Business Management Study Manuals

business growth

Diploma in Business Management


The Association of Business Executives


Diploma in Business Management

Unit Title Page v vii 1 2 4 5 6 8 12 18 22 23 29 32 41 51 53 54 60 63 68 69 70 73 75 76 83 89 100

Introduction to the Study Manual Syllabus 1 HRM and its Context People as an Organisation’s Key Resource Ways of Theorising about HRM The Tension between the Individual and the Organisation The Psychological Contract HR Professional and Line Manager Roles in Managing and Developing People The Impact of Organisational Culture on HRM The Impact on HRM of the Unpredictable Global Environment Ethics and Corporate Social Responsibility in HRM Ethics – Competing and Contradictory Theories Ethics Applied to Management Ethics at Organisational Level – Corporate Social Responsibility Equality and Diversity for All and in Every Aspect of HRM Human Resource Planning (HRP) The Purposes and Importance of Human Resource Planning The Processes of Human Resource Planning Redesigning the Organisation Changing Patterns of Work External Supply Forecasting HRP and Horizontal Integration HRP in Today’s Unpredictable Global Environment Recruitment and Selection The Recruitment and Selection Process Defining the Vacancy Casting the Net Selection Procedures Employee Induction





Unit 5

Title Performance Management – An Overview What is Performance Management High Performance Working The Contrasting Objectives of the Employer and the Employee Reward and Motivation Need Theories of Motivation Process Theories of Motivation Excellence Theory and Motivation Job Design Definitions of Job Design Empowerment Centralisation and Decentralisation Elements of Good Job Design Delegating and Monitoring Work Flexible Working Performance Appraisal What is Appraisal? Appraisal in the Context of Performance Management Different Approaches to Appraisal Typical Processes of Appraisal Personal Objective Setting Managers Need to Have Appraisal Skills Self-appraisal Continuous Appraisal Learning and Development Learning, Training, Development or Education? Value of Learning Identifying Learning Needs Theories about Learning Ways of Delivering Learning Aligning the Individual’s Needs to Those of the Organisation Talent Management The Importance of Career Development The Individual’s Contribution to Career Development The Employer’s Contribution to Career Development Self-Assessment and Keeping Aware of Career Opportunities Continuing Professional Development (CPD) Employee Reward The Elements of Reward Financial Reward Non-Pay Reward Flexible Benefits

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Unit 11

Title Discipline and Grievance Disciplinary Procedures Grievance Procedures Disciplinary Penalties Appeals Processes The Right to be Accompanied Redundancy Employee Communication, Involvement and Engagement Communication in Organisations The Communication Process Methods of Communication Effective Communication Negotiation Health, Safety and Welfare Tensions Between the Legal, Ethical and Business Implications of H&S The Size of the Challenge The H&S Responsibilities of the Employer Stress Occupational Health Working Hours Substance Abuse The H&S Responsibilities of the Employee Risk Assessment

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

We wish you every success in your studies and in the examination for this And finally … We hope you enjoy your studies and find them useful not just for preparing for the examination. The Association of Business Executives September 2008 . but also in understanding the modern world of business and in developing in your own job.

6 2.1 1.2 Describe the wide range of competing and sometimes contradictory theories about ethics Explain the importance of providing equal opportunity to all employees and potential employees in every aspect of HRM and that equal opportunity means absence of discrimination on grounds of religion. Distinguish between anti-discrimination legislation and ethical employment Discuss diversity and the need to take account of difference in employing and developing people Discuss examples of ethical dilemmas in managing people Outline the range of arguments in the context of Corporate Social Responsibility Identify the influence of the issues set out in 2. Unit Code: HRM (Dip) Learning hours: 160 Understand the principal elements and theories of HRM as they relate to the role of the HR professional and that of the line manager in managing.4 1.1 to 2.5 1. gender. leading and motivating people 1. ethnicity.3 2.5 2.2 Describe the principal theories of HRM Explain the importance of people as a key resource and examine the potential for tension between the objectives and needs of individuals and the organisation Discuss the impact on the organisation and employees of the unpredictable global environment Explain the significance of the psychological contract between organisation and employee Discuss the leadership and management roles of HR professionals and line managers in a variety of aspects of HRM Compare and contrast the impact of different organisation cultures in the context of HRM 1.1 2. and disability.5 on the development of effective working relationships with colleagues and stakeholders 2.4 2.vii Unit Title: Human Resource Management Level: 5 Learning Outcomes and Indicative Content: Candidates will be able to: 1.6 .3 1. Understand ethical issues and dilemmas which affect the management of people and the organisation’s approach to its stakeholders 2.

viii 3. Compare and contrast learning.3 4.2 4. Understand that effective recruitment is crucial to the successful functioning of an organisation 4. for example.1 4.2 Apply learning theories to individual and organisational circumstances Explain systematic approaches to training and examine the validity of such processes and the relative benefits and disadvantages of each element Examine processes through which individuals may be developed and discuss difficulties of aligning long term development of employees to short term needs of the organisation 5.2 Explain the purposes and processes of Human Resource Planning Identify and explain the relevance of specific elements of the HRP process to other aspects of HRM.3 6. development and recruitment Discuss the relevance of HRP in today’s unpredictable global environment 3. Understand the importance of Human Resource Planning (HRP) for the effective conduct of the organisation’s activities 3.2 Examine a variety of approaches to appraisal distinguishing between appraisal and “performance management” Describe typical processes of appraisal.1 3. Understand a variety of forms of performance appraisal 6.4 .1 5. the identification of skills gaps to issues of training. explain the importance of clear appraisal objectives and discuss the benefits and disadvantages of different forms of appraisal Explain the need for managers to be trained in appraisal techniques and in the reasons for appraisals Discuss the need for continuous employee self-assessment and continuous managerial appraisal 6.1 6.3 6. training and development and demonstrate their importance to the long-term success of an organisation 5. selection and induction Compare and contrast different methods of recruitment and selection Examine and discuss the validity of alternative approaches to selection 5.3 Explain the principal elements in the processes of recruitment.

attitude and behaviour) Describe financial and non-financial elements of reward.1 Explain the compatibility of employees’ needs with organisations’ needs with the values employers are rewarding.2 7. skill. Explain the principles of job design and discuss the application of the concepts to changing organisational and employee needs 8. flexible benefits and non-pay rewards Explain the application of motivation theories to the development of “ total reward” incorporating learning. working hours. Examine the benefits to employee and employer of each approach Examine methods of allocation of work and of monitoring progress towards effective and productive outcomes Describe the factors which influence trends towards flexible forms of working Compare benefits and disadvantages to employee and employer of a variety of forms of flexible working 8.2 9.3 8. job enrichment and job enlargement.ix 7.4 9.1 Describe and discuss the principal H & S responsibilities of employers. Identify and discuss the principles of Health and Safety and the benefits to organisational effectiveness of healthy and safe employees 9. in consultation and representation and in training in H & S Examine and discuss and the potential conflict between the legal and ethical requirements of H & S and the efficiency and effectiveness of the organisation 9. development.3 8. encompassing employees’ physical and psychological health in matters such as stress. monotony and abuse of alcohol or drugs Recognise the role of the employee in risk awareness and avoidance. working environment. Compare and contrast approaches to reward.2 8. recognition. competence. in adherence to policy. recognition and performance management 7. (For example. involvement and so on 7. occupational health.1 Describe the significant differences between job rotation.3 . performance.

opinion and argument. Explain the application of principles of communication to a variety of aspects of employee involvement.1 10. Apply systematic. fact. each question carrying equal marks .2 Outline typical frameworks for disciplinary and grievance procedures Discuss the value of discipline procedures as positive foundations for employee awareness of employer expectations. flexible working. grievance and dismissal 10.4 11. in discussion about reward. means of removing barriers to improvement and opportunities to agree targets Discuss grievance procedures as employees’ reassurance of equitable treatment Describe the legal framework of dismissal procedures and discuss the ethics of redundancy 10. Identify and explain the importance of individual employee’s personal development and be able to make judgements (in workbased or case study examples) about the extent to which employees should develop their career and competence in collaboration with or independently of their employer Explain the value of: 12.3 10.2 12. in appraisal in context of training or development.2 11.3 Listening and feedback during appraisal Presentation: formal.1 12.6 12.4 11. discipline or grievance Team briefings Suggestion schemes In-house corporate publications 11.1 11.x 10. Negotiation – for example.3 Employee self-assessment and self-awareness Monitoring and networking career opportunities Ensuring continuing professional development Assessment Criteria: • • • Assessment method: written examination Length of examination: three hours Candidates should answer four questions from a choice of eight. motivation and performance Explain the value of: 11. legal and ethical approaches to employee discipline.5 11. informal.

xi Recommended Reading ABE. ABE Marchington M and Wilkinson A. Human Resource Management at Work (2005) ISBN: 1843980622 . ABE Study Manual – Human Resource Management.

xii .

HR Professional and Line Manager Roles in Managing and Developing People 8 How do organisations use hr professionals? 8 How did the role of the HR professional develop? 11 The Impact of Organisational Culture on HRM What is organisational culture? What sorts of organisational culture are there? What influences an organisation’s culture? Where do I look to analyse the culture of my organisation? Can culture be changed? The Impact on HRM of the Unpredictable Global Environment Is globalisation an issue for HR? What impact has globalisation had on managers? 12 12 13 14 16 16 18 18 18 F. © ABE and RRC . D. G.1 Study Unit 1 HRM and its Context Contents A. E. C. People as an Organisation’s Key Resource To employ or not to employ – that is the question What do we mean by the word ‘organisation’? Ways of Theorising about HRM What is human resource management? What is horizontal integration? What is vertical integration? The Tension between the Individual and the Organisation Why is there a tension between staff and employers? The Psychological Contract What is the psychological contract? Is it the same as the legal contract of employment? What happens if the contract is broken? Does the contract change over time? Is the psychological contract the same as the employer brand? Can you give some examples of the contract terms? Page 2 3 4 4 4 5 5 5 5 6 6 6 7 7 7 8 B.

” “If that were true you wouldn’t treat us like this. It tracked organisational performance over a three-year period and found that where effective HR practices were not in place. beyond the bland mission statement or generic goal of financial returns. levels of employee commitment were up to 90% lower. employee commitment and operating performance. they wanted to understand more about why and how these practices influenced organisational performance – to unlock what has been termed the ‘black box’. the six-sigma methodology at Jaguar or a quality framework at the Court Service. One of the key conclusions was that the most carefully thought through HR strategy was useless. the Nationwide Building Society. PEOPLE AS AN ORGANISATION’S KEY RESOURCE “Our people are our most important resource. The University of Bath in the UK had carried out the research. which engages. which will guarantee an organisation’s success. Case Study 1 In 2003 the UK Chartered Institute of Personnel and Development (CIPD) published a study into the HR practices. At Royal United Hospital (RUH) Bath it is saving lives. At The Nationwide Building Society this is a commitment to mutuality. High performing organisations invariably employ some form of balanced performance scorecard or methodology. “Understanding the People and Performance Link: Unlocking the Black Box” confirmed the powerful relationships between HR practices. and links individual and corporate goals. staff views and performance in 11 large UK organisations. including Jaguar Cars. Research had already demonstrated the powerful statistical impact of people management practices on overall business performance. (b) © ABE and RRC . In this study. There are many other variables to be taken into account. The study. Selfridges (a large and successful London store) and Tesco (the UK’s largest supermarket chain). this demonstrates the importance of different stakeholder groups to the organisation's success. (If we can demonstrate that business success depends upon good people management and development. key decision makers are much more likely to pay attention to HR issues.) The good news is that evidence is now available and widely accepted. Other key conclusions included: (a) An organisation needs a clear direction and purpose.2 HRM and its Context A. unless it was embraced by line managers with the skills and understanding necessary to engage and motivate employees. Be it the stakeholder value model employed at Selfridges. enthuses and unites people. The bad news is that there is no one right way to manage and develop people. This 'big idea' appears essential in motivating and directing people behind the strategy of the organisation.” For as long as owners and managers have been claiming that their people are their greatest asset. HR professionals and academics have been looking for the evidence that connects the way people are treated to the success of their organisation.

where 88% of staff feel loyal and share the company's values. emerged as common ingredients in the performance-driving HR mix. Yet every worker there could tell you Jaguar's latest position in the international quality league table. coach and support their first line managers and integrate HR policies with goals and values. people need managing. Organisations can make progress very quickly. For example. Similarly. and positive perceptions of training and careers. the principle is one of added value." The high level of staff turnover in the ward had since fallen to almost zero. Now we have a strong team…you want to do the job to the best of your ability. This is the mindset of the HR manager and distinguishes it somewhat from the more workforce orientation of the personnel manager. such as flexible shift working and 360 degree appraisal. "mobilising the team with a goal. Another example is hospital nursing staff. This meant a high headcount. Strong attention to team working. To employ or not to employ – that is the question Until the 1970s it was natural. building. or did not happen. The move towards subcontracting and flexible employment practices (calling upon staff when they were needed rather than having them there all the time) made many employers look at people as a human resource. describing the change after a new ward manager worked with her HR colleagues on a range of new policies. HRM calls for investment in the people who will pay back that investment with interest. extensive employee communications and involvement. Rather like money. It is all about having a broad and integrated 'bundle'. Comments included: "I'm much more motivated now. equipment or stock. outside industries such as construction and assembly industries such as car manufacturing." "Communication is excellent now…our manager is very approachable." "When I came here it was unsettled. train. the practices employed at technology company AIT would be unlikely to go down well on the production line at Jaguar. Leadership – not at the top of the organisation but at the front line appeared to be holding back many UK organisations. These people do not always need to be employees. © ABE and RRC . at the UK supermarket retailer Tesco. for tasks to be performed by employed staff working full time.HRM and its Context 3 (c) The research confirmed that there was no universal 'best HR practice'. the atmosphere's totally different. there's training. Building management capability is a core component of the UK government tax office’s HR strategy. tailored to the needs of the organisation. motivating people". For example. They need to survey employee attitudes and commitment. some staff are regarded as a more disposable asset and offer only small returns on investment in their career. a typical section manager described their role as. Middle managers and supervisors set the context in which the HR/business performance relationships happened. assess. Once these processes are underway there is a very high likelihood of transformation. Those posts are either contracted out or regarded as peripheral. their learning or their engagement with the business.

reward and recognition – Creating structures that maximise recruitment. associates) get the necessary knowledge.    An alternative way is to look at the four HR outputs: © ABE and RRC . involved and engaged with the business. values) features of the organisation. governors. as well as not for profit bodies like charities. The word ‘organisation’ is wider and embraces the public sector. People resourcing – Getting the right number of the right sorts of people in the right place at the right time and ethically getting rid of them when they are not needed. religious organisations and professional associations. WAYS OF THEORISING ABOUT HRM What is human resource management? “Ask any three economists for a definition of economics and you will get four different answers!” The same can be said of human resource management. retention and motivation. Organisation development – Managing the hard (structure. skills and attitudes. Employee relations – Creating a workforce that is appropriately supportive. People are unique. HR processes Lead to  HR outputs Lead to  Organisational success The division based on HR processes is:    HR strategy – A long term perspective that addresses the big questions about how the best return can be obtained from the human resources available now and in the future. systems) and soft (culture. Learning and development – Creating an environment in which employees and others associated with the organisation (contractors. Performance management. B.4 HRM and its Context What do we mean by the word ‘organisation’? If we use the word ‘business’ it suggests a profit making company. But definitions are necessary. obtaining the best performance from the people available to you. owners. Dividing HRM up into its constituent parts no more captures the subject than a study of anatomy captures what it means to be human. complex and no single definition fully captures the developing and multifaceted nature of this remarkable subject.

THE TENSION BETWEEN THE INDIVIDUAL AND THE ORGANISATION Why is there a tension between staff and employers? This is an old and somewhat political question. What is horizontal integration? One of the beauties of HRM is that all of these topics integrate with each other. Without it HRM is dysfunctional. developing policies and administrative practices The Four Objectives of HRM 3. Those objectives will only be met if sufficient rewards are available. structure. If your organisation is also subject to control from outside (such as by government or by a regulator) your HRM decisions will need to be vertical integrated with that external environment too. induction also involves finding ways to engage the new member of staff with the decision-making processes of the business (employee relations). Hence HRM must be vertically integrated with top-level business decisions. Induction will involve setting work objectives (performance management) that take account of the direction in which the business is going (organisation development). Your organisation’s long term HR strategy leads to a resourcing plan for getting the people you need. C. The left wing (pluralist) approach is that the interests of owners and managers are served by getting high productivity for low cost. Employment administration Keeping the organisation within the law. What is vertical integration? The activities of line managers and HR professionals need also to be integrated with the strategy and business plans of your organisation. However. We call this horizontal integration. Staffing the organisation Sufficient numbers of the right people in the right place at the right time 4. Organisational change management Aligning culture. getting staff paid. We could go on.HRM and its Context 5 1. learning and development etc to advance the business 2. Clearly managers believing in this model will take an adversarial approach – seeing the interests of © ABE and RRC . In this model workers are seeking high rewards for as little effort as they can get away with. If an organisation’s business plan is to increase productivity by 3% next year and to reduce costs by another 3% this will probably need to be reflected in the way performance is managed and in pay settlements for next year. Organisational performance Engaging and supporting the workforce so that people make their best contribution For these objectives to be met HRM must be integrated horizontally and vertically. Recruitment (part of people resourcing) overlaps with induction (learning and development).

(2002). Although it may not be legally enforceable. It is usually the same as the organisation. therefore. D. offer only a limited and uncertain representation of the reality of the employment relationship. THE PSYCHOLOGICAL CONTRACT What is the psychological contract? Although first used in the early 1960s. It is not the shareholders. The latter will. London: CIPD) It is often expressed as the unwritten understandings between the two parties. tells employees what they are required to do. It may be more influential than the formal contract in affecting how employees behave from day to day. and Conway. employee and employer. in many cases. it comes to be tested in a court. The ‘employer’ is the body that makes an offer of employment. a court may be influenced by it in reaching a judgement. The employee may have contributed little to its terms beyond accepting them. the term became popular in the early 1990s. the employer. of what their mutual obligations are towards each other' (Guest.  So are owners the same as managers? Not usually. the interests of both sides are the same – the prosperity of the employing organisation. to meet their side of the bargain and what they can expect from their job. not for profit organisations are usually ‘owned’ by a board of trustees and public bodies are owned by the state. (Are you a unitarist or a pluralist? What are the views of the people you work with?)  By ‘employer’ do you mean ‘owner’? Good point. who will remain answerable to the owners. Such understandings are usually informal and imprecise and may be inferred from:   History Statements made by either side. It has been defined as: ‘The perceptions of the two parties. The psychological contract on the other hand looks at the reality of the situation as perceived by the parties.g. © ABE and RRC . However. e. Is it the same as the legal contract of employment? No. effectively. the psychological contract contains both promises and expectations. The important thing is that these are believed to be part of the relationship. Like all contracts. It is the psychological contract that. Pressure at work and the psychological contract. during the recruitment process or in a performance appraisal. DE. the right wing (unitarist) approach suggests that prosperous employers produce prosperous employees and therefore.6 HRM and its Context the two sides of industry in opposition. Shareholders own public companies. the trustees or the state that runs them day by day – that is the job of managers. N. The nature and content of the legal contract may only emerge clearly if and when.  So are the managers the employers? Not as individuals – they are usually employees themselves. We ought to distinguish between the owners of an organisation and those who manage it day by day. It is the organisation that does the hiring of labour and is.

Markets. Organisations have downsized and delayered: Individual employees have to do more with less. where employees do not receive promised training. quality and service standards are constantly going up. Does the contract change over time? Yes. where employment prospects deteriorate or organisations are affected by mergers or restructuring . more jobs are being outsourced. the psychological contract is a small part of that overall brand. it will be influenced by:  The nature of jobs: More employees are on temporary contracts.for example. The employer brand is the bigger image of the organisation held by those inside or outside the organisation.     Is the psychological contract the same as the employer brand? No. for instance. For example. this has a negative effect on job satisfaction. or performance reviews are badly handled. Managers cannot always ensure that commitments are fulfilled . commitment and on the psychological contract as a whole. As such. It is no longer possible to guarantee lifelong employment to anyone who will simply stay out of trouble. technology and products are constantly changing: Customers are becoming more demanding. tight job descriptions are out and functional flexibility is in. new methods of managing are required. in the eyes of employees. What happens if the contract is broken? Where an employee believes that management has broken promises or failed to deliver on commitments. In many countries there is an end to the concept of the traditional job for life.but they may still take some blame. © ABE and RRC . Technology and finance are less important as sources of competitive advantage: 'Human capital' is becoming more critical to business performance in the knowledgebased economy. Traditional organisational structures are becoming more fluid: Teams are often the basic building block.HRM and its Context 7 It is often summarised as the expectation that both sides will act fairly. This is particularly the case where managers themselves are responsible for breaches. in a trustworthy fashion and deliver on its promises.

The degree to which it is delegated to line managers will vary from country to country. to attract high-quality recruits. It is always good to remember that the way you have experienced HR is not the way it is organised everywhere else. The most important aspects of the contract were found to depend on the investment made in the employment relationship by both the employer and employee. Employers are expected to provide: Pay according to performance Training and development Promotion opportunities Recognition for innovation or new ideas Feedback on performance Interesting tasks An attractive benefits package Respectful treatment A pleasant and safe working environment Reasonable job security. The employee expected high and individual human contact and professional development. there was a growing breach in the areas the employer was having the greatest difficulty providing (e. Case Study 2 The government of the UK was striving to make its National Health Service (NHS) an employer of choice. by taking on a colleague’s work Be courteous to clients and colleagues Be honest Come up with new ideas. for example.8 HRM and its Context Can you give some examples of the contract terms? Employees are expected to: Work hard Uphold company reputation Attend and be punctual Be loyal and honest Work extra hours when required Develop new skills and update old ones Be flexible. Employee satisfaction with this was good. from sector to sector and even from unit to unit within one organisation. However. A study of health professional staff looked at their psychological contract to see whether it was likely to enhance the employer brand.g. pay). Despite this. © ABE and RRC . the overall health of the psychological contract was classed as good. HR PROFESSIONAL AND LINE MANAGER ROLES IN MANAGING AND DEVELOPING PEOPLE How do organisations use HR professionals? Managing people is a shared activity and many people play a part. E.

It is also aims to inform and shape HR strategy. But line managers are busy and cannot be administrative experts. Highlights to general managers the HR issues and possibilities they may not see. learning and development. influencing strategy and steering its implementation. diversity and compliance. Low-cost but effective HR administration. Delivers competitive business advantages through HR innovations.the HR Strategic Business Partner Model. Strategic Partners A small number of HR professionals working closely with local business managers. Shared Services A single and sometimes large unit that handles all the routine transactional HR activities for the organisation. with emphasis on vertical integration and making best use of the available human resource – added value HR (Based on: Tyson and Fell (1986)) It became increasingly common during the 1990s for transactional HR (the left hand box) to be devolved to line managers and even the individual employee. The task of strategic partners is to ensure the business makes best use of its people. So a new model became increasingly popular in the early twenty-first century . © ABE and RRC . payroll. talent management. Typically: resourcing. advice on the simpler employee relations issues. absence monitoring.HRM and its Context 9 It is helpful to separate: Clerk of works HR Transactional HR Dealing with individual casework and predominantly administrative Contracts manager HR Managerial HR Where HR is heavily formalised and rule-bound and emphasis is on troubleshooting or staying on the right side of employment law (often strong in a public sector or unionised environment) HR Architect Strategic HR Creative and innovative HR. employee engagement. find out about conditions of service etc. so that HR meets organisational needs. apply for promotion. proposed by David Ulrich in the USA in 1997. get a pay slip. Centres of Excellence Small teams of HR experts with specialist knowledge of key areas of HR. Typically reward. if there was access to an intranet containing an employee portal via which the employee can manage their leave. change their hours of work.

where HR staff are trained to develop generalist knowledge. training and employee relations experts. HR director at beauty products manufacturer Elizabeth Arden. making it more valuable to chief executives. and had not resulted in strategic thinking. those critical of the model said all too often it had only involved a change in title. © ABE and RRC ." she said. Case Study 4 Job Advertisement HR Business Partner .10 HRM and its Context Case Study 3 From Personnel Today magazine. "This encourages a trust relationship between staff and their HR partner. 28 January 2008 BACKLASH AGAINST HUMAN RESOURCES BUSINESS PARTNER MODEL AS MANAGERS QUESTION RESULTS A backlash against the much-feted human resources (HR) business partner model appears to have begun after research revealed that more than half of managers were unconvinced by the structure. Her company is moving towards a more traditional structure. However. Only 47% of the managers polled by research firm Roffey Park said that business partnering was in any way successful in their organisation. Almost half of the 479 managers polled had business partners in their organisation. and "Greater conflict within HR" in the survey. said she disagreed with any model splitting HR professionals into recruiting. The business partner model has been hailed as the way forward for the profession since HR academic Dave Ulrich first wrote about it in 1997. It was supposed to modernise the function. while the rest were undecided on the merits of the increasingly popular system.offering guidance . Our client delivers an HR service focused on developing the skills of the managers. with comments such as: "Too much reliance on the intranet". a chance to join an efficient organisation who have a modern HR strategy that works within this huge global organisation. The overall objective of the HR team is to skill managers in all the basic areas of HR . but also allows department heads to discuss their issues with one HR partner rather than three. Gabriele Arend. and is now the most common structure. so they are truly capable of managing every aspect of the employee lifecycle . according to the Chartered Institute of Personnel and Development (CIPD).from an unhappy team member.but not hand holding as happens so often in less sophisticated organisations. One in four said the model was ineffective.Various locations At last. through to under performance to career development and beyond.

 Industrial relations In the 1960s improved communication and collaboration saw the increased growth in the power of trade unions as a counterbalance to the powerful employer – in both the public and private sectors. change management and keeping the employer on the right side of the law. What should be the respective contributions of the HR professional and the line manager in recruiting someone for that manager’s unit? Why have you split the responsibilities between the two parties in that way? Is there any other way to split the responsibilities? How did the role of the HR professional develop?  Welfare As a result of the industrial revolution.HRM and its Context 11 HR professionals at middle and senior levels in organisations are increasingly seeking professionally qualified recruits. to make best use of the welfare provisions available to workers and their families. low productivity meant low job security and management seized back the power (with some drama. The result? Personnel managers became human resource managers and clearly identified themselves with the interests of the employer. 2. Government direct labour was high. that society developed a need for welfare workers. then. The relationship between employer and employed was often adversarial and the power of the trades union was high. The emphasis was on industrial relations – keeping the workers at work. By the start of the new millennium the key contributions of the HR professional became enhancing human performance. Personnel managers were doomed to extinction unless they found a new role. They were managed accordingly. The job for life culture disappeared. Exercise 1 The exercises in this manual are designed to encourage you to think about particular ideas or approaches to HRM in the light of the preceding text. Competition increased. 1. People management professionals began to be looked upon as neither management nor unions – they were the independent arbitrators between the two and the title ‘personnel manager’ was adopted. 3. © ABE and RRC . humans in organisations were often looked upon as adjuncts to machines – doing the things that machines were not yet able to do. In Europe this coincided with a mushrooming of employment legislation. There are no right answers (and none provided) – just think about the questions and perhaps make some notes about your response. such as in the UK miners’ strike and in the newspaper printing industry). ‘People professionals’ were engaged in largely welfare roles – representing the interests of workers. which naturally fell to the new breed of HR professional.  Human resource management The 1980s saw a dramatic shift. along with the need for an independent arbitrator between the employer and the employee. Little surprise. This continued through the two world wars. That is probably one of the reasons why you are pursuing an ABE qualification.

People can instinctively get a “feel” of an organisation that is often difficult to define but represents some intuitive “gut reaction” to the nature of the business. The culture of an organisation can be observed in the way in which it is structured (e. Through contact with a particular culture.” Organisations possess some of the ingredients of a subculture. acquire values and learn habits of behaviour and thought. knowledge.12 HRM and its Context F. in the way authority is distributed (e. Outside commentators will often say that a progressive business has a “buzz” about it or a conservative one feels “stuffy and formal”. like Tom Peters. They have distinctive shared beliefs and values that sometimes translate into policies and practices. THE IMPACT OF ORGANISATIONAL CULTURE ON HRM Management experts are placing increasing importance on the study and understanding of what is sometimes termed ‘organisational’ and other times ‘corporate’ culture. customers and its competitors) perceive that organisation. authoritarian or employee empowered) and along the lines of the analysis described below. refers to the deep-seated values of an organisation as they are manifested in the ways in which people are expected to behave.g. Organisational culture affects organisational climate. centralised or decentralised). Excellence theorists. How customer friendly is it? How concerned is it with the welfare of its employees? To what degree does it empower its employees? Culture becomes apparent through many observable features of an enterprise:               Formal or informal structure Centralised or decentralised decision-taking and whether decisions are taken by committees or individuals The extent to which innovative thinking is promoted and encouraged Freedom of various levels of staff and management to take decisions and responsibility (empowerment) Openness of communications and even whether people are on first name terms Layout and appearance of the factory or office Formality of dress Leadership styles adopted by managers Educational attributes and intellect of employees Acceptance or adversity to risk Attitudes to teams Attitudes to training and development Attitudes to change and particularly. then. Organisational culture. technology Commitment to service and quality. place strong emphasis on the part played by organisational culture in influencing the success or failure of organisations in their pursuit of excellence. What is organisational culture? Culture may be defined as “the sum total of the beliefs.g. © ABE and RRC . Organisational climate refers to the ways in which people involved with the organisation (its stakeholders. individuals learn a language. attitudes of mind and customs to which people are exposed in their social conditioning.

during rapid change the roles have to be redefined and the person has to adapt or move on. procedures and practices that are formally laid down. unless they happen to find that their talents fit into progressively more attractive “boxes” as they attempt to move up the organisation. These may not apply through the whole business – different constituent parts of the business may have differing cultures. The workers will rely on what has gone before. Charles Handy identified four organisational cultures.HRM and its Context 13 As all these features contribute to the culture of the organisation. An ambitious person can find the role culture frustrating. as they cannot control everything. with a highly structured organisation set out below. While things remain the same. the God of Reason. procedures for communications and other internal processes. Fine examples of role culture are found in the British Civil Service and in the European Commission. as the basis of appointment is the ability of the individual to perform that role. Building on an article by Roger Harrison in 1972. the manager in this culture is the source of all power. procedures and policies. Role culture enterprises are likely to have a narrow band of senior managers at the top. What sorts of organisational culture are there? There are many different ways of analysing culture and several popular models. (a) Power Culture Handy gives names of Greek gods to illustrate each of the cultures. The role culture is represented as Apollo. which works by logic and reason. Despite power emanating from a central source. © ABE and RRC . there may be a limited amount of formalisation. organisations that fit this stereotype can find it extremely hard to adjust to changes in the external environment. A textile company will have a different culture to an IT company. In smaller businesses. Role culture is at its strongest during a period of little change. Like Zeus. The role of the person is more important than the person in it. the individual is comfortable and secure in the role culture. The role culture is typified by policies. it must follow that each will be unique to its particular organisation. the power culture can work well. as too are job descriptions. The power culture is attributed to Zeus. (b) Role Culture This is a quasi-bureaucratic culture. It typifies the owner-manager who initially founds the business and takes all the decisions and all the risks. the power of key decision-takers is likely to diminish. As the organisation is not rigidly structured. It is perhaps less obvious that the organisational culture in Sainsbury’s will differ from that of Tesco. However. it can often adapt quickly to change. each constituent part knowing its function. although its ability to do so efficiently depends entirely on the quality of those few key individuals trusted with decision-taking power. rules. As these organisations grow. Authority is clearly defined.

The task culture is very different to the role culture in that the former is flexible and changeable to suit the job in hand. certainly in their early days. If the consultant wants to specialise in “training the trainer” courses. for example. Many large accountancy and consultancy firms now aspire to the task approach. This is the opposite of the more rigid. © ABE and RRC . in which the individual is the main focus. for accountants employed to carry out auditing duties to be assigned to different teams while an audit is under way. In the case of Virgin. depending on what week it is. or replaced altogether. This culture is found in diverse businesses such as some solicitors’ offices (where the principals choose their own specialisms and interests if they can). Person Culture This is an existential culture. Handy argues that modern organisations are marked by the change from role culture to task culture. but two examples are The Body Shop and the Virgin Group. bureaucratic role culture. Handy chooses Dionysus as its symbol. by project or task forces. The emphasis here is on completing the job. The employee will.14 HRM and its Context (c) Task Culture The task culture is one based on jobs or projects to be carried out. therefore. Handy states that it is rare to find organisations with this culture. if a self-employed training consultant likes working in Scotland. you find diversity of interests today that could never have been predicted. the Greek god of the self-orientated individual. it is perhaps easier to identify those factors that will influence the culture of an organisation and hence the structure it adopts to pursue its objectives. Thus. he may well try harder to develop business in Scotland to suit his own purposes. The most difficult issues for managers in the task culture are:     (d) Control of work Coordination of resources Achieving economies of scale Budgeting. It tends to thrive when:    Markets are rapidly changing or volatile Speed of response to the customer is important Product life cycles of products and services are short. The person culture is about being able to “do one’s own thing”. as getting effective performance is more important than power or individuals. It is quite usual. small businesses and small consultancies. Task culture can be ideal when the enterprise has to adapt quickly to changes in the external environment of its market place. It is best illustrated by the matrix organisation used in some companies. this is where the main focus of his marketing efforts will lie. What influences an organisation’s culture? Whilst it is difficult to tie down a meaningful definition of a culture. The organisations were founded on the idiosyncratic interests of the founders. have different colleagues and a different boss. where a line and staff organisation structure is complemented. The organisation and its structure exist to serve the individual’s objectives and aspirations. Handy apportions no Greek god to this culture.

© ABE and RRC . attitudes and beliefs. Environmental change can critically affect organisational culture. In turn. the person culture may be vulnerable if the markets move against the interests of the decision-taker. on the other hand. the role culture is difficult to sustain. If. where the business is broken down into divisions or semi-autonomous units. If change is swift and relentless. Similarly. (c) Technology Companies that employ technology in their production processes generally have to sacrifice non-routine tasks for routine ones. there is a standardised environment. it is quite likely that the task culture and even the person culture will be evident. if one or just a few very powerful individuals lay down goals and objectives. this too suits role culture. this might suit a role culture. In decentralised organisations. particularly where there remains a founding family involvement or a tie-in to some particular set of values. the power or task cultures may apply. The power culture is best equipped to cope with external threats in the environment.HRM and its Context 15 (a) Origins The founding principles of the organisation will have a strong impact. provided the select group of decision-takers can complement their power with effective decisions. as the tasks are different to suit different segments. (f) Human resources People are the most diverse resource of all to the organisation and so the culture that suits best will depend on personal values. the power culture is likely to apply. routine operations are best suited to the role culture. on the other hand. Some of the multinational accountancy firms have moved the same way. If the technology is expensive and needs close controls and supervision. (b) Size The organisation will tend towards adoption of the role culture if it is big and cumbersome. There are six such sets of forces:       Political Economic Social Technological Competitive Demographic. (e) External environment The external environment is made up of those forces which impact on the organisation from outside. Diversity in the external environment can lead to a task culture being employed – get the job done. If. Some US aerospace companies have been able to move in the direction of the task culture with widespread applications of matrix organisation. (d) Goals and objectives Obviously. the company employs technology for short job runs and individual batches of output. In such a business the person culture would be almost impossible to adopt – the structure tends to be more formal.

centralised or decentralised. will prefer the person culture but may also flourish in a task culture and even a power culture. Analysis asks whether the culture is proactive (anticipating and planning for change) or reactive (coping with change as and when it arises (h) Cultural climate Cultural analysis pays particular attention to the nature of the cultural climate. (d) The nature of leadership and the distribution of authority These are key indicators of the type of culture in an organisation. (e) The values of the organisation Values can be tested. authority and decision-making may be concentrated at the top or spread downwards to teams working close to customers by the empowerment of employees. (f) Entrepreneurial spirit The entrepreneurial spirit of the culture is revealed by the degree of enterprise. innovation. competitiveness. is a useful indicator of organisational culture. i. © ABE and RRC . Is it clear and well defined. Culture management may have to bring about change in some culture elements.16 HRM and its Context The individual who prefers the job tightly defined and prescriptive will almost certainly prefer the role culture. This puts particular focus on the ability to cope with change. (g) Receptiveness to embrace change An important cultural quality of an organisation is its willingness to embrace change arising from changes in its environment. in practice. while reinforcing other elements of the existing culture.e. Cultural climate elements pose questions whether the organisation is friendly or formal/distant. strong on conceptual ideas. how employees and other stakeholders view and evaluate the organisation. So. bureaucratic or relatively free of administrative rules. is characterised by conflict or co-operation between teams and departments. Can culture be changed? The function of culture management is to foster the most appropriate pattern of the culture elements revealed by analysis to achieve organisational goals. will the person who wants an undemanding and repetitive job. flexibility and drive for excellence of the organisation. individual thinker. is it communicated to and embraced by all levels of the organisation? (b) Behaviour patterns Do actual patterns of behaviour match the organisation’s expected patterns of behaviour? This analysis can apply to the interaction between the organisation and its stakeholders. too. The expressive. Leadership may be authoritarian or democratic. by assessing the responsiveness to stakeholder needs and expectations. or in some cases the task culture. Where do I look to analyse the culture of my organisation? (a) Mission Statement This is the starting point of culture analysis of the organisation. is people oriented or task oriented. creative. (c) The structure of the organisation Whether the structure is flat or tall.

i. stressing quality and meeting market requirements. Describe their respective cultures. 2. 3. This means that all the cultural elements must be following a similar style and direction. usually delayering (stripping out layers of management) and empowering teams with decision making authority in their work situations. The structure of an organisation should be simple and flat. making contributions through empowerment and being valued for their contributions. Schein points to the importance of leadership when managing cultures. and what forms of cultural behaviour leaders reward e. Excellence theorists have their ideas of what makes an excellent organisational culture to inform modern culture management. good leadership and clear vision should be customer oriented. what leaders of organisations.e. Exercise 2 Think of three very different organisations with which you are familiar and then consider the following questions. Organisational cultures should be proactive. Excellence supporters argue that the culture of the work place should encourage employees to thrive and develop. what earns promotion and higher status in a given organisation. The culture must be flexible enough to cope with rapid changes in the environment. departments or teams set out to measure and control. which builds up over time. Organisational culture can be shaped by what elements or behaviour leaders rate as important. Why have they developed those cultures? What pressures to change are there? © ABE and RRC . It is not always easy to combine coherence. Heckman and Silva follow Schein in stressing the crucial role of leadership. listening to employees and customers. Organisational culture should have a focus on what the organisation does best. Culture should encourage vision so that everyone knows where the organisation is heading. People are an organisation’s most important asset. 1.g.HRM and its Context 17 Excellence theorists argue that successful organisational cultures must have two key characteristics:   The culture must be coherent. not just concentrating on the present. i. but core values like quality and customer care should be universal. anticipating change and getting to the source of problems before they become critical.e. Culture can be changed for the better by re-engineering. Managers should be out and about in the organisation talking and particularly. with flexibility that implies change.

The most vivid illustration of global markets is in money business. the existence of trading blocs such as the European Union was seen to favour only the select few member countries to the detriment of outsiders. Many services remain subject to trade restrictions and others will never cross international frontiers due to their very nature. The global market for labour has developed slowly. readily identifiable by consumers in virtually every country. stated that “national economies and cultures are dissolving before the great flows of trade. Work will go to where staff are competent and where the costs are lowest. customs and attitudes. finance and information. unconstrained global markets for capital and goods allow companies to allocate resources to maximise benefits for consumers”. their products tend to follow the requirements of each single market place. have overtaken manufacturers in Europe and America.. Is globalisation an issue for HR? Globalisation is the process by which national barriers are breaking down in the market within which organisations operate. Coca Cola is a truly world brand. On the other hand. multinational companies have been with us for some time. although the various markets for money and financial products and services is not yet a perfect one. The global market is an aspiration rather than a reality. where labour costs are significantly lower. Initiatives by the World Trade Organisation (formerly GATT) constantly improve the prospects of free trade. In the twenty first century it is the quality and added value of your people that will determine whether or not your organisation will be successful. Whereas once. The move towards a global market place has been accelerated by the growing acceptance that barriers to trade are essentially unproductive and serve only to reduce the level of demand for goods and services overall. Managers in such companies have to be aware of the different dimensions brought to their organisations by the home and host countries’ sets of values.. © ABE and RRC . is an acknowledged global financial centre. the increase in cooperation between different nations and trading organisations is gradually breaking down the barriers. the EU (BMW).18 HRM and its Context G. Producers in Asia. call centres have moved to India. Japan (Mitsubishi) or Malaysia (Hyundai). This does not automatically mean that the global market is with us yet. Some companies already regard the entire world as their target market. In Britain you can buy a car made at home (Rover). though it is unlikely that this will ever mature to a significant level. writing in 1992. business processes can be copied anywhere in the world. as well as inhibit customer choice. given immigration controls and different international emphases on skills and other technical requirements. THE IMPACT ON HRM OF THE UNPREDICTABLE GLOBAL ENVIRONMENT In a global economy. The UK and more specifically London.. This supports the view that the world is becoming a single market as if borders did not exist. What impact has globalisation had on managers? Although globalisation is a modern trend. Work requiring little training or specialist skill will go to the lowest cost operators. the giant life assurance industry has few global players – even when companies such as Zurich Insurance and Allianz work across frontiers. Different institutions know the considerable advantages of trading across international frontiers as well as the many drawbacks. whilst for others this will not be so for many years. For example. Paul Hirst. Likewise.

the lack of fulfilment of Maslow’s lower order needs. Some EU countries have personnel policies that are more liberal than those in the UK. may predominate. etc. Internet. advancement and meaningful.HRM and its Context 19 If the entire world is the market place. In France it is much more acceptable to “speak one’s mind” before staff than in the UK. partly due to legislation arising directly or indirectly through the Social Chapter. then organisation structures must inevitably become more complex. This is partly due to different company processes but may also be explained by the fact that the two relevant groups of managers think in different ways.  Decision-taking Different countries have entirely different cultures. the manager can often focus on recognition. videoconferencing. respond to different motivational stimuli. interesting work as motivators. it is logical to withdraw the remuneration. One major difference between UK and Japanese companies is that the UK ones get into action relatively quickly on a given problem.) must increase. In developed countries. whereas the Japanese spend significantly longer forming a consensus about what the problem actually is and formulating alternative courses of action. The potential for face-to-face communications must recede. Perhaps Herzberg’s aspiration to lower quantity but more quality in business communications will become a reality.  Communications Globalisation has serious implications for the way different parts of the enterprise communicate with one another. What a French person would regard as a frank discussion might be taken as an insult by a British worker. For a start. financing and marketing.  HR Policies and Practice Security of job tenure is extremely variable from country to country. There are many aspects of this that affect the manager.  Motivation People from different cultures. or the attitude would simply be that as the person had not worked. A white-collar worker such as a teacher will get paid if they take a day off due to illness. there has been much benefit for those UK companies that have imported the Japanese quality circles concept and adapted it for their own use but it is impossible to transplant an entire system successfully from one country to another.  Leadership Styles Some countries have much more didactic (instructional) approaches to leadership. For example. In the UK we are taught to “consult before you decide” whenever possible – elsewhere this may not be so. it follows that this market must be observed not only in the context of the final product but also in terms of resources for production. whilst dependence on more indirect methods (fax. so it is inevitable that decision-taking processes will vary across frontiers. Reporting lines may become extended and there must certainly be less regular direct contact time between different parts of the enterprise. © ABE and RRC .  Organisation Structures If companies are to operate globally. too. So. there would be an automatic deduction of one day’s salary for the sick leave. In poorer countries. are terms and conditions of employment. as the person is expected to insure against loss of pay due to sickness. e-mail. In many countries. such as basic physiological needs and safety security needs. the UK is a Christian democracy whilst the Japanese are Shinto Buddhists. understandably.

presents managers with the opportunity to use their skills in a wider context but with this come inevitable new management issues to resolve. set out in the first study unit of the course. The global market.  Planning Planning is made more difficult in a global market due to such issues as: (i) (ii) (iii) (iv) (v) (vi) Greater risk Less knowledge of local conditions Lack of market intelligence Currency risk Different inflation rates Differing worker expectations of the enterprise. just as the French reserve the right to switch from “vous” to “tu”.  Geographical Dispersal Dispersed production and marketing bring new challenges to the manager. therefore. the manager must be aware that cultural differences are highly important. In some cases a good will be produced in one country. Lawrence and Lorsch point out the extreme difficulties of harmonising the efforts of generalist managers and specialists in a single country – this problem multiplies across frontiers. Polish managers are extremely direct in manner but highly status conscious – they also expect to tell the person with whom they are communicating when first name terms are acceptable.  Technological Transfer Technology is a critical variable in establishing competitive differential advantage but are the technologies employed in different countries compatible? An otherwise straightforward implementation programme in a single country can be complicated by such problems. company statutes. employment and marketing.  Costs If a company produces and markets its products on an entirely domestic basis. Can you draw any conclusions from the results? © ABE and RRC . making allocation decisions less straightforward. Exercise 3 Search ‘globalisation HR’ on the Internet. Personal presentation skills are very important to American managers. the relative costs of labour and capital are known and choices can be made. Japanese managers instinctively “weigh up” the status of the person with whom they are communicating before selecting the words they use. Virtually all of them are affected in this situation. posing control and coordination problems for the manager.  Legal Environment Each country has its own laws in respect of manufacturing. Look at Fayol’s mechanics and dynamics of management. processed in another and then exported back to the original country. etc. The trade-off between these costs may be different in other countries.20 HRM and its Context When communication is face-to-face.

21 Study Unit 2 Ethics and Corporate Social Responsibility in HRM Contents A. Ethics – Competing and Contradictory Theories What do we mean by ‘ethics’? Who must behave ethically? To whom are organisations accountable? What is the significance of the three stakeholder groups? What is stakeholder theory? How should we act when stakeholders want different things? Can’t one stakeholder group sometimes want opposite things? What is an ‘externality?’ Ethics Applied to Management How do managers make decisions ethically? Aren’t managers torn between their best interests and those of the company? How do we develop business ethics? Ethics at Organisational Level – Corporate Social Responsibility What is the social responsibility debate? How can we improve our Corporate Social Responsibility? How do we combine our legal and our social responsibilities? What relevance does CSR have to HRM? What is whistle blowing? The case for whistle blowing The case against whistle blowing Equality and Diversity for All and in Every Aspect of HRM Aren’t all HR professionals discriminating all the time? So who experiences unfair treatment? How is discrimination relevant to employment? What behaviours are outlawed by the legislation? What constitutes less advantageous treatment? What is harassment? What is in the equal pay legislation? All discrimination is obvious isn’t it? Who can bring a claim? Page 23 23 23 23 26 27 28 28 29 29 29 30 31 32 32 36 36 37 37 40 40 41 41 42 44 44 44 44 45 45 46 (Continued over) B. C. D. © ABE and RRC .

fair treatment or diversity? Equality and diversity – in policy and practice How do employers manage equality and diversity in the workplace? 46 47 48 49 © ABE and RRC .22 Ethics and Corporate Social Responsibility in HRM What is a disability under the legislation? Discrimination. equal opportunity.

an organisation's activities. rather than announce a larger share dividend. shareholders must receive a return on their shares and. We can consider stakeholder groups under three main headings – internal. In the competitive labour market. (b) Employees Irrespective of the kind of organisation. the interests of the employees must be considered. (a) Shareholders Being the owners of the company. Employers. of course. it is generally acceptable for you to draw staff from other employers but it would not be acceptable to draw them in with promises that you were not then willing to fulfil. However. have certain statutory obligations to safeguard the interests of workers (e. future borrowing problems for the company and difficulty in achieving plans. nationally and locally.g. ‘Do unto others as you would have them do unto you. To whom are organisations accountable? Managers have to reconcile their sometimes-conflicting responsibilities to a number of different stakeholders. It is significantly broader than the common concept of choosing right from wrong and what is considered ethical will vary from country to country. for example. And in that they are expected to understand and follow the moral code prevalent within society – even if this is not expressly stated in law or company policy. we can say that both expectations will be in general agreement with the company’s general aim. and Requirements for a return on their original investment. conflict arises where.Ethics and Corporate Social Responsibility in HRM 23 A. the firm wishes to reinvest a large proportion of the profits to finance future investment for expansion. In a general sense it takes the Biblical dictum. Hence ethics are always changing. and original objectives may be obscure. In recent years many firms and governments have © ABE and RRC . As a rule. ETHICS – COMPETING AND CONTRADICTORY THEORIES What do we mean by ‘ethics’? Ethics is about morality . there must then be rules of ethical competition.’ Whilst this is limited in business where there is the element of competition between organisations. the market value of their shares must appreciate. for example. One problem here is that in large business enterprises the gap between shareholders and the company itself has grown wide. or can be affected by. Owners and managers hold the key responsibility for determining and enforcing the acceptable standards within their organisations. eventually. These moral obligations will be influenced by prevailing social attitudes that may be as compelling as the legal obligations. The only way to do this is to achieve a profit large enough to satisfy shareholders and at the same time allow enough money to invest in the future – clearly not an easy thing to accomplish! If the shareholders’ interests are not satisfied then there may be a loss of financial status. Who must behave ethically? It is usually accepted that governments have a primary role to set the scene for society internationally. We can state what shareholders expect in terms of:   Requirements concerning capital growth.right and honourable conduct. a duty to promote safe working practices) but moral obligations also exist. connected and external stakeholders. A stakeholder is simply a person or group of people who affect.

consumer groups have been established which monitor the workings of the above acts. Secondly. The interests of employees are. Managerial decisions have to reconcile the customers’ interests with those of the organisation. The well being of these external suppliers is therefore vital. and the Consumers’ Association. In modern societies a movement has developed which sets out to guard and promote the interests of consumers against what is seen as the considerable power of the large firms who sell goods and services to the public. telecommunications. and as such managers have to take account of it. on the safety of goods for their users. In the long term. Competition tends to preserve the objective of customer satisfaction in firms to a far greater degree than would otherwise be the case. (d) Customers There are very few true monopolies.24 Ethics and Corporate Social Responsibility in HRM recognised a moral obligation to give workers a say in the running of the organisation or a share in the profits. largely due to the prevalence of substitute products and brands. Both sides have a duty to behave reasonably and responsibly. There are also independent consumer groups like the Citizens Advice Bureaux.   Consumerism has become an important feature in the organisational environment of advanced societies. and against extortionate rates of interest being charged for credit. rail and energy suppliers. The basis of the legal relationship between an organisation and its employees is that of a contract of employment (a voluntary agreement into which employer and employee freely enter under the terms of common law). against wrongful or misleading advertising. by offering long-term contracts of sale. employees should give faithful and honest service. However. organisational objectives may be achieved only when the enterprise is able to satisfy the needs of sufficient customers to generate adequate sales revenue. often channelled through trades unions. (c) Suppliers Most organisations depend upon an external source of supply and all business enterprises depend upon outside markets. In addition. on their correct description. Sellers are seen as highly organised with large resources and the services of experts to help them market their products.  Firstly. There has also been a considerable growth in consumer protection during recent years. The customer clearly desires low prices. and which promote further protection for buyers of goods and services. publicly funded regulators have been established to promote fair-trading by formerly state-owned or near-monopoly enterprises such as mail. three broad developments have taken place. Employers that resist such moves may find it difficult to recruit suitable staff. consumers are seen as unorganised and lacking professional and expert advice. of course. Thirdly. There have been examples of conflict between firms and the consumer movement over the © ABE and RRC . conflict occurs between customer expectation and the price and quality of the goods being offered by the firm. In order to redress the balance. Many enterprises will take positive measures to ensure that their supply lines remain intact.g. This movement is known as consumerism. It is argued that the need for such a movement arises because of a perceived imbalance between sellers and buyers. there is a legal framework to ensure the fair treatment of employees at work and to prevent discrimination on various grounds. conflicting with the profitability objective. e. legislation has been enacted to protect consumers by providing protection for the consumer on the quality of goods. on fair guarantees. This emphasises the mutual interdependence of commercial bodies.

The long-term effect of such actions may well be an improvement in profitability. However. nevertheless. The objectives are that customers should get what they pay for and be able to have redress and compensation if they do not. 1. even beyond the boundaries of legal requirements. distributed and sold.g. Many firms take great care in the provision of anti-pollution plans. the Internet or TV news for items reporting on unethical behaviour by organisations. This may be thought of as an obligation to the government of the day. wise management will take account of consumer ideas and use them to guide future product/service developments and organisational policies. 2. or nature of. the trading standards departments of local authorities. Organisations often have training and development policies to assist in personal satisfaction. e. The legislation is rooted in common laws that enable customers to receive fair dealing. (f) Local communities Within society as a whole organisations often have a significant impact upon the local communities in which they trade – where products are grown. The legal responsibilities of an organisation to its customers fall into two broad areas: firstly. Managers should demonstrate awareness of responsibilities to society in general. (e) Society Current belief is that all organisations have an obligation to contribute to the well being of the country’s economy and society as a whole. Who has determined what is right and wrong? What pressures are there to regulate an organisation’s behaviour? © ABE and RRC . Exercise 1 Look at a newspaper. secondly. policies of this kind indicate an acknowledgement of general social needs. These legal responsibilities to customers are governed by legislation and enforced by institutions.Ethics and Corporate Social Responsibility in HRM 25 necessity for. processed. to ensure fair dealing. In employment terms this means that employers have an ethical relationship with residents within the travel to work areas of their organisations. consumer proposals or demands. The media (both within an organisation but more particularly within society as a whole) have an ever-increasing role in helping society answer its ethical questions and reporting on alleged unethical behaviour by organisations. to provide consumer choice. but expectations now extend to all types of organisations.

Participation in decision taking through exercising rights to attend the Annual General Meeting and vote. The organisation’s bankers will have specific concerns relating to the financial performance of the company. The result was that many of Enron's debts and losses were not reported in its financial unprecedented and disastrous event in the financial world. so that any short and long-term financing will be repaid with the minimum of risk. Enron filed for bankruptcy and the scandal brought down their accountancy firm also. In addition. Later on it was discovered that Enron’s lack of ethics in the financial domain was mirrored by similar inconsistencies in other areas. But all of this occurred within a company that made much of its corporate social responsibility image. What is the significance of the three stakeholder groups?  Internal stakeholders The objectives of employees and management are bound to have an influence on how the organisation is run. businesses are seeing increasing evidence of © ABE and RRC . Connected stakeholders Shareholders are not always part of the organisation itself. low cost distribution channels. Once the true situation became known Enron shares became practically worthless . it will also wish to ensure that it is kept informed of the company’s financial condition. They will have distinctive interests in the business. Growth of the organisation in order to share in its prosperity. However. Enron’s auditors did not report this. Concerns that the business performs within the law and reasonable ethical parameters. Much of its reported profits and revenue were the result of financial deals with limited partnerships that it controlled. such as personal development and psychological growth as well as material well being. The customers of the enterprise require good quality goods and services at the right price. If the bank provides finance for a company. The esteem arising from identification with success where possible. They are likely to be interested in: (i) (ii) (iii) (iv)  Continuity of employment. They also want to have access to products through convenient. Individual interests and goals. irregular accounting practices during the 1990s covered up a financial collapse that was going on within the company.26 Ethics and Corporate Social Responsibility in HRM Case Study 1 Enron Corporation– The Accounting Scandal of 2001 Enron was a large and well-reputed US energy company. except in the case of managers and staff who hold equity in the company. such as: (i) (ii) (iii) A return on their investment in the form of dividends and an increase in the capital value of their shares.

