding Written and Unwritten Agreements. Thousand
Oaks, CA: Sage Publications.
10
The individual mediating lens of each person upon which subjective perceptions are based is addressed in
Caldwell, C., and Hayes, L., 2007. “Leadership, Trustworthiness, and the Mediating Lens.” Journal of
Management Development. Vol. 26, Iss. 3, pp. 261-278.
11
For a review of the problem of inconsistency about psychological contract perceptions, please see Robinson, S. L.
& Rousseau, D. M., (1994). “Violating the Psychological Contract: Not the Exception but the Norm.” Journal
of Organizational Behavior, Vol. 15, Iss. 3, pp. 245-259.
12
Ibid.

Figure 3.
To clarify their expectations of what they expect from employees, organizations

typically establish a comprehensive set of policies, procedures, job descriptions, work
rules, and guidelines that define those expectations. Organizations adopt and distribute a
Human Resources Handbook or Personnel Policy Manual which summarizes the rules
governing employee work; for employees governed by a labor agreement those rules are
formalized in an employment contract13. Despite the fact that policies and rules are in
writing, those rules are nonetheless subject to interpretation and can often be the cause of
substantial disagreements between employees and their employer14. Differences in
employee perceptions of their relationship with a company and the duties owed to them
often lead to a serious breach in the psychological contract, as perceived by those
employees and can result in the erosion of commitment and trust15.
ER is dependent upon the perceived trustworthiness of an organization in honoring
its duties to its employees16. Although it is the Top Management Team that establishes a
company’s culture and articulates its values17, the HRM staff implement an
organization’s personnel systems and model the values that reflect a company’s
commitment to employee success18. Creating an ER based upon high trust is essential for
any organization to establish credibility with its employees. Organizations that
consistently communicate expectations and values – and monitor the actions of
13
For a review of how to create such a manual, please see Lawson II, J. W. R., (2005). How to Develop a Personnel
Policy Manual. New York: AMACOM.
14
Robinson, S. L. & Rousseau, D. M., (1994) op. cit.
15
Ibid.
16
Organizational trustworthiness is a key to competitive advantage and is addressed in a number of sources. See, for
example, Caldwell, C., and Clapham, S., 2003. “Organizational Trustworthiness: An International
Perspective,” Journal of Business Ethics, Vol. 47, Iss. 4, p. 349-364 and WA: Washington State University
Press.
17
For a review of the role of a company’s leaders in establishing its culture and values, please see Schein, E. H. &
Schein, P., (2013). Organizational Culture and Leadership. San Francisco, CA: Jossey-Bass.
18
Atwijuka, S. & Caldwell, C., (2017) op. cit.

Figure 4.
supervisors and leaders to ensure that they adhere to those criteria – reaffirm the
organization’s ground rules and articulate its priorities and values to employees. When
systems, policies, and values espoused are aligned with the actions of HRPs, managers,
and the Top Management Team, trust in an organization increases and employee
commitment is enhanced19.
Employee engagement -- the degree to which an organization involves employees in
organization decisions, creates a culture that holds employees in high regard, and treats
employees as partners in improvement -- enables an organization to reinforce its
commitment to employee success and enhances productivity and performance. An
employee who is engaged “is fully involved in, and enthusiastic about, his or her work,
and thus will act in a way that furthers their organization’s interests”20. Unfortunately, the
overwhelming majority of employees describe themselves as not engaged at work and
fewer than one in three Millennials are positively engaged21. When managers and team
19
For a more complete understanding of the importance of engagement, see Smith, S., Peters, R., and Caldwell, C.,
(2016). “Creating a Culture of Engagement – Insights for Application.” Business and Management Research,
Vol. 5, No. 2, pp. 70 -80 available online at http://sciedu.ca/journal/index.php/bmr/article/view/9734.
20
This helpful definition is found at Paul, E., (2017). “Employee Engagement: A Key HR Strategy” EmptrustHR
found online on October 25, 2017 at http://www.emptrust.com/blog/employee-engagement-a-key-hr-strategy.
21
The actual percentage, according to a Gallup survey was 28.9%. See Adkins, A., (2015). “Majority of U.S.
Employees not Engaged Despite 2014 Gains.” Washington, D. C.: Gallup found online on October 25, 2017 at
http://news.gallup.com/poll/181289/majority-employees-not-engaged-despite-gains-2014.aspx.

Figure 5.
leaders provide meaningful feedback to employees, a 2017 Gallup report found that those
employees are 3.5 times more likely to be engaged in their organization22. Creating a
culture of engagement through effective ER enables organizations to unlock the potential
contributions that employees can make through increasing innovation, productivity, and
creativity within an organization23.
One means of increasing a positive employee response to its organization is by
internal marketing. Internal marketing “views the employees as internal customers”24 and
is the communication of positive information about an organization to its own employees,
thereby building greater pride in the organization and improving customer service and
performance25. A positive way to build high employee regard for their organization is to
share with the employees the ethical rationale behind decisions that are made and the
values of the organization that guide that rationale26. When employees take pride in their
22
Gallup Access, (2017). “Transform Your Workplace” found online on October 25, 2017 at
https://my.gallup.com/?utm_source=google&utm_medium=cpc&utm_campaign=workplace-
branded&utm_keyword=gallup%20employee%20engagement&gclid=CjwKCAjw7MDPBRAFEiwAppdF9K
R2g0Qkku7KtYEWftJnQxhGeknveZH1q04MqO-mPqfQrTUbzPWl5xoC-dUQAvD_BwE.
23
Smith, S., Peters, R., and Caldwell, C., (2016) op. cit.
24
This quote is found on page 1118 of Tsai, Y., & Tang, T-W., (2008). “How to Improve Service Quality: Internal
Marketing as a Determining Factor.” Total Quality Management & Business Excellence, Vol. 19, Iss. 11, pp.
1117-1126.
25
See Caldwell, C., Licona, B., and Floyd, L. A., 2015. “Internal Marketing to Achieve Competitive Advantage.”
International Business and Management, Vol. 10, Iss. 1., pp. 1-8.
26
Ibid.

Figure 6.
companies and feel positive about the underlying values, principles, and moral impacts of
their company in society, commitment to the organization increases and can become a
source of competitive advantage27.
One of the important first steps in building successful relationships with new
employees in ER is the quality of an organization’s onboarding process to transition
employees and prepare them for success on the job28. Unfortunately, most organizations
are ineffective in their onboarding process for new employees – to their own detriment
and to the disadvantage of incoming employees29. Despite the fact that onboarding is
essential to enable new employees to become truly effective and despite the economic
savings from assisting these employees to become quickly assimilated into an
organization, HRPs consistently fail to take advantage of this opportunity and obligation
to assist new employees to become familiar with their new organization context and
make a smooth transition30. By failing to make onboarding an HRM priority, HRPs
violate the perceived duty to help new employees as they enter their organizations and
overlook an important opportunity to create a strong ER impression31.
Another critical factor in great ER is an organization’s commitment to the training
and professional development of employees. Investing in employee training and
27
Ibid.
28
The importance of onboarding employees is identified by the Society for Human Resource Management in their
online book by Talya N. Bauer. See Bauer, T. N., (2010). Onboarding New Employees: Maximizing Success.
Washington, D. C.: SHRM Foundation found online on October 25, 2017 at https://www.shrm.org/
foundation/ourwork/initiatives/resources-from-past-initiatives/Documents/Onboarding%20New%20
Employees.pdf.
29
This verity about the ineffectiveness of new employee onboarding is identified in Caldwell, B. G., and Caldwell
C., 2016. “Ten Classic Onboarding Errors: Violations of the HRM – Employee Relationship.” Business and
Management Research, Vol. 5, No. 4, pp. 47-55 and available online at http://www.sciedu.ca/journal/
index.php/bmr/article/view/10672/6501.
30
See Caldwell, C. and Peters, R. 2017. “New Employee Onboarding – Psychological Contracts and Ethical
Perspectives.” Paper accepted for publication in the Journal of Management Development.
31
Ibid.

development, when done properly, inevitably brings an economic return on that

investment – in addition to improving service quality, reducing turnover, increasing
innovation and creativity, and improving employee morale32. Creating a learning culture
enables a company to adapt to change and keep pace with an increasingly competitive
global marketplace33. Training and development and creating a learning organization are
expected obligations of the modern organization in honoring their responsibility to help
their employees to progress personally and professionally34.
Each of these important elements of ER enables organizations to demonstrate their
commitment to employee success while improving the ability of those organizations to
compete effectively and create high value. ER plays a vital role in creating the work
environment that builds a committed and enthusiastic culture and promotes profitability35.
Great ER programs create a win-win benefit for organizations and their employees and
HRPs who are effective in establishing such programs honor their obligation as stewards
who optimize long-term wealth while helping employees to grow and progress36.
EMPLOYEE LAW AND HRM IMPACTS
There are a number of significant legal issues associated with HRM and, particularly,
with the impact of those issues on ER. Without question, the issue of “employment-at-
will” is the most important legal issue that affects employees. This concept enables an
employer to terminate an employee with or without cause, or even for bad cause, with
four exceptions:
 Public policy – The public policy exception prohibits terminating an employee

who is acting in the public interest, such as warning that an employer is shipping
harmful or defective products that can seriously endanger the public.
 Implied contract – An employee may not be fired under an implied contract
exception in thirty-six states if an employee handbook specifically states that an
employee may not be fired, except for “just cause.”
 Violation of good faith – Eleven states prohibit the termination of an employee if
that termination appears to be for a malicious reason, such as terminating a long-
32
See Pfeffer, J., (1998) op. cit. and Beer, M., (2009) op. cit. for confirmation about the return on investment from
well-crafted employee training and development programs.
33
Ibid.
34
See Atwijuka, S. & Caldwell, C., (2017) op. cit. and Caldwell, Truong, D., Linh, P., and Tuan, A., 2011.
pp. 171-182,
35
This ER purpose is clearly enumerated in Aylott, E., (2014) op. cit.
36
See and Caldwell, C., Hayes, L., Karri, R., and Bernal, P., 2008. “Ethical Stewardship: The Role of Leadership
Behavior and Perceived Trustworthiness.” Journal of Business Ethics, Vol. 78, Iss. 1/2, pp. 153-164.

tenured employee just prior to when (s)he is eligible to qualify for accrued
retirement benefits.
 Existence of a written contract – If a union labor agreement or written contract
exists that specifically protects employee rights, an employer is required to
demonstrate just cause for termination.
In all but one state, the employment-at-will rule is the rule of law governing
employee termination. Montana requires just cause for firing an employee. Despite the
fact that the employment-at-will rule fails to protect an employee’s right to be treated
fairly by an employer, this rule is overwhelmingly the dominant legal position and is
conceptually justified under the argument that an employee also has the right to terminate
his or her employment at any time. But this law is, nevertheless, biased firmly in the
favor of employers37. From a procedural justice perspective the employment-at-will rule
is patently unfair on its face and jeopardizes the rights of any employee to assume that
(s)he will always be fairly treated by an employer under its provisions. Ethics scholars
like Dr. Patricia Werhane, Director of the DePaul University Ethics Institute, and Dr.
Tara Radin have expressed strong criticism of the employment-at-will doctrine38 – with
Werhane calling the doctrine “morally bankrupt”39.
Termination recourse for employees who claim that their employers have violated
their federally-protected 14th Amendment due process rights is also limited. Employees
who are terminated by employers who claim to have had their rights violated due to their
age, religious preference, gender, sexual preference, or other protected classification are
dependent upon an Equal Employment Opportunity (EEO) hearing before they have the
legal right to sue their employer. According to federal law, the agency has “180 business
days” or as long as thirty-eight weeks to defer hearing a filed complaint – and as a
practical matter most employees cannot wait that long to have a discrimination claim
resolved. Only after the EEO has heard a claim can a wronged employee then sue his or
her employer.
As a practical matter, this law is distinctly biased on behalf of employers and leaves
employees in a position where they effectively have extremely limited recourse, even if
discriminated against40. Similarly, employees who have a written contract must go
through an extended legal waiting period which they can rarely afford—requiring them to
37
See Pfeffer, J. (1998) op. cit. for a strong criticism of the employment-at-will rule.
38
Radin, T., and Werhane, P. W., (2003). “Employment-at-Will, Employee Rights, and Future Directions for
Employment.” Business Ethics Quarterly, Vol. 13, Iss. 2, pp. 113-130.
39
This description was used by Dr. Werhane in a personal discussion on January 17, 2012 at the International
Conference on Ethics in Business at St. Johns University.
40
The EEOC process is explained at “Federal Employees: You be the Judge” found online on October 25, 2017 at
https://yaf.1105uat.com/default.aspx?g=posts&t=3851#post17101.

Figure 7.
hire an expensive attorney to represent them if they feel they have been unfairly treated.
Once again, most individuals are financially unprepared to fight for their violated rights,
even when those rights are clearly enumerated by their employer in writing.
In many organizations the Human Resource Handbook or Personnel Policy Manual
for the company has been written by an attorney. Often the specific goal of the attorney is
to preserve and protect the rights of an employer and to disclaim any and all liability that
may be associated with ER. For that reason many such handbooks or manuals read like
intimidating legal documents that communicate in formal language and limit the rights of
individual employees.
We urge HRPs and Top Management Team members to carefully reexamine the
message that they send to their employees by allowing their attorney to draft such
documents. If the purpose of ER is to create an environment of partnership and trust with
employees and to communicate their value to the organization, then attorneys should be
given the opportunity to review a Human Resource Handbook or Personnel Policy
Manual to offer advice but should not be asked to write those documents. The guiding
query in assessing the impact of a legalistic manual of personnel policies and rules should
be, “Do these rules convey the best interests of the organization in creating a high trust
partnership with employees while communicating performance expectations?”
Employee policies and rules that undermine the importance of creating a
collaborative partnership with employees or that convey the message that the employer-
employee relationship is an “arms-length” adversarial association conflict with best
practices of HRM and are not in the interest of the modern organization41. The maxim
that Top Management Teams and HRPs should seriously consider in identifying the role
of the attorney with regard to ER is that “Attorneys should be ‘on tap’ but not ‘on top.’”
41
This conclusion is the strong opinion of Pfeffer, J., (1998) op. cit. as well as the logical inference derived from the
empirical evidence provided by many other scholars.