The idea is that there are certain groups that have specific interests in a business. this body will wish to ensure that activities fall within any codes or statements of practice agreed by its members. The government seeks compliance with legal requirements as well as: (i) (ii) (iii) Ongoing creation of employment and wealth. A wider concern is the impact of the business on the local environment. protecting its workers and those living in the vicinity. What is stakeholder theory? The act of balancing responsibilities to various stakeholders is a constraint on managers. the community wishes to ensure that any organisation produces its goods and services in a safe environment. National Insurance contributions. who expect the business to provide information on job opportunities.Ethics and Corporate Social Responsibility in HRM 27 consumerism – customers being more demanding of enterprise not only in what they produce. The concept can also be used to analyse the contributions and rewards in a given organisation. © ABE and RRC . Where a business has a professional body or trade association. information on what the company actually does and its contribution to society and (sometimes) a dialogue with secondary education providers to educate the young on industry and commerce generally (many companies have their employees make presentations to schools and colleges as public relations exercises to cement business/community relationships). Being paid on time. The debate about a major football manufacturer using child labour in Asian countries is evidence of this – not only did it impact on the manufacturer. They will also be interested in revenues through local taxation. value added tax and excise duties. capital gains tax. Lastly. Lastly. but it had a major effect on perceptions of large football league teams buying the merchandise. The competitors of the business wish to ensure that there is fair competition and that all businesses operating in a sector are behaving ethically and in a climate of mutual respect. corporation tax. Local authorities have a specific concern with the economic activity that can be brought to their catchment area. Information. and sometimes the interests of different groups may actually conflict with one another. These interests may differ from one group to another. The behaviour of the various stakeholders will have a profound effect on the organisation’s prospects. such as statutory company returns and export/import information for the Department of Trade and Industry. Other stakeholders in this respect are the education and training providers. In order to assist managers to cope with this problem there has developed what is known as the stakeholder concept. This category includes virtually everyone else. External stakeholders External stakeholders are those generally unconnected with the business but who nevertheless have an interest in its activities. such as schools and colleges. suppliers have interests in: (i) (ii)  Ongoing and mutually beneficial business relationships. Revenues in the form of income tax. but how they conduct themselves generally.

but as a shareholder the same person wants the firm to make higher profits. The positives emerging from this development were jobs and the economic stimulation to the area that always comes from a new enterprise setting up in a locality.28 Ethics and Corporate Social Responsibility in HRM In addition. if not directly then through pension or insurance schemes and unit trusts. the blurring of the lines between various groups has further complicated the analysis of stakeholders. the concept can reveal the way in which problems in a stakeholder group can threaten the well-being of the whole organisation. Clearly there is a tension as to which stakeholder group is the dominant force. © ABE and RRC . as a customer the person may want lower prices. In the case of retail stores and supermarkets. Can’t one stakeholder group sometimes want opposite things? Yes. such as where workers make excessive pay demands or customers transfer their loyalty to a competitor. These developments make stakeholder analysis more problematic than when each stakeholder group had only its own interests to promote. How should we act when stakeholders want different things? Organisations have to balance rewards to stakeholders with the contributions that stakeholders make to the firm. However. Sometimes conflicts that arise have no obvious solution but have to be balanced carefully and diplomatically. employees may be both shareholders and customers. Case Study 2 During the early 1990s a minerals extraction company wanted to open a business at Rodel on the Isle of Harris in the Outer Hebrides. however. Some writers see dealing with stakeholders as an extension of the marketing concept: the organisation must “market” its views and values to all stakeholder groups. who as Free Presbyterians could not agree to this.    Many employees are also shareholders. thus improving the return to shareholders. due largely to being given bonus shares. The development was opposed in the strongest terms. This conflicted directly with the religious beliefs of a sizeable section of the community. For example. This blurring can cause a conflict of interests for individuals. because motivated staff will ensure customer satisfaction that in turn will increase sales. Top managers and directors have been criticised for awarding themselves large bonuses and share options – the so-called “fat cat” debate where customers feel aggrieved. Most organisations use the technique of “branding” to create an image of loyalty to unite the interests of stakeholders. by some in the local community as the firm considered it essential to have workers come in on Sundays. particularly between customers and shareholders in the privatised utilities. Brands like “Virgin” give first priority to employees. Many customers may be shareholders in the firms that they patronise.

This is the usual driving force behind the founding of an enterprise and is an assumption of most microeconomic models used to analyse the behaviour of firms. The word “ethics” refers to actions that are held to be right or wrong. When private and social costs diverge. whilst the social costs are born by society as a whole. Most decisions that organisations make will be founded upon one of four basic beliefs:  Deontology: That the organisation has a responsibility to act in ways that respect the fundamental rights of human beings (as if there is a set moral code that is larger than © ABE and RRC . assuming they can be measured at all. who in turn raise revenue from local taxation. such as people from other districts and towns who did not pay for the lighting but nevertheless gain some advantage from it. Others will benefit. however. the effects are called “externalities” and these can be positive or negative. The private costs of production are borne by the excess of any financial recompense paid by motorists in higher taxation. Social costs are the costs to society as a whole of the actions of the business. An example of a positive externality is the provision of street lighting in an urban area. 4. transport and so on. if a foreign tourist collapses in the street. e. Define unethical behaviour? To what extent do you think is it important that organisation should have a code of ethics? Who are the stakeholders for your organisation? What does your organisation do to keep its stakeholders in balance? B. Vehicles cause pollution with widely accepted damage to the planet .g.   Private costs are made up of the costs of production met by an enterprise. ETHICS APPLIED TO MANAGEMENT How do managers make decisions ethically? The terms “accountability” and ”social responsibility” refers to the way in which an organisation is run and held responsible for its actions. The residents of the area in which the lighting is installed benefit from it through greater physical safety and less risk of road accidents. This negative externality can only be redressed by charging the cost of pollution to the company that owns the factory. such as wages and salaries. 3. 2. There are many other examples of externalities:   The National Health Service provides free treatment to those who do not fund it. or forcing it to eliminate the pollution under threat of closure.Ethics and Corporate Social Responsibility in HRM 29 What is an ‘externality?’ Economists distinguish between “private costs” and “social costs”. A negative externality is the pollution caused by a factory. The debate about business ethics centres on whether the only responsibility of organisations and management is to maximise profits. This is funded by local government. Exercise 2 1. fuel.

harassment of employees. The morality of the actions is to be considered. a lack of public awareness and scrutiny of the activities of the organisation.     Ethical considerations focus on individual managers behaving in an honourable way. If the owners do not receive a return on capital. the Cooperative Bank’s policy of not lending to countries with oppressive human rights records or to bodies associated with blood “sports”). cost cutting. exploitation of staff and customers. The problems which face managements pursuing higher ethical standards include: the pressures of competition and rapid change. Unethical behaviour can take place at the individual level – e. Aren’t managers torn between their best interests and those of the company? Ethics operate at two basic levels – the ethics of the individual manager and the wider ethics of the whole organisation. not just their consequences    Utilitarianism: That the business should serve the greatest good of the greatest number Teleology: That the end justifies the means. also Barclays Bank/apartheid in the 1970s).g. they will withdraw the capital or close the business. The government imposes a greater financial burden on businesses whose activities result directly or indirectly in divergence between social costs and private costs (such as private motoring and smoking.g. or a ruthless pursuit of profit at any cost.g. resulting in decisions to impose increases in tax on petrol and tobacco at higher rates of increase than the retail price index). and these operate in conjunction with the ethical culture of the organisation. irrespective of the damage that is caused to people on the way to utopia Egoism: That moral behaviour should be considered in terms of personal self-interest. which is revealed in general terms in their mission statements. founder of the Body Shop).g. take account of broader responsibilities for several reasons:  Despite deregulation and a general contraction of state involvement in enterprise. the Shell/Nigeria controversy. The duty of managers to the owners of the enterprise is indisputable. cutting their losses if necessary. and clash of interests between the various stakeholders of the organisation. and often do. the Camelot controversy in 1997 as described elsewhere in this chapter). insider trading of shares. conflict with the profit motive espoused by the purists. There are strong pressure groups that make it their business to ensure that organisations and their customers serve the general good (e. Unethical conduct at organisational level includes pollution of the environment. however. © ABE and RRC . New pressures arising from consumerism mean that businesses have to take account of customer concerns in the wider sense (e. there are many entrepreneurs who support socially responsible policies (such as the late Anita Roddick.30 Ethics and Corporate Social Responsibility in HRM the organisation). there are boundaries of tolerance shown by governments to certain practices (e. These are wider views of management responsibility. leaking information to competitors. Modern day businesses must. Managers bring a set of values into their work situations. Various organisations have an ethical stance. In industry itself. They can.

greening of the environment. bullying in the workplace. that is to turn raw materials into goods and services that meet customers’ expectations. The analysis develops into how this issue affects the organisation. management should pursue the principles of justice. no matter how efficiently. It is unethical to take the credit for the efforts of subordinates. their staff and the environment. and are drawn together into an ethical audit. the unethical approach would be to let the situation deteriorate further and then dismiss the subordinate. These three elements have to be deployed to add value. © ABE and RRC . This code would include such qualities as honesty. Knowing that older workers value security at work. improved labelling to give customer information. The more management comes to be seen as a profession. not making use of surveillance technology for spying on workers. then the external constraints on ethical behaviour. a concern for others. the elements have to be compatible with the values of a socially responsible management. fairness. not taking advantage of one’s status in the firm (e.  If the performance of a subordinate is unsatisfactory the ethical conduct of a manager would be to tell the subordinate and help him to improve.g. (b) EVR congruence Ethics and values are closely associated with social responsibility but place the focus on the behaviour of managers.   The essence of ethical behaviour is to follow a moral code. sexual harassment of a subordinate is unethical conduct). it is not socially responsible to produce goods. How do we develop business ethics? (a) The ethical decision model (EDM) This approach begins with an analysis of what is at stake in the ethical issue being considered. Take for example the use of resources. Managers should be fair and honourable in all of their dealings. which reflects values on how life should be lived. ageism. The concept of EVR congruence takes the three key elements:    Environment Values Resources. it would be unethical to deliberately threaten them and make them feel insecure. if it means harming the natural environment. fair treatment in all dealings. counselling for social problems and career development. lawyer.  The activities of an organisation can impact on the environment and the response of an ethical firm would include: pollution control.Ethics and Corporate Social Responsibility in HRM 31 There are many management activities that offer a manager the opportunity to behave in either an ethical or an unethical manner. safety and welfare. and taking account of wider social responsibilities. Ethical approaches to customers include: quality and service considerations. integrity and decency while still building long-term value for the firm. The findings of the analysis are applied to the ethics of each functional area of the organisation. etc. Managers should care for their customers. recycling. However. Ethical approaches to human resources include: promoting employee health. tackling racism.   In summary. they should not deliberately mislead. conservation of natural resources and energy. the closer its ethics move towards those of the doctor.

customers. (What does your organisation do to help managers make ethical decisions? Where do you see tensions between self-interest and the best interests of the organisation?) C. or to what extent. Organisations are constrained in their conduct by legislation that affects their relations with shareholders. are closely entwined with their environments and as such. there is a good deal of debate whether or not. It is difficult to define just what being a good citizen means in terms of an organisation. society and the environment. the government. It is not fair to give the responsibility for deciding on the amount and direction of social obligations to the managers. The essence of social responsibility is summed up in this quotation from the Watkinson Report (1973): “A company should behave like a good citizen in business. Consider the following points:    There are legal obligations on every organisation and if an enterprise obeys these it is doing all that can be expected of it. as many people have realised that the decisions of business managers can have considerable effects on the environment. Frequently. employees and society at large. This. If an organisation goes beyond its legal obligations (e. to become involved. There is a conflict between social obligations and profit maximisation. have responsibilities to the wider environment. employees. it is possible to make a case against firms taking on social responsibility. by giving money to improve the environment of a community) it may be wasting scarce resources. organisations have social responsibilities that go beyond their legal constraints. The law does not (and cannot) contain or prescribe the whole duty of a citizen. etc. as open systems. is how companies should seek to behave. This has led to a climate of support for social responsibility. so there is no need for organisations.” What is the social responsibility debate? Although the statement above seems reasonable. Social responsibility refers to the liability to be called to account for conduct that affects communities or society at large.32 Ethics and Corporate Social Responsibility in HRM EVR has implications for the quality of products and the quality of life of employees and all who come into contact with the organisation. Many so-called “good works” in society are already being taken care of by charities. set up for other purposes. Actions that are perfectly legal and taken in pursuit of profit or efficiency can be damaging and managers have come to realise the responsibilities that rest upon them. The prime duty of a firm is to produce profits for its shareholders (who are the true owners of the firm).. ETHICS AT ORGANISATIONAL LEVEL – CORPORATE SOCIAL RESPONSIBILITY Organisations. A good citizen takes account of the interests of others beside himself and tries to exercise an informal and imaginative ethical judgement in deciding what he should or should not do. © ABE and RRC . which would be better employed by investing in the development of the organisation.g. However. managers do not consult shareholders properly when they allocate money for social or community purposes. there has been a change in attitude to social responsibility. suppliers. it is suggested.    However.

Governments and charities. Pollution of the environment and conservation of resources have become very topical issues. Organisations must take account of this or they will be at odds with the community where they operate. For example. The amount of resources allocated to social obligations is relatively small and will not adversely affect the investment policies of an organisation. Common social sense tells us that an organisation should act like a good citizen. a form of enlightened self-interest for an organisation. this may raise the morale of its workers and make it easier to attract goodquality labour to live in the area and work for the firm. there are many good causes that need a voluntary dimension (the Watkinson Report stressed this point).    © ABE and RRC . etc. do not have sufficient resources to meet all community needs. if a firm contributes to improving the environment in which it operates.Ethics and Corporate Social Responsibility in HRM 33 Points in favour of CSR include:      Legal obligations cannot cover every eventuality. Managers are well qualified to make decisions that may help the community or society. Many moral obligations are. so if firms do not help. Shareholders are not consulted on many decisions taken in organisations and the money involved in moral obligations is not enough to make this an issue of shareholder interest. in fact. many of these needs will go unmet.

the environmentalists expressed concern that this would set a precedent and lead to a situation in which the seas and oceans would be regarded as a large rubbish dump. The debate continues. As well as the immediate pollution risk. Greenpeace subsequently admitted that they got their own figures wrong. searching questions were raised on environmental policy. Peaceful protests were thankfully more common. The platform’s journey to its final resting place was stopped and it was towed to a Norwegian fjord to await a final decision. © ABE and RRC . with Shell premises as well as government offices being subjected to picketing action by demonstrators. Shell produced a very strong argument in favour of its proposed actions – sufficiently so to persuade the government of the day that it was right. who were deeply concerned about the consequences of this action. The campaign against Shell was led by Greenpeace. there were angry scenes as shareholders arrived at the venue for the meeting to a further barrage of protests by demonstrators about Shell’s policy on the environment. though attempts to change policy by formal resolutions failed. The proposal to do so immediately enraged environmental campaigners. for example. The controversy did not stop there. this time targeted at the company’s operations in Nigeria. The Greenpeace protest was not confined to a highly motivated group of environmentalists – the debate had an effect on the public conscience.34 Ethics and Corporate Social Responsibility in HRM Case Study 3 The Brent Spar Controversy This case concerned the decommissioning and disposal of the “Brent Spar” oil platform by Shell plc. The “Brent Spar” affair confirms the new importance placed on the social accountability of businesses by not just environmental pressure groups but also the public at large. Fuelled by the media. On the other hand. Then at the 1997 Annual General Meeting of Shell plc. many still wonder whether such issues are considered sufficiently thoroughly when there is an apparent conflict between profit motive and social consequence. the controversy spread across European states and at one stage got out of control – in Germany. Despite formal sanction by the UK government for Shell’s proposal and the production of a persuasive business case by Shell apparently confirming that sinking the platform would be the best option. It was decided that it would be best to dispose of the platform by sinking it in deep water in the North Atlantic Ocean. which produced compelling facts and figures to back their argument that Shell’s proposal would lead to lasting environmental damage. some extreme groups set fire to Shell filling stations. At the meeting itself. though it was stressed that their view had not changed on the issue. the company eventually backed down.

Ethics and Corporate Social Responsibility in HRM


Case Study 4
The UK National Lottery The company responsible for the National Lottery is Camelot plc. During 1997, there was a major controversy concerning the payment of large salary increases to the directors of the company. This followed an announcement by the incoming government that the management of the National Lottery would be reviewed and consideration would be given to administering it on a non-profit making basis in the future. The National Lottery has always been surrounded by controversy. Its launch was delayed for many years by strong lobbying by existing gambling organisations, which feared that it would erode their appeal to the paying customers. When it was launched, the selection of Camelot dismayed many, especially as this was to be a company driven by profit running an enterprise that was aimed (amongst other things) at raising money for good causes. Especially irate was Richard Branson, who had offered the services of his business empire and stated that he would run the National Lottery as a non-profit making venture. Camelot had to deal with several problems before the change of government in 1997. One issue was the proposed limitation of prizes – it was suggested that they would be “capped” in the event that there were too many claimants on the fund (this is standard practice in most European lotteries). There was also the inevitable conflict of interest between “haves” and “have nots”. The tabloid press argued long and hard against lottery grants to projects that were perceived to be the domain of the rich, such as opera houses and the arts. Lastly, there was the on-going argument that a company that is driven by a need to fulfil the needs of shareholders, which in turn can only be done by making a profit and paying the appropriate level of dividends, cannot possibly reconcile this with promoting the good of nonprofit-making charities. In general, Camelot did not come out of the controversy particularly well. They were always quick to produce a sound business case for their actions, but one public perception was that they were “smug” and far too smart for their own good, especially when reporters interviewed spokespersons for the company. The debate came to a head with the pay increases for Camelot executives. Some saw this as a cynical exercise to milk the product while the franchise was still held. A government cabinet minister held urgent talks with Camelot and it was eventually announced that a compromise had been reached, though exact details were not fully published.




Ethics and Corporate Social Responsibility in HRM

How can we improve our Corporate Social Responsibility?
(a) Codes of practice Trade associations or professional bodies may set voluntary codes of practice. Codes give details of what is and is not acceptable conduct by members of an association (e.g. ABTA has a code of practice for travel agents and tour operators). Codes provide guidance and monitoring of members’ behaviour and safeguards for the public or the environment. Organisations have an interest in making codes work effectively because if they fail, the state may step in with legislation. An example of such a code is the City Code that guides Stock Exchange activities and conduct on takeovers and mergers. (b) Social accounting and social audit In order to assess how well an organisation is meeting its obligations to the society in which it operates, it has been suggested that it should compile a social balance sheet. This interesting idea reverses many of the points of classical accounting, e.g. in terms of profit and loss, taxes paid by the organisation are treated as revenue (because they accrue to society) whereas fees and payments to the organisation are treated as costs (because they are paid by society). Society is seen as evaluating what it puts into the company and what it gets out of it. Social audit draws attention to the fact that a firm’s gain can sometimes be a loss to society. For example, if a firm makes unwanted workers redundant, this may increase productivity and profits for the firm but it can become a cost to society, as the state has to pay unemployment benefits. Critics of social accounting argue that many features of organisational and social activities cannot be measured in precise monetary terms or that some calculations are so complex that it is difficult to reduce them to items in a social audit. Even supporters of social accounting admit that techniques are not yet sufficiently developed to give accurate reflections of the impact of an organisation’s activities on the society in which it operates. However, this does not mean that efforts to assess the social performance of an organisation should be abandoned. Organisations should present social reports that give information on both the positive and negative effects of their activities on society at large. All socially relevant areas should be included, e.g. contributions to education, research, effects on the environment, employment policies, taxation, etc. Social accounting could become a regular feature of organisation policy and reporting. Finally, remember that it is the firm itself which prepares its social balance sheet; it is not always an impartial statement of affairs.

How do we combine our legal and our social responsibilities?
Many enlightened managements are becoming convinced that they should meet their social responsibilities in the fullest possible way, going beyond any legal requirements that apply. Rather than seeing these responsibilities and requirements as constraints, many managements see them as opportunities to act in such a way as to not only improve their own organisations but to improve society at large. Here, we consider this in respect of retirement and redundancy. In the next section we look at the issue of equal opportunities in employment in some detail.



Ethics and Corporate Social Responsibility in HRM


What relevance does CSR have to HRM?
(a) Retirement and redundancy With a number of trends manifesting themselves in modern society, the departure of a worker from an organisation offers an interesting example of the interplay between legal and social obligations of employers towards their workers. These trends include people living longer and retiring earlier and increased redundancy as techniques change and productivity increases. The main legislation here is the Employment Rights Act 1996 which consolidated former relevant legislation. Conditions are stipulated as to when an employee should be taken to be dismissed by reason of redundancy. The qualifying conditions for workers being able to claim redundancy pay are listed and a formula is provided to calculate an employee’s entitlement if they qualify as having been made redundant. Thus an employer’s legal obligation to a worker made redundant is quite clear. However, many employers feel they have a moral obligation to those made redundant and sometimes to those taking retirement. It is now widely realised that an individual’s move from the world of work to that of non-work may pose psychological, social and economic problems. One of the main psychological problems is that of social isolation; sociological problems include the lack of meaningful activities and the repercussions on other family relationships; economic problems arise from more leisure time with less money to spend. The caring employer will introduce pre-redundancy and pre-retirement programmes to help employees prepare to adjust to the non-work situation. These programmes might include psychological preparation, the encouragement of outside interests, and planned budgeting to make the best use of financial resources. Research reveals that if an individual can maintain social engagement (i.e. a high rate of social interaction) they can cope better with the change from work to non-work. Part-time or voluntary work can be of great assistance and forward-looking managements include ideas for such work in their programmes for those who will be leaving. (b) Outplacement The idea of taking a social responsibility, over and above legal rules, to staff made redundant has been developed with the use of outplacement techniques. This deals specifically with the problems of redundancy, dismissals and early retirement of managers, by using external consultants, paid for by the firm which has made the manager redundant, to help redundant managers to find new, rewarding posts. Outplacement consultants counsel managers to help them maximise their talents and skills; they do not find jobs for redundant managers. The essence of outplacement is to encourage redundant managers to “market” themselves – this entails improving jobsearch skills and rebuilding self-confidence. Outplacement, therefore, helps managers to get their careers moving again and aids the economy by bringing these experts back into the workforce as quickly as possible.

What is whistle blowing?
Whistle blowing is a practice which, whilst not entirely new, became the subject of fierce debate during the 1990s and resulted in legislation to protect whistleblowers ( Public Interest Disclosure Act, 1998). It may be defined as intervention by an employee to bring the wrongs (or perceived wrongs) of the employer to the attention of the owners of the company, the government or the public at large. The legislation is an extension of other discrimination legislation in extending protection for victimisation as a result of making a complaint. Although most workers agree on what is right or what is wrong, there are many different attitudes to whistle blowing. Some argue that the worker should have a conscience and




Ethics and Corporate Social Responsibility in HRM

speak out, while others are more submissive about situations that are unpalatable to them – the latter are unlikely to intervene. The debate is clouded by the conflicting obligations imposed on most workers by a duty of secrecy imposed by the contract of employment (as well as common law) and the duty to the company and the public at large.

Case Study 5
From Personnel Today magazine, 17 September 2007 Whistle blowing One of our employees, a financial controller, has raised an issue with us in confidence. Part of his job is to review accounts prepared on a departmental basis, and he is concerned about a large sum of money that appears to be missing. He initially raised his concern with his line manager, who told him to ignore it. How should we handle this? Workers are protected and encouraged by the public interest disclosure act 1998 to disclose malpractice internally (in exceptional circumstances, disclosures can be made to a regulator or the media). Your employee has the right to be protected even if he is incorrect, so long as he is sincere. Whether a belief is reasonable is assessed based on the surrounding circumstances, including the personality traits of the whistleblower and the ethos of the organisation, and the relationship between the whistleblower and the person alleged to be doing the wrongdoing. Maintain confidentiality where possible regarding the identity of the whistleblower and the concerns raised. Hold an investigative meeting with him to obtain details of his concerns. Investigate these concerns and document the investigation, and take appropriate action to remedy the wrongdoing or confirm that no irregularity has taken place. If his line manager bullies him or downgrades his performance because of the disclosure, the employer will be vicariously liable, and the employee will be able to claim that he has suffered a detriment. Make sure you have a whistle blowing procedure in place that covers:      The concerns that should be raised The procedure to raise a concern The procedure followed to investigate a concern Accessibility Confidentiality.

There are many examples of whistle blowing which demonstrate a conflict of interests between the duty of the employee to keep secrets and the duty to the company or the common good.



Ethics and Corporate Social Responsibility in HRM


Case Study 6
Whistle blower: Sarah Tisdall One of the highest profile examples of whistle blowing occurred in the UK Civil Service. A civil servant, Sarah Tisdall, discovered that government policy on nuclear missiles was at odds with its public pronouncements on the issue. Apparently driven by her own conscience to do what she believed to be right, she leaked documents to the press. The consequences of her action were dismissal from the Civil Service and prosecution for offences under the Official Secrets Act. She eventually served a custodial sentence when the case was proven against her.

Case Study 7
Whistle Blowing In 1993, a chief executive of a large company was found to have sold his personal dwelling house to the company, sanctioned improvements costing many thousands of pounds and then bought the house back at the original price. He later argued that this was done with the full sanction of the board of directors. In the meantime, he was suspended from duty and later dismissed. Legal action was brought against him, instigated mainly by fairly newly appointed directors. The former executive in turn counter-sued and the affair was eventually settled out of court. In this instance, it could be argued that he did nothing illegal or contrary to his terms of employment. There is no doubt, however, that he and his colleagues who sanctioned his actions failed in their fiduciary (moral) responsibility to the shareholders and the company itself.

Case Study 8
Whistle Blowing In the same year, an executive in a different company was reported by members of staff for sexual harassment of female employees. Persons who had not been harassed but disapproved of the actions of their senior colleague made the report. The case resulted in the resignation of the person concerned when, as a direct result of the action of the whistle blower, several other persons came forward with additional and similar complaints making the offender’s position untenable.




Ethics and Corporate Social Responsibility in HRM

Case Study 9
Whistle Blowing A final example concerns the actions of a young bar tender who became increasingly concerned about the actions of her immediate boss, who was in charge of bar and catering facilities. The manager was an alcoholic, and perhaps not in the most suitable occupation. It was reported by the bar tender that her manager was accepting far too much alcoholic drink from customers when offered to the extent that this affected his ability to manage the bar. In addition, she claimed that when he put “two gins” in the complimentary drinks book, he was in fact taking two bottles, not dispensing two measures. The consequence of this episode was that the bar tender was dismissed and the manager suffered no immediate consequence, though he died two years later of an alcohol-related illness.

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

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

The case against whistle blowing
    Some believe that the employee should concentrate on doing their job and that the actions of others are nothing to do with them. The situation may be misinterpreted – what may be seen as a breach of company rules or policy may turn out to be perfectly legitimate. The employee can over-rate the importance of the perceived misdemeanours of others and cast themselves in a bad light or even lose their job. Some are reluctant to “blow the whistle” due to a “snitching” mentality – it is considered bad to tell tales on others.



if anything. Sadly. It is common practice in many organisations for the terms and conditions of employment to bind the employee to secrecy. to interview and to appoint. Discrimination in this sense is perfectly acceptable as long as it is done and seen to be done. confirms that organisations and the people within them do not always behave in the way we would like. unions are becoming more aware of the need to act as moral policemen. the process of selection is specifically concerned with discrimination between people – by making decisions about who and who not to shortlist. If there is something wrong. In late 1997. on the basis of fair treatment of the people concerned. 2. in itself. 4. Sometimes the whistle blowing can be done through a third party. Forms of discrimination that are not based on such treatment have increasingly come to be seen as unacceptable and in many cases have been made unlawful. if they did the legislation would not have been needed in the first place. 5. This has a particular impact on management practice. If information is given to someone outside the organisation. Exercise 3 1. restrictive practices legislation. consciously or unconsciously. they will react in different ways as well as interpreting situations differently. This is not. this can be a breach of contract or even render the whistle blower liable to criminal action. the very existence of employment legislation. Whether to “blow the whistle” or not is usually a matter for individual judgement or conscience. However. Aimed primarily at identifying bad employment practices. In an ideal world all managers and workers would behave honestly and ethically at all times. Managers need to ensure that they do not discriminate unfairly in the decisions or actions that they may take in regard to © ABE and RRC . Sometimes the employee can be on dangerous legal ground by “blowing the whistle”. For example. As all employees are different.Ethics and Corporate Social Responsibility in HRM 41   It can be argued that the actions of others are none of the concern of the employee. consumer protection legislation and more broadly. it is sometimes found that a trade union representative can handle a difficult situation without exposing the individual to recriminations. even after they leave. a problem. let others find out for themselves. in many aspects of our life and work. EQUALITY AND DIVERSITY FOR ALL AND IN EVERY ASPECT OF HRM Aren’t all HR professionals discriminating all the time? We discriminate against different types of people. 3. After all. one such organisation stated that it was going to compile a “rogues’ gallery” of employers and publicise their actions. For example. this initiative would appear to be an open door through which potential whistle blowers can move if they believe a case has to be answered. What CSR issues do you or your organisation face? How could organisations you know show more CSR? In your experience how good is CSR in HRM? What cases of whistle blowing can you think of? Should there be more or less whistle blowing in your organisation? D.

rather than a problem of the victim of the discrimination. We then go on to consider the future of these issues. purely on the basis of their membership of that group. we shall review those aspects of legislation that apply directly to these issues and also explore how organisations meet the challenge of providing equal opportunities. (UK Government’s Women and Equality Unit). So who experiences unfair treatment? There are certain groups in any society who are discriminated against for unjustifiable reasons. with particular reference to the move away from a concern with equality per se towards the issue of managing cultural diversity. Women are less mobile as they have to stay in the part of the country where their husband has a job. Recognising the basis of discrimination is the first step towards establishing equal treatment for disadvantaged groups. Legislation also encompasses equal pay. as victims of persistent discrimination. they have been excluded from playing their full part in society. Here. this may be seen from the following list of attitudes. Such unequal treatment derives from the prejudices and preconceptions of the people with whom they have to deal and needs to be seen as a problem of those acting in a discriminatory manner. in employment). there are six main characteristics which have resulted in unfair treatment and which the government has addressed through legislation:       Sex/gender Race/ethnicity Disability Age (older and younger workers) Religion and belief Sexual orientation. In 2007 UK women who worked full time were paid on average between 83 and 86% of men's hourly earnings. in this context. They do not want much responsibility at work. The main benefit has been to women who have been subject to assumptions such as:     Women should not work – their place is in the home. or in particular parts of it (for example. In the context of employment. © ABE and RRC . However these topics are often known colloquially as the ‘six pack’. are referred to as disadvantaged in that. Within the United Kingdom. Members of such groups are subjected to treatment which is different from that accorded to other people.) These groups. although this appears to have had limited effect in bringing the pay of women in line with that of men.42 Ethics and Corporate Social Responsibility in HRM employees. it derives from prejudice towards and preconceptions about the members of such groups. As we noted above. (a) Sex and gender This is aimed at equalising the treatment of women and men. Their home commitments (children) will impinge on their working life. (There is legislation covering some other issues such as trade union membership. As such. whether prior to or during employment. On some occasions these attitudes are consciously and overtly displayed but very often the people holding them are not even aware that they influence their dealings with other people. particularly in respect of certain characteristics that these groups are assumed to possess and which are then used to pass judgement on individual members. many of the preconceptions are widely held.

Employers and service providers are required to make reasonable adjustments to premises and practices to compensate for someone’s disability. (f) Sexual orientation Likewise. The Regulations counter assumptions such as:      (e) Older people are less adaptable They are not interested in coping with new technology They will work much more slowly than younger employees They have become less interested their career development Younger workers are immature or lack skill. A visual handicap cannot be overcome. The ability to fill out an application form in good English is a requirement for someone who is being employed in low-level manual work. lesbian or transgender. irrespective of their race or ethnicity. Qualifications gained abroad are not as good as those to be found in the UK. This includes less favourable treatment arising from a belief (without any evidence) that someone might be gay. The main benefit has been to ethnic minorities who have been subject to views such as:     They require time-off for religious holidays that do not mesh with the needs of the employer. discrimination on the grounds of someone’s sexual orientation is unlawful. © ABE and RRC . in the UK discrimination against someone because of their religion or similar belief system is covered by the law. Assumptions countered by the legislation include:     An employee with facial disfigurement will be an embarrassment to other workers or customers. employees. Religion and belief Although much of the discrimination directed at members of religious groups was covered by the legislation dealing with race and ethnicity. Workers will not want to work for a black supervisor. (d) Age Since October 2006. What is reasonable will vary from organisation to organisation. A physical impairment affects mental faculties. the latter also including learning disability. Someone who has suffered mental illness will automatically not be able to take any kind of pressure that the working environment could provide.Ethics and Corporate Social Responsibility in HRM 43 (b) Race and ethnicity This is aimed at removing race and ethnicity as a reason for disadvantageous treatment. (c) Disability This covers both physical and mental disability. job seekers and trainees because of their age. in the UK the Employment Equality (Age) Regulations have made it unlawful to discriminate against workers.

As a result – partly driven by legislation and partly driven by good practice – most organisations have adopted policies and practices designed to ensure the fair and equal treatment of those with whom they have dealings (and note that this does not just cover their own employees). one's contributions ignored) © ABE and RRC . There is. though. tripping up) Verbal (personal comments. with responsibility for more and more employee issues being devolved to line management. The adoption of policies. does not eradicate the problem and control over practice has become more difficult. What is harassment? There are several definitions. It usually means:     Unwanted actions or comments Viewed as demeaning and unacceptable to the recipient Detrimental to the recipient’s dignity Unwarranted. Harassment and bullying (teasing a young person because of her age or a worker with a visual impairment because of his disability). particularly. name-calling. of itself.44 Ethics and Corporate Social Responsibility in HRM How is discrimination relevant to employment? The need for fair treatment is particularly acute in the area of employment in general and of management in particular. put-downs) Emotional (being left out. unconscious prejudices and preconceptions in society at large. Victimisation (treating someone less advantageously because they had previously complained or had supported someone else who had complained). where decisions are constantly being made which affect the lives and opportunities of individuals. dismissing a gay man because of his sexual orientation. pushing. which will invariably be reflected – to a greater or lesser extent – within the organisation’s own workforce.   What constitutes less advantageous treatment? It includes:      Recruitment and selection Opportunities for training and development Promotion and career development Benefits. Bullying can happen in a variety of ways:    Physical (shoving. Harassment can be a one-off act (shouting at someone in front of others) or low key but persistent (repeatedly brushing up against a member of the opposite sex). not promoting a middle aged worker because of her age). including pay Dismissal. a continuing concern to ensure the effectiveness of such policies and practices in the face of the widespread existence of. What behaviours are outlawed by the legislation? Principally three:  Less advantageous treatment (not giving a job to a woman because of her sex.

e-mails.e. work as a man – i. although that was the main concern in the early days when there were many instances of such inequitable treatment to be dealt with. boredom. where two people of different sex are doing exactly the same job.) The Act specifies the occasions when the pay of a woman should be equal to that of a man as follows. disdain) Written (graffiti. such as in modelling or acting. each teaching the same subject to children of the same age in either the same or different schools. There are exemptions to this for jobs where there is a ‘genuine occupational requirement’ – those that can only be undertaken by a member of a particular sex for reasons of. although the latter case is rare. would amount to unfair treatment. Note that either women or men may claim equal pay under this legislation. What is in the equal pay legislation? The Equal Pay Act 1970 was the first piece of legislation that attempted to promote equality at work. Parity on this basis would be established in a similar way to the previous category by comparing indices of value to the organisation between different jobs. Different jobs are often grouped together in “families“ where they are considered equal even though the actual tasks involved may vary.  Like work This is where a woman can show that she is doing the same. one male and one female. for example. or very similar. All discrimination is obvious isn’t it? This is a common fallacy and held by those who do not know about indirect discrimination. on the basis that a woman holds it. It actually came into force in 1975 and sought to address the issue of parity between the pay of men and women who were doing work of equal value in the same employing organisation. Job evaluation schemes are normally used compare the knowledge and skills required to do different jobs and seek to establish parities between them.  Direct discrimination This occurs where one person is treated less favourably than another on the grounds of their sex. © ABE and RRC .Ethics and Corporate Social Responsibility in HRM 45   Gestures (gestures and pulling faces to others indicating stupidity. marital status. If the work is the same. The best example of this is in the area of recruitment advertising. a need for authentic male or female characteristics. In such circumstances.  Work rated as equivalent This where a woman can show that the job she is doing could be rated at the same level as that of different job held by a man and paid at a different level. age etc. cyber-bullying.  Work of equal value This is concerned with work that may be shown to have an equivalence of value to the organisation. when it could equally be done by someone of either sex. such that to pay one job less. texts). direct discrimination is allowable. so should the rate of pay. where restrictions may be placed on (or implied about) the sex of the person required for the job. body odour. (Note that this does not necessarily mean simply doing the same job. A good example of this would be two teachers.

indeed. obviously apply during the course of employment. hearing. in certain circumstances. Who can bring a claim? A candidate – or even a potential candidate – may claim unlawful discrimination from the moment they see the advertisement for the job. They can claim if they suspect that treatment was for unlawful reasons. eyesight Memory Ability to concentrate Perception of risk or physical danger Learning disability such as dyslexia. So. Thus. the requirements of the Act apply regardless of whether or not the person actually gets the job or.46 Ethics and Corporate Social Responsibility in HRM  Indirect discrimination This occurs where a requirement is applied equally to both sexes. For example. the burden of evidence is upon the employer to prove that the person was treated fairly. but one sex is proportionately less able to comply with it. What is a disability under the legislation? For the purposes of UK legislation disability is defined as: “A physical or mental impairment that has substantial or long-term adverse effect on a person’s ability to carry out normal day-to-day activity“ Such “impairments“ include:           Mobility Dexterity Physical co-ordination Continence Ability to lift/carry Speech. be held to indirectly discriminate against women because they may have had a career break for maternity. must comply with the legislation on unlawful discrimination. In the event of a claim. interviewing or in terms and conditions. This means that the whole of the recruitment and selection process must be and be seen to be free from any discrimination for reasons covered by the law. child or elder care reasons. So. © ABE and RRC . for example. It is not necessary for a claimant to demonstrate that the organisation committed unlawful discrimination. One of the key aspects of this legislation is that it applies to all the dealings that an organisation has with individuals – not just those arising in the course of employment. interview notes and individual assessments taken during a selection procedure need to be free of any bias and be kept for possible future reference. making a minimum number of year’s continuous service in a particular profession a job requirement may. an interview for it. with reference to the process of recruitment and advertising. The same requirements for arrangements and decisions being and being seen to be free from bias. but also that they are applied in practice. opportunities for training and development or any other benefits. It is unlawful to discriminate in any part of the arrangements or decisions made as part of the process . This invariably means that documentary evidence must be produced to demonstrate not only that appropriate policies are in place to prevent discrimination.

is impossible since everyone is different. The Act specifies the types of adjustment to working conditions and practices that it is incumbent upon the employer to explore to facilitate the employment of a disabled person. using the words ‘equality and diversity’. since it creates an impression that this is a negative topic. The onus is also on the organisation to demonstrate fair and equal treatment in the case of a claim of discrimination. There are circumstances where what would otherwise be unlawful discrimination is permitted. That another person who is not considered to be suffering from a disability is more appropriate for appointment. Most organisations deal with both. practicality and disruption. The first point raises the question as to what constitutes “reasonable adjustment“. personal assistants or interpreters Providing adequate supervision. age. Where it is “reasonable“ to implement these adjustments. equal opportunity. It is also important to note that no adjustment is necessary should the person concerned not admit to a disability. of course. Diversity suggests that there will be variety in a healthy workplace – gender. fair treatment or diversity? Discrimination is a word that is falling into disuse. It is also possible to provide financial or other outside help to achieve these aims. Theses are where “less favourable“ treatment may be justified on the following specific grounds:    That the less favourable treatment cannot be removed or made non-substantial by a reasonable adjustment on the part of either the employer or the employee. The concept of reasonableness takes account of cost. although no cost ceiling is specified. Equal opportunities has come to be associated with giving access to opportunities that were previously closed or restricted .Ethics and Corporate Social Responsibility in HRM 47 Again. These include the following:         Adaptation of premises Job restructuring Part time or modified work schedules Reassignment to vacant posts Acquisition or modification of equipment Adjustments to examinations and training materials and activities Provision of readers. © ABE and RRC . attitudes. That the person with the disability is not able to fill the post. challenging and effective. Diversity programmes tend to concentrate on encouraging workplaces to be diverse and welcoming and therefore. the employer must do so. the legislation applies from the moment an individual has contact with an organisation – they do not have to be in employment.removing barriers. (It has the danger of creating an impression that everyone is treated the same. It also encourages action to overcome the downsides of diversity (such as the need for flexible working and cultural and religious awareness). Discrimination. more creative. career aspirations etc.) Fair or equal treatment is now more commonly encountered because it suggests that one person can be treated differently to another but that there will be an objectively fair reason for such differences of treatment. It was popular in the literature of 1980s. which. The spectrum of views runs from the negative discrimination to the positive diversity management.

The diversity movement starts from a recognition of the differences between individuals in society – age. Many modern organisations are also developing techniques of empowerment. This can only be of advantage to the organisation as a whole. An example of diversity providing a direct organisational benefit may be seen in respect of attitudes to older people. The policy needs to be overt and provided to all staff and it is good practice to make it available to any prospective members of staff by sending it out as a part of the recruitment literature. Equality and diversity – in policy and practice The cornerstones of good employment practice in this area are an equality and diversity strategy based upon a firm E&D policy. influencing the growth and cohesion of the organisation and so improving competitiveness. etc. This may be seen in the growth of more flexible and individual contracts of employment. the development of more flexibility in working conditions can be a key feature of enabling different groups to be involved in the organisation. rather than fixing all employees in the straightjacket of close control and conformity. The concept can be applied to the management of diversity. sex. Establishing a culture of diversity needs commitment from the top and active encouragement throughout the organisation. The stereotypical image is that organisations thrive with a younger workforce. It accepts that an organisation should encompass them all and sets out to promote and celebrate the diversity of people in the workforce (and in the organisation’s contacts with its environment) and to value their different contributions and needs. it may be said that diversity will help the organisation grow and develop by opening doors to more skills and talents. This requires an organisational culture that addresses the obstacles faced by all individuals in a climate of trust and mutual respect. the average age of the population is increasing and an employer who recognises that the value of diversity in the workforce has access to a much wider pool of talent. the introduction of career breaks and the establishment of flexible working hours. In these circumstances. However. based on the model developed by the Equal Opportunities Commission. Most large organisations have some form of statement of its commitment to E&D and the procedures and practices that are required of its workforce to put it into effect. background. as adapted by Torrington and Hall. This frees employees from close control and allows them to develop their skills and talents. individuals from a whole range of different backgrounds may be encouraged and feel able to put forward their views and ideas. work style. personality. different types of diverse employees can be encouraged to maximise their particular talents and insights. Managing diversity enables the issues of equality to be approached within a strategic framework.  Definitions Direct and indirect discrimination defined. The contents of an equal opportunities policy commonly follow a standard pattern.48 Ethics and Corporate Social Responsibility in HRM Some progressive organisations will approach this subject from the angle of ‘respect and personal dignity’ – emphasising the interpersonal aspect of the topic. It needs to be supported by appropriate management policies and practices. differing abilities. race.  Introduction A statement of the desirability of the policy and the requirement that it is strictly adhered to. It recognises that these differences can be a positive asset to the organisation. The main elements are summarised below. In summary. For example. © ABE and RRC .

An E&D strategy contains the organisation’s aspiration over.Ethics and Corporate Social Responsibility in HRM 49  General Statement of Policy A commitment to equal treatment and the belief that this is also in the interests of the organisation. An intention not to discriminate in promotion. How do employers manage equality and diversity in the workplace? Most larger organisations are formally trying to integrate equality and diversity into their business strategy. with some further details. Care that job requirements are justifiable and that interviews are conducted on an objective basis. They would see a parallel between valuing diversity and promoting equal treatment to workers and doing the same for its customers. the concept of an integrated workforce and not continuing to treat the issue of equality separately. through its employment policies. An intention to rectify any areas where employees/applicants are found not to be receiving equal treatment.   Harassment A definition followed by the organisation’s response to allegations of harassment. It involves promoting. An intention to review the policy and procedures. Staff in the organisation should be made aware of the policy and key personnel trained in it. say a five-year period. © ABE and RRC .  Recruitment and Promotion Care to be taken that recruitment information has an equal chance of reaching all areas of the community and that it does not indicate preference for one group of applicants. Grievance and Victimisation An intention to deal effectively with grievances arising from unfair treatment and a note of the victimisation clauses in the relevant acts. Most would see a commercial business case for being an ‘equal opportunity employer’. the broad routes it will follow to get to that destination and the key actions to be taken. race. Terms and Conditions of Service An intention not to discriminate Monitoring Nomination of a person responsible for monitoring the effectiveness of the policy and with overall responsibility for its implementation. Such an approach would move beyond complying with the legislation.    Training An intention not to discriminate.  Possible Preconceptions Examples of preconceptions that may be erroneously held about individuals due to their sex. marital status or disability.

3. 4.50 Ethics and Corporate Social Responsibility in HRM Exercise 4 1. 2. 5. Where would you draw the line between fair and unfair discrimination? Why? How fair is your organisation in each of the six key areas? What would happen where you work if someone was harassed? Is that ethical? What scope is there for indirect discrimination in your organisation? What is the difference between promoting equality and promoting diversity? © ABE and RRC .

D. D. The Purposes and Importance of Human Resource Planning What is HRP? What value does HRP add? How does HRP fit with other strategic activities? What is the difference between hard and soft HRP? The Processes of Human Resource Planning How do I assemble a HR plan? How do I analyse the workforce? How do I analyse labour turnover? Is labour turnover a bad thing? How do I forecast demand? How do I forecast supply? What actions might we take to fill the gap? Redesigning the Organisation What about reorganising the way we employ people? Should we change the basic nature of the employment relationship? What is the flexible firm? Why might we want to increase flexibility? Does the flexible firm exist in practice? Changing Patterns of Work What forms of employment are there? What time-based methods are there? What location-based methods are there? External Supply Forecasting What is an external labour market? What are the features of the external labour market? Page 53 53 53 53 53 54 54 55 56 58 59 59 59 60 60 61 62 62 63 63 63 65 66 68 68 68 B. (Continued over) © ABE and RRC . C.51 Study Unit 3 Human Resource Planning (HRP) Contents A.

© ABE and RRC . HRP and Horizontal Integration What is horizontal integration? What contribution does HRP make to vertical and horizontal integration? HRP in Today’s Unpredictable Global Environment What future does HRP have when organisations are changing so rapidly and so unpredictably? 69 69 70 70 70 F.52 Human Resource Planning (HRP) E.

as such. Human resources are considered by most to be the organisation’s most valuable (and expensive) asset so they need to be deployed with the maximum efficiency and effectiveness. operational plan. These highlight the type of plans that contribute to the overall corporate and strategic plan along with the finance plan. (b) Hard HRP concerns the type of activities the HR department will need to carry out to ascertain the appropriate level of human resources. goals.Human Resource Planning (HRP) 53 A. procedures. What is the difference between hard and soft HRP? (a) Soft HRP involves the assessment of four categories or areas:     Defining where the organisation is now Defining where it wants to be in the future Analysing its external environment. These four categories are important stages in the strategic planning process. Hard HRP activities include: © ABE and RRC . etc. THE PURPOSES AND IMPORTANCE OF HUMAN RESOURCE PLANNING What is HRP? Like corporate and strategic managers. developing and retaining people. HRP supports this by developing a systematic plan for getting. they have a specific role to play in the formulation and vertical integration of HR objectives. organising. etc. One way they do this is by ensuring that the organisation is appropriately staffed and that those staff are able to contribute to corporate success. marketing plan. life cycle. human resource professionals have a role to play in the sustainability of an organisation. influences and trends (over which it has no control) Formulating plans to implement necessary changes. Soft HRP is concerned with the formulation of the mission. HR directors are increasingly members of the board and. policies. whether its current level is sufficient. This is human resource planning: The right number of the right sorts of people in the right place at the right time and for the right cost. competitive advantage and HR development will impact on its human resources. plans and strategy. objectives and strategy of the organisation and how variables such as growth. What value does HRP add? HRP makes a number of specific contributions to added value:      To integrate human resource activities into the business (vertical integration) To integrate human resource activities with each other (horizontal integration) To strengthen control over staff numbers and costs and to determine whether growth or reductions are necessary To profile current levels and attributes of staff To identify the need for training and development. product. How does HRP fit with other strategic activities? HRP is a vital strategic activity. whether there is a deficiency in one department over another.

THE PROCESSES OF HUMAN RESOURCE PLANNING How do I assemble a HR plan? HR planning can be complex but in its simplest form it centres on supply and demand forecasting: Forecasting (over the period covered by the plan) the numbers and attributes (knowledge. it can provide for a more orderly adjustment. skills and attitudes) of staff that will be: Demand Supply – internal Supply – external Needed Available internally Available externally Responding to the gap between demand and supply: Recruitment Redundancy Redeployment Upskilling/Multiskilling Career development/ talent management Changing contract terms/ flexible firm These activities must be proactive rather than reactive. by attempting to identify. Monitoring and review: reconciling HR plans with actual practice and facilitating any amendments needed to plans. It also includes the assessment of the internal and external supply of human resources. Surplus of staff – An organisation that finds itself employing more staff than it needs will incur wage and salary costs.54 Human Resource Planning (HRP)  Forecasting: the number of employees required in the future to support the demand for the organisation’s products and services. which means that they must be planned. Analysis: of how current employees are being utilised throughout the organisation and how this impacts on demand. capabilities and cost of the people in the organisation External labour supply – numbers. machinery and stock will be under used and it is likely to fail to meet its targets. HRP cannot protect an organisation from the need to adjust its personnel policies in response to changes in the market place. the trends in demand and supply of staff which indicate whether future needs should be met by recruitment and training of new staff or by reducing the size of the © ABE and RRC . This requires extensive information about the:    Corporate plans for the organisation – for both numbers and types of people needed Internal labour supply – numbers.  These and other problems occur regularly in organisations. Failing to establish a correct balance between the supply of and demand for labour in an organisation can lead to:  Shortage of staff or of skills – If an organisation employs fewer staff than it requires. in advance. as employers have to adjust their plans in accordance with continual changes in market place conditions.   B. However. it is unlikely to be able to meet its production and sales targets. capabilities and cost of the people available from outside the organisation.

This information can be obtained by the HR department administering a skills audit. The information required falls into the following main categories:  Inventories of the existing workforce – A statistical analysis of the number of employees. The same applies to ethnic groups. in some instances. The forecasts that are made at any given time can never be precise predictions of what will happen to either the demand or supply of labour. implementing. This will give an indication of the existing skills within the organisation and (ii) (iii) © ABE and RRC . This will identify any gender imbalance (more men in relation to women). An accurate picture of the composition of the workforce and analyses of important features of its deployment are essential. which determines the skill composition of employees. This action may determine the activities to be undertaken under several personnel policies. Gender breakdown of employees and the relevant concentration in each department.Human Resource Planning (HRP) 55 workforce. It cannot be done just once each year.  HR supply forecasting A forecast of anticipated changes in the supply of labour. The importance of HRP is that it provides the means of ensuring that personnel policies and their objectives are properly integrated into the organisation policies. This takes account of anticipated losses from the existing workforce and the external supply of suitable staff from sources outside the organisation. by analysis of certain issues such as absenteeism or overtime working. and HRP is no exception. be maintained indefinitely so they must be adjusted as new information becomes available. Policies based on these forecasts cannot. Each of these activities is carried out on an ongoing basis. taking into account the requirements of the corporate plan. monitoring. HRP is a continuous process of planning. Skills breakdown. evaluating and replanning. an analysis is made of the action required to fill the gap between the demand forecast and the supply forecast.  HR demand forecasting An analysis of the staffing requirements necessary for the organisation to succeed in achieving its business objectives. goals and objectives. based on certain characteristics which are relevant for planning purposes. This will include the following breakdowns: (i) Age breakdown of employees and the relevant concentration in each of the departments. supplemented. To be of value it must be maintained and adjusted to take account of new trends as they emerge . There are four stages involved in the process of HRP:  Analysis of existing resources A profile of the workforce.  HR plan By bringing together information obtained from the first three stages. divided into different categories. The organisation will also need to determine whether there are any imbalances in age (such as a large number of older workers against young workers and school leavers).both changes within the organisation and outside. therefore. How do I analyse the workforce? Any effective corporate planning depends on efficient information systems.

including:         Dissatisfaction with the job Dissatisfaction with the organisation Inability to cope with responsibility Moving out of the area Retirement Inability to get on with colleagues and line managers Career development or career change Domestic reasons. Costs – Personnel policies should. It is. This is done to try and pre-empt the individual’s decision to leave. a raw headcount of numbers employed is inadequate as a basis for planning future personnel policies. How do I analyse labour turnover? Labour turnover relates to the number of employees who exit the organisation. For this purpose.    Succession plans – To determine the type and calibre of managers available to succeed senior or middle managers who retire or leave. where possible. for instance. be based on information which identifies the cost implications of alternative courses of action. information relating to one or more of the following topics may be needed: (i) (ii) (iii) (iv)   Overtime working Absenteeism Ineffective or wasted time Efficiency in the use of labour. Carrying out attitude surveys. secondments and transfers. which must take account of the objective of improving efficiency in the use of staff. Use of staff – In many cases. which attempt to establish the way individuals feel about their jobs. Employees leave an organisation for a number of reasons. etc. the organisation. their colleagues. The reasons for turnover can be investigated and monitored by:   Undertaking exit interviews with individuals who have decided to leave. their working conditions. © ABE and RRC .56 Human Resource Planning (HRP) highlight any areas of skills shortage. It may lead to external recruitment to meet these shortages or the implementation of training and development initiatives to bridge the gap. Movement of employees – throughout the organisation including promotions. Labour turnover – An analysis of the rates at which staff are leaving employment and of trends in the characteristics of such turnover (see below). useful to know at which point recruitment becomes more cost-effective than increased overtime working. Not all these reasons are healthy for an organisation and they need to know both what the rate of labour turnover is (and whether the rate is acceptable or not) and why staff are leaving.

At the start of last year. the half-life of basic grade staff joining in 1970 was 19 years. (c) Cohort analysis It is increasingly common to track a cohort of people through their career within an organisation. 50 people left. the labour turnover index would be: 50  100 = 1. This method is usually more descriptive than statistically analytical and often reveals rich data on which management decisions can be based. if ABC Ltd employs 3. one year) So. This measures the level of employees who could have stayed with the organisation throughout the period being measured (usually a year). turnover rates drop.400 people.g.g. They also help with forecasting the levels of employees needed to run the organisation efficiently. (b) Labour stability index The second index that HR managers can use is the labour stability index. It is calculated by taking into account the number of employees with one full year’s service divided by the number of employees exactly one year before. For casual employment the induction crisis can be short (hours or days).400 Calculating the labour turnover index allows companies to make comparisons with other companies in the same industrial sector and to compare the turnover of staff within different departments in the organisation. It enables simple comparisons to be made.5% 3. For exam[le. but 50 people left during the year. Exactly a year previously it employed 3. meaning the period of adjustment after a new employee joins an organisation. if the half-life is increasing or decreasing.400 Both the labour turnover and stability indices enable HR departments to monitor the comings and goings of employees within the organisation. It involves the following simple calculation: Number of leavers in a period (e. (d) Employee half-life This is the time taken for half of the cohort to leave the organisation. (a) Labour turnover index This tool establishes the rate at which employees leave the organisation. By last year this had fallen to only 4 years. HR professionals often refer to the ‘induction crisis’. The stability index would therefore be: 100  100 = 3% 3. for example. The figure is then multiplied by 100 to determine the percentage stability: Number of employees with one year' s service  100  % turnover Number of employees employed exactly one year before We can illustrate this by use on example. ABC Ltd recruited 150 employees.. © ABE and RRC .400 people and last year. At the end of last year the organisation had 100 employees with one year’s service. Once the new employee is through that induction period.Human Resource Planning (HRP) 57 There are several analytical techniques for investigating the turnover rate. during which their likelihood of resigning is at its highest. especially over time. for professional employment it can be two or three years (or even longer). one year)  100  % turnover Average number of people employed in the period (e.

working conditions.58 Human Resource Planning (HRP) (This would show a considerable increase in wastage and it was likely that the organisation had moved from offering a long-term career to one offering only a relatively short-term job. © ABE and RRC . there are a number of disadvantages:   High labour turnover is costly. Disruption to the day-to-day operations. skills and attitudes. etc.) (e) Census of leavers This census shows how many left the organisation during a period (usually a year) broken down to show how long they had stayed in the organisation. The HR department needs to work with managers of corporate functions to ensure that turnover is closely monitored and appropriate measures taken to prevent high turnover having a negative effect on the organisation. change and new processes. If new employees do not join the organisation. it may send messages to remaining employees that senior management does not care about their welfare. It is also a way for the organisation to cope with surges in surplus staff. knowledge. It is usually expressed as a bar chart: 350 300 250 200 150 100 50 0 <1 year 1>2 years 2>3 years 3>4 years 4>5 years 5>10 years Is labour turnover a bad thing? It is hard to think of employees leaving an organisation as advantageous. Labour turnover has long been seen by some as a negative employment factor. as people leave and take their knowledge and skills with them. This basically means that if employers do not monitor high labour turnover and take steps to reduce it. including:  It allows “new blood” to join the organisation. secondment. This enables the organisation to grow by the introduction of new ideas.  On the other hand. the organisation and their colleagues. It allows the progression of employees through the organisation by means of promotion. many people see employees leaving as a sign of their dissatisfaction with the job. It can foster a culture of what could be perceived as “uncaring employer syndrome”. succession. but labour turnover does have its benefits. it reduces the need for redundancies. it will stagnate and become unresponsive to innovation. Escalating labour turnover can affect morale and production. For example. etc.

(a) Staff/skills shortages When there is a shortage of staff and/or skills the plan should make provisions along the following lines:      Promoting existing staff: Integrated with appraisal and development schemes. what kinds of courses are required. The HR forecast takes account of forecasts about the general economy. Getting more from existing staff: By offering employees the opportunity to work overtime. What actions might we take to fill the gap? An analysis of your organisation’s current level of staff and the likely number it will need to secure the continuation of its operations. will determine whether it has a surplus or deficiency of staff and/or skills. Companies can make contingencies for both a shortage and a surplus of staff. This process is summarised in Figure 3. and extending temporary or fixed-term contracts. a surplus of staff may be identified. the established complement of staff in a category where scarcity of skilled employees is a problem may have been defined as five. © ABE and RRC . and those of the specific business or organisation. undemanding tasks from these jobs. For instance. Training: Specifying numbers of staff in various categories who will require training.1: HR Demand Forecasting Stage 1 Economic forecasts Inflation Growth Savings  Stage 2 Business/service forecasts Expansion Contraction Diversification  Stage 3 Human resources demand More staff Fewer staff Skills How do I forecast supply? The supply of labour will depend on the availability of suitable staff who can be recruited from outside the organisation (external supply) and the potential for developing existing employees to meet new requirements (internal supply). reducing the complement of experienced staff to four and creating one new job for an assistant with a less demanding specification that will not present recruitment difficulties.Human Resource Planning (HRP) 59 How do I forecast demand? The HR demand forecast is an estimate of the numbers of staff required to carry out the level of business or service that is anticipated. from which the staffing needs can be derived. Job design: Difficulties in staffing may sometimes be overcome by redesigning jobs. and resources needed. If demand for the organisation’s goods/products or services falls and leads to a drop in output.1. to arrive at the conclusion of whether to increase or decrease staff. and exactly what type of staff will be needed. Redeployment of staff: Secondments and transfers may be appropriate. It may be possible to remove routine. particularly where surpluses exist in one part of the organisation but not another. The basis of this should be a corporate forecast. Figure 3.

This can be an expensive way of reducing staff numbers.      C. Short-time working: This option is often used in manufacturing companies. When the jobs of their own employees are threatened. Reducing overtime: A substantial amount of overtime may be worked on a regular basis. the most expensive resource to the organisation is the full-time employee. Declaring redundancies and then needing to recruit staff in a few months’ time is embarrassing and costly. Non-establishment and part-time recruitment: Increasing the number of parttime staff. Early retirements: Staff inventories can indicate the numbers of staff members due to retire at normal dates and the potential number who might consider retiring earlier. if compensation for reduced pension entitlement is provided. Most organisations know what their employees are capable of producing but a fundamental problem is that the demand for output is not constant. Advances in technology mean that many processes formerly undertaken by human beings can now be consigned to machines. such as land and raw materials. this may be all that is required to survive a lean period. specifying the numbers and required. It is unlikely that short-time working can be sustained for longer than a few months but in some instances. Natural wastage: As workers leave they are not replaced. As a consequence. However. Therefore. using sub-contractors and temporary staff. Restrictions on the mobility of staff. It involves putting the workforce on a reduced working week for a limited period. or even eliminate this work. Redundancy: This may be seen as a last resort. Staff surpluses When there is a surplus of labour the plan will make provisions as follows:    Stopping recruitment. It makes good sense to reduce. and hiring from agencies. REDESIGNING THE ORGANISATION What about reorganising the way we employ people? The demands of employers are also changing. labour-intensive © ABE and RRC . capital machinery. but the prospects should be investigated. an organisation can find itself with the full-time workforce on overtime one year and then idle the next. in the hope that business will improve and redundancies can be avoided. Redeployment/transfers: Employers have a statutory obligation to seek alternative employment for employees whose jobs are threatened by redundancy. Trade unions may react to a threat of redundancies by banning overtime work anyway. Reducing subcontracted work: Some companies do not rely entirely on their own workforces but subcontract a proportion of work that they are capable of undertaking. both geographically and occupationally. large scale. Managers have various resources at their disposal: physical resources.60 Human Resource Planning (HRP)   (b) External recruitment: Undertaking specific recruitment and selection for the vacancies identified. it will ebb and flow with the level of economic activity between booms and slumps. Redundancy may be either compulsory or voluntary. inhibit the scope for redeploying staff. with the latter being preferable. and people. plant and equipment. less of this work could be subcontracted. if there are risks that some employees will be made redundant.

The details of employment law and the contract of employment are beyond our present purposes but we do need to note two different types of employment relationship. with greater dependence on machines and less on people. as if they were permanent. This is reflected in the law. They also cover contracts for specified periods (i. We consider some of the developments in working patterns in the next section but there is one significant development in “employment” to note here. and the responsibilities of both parties.  Contract of service The concept of employment is taken to cover those relationships that are contracts “of service“. These relationships are governed by a contract of employment that defines all aspects of the means of providing the service. the servant. to define what is and is not acceptable in the contract. as the labour market is contracting and the levels of education are rising. The labour market was literally a market then. the remuneration. Should we change the basic nature of the employment relationship? The establishment of an employment relationship involves creating two parties to a contract for the provision of services in exchange for some form of benefit: the employer and employee. Some of the developments contributing to this are:      Robotics in car manufacture Computer aided design/manufacture (CAD/CAM) Just in time (JIT) systems reducing the need for storage and handling of stock The use of call centre operations instead of retail outlets. temporary work) that may be under the same terms and conditions. often for just short periods. The growth of e-commerce and other Internet applications. invariably to redress the in-built balance of power in favour of the employer by protecting or promoting the interests of employees.Human Resource Planning (HRP) 61 processes are becoming a thing of the past. Largely. this has been created by governments intervening in the labour market. which could be cash or in kind. for services to be rendered in return for some consideration. the work. etc. to provide their labour. and for the eligibility and payment of social welfare benefits. The first is the traditional form of employment and the second represents a relationship that is becoming increasingly important. Such relationships date back to the Middle Ages and the formation of master-servant relationships. These exist where the individual is permanently contracted with an organisation. the demand for unskilled labour is also contracting but there is increasing demand for skilled employees and for greater flexibility in the pattern of work itself. albeit with some changes. One effect of this is that. © ABE and RRC . the master. or another person. The essence of these relationships was that one person. as it defines employment for the purposes of the liability for and collection of taxation and national insurance. to make it binding. The law also heavily influences it. contracted with another individual.e. The law governing the framing of contracts of employment has grown enormously since then to encompass a field of study on its own. with hiring fairs being held around the country (the Nottingham Goose Fair being a good example). The terms of the contract would be agreed verbally and cemented with a handshake.

Atkinson also split the organisation into two groups:  The 'core' group. Contracting out takes responsibility for all problems concerning adjustments in contractual arrangement e. wage rates and hours worked. The balance of power in the relationship may still lie with the organisation but it may also be more equal. Financial = the scope to vary remuneration to fit the changing needs of the organisation. Core workers may display common features and may have firm specific skills that would be hard to buy in. being permanent and displaying functional flexibility characteristics. not governed by a contract of employment. They are formed between organisations and individuals on the basis of a commercial contract to provide services. The services provided will be of a specified type over a specified period for a specified payment. this may also lead to workers being multi-skilled . Functional = the ability to train and deploy labour over a range of tasks. rather than an employment contract. This creates a different form of working relationship. or even tilted towards the individual in some instances. the employee. it is also being exploited by many other workers who want the flexibility to determine their own working patterns. However. What is the flexible firm? Atkinson in 1984 divided this move towards flexibility into four main components within his model of the 'flexible firm'     Numerical = where management can adjust levels of labour in line with demand. offered numerical and distance flexibility and used and discarded as required by demand.brick layers also being plasterers and doctors also managers. Functional flexibility allows people to respond to change and move quickly between tasks. allowing functional flexibility to be exploited to the full. The organisation can then concentrate on its core activities. responsible for their own tax liability and national insurance or working through an agency. The peripheral worker provides a buffer. rather than fit in with the pattern offered by the traditional contract of employment. Distance = replacing permanent employment contracts with self-employment. It is the end product that is being bought rather than. by increasing the speed with which the organisation can adapt to meet changing market needs To take advantage of staff available in the external labour market To clarify career development routes To reduce the power of trade unions  Why might we want to increase flexibility?      © ABE and RRC . in the case of an employment contract. The organisation effectively buys the service in much the same way as buying stationery from a shop. To focus resources and attention on core activities To reduce waste.g. The individual will probably be selfemployed. subcontracting and agency workers both temporary and part time. The peripheral workers. This type of employment relationship is becoming increasingly significant in areas of work which demand high levels of skill.62 Human Resource Planning (HRP)  Contracts for service These need to be distinguished from contracts of service.

some based on computer technologies. making use of e-mail as well as “lower tech” devices such as fax machines. For the organisations. to some degree or another. D. This suggests that the patterns of employment will change but so.Human Resource Planning (HRP) 63 Does the flexible firm exist in practice? The flexible firm model is useful in showing what flexibilities organisations might seek and how they might go about keeping things flexible. However. but many simply based on building greater flexibility into traditional types of job. different working patterns offer the opportunity to fit work in with other responsibilities and interests (domestic and social). will the ways in which work is done. the complexion of the labour force can be altered to reflect new needs. otherwise the person may stay too long as an unproductive resource. it means that the person entering the job knows that the work will last a specific time and enable both them and the employer to plan accordingly for the next time period. Fixed-term contracts can provide useful flexibility but they do require careful planning to:  Avoid getting the period of employment wrong. a significant feature of the modern organisation environment is relentless change. CHANGING PATTERNS OF WORK As we have seen. Fixed-term contracts are quite common in positions such as overseas appointments and domestic senior level/executive jobs. there is no doubt that the elements of the model are present in most middle to large organisations. as well as gaining more personal control over their working lives. workers are taken on for a specified period to ensure that when the needs of the organisation change. There are a great many new patterns of work evolving. permanent working offer the opportunity to provide themselves with more flexibility at lower cost. For the latter. Research has failed to show a wide scale adoption of the flexible firm model so we cannot yet say: ‘This is the way everyone structures their organisation’. the organisation can lay off part-time workers more easily during slack periods and part-timers have fewer rights to statutory redundancy payments. a person who used to come to the office every day can work from home. using a PC and a modem. For example. or alternatively have to have the contract “rolled over” for a new period Avoid losing valuable people who might otherwise stay Reduce or eliminate the likelihood of the fixed-term employee going off to a competitor with valuable intelligence   © ABE and RRC . alternatives to the traditional “nine to five” pattern of full-time. Furthermore. this reduces the damage that can be done by having the wrong person to do the job for any longer than necessary. too. For the former. Technology has made it easier for organisations to bring in new working methods. (b) Fixed/short-term contract workers Here. What forms of employment are there? (a) Part-time workers Part-timers are often cheaper and can be more flexible. For the individual worker. even if the model is not adopted in a wholesale fashion.

The turnover of agency personnel is also high. where self-employed people operate as direct sales personnel. which can result in continuity problems. (c) Outside contractors/sub-contractors There are several advantages of outsourcing work to independent contractors:      The organisation only has to pay for what it gets The contractor may be negotiable on rates of pay or fees. The “employer” has to take great care to ensure that quality standards are maintained and that the self-employed person does not have any conflicts of interest.64 Human Resource Planning (HRP)  Gain the full commitment of the person. who after all will only be with the employer for a while and cannot be expected to foster the same loyalty as a “full timer”. There are many employment agencies. Decisions also have to be taken on methods of pay and who provides any equipment or machinery. the outsourcing permits both the buyer and seller of the service to specialise Long-term relationships can be built up between buyer and contractor. (f) Get the customer to do the work Technology now enables companies to deliver services on a DIY basis. e. Self-employed labour Many organisations now have people working for them who work on a self-employed basis. Many functions that were traditionally the domain of internal labour are now outsourced.g. These include:     (d) Catering services Information technology services (often put out to bureaux) Printing and stationery Specialist advisory units. earning mainly commission. This is common in life assurance sales functions. especially if the organisation is competing with others for the same contracts Contracts can be written precisely to reflect needs and can include clauses to invoke time or quality penalties Often. some of which specialise in certain fields of expertise. © ABE and RRC . (e) Agencies An organisation can give itself more flexibility by using agency labour. especially when the relationship with the agency is not well established. even if all the work is provided by one source.    Scanning your own goods at supermarkets Filling up the car with petrol and paying at the pump by debit or credit card Internet shopping. There are obvious dangers with quality control.

It provides a format. but not necessarily. “Core time” is the time when employees are required to be at work (usually between 10am and 4pm). but these can be overcome. particularly for women with child responsibilities. Different types of shift working systems include:  The continental system Organisations are increasingly moving over to a continental pattern of shift working. usually. to carry on with their jobs on a specialised part-time basis.Human Resource Planning (HRP) 65 What time-based methods are there? (a) Shift working Shift working enables a continuous production process. who are dependent on income from full-time employment. etc. This involves employees working a rota. the evidence seems to be that job sharers work harder and better. In some companies it means 12 hour shifts on each occasion worked. Friday nights are left free. as long as the hours at the end of the week add up to 37. followed by two or three rest days. so that the factory environment never really shuts down (apart from during holiday periods). individuals can determine the hours they work during each working day. (c) Job share One full-time job is shared between two employees working on a part-time basis. but it means that employees have “rest days” to catch up on lost sleep. It is a popular option with some companies as it gives employees variety and more time to spend with their families and on leisure activities. When employees work the night shift they usually work four nights (Monday to Thursday inclusive) and go home on Friday morning. It also enables the effective utilisation of employees and machinery. thus increasing personal flexibility. because they are doing what they want to do and are more motivated. if their normal working week is 37 hours. This is ideal for individuals who want to work only for a proportion of the normal working week. around the core time. Many organisations are critical of job sharing and believe that it is more expensive to run and harder to manage. afternoons (2pm to 10pm) and nights (10pm to 7am). or to older employees who may regard part-time work as a compromise between full-time work and retirement. Job-sharing is most likely to appeal to staff who have domestic commitments and prefer part-time work to full-time work.  Three shift system Here. For example. employees work a pattern of three shifts: mornings (7am to 2pm). As you can imagine the night shift (as well as shift working per se) puts enormous psychological and physical stress on individuals. There may be practical difficulties of liaison between the two part-time staff members in some cases. such as two mornings followed by two nights. Companies usually have a recording mechanism to ensure that employees do not abuse the flexi-system. Clearly. Tasks are also shared equally between job share holders. (b) Flexi-time Flexi-time gives employees the opportunity to determine when they come in to work and when they go home (within certain parameters). © ABE and RRC . dividing the time (and the pay) equally between them. Job sharing has become popular partly because of equal opportunities awareness. However. there is a limiting factor in the reaction of many staff.

and also by fast delivery services for materials. The annualised hours contract was first developed in the pulp and paper industries in Sweden and Finland. the length of the working day can be varied up to. on the road. It has been the advance of this modern technology that has made it feasible for many people to carry out their jobs without working from an office. a large insurance company in Surrey reorganised its sales structure and closed many of its © ABE and RRC . The extra hours worked in the busy period can be compensated by shorter days in the quieter period. or by aggregating the hours into blocks of time off. to take account of changes in the organisation. Reluctance to work “pay back” hours Difficulties in organising shift cover The complexity of planning shift rotas Problems in scheduling holidays.66 Human Resource Planning (HRP) Job sharing can be an effective tool to keep staff who might leave because they can’t or won’t work full time any more. They can be supported virtually. 9 hours a day in a period of peak demand. It can work well for both employer and employees provided both job share holders are happy with the continuation of the arrangement. where the objective is to alter working practices to reduce costs. (d) Annualised hours An annual hours contract requires the employee to supply a given number of hours of labour over a 12-month period. It is usual to have arrangements to review quarterly or half yearly. Within the agreement. The benefits of annualised hours include:          A reduction in overtime worked Lower labour costs Reduced absenteeism Greater flexibility Increased productivity. For example. The disadvantages include: What location-based methods are there? (a) Teleworking Teleworking is working at a distance from one’s employer. by video and audio conferencing and Internet meetings. It is also highly relevant when employing parents who wish to manage their time around school hours and holidays. the actual hours worked can vary from week to week and month to month. Annualised hours contracts are gaining popularity with employees and employers (although there is a suggestion that administratively they are more complicated to manage). increase flexibility and introduce new cultures. Teleworkers use e-mail. For example. or at a locally based centre. either at home. From this example you can see that annualised hours is a good strategy for organisations that have a demand for labour that is predictable but not regular. It allowed people to work more hours in the busy times and less at off-peak periods. Difficulties can arise if one job share holder leaves or wishes to work full time. say. without the organisation having to employ more staff on temporary contracts or pay large overtime payments. mobile phones and faxes to keep in contact with their employers or customers. Their introduction can often be part of a change in management strategy.

sales reps. Many organisations are following suit. visiting clients/customers. No travelling to work. as the contractor will handle these. they must organise themselves to see them that day. and no money spent on commuting. whilst other jobs are better carried out at head office. etc. It found that it is far cheaper to set up individuals with the technology required to work from home than to run expensive offices in large cities. It is also important to consider the office staff with whom the teleworker has to liase. Teleworkers have to be disciplined and organised to ensure that the work is completed.g. They need to be sensitive to the fact that the teleworker may only be in the office occasionally and that if they need to see them. Some organisations are concerned about the security of confidential and sensitive material. they must also be content to work mostly alone at home. too. A considerable reduction in office overheads. without being confined to the 9am to 5pm restrictions. To save accommodation space and the associated costs. teleworking is not right for everybody. which does not suit everyone. hot desking is a working system that has been introduced in some companies. The training of staff has to be organised at a remote facility. including the Nationwide Building Society. The contractors can be employed on a series of short-term contracts rather than earning employment rights as employees. Lloyds/TSB. In some organisations teleworkers are retained as staff. Scottish Widows. The difficulty that some people have to maintain the self-discipline and motivation required to work on their own. control budgets. Lack of face-to-face contact with fellow workers. the Co-operative Bank and the Britannia Building Society. or by recalling staff to the head office. companies may employ consultants or support staff who only come into the office occasionally but have their own desk available to them permanently. etc. Alternatively. whilst employees will continue to be employed even through slack periods of work. They. Equally.. Certain types of work lend themselves more easily to teleworking: data processing. pension contributions) do not have to be paid. The advantages of teleworking include:  A substantial increase in productivity. whilst in others they work freelance. generally because of the flexibility the employee has to work when and where they want. No longer does each employee © ABE and RRC . Technical support has to be organised for the maintenance of complex equipment. They can be employed just while there is work available and then re-employed when there is a further demand. need to be organised and disciplined in the way they work.        (b) The disadvantages of teleworking include: Hot desking Many organisations have staff whose jobs involve them being out of the office for a significant amount of their working time. For the employer it can be a benefit to employ someone as a freelance contractor rather than a full member of staff. and clerical work . Staff benefits (e.Human Resource Planning (HRP) 67 regional offices. which means having to run their own organisation. the employer does not need to worry about National Insurance contributions or tax. attending site visits. no time wasted waiting for trains or in traffic jams.

It also includes the socioeconomic (or class). All these factors will have a direct effect on the type of skills. D. What are the features of the external labour market? The significant features include:  The breakdown of the population in an area (its demography). can be local. at present. but some staff do feel that they no longer have the security and stability of their own desk in the office. (c) Home working Home working affords individuals the same benefits as teleworking without the network of support and the same need for communications. and that they lose personal involvement with their work colleagues. Demographic change The most vivid feature of the UK economy. usually on a pre-booked basis. The external labour market is basically a “pool” of potential employees into which an organisation can tap and as such. etc. qualifications. the working population would decrease by 23%. generally those between 16 and 65 years of age. financial consultants. mobile hairdressers. Writing in “The Age of Unreason”.68 Human Resource Planning (HRP) have their own desk/workstation. The number of school leavers available and eligible to apply for jobs. The availability of skills. immigration into and migration from a particular area. Unemployment in a particular area (areas of high unemployment may not be a good thing as the available labour may not have the skills employers want). It takes into consideration growth of. and even from their car. Demography is the study of the population and its movements. EXTERNAL SUPPLY FORECASTING What is an external labour market? If your organisation does not have the internal human resources that it needs to continue its operations. the train if they are travelling long distances. is decreasing gradually both as a proportion of the total population and in total numbers. This is attributable to two factors:   The birth rate is declining as families are content to have fewer children The death rate is also declining as advances in medical science improve longevity. is that the population is ageing. This © ABE and RRC . etc. it must look to the external labour market. or at least from a home base. the desk is “depersonalised” and available to be used by anyone coming into the office. editors. if necessary. How other companies compete for available labour and the type of package (pay. Hot desking means that a smaller space produces the same or better output than before. It is essentially used by freelance or self-employed workers who can carry out their entire business from home. that are concentrated in any area of the labour market. etc. Savings that result from reduced accommodation can be significant for organisations. Charles Handy anticipated that in the tenyear period to the year 2000. Typical homeworkers are market researchers. when they are not hot desking the staff can work from home. Because of the developments that have taken place in communications technology. with drawers filled with their personal belongings. graphic artists. benefits and incentives) they are prepared to offer individuals in order to attract them.     (a) This means that the working population. age and gender breakdown. national or international.

More young people are prepared to leave home early to live on their own and become more independent. rising and this may mean greater expectations in respect of types of jobs and rewards. The general level of education in the labour market is. Generally. A higher proportion of people (mainly women) wish to combine being a parent with a career. team leaders and management) Reward (to recognise. © ABE and RRC . (b) Other labour market changes The labour market is also experiencing other changes. there will always be unfilled vacancies. In the ten years up to 2000. This means that workers are not always of the right type. contributing to higher national and regional levels of unemployment.  More school leavers are entering higher or further education. conventional economics suggests that the scarcity of labour in certain parts of the market will drive up the price (i. Consequently. Anticipating longer-term problems in funding the state pension scheme. during which the working population actually increased. Skills shortages are inevitable. potential recruits may be able to “pick and choose” rather more than they could have done in a tighter labour market. therefore. The ramifications of this shrinkage of the labour market are:  Employers may be in a “seller’s market” for labour: as the working population reduces. It is important in practice because a change in one area of HRM will often have implications elsewhere. wage). even when there were over two million people unemployed there were skills shortages. the numbers of school leavers staying in education rose from only three in ten to around eight in ten. HRP AND HORIZONTAL INTEGRATION What is horizontal integration? It is the ‘fit’ between different HR policies and practices and the degree to which they support or contradict one another. so this problem must worsen. workers may increasingly build pension and other retirement-related demands into wage bargaining situations.    E.Human Resource Planning (HRP) 69 may present the opposite problem to the situation from 1980 to 1990. of the right skills or in the right place to fulfil the demand. making for greater flexibility and mobility in the labour market. implying new ways of working and living.e. a move to introduce team working is unlikely to be successful unless it is accompanied by:     Training (for team members. For example. that the team is now the primary unit of activity) Appraisal (to provide for the regular review of team performance and development needs) Recruitment (recognising that team working is now a core competence to be tested in the selection process for new employees). financially or otherwise. people are retiring earlier. Following on directly from the last point.    At any given time in the economy there is said to be “friction” in the labour market.

What is new is the highly accelerated pace of change. it dramatically affects employment and therefore HR plans. 3. For example:  Politics: Governments create law.   © ABE and RRC . reward and staff development’) Then link them together where they are connected. Exercise 1. to know what is likely to change. So the challenge for HR planners is twofold:  Think ahead as far as possible. as does the increasing willingness of workers to migrate within countries and across national boundaries. national and the increasingly global economy affects which organisations grow and which shrink. flexibility is keeping your options as open as you can.70 Human Resource Planning (HRP) HR professionals will often talk about ‘best fit’. Economics: The rise and fall of local. relations. Because HRP involves stepping back to look at the big picture. HR planning precedes HR change. It is important that HR professionals are aware of and if practicable involved in the strategic decisions being made in their organisations. Students often learn the elements of HRP and believe they can be applied universally and in every age. The art is.  Turbulence is brought about by the unanticipated effects of the PESTEL environment. what may change and what is unlikely to change and to plan accordingly. What contribution does HRP make to vertical and horizontal integration? Planning precedes action. Unstable financial markets influence profitability and therefore. it gives HR professionals an opportunity to examine how well HR policies and practices fit with the business and with each other. referring to the matching of HR policies and practices with each other (horizontally) and the business and its environment (vertically).g. what would have taken a decade fifty years ago can now happen in a year or even less. Keep the plan as flexible as practicable. List the HR activities that take place in your organisation (or an organisation known to you). that is not possible. If any of this changes significantly. encourage their economies and invest large amounts of public money. (You may want to group them under the headings ‘resourcing. F. This may seem like a contradiction. Which connections are the most important? 2. Organisations have always been changing and HR plans have always had to be updated to take account of the unexpected. Society: Demographics (e. Planning is laying out what you are going to do. therefore. HRP IN TODAY’S UNPREDICTABLE GLOBAL ENVIRONMENT What future does HRP have when organisations are changing so rapidly and so unpredictably? This is very important question. Unfortunately. growth or downsizing plans. That way they can see as far ahead as anyone else and adapt their HR plans accordingly. ageing workforces) affects both labour supply and demand.

uk) © ABE and RRC . staffing plans move from employing large numbers of low skill workers to smaller and more flexible cohorts of professional through computers and associated technology.   Case Study Trainee doctors 'will go abroad' More than half of trainee doctors are ready to leave the UK if they fail to get a training post The UK government is responsible for estimating the need for newly trained doctors and for providing training places. As a result up to 10. labour relations and environmental legislation.000 newly qualified doctors were unable to find a Environment: Everything from ‘the greening of employment’ to the implications of global climate change impact upon HR planning. In 2007 it appeared that the calculation of demand was significantly too high.Human Resource Planning (HRP) 71  Technology: As work moves from manual to knowledge based. (Source: www. Law: The law is increasingly international and is affecting employment via human rights.

72 Human Resource Planning (HRP) © ABE and RRC .

C.73 Study Unit 4 Recruitment and Selection Contents A. The Recruitment and Selection Process Why is this important? What is the difference between recruitment and selection? What stages should we go through? Defining the Vacancy When should we recruit? What is job analysis? What is a job description? What is an accountability profile? What is a person specification? Casting the Net How do we fill a post internally? How do we fill a post externally? How do we choose where to advertise? What should a recruitment advertisement contain? What form should applicants use when applying? Selection Procedures How do we grade candidates? Why use a marking scheme? When does selection start? What is good practice during the pre-selection stage? What is positive action? Should we take up references? What are the rules for selection interviews? What types of interviews are there? How do we structure an interview? An Interview Checklist What are the problems with interviews? When should we use assessment tests? Page 75 75 75 75 76 76 77 78 81 81 83 83 83 85 85 86 89 89 91 91 92 92 93 93 94 94 95 97 98 B. (Continued over) © ABE and RRC . D.

Employee Induction What do we put in an acceptance letter? What should we cover during induction? 99 100 100 101 102 © ABE and RRC .74 Recruitment and Selection When should we use group assessment? What are the rules for making the job offer? E.

1. 3. This process is outlined below in Figure 4.Recruitment and Selection 75 A. It is also important to ensure that the process is undertaken fairly. Recruitment and selection is no longer a straightforward process. It has a number of stages. THE RECRUITMENT AND SELECTION PROCESS Why is this important? People are the most important part in any business and management should make every effort to get the right people in the right jobs at the right time. Many variables have to be taken into consideration.). How much money are they costing the organisation each year? How long before they will leave the organisation? Why was their behaviour not anticipated at the initial selection stage? What is the difference between recruitment and selection? Although the recruitment and selection processes work hand in hand (insofar as you cannot have one without the other) there is a distinction between them. For a company to stay competitive it must recruit and retain an efficient and effective team of employees. including employment status (full-time. The advent of the flexible workforce has encouraged companies to re-engineer their working and recruitment practices. temporary part-time. Selection involves the choosing of suitable candidates by means of the recruitment process. the external labour market. 1. © ABE and RRC . What stages should we go through? Recruitment in organisations can be viewed as a systematic process.   Recruitment involves the attraction of suitable candidates to vacant positions from both inside and outside the organisation. permanent part-time. Exercise Consider someone you have worked with who was not very effective in his or her job. each of which needs to be completed for the process to be a success. etc. 2. and even whether external recruitment is necessary. and that means being aware of equal opportunities requirements. self-employed. subcontractor.

there should be an assessment of whether there really is a vacancy or whether the work could be done in some other way. Internal recruitment is also a possibility. © ABE and RRC . and there is also the possibility of overtime or internal secondment to cover the work. The company does not directly employ agency workers. Temporary cover can be provided for occurrences like long-term sickness or maternity leave.76 Recruitment and Selection Figure 4.1: Stages in the Recruitment/Selection Process Determine the vacancy Complete the job analysis Write the job description Draft the personnel specification Advertise in suitable sources of recruitment Receive applications and pre-select candidates Hold interviews (and/or other selection method) Make a job offer Implement an induction programme B. etc. The use of temporary agencies is yet another option. which can be expensive and time-consuming. initially. sickness pay. This is cheaper than external recruitment and has the advantage of ensuring the appointment of someone already accustomed to the organisation’s culture and values. Reorganisation of work or training could solve the problem. Agencies. there are a number of alternatives to undertaking the full recruitment and selection procedure. A growing number of companies are subcontracting certain jobs to avoid on-costs such as national insurance contributions. It might be better to fill the vacancy through:   Subcontracting. When a vacancy does exist. DEFINING THE VACANCY When should we recruit? Recruitment is likely to be necessary when either an existing employee leaves or a new position is created. Whatever the reason.

but a complete job analysis will also make reference to the perceptions of others to whom the job relates. Note. though. with internal advertising of the vacancy and proper selection procedures used to make the final decision.  © ABE and RRC . the requirements of fair selection (particularly with reference to equal opportunities) imply that the process should still be worked through in its entirety. A checklist can be useful here. These all relate to examining the job itself.2. therefore. What is job analysis? Job analysis is the process of collecting and analysing information about the tasks. You can see an example of a checklist (adapted from Torrington and Hall (1987)) set out in Figure 4. It is. the line manager/supervisor should know the details of the activities the postholder will be doing. recording all actions Work performance: The analyst performs the job Critical incident technique: Observing the key incidents in the job. The objective is to provide the information on which the job description and person specification will be based. the first step is to define the requirements of the job. Once it is accepted that a vacancy exists and needs to be filled. so it is important that it is done in a systematic way. a key part of the process of matching individuals to jobs. They should have had day-to-day contact with the previous jobholder and know what is required. (b) Information collection Among the more common methods of carrying out job analysis are:       Observing the job: The observer has to check that they understand all the actions Interviewing the job-holder Work study techniques: Measuring and timing actions Diary method: The job-holder completes a diary. These staff can provide details of how the jobholder should integrate with others and perform in group tasks. The first stage in this is job analysis.Recruitment and Selection 77 However.  Line manager/supervisor. If the vacancy is a new job that has just been created. The checklist outlines the various categories under which information needs to be collected. Colleagues/peers. that the job analysis must beware personal bias intruding here and maintain a high degree of objectivity when obtaining the opinions of others. Information required The acquisition of useful data is a vital element in any job analysis exercise. A job analysis exercise has two elements:   (a) Defining the information required Collecting the information. responsibilities and the context of jobs.

associated benefits and incentives. when and why. it describes the job in terms of its duties. Other Information Outline whether the job is open to “advancement” i. and its importance in relation to other jobs it may relate to.e. what. The key elements are:        The job title To whom the job-holder reports (possibly including an organisation chart to show where the job fits in) Primary objective or overview – the job’s main purpose Key tasks How the responsibilities are to be carried out Extent of responsibility Key contacts and basic conditions of work. chain of command (if appropriate).g. give an indication of the education and training requirements (if any). Summary of Job This should provide a breakdown of the purpose of the job. What is a job description? The job description does basically that. salary/wages. responsibilities and purpose.2: Job Analysis Checklist HUMAN RESOURCE DEPARTMENT Summary of data to be collected in job analysis Title of Job Outline title of job in unambiguous terms. It sets the parameters of the job. © ABE and RRC . promotion. Organisational Context Should include: location of job. department or division. appraisals or professional development interviews) and state the review periods (whether quarterly or half-yearly). Physical Working Environment This should include the working conditions (office or shop floor). Performance Standards Indicate the systems that will be implemented to monitor performance (e.78 Recruitment and Selection Figure 4. hours of work. by covering all of the requirements: the who. reporting relationships. Human Requirements Describe the profile of the individual who must meet the job specification. This will be detailed in the personnel specification. where. Content of the Job Should include a detailed description of the duties and responsibilities of the job.

job descriptions are not necessarily definitive.3 gives an example of a job description (adapted from Cole. Once the job description has been written and finalised with the line manager (who will be responsible for the post-holder). Jargon and semantics should be avoided at all costs. To the organisation     You can consider a job description as an authoritative document. as this can lead to both job and role ambiguity. © ABE and RRC . Enables the person specification to be written Gives the organisation an in-depth overview of the job Is the basis for a training needs analysis to be undertaken and appropriate training to be planned for.e. or the blueprint to guide the individual through day-to-day task achievement. Job descriptions may vary in length and content. However. i. they are not cast in tablets of stone and as such. there are two basic rules for writing job descriptions. straightforward terms and language. However. the next stage in the recruitment process is the drafting of the person specification. objectives and targets. It should be to the point and as concise as possible. Succinct and should not ramble on or contain unnecessary information. implemented and evaluated Provides an additional source of information during performance appraisals or professional development interviews. responsibilities and seniority of the post.Recruitment and Selection 79 Job descriptions provide essential information to both the organisation and the potential employee: (a) To the individual   (b) Provides information to the potential employee/job applicant so that they can determine whether or not the job is suitable Gives the potential employee (or the job-holder) the opportunity to set individual goals. A job description should be:  Unambiguous and written in simple. can be reviewed and added to when necessary.  Figure 4. depending on the duties. 1997).

Implementing the company’s remuneration policy in accordance with laid-down procedures. at branch and local level. Providing adequate training programmes for the induction of new recruits and training and development for managers and employees. as laid out in the contract of employment. Establishing and maintaining a regular programme of joint consultation with employee representatives and senior management. 5. Company car will be provided. 7.3: Example of a Job Description for a Human Resources Manager JOB DESCRIPTION Job Title: Human Resources Manager Reports to: Human Resources Director Immediate Subordinates: Human Resources Officer Safety Officer Training and Development Officer Occupational Health Nurse Purpose of the Job: Within the limits of human resources policies. Providing a routine health and welfare service for all employees including arrangements for giving first aid. Professional qualifications (including membership of the Chartered Institute of Personnel and Development) essential. © ABE and RRC . Economic Conditions: Salary will be commensurate with the grade and scope of the post. 2. to provide a full human resources service to line management and to provide a framework for maintaining good relationships between management and staff (including staff representatives). Advising department managers on management development programmes. Previous experience of negotiating with trade union representatives. 3. Ensuring the efficient recruitment and selection of suitable and sufficient employees to meet vacancies identified by department managers. 4. 6. Qualifications Required: Over 3 years’ experience in human resources management. Activities: 1. Maintaining adequate records of employees. 8.80 Recruitment and Selection Figure 4. 37 hours per week with five weeks’ holiday per year. Advising line managers on employee relations and legal matters during negotiations with trade union representatives.

They also focus attention on the relatively unimportant ‘what the job holder does’ rather than the outputs he or she is paid to achieve. Maintaining adequate records of employees. Motivation 5. Adjustment © ABE and RRC .3. qualifications and experience to enable him/her to do the job efficiently and effectively. it is a psychological blueprint of the candidate who. the company hopes. In its simplest form. Job descriptions tend to describe activities or processes followed by the jobholder. Innate abilities 4. Provide management information on employees to those who need it What is a person specification? The person specification is used in the recruitment process to provide recruiters with an “ideal” profile of the candidate the company wishes to attract. Here is an example using two of the activities from the job description at 4. will possess the requisite knowledge. Impact on others              Physical make-up Appearance Speech and manner Education Vocational training Work experience Natural quickness of comprehension and aptitude for learning Kinds of goals set by the individual Consistence and determination in following them through Success in achieving them Emotional stability Ability to stand up to pressure Ability to get on with people 2. There are numerous models used by recruiters to construct these specifications: Fivefold grading system John Munro Fraser devised this system in 1978: 1.Recruitment and Selection 81 What is an accountability profile? You should be aware of the increasing popularity of the ‘accountability profile’ as an additional element in the traditional job description or even as a complete replacement for it. Often both are needed in order to make clear what the job entails. Acquired qualifications 3. Accountability Develop and sustain excellent top level employee relations Activity Establishing and maintaining a regular programme of joint consultation with employee representatives and senior management. skills. They can be quite specific and therefore lack flexibility.

which will enable the successful candidate to perform beyond the basic minimum standard required. often split into essential and desirable. Knowledge 2.82 Recruitment and Selection A more generic and simpler structure is: What the candidate needs to know 1. Customer service Passes the medical requirements Five GCSE A-C including English and Maths (or equivalent) Ability to work long periods under pressure. Calm in a crisis Firm and confident manner. Attitudes      Know about or understand … Be able to do … Have done in the past … Be qualified in … Be motivated by … The person specification is. Skills 3.4: Example of a Person Specification ABC AIRLINES PERSON SPECIFICATION Position: Based: Criteria Knowledge Skills Cabin Staff Southwise Airport Essential Basics of air travel Quick thinking Alert. Experience 4. nursing Manual handling Attitudes Interested in travelling © ABE and RRC . Qualifications 5. Lives within one hour of airport Neat and clean Outgoing personality and sense of humour Willing to work irregular hours and be away from home for long periods of time. Figure 4. The desirable criteria are the abilities. The essential criteria are what a candidate must possess if they are to be considered for the post. Desirable World geography Fluency in one or more language Experience Qualifications Experience in hospitality industry. above the basics. also.

Recruitment and Selection


Once authorisation to recruit has been granted and a job and person specification have been prepared, there is a choice to be made whether applicants for employment should be sought from within the organisation or will it be necessary to recruit from any one or more of a number of external sources.

How do we fill a post internally?
The mechanics of contacting internal candidates are quite straightforward; details can be put on a notice board, or published by means of a circular in any organisation that employs staff in a number of different offices. There are several advantages in recruiting staff internally, along with several disadvantages. (a) Advantages    It is cheap. Few direct costs are incurred. The advice of managers who know the applicants can be obtained. Written comments may be available if a performance appraisal system is in operation. Offering promotion to staff is a good policy. It helps to satisfy their ambitions, encourages them to seek promotion and may help to motivate the workforce to greater effort. For many jobs, particularly those that are highly specialised, the number of applicants from internal sources is likely to be limited. If recruitment is only internal, the manager may then be required to accept an applicant who is less suitable. Delays sometimes result from the fact that a whole series of replacements have to be recruited, starting from a vacancy at the lowest level. Although there may be a motivational effect from offering promotion to some staff, there may also be a sense of grievance in those who are unsuccessful.


Disadvantages 

 

How do we fill a post externally?
There are several external recruitment sources that may be used, either on their own or in combination. No single source is better or worse than the others; managers need to evaluate each on its merits for a particular vacancy.  Casual enquiries These occur where applicants write or call. It is a free source and applicants can be provided quickly.  Recommendations These may be made by existing employers and other contacts and are often a cheap and quick source of new staff. However, there is a potential problem here as the people recommended are likely to be of the same social and ethnic groups as existing staff. Therefore, you may be preventing the same diversity from appearing as you would expect to find in the local environment. An individual who could do the job but who is from a different social/ethnic group could claim that they have suffered racial discrimination if recruitment is mainly by way of recommendation.




Recruitment and Selection

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

Job Centres These are located in High Street shopping centres and they act as an intermediary, introducing prospective applicants to employers who have notified vacancies to the job centre. The service is provided free of charge.

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

Consultants (head-hunters) This type of agency is more expensive and is used for more demanding and highranking positions. The service provided usually includes advertising and preparing a profile. Preliminary interviews are carried out and a small number of applicants, well matched to the profile, are presented to the client.

Universities and colleges When the recruitment is for recently qualified graduates, it makes sense to contact the educational establishments directly. Most universities and colleges operate careers services, providing introductions to employers free of charge.

 

Careers offices These are a good source of school-leaver applicants for appropriate vacancies. The Internet Increasingly, jobs are being advertised in the Internet, a method that considerably extends the potential pool of candidates. The very advantage of the Internet, in opening up access to information, can be a problem for Internet advertising, since you have little influence over who can see the information and it can result in an increase of speculative applications. Some employers advertise direct on commercial job seekers’ sites; others will go through an agency, that will then place the advert on-line (e.g. whilst others will have specialist sites for their sector (especially in the public sector e.g.



Recruitment and Selection


How do we choose where to advertise?
The choice of recruitment sources for particular vacancies should take account of factors such as: (a) The speed with which it is necessary to fill the vacancies. Time is a difficult element to manage in the recruitment process. How long does it take to fill a vacancy? This will depend on various factors such as:  The method chosen for attracting candidates: (i) If advertising a vacancy, the time which can elapse between booking advertising space in the next edition and the advert appearing can vary significantly depending on the publication chosen, e.g. daily, weekly, monthly. If internal recruitment or word of mouth is used the replacement can be found almost instantly. A single interview. A series of different interviews or tests.

(ii) 

The interview procedure used: (i) (ii)

 

The period of notice that the successful candidate is required to work at their current place of employment. It is possible that no suitable candidates apply at the first attempt and you have to wait until you can find a suitable person for the job. In some industries there are only certain times of the year when people change jobs, e.g. in education, where term-time is static, and in travel, where jobs are seasonal, etc.


The costs involved Cost is an important element in effective recruitment. At one end of the scale, word-ofmouth methods of attracting candidates cost nothing, whilst using head hunters or recruitment consultants costs a percentage of salary (and as this method is only likely to be used for top positions this means a considerable amount of money). Once candidates have been attracted, time must be spent screening, selecting for interview, interviewing and testing them. There is a significant time cost tied up in these procedures. There is also the cost of work which is lost or productivity which falls due to staff being involved in the selection process and not having as much time to spend on their usual tasks. The position that is being filled may be empty for a time during the recruitment process and this may cause loss of production or a drop in activity.


Making sure you attract a number of suitable applicants Quality should not be compromised without careful consideration. It is not always possible to employ the perfect person for the job, but it is definitely a mistake to limit the possible applicants because the pressure of time or money constraints.

What should a recruitment advertisement contain?
The two most important decisions you must make when advertising a position are where to place the advertisements, and what to put in them. If advertisements are wrongly placed or badly worded they can be costly and ineffective at attracting the right candidates. You also want to avoid receiving a flood of replies from unsuitable candidates due to an advertisement being misplaced or a misunderstanding of the job’s requirements.




Recruitment and Selection

The following guidelines will help in the design of effective recruitment advertisements. (a) Style The look of the advert may be the first impression of the company that the reader has. Use the company logo for identity and choose a clear, easily read typeface and layout. Think about whether you want to use the job title itself as a heading or prefer something else, such as an attention grabbing catch line. (b) Content The list below gives the essential information that a good recruitment advertisement should include:  Job title: The title should be attractive yet describe the job accurately; a “supervisor” in one company may be called a “manager” or “team leader” in another. Job content: Duties and responsibilities (and working hours). This does not need in-depth analysis, simply enough to give a fair idea of what the job involves. Location of job: Especially important if the job requires some flexibility of location. Name and description of the organisation. Description of minimum qualifications and experience needed for the job. Any unique elements to this particular job, e.g. travel, wider responsibilities, etc. Rewards and prospects (if any). Clear instructions how to apply and whom to contact. Reference: So that records can be kept of response rates, etc.

       

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

What form should applicants use when applying?
The number and quality of respondents to an advertisement depend not only on it being well written and laid out, but also the way in which a response is invited. The advertisement should state the way in which an application for the job may be made. There are two possibilities:   By a curriculum vitae (CV) By an application form.

It is still not unusual for applicants to be asked to write off for an application form, which makes for a slow and drawn-out process, with extra work involved on both sides. The best procedure is for the advertisement to give interested candidates a telephone number and contact name, so that they can make initial enquiries and get any additional information they need prior to applying formally. This also helps to minimise the number of applications from candidates who do not fit the requirements.



Recruitment and Selection


Alternative methods of application are the submission of CVs or application forms on-line through computer communication. (a) Curriculum vitae The curriculum vitae is a résumé or review of an individual’s life history. It provides an account of an individual’s qualifications, past working history, etc. but is difficult to accept as a definitive document as it is open to manipulation and fabrication. Because of this, interview questions should be particularly probing, to identify any candidates who may have been economical with the truth! A curriculum vitae should be two to three sides in length; any longer and it runs the risk of not being read! Advantages of the curriculum vitae include:   They give candidates the opportunity to detail their experience in previous jobs There is no standard format so a certain degree of “flair” can be used their design. They are open to fabrication and manipulation It can take longer to “study” a curriculum vitae than an application form.

Disadvantages include:  

Remember that every curriculum vitae is different and as there is no set format, they can take on a variety of guises. (b) Application forms An application form is a selection tool, specifically designed to match candidates to a job in a structured way. Unlike a curriculum vitae, where the candidate determines the content and layout, the content and layout of the application form are determined by the recruiting organisation. In this way it can control (to a certain extent) the information candidates submit. Application forms vary from organisation to organisation, but the type of information required is very similar. Many companies prefer application forms to be completed in the candidate’s own handwriting. This allows the company to assess the candidate in terms of structure, neatness, comprehension, flair, etc. Advantages of using application forms include the following:      They can help to speed up shortlisting They allow information to be submitted in a structured way They can assess “neatness”, sentence construction and “flair” They give the opportunity for graphology to be used They help the HR department structure questions for the interview, to obtain information that may be ambiguous or absent from the form. Like a curriculum vitae, they can be open to manipulation Candidates may restrict the information given so that it fits into the boxes. provided; they may not continue on a separate sheet.

Disadvantages include:  

As with a curriculum vitae, a covering letter or letter of application should accompany application forms. The Chartered Institute of Personnel and Development have produced a set of guidelines on application forms, to encourage and assist HR departments and




Recruitment and Selection

recruiters to adopt best practice standards in recruitment and selection. They recommend that application forms should:      Be realistic and appropriate to the level of the job Not request detailed personal information unless it is relevant to the job Use clear language Be accompanied by details of the job and clear information about the application and selection procedure State the procedure for taking up references, how these will be used and at what stage in the recruitment process they will be taken

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

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

Adopting a systematic approach Please give an example of how you have introduced a new system, reviewed its effectiveness and relayed these changes to others. Tell us what the situation was? What did you do? What the outcome was?



Recruitment and Selection


Team building liaison Please give an example of when you have been part of a team, improved the team’s performance and promoted this to others. What was the situation? What did you do? What was the outcome? Planning and reviewing Please give an example of when you have put a plan into action and how you reviewed its effectiveness. What was the situation? What did you do? What was the outcome? Security awareness Please give an example of when you have had to consider security. What was the situation? What did you do? What was the outcome? Concern for prisoner care Please give an example of showing concern / care for another person What was the situation? What did you do? What was the outcome?

How do we grade candidates?
Normally, you should use a marking scheme for both shortlisting and final selection. Like job descriptions and person specifications, there are many different marking scheme formats. They try to increase objectivity in selection by adding to the person specification   Weightings to show which are the most important aspects of the job The marks awarded to each candidate under each heading.

The following is based upon the person specification we used earlier:




Recruitment and Selection

ABC AIRLINES ASSESSMENT OF ……………………………………. (name) Position: Cabin Staff Based: Southwise Airport Essential Basics of air travel Quick thinking Alert. Calm in a crisis Firm and confident manner. Customer service Desirable World geography Fluency in one or more language /35 Experience in hospitality industry, nursing Manual handling Pass/Fail Mark /10

Competence Knowledge Skills




Passes the medical requirements Five GCSE A-C including English and Maths (or equivalent) Ability to work long periods under pressure. Lives within one hour of airport Neat and clean Outgoing personality and sense of humour Willing to work irregular hours and be away from home for long periods of time.

/15 Interested in travelling


/30 /100

The essential and desirable columns are cut and paste from the person specification. If a candidate fails to meet any of the essential criteria you would enter ‘Fail’ in the pass or fail column. For example, a candidate who did not demonstrate some experience of customer service would fail, because that is considered essential. This means that you can use a marking scheme at sifting stage. Each panel member’s marks are then recorded in the ‘Mark’ column. (The panel must, of course, have agreed these weightings before they mark the first candidate.) The selected candidate is the one who passes on all the essential criteria and who scores the highest mark overall.



Recruitment and Selection


Why use a marking scheme?
    It injects a degree of objectivity into the selection decision process Preparing a marking scheme forces a panel to agree what it is looking for It supports a defence should there be a legal challenge to your selection decision It makes it easier to choose questions and to share them between panel members.

When does selection start?
Selection begins when the applications have all been received, usually by a specified closing date. The first stage is to pre-select potentially suitable candidates from the total of applications by shortlisting. Then, the final selection will use one or more of the following methods:       Interviewing; the most usual method Testing Group assessment Practical tests (such as teaching a class or wiring up some electrics) A portfolio of work from education or previous employment (to show the sort of work the candidate has already done) A role play (to test candidates’ interpersonal skills in the sorts of situations encountered at work).

What is shortlisting? Shortlisting is the first stage of selection. It involves assessing the candidates’ applications to determine their suitability for the post, with some being rejected and others being retained to go forward to the final selection process. The key to the process lies in assessing the candidates’ suitability in meeting the requirements of the person specification and the job description. These documents provide the criteria against which information about the candidates can be compared. If they have been prepared properly, in the earlier stages of the recruitment process, the task of shortlisting is made considerably easier. The most appropriate people to carry out the shortlisting are those who will subsequently be involved in the final selection procedure. This provides continuity, in the application of assessments and comparisons with the person specification, across the different stages of selection and builds up knowledge and understanding about the candidates that can be valuable at the later stage. Usually, it is the line manager for the job in question and an employee resourcing specialist who would be involved at both stages. It may not, though, be possible for all those who will be involved at the later stage to be included in the shortlisting panel, particularly when there will be an interviewing panel. It may be appropriate to include other people with an interest in the job in the shortlisting process. This may be the case where team working is an essential feature of the post and the inclusion of some or all of the existing team on the shortlisting panel may be useful. Preliminary interviews are also sometimes used as a means of narrowing down numbers, where there are a large number of suitable applications. These may be done by telephone. This approach provides the opportunity to meet a wider range of candidates and explore their applications in greater detail, before narrowing the field down further for the final selection. It also allows others to be involved in the selection process. It is likely that preliminary interviews will be conducted by staff who will not subsequently be involved in the final




Recruitment and Selection

selection procedure. So, if the line manager will form part of the final interview panel, it may be appropriate to include their manager in the preliminary interview process.

What is good practice during the pre-selection stage?
It is important that “good practice” is adopted during the pre-selection of candidates for interview. It not only promotes professionalism, but also suggests to the candidates that they are not just a name on the top of the curriculum vitae or application form. It is important, therefore, that:  All applications are acknowledged (many companies send a postcard with the application form and ask candidates to add their details to it (plus a stamp) if they want their application to be acknowledged). Some companies (because of expense) state on the application form that if candidates do not hear from them within four weeks of the closing date they can assume that they have not been successful (i.e. not made the shortlist). Candidates’ details should be treated in strict confidence and only those who are directly involved in the recruitment and selection process should have access to them. Applications should not be left lying around on a desk. They should be filed appropriately in a lockable filing cabinet or cupboard or subject to password protection if they are held electronically. The matching process incorporates the application form/curriculum vitae, job description and person specification. No other criteria should be used to select candidates for interview. The marking scheme is the best way to achieve this.

 

Adopting best practice standards portrays a good corporate image to candidates applying for jobs. Many employers term themselves equal opportunities employers and have policies and procedures in place to discourage discriminatory practices in the workplace. One aspect of this is the monitoring of applications to ensure that recruitment procedures are in line with such policies. To this end, the majority of application forms ask candidates to state their age, nationality, ethnic origin, gender and whether they have a disability. This information can then be used to:  Monitor the level of disadvantaged groups that apply for jobs. The main discrimination laws in the UK outlaw selection based upon sex, race, disability, religion, sexual orientation and age. Monitor the balance or ratio of the above groups in the organisation so that positive action programmes can be implemented to increase the percentage employed.

What is positive action?
It is where an organisation can demonstrate that members of a certain group are less well represented in the organisation and action is, therefore, taken to encourage members of that group to apply. For example, an advert might say, ‘women are under-represented in this area and we welcome applicants from female candidates’. An organisation may also provide support, such as additional education, if it can demonstrate that members of this group have suffered a disadvantage in society because they are less well educated or trained. However, the selection process itself must select on merit, because positive discrimination (as opposed to positive action) is unlawful. Hence, additional training may be given to candidates from disadvantaged ethnic minority groups or for male or female candidates, but the same selection criteria must be used for all candidates.



usually two and including at least one from the candidate’s current or last employer. Chairman of the Board and Chief Executive Officer of The Proctor & Gamble Company.Recruitment and Selection 93 Case Study 2 In the USA positive discrimination comes under the title ‘affirmative action’. What’s more. Artzt. It is usual to take up a person’s references once the preliminary selection has been made. A 1993 study rated the performance of Standard and Poors 500 on a series of factors relating to the hiring and advancement of minorities and women. There is usually an unknown factor with references because you do not know the precise relationship between referee and candidate. The American Association for Affirmative Action (www. The stock market performance of companies that were high performers in these areas was 24 times higher than firms that did not value their diverse work forces. What are the rules for selection interviews? Basically. A reference may be:      Biased in favour of the candidate due to a personal friendship Biased against the candidate due to a personal dislike Biased in favour of the candidate because the referee wants to get rid of them! Biased against the candidate because the referee wants to keep them! Impartial and accurate. as a way of confirming the choice and obtaining independent information about the candidate’s suitability. In this way you may be able to form a better impression of the referee’s true opinion of the candidate. © ABE and RRC . We have never limited our standards for providing opportunities to women and minorities to levels mandated by law – we believe we have a moral contract to provide equal opportunity for financial reward – and no change in law or regulation would cause us to turn back the clock. we have always thought of affirmative action as a starting point. an interview is a face-to-face meeting between the candidate and the interviewer or a panel of interviewers. The interview is intended to be an exchange of information. Edwin L.affirmativeaction. It is important not to take up a reference without the applicant’s consent.” Should we take up references? All forms of application require candidates to supply references. References can be helpful but again. not an interrogation. the objectives are:   To allow the organisation to assess the suitability of the candidate for the vacancy in question To allow the candidate to assess the suitability of the vacancy and the organisation for themselves. they must be treated with website says: Affirmative action is good for business. You may get a more informative reference if you telephone the referee. stated on accepting the Private Sector Leadership Award from the Leadership Conference on Civil Rights: “Affirmative action has been a positive force in our company.