From an ER perspective, input from the legal staff should be evaluated on the basis of
that input’s impact on an organization’s ability to accomplish its mission – rather than on
protecting a narrow liability interest that may be unjust and unfair to an organization’s
individual employees. Protecting liability from the mishandling of an employee
termination is far less important than creating an organizational culture that merits the
trust, respect, and extra-mile commitment of the entire work force.
At the same time, attorneys can be extremely valuable resources in helping HRPs to
understand the meaning and intent of the many laws and regulations that affect
organizations as they interact with employees. That legislation covers a multitude of
topics from overtime requirements for employees to employee rights that are and ought to
be protected – such as those covered by the Occupational Safety and Health
Administration regulations, the Fair Labor Practices Act, the Age Discrimination and
Employment Act, and the Family Medical Leave Act. Providing detailed specifics about
the multitude of legal issues affecting employees on the job is not the purpose of this
chapter, nor is it covered in this book – but that information is readily available in other
sources and the advice of an organization’s attorney can be valuable in understanding the
application of the laws that apply.
PRACTICAL APPLICATIONS FOR ER PROGRAMS
Effective ER programs are the result of the Top Management Team understanding
the importance of creating an organizational culture that promotes collaborative effort;
clear communication; a commitment to a worthy purpose; and constant attention to the
important details essential to creating mutual respect, trust, and cooperation. Such
programs are inevitably value-based, principle-centered, and ethically virtuous42. HRPs
can play an important role in helping their Top Management Team to create such ER
programs. HRPs honor their roles and serve their organizations best when they treat
employees as owners and partners in the organization’s quest to achieve its best possible
outcomes43. The following are five practical principles for HRPs in implementing
successful ER programs.
1. Focus on Creating High Trust. The ER relationship is, first and foremost, a
partnership with employees and is dependent upon creating cooperation,
collaboration, and commitment.
42
See Covey, S. R., (2004) op. cit. for confirmation of the importance of each of these qualities.
43
For insights about the ethical nature of HRM and the importance of honoring ethical duties owed to the
organization and its employees, please see Atwijuka, S. & Caldwell, C., (2017) op. cit. and Hosmer, L. T.
(1987). “Ethical Analysis and Human Resource Management.” Human Resource Management, Vol. 26, Iss. 3,
pp. 313-330.

2. Communicate Clearly, Simply, and Constantly. Make a constant effort to

provide employees with the information they need to succeed. Be precise in
communicating but also pay attention to communicating in a manner that
conveys the organization’s commitment to mutual understanding. Listen as well
as conveying information.
3. Emphasize Purpose and Values. Always keep the organization’s purpose and
mission in mind and the values upon which the organization is based. An
organization’s purpose, mission, and values are worthy ideals to inspire
excellence and employee commitment.
4. Always Honor Obligations. Keep commitments. Recognize and honor promises.
Clarify duties owed to stakeholders and be sure that those duties are fulfilled.
5. Model the Behaviors You Expect. Leaders and HRPs send a powerful message
when they are servant leaders who model the values they espouse and who
exemplify dedication to the organization’s purpose and mission.
The challenges in creating a great organization are many and those challenges can
best be met by employees who work together to achieve a worthy set of goals. ER
programs that enroll employees in meeting and overcoming those challenges help
organizations to achieve their strategic purposes and add great value in the quest to
succeed in today’s extremely competitive world.
Questions to Ponder
1. In your opinion, how does the employment-at-will doctrine undermine employee

trust in management?
2. How do employees perceive the duties owed to them by a company in the
modern organization?
3. What can HRPs do to build trust with employees in an organization where the
employment-at-will doctrine exists?
Equity, Employment Law, and Employee Relations - Case Study -- By Dr.

Sarah J. Smith
Margaret looked at her new business card: Human Resources and Labor Relations.
At first she thought the company made a mistake. After all, she applied for the HR
position at this plant location. Half of the company’s employees were union members,
half were not. This was an interesting mix! As Margaret became acclimated with her new
work, she felt her business card should have said Employee Relations.

Two issues had surfaced which would need resolution. The first was that union
employees, through their collective bargaining agreement had a defined grievance
process. These employees understood what steps to take, documentation to provide, and
who to see about their concerns or perceived inequitable treatment. The non-union
employees had no policy, procedure, nor form to use for filing a grievance. So Margaret
developed a procedure and grievance form for the non-union employees. Upper
management approved both the procedure and the form, and the non-union employees
now had a method to file a grievance, should that be necessary.
The second situation was far more complex. Margaret realized that no one at the
plant had reviewed the health care documentation for quite some time. Margaret
discovered the corporation was self-insured, meaning requests for changes to the plan
could be made and implemented with ease. While reviewing the plan documents,
Margaret noticed the reimbursement for ambulance service was far below actual costs.
Part of the health care plan -- reimbursement for an eye exam, frames, and lenses was
meager at best. Employees with young children and teenagers approached Margaret and
asked why the company plan would pay for cavities to be filled, but not for dental
sealants.
Margaret called area ambulance providers and developed a pricing guide for local
service as well as for distance travel to big city research hospitals. Margaret asked a cross
section of employees what providers they would use for vision and dental care. She
developed a list of commonly selected providers and researched the cost of dental
sealants and for filling a cavity. With the support of management, she brought the
proposed changes to the board of directors who approved her recommendations. The plan
was updated and Margaret felt she had provided a valuable service to the organization
and its employees.
1. Methods to communicate employee benefits changes include posters, Power

point presentations, video presentations, post cards mailed to employees’ homes,
payroll stuffers, company intranet-based benefits hub, group meetings, one-on-
one consultation, newsletters, social media, or text messages. Which of these
methods do you feel would be the most effective? Explain your response.
2. Non-union employees were happy with the plan upgrades. Union employees,
however, accused Margaret of bargaining in ill faith. Health care benefits are a
mandatory bargaining subject and although the changes were all positive, union
employees were not happy they were not consulted. How should Margaret
respond?
3. The National Labor Relations Act (NLRA) was enacted in 1935 to protect
employees from management actions that could be harmful. Do the provisions of
this act ‘fit’ in Margaret’s situation? Why or why not?

The EEOC Newsroom -- Case Study -- By Dr. Sarah J. Smith
Case law can have an impact on employee relations. Recent decisions must be
considered in order to protect the credibility of an HRP, retain trust in his or her decision-
making abilities, and simply, to do what is right for the employees and the organization.
For 30 years Personnel Today has included updates on legal matters and reviewed
precedent setting cases. The Society of Human Resources (SHRM) reviews relevant and
groundbreaking employment cases for HR professionals.
Employment laws that were passed years ago still impact employee relations and
case law decisions today. According to SHRM, contemporary areas of concern relate
back to the Civil Rights Act (1964, amended 1991), the Equal Pay Act (1963), the
Americans with Disabilities Act (1990), the Age Discrimination in Employment Act
(1967), the Family Medical Leave Act (1993), and the Fair Labor Standards Act (1938).
One source for updates is the Equal Employment Opportunity Commission (EEOC).
The Newsroom summarizes recent cases as well as those filed and pending. Appellate
Decisions are noted in its own section. In Appellate Court, initial decisions could be
reversed or upheld. The Small Business Resource Center could be helpful to most HRPs,
regardless of the number of employees employed within their organization.
1. Visit eeoc.gov and find The Newsroom. What do you observe about recent cases
that were taken forward by the EEOC?
2. How would recent case law impact a decision made by a company’s management
team? How should that company respond?
3. As an HRP involved in employee relations, how would you keep current with the
seemingly continual changes that result from case law decisions and appeals?
REFERENCES
Adkins, A., (2015). “Majority of U.S. Employees not Engaged Despite 2014
Gains.” Washington, D. C.: Gallup found online on October 25, 2017 at
http://news.gallup.com/poll/181289/majority-employees-not-engaged-despite-gains-
2014.aspx.
Atwijuka, S. and Caldwell, C., 2017. “Human Resource Management and Strategic
Management” in Competitive Advantage: Strategies, Management, and Performance,
(C. Caldwell & V. Anderson, eds.). Hauppauge, New York: NOVA Publishing
Aylott, E., (2014). Employee Relations. London, UK: Kogan Page Limited.
Bauer, T. N., (2010). Onboarding New Employees: Maximizing Success. Washington,
D.C.: SHRM Foundation found online on October 25, 2017 at https://www.shrm.org/

foundation/ourwork/initiatives/resources-from-past-initiatives/Documents/
Onboarding%20New%20Employees.pdf.
Burns, J. M., (2010). Leadership, New York: Harper & Row and Covey, S. R., (2004).
The 8th Habit: From Effectiveness to Greatness. New York: Free Press,
Caldwell, B. G., & Caldwell C., 2016. “Ten Classic Onboarding Errors: Violations of the
HRM – Employee Relationship.” Business and Management Research, Vol. 5,
No. 4, pp. 47-55 and available online at http://www.sciedu.ca/journal/
Caldwell, C., 2017. “Transformative Ethics and Trust – Keys to Competitive Advantage”
in Competitive Advantage: Strategies, Management, and Performance, (C. Caldwell
& V. Anderson, eds.). Hauppauge, New York: NOVA Publishing.
Caldwell, C., & Clapham, S., 2003. “Organizational Trustworthiness: An International
Perspective,” Journal of Business Ethics, Vol. 47, Iss. 4, p. 349-364.
Caldwell, C., Hayes, L., Karri, R., and Bernal, P., 2008. “Ethical Stewardship: The Role
Vol. 78, Iss. 1/2, pp. 153-164.
Caldwell, C., & Hayes, L., 2007. “Leadership, Trustworthiness, and the Mediating Lens.”
Journal of Management Development. Vol. 26, Iss. 3, pp. 261-278.
Caldwell, C., Licona, B., & Floyd, L. A., 2015. “Internal Marketing to Achieve
Competitive Advantage.” International Business and Management, Vol. 10, Iss. 1.,
pp. 1-8.
Caldwell, C. & Peters, R. 2017. “New Employee Onboarding – Psychological Contracts
and Ethical Perspectives.” Paper accepted for publication in the Journal of
Caldwell, Truong, D., Linh, P., and Tuan, A., 2011. “Strategic Human Resource
171-182,
Cameron, K., (2011). “Responsible Leadership as Virtuous Leadership.” Journal of
Business Ethics, Vol. 98, pp. 25-35.
EEOC. “Federal Employees: You be the Judge” found online on October 25, 2017 at
https://yaf.1105uat.com/default.aspx?g=posts&t=3851#post17101.
Gallup Access, (2017). “Transform Your Workplace” found online on October 25, 2017
at https://my.gallup.com/?utm_source=google&utm_medium=cpc&utm_campaign=
workplace-branded&utm_keyword=gallup%20employee%20engagement&gclid=
CjwKCAjw7MDPBRAFEiwAppdF9KR2g0Qkku7KtYEWftJnQxhGeknveZH1q04
MqO-mPqfQrTUbzPWl5xoC-dUQAvD_BwE.
Hosmer, L. T. (1987). “Ethical Analysis and Human Resource Management.” Human

Lawson II, J. W. R., (2005). How to Develop a Personnel Policy Manual. New York:
AMACOM.
and Leadership Success in Turbulent Times. Boston, MA: Pearson Publishing.
Paul, E., (2017). “Employee Engagement: A Key HR Strategy” EmptrustHR found online
on October 25, 2017 at http://www.emptrust.com/blog/employee-engagement-a-key-
hr-strategy.
Radin, T., and Werhane, P. W., (2003). “Employment-at-Will, Employee Rights, and
Future Directions for Employment.” Business Ethics Quarterly, Vol. 13, Iss. 2, pp.
113-130.
Robinson, S. L. & Rousseau, D. M., (1994). “Violating the Psychological Contract: Not
the Exception but the Norm.” Journal of Organizational Behavior, Vol. 15, Iss. 3, pp.
245-259.
Rousseau, D. M., (1995). Psychological Contracts in Organizations: Understanding
Written and Unwritten Agreements. Thousand Oaks, CA: Sage Publications.
Seth, R. C., (2014). “What Influences Harmonious Employee Relations?” International
Journal of Research in Commerce & Management, Vol. 5, Iss. 2, pp. 80-82.
Smith, S., Peters, R., and Caldwell, C., (2016). “Creating a Culture of Engagement –
-80 available online at http://sciedu.ca/journal/index.php/bmr/article/view/9734
Tsai, Y., & Tang, T-W., (2008). “How to Improve Service Quality: Internal Marketing as
a Determining Factor.” Total Quality Management & Business Excellence, Vol. 19,
Iss. 11, pp. 1117-1126.
Werhane, Dr.in a personal discussion on January 17, 2012 at the International Conference
on Ethics in Business at St. Johns University.

Chapter 14
INTERNATIONAL HUMAN RESOURCE

MANAGEMENT: STRATEGIC APPLICATION OF CORE
PRINCIPLES
Cam Caldwell
Muscat, Oman
INTRODUCTION
International commerce is not new and anthropologists have documented evidence of

long-distance trading in Europe dating back to the Stone Age1. Rudimentary Human
Resource Management (HRM) at that time was undoubtedly simplistic with one
imagining that the person seeking to trade over a long distance relied heavily on family
members or others from his or her immediate clan for assistance. Though International
HRM (IHRM) is numbingly more complex in today’s competitive world, it is best
understood in context with the strategic application of core HRM principles which affect
virtually every business involved in international commerce.
The purpose of this chapter is to identify and to briefly explain eight of the significant
IHRM issues affecting businesses as they compete within the global economy. The
chapter begins by identifying the application of the six key roles of strategic HRM within
an international context. Although the complexity of IHRM naturally varies with the size
and scope of the company engaged in international business, the same concepts and
principles of effective HRM apply within a global marketplace. Several factors, however,
1
See Inc., (2017). “Global Business” Sept. 10, found online on November 4, 2017 at https://www.inc.com/
encyclopedia/global-business.html.