94 Recruitment and Selection What types of interviews are there? There are a variety of different methods of selection interviewing. this type of interview has declined in importance. relax. This resolves the problem of ensuring fair and equal treatment. before arriving at a collective decision. each having seen all the candidates. Often each interview will concentrate on different aspects of the job or the person specification. With each interview lasting perhaps 20 minutes. They discuss the performance of each candidate. although it is open to criticism over its ability to guarantee fair and equal treatment where just one person is responsible for the process. whilst retaining their friendly and relaxed atmosphere. but being well prepared will minimise this problem. As such. The process is also much less intimidating for the candidate. The interviewers come together at the end of the process. This collective approach overcomes any problem of bias in a single one-to-one interview. whilst others are questioning them. They usually involve between three and six interviewers questioning the candidate.  Sequential interviewing Under this process the candidate moves through a series of interviews. There is only limited time available for each member of the panel to ask questions but they do offer the opportunity to listen to and observe the candidate.  Appointments boards and panel interviews These types of interview are very common in the public sector and are growing in importance in the private sector. as described below. These interviews are now becoming the norm for selection interviewing in most organisations. The sequential interviewing process has a number of advantages over panel interviews. Candidates are also often a little nervous to start with and the interviewer’s first task is to encourage them to get over their nerves.  Paired interviews These are interviews conducted by two interviewers. on a one-toone or a paired basis. although it may still form a part of sequential interviewing.  One-to-one interviews Traditionally. there is a lot more opportunity to explore the candidate’s responses than in a panel of five people with interviews lasting about one hour. with each often concentrating on a different aspect of the job or person specification. but more in-depth questioning can be pursued. © ABE and RRC . associated with one-to-one interviews. The panel approach is used where there are a number of different interests needing to be represented in the selection process. in most organisations. The same variety of interests can be involved in the selection process. together with a member of the employee resourcing function. usually the line manager in respect of the job concerned. and not overwhelming the candidate. The structure of a typical interview would be:  Opening It is quite usual for the inexperienced interviewer to be nervous. this has been the most common form of selection interviewing. with different interviewers. How do we structure an interview? All interviews need a structure. This is normally only necessary for very senior appointments.

The questions should be prepared in advance.  Collect information Start talking to the candidate about areas with which they are familiar and comfortable. then to begin gently. The importance of appropriate questioning during this stage cannot be stressed too highly. Confirm that they are still interested in being selected. An Interview Checklist The success of the interview will depend on the skills of the interviewer(s). when the appropriate time for their questions will be (as they come up or when you give the candidate a specific opportunity to ask questions) and how long the interview will take. so that they are available for future reference. its format. if any query (such as a complaint about racial or sexual discrimination) arises. Closing Ask the candidate how they feel about the job now that they have had the chance to meet you and find out more. such as their current job. © ABE and RRC . the position you are interviewing for and your own position in the organisation. The tips set out in the Figure 4.Recruitment and Selection 95 speak freely and perform well. This information is important to the candidate and it will also allow him/her a bit of time to settle down before they have to contribute. this is important for equality of opportunity.5 should help. perhaps with some informal comments about the candidate’s journey or the weather.   Allow questions and queries Provide an opportunity for the candidate to ask questions.  Give information Give some background information about the organisation. It is usual for there to be a list of set questions that the interviewer will ask of all candidates. Once the interview is over it is important to make notes and record your impressions. their thoughts on the job for which they have applied and their reasons for applying. Then explain how you are approaching the interview. forwards to find out their ideas about their future. then work backwards to discuss their previous experience and finally. Be careful not to overdo the detail at this stage. It is best. It is wise to note your reasons for either selecting or not selecting a candidate at this stage. to ensure complete coverage of all aspects of the job description/person specification. and close the interview by telling them when they will hear from you about the outcome of the interview. outline information is sufficient to begin with.

you will rarely see the best side of a candidate by being aggressive. Listen to what the candidate is not saying as well as to what he/she is saying. Say what position you hold and how it is relevant to the position for which you are interviewing. keeping them short and specific. etc. Ask “Yes/No” questions.5: Interviewing checklist INTERVIEW CHECKLIST Do:    Introduce yourself. Take notes immediately after the candidate has made a slip up. Explain the format of the interview. © ABE and RRC .      Don’t:          Remember the 80:20 rule A good interviewer will be listening for 80% and talking for 20% of the time. Listen. Patronise the interviewee. Offer the chance to ask questions and take notes. Criticise. It is best to put your pen down if you are being told about something difficult or personal. nod. Encourage the candidate by your body language: look interested. If you remain silent the candidate will often go on to offer further information that may not otherwise come to light. Press the interviewee for a specific answer if he/she appears to be avoiding a question. Ask overtly complicated or gimmicky questions. Ask for information that is on the CV unless you need the candidate to expand on it. Make assumptions or guess answers.96 Recruitment and Selection Figure 4. Explain that you will be taking notes during the interview. Ask leading questions. Ask open-ended questions. You may wish to note it later. don’t rush to fill it. Pause. Be aggressive. If there is a gap after an answer.

 The horns effect This is the opposite of the halo effect.g. black.  Stereotyping This is where the interviewer’s perception of a candidate alters because the individual is a woman. are smartly dressed. Ensure the interviewing staff have been trained or otherwise briefed.  Fear A candidate who is different in any significant way to the interviewer has the potential to create fear. Fight: the interviewer may concentrate excessively on the ways in which the candidate is different. it is very difficult to shake off. Asian or disabled. they gain a set of “horns”! Once the interviewer adopts this perception of the candidate. Ensure that interviewers are aware of criteria being used. it helps to avoid scenarios such as the halo and horns effects happening. even if it is fear of offending them because you do not understand their sensibilities. their personality.  The halo effect This is where the interviewer or interviewers see the person in an “exalted” way because they have the same hobbies or interests. These perceptions often cloud the mind and judgement of the interviewer and the candidate gains a halo whether they are good or bad at doing their job. In particular. Do not ask questions which are based on stereotyped assumptions. their lack of training or errors of judgement. Flight: the interviewer may reject the candidate at sift stage because that avoids any potential for conflict or may find ways to justify rejecting the candidate to avoid imaginary problems later on. etc. flight and fright. there are times when things go wrong in interviews. went to a top school. Additional problems may arise in respect of the way in judgements are formed by the interviewer(s).  Asking discriminatory questions The CIPD has made the following points to avoid this: (i) (ii) (iii) (iv) (v) Ensure a clear job description has been defined and clear criteria set. The interviewer takes a dislike to the candidate.Recruitment and Selection 97 What are the problems with interviews? However objective interviewers may feel they are. Ensure all candidates are asked the same questions about matters that might create a problem. these issues need to be avoided. etc. This alters the interviewer’s perception of the candidate and no matter how good that candidate may be at doing the job. belong to the same golf club. the way they dress. © ABE and RRC . The natural reactions to fear are fight. Some common societal stereotypes or preconceptions are: (i) (ii) (iii) That a woman’s place is in the home That it will be difficult to get a group of white workers to work under a black or Asian team leader/supervisor That disabled people are difficult to employ. This is why it is often important to have more than one person interviewing. Fright: the interviewer may become uncomfortable with the result that this candidate is treated disadvantageously. e. Check that there is undisputed justification for any absolute criteria. overtime or travel commitments. Sometimes this is due to the inexperience of interviewers. etc.

Such tests should be used with care.98 Recruitment and Selection Interview training will help to remove some or all of these preconceptions but it very much depends on the individual interviewer and their perceptions about society and the groups that live within it. designed to test an individual’s mental capacity and process. quickly. When should we use assessment tests? A growing number of recruiters are using a variety of testing techniques as part of the selection procedure. to assess an individual’s ability to do the job for which they have applied. primarily. what motivates them and how ambitious they are. Of particular importance are psychometric tests. These tests supplement the traditional interview as a selection method and include a variety of styles and content. the body that regulates the use of tests. these should be used holistically. The nature of the tests often makes it difficult to remove bias. as with intelligence tests. These tests include the 16PF test (16 scales which measure factors that influence behaviour) and the OPQ (occupational personality questionnaire – a series of questions which test the individual’s attitude to certain situations). as individuals can try to choose questions that will give the best results. in some cases they are members of the British Psychological Society. proficiency tests assess the ability of the individual to do the tasks involved in the job. Testers should be qualified and trained to carry out the tests.    © ABE and RRC . The best-known example of this is a keyboard skills test for speed and accuracy. Tests are not always reliable. they cannot always be relied upon to be valid and reliable. This infringes the equal opportunities legislation that was brought in to protect individuals against race and sex discrimination.  Aptitude tests These are used. This can leave the tests open to manipulation. The most common forms used in selection are:  Intelligence tests These test an individual’s intelligence quotient (IQ) or their capacity to think logically. Recruiters should be aware of the following points:  Scoring highly on the tests we have mentioned does not mean that individuals will necessarily be good at carrying out the tasks and duties of the job. Recruiters must use these tests in the right context and view them as part of an holistic process and not as a process in itself. Women and some ethnic minority candidates tend not to perform well in such tests because of the way some of the tests are designed.  Proficiency tests Like aptitude tests. Again. Aptitude tests include spatial reasoning and manual dexterity tests. This is because a high IQ does not necessarily mean that the individual has the ability to carry out the tasks and responsibilities of the job or the personality to get on with people at all levels within the organisation.  Personality tests These are used by recruiters test or measure an individual’s character and personality. and/or in a problem-solving situation. This would take into consideration the individual’s capacity to relate to and get on with other people. Although recruiters are increasingly making use of psychometric tests as part of the selection process.

although psychometric tests have their place and can be useful in helping to select the candidate for the job. The discussion is usually recorded and/or observed by assessors. However. Leaderless groups. validity and effectiveness are supported by statistical evidence. Users should satisfy themselves that any tests they decide to use actually measure factors that are directly relevant to the employment situation. The group does not have a leader and must organise its own activities. Here. interpretation and feedback. including evaluation. can prove to be effective selection tools. Group assessment methods are used to:      Assess how individuals behave in a group situation and how they interact with others Assess how individuals respond to “realistic” situations Assess how individuals think and respond to problems Identify individuals’ thoughts and views on particular topics. The results of single tests should not be used as the sole basis of decision-making. Care must be taken to ensure equality of opportunity among all those individuals required to take tests. This is where six to eight candidates are asked to discuss a general topic of interest.  Everyone responsible for the application of tests. the group is given a real case study and each individual is assigned a role they must fulfil. Each individual then outlines their views on the situation and how the particular problem can be solved. Users must satisfy themselves that all tests have been rigorously developed and that claims about reliability. they must be used holistically. Potential users should satisfy themselves that it is appropriate to use tests at all before incorporating tests into their decision-making process. © ABE and RRC . solve problems and work with or lead others. The centre houses trained assessors/selectors whose job it is to observe and assess the candidates’ abilities under set criteria. both methods have their limitations. the CIPD have produced a guideline document on psychological testing. Testers must be qualified and trained to apply the tests and should ensure that bias and subjectivity do not cloud their judgement.      In summary. this is particularly relevant in regard to personality tests.Recruitment and Selection 99 To promote best practice standards in administering selection tests. to reach an effective solution to the problem. cope in stressful situations. the group is allocated a task to solve. Here. When should we use group assessment? Psychological testing and interviews have their place in the selection process and if conducted appropriately. They cannot be relied upon to assess an individual’s ability or competence to interrelate with people. Command or executive exercises. should be trained at least to the level of competence recommended by the British Psychological Society. One way of assessing these characteristics is to apply group assessment (or selection) methods. Group problem solving. Plumbley (1985) identified three types of group assessment method:   These activities are usually undertaken in an assessment centre. taking into account the entire recruitment and selection process. such as “the ability to communicate effectively with others verbally”. This includes the following points about the way in which they should be used.

obvious that it is better to retain good employees than to be called upon to replace them regularly. If there are any qualifying conditions these should be mentioned. Written documentation will demonstrate the standards the organisation finds acceptable so. as a good candidate may receive another offer in the meantime. subject to references. health check. The induction of a new employee is the beginning of the process that may turn them into a long-term. as you may find that you need them in the future (or if the chosen candidate lets you down at the last minute). loyal member of staff.100 Recruitment and Selection Advantages of this approach include:         Assessment can be done on a group basis It can be used for a variety of jobs. The attitude of company staff the candidate has met and the style of correspondence or telephone communications involved in the process of inviting the candidate to interview and making the job offer will have given the new employee expectations of how they will be treated. However. © ABE and RRC . for example. Disadvantages are that: What are the rules for making the job offer? It is likely that a choice will have to be made between candidates and this will mean comparing the performance of candidates in the selection procedure(s) against the requirements of the person specification. EMPLOYEE INDUCTION Selecting the right candidate for the job is just the beginning. The impressions formed at interview or on other visits to the organisation’s premises will remain with the successful candidate once they begin work. Poor induction demotivates people and demotivated staff will lead to high staff turnover. It is best to tell these candidates that they impressed you and that the decision was close. It is.g. The induction process begins even before the candidate is offered the job. E. including management and supervisory positions It can be used as an additional selection tool to interviews and psychological tests. the decision should be made without delay. a spelling mistake in a letter inviting a candidate to attend an interview will have created a poor impression even before they have come on to the premises. Once the candidate has accepted the position you can reject any other candidates you were holding in reserve. now it is time to convert the successful applicant into a reliable and productive member of staff. e. Once you have decided on the right candidate for the job you must make them an offer. We have already noted the high cost in terms of both money and time that recruitment incurs. It is important to wait until you have seen all the candidates before making a decision. particularly if all candidates contribute equally It is expensive and time-consuming Assessment can take a couple of days and candidates may find it difficult to be available for this length of time. therefore. You should know from your discussion with them what pay and conditions package will be acceptable to them. etc. Individuals may be unwilling to take part Individuals may not perform to the best of their ability in such a competitive situation An individual’s contribution can be difficult to measure.

All new staff experience the stresses of induction and if not handled with care it can quite easily result in early resignation. There is a noticeable tendency for staff to leave during the early months of employment. Leave allowance. This letter should include the following details that will be needed to prepare the employee for a successful first day at a new workplace. Medical: Is the employee expected to have a medical? Catering: What facilities are available? If most employees bring a packed lunch as there are no facilities either nearby or on the premises this should be mentioned. Job description. Overtime arrangements (if applicable). Induction training can help to mitigate the stress and overcome the problems. (a) Starting instructions     Time: Usual start time or a little later to be sure that those necessary will be available to meet the new employee. is aware that they are out to impress. even if only indirectly. Pension scheme booklets. Safety policy statements (another statutory requirement).Recruitment and Selection 101 So. health insurance. this is called the ‘induction crisis’. Employee handbooks or intranet site. and any other “perks” to be included in the package. from where should this be collected? If not. it is necessary to send a letter giving all the details that are required by the new employee. So much for a careful recruitment and selection process! The reasons why induction is a stressful experience (the induction crisis) need to be examined. is there any particular dress code that the employee should know about? Documents: Are there any specific documents that the employee will need? Starting salary and when it will be due for review. it is important that everyone involved in the recruitment and selection process. this is a statutory requirement in many countries. Details of car. pension. in documents such as:      Statement of particulars of employment which must be provided to new employees. with the formal offer of employment and the above information. What do we put in an acceptance letter? Once an offer has been made and the successful candidate has accepted the position. Place: Which entrance? Report to reception or go to a specified office or department. Transport: Where can you park? What public transport is available? Appearance: Is there a uniform required? If so. © ABE and RRC . etc. which some companies provide.  (b)     (c) Package details Other requirements   A lot of written information can be provided. the induction period.

The induction process should not finish at this point as the manager/supervisor should have informal talks at regular intervals with the new member of staff to make sure that they continue to be happy in their job.g. Formal courses Less immediately urgent matters can be given to new employees through formal courses. Allocating a new member of staff a “friend” who can answer questions is often a sensible approach to take. company projects. Feedback should be provided to the employee during this period. cloakrooms. etc. etc.102 Recruitment and Selection What should we cover during induction? It is important that a systematic induction process is carried out effectively. canteen. (b) First week Induction will normally continue on subsequent days of the first week covering matters such as:    (c) Explaining essential procedures. In large organisations induction courses may be held each week but elsewhere they will be run when the numbers justify them. saving both inconvenience and costs. It can also help to reduce labour turnover in the early months of employment. Topics covered may include:     General information about the history and development of the company/organisation Information about trading policies. payment of wages. e. with emphasis on:  Introduction to other employees Establishing friendly relations with colleagues can help to provide psychological support and introduce the employee to behavioural norms. the location of departments. is helpful and necessary. At the successful completion of the probationary period the employee should be interviewed formally and given a letter confirming that their employment is now permanent. e.g. (d) End of probation period Most offers of employment specify a fixed period of three or six months as a probationary period.  Physical layout of the office A quick understanding of the layout of the premises. for claiming expenses. fire evacuation procedures. Perhaps the “friend” could take the new employee on a “walkabout” to become familiar with the layout. Sparing some time at the end of the week to discuss first impressions and answer any queries. (a) First day This is an important part of induction. Induction training can be extremely cost effective if it succeeds in helping new employees to settle down quickly. etc. The following guidelines set out a comprehensive approach to achieving this. acknowledging success and pointing out weaknesses. © ABE and RRC . A description of what each department is responsible for within the organisation More detailed explanations of personnel policies and procedures. Highlighting important safety provisions.

During induction managers shadow the staff learning how they do their jobs stacking shelves and working on the tills. This is in a different store from the one the recruit will join. © ABE and RRC . to demonstrate that retail isn't as easy as it looks and learn to value the part that everyone plays a part in the company’s success.Recruitment and Selection 103 Case Study 3 Management Induction for Tesco Stores Ltd New managers go through a personally tailored induction programme with the supermarket giant Tesco. Induction at Tesco is as much about attitudes as about knowledge and skill. getting to understand the business from the ground up and to feel confident that they understand and can relate to the business. They describe it as ‘a complete immersion in the business’ and it is takes account of what the new manager already knows and can do and where he or she sees the career as leading. Recruits spend 12 weeks in a store.

104 Recruitment and Selection © ABE and RRC .

C. What is Performance Management? How is it done? Isn’t each of these a subject on its own? Is there a connection between performance management and leadership? Do we performance manage only individual employees? What performance do we monitor? What are the rules for monitoring performance? High Performance Working What is high performance working? Why move towards HPW? What does this mean in practice? What evidence is there that it works? How do we go about implementing high performance working? The Contrasting Objectives of the Employer and the Employee What is the employer trying to get out of the employee? What do the elements of good performance look like? What are the employees’ objectives? Reward and Motivation What is motivation? Why do people go to work? How do employers influence their staff’s behaviour? What is the difference between intrinsic and extrinsic motivators? What problems do employees experience with their work roles? How did managers used to view motivation? Has scientific management always ruled our thinking? What role does employee morale have? Page 107 107 107 107 108 108 108 109 109 109 110 110 111 112 112 112 113 113 113 113 114 115 116 118 119 121 B. (Continued over) © ABE and RRC .105 Study Unit 5 Performance Management – An Overview Contents A. D.

G. Need Theories of Motivation What are ‘need theories’? What is Maslow’s Hierarchy of Needs? Was Maslow right? Isn’t there a less detailed model than Maslow’s hierarchy? Are there any other need theories? What about Frederick Herzberg’s Two-factor Theory? These are quite old theories. © ABE and RRC .106 Performance Management – An Overview E. are they still accepted? Have these content theories ever been applied to management? Ouchi’s Theory Z What is participative management? Process Theories of Motivation What is the difference between a content theory and a process theory? What process theories are there? Can we apply this to employee reward? What is attribution theory? What is Handy’s motivational calculus? Does this have any connection with the psychological contract? Excellence Theory and Motivation 121 121 121 123 123 123 124 125 126 128 128 128 128 128 129 130 130 131 132 F.

Leadership concentrates on the inter-personal dynamics of your relationships with individuals and groups. techniques. manage a range of different but inter-related topics:                   Mission (what your unit is trying to achieve) Vision (what things might look like if yours really was a quality outfit) Strategy (a long term sense of direction) Business plans (more immediate targets and plans for reaching them) Values (how people should and should not behave) Culture in which improving performance is valued and developed Monitoring of performance – at individual. Isn’t each of these a subject on its own? Yes and many of them are dealt with elsewhere in this Study Guide. © ABE and RRC . This is integration. team working. saying ‘well done’) Intrinsic rewards (the satisfaction from doing a worthwhile job reasonably well) Effective remedies for under performers. reading. unit and Guild levels Feedback of that monitoring to staff Clear goals A set of competencies (to describe what good performance looks like) Appraisal discussions Personal development (anything that would help people perform better – off the job training. Clearly the two intertwine. WHAT IS PERFORMANCE MANAGEMENT? “How I get my people to do what I want them to do. It concentrates on the ways to organise your people. performance pay. so that you can deal with them in a coordinated fashion.Performance Management – An Overview 107 A. Is there a connection between performance management and leadership? They are very closely linked. structures etc. The beauty of performance management is that it is a way of uniting a wide array of seemingly unrelated topics. It is about management. awards. sitting with Nellie etc) Management development Good job design (creating jobs that satisfy) Team working (interaction and mutual responsibility) Extrinsic reward and recognition (basic pay. Performance management deals with the more tangible aspects of getting the best out of your people – systems. coaching. in the way I want them to do it!” How is it done? Organisations that take performance management seriously.

Treat your staff as professional. sales.108 Performance Management – An Overview Do we performance manage only individual employees? No. students helped. purchasing etc. If you try to do it without the bigger objective in mind it will fail. (c) Involvement Get those responsible to work on the monitoring. What performance do we monitor? You need to be gathering management data at four levels:     Inputs: Staff time. an organisational objective to become greener might translate into:     A departmental plan to reduce transport miles by x% A unit plan to reduce their transport miles by an equivalent proportion A team initiative to car share An individual plan to reduce unaccompanied car miles by y%. What are the rules for monitoring performance? (a) Objective Introduce monitoring as one part of a bigger drive to improve customer experience. If you choose items to monitor and you impose them. consumables. responsible and motivated. Outputs: Customers served. teaching. research. equipment Processes: Support. data. Likewise. paperwork. For example. research written up Outcomes: Profit in a commercial enterprise or service delivery in a service organisation (usually assessed through customer satisfaction). bills paid. Performance management must take place at several levels Organisation Department Unit Team Individual That means there ought to be vertical integration. budget. (b) Positive You are seeking to improve the customer experience and not to gather data to blame people. IT. as a part of their drive to improve the customer experience. © ABE and RRC . degrees awarded. items sold. Monitoring is a means to a bigger end and never an end in itself. an organisational goal to penetrate new markets in China might cascade down to an individual’s development plan to learn to converse in Chinese. your staff will probably be demotivated and performance will drop. energy.

B. Choosy Pick only the most important factors to monitor as too many measures will be counterproductive. HIGH PERFORMANCE WORKING What is high performance working? The four elements of HPW are:     Employee autonomy and involvement in decision making Support for employee performance Rewards for performance Sharing knowledge and information (learning). if you monitor an output with a view to driving it up or down. Place the indices somewhere where everyone can see them. numbers of students receiving degrees. Details will vary from organisation to organisation. Output monitoring has its place but remember that. (Governments are obsessed with outputs . therefore. (You are aiming to raise this year’s customer satisfaction index of 3. (g) Numbers Measure performance numerically.) (i) Communicate Make sure the targets are known. by getting the customer to grade them on a scale 0 to 5. understood and accepted. quantity and innovation will decline Pressure to reduce your prices will grow or Customers may simply stop buying your goods or services altogether or Competitors may take your work. If you are measuring the customer experience you will usually be able to keep the number of questions low. (j) Reliable Use reliable sources of data. numbers of children who can read and write etc).5 to 4. Why move towards HPW? Because if you are not driving up performance:      Staff motivation will be lost Quality. (h) Benchmark Use the results as your baseline or benchmark. © ABE and RRC . your staff will focus on that to the detriment of other things.Performance Management – An Overview 109 (d) Outcomes Measure outcomes in preference to outputs. from where you can improve. You may create new problems but do not think that the answer. is to monitor every output! (e) (f) Tough Challenge those who like the fuzziness of not knowing how they are doing.0 next year. lengths of waiting lists.numbers of patients treated.

quantity and innovation Employees more likely to say ‘a great place to work’ Increased earnings potential for employees.110 Performance Management – An Overview What does this mean in practice? Employee autonomy and involvement Support for employee performance    Develop flexibility of skills Team working to give variety and responsibility. Appropriate selection and recruitment processes (finding staff at all levels who will support a high performance culture) Comprehensive induction programmes Sophisticated and wide training Integrated and wide ranging performance management Emphasis upon work-life balance. HPW explains about 20% of increases in productivity and profit in manufacturing organisations that have adopted HPW Increased job satisfaction and commitment: quality.     Rewards for performance     Learning     What evidence is there that it works?  According to 2004 research. Plenty of effective communication Quality improvement teams Lean systems (this can be expanded upon at the workshop) Spending on training. Offer a career not just a job Harmonised terms and conditions Pay that is competitive with other employers Rewards linked to individual and team performance.    © ABE and RRC . by the Engineering Employers’ Federation and Chartered Institute of Personnel and Development.

Getting staff to be understand about organisational performance (so they see where they fit in and ratchet it up).Performance Management – An Overview 111 Exercise 1 Tick the relevant boxes where HPW practices are present in your organisation: Employee autonomy and involvement Support for employee performance        We develop flexibility of skills Teamworking gives variety and responsibility We look for staff at all levels who will support a high performance culture We have a comprehensive induction programme Training is wide and appropriately sophisticated Performance management is wide ranging and integrated into our operations We provide work-life balance We offer a career not just a job Terms and conditions are harmonised Pay is competitive for the sorts of work we do Rewards are linked to individual and team performance There is plenty of effective communication We have quality improvement teams We have lean systems We invest adequately in training our people Rewards for performance     Learning     How do we go about implementing high performance working? Things that may need to be addressed are:          Getting top management’s commitment. Carrying out team and individual appraisals that make a real difference. (Managers are the key. Allowing employees to re-design jobs to maximise interest and challenge. particularly to resource. Seeking and rewarding discretionary behaviour (Ability x Motivation x Opportunity = AMO). new reward structures). © ABE and RRC . Increasing levels of trust between management and employees. Changing existing strong cultures (especially to promote local discretion). Involving employees in design and implementation of HPW.) Getting the resources HPW needs (both financial and risk taking e. to communicate and to demonstrate the required behaviours.g.

112 Performance Management – An Overview   Not regarding HPW as one simple solution. is somewhere in between and is sustained by both parties balancing their needs through negotiation. an employer wants three things from employees:      Quantity (productivity) Quality (producing good work with low wastage) Innovation (finding new and better ways to get the work done). so they reinforce each other. Employers seek discretionary behaviour and good organisations will establish performance management processes to generate it.’ Life is more complex than this. it is a number of themes woven together. engage in high-quality work and participate in wider activities. over and above the bare minimum. have their attributes recognised and are willing to learn new skills. Integrating initiatives. but this is a useful start! This is the left wing pluralist approach. Cost Control (of cost and of the employees).’ The reality. It is normally expressed as: Discretionary behaviour = ability x motivation x opportunity If the value of any component on the right is zero there will be zero discretionary behaviour. The right wing unitarist approach is ‘Prosperous employers make prosperous employees. © ABE and RRC . the voluntary effort people put in. What is the employer trying to get out of the employee? Principally. therefore: – Implementation is in bundles – Staff understand it and show commitment – Other organisations are used as benchmarks – Continuous improvement is developed. of course. But there are also management issues: What do the elements of good performance look like? We now talk about ‘discretionary behaviour’ i. Opportunity assumes people will perform well. Motivation assumes that people can be motivated to use their ability in a productive manner. if they are given the opportunity to do so.    Ability is the assumption that people want to apply for jobs.e. THE CONTRASTING OBJECTIVES OF THE EMPLOYER AND THE EMPLOYEE ‘The employer wants as much productivity for as little cost as possible. whilst the employee wants as much money for as little effort as possible. below which they will get into trouble. C. such as team initiatives or problem solving. The result is reflected in the psychological contract.

Why do people go to work? Work has become an accepted part of the way of life of almost any society. they are not interchangeable. in many ways people are unpredictable. and he has settled for what Dunlop describes as “the inevitable and eternal separation of industrial man into managers and managed”. You will remember that in the last unit we pointed to the way in which management could be defined as “getting things done through people”.g. Work published by Guest and Conway (2001) on the psychological contract suggested the most common were:         A reasonably secure job Fair pay for the work done A career Interesting work Fair treatment by managers Equitality of treatment To be kept informed about changes affecting them Involved and consulted about changes affecting them D. This means that. People possess a variety of talents and they will react differently in different circumstances. A person’s motives may be clear to themselves but quite puzzling to others. The process of motivation involves choosing between alternative forms of action in order to achieve some desired end or goal. As the following formula shows.Performance Management – An Overview 113 What are the employees’ objectives? This will vary from person to person. Motivation is concerned with WHY people do (or refrain from doing) things. It is important for people in management and supervisory positions to understand such alternatives and to adapt their leadership style accordingly. On other occasions. modern man must “labour by the sweat of his brow”. which creates problems for organisations. a person may not understand their own motives. © ABE and RRC . both the person concerned and those around them understand what their motives are. or may cope well with pressures one day but fail to cope another day. even though these may be perfectly clear to a trained observer. Human beings have various wants. Motives or needs Selected behaviour Goals or desired ends (tangible or intangible) Understanding human behaviour can be a complex matter. To survive. goals can be tangible – such as higher earnings – or intangible – such as personal reputation or prestige. unlike machines. desires and orientations to work. A “motive” is a need or a driving force within a person. In fact. e. This is more easily said than done. On the other hand. REWARD AND MOTIVATION What is motivation? People are an organisation’s most valuable and expensive resource. but they are the most difficult element of an organisation to manage. a person may work well one day but not the next.

if a certain task is not completed on schedule. This traditional “carrot and stick” idea still lingers – the carrot often being money and the stick. for instance.  Money. when the future of the company is in jeopardy. (b) External motivation This is independent of the task i. including welfare amenities.  Fear. a chance to experience pride of workmanship. The “big stick” theory is rather outdated now. these were resolved in the traditional manner by offering financial incentives and/or threatening the loss of employment – providing external motivation. The “great motivator”. though. desirable conditions of work. but it is still occasionally appropriate to motivate people through fear. skills and expertise for the greatest reward. However. What. such as reprimands or the possibility of dismissal.g. During the Industrial Revolution. (a) Internal motivation This is related to the work. which has been expanded by management theorists. as if it is used over a long period or too frequently it will demotivate and have the opposite effect. this basic need for money will only make a worker turn up and do the acceptable minimum. then. This approach has a simple base. this is only a short-term measure. the task is merely a means to an end.114 Performance Management – An Overview To satisfy basic human wants. Money is seen as a prime motivator to improve performance in situations such as the salesperson that earns commission.g. when a person works on an assembly line to get high wages. where there is a close identity between the task itself and the human needs. An organisation is in the position both to © ABE and RRC . people must earn money and consequently. work became more specialised and mechanised. or workers on the factory line work that bit faster where performance related bonuses are used to maintain productivity. holidays. the opportunity to participate in the course of events and a feeling of belonging. It is a fact that most people go to work because they get paid to do so. The starting point of this effort is basic behaviour modification. They are motivated to go that extra mile if it will close one more sale and earn an extra 5%. they offer their skills in return for work and reward. Other “sticks” or negative incentives are those distasteful consequences that a person will wish to avoid. Whenever clashes of interest developed. etc. or to particular types of performance. However. then letting staff know this will motivate them to work harder for fear of losing their jobs. motivates workers? Material rewards are certainly one aspect. There are. How do employers influence their staff’s behaviour? When managers set out to get things done through people they have to ensure that employees perform their work roles effectively and efficiently.e. However. We can divide motivation at work into internal and external motivation. the feeling of working towards altruistic ideals. The starting point is that most human beings are influenced in their work performance by the desire for reward and the fear of punishment. We might assume that they also endeavour to sell their knowledge. pleasant association with others. fear. e. Note that there are a range of other “carrots” – or positive incentives – offered as an incentive to work. e. where a cabinet-maker or motor-fitter derives satisfaction from a job well done. some value other factors more highly and will accept lower pay in exchange for perhaps status or a more “worthwhile” post. many other inducements. For example: the opportunity for distinction and power.

In this simple behaviour model. The rewards and punishments need to be defined and explained to the employees. when fellow workers see an individual punished it can make them resentful of the organisation and may adversely affect their behaviour. appear to be complying with the wishes of the organisation whilst not really giving of their best at work. negative attitudes can be reduced if management deals swiftly with complaints and try to make work life interesting for employees. The term used for encouraging workers to meet the expectations of the organisation is positive reinforcement.Performance Management – An Overview 115 reward and punish its employees. © ABE and RRC . What is the difference between intrinsic and extrinsic motivators? Psychologists identify two types of positive reinforcement: extrinsic reinforcements of behaviour. employees may see a reward as a bribe so it may have the opposite effect to the one desired by management). While experts agree that the model has some sound points. etc. people are not like cogs in a machine. Furthermore. so has to take account of the following points:     The desired behaviour must be defined and explained to the employees so that they know what is expected of them. extra holidays. involving them and creating an atmosphere of reasonableness and caring in the organisation. it is how people see the situation that guides their behaviour (e. and intrinsic reinforcements of behaviour. company car. like finding work interesting. i. may encourage favourable attitudes. it can be criticised in a number of areas:  Behaviour in human beings arises from attitudes. which are the outside influences and rewards such as money. etc. Experience has shown that while the positive reinforcers (rewards) tend to work well. A decision must be made whether to use extrinsic or intrinsic reinforcements or a combination of these. the negative reinforcers (punishments) may make workers hostile and create unfavourable attitudes that persist long after the punishment is over. Management has to operate behaviour modification for the advantage of the organisation. feeling appreciated. Attitude research reveals that consulting employees.e. There must be adequate monitoring of employee behaviour to see whether the reinforcements are having the desired effect. the organisation does not need to take much account of human differences because most people react similarly to the promise of the rewards for compliance with work rules and the threat of punishment for breaking them. Management theorists have tended to emphasise the reward side of this model because individuals can be encouraged to become increasingly better workers. Thus attitude change is the root of behaviour modification and this is a far more complex and difficult task than simple reward and punishment. Resentful workers may.  The ideas behind behaviour modification take too little account of individual differences of personality. Furthermore. on the surface.g. which are “inside the individual” reward feelings. while the ultimate punishment is dismissal and the worker is lost to the organisation. The criticisms of behaviour modification show that the relationship between individuals and their work lives is a complex one and can contain problems.

other times against management or even fellow workers. The individual may be faced with pressures and problems at work that they do not fully understand. Alienation is a state of mind that can arise from unsatisfactory work situations. Management theorists have analysed both the situations at work and the states of mind as follows. management should. Modern researchers have set about measuring the level of alienation among workers by using interviews and attitude tests.116 Performance Management – An Overview What problems do employees experience with their work roles? Psychologists have used two key concepts to analyse problems which people experience in their work roles. Feelings of isolation and of being alone in a hostile environment. Feelings that working life is meaningless. Feelings of putting on an act. The individual feels that they are surrounded by obstacles that prevent them from fulfilling themselves or making progress. Situations which separate workers from each other – noise. The worker does not understand the purpose of the work they are called upon to perform. (a) Alienation Psychologists use this term to refer to the feelings of an individual when they are estranged from their situation at work. when their work role is not a true expression of themselves. However. therefore. e. Situations that inhibit the use of the whole range of a person’s abilities and talents. inability to move about the workplace or any factor which inhibits communication among workers. with worker feeling loss of control over their own life. Resulting subjective state of mind Feelings of being powerless. try to create work conditions that will not give rise to alienation in their employees. Worker is strictly controlled. © ABE and RRC . the causes of anomie are to be found in the confusion that arises in large organisations. the salesperson forced to sell goods in which they have little belief or confidence.g. Feelings of self-estrangement and of not being one’s true self. and not consulted over decisions that affect them. Objective work condition A lack of power and influence over the work situation. an individual may become alienated from their true self. Alienation theory argues that an alienated worker will not be an effective employee of an organisation. They have related their findings to the objective conditions under which people work. At its extreme. (b) Anomie Anomie has certain similarities with alienation in that it is a state of mind that arises in the individual from unsatisfactory work situations. Sometimes alienation is focused against the organisation.

which set up a vicious circle by creating even worse physical problems. e. As with alienation. everyone to wear the firm’s uniform. for employees lower down in the organisation.g. So. single canteen. dress. the decision whether to retain or reduce status symbol differences presents problems for management. (d) Stress Psychologists define stress as strain experienced by an individual over a period of time. people at work may experience problems related to status and stress: (c) Status Social status refers to the amount of respect paid to an individual.Performance Management – An Overview 117 We can summarise anomie as follows: Objective work condition When an individual is not properly integrated into a social or work group. breaking down or contradictory. work surroundings. A work role can confer prestige upon a person. In addition to alienation and anomie. Their findings can point out any lack of clear leadership and confusion over norms and values. When there are confusions over values and beliefs. Many modern theorists are becoming convinced of the value of the Japanese approach of reducing status differences. status can be very divisive in an organisation. while coping with status differences may present problems. too. At the individual level. parking and toilet facilities for all staff. © ABE and RRC . company car. anomie is a deep personal disturbance. which impairs the ability of the individual to perform their role. etc. symptoms of stress such as tiredness. The worker suffering from anomie will not prove to be an effective employee of an organisation. Confusion and no clear idea of how to behave. thus guiding management towards correcting the conditions that give rise to anomie within an organisation. modern researchers set about measuring the level of anomie by the use of attitude testing. title of job.g. salary. Resulting subjective state of mind Loneliness and a sense of isolation. etc. e. there may be a total breakdown of cohesion within the organisation. if whole groups become anomic.g. etc. Some management experts have used status symbols as positive reinforcers (rewards). management dining rooms. headaches and irritability. can cause resentment in those workers not allowed to use these facilities. e. The individual will have difficulty in recognising right from wrong. Status may be perceived through the possession of symbols. Stress can produce physical or mental symptoms and can be generated by pressures and problems in the work situation. Furthermore. toilets. When the norms that govern social behaviour are unclear. However. can lead people into other problems like heavy drinking or excessive smoking. car parks.

Alienation – Again stress arises from a work problem. it is widespread and can affect people at all levels of an organisation. To combat this situation. management and labour would co-operate to accomplish the best results. all calling for attention to their instructions. we must remember that we are talking about high levels of excessive stress. Personality clashes – Stress may arise from conflicts with supervisors. How did managers used to view motivation? The proponents of scientific management saw the problems of people at work as resulting from a failure of management to properly integrate workers into their roles in the organisation. can give rise to stress. This in turn can generate excessive stress. anomie. However. or blocked progress. even if it is not possible to promote them. this can give rise to stress. Management must use time and motion study to establish best practices.  Planning Many problems of employees arise because their work is not properly planned for them and workers do not know the best way in which their jobs should be done. while being quite happy with other parts of the job. Conflicting loyalties – If an individual has too many bosses. higher pay. © ABE and RRC . important among which are:  Anomie – Here we have one occupational problem. scientific management puts forward its view that management should plan the jobs of workers and should establish the best way in which each job should be performed. Thus. higher profits. stress. Frustration about an individual’s place and worth in the organisation. and the way to achieve this was through the application of scientific management principles. When people are confused as to just what is expected of them and just how to go about their organisational goals they are likely to suffer from stress. F W Taylor was an early proponent of the dictum that workers should share the same goals as those of the organisation. He felt that the scientific approach to organisation and management would be accepted by all as the best way to operate and it would result in everyone getting what they wanted – higher output. Role conflict – If a person finds certain aspects of their work role unattractive. The basis of this approach lay in the following principles. subordinates and/or fellow workers. particularly if these conflicts are left unresolved.      The above summary of the causes of stress tells us that we are dealing with a complex problem. arising from another occupational problem. Poor communications – A lack of good communications can give rise to frustration and feelings of isolation at work and these can cause stress.  Time and motion study Many work-related problems arise because workers do not realise the one best way of performing a task.118 Performance Management – An Overview Stress in the work situation has many causes. We can see that this could give rise to anomie – the confusion of the individual in relation to his job.  Incentives Bonus payments and incentive schemes give good workers a sense of making progress.

if not.  Training Taylor and his followers believed that many of the problems of individuals at work arose because they had not been trained properly. in fact they often pursue goals which conflict with those of the organisation. people may brood and discontent festers. they react against uncertainty and threats. they expect to be treated with dignity and politeness. gossip and generally accepted norms and values. Many of the ideas of Elton Mayo can be deployed to assist the integration of individuals into their work roles. so scientific management emphasises the importance of proper training. Important among these are the following points:         Individuals are social beings just as much as economic beings and will only perform well in organisations if their social needs are met. Individuals value praise when they feel that they have earned it. We can see that scientific management suggests a range of techniques that can be employed to cope with at least some of the problems that arise when individuals work in organisations. Individuals like to feel that they have some control over their own work situation. Grievances should be dealt with quickly. Individuals expect to be treated as human beings in the workplace. e. Within enterprises there is an informal organisation of friendship groups. Has scientific management always ruled our thinking? No. The major breakthrough of the human relations approach was the realisation that people. © ABE and RRC . Good communications are crucial.g. Individuals perform well in a secure environment. unlike machines. The essence of the practical application of the approach is to try to reconcile the needs of the organisation and the needs of the individual. when changing a worker from one job to another. The dehumanising effects of Taylorism gave rise to the Human Relations Approach. Good training not only improves production performance but also builds up the confidence of employees. Management should take account of this. they appreciate being consulted over matters that affect them.Performance Management – An Overview 119  Working conditions Management has a responsibility to provide good working conditions so that workers can achieve their full production potential. are not passive instruments of the organisation who will always pursue organisational goals. people have a right to know what is going on in the organisation.

productive workforce Contented. To motivate other people to perform to the best of their ability it is necessary to make them want to do it for themselves. to some degree. The manager will set about finding out what motivates the people they are managing. There is no simple answer to the problem of motivation. help them find the impetus from within themselves to work towards their own goals and rewards. efficient workforce Motivating workers involves inspiring them to contribute to the goals of the organisation. to some extent.1 shows the two sets of needs that must be reconciled. Create an environment where they will become selfmotivated. © ABE and RRC . but modern theorists look to ways of going beyond the simplistic views based on punishment and reward models. It is now realised that other influences are often more important and increasingly. in any motivation model that a manager may use. for people to behave in a way an organisation demands. their role and the organisation. there must be an integration of the needs of the people and the demands of the organisation. although these may still feature. How a manager goes about this will depend. on what they believe people want from their work. These are the factors that improve an employee’s level of job satisfaction and include such things as:      Responsibility Challenge Self-improvement and personal growth Recognition Sense of achievement. it has been recognised that. Figure 5. To become a successful motivator of other people you must learn to concentrate on certain factors that make an employee feel good about themselves.1: Individual and Organisational Needs INDIVIDUAL NEEDS Physical well-being Job satisfaction Personal development Achievement Respect from work group ORGANISATIONAL NEEDS High productivity Low absenteeism Co-operation Industrial harmony Constructive disagreements Low labour turnover If needs are met If needs are met Contented.120 Performance Management – An Overview Figure 5. Motivating others means giving them a reason to want to do something and there is a better way than bribes and punishments.

perhaps unconscious.e. The most commonly accepted theory about causation of human behaviour is ’need’ or content theory. rather than a simple list of human needs driving us on. It is a mistake to think that everyone feels the same about the job or the company! What role does employee morale have? Morale is the state of the individual’s or group’s complex of attitudes. which has found wide acceptance. Furthermore. Low morale exists when employees’ attitudes are antipathetic to the attainment of the undertaking’s objectives.   High morale exists when employees’ attitudes are favourable towards their jobs. except for a short time. Research shows that not all high-producing workers are happy and that not all low-producing workers are unhappy. that all behaviour has a cause: a person does something because of a basic underlying reason (which itself may be irrational. people rarely reach a state of complete satisfaction.Performance Management – An Overview 121 For the manager to get the best out of those they are working with they must first appreciate the needs of the staff and their motivation to work. It is also a person’s attitude towards voluntary co-operation to the full extent of their ability in the best interests of the organisation. However. Five overlapping needs Maslow suggested that people are in a continuous state of motivation and that the nature of that motivation is variable and complex. we should think of a sequence or hierarchy of needs. © ABE and RRC . i. Abraham H Maslow. Morale is not the same as “happiness”. We can view morale as covering job satisfaction or dissatisfaction. another overlapping need assumes prominence and motivates further effort until satisfied. E. Hence. There is a cause-andeffect process at work in all human behaviour. to the point where the phrase “hierarchy of needs” is now commonly used without explanation. NEED THEORIES OF MOTIVATION What are ‘need theories’? Each human being is an individual and each individual's behaviour is not entirely (some would say hardly at all!) rational – not always prompted by his conscious mind. judgements and feelings about the work situation. when yet another clamours for satisfaction. is particularly associated with “needs” theory. What is Maslow’s Hierarchy of Needs? An American psychologist. their fellow workers and the undertaking. the total work situation. might be denied if it were suggested as the motivator). In 1954 he published an expansion of the threefold classification of needs. psychology makes a basic assumption. As one need is satisfied.

3. esteem and self-respect) People want to feel a certain pride in themselves. 2. Self-actualisation Secondary needs Ego needs Social needs Primary needs Safety needs Physiological needs Now let’s look at each of these in turn. We all wish to enjoy the feeling of our worth among others. defence against natural dangers (animals. overlapping the need for belonging and affection. warmth. This concept is now generally accepted. In a developed country. clothing (for warmth or protection from the sun). once there. (e) Self-actualisation (the need for personal status. to be noticed among all the others and at least.e. some degree of prestige and status. In all except the most primitive communities. food. and a need for company and association with other people. to achieve complete success. water. these needs largely take an intermediate form of a need for money. Is this not a powerful factor in the cohesion of work groups? (d) Ego needs (the need for social status. security of employment is the intermediate need covering the basic ones. Maslow describes this need as: “Man’s desire for self-actualisation … to become everything that one is capable of becoming”. to “reach the top” and.e. sex. (c) Social needs (the need to belong or affection needs) These include the need to love and be loved. germs). insects. shelter). © ABE and RRC . beginning with the most basic. another assumes major importance in an individual’s mind. 4.2: Hierarchy of Needs 5. as a need is satisfied. his suggestion that. Man needs protection from the physical environment: housing of some sort. sleep. the need to give and receive affection. (b) Safety or security needs These are a subdivision of the material needs mentioned above (i. extending to co-operation in joint effort. We want appreciation. etc. What does Maslow’s hierarchy teach us? The critical feature of Maslow’s analysis is the hierarchy. Complementary to this is a need for the respect of others. self-realisation and accomplishment) Maslow places this need at the top of the hierarchy. that they are achieving something and that they are useful as individuals.122 Performance Management – An Overview Read the following from the base upwards: Figure 5. 1. (a) Physiological needs The obvious basic needs arise from a person’s instinct to stay alive and reproduce his kind: the need for food. a measure of acclamation. The person fortunate enough to satisfy the first four needs is still driven on by an urge to accomplish the uttermost of their ability. that their abilities are tested and proved adequate. i.

an incentive should be designed and presented in such a way that the person to whom it is offered will see it as a means of satisfying one or more of their needs and be their motive for working. © ABE and RRC . they wish to make a strong impression on people and events.  Need to achieve To many people. to date. Need for power Some people seek power in their work situations. These three points relate to the functioning of people at various levels of authority in an organisation. Clayton Alderfer’s ERG theory collapsed Maslow’s hierarchy into three headings: existence. At the lower levels. When the fortunate few get to the ultimate need – self-fulfilment – it seems this is the hardest to satisfy. therefore. Are there any other need theories? D C McClelland is another theorist who. unsatisfied or under satisfied needs. love and self esteem needs in the relatedness category and the growth category contains the self actualisation and self esteem needs. He concentrated on three key needs:   Need for affiliation The need of human beings for friendship and meaningful relationships. Physiological and safety. the sense of “getting on”. To what extent have you found Maslow’ hierarchy to be true in your experience? Using Maslow’s hierarchy. the drive for affiliation should be strong. relatedness and growth. 2. said Maslow. was concerned with the analysis of human needs. which means it can be a most powerful motivator. that the needs function as a true hierarchy. are in the existence category. However. from the early 1960s. People “high up” will have a strong drive for power and making an impact. progressing or being promoted. substantiates the existence of the various needs identified in the model.Performance Management – An Overview 123 The various needs are interdependent. Was Maslow right? The model provided a useful conceptual framework for some fifty years but by the twenty first century was becoming widely rejected as a fully adequate theory of human behaviour. Exercise 2 1. how would you explain the motivation of someone who was willing to give his or her life for a cause they believed in? Isn’t there a less detailed model than Maslow’s hierarchy? Yes. The important elements in motivation to work are. there is little evidence. Empirical research. carried out since Maslow developed his theory. The urges for accomplishment and growth emerge only when the most basic needs have been satisfied: “Man is a perpetually-wanting animal”. is very important. the lower order needs. This less prescriptive approach increases the validity of the ERG model. To be effective. People in the middle reaches have considerable achievement needs and compete with each other.

the worker will sublimate back to the original level of output. To achieve genuine long-term motivation. Job enrichment: creating meaningful. it is necessary for the leader to focus on the motivators. in the sense that they prevent the “disease” of job dissatisfaction. Herzberg called these “hygiene” factors. recognition by supervisors.124 Performance Management – An Overview What about Frederick Herzberg’s Two-factor Theory? Frederick Herzberg. Drawing an analogy between a healthy organisation and a healthy person. of achievement and quality of work. interesting work Advancement Psychological growth It is important to understand that the hygiene factors and motivators are not mutually exclusive in their effects. interpersonal relations and pay and salary. status and security of job. However. giving of increased responsibility as a reward for successful work efforts. Herzberg believes that it is difficult or impossible to achieve if the job is basically dull. writing in the late 1950s and early 1960s. If these are not adequate there will be dissatisfaction and work output will suffer. Herzberg included achievement of work tasks. these are short lived. © ABE and RRC . people will work harder to satisfy them through their job. Focus on quality of communications. rather than quantity: communication should be direct whenever possible. interesting work. identified two distinct sets of needs in individuals working in organisations: the need to avoid pain and discomfort and the need to develop psychologically as a person. the more that person can be motivated. He identified two areas of concern for the organisation employing people:  Hygiene factors (or extrinsic factors) These include working conditions. supervision. Herzberg acknowledges the short-term motivational impact of a pay rise or an improvement in working conditions. Since these are the characteristics that people find intrinsically rewarding. Job rotation: improving the variety of tasks and responsibilities. We can present Herzberg’s two-factor theory in the following table: Hygiene Factors (Dissatisfiers)       Pay Fringe benefits Quality of supervision Company policy and administration Working conditions Interpersonal relationships Motivators      Achievement Recognition for achievement Meaningful. the opportunity for psychological development in the work role and growth. Job enlargement: making a person capable of more. repetitive or uninteresting. company policy and administration. Herzberg proposes several ways in which a higher level of motivation might be promoted:      Good quality training: the more a person can do. In Herzberg’s words.  Motivators Under this heading. “a reward once given becomes a right”. Once hygiene factors are enhanced.

for two main reasons:   His own data. you are competent in what you do. These are quite old theories. Plausible though it sounds. did not support it. which was limited. community. We are masters of our own destinies – not at the whim of others. These four needs are not in any order of priority. Are they appropriate to you? © ABE and RRC . In the twenty-first century. neighbours. friends and workmates. in recent times Herzberg’s theory has been somewhat discredited. Despite its shortcomings. A shortfall in any one area would tend to create discomfort and therefore prompt action – consciously or unconsciously. Apply these four needs to your life. because they give different perspectives on the seemingly impossible to capture meaning. of what it is to be human. Other data does not support it. To give and to receive from family. Autonomous and Authentic Exercise 3 1. We are happy that other people see who we really are – so we do not need to live behind a mask.Performance Management – An Overview 125 In Herzberg’s model it is possible to avoid job dissatisfaction without necessarily achieving job satisfaction. To feel that you have a contribution to make and that. the theory continues to attract a great deal of attention and it has stimulated developments in work structuring. psychologists have tended to settle upon a typology of four human needs: security. to feel competent and to be autonomous and authentic: Security Community To feel competent Safe from both physical and emotional hurt. 2. however humble your tasks. This is possible where an organisation meets a high level of hygiene factors but fails to provide a high level of motivators. are they still accepted? Yes.

so it is a mistake to view the average worker as “rational economic man”. Douglas McGregor developed a typology of two opposed views about employee behaviour. as revealed by social science research and this can have disastrous results for the organisation. Firstly.126 Performance Management – An Overview Have these content theories ever been applied to management? Yes. which accepts the worker as a lazy. also feelings. The average human being will avoid work whenever possible. able to gather information about and assess their work situations. Workers would aim to obtain the highest possible pay for the least possible input of work effort. consultation and discussion between management and workers are far more effective ways of achieving organisational goals. Complete rationality of thought is rare in human beings. McGregor took issue with Theory X. This traditional approach of management. Secondly. Control of employees must be backed by coercion and threats. Social science research has revealed that many other influences play a part in shaping behaviour in the workplace. (a) Theory X The starting point of McGregor’s approach was to postulate a view of employee behaviour based on managers and industrial theorists. workers were rational beings. who must be bribed or coerced into working. There are considerable individual differences between workers. grasping individual. This perception rested on two key assumptions. Because of the above characteristics. the economically rational worker would seek to push up wages and/or cut down hours of work. McGregor called Theory X. related to Maslow’s categories of need and considered their implications for management and motivation. if the objectives of the organisation are to be achieved. norms and values all influence the conduct of employees. It rests on the following assumptions:       The average human being dislikes work. McGregor disputes the need for strict controls backed by threats. Frequently management’s policies run counter to the human nature of employees. it places most of the blame on the workers when things go wrong. he argues that in many cases persuasion. Not only is the average employee lazy but they also lack ambition and do not wish to take on responsibilities. The average person prefers to be directed and not to have to think deeply for themselves in the work situation. Any meaningful models of employee behaviour should be drawn from the work of modern social scientists and not from the traditional views of management. Because management’s view of the nature of man is wrong. The two views are known as Theory X and Theory Y. having assessed the work situation. Because management is convinced of the laziness and irresponsibility of the workforce. attitudes. much of the action taken by management is also wrong. ideally they would try to do both. who saw workers as totally rational economic individuals. He goes on to argue that modern organisations are characterised by interdependence between management and workers and that this has to be recognised if the organisation is to prosper. employees must be strictly controlled and directed. workers would be economically activated to optimise their position in the labour market by selling their labour at the highest unit labour price. on the following points:     © ABE and RRC . Hence.

therefore.Performance Management – An Overview 127 McGregor argues that once this blinkered view of the nature of workers is broken. (b) Theory Y McGregor then put forward the set of assumptions that modern managers should act upon. Management should reduce controls but retain accountability. Hence. McGregor sees as the basic fault of Theory X the fact that it is based on a false idea of human nature. but it also causes frustration among the workforce. responsibilities.  The physical and mental effort people put into work is a natural human response. Employees have reservoirs of imagination. creativity and ingenuity and given the right environment and encouragement. they have reserves of selfcontrol and self-motivation once they feel committed to the objectives of the organisation. Employees do not have to be controlled or threatened. employees will not only take. many management theorists have pointed to the growing amount of evidence from research by social scientists that supports Theory Y. This would give employees a degree of freedom to direct their own activities and assume new responsibilities. valuable and industrious people. Hence. i. To sum up. Given the opportunities and training.   © ABE and RRC . management should apply Theory Y in the organisation. work can be enjoyable. Participation and consultative management should be used to encourage people to direct their creative energies towards organisational objectives and to give employees some voice in decisions that affect them. the whole theory is wrong. However. Job enlargement should be introduced to encourage the acceptance of responsibility at the lower end of the organisation (see later in this study unit). Critics of McGregor have argued that some aspects of Theory Y are not practical and that there is more truth in Theory X than McGregor cares to admit. but research proves the model to be wrong. He calls this Theory Y. The workplace should allow the worker to gain satisfaction in the pursuit of objectives to which they are committed. in many cases.     To sum up Theory Y. Let us for a moment relate McGregor directly to Maslow. but also desire and seek. managers can begin to question the efficiency and appropriateness of their own methods and styles of management.e. they should replace direction and threats with the giving of responsibility. not only is this a waste of resources. they will use these to help solve problems in the work situation. All the rest of the theory follows logically if the human nature model is correct. We can say that McGregor has made an important contribution to our understanding of management and workers in modern organisations. The four most basic elements of Theory Y are as follows:  Decentralisation and delegation should take place in organisations where there are too close controls. egotistic and selffulfilment needs. when workers do not co-operate to achieve organisational goals. the fault may lie in the structure of the organisation rather than in the workers. McGregor argues that management should assume that. it is similar to the effort individuals make in games and sport. employees will contribute more to the organisation if they are treated as responsible. To satisfy social. In some modern organisations the potential of employees is not fully utilised.

We shall look in more detail at the concept of quality circles later in the course.128 Performance Management – An Overview  Performance appraisal for all levels of management should be carried out to find out how consistent management is with Theory Y. Participative management style is directed towards encouraging workers to be self-motivated as far as possible in a given work situation. He concluded that a participating employee would be a well-motivated employee. Employees will be motivated to higher levels of performance if they are involved in meaningful participation in decisionmaking in their organisation. Employees should participate in groups and enter into consultations with management to sort out problems and put forward ideas. Ouchi’s Theory Z William Ouchi agreed with the basic ideas put forward by McGregor’s Theory Y and related these to certain of the ideas he detected in Japanese organisations. Under this style of management employees feel valued and are treated as individuals in the workplace. following the ideas of Ouchi and techniques like quality circles. “process” theories concentrate on elucidating the thought processes through which individuals determine their course of action. self respect etc. What is participative management? The culmination of human relations and human behaviour approaches is presented by McGregor as participative management style. McGregor argues that if employees do not feel valued some of them will spend more time and effort in attempting to defeat management’s objectives than they would in achieving them. He said that the circles should be a forum for employees’ ideas and a way in which employees could really influence the running of the organisation. According to this theory the strength of a tendency to act in a certain way depends on the © ABE and RRC . Ouchi took the idea of quality circles and developed it far beyond a concern for the quality of goods and services produced by the organisation (important though this is). socialisation. They attempt to show how individuals determine the amount of effort that needs to be exerted. Process theories do not look at the content of the motivational package but at the mental processes that we go through when faced with a situation.). By contrast. Needs theories try to identify the integral desires that influence behaviour and are concerned with the nature and context of motivating factors. The whole basis of the participative style of management is to do away with the “them and us” mentality in an organisation. put forward by Victor Vroom. PROCESS THEORIES OF MOTIVATION What is the difference between a content theory and a process theory? Content or need theories suggest that there are universal needs that all humans have (security. Ouchi’s theory argues that participation is a crucial motivator. F. management tries to create an atmosphere of cooperation rather than merely depending on rules and regulations. This will encourage the individual in management to take greater responsibility for planning and appraising their own contribution to organisational objectives. What process theories are there? Expectancy Theory is a cognitively based motivational theory. The effect of this on egotistical and selffulfilment needs is said to be quite substantial. Participative management tries to involve employees in decision-making.

do relatively few organisations deliberately use pay as a motivator? Most organisations see pay as compensation and many managers are rewarded not for particular results but for seniority and experience.  Effort-performance linkage The probability that we perceive that exerting a given amount of effort will lead to performance. rather than paying the employee for results. it is not money that is a hygiene factor. In a sense. Expectancy theory may sound complex but it is useful as a framework for diagnosis and identification of changes needed to increase motivation. as Herzberg argues. To understand this best. or equity. They suggest that the amount of effort (motivation and energy exerted) put into work depends on:    The eventual reward The amount of effort necessary to achieve that reward How probable it is that the reward will be forthcoming. as distinct from the generalisations implied in the theories of Maslow and Herzberg. otherwise pay will not work as an incentive. then. organisations are very secretive about pay levels. Seniority is the reward for success and pay follows seniority. the perceived effort and probability of getting a reward are influenced by past experience of whether such rewards have materialised. This means paying a rate for the job. pay should be a very convenient motivating force.  Performance-reward linkage This is the degree to which we believe that performing at a particular level will lead to a desired outcome. Can we apply this to employee reward? Theoretically. expectancy is the perceived likelihood of the outcome. If we perceive our ratio to be equal to that of others with whom © ABE and RRC . there is the question of whether they will be adequately rewarded.Performance Management – An Overview 129 strength of our expectation that the act will be followed by a given outcome and on the attractiveness of that outcome to us. but equity. The strength of people’s motivation to perform (effort) depends on how strongly they believe that they can achieve what is attempted. In turn. This will consider the unsatisfied needs of the individual. theory suggests that evaluation of rewards is based partly on comparisons with others. In their worry over differentials. Lacking knowledge of pay. which can be self-defeating. Rarely does a boss earn less than their subordinate(s). Why. The importance of this approach is the emphasis that it places on the individuality and variability of motivational forces. Porter and Lawler developed expectancy theory in the 1970s. There must be large differentials in levels of pay. individuals make estimates of other people’s wages and feel they are less well paid. Organisations also follow rules for equity.  Attractiveness This is the importance we place on the potential outcome or reward that can be achieved on the job. think what happens if either valence or expectancy are equal to zero. Adam’s social exchange. If rewarded by the organisation. will the reward satisfy their needs? The theory can be expressed by the formula: Motivational force (F) = Valency (V)  Expectancy (E) Valency is the value of the outcome to the person. If they achieve the goal (performance).

The motivation decision will depend on: The strength of the person’s needs. Attributions may be subject to distortions to protect or enhance their self-esteem. We see ourselves as under-rewarded or over-rewarded. Since it is out of their individual control. The attribution theory is extremely relevant when we consider how people judge others. they give attention to three sets of factors: (a) (b) (c) The individual’s personal needs The desired outcome or results The E factors:       (i) (ii) (iii) Effort Energy Excitement in attaining the desired outcome Enthusiasm Emotion Expenditure. and how. The equity theory is not without its problems. may be attributed to difficulty and luck. © ABE and RRC . Four variables are frequently used:     Ability Effort Task difficulty Luck.130 Performance Management – An Overview we compare ourselves (referents). say. The expectation that by contributing one of the Es. a state of equity is said to exist. failure to obtain promotion. What is Handy’s motivational calculus? Handy looks at motivation as though when a person takes a decision. effort is the key factor. people may give up trying to perform well. On the other hand. There are still some key issues that are unclear. do factors change over time? What is attribution theory? Kelley’s attribution theory examines the way in which people explain success or failure and the impact on subsequent motivations. If success or failure is explained in terms of the level of effort. If the ratios are unequal. the individual will achieve one of the desired results. For motivational purposes. The extent to which the result will contribute to satisfying the person’s needs. inequity exists. then it is possible that high motivation may follow. such as:    How do employees select who is included in the other referent category? How do they define inputs and outputs? When.

but it does help us understand that we need to set specific goals. Managers. A remunerative psychological contract exists when a person works for the money. Handy’s theory can be accused of gimmickry. The person may tolerate the job to attain the lifestyle it provides. Three examples of psychological contracts are:  A coercive psychological contract exists when a person works because they are forced to do so. psychological contracts can change radically. If actual results are not known. the nature of the contract will change over time and will be influenced by many variables.   As stated above.Performance Management – An Overview 131 There are certain prerequisites for the calculus to be completed:   The individual must be made aware of the intended results: it will then be known what has to be done and the commensurate rewards. The theory also goes some way to taking some elements of the simpler content theories (such as needs. preferably on a mutually agreed basis. the individual will not know whether the E output was justified. banking institutions and many organisations which have been through mergers and acquisitions. therefore. Alternatively their age may render them relatively immobile. “delayering” and “down-sizing” have become common features. This differs from the coercive contract as the remunerative contract may bind the person in the short term. They relate to the way people feel about the organisation for which they work. but also those who remain with the employer. From an employer’s point of view. as well as how much E is necessary. so feedback on performance is vital. The person’s desire to achieve can facilitate the company’s performance objectives. It will also influence the factors that will motivate the individual. A study in 1994 by the Working Transitions outplacement consultancy suggested that redundancy programmes not only affect the values. The theory also suggests that rewards can be tied to standards. The concept is essentially a dynamic one. so a lesser expenditure of E will lead to lesser standards and hence rewards. They might not be able to achieve the same package from another employer and would have to lower their standard of living. They may be tied into the job because the salary and fringe benefits prevent them from moving elsewhere. derived from Maslow) and the more modern process theories of Vroom and others. Large-scale redundancies in hitherto “safe” jobs can change the nature of the forces that bind the person to the organisation. this is more likely to result in having a highly motivated workforce.) A psychological contract is the perceived relationship between the individual and the organisation and involves the various factors that bind the individual to the enterprise. only to be severed if a better deal is available elsewhere. (We have already touched upon the psychological contract in HRM and its Context. have to be conscious of these changes. In managerial and clerical professions. Does this have any connection with the psychological contract? Yes. Professions which have been affected in this way include many branches of the public service. beliefs and drives of those who lose their jobs. A collaborative psychological contract is one in which the worker is bound to the organisation by a belief that personal objectives can best be attained by enabling the organisation to fulfil its objectives. These standards can be variable. © ABE and RRC . with middle managers being sacrificed in pursuit of greater cost-efficiency. to manage in an increasingly volatile climate.

It is not always possible to translate successful practices across cultures. By applying the lessons of the successful companies. EXCELLENCE THEORY AND MOTIVATION Excellence theories originate in the works of writers in the early 1980s. One group had a button to cut off the noise whilst the other did not. Among their conclusions were:  Original ideas and ingenuity are grossly under-utilised. The empirical theories have several drawbacks:  What is successful today may not be so tomorrow. The group with the button made far less errors than the other group. This had stunning results in terms of increased productivity and reduced defect rates. Of the 43 excellent companies identified by Peters and Waterman. their gifts should be harnessed for the benefit of the organisation. these are empirical studies. others can usually benefit to some degree.132 Performance Management – An Overview G. They believe that workers respond more positively when they feel more in control of their destiny. though it is surprising to note the extent to which the authors feel that the latter are common today. In one control group experiment. For example.   There are obvious lessons to be drawn from empirical theories. two teams were given the task of proofreading some text material against a noisy background of a tape containing foreign speech. and some of those of the Far East and Europe would be totally incompatible. It was found. at least 11 did not fit the “excellence” criteria only five years later. Peters and Waterman claim that they originally wanted to call their book “Management By Wandering Around”. In other words. principally based on the work of Tom Peters and Robert Waterman. that no one had pressed the button! The fact that the workers felt in control made them work more effectively. Peters and Waterman noted that companies who treat their staff and customers with respect and decency tend to do better than those who do not. Successful US motivation techniques may not apply in the UK or vice versa. even though some of the ideas are really just common sense codified. but their work comments much on the ability of successful companies to get a high level of commitment from their workers. Peters and Waterman did not set out to write specifically on motivation. it is necessary to get close to the workers and understand the issues affecting them as well as their drives and motivations. Drucker’s idea of the “entrepreneur” (the original thinker and innovator) was extended to suggest that if such persons are employed.  © ABE and RRC . loud music and other distractions. In order for this to be done successfully. The book cites one example where a company developed a successful product when it was discovered that a manager was working on it privately on an outof-hours basis. Peters and Waterman record a direct application of this in a Ford Motor Company plant whereby any worker could (temporarily) stop the assembly line. with the commitment of the person concerned. To motivate workers. the individual has to see the benefit of putting all his energy into the organisation. however. The nature of these ideas is essentially one of observing successes and failures in actual business scenarios and attempting to draw universal lessons that can then be applied elsewhere.

Definitions of Job Design What is job design? So are employees looking for job satisfaction? How have organisations approached job design? Empowerment What is empowerment? Is ownership the key? Is team working important in empowerment? Are structure and culture important to empowerment? Is training important to empowerment? How do we evaluate empowerment? Centralisation and Decentralisation Why centralise? Why decentralise? What are the advantages of decentralisation? What are the disadvantages of decentralisation? What is federal decentralisation? What is the current perspective on decentralisation? How do we create a culture that is flexible? Elements of Good Job Design What are the features we should look for in a well-designed job? Job Rotation Job Enlargement Job Enrichment Delegating and Monitoring Work What are the relationships between responsibility. C.133 Study Unit 6 Job Design Contents A. authority and accountability? What are the conditions for effective delegation? What is it that managers delegate? What is the process of delegation? Page 135 135 135 136 138 138 138 140 141 142 142 144 144 144 145 145 147 148 149 150 150 150 151 151 153 153 154 156 156 B. F. E. (Continued over) © ABE and RRC .

134 Job Design What gets in the way of delegation? What are the techniques of delegation? How do I decide whether or not to delegate? G. Flexible Working What is flexible working? Why are organisations using more flexible working arrangements? What are the potential benefits of flexible working? How should we implement flexible working practices? 157 157 158 159 159 160 160 160 © ABE and RRC .

This would give employees a degree of freedom to direct their own activities and assume new responsibilities. Extrinsic influences are factors that fall outside the doing of the job. job dissatisfaction. Participation and consultative management should be used to encourage people to direct their creative energies towards organisational objectives and to give employees some voice in decisions that affect them. Research has associated job dissatisfaction/low morale with high labour turnover. whether it is challenging. Vroom puts it thus: Performance = Ability  Motivation There is general agreement among writers that job dissatisfaction can have harmful effects on both jobholders and the organisation. Success and recognition by managers contribute to high job satisfaction. So are employees looking for job satisfaction? That depends what you mean by job satisfaction. These include: whether the job has variety. whether the job holder has control over the work situation and whether their views influence decisions affecting the job. absenteeism. skills wastage. fringe benefits that accrue to the job holder. Other theorists have questioned this direct link.  © ABE and RRC . it is the inability to deal with and manage stress that afflicts the individual who suffers job dissatisfaction. methods and relationships of jobs in order to satisfy technological and organisational requirements as well as the social and personal requirements of the job holder. Morale can be viewed as a state of mind dependent on the degree of job satisfaction experienced by an individual or group. The individual in a low job satisfaction situation may suffer frustration and stress. How can organisations increase job satisfaction? Job satisfaction will be increased by careful job design that includes job enrichment and thoughtful consideration of the intrinsic and extrinsic factors. a win-win situation for both sides of the employment relationship. Factors that influence the level of job satisfaction that a jobholder experiences fall into two broad categories:  Intrinsic influences are factors arising from the performance of the job itself. refer to the attitudes and feelings job holders have towards their work. Although stress may arise from many quarters.” In other words.  Will the employer gain if job satisfaction improves? Elton Mayo argued that by increasing job satisfaction the performance and productivity of workers could be increased. These include: the pay or salary earned for doing the job. for the employer and for the employee. DEFINITIONS OF JOB DESIGN What is job design? “The specification of the contents. whether it allows the job holder to use a wide range of talents or skills. but where job satisfaction links with motivation (Herzberg) then performance improves. Job satisfaction and its opposite. high accident rates. poor timekeeping and a lack of commitment to quality. Writers argue:  Decentralisation and delegation should take place in organisations where there are “too close controls”.Job Design 135 A. how well the individual integrates into the work group (the work of Mayo is important in this context) and the nature of management and supervision (Mayo and McGregor stress this aspect).

Free-expression interviews may also be undertaken. The primary objective of Taylor and Gilbreth was to determine the most efficient method of working. Respondents are asked to rank features of work in order of importance. along with Gilbreth. using what can be termed an “engineering approach”. You will note that the extrinsic rewards referred to above relate to Maslow’s lower level needs and to Herzberg maintenance factors. Although a production line might be highly efficient in work-study or engineering terms. This is done by the use of questionnaires. increased absenteeism and labour turnover. This resulted in the so-called intrinsic rewards – the restructuring or redesign of jobs. Therefore. to allow employees to give their views on the job. W Ouchi.  However. the lack of job satisfaction resulted in a fall in motivation. How have organisations approached job design? (a) Scientific Management approach As we have seen. Employees were regarded as just another production resource that could be organised to work efficiently in a predetermined way. management’s approach to worker motivation followed the scientific management approach of F W Taylor. critics argue that job satisfaction is better revealed by factors such as absenteeism. sickness rates and labour turnover. This adversely affected overall performance. job satisfaction and performance appraisal. attention was directed towards Maslow’s higher level needs and Herzberg’s motivational factors. Employees should participate in groups and decisions should take account of the views of people actually doing the job. and caused deterioration in industrial relations. prior to the Hawthorne experiments and the work of Maslow and Herzberg. perhaps. The characteristics of this approach were:  Jobs were broken down into small. to provide greater scope for an employee to use their abilities and skills and to give them greater control over the way they carry out their work. However. repetitive components. the carrot being such extrinsic rewards as pay and job security. so that areas for improvement can be identified. Employee motivation was based on a “carrot and stick” approach – the stick being the threat of such “punishments” as suspension or dismissal. with numerical scores allocated to the answers. (The car assembly line is.136 Job Design The management expert. the classic example. to reduce skill requirements. argues that participation is the crucial motivator and contributes greatly to job satisfaction. Research reveals that job satisfaction can be increased if individuals are properly trained for the jobs they are expected to perform. He. is regarded as the founder of what was originally termed time and motion study and which has evolved into the modern discipline of work study. Employees will be motivated to higher levels of performance if they are involved in meaningful participation in decision-making in their organisation. © ABE and RRC . QWL tries to involve employees in identifying problems and suggesting solutions. to improve motivation. The starting point of QWL is the measurement of job satisfaction.) This passed control to management and away from previously “skilled workers”. Is this the Quality of Working Life (QWL) approach? The Quality of Working Life (QWL) movement advocates techniques drawing together the ideas of job design. the workers themselves say what is important to them and management acts upon these ideas. realisation gradually dawned that in many cases the scientific management approach did not produce the expected results in terms of increased efficiency.

led to the development of the Human Relations School. This and the obvious unpopularity of the ideas of Taylor and other scientific managers.e. From this experiment Mayo concluded that motivation depends on:   The type of job being carried out and the type of supervision given to the employee Group relationships. These groups allocate tasks and ensure members have variety of work and the satisfaction of contributing to the team performance. Elton Mayo. The need to be able to learn on the job.Job Design 137 (b) Human Relations School of Management A weakness of scientific management was that its work ignored the social needs of employees. It became apparent that they were responding to the level of attention they were receiving as part of the investigations and because they were working together as a group. These are: (a) (b) (c) (d) (e) The need for the content of the job to be reasonably demanding. The foremost advocate of this approach to management was the American psychologist. rather than just the needs of the organisation. A number of psychological requirements have been identified for the large majority of people at all levels of employment. The results surprised Mayo. He is best remembered for his Hawthorne Studies at the Western Electric Company in Chicago between 1927 and 1932. McGregor. The need for an area of decision-making where the individual can exercise their discretion. which concentrated on the sociological aspects of work.e. The opportunity to have social interaction when doing the job and at other times. (c) The Neo-Human Relations School A weakness of the human relations approach was that it focussed largely upon the sociological aspects of work. breaking down the old demarcation lines between types of job and the constant updating of skills. (f) (g) (h) (j) © ABE and RRC . Sufficient challenge in the job to lead to a sense of satisfaction when the task is completed satisfactorily. i. i. The productivity of one group of female employees increased both when the lighting was lessened and when it was increased. and yet provide variety. The need for social support and recognition in the workplace. Mayo’s work took forward the debate on management in general and motivation in particular. The value of giving work groups a high degree of autonomy over the work situation. He conducted experiments to discover whether employee performance was affected by factors such as breaks and the level of lighting. group morale and individuals’ sense of worth. Maslow. The value of multi-skilling. Vroom etc. in terms other than sheer endurance. The motivational theorists we considered in Unit 5 – Performance Management – an Overview – tend to take this approach: Herzberg. go on learning and to have some measure of freedom in the way in which a person carries out their work. to a large extent self-managing groups. The Neo-Human Relations School considered the psychological aspects of employment. The establishment of agreed targets/goals and appropriate feedback of results. He moved the focus on to the needs of employees. such as Henri Fayol.

EMPOWERMENT Empowerment can offer an approach to organisations that will enable them to succeed and treat themselves. the burden of proof should be on head office to tell them why they can’t. B. We shall look at each of these in turn. We can consider this in the context of the stakeholder model we have met before. to release hidden resources which would otherwise remain inaccessible.” (Jan Carlson) “When managers are truly empowered. rather than on them to prove why they should. That is where job design now rests. First. It implies synergy. Empowerment can be broken down into three distinct areas:    Ownership Teams and leaders Structure and culture. Empowerment is about ownership. If people feel that they own their actions or decisions. the whole can be greater than the sum of the parts. © ABE and RRC . It is a way of involving people in the operations of the organisation. into a coherent approach to job design that takes account of the need for:    Efficiency (scientific management) Socialisation (human relations) Psychology (neo-human relations). they are likely to be better actions or decisions.” (Valerie Stewart) Empowerment is the concept of giving people more responsibility about how they do their own jobs. Empowerment offers a way to deal with the situations where we don’t know the questions yet. which must be the signs of a civilised society and provides a modus operandi for organisations wanting to be successful in the climate of constant change in which we now live. What is empowerment? Consider the following two explanations of what empowerment means in practice: “The purpose of empowerment is to free someone from rigorous control by instructions and orders and give them freedom to take responsibility for their own ideas and actions. we should look at the opposite model. It is about giving more involvement in decision-making and more encouragement to investigate their ideas fully.138 Job Design (d) Current approaches Not surprisingly. It offers a way of treating people with respect and honesty. though. contemporary academics. their staff and their customers well. consultants and organisation development practitioners try to bring these different approaches together. so that they feel personal responsibility for their actions. Empowerment is a process to increase efficiency and make greater use of each individual’s contribution. Is ownership the key? Yes.

1: Stockholder Model Profit Shareholders Staff Pensioners If the objective of the organisation is solely to make a profit. At the macro community level there is a responsibility to be environmentally aware. Figure 6.2: Stakeholder Model Employees Customers ORGANISATION Shareholders Pensioners Community  Employees The employees achieve reward and recognition. The organisation is in existence to make profit for the shareholders (or stockholders). then of course it can engage in ecologically unsound practices or.  Community The organisation has a commitment to the local community in terms of job opportunities and disposable income. The model in its basic form looks like this: Figure 6. (b) The stakeholder model The stakeholder model is a different approach and one that seems much more pertinent to the new millennium.Job Design 139 (a) The stockholder model The traditional view of organisations is the stockholder model. With this approach. © ABE and RRC . It may provide facilities for outside use (such as sports grounds). as both staff and management have an input in decision-making. no other factors need to be taken into account. if the management believes that it will lead to profit. Theory X management practices. This may be in terms of avoiding pollution or in building aesthetically pleasing offices. It is an approach that can take into account the external environment and interact with it.

the board is the fulcrum on which the organisation can change direction. The role of management is to manage that process and ensure that it works successfully. There is no room for slack and the other members of the team deserve to be protected. In this model. they are the ones who interact with the customers. learning each other’s jobs. they constitute a resource and they need to lead in a way that will encourage empowerment. Staff can be moved around in times of crises to do other work. but what is also important in the financial market place is confidence and positive image.140 Job Design  Customers The customers are looking for reliability and value for money.  Shareholders The organisation still needs to perpetuate itself and there needs to be a return on investment. Successfully empowered organisations are often based on teams that are working well and co-operatively. In Japanese companies. for example. but it is only one element. The campaign was based on the idea that they were doing this to make a fat profit rather than acting in the interests of the mothers and babies. their ability to do their job and their satisfaction levels can both be raised. staff are expected to do whatever the organisation requires them to do. A lot of work on organisational change concentrates on teams because they are the building blocks of organisations. How will the manager measure the performance and how often? © ABE and RRC . as shown. among its members. The whole approach requires managers to lead their people and get the most out of them. The frontline workforce is the face of the organisation. They will need to act in strong participation and involvement mode. are involved and kept informed. (More is said about the stakeholder approach in Unit 2 – Ethics and CSR. This process may be achieved through systems such as quality circles or regular.3). formalised meetings. Organisations need to operate as inverted pyramids (see Figure 6. They are also concerned with the wider implications.) Is team working important in empowerment? Yes. The advantages will be in giving staff more skills and providing the organisation with more flexibility. such as pensioners and sub-contractors. the managers are leaders. where lifetime employment has been guaranteed. The job of empowered managers is becoming harder. Some of the activities that will be developed may include multi-skilling or. In the slimmer team. they will have to manage poor performers and either train them or move them out. A second important area is encouraging teams to contribute ideas on work methods. in other words. how the work should best be organised and distributed.  Pensioners Those with an interest in the success of the organisation. The team can be encouraged to agree. The leader will also have to manage the appraisal process better. So. then the “it” needs to be very carefully agreed and worked out. If staff are to be left to “get on with it”. to achieve team targets and organisational goals. By giving staff more skills. by a campaign to boycott the goods of a Swiss-based confectionery manufacturer that was pushing the use of powdered milk for babies in the Third World. Bonus or performance pay schemes may be introduced that reward the team rather than the individual.

and then set targets. The Japanese word “Kaizen” means continuous improvement.4: Traditional Pyramid Model BOARD PROVIDES DIRECTION MANAGEMENT STAFF USERS © ABE and RRC . Management will need to change from issuing directives and acting in the way of the traditional pyramid (Figure 6. Figure 6. This will lead to increased motivation of the individual and improved morale for the team. The new way will be to provide the overall direction and vision.3: Inverted Pyramid Model CUSTOMERS FRONT LINE STAFF (customer facing) Management and other functions as support BOARD PROVIDES VISION Empowerment for individuals and teams will mean that jobs become more interesting. When you learn a new skill you make tremendous improvements in the early days but as you get more proficient.Job Design 141 Figure 6. as individuals have more responsibility and the ability to influence events. For culture change to happen there has to be clear commitment from senior management and the involvement and participation of all staff. Are structure and culture important to empowerment? The organisation will need a culture that is open and responsive to change. the improvement gets smaller and smaller.4). questions and challenges.

Training can facilitate their “visioning”. After years of being told what to do. There will be a lot of uncertainty and fear about whether they will still have jobs. too. © ABE and RRC . so that the empowered staff can communicate with each other. in creating and maintaining an empowerment culture. who will be required to interact with each other. the staff will need influencing and assertiveness skills. Training needs to include top management. One of the outcomes of empowerment is that there will be many staff on the same level. they will need help to change their approach. Do the jobholders have more responsibility? Are their departments being more successful? There may be statistical evidence to show increased performance. Another well-used method would be the use of attitude surveys. Assertiveness training is a good way to reach and change attitudes. Some managers will have to adopt a whole new way of managing their staff. These can be used before and after any changes. will be training and development. to help them work through and plan the changes required. How do we evaluate empowerment? How will you know that the empowerment exercise has been worthwhile? Some of the obvious ways of checking the success of the programme will be by random interviews at different levels to see how jobs have changed. Some degree of influencing or communication skills will be useful. decreased costs and even decreased sick absence – an indicator of staff motivation. Finally. Influencing and assertiveness skills can help to make these exchanges more successful. Information can be gained on general satisfaction or involvement in decision-making.142 Job Design Is training important to empowerment? A key change process. Another key area is the training of middle management.

then a division of Forte’s. as she had some special skills she became a “team expert”. Each team on each shift has a co-ordinator. Jane Pickard described it in “Personnel Management” magazine (November 1993). A good example of team decision-making is that one restaurant. Everyone else is a team member of some description. (Having mastered special responsibilities or “accountabilities” makes one an expert. drawing up rotas or keeping track of sales targets. as those who did not want to change. In the first six months after empowerment was introduced staff turnover rose. Four people are empowered as “appointed people” to open up in the mornings and lock up at night. The team now elects the experts. and in particular the Dulwich restaurant in south London. Because of this. © ABE and RRC . the team wants to know what went wrong. left. The accountabilities were to replace traditional upward promotion that was no longer available under the flatter structure. Every waitress in the Dulwich branch is expected to sell a side order to every table. All members of the team take it in turns to take on this role. carrying out their own hygiene checks. The Harvester empowerment plan was highly structured and linked to delayering. dealing with customer complaints or cashing up. They also have tight targets to meet. The structure now is that a branch manager works with a “coach”. The teams look after their own recruitment and promotion and the coach is available for training. Many people lost status. it was seen as highly threatening by many staff. but there can still be local flexibility.Job Design 143 Case Study Empowerment in Action The subject of this case study is Harvester Restaurants. One employee who had been taken on as an assistant manager became a waitress. Every restaurant in the chain is run in the same way. It is a recognition that someone needs to make instant decisions. The changes have meant that waitresses and chefs are now accountable for ordering their own stock.) A team can be made up completely of experts. If they don’t do this. in a tourist area. who handles all training and some personnel issues. Accountabilities include recruitment. was so seasonal that staff decided to give up summer holidays altogether and take them in the winter. The staff are empowered to do virtually anything except decide whether they will be empowered. However.

At the other extreme. decisive action that will be effective throughout the organisation. centralised buying can obtain higher discounts. With complete centralisation no one.g. central authority takes on the role of a referee. this will ease pressures on senior management. of the organisation can relate. complete decentralisation would deprive an organisation of the overall planning. Why centralise? (a) Integration A strong central authority holds together various parts of the organisation. strong central authority can take swift. divisions. ensuring that the various parts of the organisation perform as a team. The reduction of stress may result in more effective and efficient performances by top managers. (b) Making informed decisions Top management can make important decisions because they have access to the whole range of information generated and collected by the organisation. (e) Crisis management When organisations face sudden. (d) Economies of scale Centralisation can endow a firm with economic benefits by drawing together certain activities. serious emergencies. so. CENTRALISATION AND DECENTRALISATION No organisation can be totally centralised or totally decentralised. Senior management can be seen as the leaders. (f) Establishing new ventures At the outset of a new firm or a new venture. e. centralisation encourages a unity of style and purpose. it serves as a figurehead to which all departments. The result would be that the organisation would be paralysed and unable to function. If some authority can be allocated to subordinates. could make any decisions. information is often partial. decision-making. © ABE and RRC . when this is desirable. etc. by making the decisions which resolve such conflicts. Why decentralise? (a) Reducing pressure on top management Running a highly centralised organisation places heavy burdens on top managers. So. In the event of disputes between departments or divisions. co-ordination and control that are the functions of top management. At lower levels. centralised administration may cut some costs. decision-making would be flawed. there has to be equilibrium between centralisation and decentralisation that allows both centralised and decentralised authority to perform useful functions for the organisation. strong centralised authority can provide the leadership and vision required for success in getting established. The organisation would fall apart. (c) Standardising procedures If an organisation requires all its parts to behave in a similar way then it needs a strong centralised structure. other than a small group of senior managers.144 Job Design C.

which they may feel to be properly the work of top management. Initiative is encouraged. By allowing staff at lower levels of the organisation to make decisions. © ABE and RRC . because new products or different markets may present a variety of problems better coped with by the decentralisation of authority levels. who need authority to make certain decisions themselves. sharing particular expertise. The advantages of decentralisation include:      Decentralised decision-making avoids the delay involved in having to refer problems to higher authority. Top management feel their importance is diminished by allocating authority downwards. their jobs become more stimulating. It is crucially important that an organisation selects the optimum equilibrium point. it is easier to assess how well these levels and parts are performing. What are the advantages of decentralisation? Current management thinking approaches the centralisation/decentralisation debate by analysing the potential advantages and disadvantages of decentralisation and then asking how they would apply to a given organisation at a given time. in that people who are given responsibilities have to solve problems and make decisions for themselves. Decentralisation requires lower levels of an organisation to take on authority. and workers feel they are being involved in the organisation. What are the factors on which centralisation and decentralisation are contingent? The decision on where to strike a balance between centralisation and decentralisation in a given organisation will depend on a number of factors. A decentralised organisation needs a more talented management because more people are taking management decisions.   What are the disadvantages of decentralisation?     When authority is allocated to lower levels of an organisation there is a tendency for top management to lose touch with various parts of the organisation. (c) Developing specialised groups Some organisations require small groups of people. because research shows the clear link between organisational structure and performance. decentralisation can be useful for a growing or diversifying organisation. employees learn the problems that are encountered when making decisions and so. the decisions made are more likely to be acceptable to the workers in that situation. When those who have an intimate knowledge of a particular work situation and are well acquainted with the sorts of problems that can arise take decisions. Wider allocation of authority improves morale. When decision-making is allocated to lower levels in an organisation. are prepared for promotion.Job Design 145 (b) Encouraging growth and diversification Just as centralisation is functional for a new enterprise. When we break down an organisation into various parts and levels and give them authority. so swift decisions can be made.

In large organisations we find different types of decision being taken at different levels of authority.e. On the other hand. These range from high potentialcost decisions taken by top people. departments and levels of management spring up and the existing top management becomes overloaded with decision-making problems. some high level managements are democratic and believe in spreading decision-making as widely as possible throughout the organisation. The proprietor of a small firm may take all the major decisions alone. (c) Willingness of top people to delegate The amount of decentralisation in an organisation will also depend on the willingness of senior people to allocate authority to those below them. new divisions. Top management is sometimes autocratic and wishes to give all the orders themselves – they believe in tight control over subordinates.1. (d) Willingness of employees to accept responsibility Not only does authority have to be allocated by those above. However. This key area of decision-making is usually reserved for the top people. (e) Availability of management talent It is not enough for employees to be willing to take decisions. to less important decisions taken by middle and lower levels of control. In a growing organisation. a static or slow-growing organisation will continue to centralise its decisions at the top.146 Job Design (a) Importance of the decision What determines the importance of a decision will vary from one organisation to another. (f) Rate of growth Where organisations are growing rapidly we are likely to find decentralisation and rapid promotion through the levels of management. We can compare organisations with differing degrees of centralisation in Table 6. © ABE and RRC . but it also has to be accepted by those below if decentralised decision-making is to come into being. and only the less important decisions are allocated to lower levels. how much would it cost the organisation (in money or prestige or efficiency) if an unwise decision were made? High potential-cost decisions are not usually allocated downwards. There are no new areas calling for attention. This calls for well-trained and experienced employees at the lower levels and in the various divisions of an organisation. (b) Size of the organisation As organisations grow in size they tend to make greater use of delegation. so the existing management is unlikely to allocate any further authority to lower levels. Normally importance is related to cost. as the firm grows they have to delegate authority because they just do not have the time to make considered decisions on every issue. hence they are likely to allocate authority downwards. but in every organisation there is an area of decision-making that is seen as vital to its well-being. This calls for a spirit of co-operation within the organisation. they must also be capable of using this authority wisely. i. In contrast.

thus maximising the advantages of decentralisation. Management theorists like Levitt and Whistler argue that even within federally decentralised organisations there are pressures towards greater centralisation. meaningful and high objectives for the whole”.Job Design 147 Table 6. the strong centre of the organisation has its part to play. As Drucker describes it: “strong guidance from the centre through the setting of clear. In a federally decentralisation organisation the functions of head office (the strong centre) are as follows:       To issue policies and set organisational objectives To approve objectives suggested by the next-lower level To undertake long-term planning and in particular. any closures and major capital spending To make senior appointments at the next-lower level To provide those technical services where the advantages of scale and centralisation are clear (e. computers. The federal idea takes account of the way in which many modern organisations are expanding and divisionalising by products. In federal decentralisation each division is responsible for the day-to-day running of its own affairs. Federalism argues that each division should be seen as a profit centre and have its own functional departments. The federal approach is described by Peter Drucker as an organisation that has both strong parts and a strong centre. If these divisions are to operate effectively they must have a degree of autonomy. management writers have put forward the concept of federal decentralisation. legal advice. customers or geographic areas. The strong centre is also ultimately responsible for seeing that each division achieves the objectives set for it.1: Characteristics of centralised and decentralised organisations High Degree of Decentralisation Large organisation Top people willing to delegate authority Employees willing to accept responsibility Large number of divisions and departments High availability of management talent Fast-growing organisation Low Degree of Centralisation Small organisation Top people unwilling to delegate authority Employees unwilling to accept responsibility Few divisions or departments Low availability of management talent Slow-growing or static organisation What is federal decentralisation? In an effort to maximise the benefits of both centralisation and decentralisation. However. how these objectives are achieved is a matter for the divisions themselves. research) To develop the company image and ethos so that employees in all divisions feel they are valued members of the company.g. this is what strong parts mean. these arise from the © ABE and RRC .

e. this should not be allowed to change the federal principles of which decisions should be taken at the centre and which should be taken in the divisions. but also the type of decentralisation. with considerable autonomy to tackle tasks. The loose element is the creation of task forces. Peters sees an organisation as a network of tasks that are best tackled by teams or task forces. in a federal structure. ready for new task forces to be formed as needed. Managers should not merely delegate downward but should rather create vision for others to follow. Task forces and work groups set up to achieve specific objectives are made up of individuals with specialist skills. However. Project teams or task forces are flexible and come into being to tackle a given task and disband when the task is finished. the team spirit lives on. What is the current perspective on decentralisation? A twist to the decentralisation debate has been introduced by management writers like Peters. Handy’s views have been borne out to a large degree in those organisations that have sought to radically decentralise. greater freedom of action is permitted for each part of the business. Teamwork is more likely to be effective when team members are volunteers and not subject to heavy bureaucratic controls. Peters argues that the links of authority should be few but crucial. quality and service to the customer. Handy sees delegation as a way of developing new role cultures. The generally accepted form of decentralisation has been characterised by hierarchical delegation. Organisations have tended traditionally to control the constituent parts of the business from the centre. they can be made up of members drawn from high or lower levels of staff depending on the importance of the task being tackled. In contrast. and others (including British Gas.g. The essence of modern decentralisation is that decisions of all levels of importance should be made where they are most effective. relegating the core chief office function to the provision of shared management services. Peters argues that highly structured forms of organisation are not suitable for the changing conditions of modern society for they either fail to integrate effectively or they integrate tasks at too high a cost (economic and social) and are inefficient. He suggests that. © ABE and RRC . The thrust of their arguments is that it is not only the degree of decentralisation and delegation that is important. e.g. so long as the task is completed and the core values are respected. Task disciplines arise from the values. central administration offices are inevitably going to get smaller as each strategic business unit becomes more accountable for its own destiny. In his book “The Age of Unreason”. However. The tight integrating element is shared values. Handy sees greater devolution of authority and a much greater degree of autonomy for the various parts of each organisation’s business. In place of traditional structures. Peters puts forward the simultaneous loose-tight concept. the whole structure should be lean and flexible. Task forces have relatively few members (Peters suggests ten or less). there should be no short cuts on quality or service. to be processed and analysed. Computers encourage centralisation because information flows to the centre of organisations. i. authority and decision-making has been passed down from higher to lower levels. Peters argues that teams or task forces are important building blocks in effective organisations. Charles Handy describes the trend towards federalism that has developed in recent years and is expected by him to continue. As a consequence. so professional and operative staff are drawn together into a co-ordinated team with shared goals. ICI and Hanson) that have demerged or propose to do so. e.148 Job Design increasingly important role of computers.

policies and measurements known. actual decentralisation will never take place. Recentralisation may arise when emergencies or sudden changes of conditions call for crisis measures to be controlled from the centre. commensurate with decision-making authority. and such confidence starts at the executive level. yes. Decentralisation requires personnel policies based on measured performance. understood and followed. organisation structure. but definition of policies does not necessarily mean uniformity of methods of executing such policies in decentralised operations. Decentralisation requires confidence that associates in decentralised positions will have the capacity to make sound decisions in the majority of cases. Decentralisation rests on the need to have general business objectives.g. e. When the crisis is past. Decentralisation can be achieved only when higher executives realise that authority. Decentralisation requires the realisation that the natural aggregate.Job Design 149 Should authority move around? In a dynamic business environment. a constant control of costs undertaken by the centre to make the whole organisation more competitive. The key is to know when each is appropriate. certain changes in the organisational environment may call for a permanent recentralisation of functions. (e) (f) (g) (h) (i) (j) © ABE and RRC . is truly accepted and exercised at all levels. also. the need to make across-the-board economies. There will be times when the organisation will be decentralising and other times when centralisation is appropriate. enforced standards.” Certain functions that have been decentralised may need to be brought back into the centre. Decentralisation calls for a full spread of relevant information to decision-makers. will be better for the business and for the public than centrally planned and controlled decisions. Decentralisation requires understanding that the main role of staff or services is to provide assistance and advice to line operators. How do we create a culture that is flexible? R J Cordiner argues that a culture conducive to decentralisation and delegation can be created by following ten key principles: (a) (b) (c) (d) Decentralisation should place decision-making as close as possible to where actions take place. be retained by them. so that those making decisions can themselves make them properly. We might call that ‘distributed authority’. genuinely delegated to lower echelons cannot. rewards for good performance and removal for incapacity or poor performance. The way in which authority is distributed in an organisation should not be seen as fixed. Koontz et al define recentralisation as: “to centralise authority once decentralised. The authority delegated should be real. of many individually sound decisions. relationships. However. Decentralisation will work only if responsibility. The managers must set an example in the art of full delegation. Unless the chairman and all other directors/managers have a deep personal conviction and an active desire to decentralise full decision-making responsibilities and authority. through a relatively few experienced people. Recentralisation may be temporary. e. not just nominal. the functions are returned to the divisions.g.

According to Torrington and Hall (Personnel Management. ELEMENTS OF GOOD JOB DESIGN What are the features we should look for in a well-designed job?         Variety of tasks – requiring the use of several skills. Achievement – with the finished product often in view and with their responsibilities for quality in mind. Feedback – constant information on how things are going. With an emphasis on quality. Social contact – opportunity for interaction with colleagues on work-related matters. or if a task is left unfinished.150 Job Design E. However. and employees become more flexible in their abilities and able to cover holiday and sickness absences more easily. there are a number of problems associated with job rotation:     If management imposes job rotation employees may resist it. although he did report that Volvo workers in Sweden were positive about job rotation. e. Balanced workload – team members help each other to even-out peaks and troughs in their work. The advantages for management are that job rotation rarely leads to a need for additional machinery and tools. if it interferes with the development and functioning of the work group Some individuals may prefer to be excellent at one task. provides opportunities for learning and development. © ABE and RRC . A New Approach) the amount of change for the employees concerned may be very limited. so avoiding physical strain.   Job Rotation Job rotation is the simplest form of job restructuring or design and involves moving workers from one job to another. Development – the general increase in the required level of skills and particularly interpersonal skills.g. if a workstation is left in a mess. team members can be satisfied with a job well done. The employee is given a greater variety of tasks and for some. Personal identity – the task forms a whole job (or a large part of a whole job). this may give the opportunity to move from a standing task to one which involves sitting down. Responsibility – individuals accountable to each other. These are transferable outside the immediate workplace and can contribute to a significant sense of personal growth. Birchall (1975) claimed that workers soon became familiar with each type of work and the actual work done was still repetitive. rather than good at several tasks The training required is likely to be more complex and extensive and therefore more expensive The changeover situation may cause problems. teams are required to ensure quality standards are given higher emphasis than simply reaching output quotas. Autonomy of the team member in deciding the order or pace of work. Even though these jobs are of similar level of skills. they do at least afford a change from boring routine. Minimal role ambiguity or conflict – the team has the opportunity to deal swiftly with any problem of ‘who does what’.

consultation on possible changes. Job enlargement is often criticised on the basis that the enlarged job tends to consist of multiples of the original task and nothing of any significance is added that will improve job satisfaction or motivation. Enlarging a repetitive job may alter an employee’s job in such a way that they can no longer socialise or daydream.g. Results of research into job enlargement indicate inconsistent findings:   Job Enrichment This is a more ambitious technique. Delegated “control”. outweigh any loss of production from making the work less specialised. For management.g. if not to the individual. reduction in waste. less idle time (operative and machine) and huge cost reductions in set-up and inspection. the operative performs their own inspection function on what they make. and it may be this part of the job that the individual finds attractive! Hackman and Lawler (1971) reported that workers in varied jobs were generally more satisfied and performed better than those with less variety.g. at least to a work group. e. bench work rather than assembly-line work.g. and it may be this that gives the individual satisfaction. meaningful modules of work. © ABE and RRC . incorporating the ideas of job enlargement but going much further in changing the nature of jobs. e. so long as the job is done well. space and training.Job Design 151 Job Enlargement Job enlargement refers to ways of making a job less boring by introducing more variety. However. Torrington and Hall point out that research evidence relating to worker behaviour and attitudes to repetitive tasks is conflicting:   Some workers seem to prefer repetitive jobs as they give a sense of security. The jobs of the operators were redesigned to include the tasks of machine set-up and output inspection which had previously been done by other groups. This usually involves widening a job from a central task to include one or more related tasks. more direct communication instead of going through formal channels. In this case.e. Job enrichment supporters argue that introducing more variety may enrich a job but this can go far beyond giving the employee more tasks to do or job rotation. This means that as the member of staff is doing a wider range of tasks they are less dependent on colleagues and can work at their own pace. benefits were reported to include improved quality. Job enrichment ideas include:     Job freedom. job enlargement may require additional equipment. by the worker with higher morale. usually of the same type as the original task. An example of job enlargement was reported at the Endicott plant of IBM. The worker is given a greater opportunity for achievement and recognition and job enrichment aims to increase the worker’s involvement in the organisation and/or the job. e. Allocation of natural. Kilbridge (1960) found that after enlargement of some industrial jobs. Participation. increasing the number of different tasks the worker has to perform. staff may quickly become familiar with the additional tasks and the motivational effects may wear off. letting workers decide their own methods and pace of work. e. workers preferred the pre-enlarged jobs. i. It is argued that the gains in performance.

Fiat. which in turn have provided evidence to indicate that individuals’ needs should be taken into account if any form of organisation improvement is to be made. redesigning the jobs of female telephone operators. they may express this by poor workmanship. McGregor. they face certain problems and limitations:  Technology. The international publicity given to such experiments as those taking place in Volvo. Job enrichment may well expand the job to include supervisory or managerial functions and elements of decision-making. real increases in productivity can only come from the more efficient use of the workforce. This is the difference between job enrichment and job enlargement. If they are not satisfied at work. For example. unions can react against ideas that dilute strict trade and demarcation lines between jobs. In general. the worker is allowed to complete a whole or much larger part of a job. Cost. Workers themselves. etc..    Despite these problems. Some workers prefer stability in their jobs and may feel threatened by ideas of making their jobs more interesting. the changes involved added initiative and a relaxation of the control mechanisms of the company. have led to examples being tried out. prompted other work groups to ask for such “experiments”. These include:    In the absence of technological breakthrough. and the added tasks are often of a different nature to the ones already performed. Ideally workers should have regular feedback direct to themselves on the quality and quantity of their performance at work. The only remedy here is automation. Some forms of technology are strongly associated with boring repetitive jobs. They did not have to obtain the supervisor’s permission to leave their posts to check records or go to the toilet. Today’s worker is often better educated than their predecessor and consequently expects more from their job. the cost of doing so would be so high it would make the firm uncompetitive. Likert. rather than in scripted phrases. absenteeism and high labour turnover. Trade unions. They were given discretion to handle lengthy or complicated enquiries as they thought best. Lawler. much as they would like to enrich the jobs of their employees. some form of job design can often achieve this result. Some firms argue that. Porter and Lawler. and to help out operators engaged on other tasks during busy periods if they wished.. High labour costs have led to the need for the better use of people.   © ABE and RRC . Sometimes trade unions oppose changes in jobs. etc. operators were allowed to reply to customer requests in their own words.152 Job Design  Allowing employees to feel responsible for their own work performance. Herzberg admits there are some jobs that simply cannot be enriched: he calls them “Mickey Mouse jobs. Behavioural scientists like Herzberg.g. there are many positive views emerging on job design and enrichment. e. for Mickey Mouse men”. Philips. When organisations decide to make use of the job enrichment technique. as they would have to raise prices to consumers. Hackman and Kaufman implemented an early job enrichment programme in 1973. Essentially.

(c) Accountability Accountability is created immediately responsibility and the necessary authority have been accepted. essential to ensure that those to whom one delegates have a clear understanding of what they are required to do. whilst managers can delegate authority (so subordinates can work with derived authority) they must assign responsibility. it is totally for them to achieve the task(s) in the way that appears most effective and efficient. in other words. as used by Sisk. Acceptance of responsibility (assigned) and authority (delegated) means that an obligation is incurred. If a manager does not. DELEGATING AND MONITORING WORK When an organisation structures its work into jobs that are undertaken by employees. are:    The assignment of responsibility The delegation of authority The creation of accountability. delegate sufficient authority for the subordinate to carry through the task then accountability for the level of success rests with the delegator. The three aspects of delegation. to achieve and the limits of the authority that is delegated to them. Thus. therefore. What are the relationships between responsibility. an everyday fact of real management life that responsibility is assigned and subordinates held accountable. but note that there is considerable variation in the terms used by management theorists to describe each of the three steps. whilst the manager holds back the necessary authority. It is. authority and accountability? There are three generally agreed steps to the process of delegation.Job Design 153 F. The principles are quite clear. “Responsibility” in management terms refers only to duties. Sisk defines the delegation of authority as “an organisational process that permits the transfer of authority from manager to subordinate”. in line with their proven or believed capabilities. they empower that person to act for the delegator. (b) Authority When a manager delegates authority to a person. The jobholder is accountable for their actions and their results. it formally assigns responsibility and delegates authority. This is particularly true within Theory X organisations and is © ABE and RRC . or work. (a) Responsibility Koontz defines responsibility as “the obligation to accomplish assignments”. Once a person accepts responsibility for a task. that is specifically assigned. It is axiomatic that responsibility without authority is of no value since the “responsible” person will have no ability to initiate the actions necessary for task achievement. (Given compliance with organisational policy and the law of the land. unfortunately.  It is. to work with derived authority. or cannot.) It follows that responsibility should only be assigned to trusted members of staff. not with the subordinate. It is essential that delegation be carried out effectively and we shall return to this in a moment. or range of tasks. no subordinate should accept responsibility without sufficient delegated authority. but the practice is not.

© ABE and RRC . but not all delegate effectively. it indicates a lack of trust in the subordinates. yet without such a climate effective delegation is unlikely to take place.) Take the pains to write on one sheet of paper the optimum and the minimum that you expect from each area of the contract. with the top person involved at each supplier. in “Up the Organisation”. I know that 99 out of 100 managers won’t take the risk. I want a signed contract in 30 days. edit. 4. add and modify. But is it a risk? Jean is closer to the point of use. She will be most affected by a bad contract. Certainly. all suffering from a lack of authority. Sisk establishes three conditions that must be met:    (a) Parity of authority and responsibility Absoluteness of accountability Unity of command. And she’ll spend full time on it for the next 30 days. Find the person in your organisation to whom a good contract will mean the most.  What are the conditions for effective delegation? Virtually all organisations delegate. you say: “This is Jean. With Jean on an extension phone. 3.” Robert Townsend. or forget it). call Jean into the office (with her boss if there is one between you and her – I assume he’s in favour of this. many subordinates are frustrated and many managers overworked. It is extremely difficult to achieve effective delegation. which will be noticed by them and which will affect their behaviour. She knows how much the company gains or loses by a concession in each area (and they know that she knows). This can be very ego satisfying and a certain type of person will feel very secure in the knowledge that without them the place “would grind to a halt”. they may find each day occupied by a queue of staff. the authority granted to a subordinate must equal the assigned responsibility. They are also likely to use the phrases such as: “If I’m not there to hold their hands nothing gets done. Would you? I maintain the company will get a more favourable contract every time. There is no appeal over her head. This is Townsend’s recommendation: “1. subtract. I’ve asked her to negotiate the contract.  It is not easy for a subordinate to insist on the delegation of sufficient authority. If a manager has several subordinates. 2. Give your organisation (including Jean – the person you’ve picked to negotiate) a couple of days to discuss your outline. Then rewrite it. (Can’t be more than two levels below you – there’s that organisation chart getting in the way. An important contract with a supplier is coming up for renewal.154 Job Design normally a sign of a manager’s lack of self-confidence. especially in the face of a direct order and therefore. Whatever she recommends we’ll do. It can be extremely difficult to create and maintain a climate of trust within an organisation. all needing to secure their approval. Parity of authority and responsibility For effective delegation.” Now. gives an example of how to delegate effectively. Too little and the subordinate must consult the manager too often and in some cases a decision cannot be implemented until the manager signs the necessary authority.

So it becomes a question of how many mistakes are reasonable. They have to because they are working into an uncertain future. and she would feel she could turn to her boss if she was in need of advice. And you’ve been fair to (and put great pressure on) your suppliers by telling them the rules in advance. Nevertheless. without perfect information. and whilst full authority will be delegated commensurate with responsibility. yet it came to a halt during the period of the UK recession of the early 1990s. The worst scenario would be a contract at minimum terms (Jean was not empowered to authorise except at minimum or above) and perhaps a manager who would require some TLC (tender-loving care) but who had learned a valuable lesson. (Witness Canary Wharf in London’s Docklands. We all know that nobody can serve two masters well. and only one manager. the converse is that each of two managers cannot take responsibility for half a subordinate. every one of them. who is accountable to the chief executive. (And every shareholder will be accountable to someone for their choice of the organisation as an investment. In Townsend’s example the situation was carefully prepared for the manager. a highly-motivated manager. who wants an easy life. departments and sections. It is only reasonable to hold someone accountable for matters that are within their control.) (c) Unity of command Each subordinate should be accountable to one.  Nothing can be learned unless a junior is allowed to work alone. defined manager. a property developer is unlikely to be able to achieve the targets set whilst interest rates were low and forecast to remain so. If interest rates are forced up by government. A clever junior. © ABE and RRC . can easily play two bosses off against each other so that both think the junior is working hard for the other! Of course there is need for flexibility. each dealing with matters that are successively more tactical. who will assign responsibility for parts of the function to managers. it is still a fact that the paint shop manager is accountable to the factory manager who is accountable to the production manager who is accountable to the production director. Not unaided. it is not always possible for a manager to achieve the specified task(s). but without overt interference. When all goes well he gets a good contract and more importantly. Whilst they will assign responsibility for each function to a director. which is one of the biggest and most publicised developments. as within a matrix organisation but flexibility should never be allowed to disguise or diminish the clear line of accountability for dayto-day activity that must be to one.” Note the following points about this example. Managers make mistakes. the chief executive is accountable to the shareholders for every action the organisation takes.) (b) Absoluteness of accountability Although responsibility may be assigned to subordinates and authority may be delegated to them. for example.  Although full authority may be granted.Job Design 155 Note that you’ve given maximum authority and accountability to Jean. But she had been carefully chosen as the most suitable and would be unlikely to fail. In taking the assignment she accepted the accountability. Townsend was taking a risk but a carefully calculated one. of what magnitude and how fast the manager notices and responds with a revised decision. accountability to a manager can neither be assigned nor delegated. who is accountable to the shareholders. Within a typical organisation will be divisions. She would not feel that she could shift the accountability off to somebody else.

156 Job Design What is it that managers delegate? We have given a general definition of delegation within an organisational structure. the manager gives increments of authority to a subordinate. Allocating decision-making in defined areas – a manager delegates decisions that previously they had made. The delegator does not wash their hands of the function when it is delegated (accountability demands that the delegator. The delegator must be ready to answer any queries and should stress their confidence in the recipient. We can identify three types of delegation:  Entrusting tasks to subordinates – when a manager allocates a job they normally undertake themselves to a person at a lower level in the organisational structure. where a manager delegates certain activities to a subordinate but we need to look in closer detail at just what it is that is being delegated. too. issuing orders and/or decision-making and then making it more specific by listing the exact requirements and standards expected from the recipient Selecting suitable recipients by an assessment and appraisal of their competence in the light of what is expected. attitude. another part is fed to them. is accountable to superiors). © ABE and RRC . Allocating authority to issue orders – trusting a subordinate to issue orders to those who would previously have received those orders directly from top management. The process of accountability will also be explained. A careful balance must be drawn between control and freedom to get on with the job. In practice delegation may be a “drip process”.   What is the process of delegation? The key steps in delegation are: (a) Planning There are number of aspects to this:   Deciding which tasks and functions can usefully be delegated Specifying the type of delegation . This incremental delegation allows potential to be developed in the recipient. all have to be taken into account. i. in writing.task. experience. the delegator does not want to give such close control that it undermines the confidence of the recipient.  As a general rule. The recipient will be informed of the above decisions and given exact details of objectives and standards expected. workload. (b) Action Assign the duties and delegate commensurate authority. Once the subordinate shows themselves capable of one part of a task or function. (c) Control Establish the necessary controls. It is essential that the delegator retains the right to recall responsibility and authority and that periodic reports on progress are made by the junior. Skill(s). However. Those jobs will usually be of some importance as they have formed part of the manager’s duties. for delegation is not synonymous with abdication. a manager should delegate whenever a subordinate shows the ability and enthusiasm to undertake a function being carried out by the manager.e.