212 Cam Caldwell
become far more difficult to address and have been consistently handled poorly – even
Figure 1.
by many Multi-National Corporations (MNCs) who have been engaged in global

commerce for many years. The chapter incorporates a Western bias by focusing on many
of the problems faced by the companies doing business out of the United States. The
chapter also offers twelve IHRM principles for businesses to consider as they assess their
own HRM systems and as they establish guidelines for conducting business in the global
economy.
SIX HRM ROLES -- THE INTERNATIONAL CHALLENGE
The six fundamental roles of HRM are made more challenging as Human Resource
Professionals (HRPs) and Top Management Teams guide their organizations in a milieu
that is constantly changing, culturally diverse, highly competitive, and often volatile2. In
this section we briefly review the six strategic HRM roles and identify IHRM factors that
make each role more difficult.
2
The term, VUCA, meaning a Volatile, Uncertain, Complex, and Ambiguous world is briefly summarized in
Bennett, N. & Lemoine, G. J., (2014). Harvard Business Review, Vol. 92, Iss. 1/2, p. 27.

International Human Resource Management 213
1. Create and sustain an organizational culture aligned with the mission and
strategy. Because a company’s international strategy may expand to include
production, and/or distribution and sales in other countries, HRPs need to clearly
understand the nuances of that strategy and the implications of working with
employees with diverse backgrounds. HRPs can assist the Top Management
Team to understand the cultural differences that exist from country to country
and the behavioral and ethical implications of those differences that affect
achieving desired outcomes3. Norms, values, and priorities that may seem to be
“basic assumptions” or “common sense” in the home country may have far
different implications within the host country context. HRPs must become
subject matter experts about cultural nuances of the countries in which a firm
conducts business. A humorous example of the problems that might have
occurred if a company fails to consider cultural and/or language differences and
their significance is the experience that Chevrolet could have had if it had begun
marketing its Nova in Spanish-speaking countries. Chevrolet realized that “no
va” means “It does not go” and opted to market its Chevy Novas elsewhere than
in Spanish speaking countries4. HRM policies, systems, and programs must pass
the litmus test of cultural and language differences or be amended as necessary.
As with parallel responsibilities in the home country, IHRM programs and
systems must align with the organization’s mission or be vulnerable to sending
mixed messages and creating uncertainty.
2. Demonstrate excellence in performing technical and operational tasks
requiring the specialized skills and knowledge of HRM. HRPs must confirm
that the technical and operational HRM tasks that they perform in host countries
are contextually explained, properly conducted, and culturally aligned with best
HRM practices. HRPs are responsible for ensuring that the purpose, underlying
values, and principles that are the foundation of technical and operational tasks
are maintained so that necessary outcomes may be achieved. IHRM tasks become
a building block for efficient and effective performance – if, and only if, there is
no cultural conflict with the values of the host country. Although HRPs are not
responsible for changing policies, they have an absolute obligation to the Top
Management Team, to employees, and to managers in the host country to alert all
3
See, for example, Katiyar, A., Thomas, K., and Caldwell, C. 2011. “Ethical Issues in International Human
Resource Management.” Journal of Global Business Development, Vol. 3, No. 1, pp. 103-114 and Dixon, R.
D., Caldwell, C., Chatchutimakorn, A., Gradney, K., and Rattanametangkul, K., 2010. “Managing Justly
Across Cultures: The Problem of Fairness in International Business.” Journal of Management and Strategy,
Vol. 1, pp. 22-32.
4
Fortunately the Chevy Nova story is one of many urban myths that did not occur because a company’s employees
were sensitive to potential cultural and/or language issues. The Nova story and its status as a myth (that is
often told but it not true) is retold in Wooten, A., (2011). “Chevy Nova Tale, Other Marketing Myths
Debunked.” Deseret News July 10 International Business found online on Nov. 4, 2017 at
https://www.deseretnews.com/article/705388000/Chevy-Nova-tale-other-global-marketing-myths-
debunked.html.

214 Cam Caldwell
parties about potential cultural conflicts associated with HRM tasks so that the
Top Management Team can address those issues and make appropriate
accommodations.
3. Perform as business partners for each organizational department to assist them
in identifying how to most effectively achieve operating efficiencies in
accomplishing tasks that support the organization’s mission. Being an effective
international business partner for a host country’s divisions is more complex than
providing that service in the home country. To be successful as an international
business partner, HRPs must develop an in-depth expertise about the goals,
operations, and objectives of the departments in the international division.
Premature attempts at providing this service without proper preparations are
recipes for failure. This internal organizational consulting role demands extensive
research and is often highly sophisticated in its requirements. If HRPs are unable
to develop this strategic capability, their companies must call upon other
resources that can result in time delays and expense.
4. Listen to and provide an effective voice for the work-related needs of employees
to enable and empower employees to be contributors to improving the
organization. In fulfilling responsibilities within a global context, HRPs need to
listen to, understand, and communicate the unique needs of international
employees as well as those of home country employees and convey those
concerns to the Top Management Team. Giving priority to the needs of
international employees and responding effectively enables organizations to
create high trust organizational cultures that 1) enhance quality, productivity, and
profitability in the international division; 2) encourage international employees to
innovate, grow, and thrive; and 3) build organization-wide commitment and unity
of direction.
5. Create organizational systems that support continuous improvement,
organizational and individual learning, the creation of new knowledge and
innovation, and the acquisition of critical information associated with outside
stakeholders. At the international level, alignment requires integrating insights
about local cultures with the company’s values and purpose. Constant
improvement and continuous learning are important factors within the
international context and integrating organizational information with
international divisions is a necessity. Building a constantly learning organization
makes it possible for those international units to keep track of customer needs,
industry innovations, and new opportunities. Failing to invest in constant
improvement at the international level makes an organization vulnerable to
competitors in its geographic market.
6. Monitor the organization climate and assist the organization to make timely
and effective changes, as required by constantly changing environmental

conditions. Monitoring employee attitudes and perceptions is as important in

international divisions as it is in the home country. HRPs who pursue
opportunities to improve the quality of life within the international division and
who understand the most effective ways to make employees partners in the
process of organization success can make a powerful contribution at the
international level. Once again, being highly sensitive to local country values and
cultural expectations is a requirement in developing policies and systems that
best achieve a company’s objectives.
Figure 2.
All six of these HRM roles have practical application at the international business
level and HRPs responsible for serving international divisions have the responsibility to
become experts about adapting HRM policies within those divisions.
Eight Important International Issues
IHRM presents unique challenges for employers that should never be underestimated
or minimized and that have serious consequences for organizations conducting
international business. Candidly, IHRM has not yet developed a reputation for effectively
dealing with these gnawing issues and the struggles of many organizations reflect the
difficulties of these challenges.
The importance of HRPs becoming expert about their six strategic roles is made more
complicated because of variables associated with differing employee perspectives and a
different national culture. The following is a brief summary of eight challenging issues
and the IHRM problems associated therewith.

216 Cam Caldwell
1. Selecting, training, compensating, and coaching expatriates and utilizing them

effectively upon their return.
The failure of corporations in properly selecting, training, compensating, and
coaching expatriates is notorious. In a 1999 Harvard Business Review article
about managing expatriates (expats), Black and Gregersen reported that 80% of
midsize and large companies doing business abroad used expats and 45%
planned to expand that approach to managing internationally5. Alarmingly,
however, they also reported that 10 to 20 percent of expats came home from
assignments early – and one-third of the remaining expats who completed their
assignments in a host company did so unsatisfactorily6. Of those who completed
their expat assignments one of four then left the company within the first year of
returning home and immediately joined a competitor7.
This data is alarming and emphasizes the failures of companies to effectively
manage the expat relationship. According to a more recent 2013 article published
by the Society for Human Resource Management, 58% of expat assignments
were declared “successful” by HRPs and Top Management Teams8 – although
that number is likely to be self-serving and inflated.
2. Developing policies that are culturally contextual.
HRPs face the challenging problem of understanding and adapting to the
complex factors required in recruiting, selecting, evaluating, and compensating
employees hired within a host country – as well as adjusting to the nuances of the
cultural perspectives of expats who work within that country9. Although Geert
Hofstede has done a widely-respected job of classifying cultural factors that
dominate in many countries, he has also noted that variance within countries was
as wide as the differences in cultures between countries10. Understanding the best
ways to interact with employees’ demands that HRPs research and apply how
cultural factors affect employee relationships and the HRM policies that affect
5
This issue is addressed in Black, J. S. & Gregersen, H. B., (1999). “The Right Way to Manage Expats.” Harvard
Business Review, Vol. 77, Iss. 2, pp. 52-63.
6
Ibid.
7
Ibid.
8
See Maurer, R., (2013). “Survey: Companies Fail to Train Managers for Overseas Assignments.” Washington, D.
C.: Society for Human Resource Management July 8, 2013 found online on November 6, 2017 at
https://www.shrm.org/resourcesandtools/hr-topics/global-hr/pages/fail-train-managers-overseas-
assignments.aspxm.
9
For a review of the many cultural factors that HRPs must address, see Dordevic, B., (2016). “Impact of National
Culture on International Human Resource Management.” Economic Themes, Vol. 54, Iss. 2, pp. 281-300.
10
See Hofstede, G., (2003). Culture’s Consequences: Comparing Values, Behaviors, Institutions, and
Organizations Across Nations (2nd ed.). Thousand Oaks, CA: Sage Publishing.

Figure 3.
those relationships11. The evidence suggests that companies provided HRPs with
inadequate resources to properly assess cultural factors and develop HRM
policies that mesh well with host country values12.
3. Supporting and training international host country personnel.
International employees from the host country frequently find it challenging to
make a smooth transition in adopting the implicit values of their hiring (or
acquiring) corporation13. Assuming that onboarding a new employee is an easy
task is a common error made by many organizations, but the challenge of
integrating an employee into a new organizational culture is frequently difficult
in the best of conditions14. Tarique and colleagues note that training international
employees and providing management development opportunities for
international staff is one of the important priorities of IHRM if a firm is to keep
pace with its international competitors in the host country15. Specific training
attention needs to emphasize assisting managers and supervisors to understand
11
Dordevic, B., (2016) op. cit.
12
See Tarique, I., Briscoe, D., & Schuler, R., (2015). International Human Resource Management: Policies and
Practices for Multinational Enterprises. New York: Routledge.
13
Ibid., Chapter 10, pp. 288-327l.
14
The difficulties associated with onboarding new employees are identified in many sources. See, for example,
Caldwell, B. G., and Caldwell C., 2016. “Ten Classic Onboarding Errors: Violations of the HRM – Employee
Relationship.” Business and Management Research, Vol. 5, No. 4, pp. 47-55 and available online at
http://www.sciedu.ca/journal/index.php/bmr/article/view/10672/6501
15
See Tarique, I., Briscoe, D., & Schuler, R., (2015), op. cit., Chapter 10.

218 Cam Caldwell
the application of personnel policies and systems that convey firm values and
mission and that integrate the corporate and national culture16.
4. Articulating and honoring ethical responsibilities in host countries.
International differences exist in identifying what constitutes ethical behavior
throughout the world and those ethical variations are frequently found in
IHRM17. Assumptions about the employee relationship, the role of employees in
decision-making, and the role of employee representatives as corporate policy
setters are common IHRM issues that HRPs must understand to meet the duties
and responsibilities owed to employees and to their companies18. The perceived
rights of individual employees and the obligations of companies owed to
expatriates are often the focus of subjective perceptions and the breach of those
rights can be perceived by employees as unethical and unfair19. A key to
resolving many of these perceived differences in ethical obligations can be
mitigated by communicating to supervisors and employees the values-based
differences that form the basis for the ethical assumptions; explaining how those
differences will be handled to treat employees with their welfare in mind; and
honoring duties to employees, customers, and society20.
5. Compensating employees across nations.
Among the most difficult practical and philosophical issues facing international
organizations is the handling of employee compensation – especially when the
home and host countries involved differ markedly in their economic conditions
and quality of life. The issue is made much more complex in light of the need to
fairly compensate expat employees, provide housing and education for them and
their families, and the contrast in the reward systems made available to expats
and their families as compared to benefits provided to host country staff with
whom they work21. According to one study, there are many different perspectives
about the obligations that companies owe in compensating expats, with 15% of
all companies not adopting a compensation philosophy regarding their expat
benefit structure22. The Cost-of-Living index for countries varies widely and can
be a major factor in affecting real and perceived income and employee benefits23.
16
Ibid.
17
See Winstanley, D. & Woodall, J., (1999). Ethical Issues in Contemporary Human Resource Management.
London, UK: Palgrave.
18
Ibid.
19
See Rousseau, D. M., (1995). Psychological Contracts in Organizations: Understanding Written and Unwritten
Agreements. Thousand Oaks, CA: Sage.
20
This process is addressed in Katiyar, A., Thomas, K., and Caldwell, C. (2011). “Ethical Issues in International
Human Resource Management.” Journal of Global Business Development, Vol. 3, No. 1, pp. 103-114.
21
Haile, S. & Williams, D., (2011). “Factors that Affect Expatriate Compensation.” Academy of Business Research
Journal, Vol. 1, pp. 25-32.
22
Reported in Noe, R. A., Hollenbeck, J. R. Gerhart, B., & Wright, P. M., (2011). Fundamentals of Human
Resource Management (4th ed.). New York: McGraw-Hill, Chapter 15.
23
See Tan, B. S., (2016). “On Comparing Cost of Living of Cities Using Expatriate Price Surveys.” Policy Studies,
Vol. 37, Iss. 1, pp. 53-73.

Figure 4.
6. Monitoring performance and identifying opportunities for performance

improvement.
Monitoring and evaluating expat performance and the success, or lack thereof, of
a new international division is fraught with complex challenges. On-site
information is often critical to accurately assess performance and providing
people at an international division site to monitor a division can be both
expensive and difficult to schedule. Moreover, those who conduct evaluations are
often limited by their lack of familiarity with the host country culture, values, and
the manner of doing business. In addition, it is difficult to identify the root causes
of major shifts in clients and levels of business in foreign markets and/or to
determine the relative contribution of a local host who serves as a coach for an
expat24. Careful attention needs to be given to the process that will be used in
assessing and improving a new division’s performance, with HRPs involved in
establishing metrics by which to measure the division’s accomplishments25.
24
See, for example, van Bakel, M., Gerritsen, M. & van Oudenhoven, J. P., (2011). “Impact of a Local Host on the
Success of an International Assignment.” Thunderbird International Business Review, Vol. 53, Iss. 3, pp. 391-
402.
25
See Tarique, I., Briscoe, D., & Schuler, R., (2015) op. cit.

220 Cam Caldwell
7. Creating business partnership relationships with host country personnel.

Establishing business partnerships between HRPs and host country personnel is
dependent upon the ability of the HRPs to be perceived as competent, credible,
and trustworthy26. Although the natural tendency may be to standardized HRM
policies, the realities of the host country culture and HRM practices often require
customizing those practices. Adopting HRM policies that fit local cultural needs
enables HRPs to demonstrate that they understand the values of the local
division. As with other business partnership relationships, HRPs are there to
serve the managers and staff of the host country and to play a staff role, rather
than to direct those employees and managers or to assume that the HRPs’
knowledge is superior to that of local individuals. By carefully managing their
support role and by demonstrating that they clearly understand the local culture,
values, and priorities, HRPs can become highly valued international business
resources and can empower local managers and staff members to manage change
and continuously improve27.
8. Managing the language, culture, and communication gaps.
HRPs play a major role in monitoring organization expectations, perceptions, and
communication about outcomes, policies, and goals and identifying gaps that
have not been adequately addressed28. Differences in language, culture, and
meaning are constant problems in international communication and the subtle
nuances of those differences can destroy trust and reduce commitment. By
becoming experts about a new international division, its needs, and its
communication issues, HRPs fill a profoundly important role in assessing
information and keeping the Top Management Team informed29. It is by
enhancing this trust and commitment through improved communication that
enables HRPs to play a critical role in improving the effectiveness of a new
international division by engaging and involving employees30.
The universal problem facing HRPs for all of the issues associated with IHRM
involves reaching consensus with the Top Management Team about the resources
required to address the complexities associated with meeting organization needs in new
26
See Cogin, J. A. & Williamson, I. O. (2014). “Standardize or Customize: The Interactive Effects of Environment
Uncertainty on MNC Performance.” Human Resource Management, Vol. 53, Iss. 5, pp. 701-721.
27
Kochan, T. A., Dyer, L., (1993). Managing Transformational Change: The Role of Human Resource
Professionals.” International Journal of Human Resource Management, Vol. 4, Iss. 3, pp. 569-590.
28
See Lado, A. A. & Wilson, M. C., (1994). “Human Resource Systems and Sustained Competitive Advantage: A
Competency-Based Perspective.” Academy of Management Review, Vol. 19, Iss, 4, pp. 699-727 and
Atwijuka, S. and Caldwell, C., 2017. “Human Resource Management and Strategic Management” in
Competitive Advantage: Strategies, Management, and Performance, (C. Caldwell & V. Anderson, eds.).
Hauppauge, New York: NOVA Publishing.
29
See Thomas, G. F., Zolin, R., & Hartman, J. L., (2009) “The Central Role of Communication in Developing Trust
and Its Effect on Employee Involvement.” Journal of Business Communication, Vol. 46, Iss. 3, pp. 287-310.
30
See Pfeffer, J., (1998). The Human Equation: Building Profits by Putting People First. Boston, MA: Harvard
Business Review Press.

international divisions. Inevitably, organizations fail to adequately provide HRM

resources to optimize the effective transition of a company, to support the staff required
to succeed, and to enable HRPs to pay adequate attention to these eight important
priorities.
Figure 5.
TWELVE PRINCIPLES TO GUIDE IHRM
As HRPs who have international assignments seek to assess their own performance,
or as members of Top Management Teams evaluate their HRM systems, there are well-
established HRM principles that have proven helpful in determining whether there are
opportunities for continued improvement. In this section we identify twelve principles
and briefly comment on the practical issues associated with each one.
1. Begin at the top.

Leaders of every organization possess the capacity to make or break its success;
they have access to resources; they model behaviors; they provide a guiding
vision; and they either earn the trust and followership of others or they destroy

222 Cam Caldwell
that trust by their actions, their inconsistencies, and their failure to realize the
duties that they owe to others31.
2. Hire for attitude AND intelligence.
Both a positive willingness to work with others and the raw intelligence to
understand critical issues and to craft workable solutions are essential in
employees. Attitude is not enough. Intelligence, by itself, is insufficient32.
3. Align talent with strategy.
The strategy of an organization should always be the purpose for which the
organization exists in adding value to society33. Achieving that purpose requires
people whose talents match the organization’s mission and who make that
purpose a personal quest34.
4. Maintain a change perspective.
Organizations that are constantly learning, striving to be excellent, and
committed to innovation create a change-oriented culture that sustains constant
improvement35. Acknowledging the constant pressure of change is a cultural
value that must be present in today’s global marketplace36.
5. Honor commitments.
Building trust depends upon the ability of organization leaders to make and honor
commitments and demonstrate personal credibility37. Keeping promises and
honoring commitments are foundation elements of trustworthiness38.
6. Emphasize employee retention.
High performing organizations have realized that creating high trust cultures
means that the employee-employer partnership must be based upon mutual
commitment and shared goals. Creating a culture that values and retains its
employees establishes that committed partnership39.
31
This leadership role is clearly the message of Schein, E. H. & Schein, P., (2016). Organizational Culture and
Leadership. San Francisco, CA: Jossey-Bass.
32
Caldwell, C., Converse, P., and Beverage, M., 2018. “Selecting for ‘Flair Factors’ -- Improving the Selection
Process.” Paper accepted for publication in the Journal of Management Development.
33
The importance of a purpose-driven organization is clearly enumerated in Collins, J. & Porras, J. I., (2004). Built
to Last: Successful Habits of Visionary Companies (3rd ed.). New York: Harper Business.
34
See Collins, J., (2001). Good to Great: Why Some Companies Make the Leap and Others Don’t. New York:
Harper Collins.
35
See Senge, P. M., (2006). The Fifth Discipline: The Art & Practice of a Learning Organization. New York:
Doubleday.
36
Christensen, C. M., (2016). The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail.
37
See Kouzes, J. M. & Posner, B. Z., (2011). Credibility: How Leaders Gain and Lose It Why People Demand It.
38
This fundamental principle for people and organizations is identified in Pfeffer, J., (1998) op. cit. and Caldwell,
C., and Clapham, S., 2003. “Organizational Trustworthiness: An International Perspective,” Journal of
Business Ethics, Vol. 47, Iss. 4, p. 349-364.
39
See Pfeffer, J., (1998) op. cit. and Beer, M., (2009). High Commitment High Performance: How to Build a
Resilient Organization for Sustained Advantage. San Francisco, CA: Jossey-Bass.

7. Embed core values.

Core values can be embedded into an organization by constantly emphasizing
them, creating HRM systems that sustain those values, and living the values on a
daily basis40. Organizations that are value-based and principle-centered honor
what they claim to believe. Deviating from those values violates the
organization’s norms41.
8. Integrate the culture.
The integration of an organizational culture into international divisions requires
careful attention to the unique elements of the host culture and a well-conceived
plan for connecting values with organization systems. Cultures that have systems,
programs, and policies that conflict with their values fail to create that
integration42.
9. Balance global and local needs.
The organizational purpose at the global level and the unique features of a
country’s culture both create compelling needs that must be understood and
integrated into any new international corporate division for it to optimize its
performance. HRPs who understand the nuances of local needs can play a key
part of this integration process43.
10. Market the company internally.
Internally communicating to employees, emphasizing the company’s contribution
to the larger community, and promoting its high values and goals are all part of
the process of internal marketing. That internal marketing process builds esprit,
increases team commitment, and elevates the pride of the entire work force44.
11. Create employee ownership.
As organizational stewards, effective HRPs seek to make employees “owners and
partners” with the opportunity to personally grow and improve along with the
organization. When employees become stakeholders in the organization’s
success and share in its profitability, they adopt that ownership mentality and
increase their commitment45.
12. Balance short-term and long-term.
Stewardship as it relates to IHRM includes honoring duties owed to all
stakeholders, maintaining a long-term vision in the pursuit of wealth creation,
and avoiding the pursuit of short-term profits that jeopardize the future46. The
40
See Atwijuka, S. & Caldwell, C., (2017) op. cit.
41
See Schein, E. H. & Schein, P., (2016) op. cit.
42
Ibid. and Pfeffer, J., (1998) op. cit.
43
See Tarique, I., Briscoe, D., & Schuler, R., (2015) op. cit.
44
See Caldwell, C., Licona, B., and Floyd, L. A., 2015. “Internal Marketing to Achieve Competitive Advantage.”
International Business and Management, Vol. 10, Iss. 1., pp. 1-8.
45
See Pfeffer, J., (1998) op. cit. and Beer, M. (2009) op. cit.
46
Compare Caldwell, C., Truong, D., Linh, P., and Tuan, A., 2011. “Strategic Human Resource Management as
Ethical Stewardship.” Journal of Business Ethics, Vol. 98, Iss. 1, pp. 171-182.

224 Cam Caldwell
moral obligation of every organization is to focus on creating value both short-

term and long-term47.
Figure 6.
There is no guarantee to success in international business because of the constancy of

change, the rapidity of innovation, and the fierce struggle for competitive advantage48.
However, HRPs and their Top Management Teams who apply these twelve IHRM
principles can exponentially increase their likelihood for success – but if, and only if,
they constantly seek to improve and excel.
CONCLUSION
Despite an overwhelming body of evidence, international corporations, their leaders,

and their HRPs fail to acknowledge the importance of the key roles of HRM, the vital
importance of IHRM issues that seem to constantly recur, and the fundamental principles
upon which HRM is founded for achieving long-term success. As is the case with many
47
That moral requirement is clearly set forth in Lennick, D. & Kiel, F., (2011). Moral Intelligence 2.0: Enhancing
Business Performance and Leadership Success in Turbulent Times. Boston, MA: FT Press.
48
That verity is constantly reemphasized by scholars and practitioners. See, for example, Quinn, R. E., (1996).
Deep Change: Discovering the Leader Within. San Francisco, CA: Jossey-Bass.

issues, the problem is often not that we are unaware of what needs to be done or what
standards to establish – but is in the implementation of what ought to be done. There is,
however, a continuing lack of insight about the important role of well-qualified,
dedicated, and competent HRPs – and, unfortunately, often that same failure to
acknowledge the evidence on the part of Top Management Teams and leaders who
discount the HRM role in modern organizations.
Figure 7.
Questions to Ponder
1. What barriers do you think are most difficult for HRPs to overcome as they seek
to contribute to the success of an international division?
2. Which of the twelve principles do you consider to be the most difficult to apply
within an international context? Why?
3. Why are companies so unsuccessful in placing and retaining expats? What
solutions do you think they should consider? What do you think should constitute
“expat success” for a company?

226 Cam Caldwell
No Man Is an Island -- Case Study --

By Dr. Sarah J. Smith
In some organizations, HR is responsible for safety and health of the employees.

HRPs can assist a safety professional or division when developing or revising company
polices. The duty to protect employees from harm continues when doing business on a
global scale.
One challenge to IHRM professionals is recommending employment health and
safety initiatives abroad. The question of home country v. host country safety and policy
must also be reconciled. This quest should begin with top management to set policies and
guidelines that will keep workers safe and healthy while representing the home plant as
an expatriate, or for employees of a foreign-based location to meld their safety culture
with the host country’s requirements and philosophies.
Nikolaj, a Danish plant manager, was sent to the corporation’s production facility in
Beijing, China to evaluate safety and health concerns as well as improve operations at
this global location. A few months prior, a top manager from Denmark visited the
Chinese plant location. He was less than impressed with what was seemingly a lack of
safety, health, and environmental policies to protect workers.
The Danish Working Environment Act protects those working in Denmark and
offshore, but not abroad. The Beijing facility had adopted some best practices put forth in
the Act, however, room for improvement existed. Nikolaj had his family accompany him
in China. He was surprised to find smog indicators in public areas, such as on highways.
In many northern countries, school is canceled when conditions are not safe. In Beijing
schools may be canceled for smog days. Students stay home from school and
construction work is called off. Research by Nanjing University’s School of the
Environment links smog to nearly one-third of the deaths in China.
In the United States, the Occupational Safety and Health Act was passed into law in
1970. The act does not transcend country borders. Larry, an American plant manager for
a wire manufacturer, was sent to China with his Chinese wife, to establish production in
Changshu, a small city about an hour’s drive from Shanghai. The plant was immaculate
and workers were highly devoted because they were allowed to return home every night
rather than stay in rooms of a company dormitory.
At one company work station an employee guided wire through his fingers after it
went through a cooling tank to check for wire quality. Larry discovered that this man had
no fingerprints because he chose not to wear protective gloves. Nikolaj and Larry felt
they needed home country top management support to design and implement health,
safety, and environmental company policies at the China plant.