The yardstick should be results. these functions are delegated to subordinates.g. Computers can assist MBE by taking over many routine matters. which may include the following:   Delegation allows top managers to be more productive because they can get subordinates to assist them in achieving the objectives of the organisation The time gained by managers allows them to improve the quality of their work © ABE and RRC . it is useful to analyse the costs. However. if it fails. e. The advantage of MBE is that it divides functions into the less important. Has the recipient achieved the objectives and standards set by the delegator? Not all delegation will be successful. as they hold ultimate responsibility Fear that subordinates will do the job better than they were doing it themselves and so show them in a bad light. against the benefits or advantages. which are delegated and the more important. Some managers may:    Be reluctant to delegate. Coaching can be intensive when the function is new and then gradually reduced as the recipient grasps the situation. (d) Feedback The degree of success of delegation should be kept under review. What gets in the way of delegation? Problems can arise both in delegators and recipients. MBE acts as a sieve. which have the attention of top management. as they may lack confidence in the subordinates or just wish to do everything themselves Worry that subordinates may fail and that this will rebound on to them. (b) Management by exception (MBE) This technique aims to avoid an overload of functions on top management. In the case of recipients. they may find their new authority a cause for stress and worry. What are the techniques of delegation? There are a number of techniques that can be deployed to help achieve effective delegation. MBE requires careful planning and sensitive operation.Job Design 157 Well-constructed and thoughtful controls give assurance to the delegator that the job is being done properly and confidence to the recipient that there is a fail-safe mechanism to prevent too much of a disaster if things go wrong. Delegated authority can sometimes cause confusion and bad feeling in the organisation. The result is a smoothrunning organisation. delegation should be rescinded. So long as things are going along well and the decisions required are not of major importance. (c) Cost/benefit analysis of delegation To decide on the level of delegation to be deployed. possible lowering of performance. Important among these are: (a) Coaching The delegator helps and guides the recipient with the delegated function. the manager establishes standards of performance and levels of decisionmaking and it is only when standards are not reached or decisions are of greater importance that the manager swings into action.

it is necessary to communicate clearly but not always desirable to state exactly how the task has to be carried out. Delegation involves people and all people are different. They respond differently when placed in positions of responsibility. As we saw in the study unit on motivation. Delegation provides the most significant test of manager versus leader. controlling. more efficient and often more effective way. at the same time as developing the team and individuals within it. This diffusion of task performance or issuing of orders and decision-making may be necessary as an organisation decentralises. Delegation helps each team member to realise their potential by gaining knowledge and developing skills. Delegation creates fear that the job may not be completed properly. It is an essential part of the training process.      (b) Disadvantages      In conclusion. skills and abilities in subordinates and increases their morale by making their work more challenging. organising and so on. Delegation is essential if managers are to be freed up to manage. The person carrying out the task may also have to refer back frequently for instructions. requires the subordinate to report back on matters of detail. By delegating work it is possible to make use of individual and specialist skills that team members possess. It is sometimes tempting to retain those jobs that are varied and interesting and to delegate those jobs that are less desirable. It can sometimes cause the manager to fear the subordinate as a “rising star”. To delegate properly. The traditional manager retains a high degree of control. they help the subordinate and between them. Delegation helps to increase job satisfaction. forecasting. you can see that delegation develops the spread of authority in an organisation. we can say that delegation helps a manager or supervisor to do the job in a better. People need space to function. disrupting other tasks. to help them through any difficulties. increasing both productivity and quality. or the work may take longer. building more responsibility into a job or giving employees greater autonomy or control of their work can be a powerful motivator. How do I decide whether or not to delegate? (a) Advantages  Those who delegate well regard it as an opportunity to plan work systematically. The person asked to carry out the task will not normally be as technically proficient as the manager. People feel more involved in the job if they are given responsibility. This can cause substantial problems if the organisation is restructuring or delayering. they solve the problem. © ABE and RRC .158 Job Design   Delegation and particularly MBE filters out the more trivial issues that arise in the organisation Delegation develops potential. so the standard of work may drop. Their time should be taken up by managerial responsibilities: planning. By considering the nature of what is delegated. The leader maintains sufficient control for a particular subordinate at a particular time. A leader does not take back control. Delegation involves risk. It also helps others to fulfil their potential.

Job Design 159 The success of a manager’s work can often be measured by the work performed for them by others.Workers regularly spend time working from home. normally unpaid.  Flexible working (this section)  The flexible firm (see Unit 3 – Human Resource Planning)  Here principally we mean the organisation’s working arrangements in terms of working time.Anything less than full-time hours. Job-sharing .This permits employees to work all or part of their working week at a location remote from the employer's workplace.A worker remains on a permanent contract but can take paid/unpaid leave during school holidays. Working from home on a regular basis . within certain set limits. What is flexible working? It depends on the context in which the expression is used:   The flexible labour market Numerical flexibility (e. are extended periods of leave. in 1998 84 per cent of UK managers believed it was up to an individual employee to balance their work and family responsibilities. G.Compressed working weeks (or fortnights) don't necessarily involve a reduction in total hours or any extension in individual choice over which hours are worked. arrangements for varying the size of the workforce using temporary. Compressed hours . Delegation enables the manager to multiply themselves. Annual hours . According to a study by the UK government. Mobile working/teleworking . Career breaks . when to begin and end work.Career breaks. working location and the pattern of working:      Part-time working . Delegation involves entrusting the care of management to another. The central feature is reallocation of work into fewer and longer blocks during the week. © ABE and RRC . multiskilling).g.g. or sabbaticals.The period within which full-time employees must work is defined over a whole year. of up to five years or more. Term-time working .A form of part-time working where two (or occasionally more) people share the responsibility for a job between them. divide their load and share their responsibilities. By 2004 this had fallen to 65 per cent. Flexitime .Allows employees to choose. FLEXIBLE WORKING This builds upon the section on the flexible firm in Unit 3 . fixed term and agency staff) Functional flexibility (e.Human Resource Planning.     Organisations are showing more understanding of employees’ responsibilities outside work.

more satisfied with their work. with more women in the labour market and an ageing population.   What are the potential benefits of flexible working? Research by the UK Chartered Institute of Personnel and Development (CIPD). How should we implement flexible working practices? Effectively communicating and implementing flexible working is likely to require effort and energy. remote working and hot desking arrangements) An increasing need for businesses to be able to deliver services to customers on a 24/7 basis. for example. on employee attitudes and the psychological contract. it is increasingly common for workers to have caring responsibilities outside the workplace) Advances in technology (facilitating. demonstrated a correlation between a flexible working and positive psychological contract. Here are some ideas:  © ABE and RRC . Establish a clear process for how flexible working works in your organisation Ensure there clear roles and responsibilities for employees. The kind of challenges you might encounter include:            Overcoming concerns about operational pressures and meeting customer requirements Line managers’ current ability to effectively manage flexible working Line managers’ current attitudes toward flexible working Your existing organisational culture A lack of support at senior levels. Workers on flexible contracts tend to be more emotionally engaged.160 Job Design Why are organisations using more flexible working arrangements?   Its potential value as a recruitment and retention tool in a tight labour market The changing profile of the workforce (for example. more likely to speak positively about their organisation and less likely to leave. line managers and HR Assess the current levels of support you offer your line managers and ensure it is sufficient Invest in communication and awareness raising Assess how conducive your organisation’s culture is to flexible working and take action accordingly Make use of pilots (when introducing new initiatives) and trial periods (for individual flexible working arrangements) to highlight potential problems with flexible working arrangements Build in opportunities and mechanisms to monitor and evaluate progress with flexible working.

161 Study Unit 7 Performance Appraisal Contents A. F. What is Appraisal? What are the purposes of appraisal? Appraisal in the Context of Performance Management Different Approaches to Appraisal What is the organisational context for appraisal? Typical Processes of Appraisal Who should do the appraisal? How often and when? What is the process for an appraisal interview? What about follow up action and monitoring? What are the potential problems in the process? Personal Objective Setting What is the purpose of managing people by objectives? How do we set objectives? What is the MBO process? How can we assess MBO? Managers Need to Have Appraisal Skills Problem-solving Delegation of Authority Career Development Training Communication Brainstorming Cascade Team Briefing Coaching Page 163 163 166 167 167 168 169 169 169 171 172 173 173 174 175 177 179 179 179 179 179 180 180 181 181 181 B. C. (Continued over) © ABE and RRC . E. D.

Self-appraisal Continuous Appraisal 183 185 186 187 © ABE and RRC .162 Performance Appraisal Counselling Mentoring G. H.

from the chief executive to the newest office junior. There are two main reasons for this. but the principle is the same. It is impossible for a good appraisal scheme to address more than a few of the various purposes for which appraisal may be used. though. there are a number of different specific purposes and outcomes of the appraisal process. Before going on to examine the role and nature of staff appraisal in organisations. They serve their purposes admirably and are well thought of by all concerned because they are seen to be of value. Some purposes sit happily together. These two observations about the problems with staff appraisal do. Within this very general description. WHAT IS APPRAISAL? The competent manager will constantly monitor staff performance and make realistic and considered comments on a day-to-day basis to assist and develop their effectiveness. appraisal is viewed with distrust in some organisations and has lost credibility in others.  There is a substantial lack of understanding concerning the overriding principles behind appraisal and about the best ways to carry it out. professional codes of practice or other organisational statements describing what is expected from a competent employee. with ideas about improvement and development for the coming period. What are the purposes of appraisal? Staff appraisal schemes are all concerned with taking stock of the present situation. It is a snapshot of progress and achievement as seen at a particular time.before going on to review the process of appraisal itself. that the standards are valid and attainable. although many organisations try to address them all. procedural manuals. All the purposes need to be addressed by a caring and developmental organisation. Granted. the criteria for judging will be different at those extremes. © ABE and RRC .Performance Appraisal 163 A. A staff appraisal scheme seeks to formally encapsulate the essence of that relationship and record comments from both sides at an annual (or twice yearly) meeting. it must be said that there are many organisations that have first class appraisal schemes. whereas others are bound to conflict. Standards for top managers will probably be based on corporate objectives whilst standards for clerical staff will be based on task performance. and that allowance will be made for factors outside the control of the individual. but different approaches need to be taken according to the desired result.looking at the various purposes and the organisational context . though.  In contrast to these two gloomy viewpoints. It may be seen as alternatively a heavy-handed tool of management on the one hand or an administrative chore with little value on the other. Appraisal can only address the achievement of standards or objectives if they have been clearly defined and understood by all concerned. it is important to note that there is considerable disagreement and conflict surrounding the entire concept of appraisal. (a) The assessment of past effectiveness and setting of new performance targets The assessment of performance is a task that can and should be carried out at every level in an organisation. These standards of performance may be found in job descriptions. As a result. reviewing past performance and planning for the future. It must be clear what levels of performance are acceptable. provide us with a framework for considering the concept .

in the shape of an action plan. is not just a case of imposing objectives. Many organisations use staff appraisal for this purpose but this is fraught with difficulty. In the context of appraisal. Linking the two inevitably means that the pay issue will distort what should otherwise be an honest and truthful exchange about performance. which should be offered by the manager to aid the individual to perform to those standards. increasingly. The identification of the individual’s key tasks within those priorities and the appropriate standards of performance in terms of quantity. This may explain some of the distrust and lack of credibility associated with staff appraisal systems in some organisations. time and costs. which is more likely at the lower ends of the hierarchy. and will probably try to over-emphasise achievements. Staff appraisal offers an ideal opportunity to managers and supervisors to discuss training needs and identify possible routes to achieving new knowledge and skills. © ABE and RRC .164 Performance Appraisal It should be remembered that not all aspects of a job can be assessed against objectives and targets. It is generally considered best practice to try and divorce the two purposes and address them separately by different schemes at different times. The employee is hardly likely to expose and discuss weakness at the risk of perhaps being penalised by the withholding of pay increases. as a basis for determining merit pay or bonuses. there needs to be some form of performance assessment. The setting of performance targets for the forthcoming period. Unless productivity is actually quantifiable. integrity. (c) The assessment of training and development needs. It is clearly difficult to have a frank discussion about performance standards and achievements when there is an overriding implication that the discussion will be used to set salary levels. views and biases. quality. Thus. the display of certain personality traits (such as reliability. etc. to qualify for the performance-related pay element. this would include:  Agreement about the overall objectives of the department/section and of the individual within that context (ideally as embodied in an accurate. However. The main problem lies in the impossible marriage of a process concerned with improving the quality of performance with one that aims to provide information for salary review. To establish that link and measure performance. pay is being linked to performance. the level of support and guidance. current and developmental job description). surveys have shown that a substantial proportion of organisations do link them together. in compensation.    (b) The assessment of present salary levels and setting of new levels and/or relation of performance to pay We saw in a previous unit that. Frequently. and identification of strategies for meeting them Whenever an assessment of performance is made there will be invariably an identified need for further training or development. final evaluation may be open to the subjective perceptions. of the appraiser. unless the performer is excellent in every respect. The identification of and agreement about. measuring success is difficult and open to misinterpretation. The establishment of the individual’s major priorities over the next period and the extent of managerial support needed for success. it must be seen as a two-way exercise that locates the individual’s own objectives in the context of those of the organisation and the organisation’s support. creativity and judgement) needs to be considered and with the difficulty of setting measurable standards for such characteristics.

the process provides a natural forum for considering where they may be going in the future . © ABE and RRC . As well as discussing improving performance in the job in the future. These likely flyers may become evident at appraisal meetings. (e) The assessment of individual progress and assistance with career planning decisions Staff appraisal schemes focus attention on the individual’s performance in the job. the complexities of setting future staffing targets must be mentioned here. by endeavouring to identify and develop individuals for specific posts in the future. the availability of materials and funds and the changing nature of service provision. people will stand out from the crowd as being likely to climb higher. based on a sound knowledge of the employee group. Hence the personalisation of such activities. with high flyers being marked out as being potential chief officers for any local authority in the future.Performance Appraisal 165 Any action plan should include a commitment to enable the individual to acquire these new abilities and the appraiser should set time scales for the achievement of specific objectives. In some situations. as can an ability to analyse and address problems associated with the present post. although it is difficult to envisage either one being discussed without reference to the other. is fraught with problems. To be effective. These approaches stem from a distrust of performance appraisal. The excellence of present performance can be measured. although the effective manager will notice latent ability as part of everyday supervision but labelling people as potential top managers can be dangerous if anything more than two or three years’ development is envisaged. any assessment of ability to tackle tasks in a possible job. training needs appraisals may be a completely separate exercise from appraisal related to performance. Disappointments can occur from both sides and plans can be spoiled or careers accelerated too fast.talent spotting . five or even a ten year period. A key difficulty is finding an acceptable yardstick against which to measure “potential”. These need to be given every opportunity to develop their skills and knowledge. (d) The assessment of potential for promotion and development of succession planning Organisations need to be clear about their future and part of that clarity includes people who are going to run the show in years to come.and groom them for future higher roles in the organisation. seek to remedy weaknesses and consider the individual’s career aspirations. Any plans for training or development should encompass the needs of the section or department as well as the individual. Many variables are in play and the task is made more difficult by unexpected shifts in the national economic scene. and training and development plans. Clearly. some time in the future. a succession plan should address organisational needs over a two. their collective and individual abilities and the future needs of the unit. Appraisal may help to identify those employees who show great potential . a point we shall consider below. In local government terms. Such discussion can inform both planned adjustments in job role and hence performance targets. However. or in certain organisations. now and well into the future. The appraiser should capitalise on strengths. Succession planning should be an continuous process. ready for eventual promotion and increase in responsibility. in political demands.both from the organisation’s perception and in view of the employee’s own aims and objective. can only be speculative and hypothetical. However. this is often seen less as a parochial concern about the organisation than to the local government service as a whole.

Above all. A creative appraisal will allow the appraisee to make constructive comments about the level and quality of supervision received . it should foster better communications between colleagues. upwards. it should stimulate dialogue about successes and failures. downwards and sideways. personal growth and greater job satisfaction. Opportunities to discuss career development are often quite rare. four elements are worthy of note:  Most people are pleased to have their work performance evaluated to have strengths emphasised and developed. and provide significant gains in the development of internal communication and individual motivation. APPRAISAL IN THE CONTEXT OF PERFORMANCE MANAGEMENT In unit 5 – Performance Management – an Introduction – we suggested that performance appraisal is only one tool in the management toolkit that organisations can use to direct performance and raise standards:           Mission (what your unit is trying to achieve) Vision (what things might look like if yours really was a quality outfit) Strategy (a long term sense of direction) Business plans (more immediate targets and plans for reaching them) Values (how people should and should not behave) Culture in which improving performance is valued and developed Monitoring of performance – at individual. with a consequent enhanced enthusiasm and commitment to the job and the organisation.166 Performance Appraisal This is an example of the creative use of appraisal to meet compatible purposes within a single framework. From the individual employee’s point of view. The appraisal process should encourage a greater sense of belonging and a feeling of co-ownership. (f) The enhancement of motivation and communication Rather than being a specified purpose of staff appraisal. it should give the organisation a powerful forum for individual and team development. to have the opportunity to discuss improving areas in which they are less effective and to recognise the relevance of the part they play in the overall pattern of the enterprise. hopes and aspirations. The act of completing a careful and thorough appraisal is a source of motivation. unit and Guild levels Feedback of that monitoring to staff Clear goals A set of competencies (to describe what good performance looks like) © ABE and RRC . the chance offered in appraisal can stimulate personal growth and set new targets for the unusual and often very powerful opportunity for frankness and openness (few personnel/management texts mention the desirability of the appraisal meeting being as much about the employee appraising the manager as vice versa. It can generate an enormous amount of goodwill and respect for the organisation.   B. with the attendant increase in worth and mutuality). this is a by-product of an effective scheme. fears and excitements.

© ABE and RRC .g. saying ‘well done’) Intrinsic rewards (the satisfaction from doing a worthwhile job reasonably well) Effective remedies for under performers. creativity. see it in this context. Where there is a sense of mutual learning and shared values and perceptions. DIFFERENT APPROACHES TO APPRAISAL What is the organisational context for appraisal? We noted above that some of the disagreement and conflict about appraisal derives from the organisational context within which it is operated. vision and business plans. them-and-us culture will see appraisal as a bigbrother operation. any scheme must be designed to reflect that culture and be consistent with internal practices and procedures. encouragement and nurture. growth and empowerment will cultivate and nurture appraisal as a critical factor in their achievement. including few managers. the older the organisation and the further its roots go back to less enlightened times. awards. linked with processes for personal and management development and reward. as well as vertically integrated with the organisation’s mission. There must also be a climate of comfort. sitting with Nellie etc) Management development Good job design (creating jobs that satisfy) Team working (interaction and mutual responsibility) Extrinsic reward and recognition (basic pay.  Where is appraisal most likely to succeed? The organisation espousing concepts such as team work.  Where is appraisal most likely to fail? Where there is a bureaucratic structure that relies heavily on control and administrative complexity and perfection. Appraisal needs to be seen as an integral part of the organisation’s life and culture. C. in an open and fair environment. Appraisal needs to be horizontally integrated into the other HR topics on this list – e. self-contained exercise. the more resistance is likely. appraisal schemes will be found to be paperbound and rigid. That is one reason why staff appraisal is so often criticised as providing no added value and is merely a bureaucratic imposition from the personnel department. (a) Organisational culture Appraisal schemes will only flourish in an organisation where there is a culture for personal growth and corporate development. A pluralist. In this section we explore some of the issues involved. innovation. not as an isolated. coaching. This is not easy to achieve and to some extent. clarity of mission. To that end. seeking scapegoats and finding faults.Performance Appraisal 167         Appraisal discussions Personal development (anything that would help people perform better – off the job training. appraisal will flourish to the great benefit of all concerned. reading. Few employees. performance pay.

before considering the nature of the interview itself. there are two other aspects of appraisal schemes to note: who should conduct the appraisal and the frequency of appraisals.the subject carries out a preliminary self-assessment and this is then the basis for discussion with the manager Let’s all have a go! . © ABE and RRC .       There are basically two elements to the appraisal process: However.who need to be informed about the scheme and its benefits. will help create a sense of ownership and commitment:   Senior management -who must be seen giving the scheme the stamp of approval and participating fully themselves as both appraisers and appraisees. This interaction needs to be supported by a commitment from the organisation to make it a meaningful and relevant process in which both parties can put their trust. All of the following groups must be fully aware of their roles in the scheme and their involvement in its planning and design. Employees (including the above categories) as appraisees . and to the operation of a fair and objective appraisal system.who must be committed to the open exchange of the appraisal process and to the implementation of action plans. If the manager believes the subject can read. in particular.the manager writes a report and then tells the subject what is in it. the subject might get to see the report and sign to say they have seen it Tell and share . to achieve that success.the subject and manager work together and decide what should be recorded You do it first . co-operation and understanding of management and employees throughout the organisation.    D. and to be involved in it at an early stage.who are responsible for the co-ordination and control of the process and implementing aspects of action plans which lie outside the scope of line managers. New employees . Personnel and training administrators . The appraisal interview itself Follow-up action and monitoring.168 Performance Appraisal (b) Commitment and ownership At the heart of all appraisal schemes is a highly personal interaction between the appraiser and the appraisee.who must be committed to the success of their sections and the individuals within them. TYPICAL PROCESSES OF APPRAISAL Organisations tend to promote one of five broad policies on appraisal:  Tell . given the fairness and objectivity of the system.the manager writes a report and then discusses it with the subject Share . A necessary precondition for such a situation is that the scheme is not imposed from above but is developed and implemented with the full support. Managers and supervisors (as appraisers) . including consequent support for and monitoring of action plans.360° appraisal.

the whole organisation should conduct appraisals within a set time. © ABE and RRC .being one hierarchic level removed. although superior-subordinate relationships are sometimes too strained to form an effective basis for appraisal.identifying realistic aims and effective approach where technical or very specialist activities take place. It is also usual that such documentation needs to be agreed by the appraisee and signed to that effect. may accept the idea of self-appraisal and will pursue it objectively and creatively. Self . this person may have a more detached viewpoint but may not have the dayto-day experience of working with or knowing the individual.  It is usual for action plans to be formally recorded so that they can be reviewed and referred to in gaining support for development resources. to focus attention on the process and ensure that everyone is covered at roughly the same time. As with all interviews.Performance Appraisal 169 Who should do the appraisal? There are a number of possibilities. preparation is essential and there are particular requirements relating to the interview itself. as we discuss below. who do not wish to be appraised. with the option of using individuals or combinations of people:  The immediate line manager (the “parent” approach) . such as training programmes. together with the necessary actions and support required to achieve them and dates for their achievement. Ideally. A combination of the immediate line manager. which may be outside the professional understanding of the line manager (and which may include personnel specialists where more or extra expertise in inter-personal communication and behaviour is required). especially where there is an opportunity to propose personal development programmes and to choose whether or not any further appraisal discussions should take place and if so.from both the appraiser and appraisee’s point of view. with one or both of the other people above as a team to provide a comprehensive but balanced view.clearly the one in the best position to have observed the individual and come to conclusions about their work. although six-monthly schemes are effective in smaller organisations. provided the employees know what it is and recognise the importance of the interviews when they occur. Spreading it out over the year is not conducive to goodwill and commitment.often used amongst very senior people. A look into the future . by whom. A non-line manager specialist (the “step-parent”) . the organisation deciding on the intervals.enabling longer term plans to be formulated in respect of the individual’s aims and objectives and considering any steps that can be taken to develop the individuals potential.)     How often and when? Appraisal should be carried out to cover specific periods. (It has been found that senior people. What is the process for an appraisal interview? An appraisal interview needs to cover three main areas:   A review of past performance in the job during the preceding period . Building an action plan for the next period . Most schemes are annual. self-assessment is becoming more popular. The line manager’s line manager (the “grandparent”) . say six weeks. Any interval is valid.

This can be highly effective to gauge early signals from the subordinate. The message should be clear that everyone has weaknesses which must be acknowledged. Before the appraisal is carried out. the reverse is probably better. (b) The interview The face-to-face meeting between the appraiser and the appraisee is central part of the appraisal system. though this should not imply that they are in a hurry to get it over with! A two-way exchange of ideas should be encouraged from the start. This having been said. Absolute privacy is a minimum requirement as there may be sensitive issues to be discussed. Some systems operate by getting both parties to complete a pre-prepared questionnaire . but there is no reason why it should be formally conducted. This can provide a useful guide to differences in perception between the two parties. If a scoring system is used in the appraisal interview. allowing sufficient time for it and stressing its importance to both the individual and the organisation as a whole. so that both parties can check progress against aspirations. It is psychologically bad to have telephone interruptions or a noisy room. but playing primarily to strengths can attain really effective performance. Quantitative systems will often © ABE and RRC . The purpose of the appraisal should be stated. Some managers insist that appraisals are conducted outside the work place. remember that the physical environment can itself be a barrier. If they differ radically. its scope and limitations. not weaknesses. Stating that the appraisal interview will be fitted in when each party has “a few minutes to spare” sends the wrong signal entirely and betrays the appraiser’s attitude to the process. Having a look at last year’s appraisal is essential. Most appraisers try to get the other person talking as quickly as possible. The appraiser might also wish to give an indication of duration. the appraiser must control the interview throughout. This is a formal interview in that it must comply with a number of procedural requirements for documentation. so there is some advantage in getting them to make pre-appraisal notes. this should be open so that both parties are aware of scores given and why this is so. It is always necessary to send the right signals about the appraisal exercise. for example. the appraiser should gather all necessary information so that constructive feedback on performance can be given.essentially both the manager and the subordinate appraise the subordinate. The logistics of the appraisal are important. the appraisal will require the two to explore why this is so and what can be done about it. wherever possible. New employees should be fully informed of how the appraisal system works. The best appraisals are those where there are as few barriers as possible. Good salespeople may.170 Performance Appraisal (a) Preparation Both the appraiser and member of staff should prepare in advance for the interview. The appraiser should prepare fully and in writing. The focus should be on strengths. Preferred outcomes will exist for both parties. be awful administrators but the latter shortcoming might be tolerated as long as minimum standards are met and excellent sales performance continues. In particular. new employees who are expected to appraise others should be trained fully in how to carry out appraisal effectively and in a manner consistent with the organisation’s own methodology. even if this is only in bullet point form. to ensure that the objectives are met in full.

This may mean that you will have to probe to find out why things went wrong. possibly injustice and even fear. initiative or whatever contribution it is which merits the extra recognition and make sure that you do it at the time and not weeks or months later or worse. it is important that it should be followed through. What you must do is to praise the exceptional effort. You will only be storing up trouble for yourself if you allow it to continue and then. You can usefully do the latter in public. The other aspect of routine appraisal.Performance Appraisal 171 create differences between people but they are not eliminated by covering over the information to go on the personnel file. there is one very significant difference from recognising good performance. below-par performance do occur. needs more careful handling. start raking up the past. rather the opposite. ingenuity. What the individual really needs is your help. The meeting should not conclude until the appraisee has had the opportunity to raise any other matters. with frequent less formal review if necessary. help to see what was wrong. © ABE and RRC . Targets or standards should be agreed. much later. however natural it may seem. the occasional comment acknowledging it is sufficient. The first thing you must do is to get this into proper perspective. More often they arise from ignorance. This kind of appraisal loses nothing by being given informally. a further interview can be arranged. It will only produce feelings of resentment. This provides vital input in identifying training gaps. (c) Giving praise or blame Praise must be earned. It can also give clues on wider training implications as what affects this worker might also affect others. some of which will be unknown to the appraiser. simply to blame or to criticise. routine correction of performance that you do as the occasion arises and which you can handle informally. as far as possible. You will gain in status as your people come to know that you are prepared to recognise and acknowledge good work openly. not at all. then summarised at the end of the interview. In most cases. Whilst focusing on strengths. why it was wrong and how to avoid it in future. blame or criticism. is not going to be your best approach. The interview should highlight future expectations of the person in their job over the next period and also training and development requirements. lack of training or experience or some maladjustment in the person concerned. This will involve action on the part of both the employee and the supervisor. correction. errors of judgment. Action points should be recorded and agreed throughout. carelessness. The recipient gains something in self-respect and the usually the respect of their fellow workers. Sometimes they are wilful or due to a “couldn’t care less” attitude. Continuous enthusiasm soon loses its effect. If there is insufficient time to deal with the main appraisal or the extra matters raised. Mistakes. it is important to bring any perceived shortfalls in performance into the open so that strategies can be agreed to tackle them. For the simple. If you expect (and get) continuous high performance. if it is overheard. accidents. should always be done in private What about follow up action and monitoring? Having made an action plan. Work which is not up to standard also deserves and should be given prompt recognition.

perceptual defence and self serving bias. to obtain new equipment. with all the faults. there must be the option of allowing the appraisee to be appraised by someone else. etc. The action plan may also require management to take action themselves e. no actions are taken. prejudice. Again. stereotyping. bias and non-communication Appraisal as we have considered it here will only succeed where there is a mutually trusting. rational assessments of people as complete individuals. It is better if it is proactive rather than reactive to problems. preconceptions and idiosyncrasies of individual personality and subject to the normal problems of being able to communicate effectively! The problems that may arise from this must be clearly recognised and addressed within appraisal schemes.172 Performance Appraisal This latter point should not be lost sight of. The principal problems in terms of both the interpersonal communication itself and the recording of outcome are: receptivity. Of particular concern is that. projects completed and additional responsibilities allocated. or are just perceived to exist. What a waste of effort and energy! The good scheme will be active. particularly where they are especially challenging and it is management’s role to ensure that that support is available. the two parties are human beings. Unfortunately. Employees often need support. Opportunities to meet personal and operational objectives must be created. it is important that this action is taken promptly so that management is seen as carrying out its side of the bargain. dynamic. the result is that the process will be effectively negated. Whether such problems actually exist. © ABE and RRC . by a “grandparent” or “step-parent” (as noted above) and for training to be provided for one or both parties to try and resolve the problems. Unfortunately. even proactive. progressive. New experience must be offered. advice and guidance to achieve new targets. bias. since the absence of action by management can render the whole process ineffective. respectful and developmental relationship between the appraiser and the appraisee. to provide training. unfairness and devaluation. the halo effect and individual misperceptions such as projection. there is the potential for partiality. (b) Problems of ineffectiveness The most common grumble levelled at appraisal schemes is that nothing ever comes of them. Every effort should be made to make clear. this implies monitoring progress on a formal and informal basis. the papers are just filed away and forgotten and it was all a waste of time. many schemes do not have any follow-up and the criticisms are valid. The other main area of difficulty arises from personal perceptions. rather than leaving everything until the next appraisal in perhaps a year’s time. which we examine elsewhere as barriers to effective communication. developmental and used. enmity.g. What are the potential problems in the process? (a) Personal conflict. where distrust or antagonism exists between the appraiser and appraisee. to make adjustments to job descriptions. It is not easy to avoid some of these problems but we can and should be aware of them and the problems they can create for the effectiveness of appraisal. In such cases. Appraised staff must be given the training and development identified (compatible with opportunity and funding).

This interaction calls for leadership and direction skills on the part of the superior. (b) Leadership and direction Odiorne stresses the contact between superiors and subordinates that sets objectives and assesses how well a given manager is achieving them. In addition MBO has links with:   Performance appraisal – Properly used.  J W Humble defines MBO as: “A dynamic system which seeks to integrate the company’s need to classify and achieve its profit and growth goals with the manager’s need to contribute and develop himself.Performance Appraisal 173 E. rather than something outside normal managerial roles. consciously directed toward the effective and efficient achievement of organisational and individual objectives”. Planning has to take account of individual as well as corporate objectives if it is to be implemented effectively (Koontz stresses this). (a) Planning Humble stresses the spread of corporate planning down through the organisation by the use of MBO techniques. (d) Control MBO may be seen as a control device in that standards are set. If the process is to be successful. self-directing and self-motivating nature of MBO. (e) Motivation Drucker made an important link between MBO and motivation by stressing the selfcontrol. Coordination – MBO forges links between managers at various levels in the organisation. © ABE and RRC .  Koontz et al define MBO as: “a comprehensive managerial system that integrates many key managerial activities in a systematic manner.”  George Odiorne defines MBO as: “the superior and the subordinate managers of an organisation jointly define its common goals. MBO allows appraisal as part of an integrated process. define each individual’s major areas of responsibility in terms of the results expected of him and use these measures as guides for operating the unit and assessing the contribution of each of its members”. If we draw out the key elements of these definitions we can see the links between MBO and the management activities we have already studied. PERSONAL OBJECTIVE SETTING What is the purpose of managing people by objectives? The clue to the wide range of functions performed by management by objectives (MBO) is to be found in the varied ways in which it has been defined. communication skills have to be developed and used by both parties. The face-to-face contacts within the MBO technique are in keeping with Follett’s ideas on improving coordination. so increasing vertical coordination. (c) Communication The MBO process is essentially one of communication between senior and more junior managers. results are monitored and feedback reaches superiors.

Quantitative objectives should be set in exact figures. it is also argued that the information on which objectives are set comes from subordinates.   MBO is a technique that stresses the negotiation of objectives between superior and subordinate managers. Drucker argues that there are certain key areas in which objectives should be set:         Market standing Innovation Productivity Physical and financial resources Profitability Manager performance and development Worker performance and development Public responsibility. the section and the individual when an objective is achieved. a given objective is to be achieved by a specific time. However.174 Performance Appraisal How do we set objectives? The bedrock of MBO is the setting of objectives. (c) Scope of objectives Objectives should be attainable and wherever possible measurable. after all. a “negotiated consensus of its influential participants” (Ansoff. The third view is a combination of these two. This is by far the simplest explanation and apparently fits in with the facts because it is the executives. © ABE and RRC . “Corporate Strategy”). namely that an organisation’s objectives are the result of a compromise. You can see this in a conventional base-up planning system.  Benefit-specific This specifies the benefits that will accrue to the organisation. so we will begin with a review of their key characteristics. who actually state the objectives. the top management team. or at the most. (a) Types of objectives We can identify three basic types of objective:  Time-specific This places a timetable on the achievement of the objectives. who place very firm constraints on action.  Description-specific The aim should be to describe objectives in as precise terms as possible. qualitative objectives should be described as accurately as possible. where each section sets its own targets that are then integrated with the next level above. (b) Formation of objectives There are three theories about the manner in which objectives are formed in an organisation:  Traditionally it is held that the company’s objectives are those of the chief executive.

Objectives may change because:    The aspirations of the senior executives change. objectives and targets are not passed down as orders from the top but rather. This process pinpoints the key areas crucial to the organisation achieving its objectives. objectives should be:        Clear. Environmental changes can have sudden and significant effects on objectives prepared under different circumstances. (d) How objectives change Objectives may change deliberately.   (e) Using objectives To be of practical use.Performance Appraisal 175 These are all appropriate areas for the application of MBO techniques. The change may be permanent or temporary. either due to the past performance of the organisation or comparison with some outside body. Where there is a tall hierarchy. are negotiated between managers and their immediate superiors. objectives are attained and must therefore be changed. one of the facts of industrial life is that objectives are often conflicting and the easiest way to overcome this is to tackle each within individual time periods. This is a valuable contribution to effective management because it reduces the danger of managers becoming so caught up in the day-to-day running of the organisation that they lose sight of their objectives. Objectives and targets should be precise and wherever possible. However. It is vital that managers accept that the objectives being set for them are realistic. to avoid confusion Allotted to an individual. © ABE and RRC . measurable.g. from a union. this can be a slow and perhaps costly process. or because of changed circumstances. concise and understandable Set with the subordinate. Objectives may have to change quickly. Pressure applied from inside the firm (e. to get commitment Obtainable but challenging enough to provide motivation Non-conflicting. so that they may be used for control purposes Not too numerous. Organisations work in a dynamic environment over which they have only limited control. What is the MBO process? The importance of MBO lies in the way it ensures that managers focus on the end results of their activities rather than the activities themselves. From time to time some objectives will be more important than others. To implement MBO it is essential to follow a set of steps in logical order. Naturally. In doing this. or from new members of staff) can force change. This stage is a time for setting objectives and targets. the exact purpose of the job is identified and the way each job fits into the overall structure of the organisation is recognised. with each employee having a set of objectives and each objective clearly the responsibility of an individual. an extreme example being the dissolution of a project team after reaching its objective. (a) Overall objectives Each manager in the organisation works out with their superior a clear definition of their job. where possible Quantified as much as possible.

put into numerical terms. the sort of information likely to be found in the performance standard measure section would be target sales and expenses figures and a time deadline to achieve these results. which they set out in another MBO form. When a manager has completed the key result analysis. The controls feedback column is where the manager records the actual results achieved. The manager and his superior then prepare an improvement plan. then a column devoted to the personal action. This should be an in-depth discussion that goes into the analysis of the key jobs. These ideas will be most crucial when the objectives of the performance standard section are not being met by the results in the controls feedback section. the key tasks may be to increase sales and cut expenses in the selling of a given product in a given area. This takes the form of an MBO diary. even when targets are being met there may be room for improvement. so the manager should strive to come up with useful suggestions. These would constitute a precise measure of success. remember that these must be the manager’s own ideas on how their performance can be improved. An example of a simple MBO form is as follows: Key Task Performance Standard Measure Controls Feedback Improvement Suggestions The key tasks of the manager’s job are listed in the first column. consisting of a restatement of the manager’s objective. If we take the example of a sales manager. that manager undertakes an analysis of their job. conditions may have changed in the period since the targets were set) and of course. which is used for analysis. including the levels of the targets (e.176 Performance Appraisal (b) Key Results Analysis Having identified the objectives and targets for a manager. However. the measures of success. Into the performance standard measure section go details that show measures of how well a given task should be performed to achieve targets. this information must be discussed with an immediate superior. a target date is agreed. In this case. (c) Improvement plan Below is a typical layout of an improvement plan. The comment column records how the improvement came about or any new problems that arose. Here our sales manager would put the actual sales and expenses for the given time period. The improvement suggestions column is self-explanatory. planned and agreed by the manager and his superior. the improvement suggestions.g. This exercise is carried out by the manager themselves and constitutes the basis of an MBO form. identifying the key tasks entailed. then the diary records the date the target is achieved. These are the most crucial tasks to a manager achieving their set objectives. © ABE and RRC . However. the improvement form.

specific.1: The MBO cycle Corporate Plan Strategic Objectives Training and Development Promotion Operating Plan Tactical Objectives Manager’s Potential Review Improvement Plan Section Plan Specific Objectives Performance Review Manager’s Objectives Key Results Analysis Performance Standards How can we assess MBO? We have already described the multifunction nature of MBO that confers considerable versatility on the technique. The review system may reveal the need for training in certain management activities. (a) Advantages of MBO  Individual objectives are integrated with the objectives of the organisation. there are other. Where the review system yields positive results it can identify managers of high potential and help to select candidates for promotion. Everyone concerned feels that they are pulling in the same direction. The purpose of the review system is not to criticise or threaten managers who are not achieving targets but rather to help them to make their own improvement suggestions more effective. as shown in Figure 7. © ABE and RRC . Figure 7. advantages that can accrue from the use of MBO. so MBO encourages team building and team spirit. It is useful to see MBO as an integrated process.1. However.Performance Appraisal 177 Objective Personal Action Planned Target Date Date Achieved Comment (e) The review system This is the stage of MBO where there is a regular review of the objectives set for managers and how well these are being achieved.

Koontz puts great emphasis on using results as the arbiter of the effectiveness of planning. when properly deployed. Not all objectives can be harmoniously integrated. the structure of the organisation and how it is controlled and all other relevant areas. there should be an overhaul of the role of the manager. MBO ensures that all managers know how well or badly they are doing in achieving their objectives. the process and the ideas that lie behind it. This will encourage the full commitment sought from the staff. would be better spent getting on with the job itself.g.178 Performance Appraisal     Suggestions for improvements come from those close to the problems that arise from running sections or departments. taking account of the resources available. Some managers may pay lip service to organisational objectives. despite certain dangers and problems MBO. If results are not up to standard. the good name of the firm) tending to be overlooked and neglected. e. can be a most useful management technique. If top management introduces MBO without proper understanding. However. combined with the work involved in the process itself. Criticism has been levelled at MBO on the grounds that it has its roots in scientific management and tends to ignore the personal objectives of the staff. makes MBO expensive in management time. care must be taken to ensure MBO does not get too bureaucratic. Some critics argue that time spent setting objectives. Great care has to be taken in setting objectives. So. not so much about MBO but rather about managements themselves. rather than from remote top management. Efforts to get measurable targets may mean certain important.        To sum up. which include the following points:  MBO must be fully understood. it cannot be introduced “on the cheap”. Vague targets are useless. This means that they must be attainable. these must be realistic and precise. thus MBO is an on-going technique. it can degenerate into just another means of checking up on people.g. Precision means that wherever possible they should be measurable. filling in records and consulting with superiors. This. yet still go about their own objectives. He argues that many managers pay lip service to MBO but studies of their organisations reveal that MBO is not being properly practised. it needs adequate resources and the full commitment of all concerned. MBO puts the focus on planning for results rather than merely planning how work is to be done. MBO can identify training needs when managers need help to achieve their objectives. A good manager would appreciate that individuals have their personal aspirations and would not ignore the human factors involved. © ABE and RRC . Management must appreciate that organisational goals can be in conflict with those of the staff and should seek ways to achieve compatibility. empire building in their own areas of the firm. (b) Problems of MBO Despite its many advantages some experts have reservations about MBO. Objectives have to be constantly reviewed and updated to cope with changing situations and environments. Peters raises a telling criticism. unmeasurable objectives (e.

as people achieve a greater sense of ownership by being more involved. Training Every line manager has a training responsibility. a plan can be formulated to maximise their contribution to the organisation. as well as some of the risks. yet keeping sufficient “distance” to avoid charges of interference. This is one of the crucial elements of effective leadership (the functional leadership model). it should not be regarded as the only time when the manager is involved in personal development of their staff. Effective delegation is a skill that can only partially be taught. MANAGERS NEED TO HAVE APPRAISAL SKILLS Managers have a duty to develop individuals and teams for the benefit of the organisation’s effectiveness. informed and enabled to perform effectively. Only by then giving them the opportunity to put their capabilities into practice can we truly motivate people to achieve. we examine three specific techniques in more detail. Problem-solving The manager can assist the process of problem solving and hence decision-taking by involving the team. Some of this can be achieved by formal training programmes. their own working methodologies. Delegation of Authority Earlier in the course we considered the benefits. Career Development As we have seen.Performance Appraisal 179 F. © ABE and RRC . Proactive managers set not only targets for output of their divisions or departments but also people management targets. Herzberg’s theory teaches us that by giving people the ability to do things we provide the basis for motivation. It is something that managers learn to do better by putting it into practice. of delegation. In what ways may the manager act as a facilitator for the enhancement of performance? We consider here some of the general techniques for working with others so that they are empowered. as well as make work a learning and growth experience. In the next sections. By reviewing the person’s current and potential future capabilities. The manager should not just leave the team to get on with the job and ignore the consequences. He should encourage the team to come up with their own solutions and where possible. This process is not about abdication. including signing off competencies. This practice can reap rich rewards. the annual performance appraisal is an ideal opportunity for the manager to facilitate the positive development of an individual. This should be an on-going feature of the role of the manager. The manager should agree targets mutually with the appraisee and then support and monitor their progress in attaining those results. intervening whenever necessary. Although the appraisal interview is the starting point. In this way the manager facilitates performance as well as development and continuous learning. which we shall consider later in course. To facilitate solutions in an effective way the manager should support and monitor the team’s progress. A further tool is coaching and counselling.

It is essential to have a flip chart or white board available to record contributions. This is often one-to-one. © ABE and RRC . The group moves on to eliminate unworkable ideas or those “off the cuff” suggestions which can be ruled out immediately. Brainstorming Brainstorming is a creative technique used to generate ideas from a small team.180 Performance Appraisal Communication To achieve business results. This stage calls for slightly more detailed discussion. It gives everyone an equal opportunity to contribute to the outcome. this is a topic we shall examine in more detail later in the course. It is easy for the group to try to “tease out” ideas too early in the session. that comes later. The brainstorming session has to be led. These should be examined in detail and action plans developed or responsibilities allocated for moving things forward. sometimes on a team basis. effective communication is vital. or potential solutions to problems affecting their work. There should now be a list of ideas that can be built upon by members of the team. In this initial stage nothing is ruled out. typically no more than ten people but it can be a useful technique for generating ideas in a 1:1 situation. However. or to be dismissive of ideas which might be good ones. Again. this can be new products or services. The team leader deletes these from the flip chart. A brainstorming session has the following characteristics: Preparation      A time should be set for the brainstorming session and a time limit for the length of the meeting. The subject of the brainstorming session is defined and members of the group are invited to call out ideas. By the end of the first stage there should be a long list of ideas on the flip chart. with emphasis on generating as many ideas as possible. it has to be carried out in an organised way. The list of ideas should be compiled as quickly as possible. These are charted up. Stage 1         Stage 2 Stage 3 Brainstorming is a great technique for using the collective power of the individuals in a group. The group assembles to develop ideas on a specific issue. allowing no time for discussion of each one. however strange or unconventional it may appear. if time is not to be wasted on a lengthy and unproductive session. but only after everyone is satisfied that there is no mileage in moving any of them forward. as well as maximising the potential for lateral thinking. though not necessarily by the formally appointed team leader.

supported by any written background material. videoconferencing and on-line information systems. but suffers all the problems of indirect communication. Team Briefing This technique was originally pioneered in the 1970s and is today used by many companies. The message can be distorted by a large number of factors. branches and sub offices. the disapproval of others or a lack of willingness to break new ground. Coaching Coaching is a form of developing others and managers have a vital role to play in the development of their staff by operating as a coach. the sender of the message may not know the answers. the originator of the message can follow it up with a more formal communication. many organisations do this on a monthly basis. Some retail companies and financial services organisations can incorporate team briefings into the half hour per week reserved for “closed for training” sessions. such as a competitor’s product launch. The content of the team brief should focus on four aspects:     Policy Products People Other points. The need for cascading has been reduced by IT developments such as e-mail. there are advantages © ABE and RRC . These in turn are charged with the responsibility of communicating the information to the next line. most often by telephone. Team briefing is a more formal version of cascade.Performance Appraisal 181 Cascade Cascading is a technique used by some organisations with a wide geographical spread of offices. Many managers accept this as sound commonsense and have a genuine desire to play their part but for a variety of reasons. It can form an important part of team appraisal. the desire is not always converted into reality. The process can be repeated on a multi-stage basis as often as necessary. Banks. When clarification is sought. Cascading is carried out on a “top down” basis. a “top down” approach is essential and the end purpose is to enhance the communication process in the organisation. it must be possible to break the whole organisation down into small teams of 4-18 (this range is suggested by the Industrial Society in its team briefing programmes). as well as in the concept of team briefing itself. Again. However. including the tendency for parts to be eliminated (or filtered) or even for some things to be added which were not part of the original message. The team leader has to be directly responsible for their team and trained in communication skills. Once the cascade exercise is complete. with each person allocated a fixed number of calls to make. Team briefings should be regular. Senior management communicates the information initially to a given number of people at the next level down. For team briefing to function. as soon as possible. Under some circumstances it is important to communicate information so that everyone is aware of a vital piece of intelligence. They are ideally short sessions but highly focused. have used this technique with messages originated at head office and moved down through regional offices. including time and work pressures. This technique has obvious benefits of speed. for example. Team briefings should take place face-to-face. such as a memorandum.

experience and development needs. These targets should be appropriate to the learner’s ability. The coaching process The process of coaching can be considered under the following headings: (a) Setting tasks Tasks should be set that have a specific learning target. which is capable of being monitored. Skills required The skills that are required of a coach include:            The ability to listen to and take notice of. others An awareness of the feelings and needs of others The ability to set clear. for example. © ABE and RRC . a review should be carried out which addresses questions such as:  What went well?  What went wrong?  How could we improve on this?  What should we do differently another time? By coaching in this way. (c) Reviewing performance When tasks have been completed. the submission of reports etc. trainees should learn how to improve their own performance in the future. Recording the time they devote to developing their staff Whether specific “coaching assignments” or learning opportunities for staff are planned in advance Whether staff are allowed to learn by experiences available through normal (business) activities How many coaching situations are created How much of the manager’s own work is done by others during their absence The level of opportunity for staff to make suggestions for solving their own work problems. (b) Monitoring progress Regular meetings should be arranged to discuss what progress is being made towards achieving the learning targets.182 Performance Appraisal to managers in persevering to master the technique because it encourages them to assess their own attitude and practices towards the development of others. Pointers to help managers measure the level of their coaching include: Assisting others to manage their time more effectively is one way in which managers can create more space for themselves. attainable goals The ability to help others identify their own strengths and weaknesses A willingness to be supportive at all times. which they can then use to train and coach staff. dates for completion of identifiable parts of the task.

© ABE and RRC . This is especially so with respect to interpersonal and communication skills. It is this partnership between a manager and their staff that empowers teams or individuals to perform to the highest levels of their competence. Feelings can block rational decision-making and personal growth. for example. A personal problem that overwhelms one person may be only an irritation to another but the problem is a “gap”. it becomes apparent that a successful team is associated with an effective coach. Often problems are more felt or imagined than real but if they are felt to be a problem then they are a problem. they are acting as a role model for others. It is for these reasons that acting as a coach enables a manager to develop a more fruitful relationship with staff. Coaching is a process of two-way communication. The British Association of Counselling defines counselling as “helping people to help themselves”. often called “empathy” It is centred upon one or more problems of the person being counselled (the “client”) It is free from authoritarian judgments and coercive pressures by the counsellor. to the advantage of both themselves and the organisation for which they work. The benefits of good coaching to staff include the provision of opportunities to:     Increase their knowledge Understand their job more fully Accept greater responsibility Be more involved in the decisions that affect their work role. Coaching staff should be an integral part of a manager’s job.Performance Appraisal 183 How is the manager a coach? If we look at the relationship between sports teams or individuals and their coach. Counselling allows individuals to work through and come to terms with changes. Counselling Counselling is a key skill. whatever the manager is doing. They may be generated by incidents at work or at home. The attributes needed in the manager/coach are a friendly approach. A way of interpreting this is to see counselling as a means of helping individuals with personal problems. These feelings dissipate our energy as. we have a need to understand the direction of our career. Counselling is also a key tool for managing change. that achieves its best results through collaboration. an informed attitude and an acceptable level of experience. the managerial role concentrated on the areas of command and control but these styles have been superseded by one based on a partnership being established between manager and managed. or we struggle with financial problems. Three themes identified by Vaughan on counselling are:    Counselling is a person-to-person form of communication marked by the development of a subtle emotional understanding. with its emphasis not on providing information but on enabling recipients to achieve. It focuses especially on feelings. to obtain and retain the necessary respect and loyalty from their team. If the relationship between the team and the coach is poor then bad results follow. Counselling helps to bridge the “gap” between the current situation and the desired one. The same may be said of the relationship between a manager acting in the role of coach and their work team. In the past.

the helper must attend to the client. The approach places more faith in and gives more responsibility to the client in problem solving. The two extremes are directive and non-directive counselling. Figure 7. Cognitive – A belief that people’s problems are created by how they conceptualise their world. Throughout. Counselling techniques Different approaches to counselling exist and the approaches of the key schools of thought are:      Psychoanalytical – Concentrating on the past history and the internal dynamics of the “psyche”. Change the concepts and the feelings will change too.184 Performance Appraisal Some of the advantages to managers of using counselling techniques are:     It is a process that helps people deal realistically with actual and/or imagined problems that are reducing performance or a sense of well-being Counselling can be preventative in that it can be a way of alleviating or preventing stress Helping clients identify feelings. A continuum of counselling styles can then be seen. Egan’s approach is person-centred rather than problem-centred. Affective – This is the Gestalt approach. genuineness. respect. The good helper respects the client for themselves and not for the problems they brings.2: Counselling Continuum Manager identifies problem Directive Manager solves problem Subordinate solves problem Subordinate identifies problem Non-directive Perhaps the seminal work on the subject is by Gerald Egan in a book entitled “The Skilled Helper”. emotions or misconceptions that prevent them from understanding their situation realistically Enabling people to make appropriate choices between strategies. It is often only after trust has been established that a client will discuss what is really bothering them. concreteness. (a) Directive counselling The process may be seen in terms of three phases. Behavioural – Applying principles of learning to the resolution of specific behaviour. Client-centred – Non-directive counselling. Phase 1: Responding Client objectives: To explore their own behaviour To examine their problem Helper skills: Empathy. © ABE and RRC . both physically and psychologically and be “for” the client. Pain and distress accumulate and have to be discharged before the individual can become “whole” again.

Performance Appraisal 185 Phase 2: Stimulating Client objectives: To seek action-orientated self-understanding To own the consequences of self-exploration Helper skills: Advanced empathy. The mentor’s function includes their being involved in:    Counselling Guidance and support Assistance with sources of information. The counsellor’s task is to facilitate the client’s own abilities and strengths so that they can experience the satisfaction of having defined and solved their own problems. The two phases of non-directive counselling are: Phase 1: Establish rapport Reduce anxiety. Non-directive counselling Non-directive counselling operates by the client reaching their own decisions. Phase 2: Explore the situation See world through client’s eyes. sensitively confront. allow the client to select the best solution. increase the client’s selfconfidence. Managing – by helping trainees to manage themselves Encouraging – trainees to achieve their targets Nurturing – their trainees Training – where appropriate Openness – between trainees and themselves Responsibility – by being responsive to trainees. show respect. The counsellor can give relevant information about their credibility and reacts honestly without imposing their own opinions. show empathy. action programmes. The counsellor establishes a relationship of trust by empathy and being authentic. explore alternative solutions. clarify and summarise. be “for” the client. Mentoring involves supporting the employee in a wider sense. reflect. The mentor can also act as a role model for the trainee and become a symbol of what they could achieve in the future. explore underlying problems. A mentor is someone within the organisation who can guide a trainee in applying what they have learned during training and then give them feedback on their performance. agree a realistic action plan. self-disclosure. if necessary. Phase 3: Helping to act Client objectives: To act on their understanding Helper skills: (b) Suggesting new directions. listen. and immediacy. confrontation. behavioural support. The term “mentoring” implies a broader role for the manager than just counselling and coaching. The counsellor can provide additional information on points of fact or in situations where the client is incapable of generating alternative strategies. Mentoring Closely allied to the role of facilitator is that of mentor. The activities that they perform include: © ABE and RRC .


Performance Appraisal

Mentoring can provide benefits for both the trainee and the mentor and for the organisation. It helps trainees to find their feet more quickly and to establish a clear sense of their career path. Some of the benefits include: For the Trainee Improving self-confidence Advice and guidance Access to sources of information. For the Mentor The challenge of guiding a less experienced employee Gaining a different perspective on the organisation A greater knowledge and understanding of what is available.

The mentor can help the trainee in a number of different ways, including:    Regularly reviewing the trainee’s progress Providing opportunities for development, where there are gaps in the trainee’s experience, knowledge or understanding Providing contact with other people or sources of information, or other help for the trainee.

Mentoring need not take up a lot of time - about ½ hour or so per week can be very productive - but it provides an important link between training and the workplace, hence the mentoring role is a very important one.

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



Performance Appraisal


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

   

Agree objectives Provide resources needed Monitor progress Give feedback and a reward.

In other words, managers continuously set objectives, provide resources and give feedback. In which case, why do we need an appraisal scheme? This is one of the objections to appraisal voiced by managers; ‘I do these things all the time; I don’t need you to impose a load of paperwork on me to make it happen!’ Others will say, ‘My staff know what I think of them without us needing an appraisal scheme!’ (this usually means the staff loathe the manager). The answer lies in distinguishing operational decision making from strategic decisions. Managers use appraisal skills and techniques all the time; otherwise they are unlikely to be good line managers. The value of the annual, bi-annual or quarterly appraisal is to step back from the day to day decision making and take a wider look at what is happening and what needs to happen in the future if things are to be done better. In that sense, continuous appraisal is operational whilst annual appraisal is strategic.




Performance Appraisal

Case Study
UK social workers and those in similar roles in not-for-profit organisations have regular 1:1 meetings with their managers. These are called ‘supervision meetings’ (usually just ‘supervision’) and can take place as frequently as every second week or as far apart as every eight weeks. As long ago as 1926 the purposes of such ‘supervision’ were defined as Administrative - the promotion and maintenance of good standards of work, co-ordination of practice with policies of administration, the assurance of an efficient and smooth-running office; Educational - the educational development of each individual worker on the staff in a manner calculated to evoke her fully to realize her possibilities of usefulness; and Supportive - the maintenance of harmonious working relationships, the cultivation of esprit de corps. Based on John Dawson (1926)

In your organisation (or one with which you are familiar): 1. 2. 3. 4. Who takes the lead in appraisal? What would happen if more responsibility were passed to the appraisee? How good are line managers at facilitating rather than directing the review and the forward planning? How would you improve the arrangements?