1. If you were a member of the IHRM team, how would you develop policies for
host country employee health and safety? What might convince top management
to work with the IHRM team on company policies when working abroad?
2. Both Nikolaj and Larry had to lock themselves in their offices during times of
employee unrest. They were instructed by their perspective home country HRPs
to roll their office bars down, place any money in their office safe, and seek
shelter in place. It is not uncommon for Chinese workers to take over a plant
location in order to obtain benefits or additional compensation. How would you
frame a safety policy for people like Nikolaj and Larry?
3. The home page for the US State Department, travel.state.gov, lists travel alerts,
travel warnings, and worldwide cautions. Should this resource be incorporated
into IHRM policy for a US company? What would you do if you found an alert
or warning for a country in which one of your US workers was assigned?
Integrating HR Policies Abroad -- Case Study --

By Dr. Sarah J. Smith
In the US, the personnel manual is a common resource to communicate policies to

employees. Several policies need to be revised for US workers assigned abroad. Jenny, an
International HRP, looked for resources to guide her as she drafted policies to address
host country cultural issues. Two of her favorite resources were globalEDGE and The
GLOBE Study.
GlobalEDGE was established by Michigan State University. This is a vast resource
which includes the information from Culture Crossings on traditions, expectations, and
culture in a host country. The second resource, The GLOBE Study, extends the work of
Geert Hofstede and his focus on cultural dimensions. GLOBE is an acronym for Global
Leadership and Organization Behavior.
For 62 countries, The GLOBE Study examined leadership worldwide. Both resources
can provide the International HRP with valuable information as to how organizational
members should lead and function within a global society. The GLOBE Study looks to
assist host country leaders so that innovation is encouraged because the leader is able to
motivate, influence, and enable others to contribute to the organization's success.
After a review of home country policies, the HRP involved in IHRM formulated
recommendations to the top management team. They understood the importance of
support for the host country leader and asked HR to proceed with their review. The HRPs
in the international division discovered was a need to research and customize HR policies
associated with the following topics:

228 Cam Caldwell
Accepting gifts/Giving Gifts

Drinking on the Job
Dress Code
Gender Rules
Meetings
Negotiations
Titles, and
Business Card
1. Go to globaledge.msu.edu and choose an HR policy-related topic. How do you

think the International HR team should address country differences for this topic?
2. What do you think is the best way to communicate corporate IHRM policy and
procedure guidelines to host country leaders?
3. In addition to the topic areas listed above, do you think there should be other
policies to consider? What other topics do you think might be included?
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230 Cam Caldwell
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marketing-myths-debunked.html

Chapter 15
THE FUTURE OF HUMAN RESOURCE MANAGEMENT:

RESPONDING TO A NEW CONTEXT

1
Muscat, Oman
2
As the increasing demands of global competition, customer expectations, and an

uncertain economy have challenged modern corporations, their leaders have recognized
the Darwinian impacts of a business world that has required corporations to be more
focused, more innovative, and more competent to survive. Human Resource
Professionals (HRPs) have realized that they must either respond to those same
exponentially different demands or find themselves relegated to being subordinate to
their organizations’ Top Management Teams, rather than strategic participants in framing
their companies’ futures. Although the Human Resource Management (HRM) profession
has evolved significantly, many HRPs and their organization leaders continue to view
employees as a cost to control and minimize, rather than as the source of innovation,
improved customer service, and wealth creation1.
The purpose of this chapter is to identify the changes facing the HRM profession and
the roles of HRPs as those who work in the profession respond to an ever-evolving world.
The chapter begins with a brief summary of the evolution of HRM, identifying many of
the factors that have required organizations to rethink their assumptions about most
effectively managing people and the strategic importance of HRM. We identify the
challenges HRPs and organization leaders face as they prepare for a changing world in
1
This perspective has been identified as a short-coming of many organizations by Pfeffer, J., (1998). The Human
Equation: Building Profits by Putting People First. Boston, MA: Harvard Business Review Press.

which challenges and problems are ominous and fraught with economic, social, and
environmental problems that world leaders seem incapable of addressing2. The chapter
then identifies ten predictions about positive changes that are necessary to address these
challenges. Although we acknowledge that any forecast is speculative and uncertain to
some degree, the insights of highly regarded scholars and practitioners are cited in
identifying opportunities for HRPs as they contemplate their contribution to a difficult
world.
EVOLUTION OF HRM
Throughout its history, HRM has primarily been focused on administrative functions
and tasks in its staff support role3. Although these tasks were necessary and contributed
to an organization’s efficiency, they tended to be technically focused rather than strategic.
The management of people did not fully emerge as its own discipline until the 1920’s and
was then called “Personnel Administration4.” Prior to that period individual experts in
scientific management and industrial relations like the Gilbreths and Frederick Taylor
had acknowledged the importance of the individual in the organization and the interaction
of groups on performance and productivity - but those insights were not widely held5.
Personnel administration was primarily focused on hiring, training, record keeping, and
compensation6. The rise of assembly line manufacturing treated employees as an
extension of the manufacturing process and led to the rise of unionism in response to
employees being treated as commodities and costs to be minimized7.
With the Hawthorne studies conducted by Mayo and Roethlisberger, attention began
to be focused on the importance of understanding the psychology of work8 and led to the
founding of what became known as the “human relations school of management.”
2
The dangers facing tomorrow’s world have been cited by many scholars, including Roger Lowenstein and Thomas
L. Friedman. See also Caldwell, C. and Anderson, V. 2017. “Ethical Leadership in Troubled Times.”
International Journal of Public Leadership, Vol. 13, Iss. 2, pp. 54-58.
3
For an excellent summary of the evolution of HRM through the end of the 20th century, see Ehrlich, C. J., (1997).
“Human Resource Management: A Changing Script for a Changing World.” Human Resource Management,
Vol. 37, Iss. 1, pp. 85-89.
4
For a complete history of the evolution of modern management, see Wren, D. A. & Bedeian, A. G., (2009). The
Evolution of Management Thought. Chennai, India: John Wiley & Sons.
5
Ibid.
6
Ibid.
7
See Ehrlich, C. J., (1997) op. cit.
8
See SHRM, (2009). A History of Human Resources: SHRM’s 60 Year Journey. Alexandria, VA: Society for
Human Resource Management.

The Future of Human Resource Management 233
Figure 1.
This perspective recognized the value of the supervisor-employee relationship and

the role of teams in organizations in determining production9, but its focus was primarily
on “treating people as if they were important” - rather than fully acknowledging their
worth and potential contribution. Business innovators like Chester Barnard and Mary
Parker Follett had recognized the importance of cooperation and collaboration as factors
affecting work success10, as well as the advantages of “power with” rather than simply
“power over” employees11. However, that perspective was not universally understood and
conflicts often arose between labor and management.
Selection and testing became an HRM priority during World War II, especially when
psychologists and military personnel recognized that general intelligence was insufficient
as a predictor for the success of individuals chosen for military intelligence and
espionage12. Behavioral simulations and assessment centers, originally used by the
Germans during World War I, were adopted by the Office of Strategic Service and
proved to be far more accurate predictors of behavioral skills than other methods13. After
World War II, these same selection methods were subsequently used by large
organizations that recognized the need to identify and develop candidates with superior
9
Ibid.
10
This insight was emphasized by Barnard, C. I., (1938). The Functions of the Executive. Cambridge, MA: Harvard
College.
11
The contributions of Mary Parker Follett, who was often labeled “light years ahead of her time,” are found in
Follett, M. P., (1940) Dynamic Administration: The Collected Papers of Mary Parker Follett edited by E. M.
Fox and L. Urwick. London: Pitman Publishing.
12
For information about the history and use of assessment centers, see Thornton III, G. C., (1992). Assessment
Centers in Human Resource Management. Upper Saddle River, NJ: Prentice Hall.
13
Ibid.

interpersonal skills14. Once again, however, insights acquired about the effective
utilization of people in organizations were not universally understood15.
The contributions of scholars like Douglas McGregor16 and Abraham Maslow17
provided managers with important insights about the nature of human motivation.
Following World War II, HRM became relatively less important than other management
functions in the United States (US). Because of the advantageous position of the US,
relative to other nations attempting to recover from the war, the country enjoyed
economic growth and prosperity and businesses thrived without extensive international
competition. However, by the decade of the 1980’s American businesses began to feel
the effects of growing international competition in a world that had become more
technologically sophisticated, more globally competitive, and more connected as a result
of the advent of the World Wide Web18.
The consequences of constant change in the modern era of management required
HRM to become more strategic in its focus, more insightful in its understanding of how
organizations create value, and more skilled in assisting department managers and the
Top Management Team of organizations to establish organization cultures and programs
that bring out the best in employees.
Figure 2.
14
Ibid.
15
Wren, D. A. & Bedeian, A. G., (2009) op. cit.
16
The landmark contribution of McGregor is McGregor, D., (1960). The Human Side of Enterprise. New York:
McGraw Hill.
17
Maslow’s insights about a hierarchy of needs and personality are found in Maslow, A., (1970). Motivation and
Personality. New York: Joanna Cotler Books.
18
Much of this evolution and the impact of change is chronicled in Friedman, T. J., (2006). The World is Flat: The
Globalized World in the 21st Century. New York: Penguin Books. http://www.huffington
post.com/2013/09/06/illiteracy-rate_n_3880355.html.

STRATEGIC ROLES FOR HRPS
The demands of change in the global marketplace require organizations to be more

productive, more efficient, and more flexible19. The strategic role of human resources has
become increasingly important in empowering employees, involving them as partners in
the process of continuous improvement, and adding value in meeting the needs of
demanding customers20. In a misguided attempt to become more profitable, some
organizations have opted to contract out HRM functions and continue to treat employees
as costs that need to be controlled21. This latter approach has resulted in a deterioration of
loyalty and trust in the workplace and the creation of a transactional approach to
employee relations wherein employees are paid for their time but not valued as
organizational partners22.
Figure 3.
For firms that view employees as engaged and empowered partners, however, HRPs
began to demonstrate six professional competency roles in the areas of business
knowledge, change management, and HRM service delivery23. The following is a brief
summary of those six roles.
19
These phenomena are addressed in Pfeffer, J., (1998) op. cit.
20
See Beer, M., (2009). High Commitment, High Performance: How to Build a Resilient Organization for
21
This trend is documented in Pfeffer, J., (1998), op. cit.
22
Ibid.
23
These competencies are identified in Ulrich, D., Younger, J., Brockbank, W., and Ulrich, M., (2012). HR from the
Outside In: Six Competencies for the Future of Human Resources. New York: McGraw Hill. The
competencies are found on pages 51-54.

1) Credible Activist. As advocates for achieving the highest potential of employees

and the organization, HRPs honor commitments and do what they promise to do.
They can be counted on. They have personal integrity. They build trust and strive
to focus their organizations on creating win-win partnerships with employees.
2) Strategic Positioner. HRPs understand the company’s vision, its relationships
with customers and within the industry, and the HRM role in supporting and
sustaining the strategic goals of the organization. HRPs recognized that the
primary role of HRM was to create aligned systems, programs, and policies that
fit with their organization’s strategic mission and to create a culture that
reinforced company values24.
3) Capacity Builder. HRPs have worked with department heads and employees to
build the unique capabilities of the organization, to expand the creation of
meaning, and to help make work purposeful and results-oriented. The role of
HRM has been to help the organization to fully engage and empower employees
in the pursuit of continuous improvement, constant learning, and the ongoing
improvement of employee skills and organization capacity25.
4) Change Champion. HRM professionals develop the structures, systems, and
processes that support innovation and change. HRPs help their organizations to
learn from both successes and failures and help employees recognize the need for
change - recognizing that their organizations must be well informed about
competitors, responsive to customer requirements, and flexible in the ability to
adapt to a constantly evolving world26.
5) Innovator and Integrator. HRPs apply HRM principles, develop ways to
improve HRM practices, and integrate systems and practices to help their
organizations to more effectively achieve business results. This role transcends
simply keeping pace with “best practices” and includes developing new and
better ways to build commitment and the extra-mile dedication that is the
difference between good performance and the truly outstanding outcomes that
create long-term competitive advantage27.
6) Technology Proponent. HRPs utilize technology to connect people, to create
relationships, build connection with customers, and monitor competitors. HRPs
also play an important role in refining results-oriented management information
systems that identify value added and assist the organization to monitor progress
and make required improvements. These information management systems are
24
25
Ibid.
26
27
To understand more about this higher degree of follower stewardship commitment and its impact on wealth
creation, see Hayes, L., Caldwell, C., Licona, B. and Meyer, T. E., 2015. “Follower Behaviors and Barriers to
Wealth Creation.” Journal of Management Development, Vol. 34, Iss. 3, pp. 270-285.

both technical and behavioral and are critical to building consensus, increasing
mutual understanding, and aligning the organization28.
Figure 4.
Although some HRPs have recognized the need to acquire these six roles as part of
their strategic competency, in other organizations the HRM function is focused on
reducing labor costs; downsizing whenever possible; hiring part-time, contract, and
temporary employees to avoid the costs of health care benefits; and treating employees in
a transactional manner rather than as empowered partners29. Unfortunately, the result of
policies that have focused on cost-cutting, down-sizing, and creating arms-length
relationships with employees has also undermined employee loyalty and rarely generated
long-term value creation30.
ALTERNATIVE FUTURES
According to a Public Broadcasting Service report conducted in 2014, 54% of

Americans surveyed opined that the quality of life in the United States would continue to
28
The behavioral significance of this role and its impact on the organization are addressed in Caldwell, C. &
Ndalamba, K., 2017. “Human Resource Professionals as Strategic Leaders – A Behavioral Opportunity for
Improving Information Management.” Journal of Values-Based Leadership, Vol. X, Iss. 1, pp. 44-53.
29
This trend has been identified by Beer, M., (2009) op. cit. and Pfeffer, J., (1998) op. cit. and both scholars have
explained why it is a fallacious long-term strategy for wealth creation.
30
See Pfeffer, J., (1998) op. cit. and Cameron, K., (1994). “Guest Editor’s Note: Investigating Organizational
Downsizing – Fundamental Issues.” Human Resource Management, Vol. 32, Iss. 2, pp. 183-188. Both of these
insightful sources identify the limitations of cost-reduction programs on creating organizational value.

decline by the year 205031, with an equal number feeling that conditions had worsened in
the previous four years32. Only 23% of respondents thought that life conditions would
improve33. In the wake of the 2008-2009 fiscal crisis, the challenges facing business in a
global marketplace are uncertain at best34. Elected officials and business leaders have
been criticized for providing retirement benefits for workers that are both unaffordable
and beyond the realm of imagination for many citizens35. And the list of environmental,
financial, and social problems goes on and on – ranging from the decline of family values
to an ostrich-like denial of changes in weather patterns and the denial of the effects of
global warming due to industrialization36.
Employee engagement - the measure of whether employees are enthusiastic about,
involved in, and committed to their work and workplace - has dropped so low that 87%
of employees worldwide acknowledged that they are not engaged. In addition, at least
17% of employees from new hires to long-tenured employees admit that they are
disengaged at work37. According to Gallup, only 5% of all employees in the work force
qualify as fully engaged high performers38.
As businesses struggle to survive, they sometimes mortgage future opportunities by
chasing quarterly report results that both misrepresent their financial health and
undermine long-term wealth creation39. Although the empirical evidence suggests that
downsizing efforts have not created long-term financial benefits for most corporations or
for society, cost savings efforts that actually undermine the ability of firms to increase
long-term wealth are commonly initiated – even by many of the world’s most well-
known firms and most highly regarded leaders40.
31
Cass, C., (2014). “Most Americans Have a Gloomy Outlook for Life in 2050.” PBS News Hour found online on
September 13, 2017 at http://www.pbs.org/newshour/rundown/most-americans-have-a-gloomy-outlook-for-
life-in-2050/.
32
Ibid.
33
Ibid.
34
This uncertainty is the clear message of a number of concerned writers, including Friedman.
35
in Lowenstein, R., (2009). While America Aged: How Pension Debts Ruined General Motors, Stopped the NYC
Subways, Bankrupted San Diego, and Loom as the Next Financial Crisis. New York: Penguin Press.
36
Friedman, T. L., (2009) op. cit.
37
Cited in Mann, A., & Harter, J., (2016). “The Worldwide Employee Engagement Crisis.” Business Journal,
January 16th found online on September 14, 2017 at http://www.gallup.com/businessjournal/188033/
worldwide-employee-engagement-
crisis.aspx?g_source=Business+Journal&g_medium=CardRelatedItems&g_campaign=tiles.
38
Harter, J., (2015). “Companies Are Maximizing Only 5% of Their Workforces.” Business Journal, March 24 th
found online on September 14, 2017 at http://www.gallup.com/businessjournal/182087/companies-
maximizing-workforces.aspx?g_source=Business+Journal&g_medium=CardRelatedItems&g_campaign=tiles.
39
The frequency of accounting misrepresentations led to Sarbanes-Oxley and is addressed in numerous studies such
as Goldman, E. & Slezak, S. L., (2006). “An Equilibrium Model of Incentive Contracts in the Presence of
Information Manipulation.” Journal of Financial Economics, Vol. 80, No. 3, pp. 603-626.
40

HRM-RELATED PREDICTIONS ABOUT THE FUTURE
HRM has the potential to play an important role in the future success of business in
the decades ahead.
Figure 5.
We have identified ten significant changes that are likely to affect the roles of HRPs
in the decades ahead – although we acknowledge that these changes are prescriptive in
addition to being predictive about future conditions. Each of these ten changes in the
status quo have the potential to benefit businesses as well as making a significant
contribution to the quality of life in tomorrow’s complex and challenged world.
1) Consistent with the research about High Performance Work Systems, corporate
CEOs will recognize the importance of an expanded role of HRM. High
Performance and High Trust work systems with aligned HRM systems, policies,
and practices focused on increasing employee empowerment and participation
have been proven to increase the profitability of businesses that adopt such
practices – in addition to improving quality, employee morale, and the quality of
customer service41. HRPs will play a key supportive role in helping organizations
41
The research of Huselid, M., (1995) has documented the value of High Performance Work Systems and aligned
HRM programs and policies. See Huselid, M., (1995). “The Impact of Human Resource Management
Practices on Turnover, Productivity, and Corporate Financial Performance.” Academy of Management
Journal, Vol. 38, Iss. 3, pp. 63-672.

to create organizational cultures, aligned systems, and programs that mesh with
the values of High Performance Work Systems42.
2) HRPs will become increasingly competent in financial management, business
partnering, organization analysis, and internal consulting. The demands of an
increasingly competitive global marketplace will require HRPs to either become
competent resources in these key areas43 or find their role being downsized or
contracted out44. By achieving these competencies, HRPs will enhance the ability
of organizations to achieve their strategic objectives and demonstrate their value
to their organizations45.
3) Top companies will recognize the importance of assessment centers and other
behavioral tools to improve employee training and selection. Hiring the right
people, putting employees in the right positions, and ensuring that they are
competently trained to perform critical duties have always been challenges facing
organizations46. Although assessment centers and other behavioral tools require
proper administration to be run correctly47, they are far more effective than other
selection tools and are extremely valuable as a resource for evaluating and
developing managerial and interpersonal skills48.
4) Companies that do business globally will exponentially improve their ability to
prepare, train, and retain expatriate employees given international assignments.
As the workforce becomes more global, companies have increasingly realized
their failures in managing relationships with expatriate employees49 and the
ethical responsibilities associated with those assignments50. Improperly preparing
and training the expatriate employee and their families and the failure to utilize
insights obtained by persons assigned in foreign countries have led to many
assignments being prematurely cut short and have resulted in alarmingly high
turnover rates once employees return. HRPs will be required to do a much better
job of selecting, preparing, and managing the reentry of expatriates into their
organizations51.
42
43
J., (2014). Strategic Human Resource Management (4th ed.). Mason, OH: South-western Publishing.
44
2005). “Outsourcing the Human Resource Function: Environmental and Organizational Conditions that Affect
HR Performance.” Journal of Business Strategies, Vol. 22, No. 1, pp. 55-73/.
45
Mello, J., (2014) op. cit.
46
These key priorities have been clearly articulated in Collins, J., (2001). Good to Great: Why Some Companies
Make the Leap . . . . And Others Don’t. New York: HarperBusiness.
47
The difficulties associated with conducting assessment centers and common errors made are cited in Caldwell, C.,
Thornton III, G. C., and Gruys, M. 2003 “Ten Classic Assessment Center Errors: Challenges to Selection
Validity.” Public Personnel Management, Vol. 32, Issue 1, pp 73-88.
48
See Thornton III, G. C., (1992), op. cit.
49
These issues are identified in Vance, and Paik, Y., (2014). Managing a Global Workforce” Challenges and
Opportunities in International Human Resource Management (3rd ed.). New York: Routledge.
50
These duties are identified in Katiyar, A., Thomas, K., and Caldwell, C. (2011). “Ethical Issues in International
Human Resource Management.” Journal of Global Business Development, Vol. 3, No. 1, pp. 103-114.
51
Ibid.

5) Corporations, universities, and governments will increasingly partner in the

pursuit of shared learning and economic growth. Although there are a growing
number of cities and universities which have created local business incubators to
support start-up companies and entrepreneurship, the need for exponentially
expanded partnering between corporations, universities, and government has
been identified as an opportunity area demanding increased participation52. HRPs
have the opportunity to reach out to business faculty to identify opportunities for
faculty to conduct publishable academic research that can also help businesses to
improve their work climate and employee commitment.
6) Governments will increasingly provide tax credits and grants to companies that
engage in Corporate Social Responsibility programs that address serious national
and international problems. The need for cooperative partnerships and economic
support from governments to encourage and assist Corporate Social
Responsibility goals has been identified by many experts53. The obligation to
expand the role of business to address and resolve significant social problems has
similarly been addressed as an ethical obligation of business in today’s troubled
world54. The need for HRPs to become the moral conscience of their companies
in honoring social responsibilities has also been addressed by many experts55.
7) Governments will reinstitute Workforce Development Programs that train the
illiterate and undereducated population to prepare to be work ready. According to
the U. S. Department of Education, the mean annual income of those who
dropped out of high school, age 18 to 67, was $18,000 less than the income of
those with a GED or who had graduated56 or $630,000 over their lifetime57. In
addition, other studies report that the high school dropout rate in America’s fifty
largest cities was 47% - with one study reporting that only 38% of high school
52
Caldwell, C., (2014). “Forging Ethics-Based Business Partners: The Integration of Business, Employees, and
Education.” Graziadio Business Review published by Pepperdine University in the April, 2014 edition found
online at https://gbr.pepperdine.edu/2014/04/forging-ethics-based-business-partners/.
53
For example, see Friedman, T. L., (2009) op. cit.
54
The importance of this role has been identified by Solomon, R. C., (1992). Ethics and Excellence: Cooperation
and Integrity in Business. Oxford, UK: Oxford University Press.
55
This role of HRPs becoming the moral conscience of their companies has been discussed in many contexts
including Bierema, L. L., and D’Abundom, M. L., (2004). “HRM with a Conscience: Practicing Socially
Responsible HRD.” International Journal of Lifelong Education, Vol. 23, Iss. 5, pp. 443-458. Others like
Stephen R. Covey have also offered commentaries about the need for organizations to periodically assess their
values in Covey, S. R., (2004). The 8th Habit: From Effectiveness to Greatness. New York: Free Press.
56
See this information in U. S. Department of Education, (2011). Trends in High School Dropout and Completion
Rates in the United States 1972-2009 – Compendium Report. Washington DC: National Center for Education
Statistics - Institute of Education Sciences.
57
The lifetime impact of failure to earn a high school diploma, as compared to a GED, as identified by a National
Center for Education Statistics study, was reported in Zhao, E., (2012). “High School Dropout Rates for
Minority and Poor Students Disproportionately High.” Huffington Post October 20, 2011 update February 14,
2012 and found online on September 17, 2017 at http://www.huffingtonpost.com/2011/10/20/high-school-
dropout-rates_n_1022221.html.

freshmen in the Cleveland inner cities graduated within four years58. Of those
who do graduate from high schools, 19% are functionally illiterate and cannot
read above the 5th grade level59. Workforce Development Programs, funded by
state and federal governments, are likely to partner to a much greater extent with
local businesses, colleges, and universities to assist this unprepared population –
with HRPs playing a key coordinating role for businesses60.
8) Governments will provide academic institutions and businesses with financial
incentives to involve students in service learning projects that benefit identified
problems. Service learning has become a well-established part of many higher
education programs and has had a positive impact on Corporate Social
Responsibility, student attitudes, and service project recipients61. Corporate HRPs
will become increasingly involved in joining with local academic institutions so
that both businesses and schools can benefit from this effort by governments to
provide incentives to address community priorities and benefit society62.
9) Standards for employee accountability will become much more sophisticated as
HRPs partner with department heads to measure and improve employee
productivity. Measuring value added and employee performance will
increasingly become a key function of HRPs who will team with department
leaders and Finance Department staff to improve metrics to measure employee
performance63. HRPs will be required to clearly understand and evaluate the
costs and benefits of human performance64 and will develop greater competence
in managing information and measuring effectiveness65.
10) Companies, non-profit organizations, and governmental agencies will
increasingly partner with academic institutions to facilitate Action Training and
Research projects that improve the efficiency and effectiveness of local
organizations and benefit local communities. The importance of integrating
Corporate Social Responsibility with the needs of local communities has been
recognized as a critical factor in resolving those problems at the local level.
58
See Dillon, S., (2010). “Large Urban-Suburban Gap Seen in Graduation Rates.” New York Times, Feb 18 found
online on September 17, 2017 at http://www.nytimes.com/2009/04/22/education/22dropout.html?mcubz=1.
59
This information reflects a study conducted by the U. S. Department of Education and the National Institute of
Literacy, as reported in “The U. S. Literacy Rate Hasn’t Changed in Ten Years.” Huffington Post September 6,
2013 updated on December 12, 2014 found online on September 17, 2017 at http://www.huffingtonpost.com/
2013/09/06/illiteracy-rate_n_3880355.html.
60
Proposed in Anderson, V., Ndalamba, K. K., and Caldwell, C., (2017) op. cit.
61
See Lester, S. W., Tomkovick, C., Wells, T., Flunker, L., & Kickul, J., (2005). “Does Service-Learning Add
Value: Examining the Perspectives of Multiple Stakeholders.” Academy of Management Learning and
Education, Vol. 4, No. 3, pp. 278-294.
62
The value of service learning in enhancing social responsibility is identified in Tyran, K. L., (2017).
“Transforming Students into Global Citizens: International Service Learning and PRME.” International
Journal of Management Education, Part B, Vol. 15, Iss. 2, pp. 162=171.
63
The integrated role of HRPs and Finance personnel is described in Roy, S. N., (2016). HR and Finance: Two
Inseparable Heads of the Same Organizational Coin.” Human Capital, Vol. 19, Iss. 8, pp. 40-43.
64
Fritz-Enz, J., (2009). The ROI of Human Capital: Measuring the Economic Value of Employee Performance.
New York: AMACOM.
65
See Caldwell, C. and Ndalamba, K. K., (2016) op. cit.

Incorporating an Action Training and Research model of collaboration and

involving non-profit and governmental agencies as partners will enhance the
planning and effectiveness of such projects66. HRPs will play a liaison role in
making such projects happen67.
These ten changes can assist modern organizations that will struggle to deal with the
long-term social, economic, political, and environmental problems that will plague the
world of tomorrow. Organizational leaders and HRPs who recognize the need for the
changing demands of tomorrow’s world are acknowledging that social responsibility and
developing new approaches to mitigate those problems are necessary steps to creating a
better future68.
CONCLUSION
The future facing HRM and HRPs is challenging and exciting, yet not a little bit
uncertain and certainly intimidating. The problems that we face as a society are troubling
morally, financially ominous, and environmentally significant . . . yet many of today’s
leaders, and those responsible for leading governments and businesses over the past three
decades, have opted to duck the problems and avoid making the morally difficult
decisions.
The famous quote from Edmund Burke is that “(t)he only thing necessary for evil to
triumph is for good men to do nothing69.” In a recent interview Dr. Henry Mintzberg,
McGill University’s brilliant scholar, advocated that “the Good Folk,” or “the people who
genuinely care about the issues we face have to act70.” Apparently, the leaders of
governments and business have been doing very little for years,” some would suggest.
For HRPs they must become not only extremely competent subject matter experts
about HRM and their company’s business metrics but also adept at how to listen and
communicate to employees at all levels of the organization. In the future, HRPs will find
that they will need to fully understand their company’s strategic mission and ensure that
its policies, systems, and practices align with its values and strategies. They must
establish a reputation of competence, caring, character, and the capacity to integrate those
critical qualities in the pursuit of organizational outcomes that create long-term value for
66
The importance of such projects is identified in Anderson, V., Ndalamba, K. K., and Caldwell, C., (2017) op. cit.
67
See Zhang, W., Levenson, A., and Crossley, C., (2015). “Move Your Research from the Ivory Tower to the
Boardroom: A Primer on Action Research for Academics, Consultants, and Business Executives.” Human
68
See Anderson, V., Ndalamba, K. K., and Caldwell, C., (2017) op. cit.
69
This well-known and frequently cited quotation was found on September 14, 2017 at
https://www.brainyquote.com/quotes/quotes/e/edmundburk377528.html.
70
This interview is found in Mintzberg, H. & Caldwell, C., (2017). “Leadership, ‘Communityship,’ and ‘The Good
Folk.’” International Journal of Public Leadership, Vol. 13, Iss. 1, pp. 5-8.