Study Unit 8 Learning and Development


Learning, Training, Development or Education? 190 So what is the difference between training, learning, education and development? 190 Value of Learning Is learning the solution to all problems? What is the purpose of learning? What is driving organisations to change? Who is responsible for the training and development function? What is management development? What is personal development? Identifying Learning Needs Why is training needs analysis important? So how does a training plan fit with other HR planning? What are we trying to change with learning? Theories about Learning How do people learn? Doesn’t this mean that everyone has a preferred way of learning? What is a skill? Why do adults learn? Is learning always an individual activity? Is feedback important? Ways of Delivering Learning On-the-job Methods Off-the-job Methods I am confused – some of these methods seem to overlap? Aligning the Individual’s Needs to Those of the Organisation How do we assess learning needs? 191 191 191 191 192 193 194 195 195 195 196 196 196 198 200 200 201 202 203 203 204 206 207 207









Learning and Development

No organisation can function without developed people. An appropriately trained and developed human resource can mean the difference between organisational success and failure. Organisations are in a constant state of change: production processes change, to improve the quality and output of products and systems change, to improve the flow of inputs and outputs. If skills and knowledge are not updated too, then employees will be unable to adapt to these changes.

So what is the difference between training, learning, education and development?
In considering the subject of employee development, we shall constantly make reference to these terms and it is important to be clear about each of them at the outset.  Development The Manpower Services Commission defined development as “the growth or realisation of a person’s ability, through conscious or unconscious learning” (1981). Thus, it more concerned with long-term individual, or organisational, development than short-term performance, although it encompasses this. It emphasises continuous learning and growth. For the organisation, it provides a focus to plan its own future through its human resources.  Training Training has been defined as “a planned process to modify attitude, knowledge or skill behaviour through learning experience to achieve effective performance in an activity or range of activities”. Training is essentially concerned with short-term performance of the job or task in hand. As such, it provides the preparation to undertake specific requirements by, usually, the development of particular skills. So, for example, it may include training to use a new piece of equipment or a new computer application, or to improve letter writing or report writing skills. It may also be linked to development plans, for the individual and/or the organisation, in which case it may be applied to assist with career growth and the building of skills, which may or may not be immediately required but will be in the future.  Education Education has been defined as activities that “aim to develop knowledge, skills, moral values and understanding required in all aspects of life rather than a knowledge and skill relating only to a limited sphere of activity”. As such, it encompasses the concept of why things happen, rather than simply how they happen (or can be made to happen). This can help to make skills more transferable. Education is also about the wider knowledge underpinning processes and procedures, and their contexts. It is, therefore, a key element of development and closely associated with professional development.  Learning Learning is the process by which individuals acquire the knowledge, skills and behaviours/attitudes that they use to deal with all aspects of life. The study of learning is a whole subject in itself but managers need to understand certain aspects of the process, to help others to learn and develop. It underpins the way in which effective training and education is provided and a misunderstanding of the processes involved can easily render such provision ineffective. (We shall consider learning in more detail later in the unit.)



Learning and Development


Learning is one of the keys to ensuring the effectiveness of an organisation’s workforce; that employees have the necessary knowledge, skills and attitudes to undertake the jobs that they currently hold and that there is a pool of such attributes in the workforce, which will enable the organisation (or, by extension, the whole economy) to meet its future needs.

Is learning the solution to all problems?
Learning is not a universal panacea for the ills of an organisation or even an individual. It can certainly be applied to resolve problems of effective performance. However, such problems may need to be addressed by alternative courses of action, such as organisational change, the application of new technology or working practices, or even the redeployment of individuals.

What is the purpose of learning?
This needs to be clearly understood as a basis for the appropriate use of learning. From the organisation’s point of view, the purpose of learning is to:        Maximise productivity or service provision Develop the adaptability of the workforce Develop the organisation as a whole Increase job satisfaction, motivation and morale Improve standards and safety at work Make the best use of existing material, resources and equipment Standardise working practices and procedures.

What is driving organisations to change?
All organisations are faced with rapid and continuous change. This comes from both internal and external forces: (a) Internal forces     (b)     New products and services New ways of doing things New people and equipment in carrying out processes Financial pressures, such as budgetary constraints. Political changes, including legislation Changes brought about by the economic cycle Social and demographic changes creating new demands on the organisation, especially as customers become better informed and more demanding Changes in the external technological environment.

External forces

Proactive organisations adopt a positive approach to these challenges by seeking to incorporate development in the strategic plan. This should chart not only where the organisation is going in the medium to long term, but should also have constituent plans for each part of the organisation, including human resources. Learning is inextricably linked to the process of change.



Any organisation. laying the responsibility for learning at human resources’ door should not be © ABE and RRC . The report. perhaps even board member. entitled A Challenge to Complacency outlined poor training investment by organisations. The report:   Encouraged companies to invest in human resource development Encouraged companies to adopt a more systematic and planned approach. corporate objectives and strategy and. large or small. learning is the responsibility of the human resources department It is true that learning has to be someone’s responsibility and it appears natural and logical that it should be the responsibility of the human resource department. etc. since learning forms part of human resource strategy and the human resource plan. though most accept that learning is of such importance to an organisation that there may be a fairly high level executive. Employers do not have to spend thousands of pounds on a training programme. Training is also costly and in times of financial constraint. many organisations recruited trainers to work directly for the human resources manager. Most managers would consider both training and marketing to be vital activities. The assumption that education. Only 20 years ago training. but this has not always been the case. operating in a state of complacency and failing to recognise the importance of training.   Some of the assumptions underlying the position reported by Coopers and Lybrand may be described as follows:  The assumption that only well-off organisations can afford training This is not correct. In 1985 Coopers and Lybrand published a major report on the state of training in organisations. However. The 1990s heralded an increase in the investment made in learning. As a consequence. responsible for these activities. presents an easy target for savings since it does not immediately impact on production. was often a “Cinderella” activity in UK businesses. but many of the outcomes are difficult or impossible to quantify in terms of tangible benefits to the enterprise.192 Learning and Development Who is responsible for the training and development function? Training originally evolved as one activity within the human resource management function. Some organisations recognise the value of development and are more proactive about it. importantly. Valuable learning and training experiences can be gained from: (i) (ii) (iii)  Observing others by job shadowing Sitting with Nellie and watching what a trained person does on a day-to-day basis Mentoring or coaching. has a wealth of learning and training opportunities at its fingertips. along with marketing. how failure to train can stunt organisational growth and promote a culture of failure. to enable managers to appreciate its benefits and effectiveness to the organisation in relation to its cost Encouraged the use of case studies to highlight best practice: how training can be used to help the company achieve its mission. extremely vulnerable to cuts in budgets and other resources during times of financial strain. The reasons for this are clear. This link with human resources management continues today. including the organisation of the training function and the utilisation of expert learning practitioners Encouraged companies to be more rigorous in the way they costed and evaluated training programmes.

therefore. Finally. is usually considered to be something for senior management in the organisation. Significantly. issues and problems? People . the human resources department is responsible for ensuring that all learning activities in the organisation are identified.Learning and Development 193 an excuse to ignore the whole organisation’s responsibility to ensure that learning is carried out. planned for. theorists such as Elton Mayo confirmed the strong identification of workers with their employers’ businesses. Of course. training becomes just another chore and line managers and employees do not take it seriously. As such. This implies a strong corporate focus and a team approach.    Quality .Various Acts of Parliament have forced many businesses to take training seriously. (i) Top management has a responsibility to ensure that it allocates sufficient money to support and finance development activity and that it forms part of the overall corporate strategy. as a process. with the organisation’s needs in mind and in line with the organisation’s objectives and strategy. © ABE and RRC . otherwise. (ii) (iii) (iv)  The assumption that any training is relevant In some ways any training is good but it must be appropriate for the individual.In a constantly changing environment it is impossible to function without training and developing people.As early as the 1930s. What is management development? Management development. Employees have a responsibility to ensure that they develop their knowledge.Successive governments in the UK have focused on development through a wide range of initiatives in both education and training. skills and experience and that learning activities are mentioned in their formal appraisals. the organisation and for the strategic direction of the company. it is less about the development of managers than the development of “management”. the development of managers is part of the general learning processes. how can they cope with new circumstances. including: (i) (ii)  Health and safety and occupiers’ liability legislation Minimum standards laid down for financial advisers. within industry and commerce and in the general field of further and higher education. as well as the concern for individual effectiveness. It is. Companies who feel that they must train staff but do so without any specific planning or focus have wasted much money over the years. implemented and evaluated in a cost effective way. ensuring competence at all levels in the organisation but the development of senior management is generally a little different. Compliance . vital that all training carried out is relevant and necessary and not merely training for training’s sake! The changes in attitude towards learning have been brought about by many factors:  Change . people generally want to be involved and want work to be a learning experience. Line managers have a responsibility to ensure that they encourage their staff to develop themselves and that time is allocated for learning activities. Government .The movement towards a total quality management approach by many organisations has meant that properly structured training programmes have to be in place so that quality cannot be compromised by poor output.

high level communication skills (both within and outside the organisation) and importantly. The process of personal development is very much the same. in the search for improved performance in meeting the challenges facing the organisation. the adaptability of individuals to change to meet new needs and the possession of appropriate skills. In respect of the management team: The need to build and consolidate strong. is the organisation in which individuals work. What is personal development? Personal development may be seen as a process of preparing oneself to meet the future requirements of one’s own career. It is about effective management behaviour. experience. The context within which a great deal of personal development takes place. attitude and skills Team development and team working. This demands that the individual takes responsibility for themselves. it is essentially based on self-audits of skills and gaps. three dimensions can be identified:  At the personal level: The continuous acquisition of the skills and abilities necessary for the management of oneself and others. the development of appropriate management styles and practices from the top down. skills and attitudes of managers.   Management development is concerned. It is an integral part of planning and organising to meet corporate goals. with its emphasis on two-way communication and the appraisee raising issues relevant to their development. The function of management should be to encourage this self-development and channel it for the benefit of the individual and the organisation. Increasingly. Management development activities focus on:     Every manager within the company Future and present needs Self-development and performance: knowledge. working with boards and committees in both formal and informal structures in the interplay of policy and decision making. However. There is a view that the development process should be individual-led as much as organisational-led. The focus for this is often the formal appraisal system. From the organisational perspective: The definition and development of the purposes and ethos of management itself. at senior level. in modern organisations the emphasis is. which provide for mutual respect and allow for individual abilities and aptitudes to be recognised and brought to bear in corporate decision making. However. then. personal development can assist progress and flexibility in employment. also. It is not just about improving the knowledge. Career development is an important aspect of personal development in organisations. Action plans/development plans should be reviewed on a regular basis to see if objectives have been achieved. innovative working relationships. often placed on individuals taking responsibility for their own development. within the organisation and the structures and processes through which these may be effected. Many © ABE and RRC . to effective performance in team working. allied. both within organisations and in the wider labour market. as we shall consider below in relation to learning in general. In the rapidly changing conditions of the modern business environment. This involves employees formulating their own personal development plans (PDPs) which outline objectives and timescales for career development activities.194 Learning and Development Thus. with the totality of managing (running) the whole organisation. is seen as an important personal attribute.

which has to be bridged through a mixture of training existing staff and the recruitment of new staff with the necessary skills (see Figure 8. training programmes should be implemented under a human resources plan that has identified both present and future needs on the demand side and matched them to resources on the supply side.1).1: Human Resource Development Plan Present and future needs HUMAN RESOURCE PLAN Present resources Business plan IDENTIFICATION OF TRAINING GAP Human resource stock take TRAINING PLAN AIMED AT BRIDGING GAP © ABE and RRC . competencies and skills that enhance an employee’s employment portfolio. The result of the match is identification of the training gap. IDENTIFYING LEARNING NEEDS Why is training needs analysis important? Misdirected training will waste time and resources and detract from the credibility of the learning function. C. It is also a way of improving employee motivation and morale. There needs to be effective identification of training needs for the following reasons:     Training can be expensive and a faulty analysis of what is required can result in a significant waste of the organisation’s resources An accurate training analysis enables limited training budgets to be directed towards activities which will achieve optimum benefits for the organisation Accurate information about training needs is essential to the specification of learning objectives and the design of appropriate training programmes An organisation’s training plan should be based upon the assessment of training needs and their prioritisation. knowledge. Figure 8. skills and experience up-to-date Personal development also includes elements of employability. It also encompasses desirable experience that can be transferred to another job. So how does a training plan fit with other HR planning? Thus. The training gap is the difference between what is actually happening and what should be happening. This very much places an emphasis on the individual organising their own development activities.Learning and Development 195 professional institutes require their members to undertake continuous professional development (CPD) to keep their knowledge.

How do people learn? There have been a number of different approaches to trying to resolve the question of “how do we learn?”  Behaviourism evolved through experimentation with animals.e. There may. knowing the disciplinary process of the organisation (knowledge) or having the ability to negotiate a change in working practices with staff representatives (interactive skills). technical standards. skills. knowledge by itself (for example. To do this. it is important to be clear about exactly what outcomes are expected i.196 Learning and Development What are we trying to change with learning? Once a learning need has been identified. His research into rats showed that positive and negative reinforcement could alter their behaviour. Positive reinforcement (or rewards) was given to the rat to promote responses and negative reinforcement (taking the food away) was applied when the rat displayed non-compliant behaviour. skills or attitudes and it can usually be observed by changes to a person’s behaviour or capability. costconsciousness or even working together effectively. Examples of learning include operating a piece of machinery such as a computer (manipulative skills). Carl Rogers developed his ideas on experiential learning in 1967. He believed in learning as an holistic process and advocated the importance of experiential learning (learning by doing) being adopted in the workplace because it is one of the most   © ABE and RRC . Pavlov advocated the stimulus-response theory (classical conditioning) in 1927. for example. It should consider the future as well as present needs. The relevant questions are:  What do employees need to know to perform their jobs well? This may range from background information about the organisation to very detailed technical knowledge about the individual work tasks. be a need for some employees to develop a particular type or set of attitudes towards customer service. body and spirit. the theory of a technical process) is not enough to secure acceptable performance and there is a need to develop the necessary practical skills to be used in the job.  What skills or competences are required and to what level? In many instances. commitment and enthusiasm are important for all jobs. Cognitive theorists or humanists believe that humans have the ability to learn and think.  What behavioural characteristics are needed? Although the general attributes of interest. for a training needs analysis this aspect needs more specific attention. He observed the way dogs salivated at the sight of food and found that the dogs could be conditioned to respond to a ringing bell. attitude or behaviours which need to be changed. Skinner developed his ideas on operant conditioning in 1953. the particular form of activities that will enable the need to be met must be considered. D. and then apply it to specific situations. work flexibility. Cognitive theory (Gestalt theory) revolves around the belief that learning is an holistic process involving the mind. store this learning and thinking. THEORIES ABOUT LEARNING Learning results in a relatively permanent change in an individual’s knowledge. what are the knowledge.

 Conceptualisation Having made the experience "coherent" through reflection. whether good or bad. you may find it helpful to talk your ideas over with another person. in terms of its significance. the next stage of the cycle is about examining it to identify what actually happened. At other times. Can any of the ideas that emerge be applied to similar situations? What common behaviour patterns might we begin to see emerging?  Application We are now ready to test out our analysis of the experience by applying the ideas and principles identified. perhaps identifying principles or trends. for example. so that the process comprises. Here we generalise from the individual experience to start to look at how it can be used in other ways. in that they happen to us in the course of our work or our everyday living. Application is active experimentation by modifying our behaviour after making decisions about how this might best be done and then beginning the learning cycle again. to further our learning. we then go into the phase of conceptualisation. Kolb’s experiential learning cycle reflects the fact that learning is a continuous process. They may be experiences which happen to us on our own. consciously or unconsciously. It stresses the need to learn from practice and feedback.2: Kolb’s experiential learning cycle Experience Application Reflection Conceptualisation  Experience Concrete experience is the basis of the cycle. or may be "accidental". rather than a sequential series of events. what we became aware of and how we felt about it.  Reflection Having been through an experience. It is also at this stage that we begin to make an attempt to understand what the experience might mean for us. if the experience seems to be something which tends to happen to us frequently and what this means in terms of our learning to deal with it. on your own. a continual series of circular patterns based on experience. This cyclical process needs to be completed in full for effective learning to take place. We use experiences that we have had in the past. This approach is now widely used as a means of managing learning. Kolb (1974) built on the work of Rogers and formulated the experiential learning cycle. or involving others. If.Learning and Development 197 powerful ways in which individuals learn. or take experiences that are new to us. by putting ourselves in the position of experiencing a situation afresh. These experiences may be structured and planned. Figure 8. Sometimes you will be able to go through this stage by thinking things through. one is tempted to jump from stage two to stage four without fully analysing and © ABE and RRC .

assert that: "As a result of our hereditary equipment.198 Learning and Development conceptualising the experience. as our individual personalities. may be cautious and are endlessly revisiting the past. Honey and Mumford also developed a comprehensive "learning styles questionnaire" which is designed to enable individuals to identify their preferred natural learning style. you will probably find that different aspects of each apply to you as an individual. and the demands of our present environment. The weaknesses of this approach are that they are reluctant to participate. most people develop learning styles that emphasise some learning abilities over others. even without completing this. The down side to this approach is that they act first and consider the consequences afterwards. to consider what seems to work best before moving forward. learning) by classifying them into broad groups. The value of this methodology lies in its ability to develop understanding of behaviours (in this case.  Activist Activists absorb themselves fully in new experiences and tend to jump in at the deep end. You may also be able to develop strategies that help you to become stronger in styles that are less natural to you. Doesn’t this mean that everyone has a preferred way of learning? In this section. The answer to this is going to be very different for each of us. They may take a minor role in discussions but will assimilate other people’s ideas readily. They are likely to be thoughtful and methodical and will demonstrate good listening skills. They have “butterfly” attention spans. enthusiastic. it is possible to give careful consideration to the four styles and to consider you in relation to each one. strengths and weaknesses are brought to bear in the learning situation. has been refined by Honey and Mumford (1986) to develop four categories of learning styles:     The activist The reflector The theorist The pragmatist. al. Rather. they will provide you with a useful tool for your own personal growth and enable you to set up the best possible learning experiences for yourself. to identify what stage of the process they are at and hence. A fundamental underlying principle in the Kolb model is the responsibility of the person who is learning. Kolb et. However. The four styles are described below in terms of the general characteristics associated with people of each type. They are open-minded.  Reflector These people like to stand back and take it all in. The work of Kolb et. get bored quickly and want to move on to the next activity. gregarious. Such ideal types can rarely be applied to individuals in their entirety. flexible and thrive on challenge. al. © ABE and RRC . we will explore the idea that individuals have particular learning styles that they tend to adopt most naturally. Note that these are “ideal types” – generalised statements applying to persons who might fit the style perfectly." Consider your own learning styles. our particular life experience. it is unlikely that any new behaviour will be effective or helpful as there will be no true understanding of why things happened as they did and no sense will be made of the data which the experience generated.

The pragmatist will be most effective in taking action in the application stage. you may now.Learning and Development 199  Theorist These people are able to integrate their observations into theories or patterns. therefore. be necessary from time to time. that you are able to identify the way in which others learn most comfortably.  Pragmatist Pragmatists like to apply theories and concepts to practice. be involved in facilitating learning for others. These people are likely to be practical and realistic. from the experience stage of the cycle. The disadvantages of this style are that theorists will have a low tolerance for chaos. in this module as much as in others. For example. objective and disciplined. Each has its merits and they relate to different aspects of the learning process. you may want to think constantly about what things mean in terms of their application. If you are a pragmatist. or at some time in the future. It is important. They will probably have a tendency towards perfectionism and an intolerance of intuition and subjectivity. For example. You also need to be aware of the learning styles with which you are not so comfortable but which may. whereas reflectors may gain more from courses where there is time to take in and reflect on new experiences. The theorist will be most able to generalise and draw conclusions in the conceptualisation stage. © ABE and RRC . This may be in the formal role of a trainer but it can also be an almost unconscious part of management. If you are not naturally a theorist. The weaknesses could be that these types are task-oriented and like to get on with things without always testing the options. you will encounter knowledge and skills that have to be learned. as you work through this course (or any other studies or new experiences). there is obviously going to be a need to understand theoretical approaches to particular topics. They will be logical. They like new ideas and seek them out and test them. In addition. The reflector will be effective in the reflection stage (obviously!). you need to consider how you can accommodate that style of learning when necessary. Understanding your strengths and weaknesses. You may also want to reflect on the types of learning opportunity which best suit you. People develop by building on their strengths and tackling their weaknesses. as part of this course. you need to sit back and analyse the experience you have gone through. so that you can provide the best learning opportunities for them. you may have already begun to make some connection between the four learning styles and the four stages of the experiential learning cycle:     The activist will be most comfortable and derive most learning. nevertheless. in how you learn. and how can this help you? The first thing to note is that there is no "best" style. Pragmatists will learn best by actually applying their knowledge and skills at the first opportunity. So can you identify your preferred natural learning style. For example. enables you to identify those situations in which learning is most naturally effective and those where you need to work harder at ensuring that learning takes place. Appreciating your learning style means that you should be aware of what approach works best for you and which methods and opportunities best facilitate your learning. whereas if you are a reflector. so on-the-job training may be most appropriate. perhaps by setting yourself clear and manageable targets that enable you to absorb theoretical concepts in digestible pieces. rational.

Sometimes. we need help from others to tell or show us where we are going wrong. or interpersonal skills such as social interaction. sometimes deliberately. even if we haven’t totally mastered the whole skill at the time. asking questions. “wish” or “need”. as in learning to use a knife and fork. their parents. the amount of interaction involved. or horse riding. no matter how hard we try (such as playing the piano). Some we may never learn completely.g. dancing. It can also mean mental reasoning skills. or is not working in the way in which it should. Why do adults learn? If you ask yourself why you are studying this course. quantity or creativity. Young children acquire skills constantly by watching. the bias towards theory or practice.  Feedback We have to have feedback to know whether we’re getting things right. Sometimes this is quite obvious. What this means for a teacher is that it is necessary to provide conditions that will lead people to want to direct their efforts towards the objectives which have been set. as when learning to tie shoelaces. the degree of research necessary. We need to check our performance. Positive feedback helps us to know when we are getting things right. there are two important elements that lead to the improvement in performance necessary to develop a skill. you may be in the position of advising someone on the kind of training or further study they could undertake. It can take a lot of practice over a long time to master some skills. mostly. Awareness of learning styles can help in considering the most appropriate approach. skills are learned by following a set of instructions. negative. our technical proficiency decreases. you see it as a means to an end. skills with the senses (and we will be looking at listening in particular later in the course). I expect you may use terms such as “want”. It is often used to describe specialist movements or techniques e. In other words. However. It is also invariably the case that. we might not claim it as one of our skills. Initially. we can incorporate mistakes into our performance. then there is negative feedback. There is a range of options about the types of programme available and a key question will be about how the programme is delivered. or they may be learned themselves by watching others perform the same activity (as a demonstration. Without this. presenting information. though.200 Learning and Development For example. sometimes just from general observation. if we don’t practise the skill for a while. We each want things that provide us with satisfaction or pleasure and we turn away from things that are offensive and cause us displeasure or pain. so whilst we may be able to do it to some level of performance. it is not confined to practical activities such as these. These instructions may be written down or spoken. You have to try again. which can then be very difficult to unlearn. For a learner it means looking for a good reason to learn. However.  Practice We need to try and re-try to become proficient at most skills. If the thing you are trying to do doesn’t work. What is a skill? A skill is the ability to do something at a certain level of performance: quality. deliberately or otherwise). © ABE and RRC . operating machinery. We can see then that motivation is a key factor in the learning process. etc. Note that feedback does not have to be and indeed should not solely be. working in groups. etc.

such as the completion of a crossword puzzle. In a discussion group the experience of members is regarded as important. have found the pay factor is commonly placed 6th or 7th. Group learning In group learning. Reviewing and learning from performance includes reviewing when tasks have been completed and carrying out a post-mortem to decide: (i) (ii) (iii) (b) Why things went well How it might be possible to improve on this in the future How anything that did not go well might be avoided in the future. Financial rewards at work. It invariably takes place “off the job”. many surveys on why people stay with a particular organisation and work hard while they are there. A means of knowing how well we are doing. Examples of extrinsic rewards include:   Praise or criticism. reviewing and learning from performance:    Setting tasks involves having a learning target. welfare and co-workers. we set ourselves targets to achieve. in a controlled manner. within a working group. Monitoring progress entails having regular meetings to discuss progress being made towards achieving the target. The achievement of competence. for example. Methods that encourage learning in the group situation include:  Discussions – It is vital that people should learn to express themselves orally. Coaching is essentially the process of setting tasks. Generally. which is appropriate to the learner’s current ability and needs. Although this type of reward is not easy to assess. monitoring performance. such as a “personal best” time for a race or other sporting event. we become good at those things that interest us. or objective. Is learning always an individual activity? (a) Individual learning In developing individuals. the teaching role is rather that of coach or counsellor.  (b) Extrinsic An extrinsic reward is supplied from outside the activity. To carry this out successfully we need to consider what this involves. but just the successful completion of the activity itself. watch the players around a pinball machine.Learning and Development 201 Motivation to learn can take two forms: (a) Intrinsic Intrinsic motivation does not depend on a reward outside the activity. the process is generally controlled by a professional teacher or trainer. interesting work. The group functions to © ABE and RRC . Oneto-one training is usually carried out on-the-job by someone expert at a task instructing someone else who is trying to learn it (often referred to as “sitting next to Nellie”). Examples of intrinsic motivation include:   The satisfaction of our curiosity over something that is unclear or unfinished. after such rewards as security.

as we move. © ABE and RRC . Indeed. discussing. It is essential that all learners know a channel of communication is available should they require help or advice. you were teaching someone oral presentation skills. on the other hand. you expect to get a quick and useful response. from the stage where a typist knows the positions of the keys and which fingers to use on which parts of the keyboard. Role-playing – Group members are given particular roles to play and are then required to act out their parts. for example. is that which the learner obtains through their own actions. involve and summarise. An extension of this method is project work. the group is divided into small sub-groups. This type of activity is particularly useful in the field of human relations training. their respective findings being co-ordinated before the completed project is presented. listening and clarifying thinking. When you submit a report. points arising are discussed. for example. behaving in the way they think their given characters would.     Is feedback important? We have mentioned that we all need to know how well we are performing and this is especially true in any learning situation. guide. At this point the skill learning becomes selfevaluative. Feedback on progress is itself a powerful motivator to continuing learning.  Extrinsic feedback is information that the teacher gives to the learner about the effectiveness of their performance. role-playing and the provision of a written report. If. interviewing. when you carry out a cross-total check on a table of figures and find that it is correct you do not need someone else to tell you it is right. they need to rely less on extrinsic feedback and more on intrinsic. For instance. At this point the group is asked to decide what they would do in this situation. one of the potential disadvantages of group learning can be the lack of feedback to individuals in the group. with each member performing some specific task(s). Tutorials – Where small groups are allowed a good interchange of questions and answers in an informal setting. each of which is given a definite task or topic to explore and to report back on later to the whole group. giving you an assessment of your efforts and encouragement. or to restrict the movement of their hands. Case history methods – A situation or incident is described up to the point where action is about to be taken by one or more key people. where a project is undertaken by the group.202 Learning and Development encourage members in speaking. say. The role of the group leader is to inspire. to be more effective.  Syndicate work – For this. Intrinsic feedback. Following this.  In skills learning. to where they reduce their errors to less than 1% and begin to increase their typing speed rapidly. it might be necessary to tell them to speak more slowly. This can involve reading.

or combination of methods. In addition. This used to be called “coaching”. WAYS OF DELIVERING LEARNING The choice of various methods of training is a key feature of effective employee development. (b) One to one instruction Understanding and speed of learning can be improved substantially with effective coaching by an experienced instructor. A great deal of such learning is provided on the job and as such. The basic distinction is between on-the-job methods and off-the-job methods. However. The instructor gives guidance and feedback to the trainee and provides encouragement and assistance in overcoming difficulties. performance is more easily monitored and relevant and specific feedback is provided. the range and complexity of tasks they can undertake without detailed guidance increases. etc. and staff who have supervisory responsibilities have a training need to acquire such skills. that term has been redefined to mean a less directive means of one to one learning than instruction. “Nelly” often has no skills as a trainer and so is often unable to facilitate the learning process very effectively. This process of learning can be improved by several means. the “learner” is prone to pick up bad habits as well as good ones. Such training is sometimes referred to as “sitting with Nelly” and the attachment of trainee managers to a more senior manager to observe negotiations or interviews. Management training programmes frequently entail such project work. is suited to a particular situation. Learning to drive is usually done in this way. Considerable knowledge of work practices and procedures can be gained. It is more likely as part of a programme for staff in junior positions who have been recruited recently. Some skill is required in identifying which method. (a) Demonstration A preliminary to much learning by experience is for an experienced instructor to demonstrate to trainees how to carry out a particular task. There is the advantage of this activity being distinct from routine work. is a similar approach. Demonstration is an essential preliminary to operating most machines and equipment. Through one to one instruction a trainee learns by carrying out tasks under guidance from an experienced person. is hard to distinguish from routine supervision. On-the-job Methods Learning on the job provides trainees with experience that is a combination of work-based knowledge and the development of skills. (c) Project activities Assigning to trainees the task of investigating a problem and analysing potential solutions to that problem is a popular method of learning in the office.Learning and Development 203 E. This approach has the disadvantage of not always providing the “learner” with an understanding of why something is done. As the trainee gains experience. © ABE and RRC . analytical and problemsolving skills can be developed and in some cases. the opportunity to apply knowledge gained at college is available. An ability to train subordinates is a basic supervisory skill. (d) Job rotation This can take the form of a series of relatively short-term training periods in a number of predetermined positions in different parts of a company.

which is that the organisation may lack an influx of new ideas brought in by staff who are recruited externally. The junior gains from the experience of the more experienced manager. which helps to stimulate creativity and new approaches. International companies often use this system to develop a cultural awareness that can be generated by working in different parts of the organisation.Made up of course members from a variety of organisations. Company culture and team building can be valuable indirect benefits. rather than earlier. Secondment to charities. This can provide a useful introduction into other functional areas of the business. Skills and aptitudes may be called forth in an assistant role. make reports. The quality and inputs are controlled. so that the content of the course and the approach are tailored to the needs of the business. trainees are presented with the task of solving simulated business problems described as case studies. Whilst the content may not be tailored to the needs of your organisation or industry there is the advantage of exposure to other ideas and experiences. to other organisations. (h) Committees/quality circles Membership of these formal groups enables individuals to interact with more experienced or more senior staff. Job rotation can also offer staff the opportunity to develop management skills by running a smaller profit centre or strategic business unit. other sectors. e. (g) Assistants An individual may be developed by appointing them as assistant to a more senior person.204 Learning and Development An alternative form is to transfer experienced staff to positions in functions or departments with which they may not be familiar. operational staff working with marketing staff. They may be:  Open . or work with suppliers or intermediaries can provide similar advantages. etc. One advantage of this method is that it should go some way towards overcoming one of the drawbacks of relying on “home-grown” talent. of staff who are undergoing development programmes. Case studies can help to illustrate  Particular techniques associated with short courses are:  © ABE and RRC . Individuals can be encouraged to contribute. Head office staff often benefit from an understanding of operational level activities and vice versa.g. who in turn gains from having an enthusiastic helper with fresh ideas. These activities are often vital to succession planning. (e) Attachments/secondments An alternative method of broadening the experience of staff is to provide for attachment or secondment to other divisions of the same business or. (f) Mentoring This involves a young manager taking guidance from an experienced manager and it should be a two-way process. Off-the-job Methods (a) Short courses These courses are generally concerned with the development of specific skills.Courses that are developed for a specific organisation. stages in their careers. Case studies . in some cases. to widen the scope of their experience at later.Here. Closed .

They usually have the added advantage of offering the opportunity to network with others in the same industry or profession. © ABE and RRC . Usually open in nature. memos from staff. (d) Programmed instruction Under this form of training. Feedback can be provided by means of video recording and replay of CCTV. etc. latest developments and updating sessions. Their decisions are fed into a computer that gives a report that forms the basis for a new situation. such courses are increasingly available in a variety of modes:     Distance learning Evening classes Intensive blocks Full time.  In-tray exercises . interactive CD-based programmes and the development of centrally controlled broad training programmes delivered over company “intranets”. which must then be analysed.The students are presented with business situations and data that they are required to analyse before making decisions.g.   (b) Longer education-based courses Courses like the ABE Diploma. though not always directly relevant to the organisation. there is no feedback with the flexibility of a human instructor unless the instruction is provided at an Open Learning Centre where a facilitator may be available to give some assistance and answer queries. whereas other methods require attendance at specific times. Role-playing . the use of multimedia. seminars and workshops Usually short. Management games . conferences and seminars can be very valuable. This is the technique most suited to developing skills in dealing with people.Here. However. (c) Conferences. there is no direct involvement of an instructor but programmed instruction is provided through a combination of the following:      Books (or binders or prepared notes) Audio cassettes or discs Video cassettes or discs Television programmes Computers. trainees act out business situations from prepared briefs. sharp inputs based on current topics. MBAs and other education courses are popular ways of developing either professional skills and understanding or management skills.Learning and Development 205 points that are difficult to explain by other means and they contribute to the development of problem-solving and analytical skills. students are provided with such things as letters from customers. and they are observed working out how best to deal with this workload. Trainees can use these courses when they have free time.Here. Developments in computer technology are extending the range of training materials available e. These exercises are time-consuming but there is an increasing use of the method since the importance of social contact skills has been recognised. requests for information.

In these new situations people face unfamiliar tasks. The essence of these programmes is to place individuals in unfamiliar situations. a non-directive form of development (unlike others above) Usually one to one.206 Learning and Development (e) Outdoor/outward bound programmes Some organisations have included outward-bound schemes to assist individual and group development. anger management. I am confused – some of these methods seem to overlap? They do and we should not be surprised at that because human beings are complicated and simple solutions to real human needs are unlikely to be effective. etc. So that development can take place. Individuals and groups develop as they meet new challenges. (g) Mentoring Traditionally. usually on a one to one basis with a qualified counsellor. using a skilled coach Focused on improving performance and developing individuals’ skill For the benefit of both the organisation and the individual Assumed that the individual is capable of learning Heavily reliant upon feedback and personal reflection on both strengths and weaknesses.g. career development etc). building shelters. rock climbing or facing the rigours of outdoor living. Supporters of outward-bound courses argue that team building. finding food. navigating over rough country. mentoring in the workplace has tended to describe a relationship in which a more experienced colleague uses their greater knowledge and understanding of the work or workplace to support the development of a more junior or inexperienced member of staff. leadership qualities and problem-solving skills developed “in the field” can assist development in the work situation.g. anxiety. crossing rivers. (f) Coaching Although people disagree about precise definitions. expert “enablers” guide the employees on these courses. confidence grows as problems are faced and overcome. © ABE and RRC . coaching can be distinguished from other methods of learning because it is:       Essentially. (h) Counselling This describes the addressing of predominantly personal problems or needs (stress. e. e. It is different from sitting with Nellie because it places the prime responsibility for the learning clearly upon the learner and it is voluntarily entered into by both the mentor and the learner. It does not usually focus upon essential technical job skills and is most often used for new or aspiring managers.

there will be differences in individual needs for training. whether derived from problems of effectiveness or not. By questionnaires. a new financial management system or the use of new equipment.   © ABE and RRC . by examining an employee’s individual output and quality section. based solely on generalisations about the whole workforce or particular occupational groups. as opposed to individual needs. (a) Individual needs Within any group of employees doing the same work.Learning and Development 207 F. we are concerned with learning designed to meet organisational objectives . In both the initial analyses and in subsequent training plans. with each employee’s individual learning requirements being identified and discussed at the annual appraisal interview. Employees’ suggestions about their own training often focus on the latter. which may require a corporate response e. time management or team building A concern with consolidating or introducing new core values. influenced by differences in aptitude or previous experience. which ask employees individually whether they feel their work would benefit form further training. There are three particular aspects to this:  A concern to improve performance. it is helpful to distinguish between immediate training needs within the employee’s current job and longer-term development needs. An effective training analysis takes both types of need into account and produces a training plan that strikes an acceptable balance. ALIGNING THE INDIVIDUAL’S NEEDS TO THOSE OF THE ORGANISATION How do we assess learning needs? There are two approaches towards the identification of training needs:   Assessing the needs of the individual Assessing the needs of the organisation. usually with a checklist of training topics. citing courses and wider experience which might assist them in gaining a promotion or general professional qualifications. The focus is on groups of staff and their common needs as defined by management. such as the introduction of a new line in a shop. departmental and whole organisation levels. Supervisors are also usually asked to complete a similar questionnaire for each member of their work group. These are not mutually exclusive and most organisations will have procedures in place to assess the needs from both perspectives. Supervisors’ views about their staff usually concentrate on training to improve current job performance. In the absence of a formal appraisal process. These differences need to be identified if resources are not to be wasted on a “scatter gun” approach to training programmes. such as quality management or customer service orientation A concern to ensure the effective introduction of new products/services and/or working practices. The main methods of assessing these needs on an employee-by-employee basis are:    The performance appraisal process. (b) Corporate needs By corporate needs.

therefore. irrespective of the individual filling it. regardless of their age. Recognition of the corporate dimension to learning in this way locates it as an integral part of management at all levels in the organisation. For example. Some participants might. experience and actual performance (and whether or not they had attended a similar programme with a previous employer). The corporate approach focuses purely on the needs of the job. therefore. it may be determined that time management should be an obligatory programme for all staff in the finance department. be sidelined as the concern of the personnel department or its training section. as individuals and collectively.208 Learning and Development Another way of viewing the corporate/individual distinction is to consider it as the separation of job-centred or occupational needs. as opposed to employee-centred needs. consider it money unwisely spent but the needs of the department as a whole are considered to outweigh that. The individual is. It is a process that is central to the achievement of organisational goals and cannot. therefore. © ABE and RRC . viewed collectively with others doing the same job. Both the identification of individual needs and the consideration and identification of corporate needs are the responsibility of those with the responsibility for the performance of employees.

C. © ABE and RRC . The Importance of Career Development Are employers offering a job or a career? Are employees changing jobs more often? Should a career be planned? What are career anchors? The Individual’s Contribution to Career Development How important is long term planning? So what is the employee aiming for? Are there stages that careers go through? The Employer’s Contribution to Career Development Why should employers bother with talent management? Does that mean that talent management is for those staff only? Is there one way to manage talent? What is talent? Is talent management easy? What tools are used to develop talent? Is talent management the same as succession planning? What is a talent pool? Self-Assessment and Keeping Aware of Career Opportunities Does appraisal make any contribution to career development? How else does someone do career planning? Isn’t age a key issue? How do people keep aware of career opportunities? Continuing Professional Development (CPD) What is Continuing Professional Development? What are the benefits of doing CPD? What might a CPD record and plan look like? Page 210 210 210 210 211 211 211 211 211 212 212 213 213 213 213 213 213 214 214 214 214 214 217 217 217 218 219 B. D.209 Study Unit 9 Talent Management Contents A. E.

What usually determines the level of planning is the existence of career anchors.210 Talent Management A. The traditional view of careers is that they consist of pathways and ladders. where an employee will remain loyal to one employer for life. In the UK in the 1980s someone could expect to have had two jobs by the age of 25. so that career development schemes must take more account of flexible working arrangements. through which persons move in an ordered sequence A job does not lead anywhere unless it is part of a career. Workers are also expecting better work-life balance. paths going broadly horizontally and ladders leading up the next level.g. medicine or a religious calling) A phase in life (e. To start with we must define whether by “career” we mean:    Lifelong vocation (e. Career = succession of related jobs arranged in a hierarchy of prestige. as a professional footballer) Paid employment as opposed to being at home and raising a family (e. to law. Are employees changing jobs more often? Yes.g. Many employers think they are offering a career when their staff perceive that they are offering a job. The internal job market is traditionally prevalent in Japanese culture. with greater sub-contracting. Some people enjoy the challenge on an emergent career. THE IMPORTANCE OF CAREER DEVELOPMENT Are employers offering a job or a career? This is a crucial question. Should a career be planned? Not necessarily. However. as they integrate work with home life and as employees adopt more portfolio working (having several jobs. it depends upon the nature and aspirations of the individual and the stability of the profession in which the individual wishes to operate. © ABE and RRC . just like their parents. Also relevant is the changing nature of employment. This has an implication for how organisations manage much more slippery talent. others will seek a relatively stable profession in which they can advance. By 2006 the average had become four jobs. either at the same time or through the phases of a working life). this model is being challenged as employees seek more flexibility in their work.g. This means that some employees will develop their career within one organisation (internal career) whilst others will need to move between employers in order to develop their career (external career). perhaps. ‘the career girl’).

Employment means that the employee is going for a low risk and probably internal job market. Employment tends to mean there is a short-term perspective. The flattening of organisations and increasing contracting out are supposed to have replaced this with a new model. That may mean staying in education longer before starting employment or it may mean coming out of employment for significant retraining. as long as you keep out of trouble. hours etc) B. Someone focussing on employability will be thinking longer term. your career will develop. Are there stages that careers go through? Yes. security. As the environment becomes more turbulent. Development will be minimal and will be principally designed to keep the person in a job in the short term. There are two possibilities: employment or employability. the following pattern emerges: © ABE and RRC . even if that means taking opportunities to move into other secure work as they arise. Whilst every career is different and writers disagree slightly on how they will present a ‘model’ career. income. THE INDIVIDUAL’S CONTRIBUTION TO CAREER DEVELOPMENT The old paternalistic model of career development assumes that your employer will look after your career and if you wish to stay. That does not mean that someone cannot have a direction of travel to reach the very top. Basically. this may reduce.Talent Management 211 What are career anchors? These are points to which an individual will tie their career. So what is the employee aiming for? This is a good question. rather that the plan to get there is unlikely to be much good beyond a 15 year point. anticipating the future needs of the labour market and will be positioning themselves to take maximum advantage of opportunities in the future. How important is long term planning? It has been shown that the high number of variables in a career reduces the effectiveness of ambition beyond a 10-15 year plan. They can usually be summed up as: Desire (What you enjoy doing and where you want your career to take you) Ability (What you are capable of doing) Needs (What you need from your career location. where the individual must take responsibility and market themselves. employment focuses on having a job (any job!) whilst employability focuses on having a planned career. The realities are more complicated than this either-or approach would suggest.

Starting out: Settling into the occupation and adopting appropriate lifestyle Cementing: Gaining security Advancing: Progressing in responsibility. Slowing: Beginning to lose drive Planning to leave: Financial and lifestyle planning Leaving: Moving into new career or next phase of life. We have traditionally called this ‘career development’. When a labour market is tight a ‘war for talent’ arises. using and retaining talent within the organisation. developing. THE EMPLOYER’S CONTRIBUTION TO CAREER DEVELOPMENT Most larger employers have taken a long term view of the talent that is employed or is available from the outside world. The result is globalisation of recruitment (exploiting the external labour market) and talent management (exploiting the internal labour market).212 Talent Management Exploration Clarifying: Choosing a sector Selecting: Choosing a career Enacting: Executing the plan to enter the profession (e.g. C. © ABE and RRC . Nurturing existing senior staff and growing their replacements are two common objectives of talent management. earnings and status. many of these larger organisations are taking a slightly more joined up approach to getting. Talent management is the integrated approach to getting. using and retaining talent Why should employers bother with talent management? Research by the Chartered Institute of Personnel and Development in 2006 showed 94% of respondents believed that well designed talent management development activities can have a positive impact on an organisation's bottom line. getting relevant degree). With the growth of strategic HR management. developing. Retaining: Holding on to career despite external pressures and change Continuing Professional Development: Keeping up to date  Establishment  Maintenance  Disengagement Becoming unique: Finding innovative ways of doing your job and progressing. This has come to be known as ‘talent management’.

"Talent management is not just about identifying future leaders or developing senior employees." When managerial and professional vacancies are hard to fill externally it makes sense to look for internal candidates that demonstrate potential to grow. how should an organisation:      Measure talent in both potential and existing staff Motivate and manage talented people Develop talent Retain talented people Avoid putting off other colleagues. "The challenge for HR professionals is to define what talent is in their organisation and then look for the best ways to identify. however. © ABE and RRC . Good talent management systems can help identify and prepare these potential candidates. For example. What is talent? It is a complex mixture of employees’ skills. cognitive ability and potential. “In the past we viewed career development as something limited to future senior managers and for growing your own specialists because they were difficult to recruit. work preferences. Is there one way to manage talent? No. They must also take into account external issues such as the changing demographics of the workforce. the difference is that these have now become subsumed within the more integrated talent management processes. talent management is for everyone. knowledge. Is talent management the same as succession planning? Organisations have always operated management development programmes and succession planning. Is talent management easy? No. What tools are used to develop talent? Coaching and mentoring are frequently used (for definitions see ‘Learning and Development’). develop and deploy this talent. values. Today. Talent management strategies will alter over time to reflect changing business objectives and resources available. retain.Talent Management 213 Does that mean that talent management is for those staff only? No. there are also the key operational and technical roles that need to be considered if organisations are to succeed.

Take a look at their approach to career management: http://www. D.214 Talent Management Case Study 1 The mailroom equipment company Pitney Bowes describes itself as ‘the world’s leading supplier of mailroom solutions’.uk/Our-Company/our-company. through induction.pitneybowes. The forward planning part of an appraisal is an ideal time to ask the questions. How else does someone do career planning? Some organisations offer advice or you can use computer based career assessment tools that will show careers for people with your abilities and personal preferences. development. performance management. many people are now challenging the stereotypes of older and younger workers and asking. ‘Am I doing the right things to get there?’ It should also then allow your appraising manager or your mentor to give you their response to your answers. Isn’t age a key issue? It has traditionally often been looked upon as a barrier.htm What is a talent pool? It is the name given to the group of talented people once they are employed by the organisation A talent pipeline is the integrated processes through which members of the talent pool flow (from recruitment. But with the advance of anti-age discrimination legislation and policies. reward to exiting). SELF-ASSESSMENT AND KEEPING AWARE OF CAREER OPPORTUNITIES Does appraisal make any contribution to career development? Yes. for example. It has a policy of having at least two people in line for most positions and up to 15 for its senior positions. ‘why can’t someone with a lot to offer us continue in employment after normal retirement age?’ What hard evidence do you have that every older worker will be:    Slower? Less interested in doing a good job? Less willing to learn? What implication does this have for HR practice? © ABE and RRC . ‘what do I want to do with the rest of my working life?’ and.

Britain does not have a rigid seniority system as in France or Germany.000 rise in the past year alone. Sidney Prior was 77 when his second career as a customer adviser began at a B&Q garden centre in Wimbledon .Talent Management 215 Case Study 2 From The Guardian newspaper. Higher labour costs for older workers cut demand. of the Organisation for Economic Cooperation and Development (OECD).or about 10% of the pensionable age workforce. to 32 million. This view is backed by the recent report of Lord Turner's pension commission. Peter Whiteford.000 staff are over 50. predicts an increasing trend in hiring older people.he is the oldest person working for the DIY group ." But there are other reasons.a rise of 11%. While about threefifths of people aged 55 to 64 are still employed in Britain . Also. That means 1.only two out of five in Europe's biggest economy.000 .000 people aged over 60 found a new job in the year to November . it began to recruit people nobody else would hire: women returning after a career break and those over 50. This rise is more surprising for coming at a time when overall unemployment and the number of jobless youngsters is going up.he is still in the job 14 years later." he says. "and they help to keep me young at heart. Today more than a fifth of B&Q's 38." The 91-year-old may not be typical . says: "This is to a large part due to the UK's economic performance during the last years. which assumes that most people will work well beyond the current state pension age as part of a national settlement to ensure decent incomes in later life. Two-thirds are women. The OECD. B&Q was the first British company to target older people. The number of workers aged 65 and over is expected to pick up by about 200. "The employment of people aged over 50 will continue to rise. the biggest ever. the Office for National Statistics (ONS) said yesterday. the pension system in much of Europe still encourages people to retire early." says Whiteford. And it contrasts sharply with continental Europe. The ONS says Britain's workforce will expand by about 2 million people. As the chain rapidly expanded in the late 1980s.a figure that may be conservative given the 100.but he certainly represents a growing trend: more than 100. where wages tend to rise with age.well above the ratio in most other developed countries . are working. like the British government. which is much better than in a lot of other European countries. "Working with people of all ages gives youngsters the chance to learn a little from an old timer like myself. Germany. © ABE and RRC . where far fewer older people are working. over the next 15 years as people live longer and work longer.1 million people over pensionable age are now working . January 19 2006 Second careers and the third age: you're only as old as your new job Staff at B&Q (a UK store chain) are increasingly likely to be over 60 and it's a trend that will only grow.

216 Talent Management Ian Cheshire. says: "There are clear business benefits to employing a workforce that is age diverse and reflects the customer profile. are healthy and do not have to work out of financial necessity. despite preconceptions. they exhibit the greatest fall in job satisfaction since the early 1990s. But what drives older people to prefer working to relaxing at home or on a beach in Marbella? Is it only because pensions are too low to survive on? Paul Bates. Changes to tax law in April mean workers will not have to retire before receiving their pension. They promote the benefits of a mixed-age workforce but also admit that no members found it easy to introduce flexible retirement. "We really must try to simplify things. of Help the Aged." Its rival Asda offers its "Asda Goldies" flexible hours and benefits such as a week off unpaid on the birth of a grandchild." More companies are expected to hire older people once new laws on anti-age discrimination and retirement come into force in October. he says. launched a campaign last June to recruit an extra 10. Nevertheless." B&Q found that older workers were no less productive. This could be a big move towards flexible retirement. John Philpott.they want to remain in the world of work. as well as a conscientious attitude and real enthusiasm for the job.000 staff.000 "mature" workers across Britain. Cheshire says: "We have found that older workers have a great rapport with the customers. they are a lot less happy with the intrinsic quality of their jobs and the hours they work. which now has more than 180 members that employ more than 3 million people. The government says older people have been encouraged to return to work by moves such as the New Deal 50 Plus. as employees aged 65 will be able to ask to keep on working. 18 of Britain's top companies set up the Employers Forum on Age (EFA). the Royal Bank of Scotland and BAA. director of EFA. Companies in other sectors have flexible retirement options that allow staff to work for longer." says the Department for Work and Pensions. In 1996. which has 170. "Our research shows that people want the choice. B&Q's chief executive." Older people have a lot to offer. says: "It would not be true to say that all these people are forced to work because of poor pensions but that might be a reason for some. a package of help for older people who have been jobless and on benefits for six months. says: "Although older workers have become more satisfied with their pay and have a stronger sense of job security. and their focus on customer service will undoubtedly have a positive effect on the shopping experience and help to drive sales. Jane Basley. "There are many complications. Sainsbury's personnel manager. A lot of older people are working because they choose to do so . although the employer can refuse them. The new legislation is supported by business." Sainsbury's. research also shows that employers do not manage and develop older workers effectively. says: "People of that age bring a wealth of experience and maturity to their work. Although they are more satisfied with their job than younger people (especially if they work part-time). They found that their Goldies help to settle and train younger staff and are also appreciated by customers. Among them are BT. such as reliability and experience. who carried out the study for the Chartered Institute of Personnel and Development." says Sam Mercer." © ABE and RRC .

Is a CPD record important? The paperwork is the means to an end. The focus should be on results i.g. journals etc. the benefits that professional development can bring. The most important person in your CPD is you. CONTINUING PROFESSIONAL DEVELOPMENT (CPD) What is Continuing Professional Development? CPD is a combination of activities that helps you manage your learning and career development. E. It should help you organise and carry out your reviewing and planning. it is the learning that matters. Your CPD should involve you learning from the past.Talent Management 217 How do people keep aware of career opportunities? Career path Internal Responsibility Employer led Sources Career development / talent management unit Career development scheme Assessment processes Appraisal discussions. © ABE and RRC . rather than be an end in itself. setting yourself objectives for development and then charting your progress towards achieving them. External Employee led Agencies Publications (newspapers. Job Centre).g.g.) Internet (email and websites) External networks Speculative application Self employment Resettlement (e. It should focus upon the outcomes and impact your learning has had rather than 'time spent' or 'things done'. rather than just listing the courses you have been on and conferences attended. Employee led Publications or intranet Internal networks Creating a post for oneself (e.e. in your area of academic research). armed services or educational institutions) Government agency (e. so any paperwork ought to be useful to you. So there are two halves to CPD – looking back and looking forward? Yes. Remember that a CPD record and plan are worthless unless they lead to you taking some development action as a result! The plan is unimportant.

creative and credible Make your working life more interesting. What are the benefits of doing CPD? CPD is an investment that you make in yourself. what can you do now that you could not do before and what impact has this had on me and my organisation? In the forward planning half think about what you need to learn to be more effective in your current job and to progress on to the next stage of your career. while others record 'insights and learning points' in their diaries as they go along. Your CPD will vary dependent on where you are in your career. You may. How often should I review my CPD record and plan? At least once a year look back over the last 12 months and set your development objectives for the next 12 months. CPD reviewing and planning help you:          Appreciate your strengths and weaknesses Increase your learning agility . How do I know what to include in my CPD? In the retrospective half of CPD ask. © ABE and RRC . It should not be a long process. where you want to get to. This helps them to assess their learning continuously. Does CPD have to be detailed? Some people find it helpful to write things down in detail. increase your job satisfaction and enable you to cope better with uncertainty Accelerate your career development Support your membership of a professional body. How will my CPD benefit my organisation? The more you learn the more impact you should have on your organisation. Some professions are also quite prescriptive about how their members will record and plan their CPD. These records and logs are useful tools for planning and reflection: it would be difficult to review your learning and learning needs yearly without regularly recording your experiences in some form or another. CPD is about capturing useful experiences and assessing the practical benefits of what you have learned. tie it into your annual appraisal.finding the best ways to learn Link your learning directly to your practice Keep your skills and knowledge up to date Prepare yourself for greater responsibilities as your career develops Be more confident.218 Talent Management Is CPD the same for everyone? No. therefore. what resources you have and your capabilities. Is CPD time consuming? The best sort of CPD does not concern itself with how much time you spend on courses or conferences.

Talent Management 219 What might a CPD record and plan look like? Here is an example used by a professional body: Development Record Key dates What did you do? Why? (From: What did you learn from this? To: How have/will you use this? Any further action? ) Development Plan What do I want / need to learn? What will I do to achieve this? (From: What resources or support will I need? What will my success criteria be? To: Target dates for review and completion ) © ABE and RRC .

220 Talent Management © ABE and RRC .

221 Study Unit 10 Employee Reward Contents A. © ABE and RRC . C. The Elements of Reward What is the reward mix? What determines the level of reward? What are employers and employees looking for in employee reward? Financial Reward Are we talking about wages or salary? What might financial reward be based upon? How do pay structures get determined? Does money motivate? What payment systems do employers use? How are reward systems changing? Non-Pay Reward Flexible Benefits Total reward Why adopt total reward? Why are employers considering total reward? What might be included in a total reward scheme? What are flexible benefits? What are the perceived advantages of total reward? What are the perceived problems with total reward? Page 222 222 222 222 223 223 223 224 224 225 228 231 231 231 232 232 233 233 234 234 B. D.

222 Employee Reward A. © ABE and RRC . accommodation etc. employee reward provides a major opportunity to improve performance. seniority and status.These are many and various. However. the need to justify pay increases and the avoidance of age discrimination. Piecework (pre-determined payment for a particular job) is an ancient system. Contingent reward .) Benefits (leave. Many forces are at work: economic. What determines the level of reward? (a) Hierarchy and qualifications . social etc and the reward mix is always changing.) Social (work relationship and social status) Developmental (professional and personal) Intrinsic job satisfaction (doing something considered worthwhile and an additional purpose for living) A structure to daily life.Reward linked to these followed naturally from the bureaucratic structures of organisations after the industrial revolution. semi-skilled. However. experience and length of service. expenses etc. Rate for the job became a key criterion in determining pay. Length of service . since loyalty is often a core value. as well as cost. legal. This reflected skill. Reward can be determined at the level of productivity of the individual. THE ELEMENTS OF REWARD Financial reward is clearly a significant cost to an organisation and for most organisations it is their largest cost. the unit or the organisation. the move to reward contribution rather than longevity for its own sake. Hence pay structures became linked to the seniority of position: skilled. unskilled etc. the team. pension. (b) (c) What are employers and employees looking for in employee reward? Principally four things:     Recruitment Retention Motivation Control (of costs and people). are resulting in a decline in the importance (if not the demise of) length of service awards.Incremental payments also became based on age. bonus. What is the reward mix? The total reward package that takes account of all the benefits that an employee gets from working:       Financial (wages or salary.