all stakeholders71. HRPs must become ethical stewards72 dedicated to the best possible
outcomes for employees, shareholders, customers, and society if they are to honor their
moral obligations to their company, to its employees, and to society in a world that has
become increasingly complex, chaotic, competitive, and challenge73.
Questions to Ponder
1) What are the reasons why so many corporations and their leaders have minimized
the role of HRPs over the years? What do you think HRPs can do to contribute
more effectively to corporate success?
2) Given the alarming problems facing a struggling world, which of the ten
predictions about the future do you think should be given the highest priority to
address some of those problems? Justify your position with thoughtful insights
and evidence.
3) Do you think the evolution of HRM as a profession has worked as a benefit or as
a detriment to business and society? Explain your position but identify arguments
for either point of view.
WEWORK - Case Study - by Dr. Sarah J. Smith
Human resource professionals and top management have recognized the need to
empower employees and to encourage creativity and innovation. These qualities are also
critically important for entrepreneurs. The majority of entrants into the business
marketplace do not begin as large employers but as small entrepreneurial businesses.
Studies have shown an increased level of employee engagement and decreased
turnover when employees are happy in their work environment. In addition, highly
creative organizational members find solitude a welcome respite to foster innovation and
to generate business solutions. Most HR professionals and top management understand
that if workers entering the workforce do not feel an ability to contribute or that their
work is valued, they will often move on, leaving the organization rather than committing
to remain with their current employer.
71
These four factors have been identified as critical conditions precedent to being perceived as worthy of trust in
Caldwell, C., and Ndalamba, K. K., (2017). “Trust and Being ‘Worthy’ – The Keys to Creating Wealth.”
Journal of Management Development, Vol. 36, Iss. 8, pp. 1076-1086.
72
The concept of HRPs as ethical stewards is articulated in Caldwell, C., Truong, D., Linh, P., and Tuan, A.,
(2011). “Strategic Human Resource Management as Ethical Stewardship.” Journal of Business Ethics, Vol.
98, Iss. 1, pp. 171-182.
73
This world is clearly described in Friedman, T. L., (2009). Hot, Flat, and Crowded: Why We Need a Green
Revolution – And How It Can Renew America, Release 2.0. New York: Picador Press.

Sabbatical requests have been granted for highly innovative and technically
competent employees in mid-sized to large organizations. These sabbaticals are certainly
not a benefit offered by all employers, but rather a discretionary benefit designed to
identify tomorrow's opportunities and to plan or begin implementation of new product
development though innovation. What if future HRPs proposed a similar structure in a
contemporary setting for workers who have an entrepreneurial mindset?
1) What do you think is the likelihood that future businesses will propose a similar
structure for workers who have an entrepreneurial mindset?
2) With new “work at home” options, many employees do not have access to HR
departments on a regular basis. How should this issue be addressed?
3) What do you think are likely to be successful ways to inspire and motivate
tomorrow’s employees?
Sharpening the Saw - Case Study - by Dr. Sarah J. Smith
Stephen Covey will be remembered most as author of The Seven Habits of Highly
Effective People. The 7th habit is Sharpening the Saw. Learning and reading are two
suggested activities to follow a path of what one might call personal continuous
improvement. Many human resource professionals entered the HRM profession because
they liked interacting with others. A good percentage have avoided measurement and
using HR metrics for strategic human resource decision-making.
In order to be strategic leaders in an ever-changing world, tomorrow's HR leaders
must be prepared in a multitude of ways. Understanding financial management, business
partnering, organizational analysis, and internal consulting will become skills the
strategic human resource professional must understand and be able to carry out. To
support strategic organizational objectives, HR professionals must understand HR metrics
and be able to understand and correlate a broad variety of productivity measures.
After learning about the future needs for knowledge and skills development, HR
professionals could formulate their own personal growth plan to sharpen the saw. For
HRPs they must become not only extremely competent subject matter experts about
HRM and their company’s business metrics but also be adept at how to work with
employees at all levels of the organization.
1) Do HRPs need to participate in higher education to learn skills that will be

necessary in the future in order to serve the organization as a successful human
resource professional? Why or why not?

2) We live in a world with a multitude of conflicting demands. What would be the

biggest barrier in your life that would challenge your own continuous
improvement?
3) What specific methods will you plan to use to sharpen the saw for your career?
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ABOUT THE EDITORS
Cam Caldwell, PhD

1110A Jim Meyer Drive,
Alexandria, LA, 71303, CA
Tel: (318) 955-6188
Email: cam.caldwell@gmail.com
CAM CALDWELL received his PhD in Human Resources and Organization

Behavior from Washington State University where he was a Thomas S. Foley Graduate
Fellow. He holds the Senior Professional and Global Professional in Human Resources
professional certifications. Prior to earning his PhD, he worked as a Human Resource
Director, City Manager, and Management Consultant for more than twenty years. This is
his fifth book and he has published many papers about a variety of management and
leadership topics.
Dr. Verl Anderson

Dixie State University, Professor of Management
225 S. 700 E. UHB 346 St George, 84770, UT
Tel: (435)652-7840
Email: verl@dixie.edu
VERL ANDERSON obtained his doctorate degree in Business Administration from

Arizona State University. He is currently a professor in Management and International
Business at Dixie State University, St George, Utah. He has taught university courses as a
visiting professor in New Zealand and four universities in China. He has published 34
articles in the past two years on leadership, ethics, China culture, kindness, strategic
management, and social responsibility. His research interests include China culture and
international cultures. He has traveled extensively, and annually takes groups on
cultural/educational tours to China and New Zealand.

INDEX
business environment, 4
A business partners, 16, 36, 214, 220
businesses, 100, 177, 183, 211, 234, 238, 239, 241,
Abraham Maslow, 234 242, 243, 244, 245
accommodations, 213 buyers, 171
advertisements, 77
advocacy, 168, 195 C
Age Discrimination in Employment Act, 208
aging population, 172 candidates, 4, 48, 67, 77, 78, 80, 81, 82, 83, 84, 86,
alcohol consumption, 190 99, 151, 172, 233
American Psychological Association, 180, 192 career development, 154
Americans with Disabilities Act, 208 case law, 208
anthropologists, 211 cash, 181, 190
Aristotle, 22 Catastrophic Event Counseling, 182
assessment centers, 79 certification, 6
assessment tools, 148 change management, 60, 128, 129, 137, 139, 235
assets, viii, 9, 11, 21 changing environment, 16, 214
charismatic, 32, 38, 39
B Chester Barnard, 28, 163, 233
Civil War, 50, 54, 77, 90
background information, 188 climate, 16, 116, 167, 214
bankruptcy, 101 collaboration, 50, 85, 205, 233, 243
Barnard, Chester, 28, 163, 233 collective bargaining, 207
barriers, 19, 21, 29, 150, 162, 169, 171, 225 commerce, 211, 212
Barry Posner, 29 commodity, 94, 116
benchmark positions, 97 common sense, 213
benchmarks, 97, 170 communication, 24, 87, 109, 134, 190, 200, 220
benefits, 18, 20, 32, 57, 59, 62, 66, 71, 79, 87, 93, comparative method, 97
94, 95, 100, 101, 102, 103, 104, 106, 134, 141, compensation, 9, 32, 37, 48, 54, 93, 94, 96, 97, 98,
149, 169, 179, 182, 189, 192, 203, 207, 218, 227, 99, 100, 102, 103, 105, 117, 121, 147, 153, 161,
237, 238, 242 171, 177, 179, 181, 185, 189, 218, 227, 232
bias, 113, 212 compensation and benefits plan, 103
building blocks, 15, 93 compensation methods, 96
Bureau of Labor Statistics, 100, 107 compensation philosophy, 98, 153, 218

254 Index
compensation systems, 96, 99, 117, 161 Deloitte, 111, 123

competition, 4, 77, 115, 234 dental care, 207
competitive advantage, vii, 4, 6, 13, 15, 21, 51, 60, Department of Education, 241, 242, 248
69, 77, 116, 156, 159, 167, 191, 195, 198, 201, Department of Labor, 75
224, 236 Digital recruitment, 77
competitiveness, 82 disability, 179
competitors, 13, 77, 99, 104, 116, 214, 217, 236 discrimination, 203
complement, 83, 137 Douglas McGregor, 234
complexity, 2, 36, 211 downsizing, 237, 238
compliance, 68, 70, 105, 163 drugs, 190
computer, 23, 77 due process, 203
conference, 23, 141
confidentiality, 190, 191 E
consumer price index, 171
cooperation, 17, 24, 46, 53, 85, 103, 134, 135, 163, eating disorders, 180
164, 166, 196, 205, 233 eBay, 151
Corporate Social Responsibility, 241, 242 economic growth, 234, 241
correlation, 114, 166, 181 education, 77, 83, 88, 97, 101, 102, 148, 218, 242,
cost, 14, 20, 100, 101, 102, 106, 141, 147, 154, 171, 247
177, 181, 183, 207, 231, 237, 238 EEOC, 203, 208, 209
cost of living, 171 emergency, 182
cost saving, 20, 100, 102, 147, 181, 238 emotional intelligence, 81, 82
Cost-of-Living index, 218 empathy, 66
counseling, 182, 191 Employee,
Covenantal, 32, 39, 40, 59, 72, 73, 146 Benefits, 81, 90, 100, 141, 182, 192
Commitment, 146 compensation, 9, 93, 218
Covenantal Commitment, 146 empowerment, 138, 163, 239
Covey, Stephen R., 21, 25, 31, 35, 40, 109, 112, 152, engagement, 64, 100, 111, 138, 199, 238, 244
241 law, 196
CPI, 171 relations, 196
creativity, 16, 19, 52, 68, 85, 146, 147, 156, 196, safety, 187
200, 202, 244 Wellness Programs, 179, 192, 193
credentials, 6, 12, 23, 52 employers, 37, 70, 77, 81, 86, 94, 95, 100, 105, 108,
criticism, 203 149, 154, 177, 181, 189, 196, 203, 215, 244, 245
cultural differences, 213 employment, 4, 36, 70, 94, 105, 122, 155, 161, 198,
cultural factors, 60, 216 202, 203, 206, 208, 226
cultural nuances, 213 employment relationship, 105
culture, 7, 14, 15, 23, 24, 25, 38, 60, 69, 70, 81, 83, employment-at-will, 202, 203, 206
104, 105, 106, 116, 117, 118, 128, 130, 131, 134, empowerment, 19, 138, 150, 163, 239
137, 138, 139, 140, 145, 147, 151, 153, 156, 162, energy, 36, 150
163, 165, 166, 171, 184, 188, 198, 199, 202, 219, enforcement, 186
220, 222, 223, 226, 227, 236 enrollment, 141
customer service, vii, 117, 170, 200, 231, 239 entrepreneurs, 244
customers, 13, 14, 45, 49, 51, 86, 104, 109, 121, 134, entrepreneurship, 241
140, 152, 161, 177, 200, 218, 235, 236, 244 environment, 4, 38, 59, 71, 85, 106, 114, 122, 141,
151, 156, 189, 196, 204
D environmental factors, 60
Equal Employment Opportunity Commission, 208
data collection, 133, 135, 169 Equal Pay Act, 208

Index 255
equality, 66
G
equity, 48, 102, 105, 121
erosion, 21, 198
Gainsharing, 98
espionage, 233
gambling, 180
Ethic of Care, 66
Geert Hofstede, 216, 227
Ethic of Contributing Liberty, 66
general intelligence, 233
Ethic of Distributive Justice, 66
General Motors, 101, 108, 238, 247
Ethic of Economic Efficiency, 66
Germany, 166, 174
Ethic of Government Regulation, 66
Gig economy, 94
Ethic of Religious Injunction, 66
global competition, 4, 115, 167, 231
Ethic of Self-Actualization, 66
global economy, 167, 170, 211
Ethic of Self-Interest, 66
global marketplace, 68, 85, 95, 118, 153, 186, 202,
Ethic of Universal Rights, 66
211, 222, 235, 238, 240
Ethic of Universal Rules, 66
global scale, 115, 226
ethical implications, 129, 213
global warming, 238
ethical responsibilities, 57, 58, 59, 65, 68, 69, 218,
goal setting, 114
240
Golden Rule, 34, 40
ethical standards, 64, 69
governance, 17, 26, 160, 167, 168
ethical stewardship, 14, 17, 18, 19, 22, 63, 65, 69,
government intervention, 141
145, 166
Green Revolution, 35, 40, 61, 73, 112, 124, 167, 174,
evolution of HRM, 232
244, 247
exchange relationship, 17
growth, 31, 34, 48, 59, 68, 87, 94, 145, 146, 147,
expertise, 16, 60, 88, 153, 165, 214
148, 149, 151, 166, 172, 196, 245
external environment, 13, 44
growth rate, 94
extrinsic rewards, 93
guide chart, 97, 98
guidelines, vii, 15, 29, 35, 48, 58, 110, 198, 212,
F 226, 228
guiding principles, 57
facilitators, 153
Fair Labor Standards Act, 208
H
federal government, 137, 143, 242
federal law, 187, 203
Hawthorne studies, 232
Financial counseling, 182
hazards, 187
financial incentives, 181, 242
health care, 10, 141, 179, 181, 189, 207, 237
financial institutions, 112
health care costs, 10, 141, 179, 181
financial planning, 107
health condition, 181
financial resources, 142, 171
health insurance, 95, 100, 181, 185
financial support, 139
health problems, 181
financial vulnerability, 186
Health screening, 181
firm value, 218
health status, 183
fitness programs, 181
hierarchy of needs, 234
flexibility, 106, 153, 160
High Commitment Organizations, 163
Follett, Mary Parker, 233, 247
high performance work systems, 159
forecasting, 81, 91
high trust organizations, 159
foreign companies, 100
higher education, 155, 242, 245
formal education, 83
hiring, 7, 23, 48, 50, 53, 71, 75, 78, 80, 81, 82, 83,
formal language, 204
86, 87, 88, 94, 95, 99, 102, 103, 107, 152, 155,
formation, 169
161, 171, 189, 217, 232, 237
foundations, 96, 145
historical data, 184

256 Index
Hofstede, Geert, 216, 227 interpersonal skills, 50, 79, 82, 83, 234, 240
host country culture, 219, 220 investment, 60, 111, 129, 147, 150, 189, 202
hourly wage, 106
HRP Roles, 146, 147 J
hub, 207
human behavior, 163 James Kouzes, 29
human capital, 117 job analysis, 8, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52,
human motivation, 110, 234 53, 54, 78, 82, 83, 84
Human Resource Management, v, vi, vii, 1, 2, 6, 8, job classification, 47
10, 11, 12, 13, 14, 19, 25, 27, 31, 34, 36, 39, 40, job description, 46, 47, 50, 52, 53, 54, 142, 198
43, 54, 57, 61, 64, 65, 67, 72, 73, 74, 75, 76, 77, Job design, 48
81, 88, 89, 90, 93, 102, 108, 111, 116, 123, 124, Job Evaluation, 48
138, 139, 143, 145, 146, 152, 157, 158, 159, 163, job performance, 80, 180
165, 166, 170, 173, 174, 175, 178, 184, 185, 187, job satisfaction, 44, 151
192, 193, 194, 195, 201, 202, 205, 208, 209, 211, job skills, 161
213, 216, 217, 218, 220, 223, 228, 229, 230, 231, Job specifications, 48
232, 233, 237, 239, 240, 243, 244, 246, 247, 248, justification, 38, 62
249
Human Resource Professionals, vii, 1, 11, 14, 27, 43, K
57, 76, 116, 123, 128, 137, 145, 159, 177, 195,
212, 220, 229, 231, 237, 246 Kotter, 128, 129, 131, 142, 143, 144
human resources, 20, 77, 84, 87, 235 Kouzes, James, 29
human right, 66 Kurt Lewin, 131
I L
illiteracy, 234, 242, 247, 248 lack of confidence, 64, 73

income, 106, 107, 218, 241 laws and regulations, 186, 205
individual rights, 65 leadership, 8, 11, 15, 17, 19, 20, 21, 22, 24, 27, 28,
industrial relations, 232 29, 30, 31, 32, 33, 34, 36, 37, 38, 57, 61, 111,
industrialization, 238 121, 122, 129, 141, 145, 148, 152, 156, 157, 166,
ineffectiveness, 19, 201 222, 227
inequity, 186 leadership characteristics, 17
inflation, 100, 112, 171 leadership style, 24, 38
information sharing, 149 learning culture, 16, 32, 38, 67, 202
information technology, 141 learning process, 132
inspections, 187 lifelong learning, 24
institutions, 33, 40, 64, 73, 100, 108, 242 loyalty, 86, 95, 105, 116, 146, 151, 154, 155, 156,
integration, 160, 163, 223 235, 237
integrity, 21, 61, 65, 66, 86, 166, 186, 236
intelligence, 52, 222, 233 M
international communication, 220
international competition, 234 management, vii, viii, 1, 4, 8, 9, 17, 18, 23, 25, 37,
International differences, 218 43, 60, 69, 70, 98, 100, 104, 109, 110, 111, 113,
International employees, 217 114, 115, 117, 118, 119, 120, 121, 122, 123, 127,
International Issues, 215 128, 129, 135, 137, 139, 142, 156, 162, 171, 185,
international strategy, 212 186, 187, 188, 189, 193, 206, 207, 208, 217, 226,
interpersonal relations, 18, 58, 185 227, 232, 233, 234, 235, 236, 240, 244, 245
interpersonal relationships, 18, 58, 185 marketing, 200, 213, 223, 230

Index 257
marketplace, 4, 68, 85, 93, 95, 118, 153, 186, 202,

P
211, 222, 235, 238, 240, 244
Mary Parker Follett, 233, 247
participants, 7, 11, 14, 45, 49, 51, 54, 103, 129, 133,
Maslow, Abraham, 234
134, 148, 184, 188, 190, 231
McGregor, Douglas, 234
payroll, 23, 172, 207
mental health, 180, 191
performance appraisal, 7, 48, 111, 112, 113, 114,
metaphor, 34
119, 120, 121, 122, 123, 124
misconceptions, 1, 5, 7
Performance management, 109, 111, 115
mission, vii, 2, 7, 13, 14, 15, 16, 19, 31, 34, 35, 43,
performance measurement, 7, 44, 120
45, 49, 53, 59, 69, 76, 93, 97, 102, 104, 105, 106,
performance rate, 113
112, 113, 116, 117, 139, 142, 146, 147, 148, 152,
performance ratings, 121
153, 159, 164, 167, 171, 189, 205, 206, 212, 214,
perseverance, 22, 50
218, 222, 236, 243
personal relations, 30
modern society, 168
personal relationship, 30
modules, 37, 70
personal responsibility, 154
moral obligation, 13, 17, 35, 36, 187, 224, 244
physical health, 182
morale, 25, 38, 114, 117, 129, 150, 155, 179, 186,
Platinum Rule, 34, 40
202, 239
policy, 25, 79, 119, 123, 155, 202, 207, 218, 226,
multinational companies, 186
227, 228
mutual respect, 205
politics, 38
population, 78, 167, 182, 241
N positive feedback, 152
positive relationship, 147
National Center for Education Statistics, 241, 248
Posner, Barry, 29
national culture, 215, 218
Principle-Centered, 32, 39, 112, 123
natural resources, 167
principles, vii, 9, 15, 17, 18, 19, 20, 30, 32, 35, 58,
negative experiences, 113
65, 66, 68, 69, 113, 115, 128, 139, 188, 201, 205,
Nobel Prize, 163
211, 213, 221, 224, 225, 236
private sector, 13, 100, 115
O
private sector employees, 100
procedural justice, 203
obesity, 181
professional development, 101, 148, 150, 201
Occupational Safety and Health Act, 226
professionalism, 191
opportunism, 17
profitability, vii, 16, 19, 20, 59, 69, 71, 99, 105, 160,
opportunities, 7, 9, 16, 17, 21, 37, 44, 48, 59, 60,
161, 170, 189, 202, 214, 223, 239
106, 116, 117, 118, 121, 133, 134, 147, 150, 152,
project, 94, 117, 118, 128, 133, 135, 136, 137, 147,
153, 169, 172, 181, 182, 186, 214, 217, 219, 221,
242
232, 238, 241, 245
psychology, 110, 131, 232
organizational culture, 5, 10, 15, 16, 20, 21, 82, 95,
public interest, 202
130, 139, 142, 143, 156, 161, 166, 169, 189, 205,
public policy, 202
212, 214, 217, 223, 240
organizational development, 131, 145, 146, 153, 156
OSHA, 70
Q
outsourcing, 53
qualifications, 20, 22, 44, 47, 48, 49, 50, 78, 80, 82,
oversight, 79, 88, 122
83, 96
overtime, 205
quality improvement, 134, 152
overweight, 190
quality of life, 17, 214, 218, 237, 239

258 Index
staffing, 4
R
stakeholders, 14, 16, 17, 18, 21, 29, 31, 32, 36, 46,
49, 53, 57, 58, 59, 60, 62, 63, 65, 67, 68, 69, 71,
Rater Bias, 113, 122
110, 129, 145, 153, 154, 166, 206, 214, 223, 244
reality, vii, 1, 2, 4, 64, 76, 81, 86, 114, 118, 120, 127,
Stephen R. Covey, 21, 25, 31, 35, 40, 109, 112, 152,
137, 168, 170
241
recognition, 117, 155, 162
Stewardship Theory, 17, 26
recommendations, 7, 83, 93, 103, 104, 136, 137, 160,
stock, 112, 151, 158
207, 227
storage, 113
recruiting, 76, 77, 81, 85, 216
strategic management, 7
regulations, 70, 205
stress, 79, 182
reliability, 78, 166
stress management, 182
reputation, 21, 151, 156, 185, 215, 243
supervisors, 13, 43, 46, 48, 49, 51, 84, 104, 109, 110,
resource management, 65, 127
111, 114, 117, 120, 121, 140, 171, 187, 199, 217,
resources, viii, 4, 11, 13, 16, 29, 44, 46, 59, 60, 66,
218
69, 77, 94, 97, 107, 108, 110, 112, 114, 118, 125,
129, 135, 137, 138, 139, 147, 148, 153, 165, 167,
183, 186, 201, 205, 209, 214, 217, 220, 221, 227,
T
240
tax credits, 241
retirement, 100, 106, 107, 155, 203, 238
teaching experience, 102
rewards, 162, 181
team members, 35, 37, 98, 137, 151
risk management, 10, 178, 185, 188
TEAM process, 134
risk-taking, 117
teams, vii, viii, 8, 35, 85, 103, 109, 110, 116, 117,
Roethlisberger, 232
134, 135, 137, 147, 161, 233
rule of law, 203
technology, vii, 85, 87, 151, 152, 236
test scores, 82
S
testing, 6, 9, 48, 49, 76, 77, 78, 79, 81, 82, 84, 85,
147, 181, 233
safety, 10, 37, 70, 105, 121, 178, 187, 188, 189, 192,
Testing Candidates, 77
193, 226, 227
time frame, 122
salary range, 98
time pressure, 82
savings, 100, 102, 106, 107, 154, 201
Toyota, 113, 124
scarce resources, 66
training, 6, 20, 37, 44, 48, 60, 70, 82, 84, 95, 97, 105,
Secretary of Commerce, 168
106, 107, 113, 117, 120, 133, 134, 138, 147, 148,
security, 140, 161, 171
150, 152, 155, 156, 157, 162, 171, 186, 187, 188,
self-confidence, 33
189, 201, 202, 216, 217, 232, 240
self-image, 167
training programs, 147, 152
self-interest, 17, 32, 63, 66, 189
traits, 30, 36, 121
self-reflection, 33
transformational, 32, 116, 220, 229
service quality, 202
transformative, 8, 19, 25, 26, 32, 34, 39, 58, 64, 65,
Short-term thinking, 95
66, 69, 72, 95, 107, 116, 117, 118, 123, 145, 157,
smog, 226
195, 209
smoking, 179, 180, 190
transformative ethics, 8, 34, 39, 58, 64, 65, 66, 69,
Smoking Cessation, 180, 192
72, 195, 209
social contract, 18
transparency, 33, 170
social problems, 168, 238, 241
transportation, 53, 54
social responsibility, 35, 242, 243
trustworthiness, 19, 30, 59, 68, 165, 166, 198, 222
Social Security, 100, 106
turnover, 24, 100, 179, 202, 240, 244
staff development, 38, 154, 155
staff members, 220

Index 259
programs, 10, 177, 178, 179

U
wellness programs, 10, 177, 178, 179
work climate, 7, 17, 147, 153, 241
unionism, 232
work environment, 16, 24, 48, 64, 87, 147, 188, 202,
unique features, 223
244
urban, 213
work ethic, 52
utilitarian ethics, 66
work roles, 152
workers, 22, 23, 70, 94, 99, 100, 105, 106, 107, 108,
V
122, 148, 151, 155, 156, 158, 161, 170, 172, 179,
validation, 82, 84 181, 189, 191, 226, 227, 238, 244, 245
values-based, 33, 40, 116, 123, 237, 246 workforce, 4, 6, 12, 23, 94, 141, 149, 151, 177, 189,
virtue ethics, 66 240, 244
virtuous continuum, 63, 68, 69 workforce planning, 48
vision, 27, 29, 30, 105, 106, 129, 137, 141, 142, 165, working conditions, 187
172, 207, 221, 223, 236 workload, 103
workplace, 48, 64, 70, 73, 93, 106, 111, 124, 148,
W 172, 180, 187, 191, 192, 193, 200, 209, 235, 238
World War I, 233, 234
wastewater, 70 World Wide Web, 77, 234
wealth, viii, 11, 17, 18, 21, 61, 85, 116, 117, 145,
146, 202, 223, 231, 236, 237, 238 Z
weather patterns, 238
web sites, 107 Zone of Acceptance, 163
weight loss, 181 Zone of Commitment, 164
welfare, 66, 68, 94, 146, 166, 177, 182, 218 Zone of Indifference, 163
well-being, 149 Zone of Stewardship, 164
wellness, vi, 10, 177, 178, 179, 181, 182, 183, 188, Zone of Trust, 163
192, 193
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Strategic human resource management

Book · January 2018

Cam Caldwell Verl Anderson

353 PUBLICATIONS 2,343 CITATIONS

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Chapter 9 Organization Change and Organization Analysis:

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STRATEGIC HUMAN RESOURCE MANAGEMENT:

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CHALLENGES TO THE SUCCESS OF HRM

 HRM is underestimated in its complexity. As the profession has evolved in

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Although the Society of Human Resource

As organizations struggle to compete in

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 The impact of global competition. As organizations struggle to compete in an

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HRM programs and policies must keep pace

MYTHS ABOUT HRM

HRM is often underappreciated as a contributing source of organization success and

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HRM is often underappreciated as a

1) Because HRM is about people, any intelligent person can be an HRP. A

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Chapter 2: Strategic Human Resource Management:

This chapter identifies the importance of HRM as an ethically-based obligation

Chapter 3: Leadership and Human Resource Management – Insights and

Chapter 4: Job Analysis: The Building Block

Chapter 5: Ethical Responsibilities of Human Resource Management:

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Chapter 6: Recruitment, Testing, and Selection: Strategic Essentials

Recruitment, testing, and selection are critical functions in a knowledge, wisdom-,

Chapter 7: Compensation and Benefits – Strategies for Attracting and

Chapter 7 identifies the varying philosophies used for determining employee

Chapter 8: Performance Management: A Strategic Perspective

Chapter 9: Organization Change and Organization Analysis – The Strategic

Chapter 10: Career and Organizational Development: The Win-Win Priority

This chapter explains the importance of creating a win-win commitment to

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Chapter 11: High Performance Organizations and

Chapter 12: Wellness and Managing Risk –

Employee wellness has become not only a responsibility of organizations but an

Chapter 13: Honoring Employee Relationships –

Chapter 13 emphasizes the importance of creating an organizational culture that

Chapter 14: International Human Resource Management –

Chapter 15: The Future of Human Resources:

ISBN: H%RRN