For example. Output over that level will earn a bonus.Employee Reward 223 Recruitment Retention Motivation Providing a steady flow of new employees into the organisation but without breaking the bank. Reducing power of trades unions . it may be hard to justify objectively that it is fair but the employees sense that it is). What might financial reward be based upon?  Payment by time – The most popular system because it is simple and seemingly fair. B.e. Often called ‘time rate’. FINANCIAL REWARD Are we talking about wages or salary? Wages are normally associated with manual workers and manual wage structures usually reflected the fluctuating need for manual labour. by devolving pay determination to local managers and particularly by individualising pay.This is slightly different from retention and is an element of the psychological contract for a fair day’s work for a fair day’s pay. Fairness . month or increasingly the year (annualised hours). Employee commitment . Today. Keeping people loyal but not keeping staff who are no longer offering best value for money.Or at least a sense of ‘felt fairness’ (i.Change reward structures and employees sit up and take notice! So linking pay to performance focuses attention on what performance. Payment by results – Pay linked wholly or partly to output and often linked to low status work. Creating a broad banded structure draws attention to career development.Pay is usually the largest element of an organisation’s budget and it is therefore the area that offers scope for the largest belt tightening when needed. Supporting organisational change . shift. week. Others want to emphasise the importance of flexibility or creativity. organisations are moving towards ‘single status’ pay deals. Control Controlling cost .Strengthening the hierarchy of power within the organisation.   © ABE and RRC . Increasing the power of line managers . Measured day work – Assumes a trained employee can produce a certain level of output and will then get the standard level of pay. has largely evaporated. Maintaining internal relativities . Image . the central power of unions is eroded. the divide between manual and salaried staff in terms of fluctuating demand and the enhanced status of salaried jobs. This resulted in two different pay structures.Some employees want a reputation as the best payers around. day. In response. Salaried posts were more for managers and professionals in more secure jobs with less fluctuation of demand.Especially through local pay determination. Time can be measured by the hour (hourly paid).

 Does money motivate? Many people associate motivation with pay. This means that it is a dissatisfier rather than a motivator and that when people get a certain level of salary. or work to live?” We can take both parts of the question and answer them separately. this does not attempt to analyse the job in any detail. each of which is assessed and graded. rather than extrinsic rewards. live in the area they want and buy the car that they want. we need to ask ourselves a simple question that may provide an answer to whether pay is a motivator. they always want more and what they want depends on what they already have”. buying goods to satisfy their wants and desires and being able to afford holidays to alleviate role stress. once they are used to it they become dissatisfied with it and want more. (b) Do we work to live? Many see work as a means to an end. in many cases. such as praise and recognition.224 Employee Reward   Overtime – Additional pay for hours worked over the set amount. Replaces arbitrary decision making with more objective ways of analysing the demands of a job. to assess their relative worth for the purpose of establishing a rational pay structure. This question is “Do we live to work. This suggests that motivation is strongly linked to pay because. Analytical – by which jobs are divided up into their constituent parts. © ABE and RRC . When talking about motivation and pay. How do pay structures get determined? Usually it calls for job evaluation of one form or another: Job evaluation – the systematic comparison of jobs. the harder we work (such as overtime). the more we have available to spend (disposable income). but instead compares whole jobs with other whole jobs to come up with a ranking. Maslow said. such as pay and other associated benefits. (a) Do we live to work? Many people see pay as a motivator because it enables them to buy the things they want. Herzberg stated that money is not a motivator. Individual performance related pay – This has some appeal because it seems fair: – Focuses attention on performance – Gives money where performance is high and not when it is low – High earning potential but only where it is earned – Supports broad banded structures. the more reward we get (in terms of money). but a hygiene factor. There are two types of job evaluation:  Non-analytical – as the name suggests. “humans are wanting beings. They see it as a direct link between increasing or maintaining their standard of living. However. People in this category are often motivated by intrinsic rewards. providing just enough pay to “keep them alive and keep a roof over their heads”.

The establishment of a payment system clearly involves balancing the organisation’s interests with those of its employees. as per Herzberg’s notion of pay as a hygiene factor Encourage staff to stay with the organisation. However. In influencing recruitment. as we shall consider below. is that they all allow for different employees to be paid at different rates. the payment system is clearly linked to human resource management. installed and maintained with the participation of employee representatives. These general aims are that the payment system should:       Be an integral part of the business strategy Be linked to human resource planning Facilitate change and development within the organisation Ensure that suitable staff may be recruited into the organisation Facilitate the deployment of staff to ensure maximum productivity Relate to the continued attainment of high performance. a payment system is a method by which the salary or wage of an employee is calculated. From this perspective. the payment system must support the cost-effective achievement of its goals. What they have in common. For the system to be effective. for an economy as a whole). Labour is often one of its highest costs. deployment and performance levels. at all levels and in all types of job (including facilitating the payment of enhanced rates to attract staff in skills shortage areas and for short term contracts. indeed. where appropriate) Encourage staff to make full use of their capabilities and develop their potential in striving to achieve the objectives set by the organisation Reward staff in accordance with their contribution Prevent any loss of morale through dissatisfaction with pay. it needs to meet the following three criteria:    Take account of the needs of the organisation and of its employees Have the commitment of all sections and levels of management in the organisation Have been developed.Employee Reward 225 What payment systems do employers use? Put very simply. are important issues for an organisation (and. They need to be addressed as part of the holistic design of a system. The rates at which individuals.      © ABE and RRC . or groups of employees are paid and the ”differentials” or ”relativities” between individuals and groups. though. To the organisation. particularly in the service sector and the overall cost needs to be balanced against other aims. (a) The aims of payment systems There are a variety of types of payment system. if that is an objective Be seen to achieve these aims at least cost to the organisation. it has significance to the organisation which goes far beyond this. payment systems need to:  Attract staff of the right calibre into the organisation.

or flat rate. rather than having one pay rate attached to a job. level of responsibility. in which pay is expressed as an hourly. flat rate systems do not provide for incentives to improve productivity as everyone is paid the same for the job. where pay is linked to performance. What is an incremental scale? Many organisations. cost of living increases Employees find it easy to check to see that they had been paid correctly. is considered in the next section on job evaluation. An individual jobholder may qualify for a higher position on the scale and thus a higher rate of pay for the job.) Pay rates will then be expressed as an hourly. Time or flat rate systems are most appropriate:     Where the volume of work is difficult to measure Where work flow over a period is uneven Where the volume or pace of work is outside the control of the employee Where considerations other than output are of more importance (although this is very unlikely). skills required. (The way in which jobs are graded and differentiated. other than across the board in respect of. weekly or annual rate Performance related systems. Time. Part time employees will be paid a proportion of any weekly or annual rate in respect of the hours/days worked. Jobs will be graded to differentiate between them on the basis of factors such as the difficulty of task. thus rewarding staff who stay with the organisation © ABE and RRC .  However. one against another. with higher levels of performance leading to increased pay. The two systems are not mutually exclusive and are often combined in some way. etc. systems Virtually all organisations use flat rate systems to some extent. weekly or annual rate for the performance of the duties and responsibilities of the job. The basis of these systems is a rate of pay attached to particular jobs. These systems have a number of advantages. other than over basic rates They help the forecasting of labour costs since salaries are a known factor and do not change. say. including:    They are relatively easy to administer once the overall rate and differentials have been agreed and established They are easily understood by employees and are not likely to lead to disputes. or flat rate systems.226 Employee Reward (b) Types of payment system There are two basic types of payment system:   Time. have scales of pay related to them. regardless of performance. according to various factors:   Performance – Receiving additional increments on the scale may be linked to assessment of performance Length of service – With increments being awarded annually.

There has been a significant growth in performance related pay in all sectors of the economy in recent years. measurable standards. (This is related to the growing acceptance of the expectancy theory of motivation. The basis of these systems is that employees have a direct stake in the overall performance of the organisation. for example. as evidenced by the holding of relevant qualifications. Generally. On the other hand. It provides a strong incentive to meet such performance targets but can be expensive to maintain (through the need to consistently measure performance and calculate consequent payments) and may lead to disputes about the standards themselves or the ability of individuals to meet them. share price. through an emphasis on team working. flexible working and multi-skilling and the development of increased autonomy (and.) The traditional basis for this type of payment system has been the performance of the individual but increasingly pay may be related to team performance or the performance of the organisation as a whole. particularly in the public sector. etc. Incremental scales tend to be associated with large organisations. such pay does not form the whole of the jobholder’s pay but the proportion may vary from being the largest part of their earnings to only a minor addition to flat rate play. There are a number of advantages to collective bargaining in that it involves employees (through their trade unions) in the process and thereby gains their commitment. However.  Team-based systems This has a number of benefits in improving team performance through encouraging co-operation. compelling conformity and stifling creativity and possibly having a negative effect on expectancy theory. such as teaching or nursing. it diminishes the role of the individual.  Organisation-based systems These types of bonus schemes are based on the performance of the organisation in meeting its objectives.  Individual-based systems This relates directly to performance levels against agreed. it also tends to produce very inflexible schemes. with fixed rates applying throughout the organisation or even to whole occupational groups. salespersons earning commission on sales or manual workers being paid according to output (”piece-work”). A process of collective bargaining between employers and employees representatives agrees the details of pay rates attached to particular groups and the conditions for receiving incremental increases. reduced supervision). it produces nationally binding agreements and also takes the process of determining pay rates away from individual managers. How can pay be linked to performance? Performance related pay has been an accepted payment system in many occupations for a long time.Employee Reward 227   Experience – Recognising an (assumed) greater level of skill acquired through experience in the same or very similar work in the past Qualification – Again recognising an (assumed) greater level of skill. as organisations have sought to find rewards systems linked more closely with performance. particularly in respect of the (local) market for skills and labour in general. it may be a lever for organisational change. as measured by a variety of indices such as profit. which do not allow for individual circumstances to influence pay rates. They may be applied to the whole workforce or to particular sections of it (and are often confined to senior management levels). hence. In addition. This is enhanced where the bonus is paid as a © ABE and RRC .

g.    There are many ways of implementing performance-related reward systems. to implement a reward system on this basis where employees are in a management services or support role. they should have a scientific basis. such as those in management support functions and service industries. irrespective of their skill or diligence but a very able salesperson may achieve bad results because the product or service is inherently poor. such as retail shops and financial institutions. Some of the methods of implementing performance-related rewards are:  Profit centres Here. nearly everyone agrees that doctors and nurses are worth more in financial terms than they are paid but the system cannot reward them appropriately without breaking the national budget. no money Flat rate plus commission or sales-related element. A computer operative. thus tying the value of the award to the continuing success of the organisation (remembering that share values may go down as well as up). with stated rates for overtime Piece rates. for example. it is easier said than done to have an entirely fair system. Whilst most would accept that greater productivity should be rewarded accordingly. e. so that there is some measurement of the value of the work in terms of economic contribution to the enterprise. A balance sheet and profit and loss account can be produced for each unit and rewards apportioned to individuals accordingly. for example:  Those who sell products or services which are in high demand will achieve good results. How are reward systems changing? Until comparatively recently. Ideally. This can be done through various techniques such as standard setting and appraisal systems (which we consider in detail in the next unit). where the worker is paid for what is produced. It is more difficult and sometimes impossible. rather than monetary bonuses. The economics of the business may not support a fair reward system. in terms of sales database management than the front line salesperson. might reasonably argue that their indirect contribution is as valuable. This inevitably creates conflict in businesses where sales performance is rewarded directly on results achieved but support staff are remunerated on a flat salary basis. where the gross (pre-tax) wage or salary is expressed in weekly.228 Employee Reward distribution of shares. on-going cost. With an increasingly global market. For the organisation. such schemes are attractive in that they are only paid out of profits and do not represent a permanent. monthly or annual terms. a fair pay structure in one part of the business may be completely out of line with that in the same company’s overseas subsidiaries. if not more so. the system is based on the contribution of each part of the business to overall performance. © ABE and RRC . The recent past has seen a considerable move towards performance-related reward. This is quite easy in an organisation with dispersed outlets. no output. It is difficult to quantify the value of output of many workers. there have been only a few variations in how pay is administered:    Flat rate for the job.

businesses can provide other nonfinancial incentives. The consequence of this is that businesses which can contract work out to external providers can reduce their full-time staff complement significantly. Examples include some life assurance companies and double-glazing salespeople. large businesses can often enjoy significant economies of scale when buying in by demanding substantial fee discounts for larger contracts. the consultant will generate outside work. Also. introduced a system whereby older. They could then use this time as they wished. whereas if the consultant’s preferred outcome is more time with the family. either to generate external fee income or take more leisure time. Further. this will provide the motivating spur.  Equity/profit share It is common practice in some organisations to reward employees through giving them equity in the business (free shares) or a stated share of the profits earned each year. when work is sub-contracted out. the points awarded may be changed to reflect different priorities. through which we learn that if more money is the preferred outcome. the business pays only for what it gets. Stephen Bragg. which demonstrate show the core workforce is decreasing in importance as part-time workers and outside contractors become more important. This model fits well with Vroom’s expectancy model.Employee Reward 229  Points systems Points systems tend to be more flexible.  Totally results/commission driven In some sectors it is common to reward people entirely on results attained. as the focus of the business changes. © ABE and RRC . These can be tied in to annual performance review and appraisal systems. Full-time employees are expensive in the long term and usually the highest cost resource. In addition to rewarding through more time off. This system rewards consistently high-performers well but has many disadvantages: (i) (ii) (iii) A downturn in the market for the product or service can create hardship and (in Maslow’s parlance) anxiety about basic physiological and safety needs Again it is difficult to reward those in service and support functions fairly Turnover of personnel tends to be high due to the low level of long-term security afforded by the system. The chairman of a health authority.  Non-financial rewards Some businesses which suffer cost pressures are able to remunerate in non-financial terms. more expensive consultants would be expected to put less time in. as they got older. such as payments-in-kind. Conversely. the greater the leverage of the company buying in. The employee is set targets of achievement which result in points being awarded on an incremental basis. resulting in the now common delayering and downsizing seen in many businesses. There may or may not be some flat salary but this is often a very small element of the remuneration package.  Sub-contracting Charles Handy highlights this feature of modern business in his “Shamrock organisation” model. The more competitive the business of the external provider.

despite the inevitable criticisms which can be levelled. especially for businesses where “intellectual property” is a critical determinant of competitive edge: (a) Long v. This type of action can appeal to the person whom Peter Drucker refers to as the “intrapreneur” – the ideas person who invents the future. should result in more money for better results and hence greater overall commitment to goals. Several privatised utilities have introduced these systems in the last 15 years. Once decided. A financial or non-financial disincentive is built into the employee’s contract which is invoked if the person decides to leave. the consequence is that the worker obtains a direct reward from the overall earnings of the enterprise. Supporters of such systems stress the greater sense of “ownership” of the business. If a person comes up with a genuinely revolutionary concept. Competition for knowledge and skills within individual sectors is a major determinant of remuneration. there has to be an additional and more direct incentive. otherwise. Remember the Black and Mouton managerial grid? A “country club” manager is going to be much more benevolent in such a system than the “task leader”. (c) Ownership Some businesses give the employee a stake in the product. The person responsible for the individual or team decides what they think the person is worth in terms of additional remuneration each year. This also creates the effect of not letting competitors know exactly what is offered. It is also fairer.230 Employee Reward Whichever method is used here. Many of these systems work remarkably well. permits an individual employee to retain patent rights over a smart card product so that both the individual and the organisation can benefit in the future. to give a person who will be responsible for generating millions of pounds of future income a direct stake in the product or service instead of expecting him to be satisfied with a flat salary.  Subjective awards Many of the more traditional businesses reward effort based on the subjective judgement of executives or managers. no performance-related reward system can provide adequate return. what is to stop a person on whom many thousands of pounds have been spent going off to a competitor? (b) Golden handcuffs This term refers to elements of the employment package specifically designed to tie the individual to the organisation. These systems also depend on being able to decide the overall size of the financial payment to be set aside for reward. There are highly important issues here. which theoretically at least. of course. for example. it is almost certain that some managers will fight harder for their people than others. The main problem is that some managers are more naturally grudging or demanding than others. either through equity participation or patent rights. © ABE and RRC . short-term focus Some organisations have moved away from addressing long-term education and training needs in favour of shorter-term competencies. resulting in unavoidable discrepancies between what is given and what is actually deserved. (d) Package approach The package approach shifts the focus away from salary alone and towards the entire remuneration package. One major bank.

NON-PAY REWARD The benefits of employment are not solely confined to pay. examples include: Financial benefits Sickness pay Superannuation scheme Season ticket loan Removal expenses Lease car or car allowance Clothing allowances Private medical insurance Non-financial benefits Leave entitlement Flexible working hours Career breaks Additional maternity/paternity leave Crèche Education facilities and study leave Sports and social club facilities In addition. FLEXIBLE BENEFITS Total reward This is the term that has been adopted to describe a reward strategy that brings additional components such as learning and development. plus benefits “commensurate with the position”. although this is likely to be the most contentious aspect to both employers and employees. total reward has wide-reaching implications for employers and employees alike. into the benefits package. It goes beyond standard remuneration by embracing the company culture and is aimed at giving all employees a voice in the operation. D. C. with the employer in return receiving an engaged employee performance. CIPD 2001 By recognising that pay is not the only motivator and acknowledging the importance of not only tangible but also intangible rewards within the wider context of the work experience. Components of total reward Base pay Variable pay Total  Share remuneration ownership Benefits Recognition Opportunities to develop Total  Career reward opportunities Quality of working life Financial rewards + Nonfinancial rewards New Dimensions in Pay Management. certain organisations provide incentive schemes linked to non-monetary rewards. such as additional leave for long service. including both monetary and nonfinancial rewards.Employee Reward 231 The most common manifestation of this approach is seen in the appointments pages regularly when a package is offered on an “OTE” (on target earnings) basis. Most organisations provide a package of benefits beyond pay to attract and retain staff. © ABE and RRC . together with aspects of the working environment.

Customised – It identifies a flexible mix of rewards that offers choice and is better designed to meet employees' needs. they have to become part of a bigger business strategy. Total reward is a mindset that enables employers to look at the bigger picture. a survey in 2007 by the UK Chartered Institute of Personnel and Development found that only around four in 10 UK employers had adopted total reward. To obtain maximum effect from these benefits. their lifestyle and stage of life. At present. Best fit – It adopts a contingency approach: total reward programmes need to be tailored to the organisation's own particular culture.        Why are employers considering total reward? Both new and old-economy companies have to rethink their reward strategies. total reward is not new. Demographic changes have resulted in a more diverse workforce demanding different returns from work. However. both have to look at new ways of attracting and retaining key personnel. one benefit for employees was that they could be relatively confident of staying with the same employer for as long as they wished. Now that the stock options have to be expensed on the profit and loss account and the traditional companies have stopped providing a job for life. including better office accommodation or more training. In a fully integrated total reward package. People-centred – It recognises that people are a key source of sustainable competitive advantage and begins by focusing on what employees’ value in the total work environment. something that can be matched by rival companies. Integrative – It delivers innovative rewards that are integrated with other human resource management policies and practices. Traditional companies had a paternalistic approach to reward. flexible benefit scheme but the employer is still faced with the prospect of having to meet demands for a wide range of other benefits. Strategic – It aligns all aspects of reward to business strategy: total reward is driven by business needs and rewards the business activities. to improve performance. Distinctive – It uses a complex and diverse set of rewards to create a powerful and idiosyncratic employer brand that serves to differentiate the organisation from its rivals. Why adopt total reward? It is:  Holistic – It focuses on how employers attract. employee behaviour and values that support strategic goals and objectives. It is only when all the elements of the reward package (that is total © ABE and RRC . They also offered significant financial rewards. all the elements of the employee's work become part of a single flexible package.232 Employee Reward Total reward is potentially very powerful in assisting employers align their HR and business strategies with employee needs. possibly for their entire working careers. As a concept. structure. in the form of stock options. pay and benefits may be covered under a single and controllable. retain and motivate employees to contribute to organisational success using an array of financial and non-financial rewards. Evolutionary – It is a long-term approach based on incremental rather than on radical change. Newer companies (particularly those in the hi-tech sectors) rewarded employees with exciting and challenging surroundings but with no guarantee of job security. Flexible benefits (see below) are important but are seen by many as little more than an extension to the existing salary package and therefore. work process and business objectives.

it is hard to replicate. beyond the challenge of supplying these less tangible rewards. Benefits that appear in existing schemes include:    Childcare vouchers Season ticket for travel Cars (for eligible staff) or employee vehicle schemes    Pension Health screening Financial planning © ABE and RRC . It also offers employers the opportunity to differentiate and create cultural brand and thence competitive advantage. total reward links cost control with the demand by employees for greater choice and flexibility in the workplace. is attempting to balance them against one another. Clearly some of these rewards are more easily provided than others and some are more quantifiable than others. The number (and type) of benefits in a scheme is a compromise between offering employees a wide choice and keeping the administration manageable. or all. of the following elements:              Flexible benefits Access to professional and career development A challenging role at work Freedom and autonomy at work Opportunity for personal growth Recognition of achievements Preferred office space Being able to raise matters of concern Being involved in decisions that affect the way work is done Preferred office equipment and mobile phone Flexible working hours Home or teleworking Secretarial support. One difficulty in a total reward package. What are flexible benefits? The contents of any scheme depend on local circumstances but core benefits that appear on many flexible benefits schemes are:      Holidays Life assurance Private medical insurance Critical illness insurance / long-term disability insurance Personal accident insurance.Employee Reward 233 rewards) are considered within the context of business and HR strategies that the total cost of each employee's job can provide the most valuable return to the organisation. the working environment and career and personal development. total reward encompasses pay and benefits (generally in the form of a flexible benefits scheme). Thus. In more detail it may include some. What might be included in a total reward scheme? Broadly.

Clearly. for example. Similarly. retention. such as holidays.234 Employee Reward       Discounted services Home phone package Life assurance Personal computers Retail vouchers Travel insurance       Give-as-you-earn charitable contributions Legal expenses insurance Dental insurance Pet insurance Bicycles Concierge benefits (eg laundry service). it would often be very difficult to meet everyone's requirements. the number that could even contemplate introducing a total reward scheme is even smaller. regardless of how much they were prepared to sacrifice by way of other benefits. Within the field of total reward. But when it comes to choosing. the choice of office accommodation may occasionally lend itself to a trade-off where limited office space is rationed according to who is prepared to sacrifice other benefits in order to obtain it. As with other reward solutions. To develop an appropriate programme would be enormously complex and would not be without risks in its implementation. motivation and control. As only relatively few companies in the UK are successfully operating flexible benefits schemes at present (though increasing numbers are considering such schemes). In this case. a computer. no off-the-shelf package is available for companies simply to plug into their operation. but (unlike. life assurance) office accommodation is a finite and not particularly flexible resource. © ABE and RRC . What are the perceived advantages of total reward? The benefits are those of reward in general: recruitment. so it is an area that would almost certainly benefit from help provided by consultants. where the employee's decision is not without an impact on the rest of the organisation. existing flexible benefits schemes already have grey areas. there is currently serious debate over where to draw the line between choices related to personal needs (such as life assurance) and choices that are strictly business-related (such as the choice of computer). some employers (and experts) believe that this is not an appropriate area for employee choice but should be a purely business decision. What are the perceived problems with total reward? Total reward may be regarded as the next logical step after flexible benefits have been implemented. say.

Disciplinary Procedures What will a disciplinary procedure cover? Disciplinary action Why have rules and disciplinary procedures? What might the rules cover? What principles should underline our disciplinary procedure? What training should be given? What should we do in an investigation? When should an employer suspend an employee? How do we decide whether or not disciplinary action is necessary? What is informal action? Can we use an independent mediator? What should we do when investigating a case? Disciplinary Hearing How should the disciplinary meeting be conducted? Grievance Procedures What is a grievance? What is the process for handling a grievance? What should a procedure look like? What happens in a grievance hearing? Disciplinary Penalties What should be considered before deciding any disciplinary penalty? What are the levels of disciplinary penalty? What are the time limits for warnings? What if an employer dismisses an employee? Can an employer dismiss without notice? What is gross misconduct? How should an employee be informed of a disciplinary decision? What disciplinary records should an employer keep? Page 237 237 237 238 239 239 240 240 241 241 241 242 242 242 243 245 245 245 246 246 247 247 247 248 249 249 249 249 250 B. (Continued over) © ABE and RRC .235 Study Unit 11 Discipline and Grievance Contents A. C.

236 Discipline and Grievance D. F. Appeals Processes What should be in an appeals procedure? What about a small organisation where there is no one else to hear an appeal? How should an appeal hearing be conducted? The Right to be Accompanied Who can accompany an employee in a disciplinary or grievance hearing? Redundancy What is redundancy? Should an employer have a redundancy policy? Should an employer consult when drawing up a redundancy procedure? What should be in a redundancy procedure? What steps should an employer take if considering redundancies? What can an employer do to avoid redundancies? How does an employer decide who should be made redundant? Who should the employer consult? 250 250 250 251 252 252 252 252 252 252 253 253 253 254 254 E. © ABE and RRC .

those which would be a detriment to the employee. in the UK there is a statutory procedure they must follow as a minimum if they are contemplating dismissing an employee or imposing certain kinds of penalty short of dismissal. through counselling or working out an 'improvement note' for an employee's performance.e. What happens if the employee thinks a dismissal is unfair? Provided they have one year’s service they may make a complaint to an employment tribunal. Content of disciplinary and grievance procedures ACAS has published guidelines that say that organisations should set standards of performance and conduct that are reinforced by rules and managerial behaviour. DISCIPLINARY PROCEDURES What will a disciplinary procedure cover? A disciplinary procedure will cover conduct and capability (the latter often called ‘performance’). employers should aim to improve and not to punish. What will happen at a tribunal? It would then be for the employer to show the reason for the dismissal and that it was a fair reason. for example. But. The employer and employee should start talking to each other long before the dismissal stage. The tribunal will vet that decision and will take into account the size and administrative resources of the employer in deciding whether they acted reasonably or not. What are the stages of handling discipline or grievances? The statutory procedure involves the following three steps:    A statement in writing of what it is the employee is alleged to have done A meeting to discuss the situation The right of appeal. when a problem does arise they are vital. Some organisations have separate procedures for misconduct and incapability. © ABE and RRC . Are there any principles underlying our actions? Yes:    Rules and procedures provide a framework for behaviour and performance Discipline and grievances are about people not processes In most cases. such as suspension without pay or demotion i. A good procedure can help an organisation to resolve problems internally and avoid legal claims. This is the minimum standard and a court would expect an employer to behave fairly and reasonably.Discipline and Grievance 237 A. Minimum standard of good practice that all managers should follow Although organisations can be flexible about how formal or extensive their procedures need to be. In a wellmanaged organisation disciplinary procedures may not be needed very often. Disciplinary action Disciplinary procedures are an aid to the effective management of people and sanctions or dismissal are only used when the procedure has failed to result in the necessary improvement or where gross misconduct has taken place.

misconduct. How should an employer go about preparing the rules and procedures? Management should aim to secure the involvement of employees and any recognised trade union or other employee representatives when rules and disciplinary procedures are introduced or revised. and ideally they should be given their own copy. timekeeping and holiday arrangements. if staff are given contracts of employment when they start work. They should be known and understood by all employees and they should have ready access to the information. Although it is important to deal with discipline and grievance issues fairly and effectively. For instance. it is good practice to include a section on rules in the organisation's handbook and to discuss them during the induction programme. Equally. employees should always be told before there is any change in practice. For example. if an employee is required to wear protective clothing. Why have rules and disciplinary procedures? Clear rules benefit employees and employers. To be fully effective rules and procedures should be accepted as reasonable by those covered by them and those who operate them. Writing down the rules helps both managers and employees to know what is expected of them. including rules for absence. and helps employers deal fairly with those who do not. it is more important to prevent problems arising in the first place. then specific problems. or staining materials.238 Discipline and Grievance Isn’t prevention better than cure? Yes. So the formal disciplinary and grievance procedures should be considered a 'last resort'? Yes. there will be less opportunity for ambiguity if problems arise in the future. health and safety. Special attention should be paid to ensure that rules are understood by any employees with little experience of working life (for instance young people or those returning to work after a lengthy break) and by employees whose English or reading ability is limited. In large organisations. timekeeping and discipline. © ABE and RRC . can be resolved before any disciplinary action becomes necessary. A good disciplinary procedure helps employees keep the rules.g. Do staff have to have access to the rules and procedures? Yes. as well as details of pay. like lack of training or poor motivation. it is sensible to explain if this is for a particular reason e. Where a rule has fallen into disuse or has not been applied consistently. it may be sufficient for rules to be displayed in a prominent place. sub-standard performance. holidays etc. It is therefore good practice to develop rules in consultation with employees (via their representatives if appropriate) and those who will have responsibility for applying them. induction and training. because of corrosive liquids. A 'quiet word' is often all that is needed. use of the organisation's equipment and facilities. and discrimination. Rules are more readily accepted and adhered to if people understand the reasons for them. In a small organisation. bullying and harassment. Rules and procedures should be clear and probably in writing. Management should ensure that those responsible for operating disciplinary rules understand them and receive appropriate training. Rules set standards of conduct and performance at work and make clear to employees what is expected of them. Rules will normally cover issues such as absence. The first step is to understand the relationship between discipline and grievance issues and wider issues like communication. They should be reviewed from time to time and revised if necessary. if managers and staff are in the habit of talking to each other openly about what's happening at work. The rules should be made clear to employees.

Require employees to be informed of the complaints against them and supporting evidence.Discipline and Grievance 239 A uniform may be more acceptable if it is explained that it is so customers or the public can identify employees. Any revisions to the rules should be communicated to all employees. What might the rules cover? Any or all of the following:      Timekeeping Approval of holidays Personal appearance Alcohol. before any meeting Provide employees with the right to be accompanied Require management to investigate fully before any disciplinary action is taken Allow employees to appeal against a decision. in advance of the meeting Given the opportunity to challenge the allegations before decisions are reached and Provided with a right to appeal. drug or other substance abuse. ACAS suggests the procedure should:    Provide that no employee is dismissed for  a first breach of discipline. Discrimination. Should there be different rules applying to different groups or levels of employees? Only where unavoidable (e.g. except in cases of gross misconduct Ensure that employees are given an explanation for any sanction   © ABE and RRC . an employees should be:        Informed of the allegations against them. together with the supporting evidence. What principles should underline our disciplinary procedure? Natural justice e. and employees should be issued with a revised written statement within one month of the change.g. bullying and harassment      Absence Health and safety Smoking at work Use of organisation facilities Gross misconduct. for health and safety reasons). Be in writing Be non-discriminatory Allow for information to be kept confidential Say what levels of management have the authority to take the various forms of disciplinary action Give employees a chance to have their say before management reaches a decision     Say who is covered Provide for matters to be dealt with speedily Tell employees what disciplinary action might be taken.

If the organisation recognises trade unions. investigations and proceedings with thought and care. as well as any appropriate records and documents. If they have not been followed and the employee makes a claim to a tribunal. or there is any other form of employee representation. race. where the facts are in dispute. Be as objective as possible. Keep records of what is said. Can an employer pre-judge a case before a hearing? No. when dismissing an employee. Relevant personal details such as previous performance.240 Discipline and Grievance What training should be given? Those responsible for using and operating the disciplinary rules and procedures should be trained for the task. or actions in the heat of the moment. disability. What should we do in an investigation? By acting promptly the relevant supervisor or manager can clarify what the problem is and gather information before memories fade. Whilst maintaining satisfactory standards and dealing with disciplinary issues requires firmness on the part of the manager. Personal details such as length of service. it can be useful to undertake training on a joint basis so everyone has the same understanding and has an opportunity to work through the procedure. Also. The disciplining of a worker is a serious matter and should never be regarded lightly or dealt with casually. reducing the need for any further disciplinary action. An employer should try to ensure that all employees are aware of the organisation's normal practice for dealing with misconduct or unsatisfactory performance. copies may need to be given to the individual if the matter progresses any further. it is also essential to take account of the circumstances and people involved. How serious should an employer treat a disciplinary action? Conduct enquiries. the statutory minimum procedures must have been followed. keep an open mind and do not prejudge the issues. Any provocation or other mitigation also needs to be taken into account. © ABE and RRC . That said. Good training helps managers achieve positive outcomes. is likely to have a bearing on the outcome of any subsequent legal action. the dismissal will automatically be ruled unfair. sex. It must be heard in good faith. Ignoring the procedures. clarifying any issues that might arise. Where necessary. Consider each case on its merits. length of service and any current warnings will need to be obtained before the meeting. no disciplinary penalty should be imposed until the case has been carefully investigated and there is a reasonably held belief that the employee committed the act in question. Avoid snap decisions. it also requires fairness. including anything the employee has to say. If the employee is dismissed or suffers a disciplinary penalty short of dismissal. Do we have to be consistent? The attitude and conduct of employees may be seriously affected if management fails to apply the same rules and considerations to each case. statements should be obtained from witnesses at the earliest opportunity. Any decision to discipline an employee must be reasonable in all the circumstances and must not discriminate on grounds of age. sexual orientation or religion or belief. Does an employer have to be careful to follow the disciplinary procedure? Yes and the supervisor or manager should never exceed the limits of their authority. past disciplinary history and any current warnings will be relevant to such considerations. such as suspension without pay.

with the emphasis being on finding ways for the employee to improve and for the improvement to be sustained. This allows tempers to cool and hasty action to be avoided. It may become evident there is no problem. how their performance or conduct will be reviewed and over what period. whilst the period of suspension should be as short as possible. © ABE and RRC . or risk to property or other people. treat employees fairly and consistently. Arrange counselling or other informal action.  What is informal action? In many cases the right word at the right time and in the right way may be all that is needed and will often be a more satisfactory way of dealing with a breach of rules or unsatisfactory performance than a formal meeting. Do not use suspension as a sanction before the disciplinary meeting and decision. A mediator won't take sides or judge who is right but can help the parties reach their own agreement where the employer and employee are unable to solve a disagreement alone. This will be necessary when the matter is considered serious enough to require disciplinary action. Arrange a disciplinary meeting. unintentionally. How do we decide whether or not disciplinary action is necessary? Having gathered all the facts. Tell the employee exactly why they are being suspended and that they will be called in for a disciplinary meeting as soon as possible. aimed at pointing out the shortcomings in conduct or performance and encouraging improvement. What if it becomes clear during the informal discussion that the matter may be more serious? Be careful that any informal action does not turn into formal disciplinary action as this may. The mediator may also recommend a way forward if both parties agree that they want this. There may be no case to answer or the matter may be regarded as trivial.Discipline and Grievance 241 When should an employer suspend an employee? Where there appears to be serious misconduct. if so make this clear. coaching and advice may be needed and both manager and employee should be aware that formal processes would start if there is no improvement or if any improvement fails to be maintained. This should be a two-way discussion. Any suspension must be with pay. The ‘praise sandwich’ may be helpful. such as the right to be accompanied. It may be useful to confirm the agreed action in writing. How should it be done? Talk to the employee in private. The employee should be told that the matter will be continued under the formal disciplinary procedure. unless the contract of employment allows suspension without pay. deny the employee certain rights. This is an attempt to correct a situation and prevent it from getting worse without using the disciplinary procedure. a period of suspension with pay should be considered while the case is being investigated. Listen to whatever the employee has to say about the issue. Where improvement is required. starting and ending on a positive note about the employee’s contribution to the organisation. Criticism should be constructive. If during the discussion it becomes obvious that the matter may be more serious. the manager or supervisor needs to decide whether to:    Drop the matter. Additional training. The employee should be told that if there is no improvement then the next stage would be the formal disciplinary procedure. Consider using an independent mediator. make sure the employee understands what needs to be done. the meeting should be adjourned.

What should we do when investigating a case? Take care to deal with the employee in a fair and reasonable manner. are there personal or other outside issues affecting performance or conduct?) Is this employee being unfairly singled out? Be careful when dealing with evidence from an informant who wishes to remain anonymous. where the employer considers that formal disciplinary action is not appropriate.g. and that they are required to attend a disciplinary meeting. The mediator may also recommend a way forward if both parties agree that they want this. A mediator will not take sides or judge who is right but can help the parties reach their own agreement.  Protect anonymity   © ABE and RRC .  Tell the employee   Get a management colleague Check Arrange for a second member of management to be present wherever possible. Take written statements.  Are there are any special circumstances to be taken into account? (e. an independent mediator may help solve disagreements over disciplinary issues. whilst the investigation is carried out. Disciplinary Hearing What preparation should we make for a disciplinary hearing? Get the records  Ensure that all the relevant facts are available. give the employee advance warning of the meeting and time to prepare. absence or sickness records or written statements from witnesses). Establish what disciplinary action was taken in similar circumstances in the past. That they are entitled to be accompanied at the meeting. Exceptionally. to take notes of the proceedings and act as a witness. Can we use an independent mediator? In some cases. seek corroborative evidence and check that the informant's motives are genuine. the procedure to be followed. Where it is necessary to hold an investigatory meeting. consider suspending the employee with pay for a brief period. Any investigatory meeting should be conducted by a management representative and should be confined to establishing the facts of the case.242 Discipline and Grievance Should managers keep notes of any agreed informal action? Yes.g. Of the complaint. where you have reasonable grounds for concern that evidence may be tampered with or destroyed before the meeting. such as disciplinary records and any other relevant documents (e.

This is because the action may be seen as an attack on the union. the employer should arrange another meeting. such as illness. If the employee concerned is a trade union official discuss the case with a trade union representative or full-time official after obtaining the employee's agreement. Explain that the purpose of the meeting is to consider whether disciplinary action should be taken in accordance with the organisation's disciplinary procedure. Introduction    Introduce those present to the employee and explain why they are there. The structure of the meeting .Discipline and Grievance 243 Allow the employee time To prepare their case. Introduce and explain the role of the accompanying person if present. How should the disciplinary meeting be conducted? Meetings rarely proceed in neat. Also to speak and to call witnesses or to submit witness statements.make a list of points you will wish to cover. If there may be understanding or language difficulties (perhaps a friend of the employee. or a co-employee). State precisely what the complaint is and outline the case briefly by going through the evidence that has been gathered.  State the case   © ABE and RRC . It may be useful and save time at the meeting if copies of any relevant papers and witness statements are made available to the employee in advance. Protect trade union officials Organise the domestics Allow the employee to state his or her case Arrange for an interpreter or facilitator Plan What if the employee fails to attend the meeting? If it is through circumstances outside their control. Explain how the meeting will be conducted. When and where? The employee may offer a reasonable alternative date if their chosen companion cannot attend. orderly stages but the following guidelines may be helpful. Ensure that the employee and their representative or accompanying person are allowed to see any statements made by witnesses.

 General questioning and discussion    Summing up   Adjourn   Make the decision Inform the employee of the decision and the right of appeal. the arguments and evidence put forward and to ensure nothing is missed. Then agree the steps that should be taken to remedy the situation. Ask open ended questions. Listen carefully and be prepared to wait in silence for an answer as this can be a constructive way of encouraging the employee to be more forthcoming. consider proceeding if it is clear that their evidence will not affect the substance of the complaint Use this stage to establish all the facts. (Remember that the point of the meeting is to establish the facts. This allows all parties to be reminded of the nature of the offence. consider whether to reconvene the disciplinary meeting. 'what happened then?' to get the broad picture. If it becomes clear during this stage that the employee has provided an adequate explanation or there is no real evidence to support the allegation. A properly conducted disciplinary meeting should be a twoway process. not catch people out.244 Discipline and Grievance Employee's reply  Give the employee the opportunity to state their case and answer any allegations that have been made. Ask the employee if they feel that they have had a fair hearing. They should be able to ask questions. Ask the employee if they have any explanation for the misconduct or failure to improve. present evidence and call witnesses.) How formal should the meeting be? Keep the approach formal and polite and encourage the employee to speak freely with a view to establishing the facts. Ask precise. If new facts emerge. This should help to demonstrate to the employee that they have been treated reasonably. This allows time for reflection and proper consideration. © ABE and RRC . The accompanying person may also ask questions and should be able to confer privately with the employee. If it is not practical for witnesses to attend. It also allows for any further checking of any matters raised. closed questions requiring a yes/no answer only when specific information is needed. stop the proceedings. particularly if there is any dispute over facts. and whether they have anything further to say. Establish whether the employee is prepared to accept that they may have done something wrong. for example. It is generally good practice to adjourn before a decision is taken about whether a disciplinary penalty is appropriate. Summarise the main points of the discussion after questioning is completed. Use questions to clarify the issues and to check that what has been said is understood. or if there are any special circumstances to be taken into account.

It also allows for problems to be settled quickly. Conciliation and Arbitrations Service (ACAS: issues very useful and practical guidance to employers about writing policies and handling cases. Like discipline. This unit is founded upon their good practice approach. problem or complaint that an employee raise with their employer. B.Discipline and Grievance 245 Do not get involved in arguments and do not make personal or humiliating remarks. If the distress is too great to continue then adjourn and reconvene at a later date. However. What is the process for handling a grievance? The same three stage process as for discipline: notification by employee. The legal requirements for processing discipline and grievance problems vary from country to country. What if a grievance is raised during the meeting? If it relates to the case it may be appropriate to suspend the disciplinary procedure for a short period until the grievance can be considered. may need to be adapted to fit the legal requirements in your country. such as in respect of:     Terms and conditions of employment Work relations New working practices Organisational change     Health and safety Bullying and harassment Working environment Discriminatory practice (equal opportunities). the issues should not be avoided. It will encourage fairness. hearing and appeal. abusive language or conduct should not be tolerated. during the meeting there may be some 'letting off steam' and this can be helpful in finding out what has actually happened. You can also do this at the request of the employee or their accompanying person. This. are we looking to settle it informally? Yes. consistency and speed. Where possible. therefore. which itself is based upon UK law. This has advantages for all workplaces. Why have a procedure? A grievance procedure is used by employers to deal formally with employees' grievances. particularly where there might be a close personal relationship between a manager and an employee. What if the employee becomes upset or distressed during a meeting? Allow time for them to regain composure before continuing. Clearly. employees should aim to settle grievances informally with their line manager. © ABE and RRC .org. Most grievances are settled informally and quickly with a line manager. However.acas. Are there international standards for handling disciplinary and grievance matters? No. In the UK the Advisory. Avoid physical contact or gestures that could be misinterpreted or misconstrued as judgemental. What if further investigation is necessary? Adjourn the meeting. GRIEVANCE PROCEDURES What is a grievance? A grievance is a concern.

What should a procedure look like? Step 1: Step 2: The employee informs the employer of their grievance in writing. management may find it useful to have someone to take notes and act as a witness to the proceedings.) What happens in a grievance hearing? A grievance hearing is a meeting where an employer deals with a complaint about a 'duty owed by them to a worker'. A neutral mediator can help sort out a grievance and maintain working relationships. Introductions as necessary. It is likely to proceed as follows: Preparation  It should be held in private and without interruption. (Employees must take all reasonable steps to attend meetings.246 Discipline and Grievance Can both parties call on a mediator? Yes. The employer must invite them to a meeting and following the meeting inform the employee of the final decision. Care and thought should go into resolving grievances.  Hearing   Seeking resolution   Summing up © ABE and RRC . Make allowances for any reasonable 'letting off steam' if the employee is under stress. Mediation is often most effective if used early. What if more than one person brings the grievance? The employer may wish to consider whether it should be resolved with any recognised trade union. As with discipline.   Step 3:   The employer invites the employee to a meeting to discuss the grievance where the right to be accompanied will apply. The employee informs the employer if they wish to appeal. The employer notifies the employee in writing of the decision and notifies of the right to appeal. Employee re-states their grievance and usually how they would like to see it resolved. how they have been resolved and any follow up action that has been necessary. Management will normally already have a written statement of the grievance. This allows consistency of treatment. They are not normally issues calling for snap decisions and the employee may have been holding the grievance for a long time. and should find out before the hearing whether similar grievances have been raised before.

. with information on the right to appeal. general work record. DISCIPLINARY PENALTIES What should be considered before deciding any disciplinary penalty?      Whether the rules of the organisation indicate what the likely penalty will be as a result of the particular misconduct The penalty imposed in similar cases in the past The employee's disciplinary record. bearing in mind the time limits set out in the procedure. C. © ABE and RRC . It should be clear what the normal organisational practice is for dealing with the kind of misconduct or unsatisfactory performance under consideration. six months). The employer may take the opportunity to review rules and procedures and the organisation's communications with employees. What are the levels of disciplinary penalty? First formal action – unsatisfactory performance Employee should be given an 'improvement note' setting out:      The performance problem The improvement that is required The timescale for achieving this improvement A review date Any support the employer will provide to assist the employee. ignorance of the rule or standard involved or inconsistent treatment in the past. work experience.g. provocation. position and length of service Any special circumstances which might make it appropriate to adjust the severity of the penalty Whether the proposed penalty is reasonable in view of all the circumstances. Tell the employee when they might reasonably expect a response if one cannot be made at the time.  Communicate decision Confirm the decision in writing. dismissal.Discipline and Grievance 247 Adjourn  Management may need to explore possibilities with other managers about the resolution of the grievance. A copy of the note should be kept and used as the basis for monitoring and reviewing performance over a specified period (e. or they may themselves wish to take advice on how to proceed further. ultimately. This does not mean that similar offences will always call for the same disciplinary action. Relevant circumstances may include health or domestic problems. (The employee should be informed that the note represents the first stage of a formal procedure and that failure to improve could lead to a final written warning and.

any disciplinary action taken should be disregarded for disciplinary purposes after a specified period of satisfactory conduct or performance. This may also be the case where 'first offence' misconduct is sufficiently serious. Alternatively the contract may allow for a different disciplinary penalty instead. These sanctions may only be applied if allowed for in the employee's contract. For example. only to lapse very soon thereafter.248 Discipline and Grievance However. while a final written warning may remain in force for 12 months (or more in exceptional circumstances). a first written warning might be valid for up to six months. disciplinary suspension without pay. A record of the warning should be kept. Any penalty should be confirmed in writing. Warnings should cease to be 'live' following the specified period of satisfactory conduct and should thus be disregarded for future disciplinary purposes. 12 months and contain a statement that further misconduct or unsatisfactory performance may lead to dismissal. Where a pattern emerges and © ABE and RRC . Normal practice is for different periods for different types of warnings. if an employee's unsatisfactory performance or its continuance is sufficiently serious. a serious harmful effect on the organisation. Such a penalty may include disciplinary transfer. but it should be disregarded for disciplinary purposes after a specified period (e. for example.  Final written warning   Dismissal or other penalty   What are the time limits for warnings? Except in agreed special circumstances. and the procedure and time limits for appeal set out clearly. but would not justify dismissal. six months).g. demotion. If the employee has received a final written warning further misconduct or unsatisfactory performance may warrant dismissal. The warning should also inform the employee that a final written warning might be considered if misconduct is repeated. for example. Such a warning should normally remain current for a specified period.. First formal action – misconduct  Employee should be given a written warning setting out the nature of the misconduct and the change in behaviour required. it may be justifiable to move directly to a final written warning. loss of seniority or loss of increment. If the employee has a current warning about conduct or performance then further misconduct or unsatisfactory performance (whichever is relevant) may warrant a final written warning. because it is having or is likely to have. This period should be established clearly when the disciplinary procedure is being drawn up. There may be occasions where an employee's conduct is satisfactory throughout the period the warning is in force.

What if an employer dismisses an employee? Employees should only be dismissed if. Details of any disciplinary action should be given in writing to the employee as soon as the decision is made. will warrant dismissal without the normal period of notice or pay in lieu of notice. hearing and appeal) should be used before deciding whether to dismiss. The employee has the right to be accompanied at any such meeting. How should an employee be informed of a disciplinary decision? As soon as possible and include the reasons for the decision. physical violence. the results of any further investigations and what action is being taken under the disciplinary procedure. Unless the employee is being dismissed for reasons of gross misconduct. although such a list cannot normally be exhaustive. Can an employer dismiss without notice? Employers should give all employees a clear indication of the type of misconduct that. verging on gross misconduct. A dismissal for gross misconduct should only take place after the normal investigation and disciplinary meeting to establish all the facts. The period that any warning is to remain in force should be clear. the types of offences which fall into this category of 'gross misconduct' should be clearly specified in the rules. as well as the value of any non-cash benefits such as a company car. as should the possible consequences of any further misconduct or continuing unsatisfactory performance. The written notification should specify:   The nature of the misconduct Any period of time given for improvement and the improvement expected © ABE and RRC . theft or fraud but may be determined by the nature of the business or other circumstances. The employer should retain a copy of the notification. in the light of the requirements of the employer's business. Dismissal must be reasonable in all the circumstances of the case. the full three-step statutory procedure (written statement. the employee's disciplinary record should be borne in mind in deciding how long any warning should last. making any further working relationship and trust impossible. medical insurance and any commission that the employee might otherwise have earned. The employee should be told of the complaint and be given the opportunity to state their case. So far as possible. Exceptionally. they should receive the appropriate period of notice or payment in lieu of notice. conduct or performance does not improve to the required level within the specified time period. despite warnings. Law in the UK lays down minimum periods of notice. It is normally restricted to very serious offences. that it cannot be realistically ignored for future disciplinary purposes. No dismissal should be instant.Discipline and Grievance 249 there is evidence of abuse. Except in very exceptional circumstances. In such circumstances it should be made very clear that the final written warning can never be removed and that any recurrence of serious misconduct will lead to dismissal. These instances should be very rare. as it is not good employment practice to keep someone permanently under threat of dismissal. there may be circumstances where the misconduct is so serious. for example. What is gross misconduct? Gross misconduct is an action generally seen as serious enough to destroy the contract between the employer and the employee. Such payment should include payments to cover pension contributions and holiday pay. as in any other disciplinary meeting.

who was not involved in the original meeting or decision. how long it will last The likely consequences of further misconduct The timescale for lodging an appeal and how it should be made. its outcome and any subsequent developments. Does an employer have to give written reasons for dismissal? Yes – within 14 days. © ABE and RRC . These records should be confidential. detailing the nature of any breach of disciplinary rules. that person should act as impartially as possible when hearing the appeal and should use the meeting as an opportunity to review the original decision. has an opportunity to comment on any new evidence arising during the appeal before any decision is taken.250 Discipline and Grievance    The disciplinary penalty and where appropriate.    What about a small organisation where there is no one else to hear an appeal? In small firms. APPEALS PROCESSES What should be in an appeals procedure? It should:    Specify a time-limit within which the appeal should be lodged (usually five working days) Provide for appeals to be dealt with speedily. particularly those involving suspension or dismissal Wherever possible. the date action was taken. it may not be possible to find someone with higher authority than the person who took the original disciplinary decision. Some disciplinary procedures provide for someone outside the organisation to hear an appeal. D. Spell out what action may be taken by those hearing the appeal Set out the right to be accompanied Provide that the employee or a companion. if the employee so wishes. An employee in the UK has access to personal and personnel records about them. In each particular case copies of the relevant records should be given to the employee concerned without him or her needing to request them (although in certain circumstances some information may be withheld. What disciplinary records should an employer keep? Consistent handling of disciplinary matters will be difficult unless simple records of earlier decisions are kept. for example to protect a witness). The employer may wish to require the employee to acknowledge receipt of the written notification. whether an appeal was lodged. provide for the appeal to be heard by someone senior in authority to the person who took the disciplinary decision and if possible. If this is the case. the action taken and the reasons for it.

If this is the case. if it becomes apparent that the previous decision was not soundly based. Can an employee take the appeal to an external tribunal? They can in the UK if they believe they have been unfairly dismissed or wish to claim compensation. consider the implications for training for managers.   Thoroughly explore the relevant issues Pay particular attention to any new evidence that has been introduced and ensure the employee has the opportunity to comment on it. Confirm it in writing Can a previous decision be overturned? Yes. clarification of rules or other implications. © ABE and RRC . how it will be conducted Explain the powers the person/people hearing the appeal (e. to come to different conclusion to first hearing or to vary any penalty imposed. if this is the case. What if an employer has failed to follow their procedure? An employment tribunal will find a dismissal unfair if the statutory procedure has not been followed where it applies. In such a case compensation may be reduced. the individual's last day of employment. Grounds of appeal Hearing Ask the employee why they are appealing. What if the employee had failed to cooperate in the procedure? This can happen (for instance they have failed to attend the disciplinary meeting without good cause). To consider the decision.g. This does not undermine authority but rather makes clear the independent nature of the appeal.   Inform the employee of the results of the appeal and the reasons for the decision Make it clear. They may also increase compensation for the employee by between 10 and 50 per cent. Summarise Adjournment Announce result Summarise the facts. The tribunal must normally receive such complaints within three months from and including.Discipline and Grievance 251 How should an appeal hearing be conducted? Introduce     Welcome and introduce those present Explain their roles as necessary Explain purpose of the meeting. that this decision is final.

to discuss such matters as staffing levels. company expansion or rationalisation plans. Should an employer have a redundancy policy? There may be occasions when the circumstances of a particular redundancy can be met by an ad hoc approach. trading position and future plans. This is particularly important where there are no recognised trade union or employee representatives. THE RIGHT TO BE ACCOMPANIED Who can accompany an employee in a disciplinary or grievance hearing? Although the choice is up to the employee. F. works council or other similarly representative body.252 Discipline and Grievance E. It is important to ensure that these are fully understood by all concerned and that uncertainty about future employment is minimised. has ceased or diminished or are expected to cease or diminish. or intends to cease. it will be prudent to consider the establishment of a formal procedure on redundancy before redundancies occur. Such a committee would normally meet regularly and consider information on the company's current performance. to enable trade union or employee representatives to monitor the need for changes in the size of the labour force. or intends to cease. However. Should an employer consult when drawing up a redundancy procedure? Management is advised to consult recognised trade unions or employee representatives about the staffing implications of any measures designed to improve efficiency. The accompanying person can address the meeting but not answer questions on behalf of the worker unless the employer’s side agrees. It is also good practice to provide appropriate information for individual employees. to carry on the business in the place where the employee was so employed. this could be done through a joint consultative committee. or The requirements of the business for employees to carry out work of a particular kind has ceased or diminished or are expected to cease or diminish. © ABE and RRC . REDUNDANCY What is redundancy? Redundancy is dismissal which is not related to the conduct or capability of the individual or to retirement or resignation but because:     The employer has ceased. Where they exist. or The employer has ceased. it can usually be only a fellow worker or a trade union official (not necessarily from within the organisation). to carry on the business for the purposes of which the employee was so employed. in the interests of good industrial relations. or The requirements of the business for the employees to carry out work of a particular kind. in the place where they were so employed.

What steps should an employer take if considering redundancies? The employer must follow a standard dismissal procedure involving written notification. Step 1: Step 2: Write to the employee notifying them of the reason for the redundancy and invite them to a meeting to discuss the matter. job losses avoided or reduced and the process of change eased. What can an employer do to avoid redundancies? Management is responsible for deciding the size and most efficient use of the workforce. What can be done to minimise or avoid compulsory redundancies?     Natural wastage Restrictions on recruitment Retraining and redeployment Reduction or elimination of overtime © ABE and RRC . Effective human resources planning can help to determine existing and future staffing needs. Such as relocation expenses and outplacement help. The intention to maintain job security wherever practicable. By carefully developing a strategy for managing human resources.   Step 3: Hold a meeting with the employee to discuss the redundancy.Discipline and Grievance 253 What should be in a redundancy procedure? Introductory statement of intent Consultation arrangements Measures for minimising or avoiding compulsory redundancies Selection criteria Severance terms Other facilities Appeals What if an employer does not follow their procedure? Failure to follow appropriate and reasonable procedures could lead to employers being liable for claims of unfair dismissal even if they have potentially good grounds for dismissal. With any trade union or employee representatives. Hold an appeal meeting (if the employee wishes to appeal) at which the employee has the right to be accompanied and inform the employee of the final decision. In turn. hearing and appeal. this can lead to an improvement in job security for employees and to the avoidance of short-term solutions that are inconsistent with longer-term needs. at which the employee has the right to be accompanied Notify the employee of the decision and the right to appeal. disruption to company performance can be minimised. Such as offering redeployment.

Agreement with trade union or employee representatives should be sought before there is any departure from an agreed procedure and where possible. regardless of company size and the number of employees to be dismissed. Any agreed change to a redundancy procedure should be made known to all employees and incorporated in the procedure. it must not be pretence. In the UK there are statutory minimum time limits. this should also be specified.254 Discipline and Grievance   Short-time working or temporary lay off (where contracts allow) Early retirement or voluntary redundancy. The procedure should be reviewed from time to time to ensure that it is operating fairly. the procedure should specify the circumstances in which departure may be considered necessary. Who should the employer consult? In all organisations. to take account of changing economic circumstances. The consultation process should precede any public announcement of the redundancy programme. What about consulting directly with the staff affected? Employees threatened with redundancy should be are made aware of the contents of any agreed procedure and the opportunities available for consultation and to make representations. but a complaint may be made to an employment tribunal. What should the consultation include?       Reasons for the proposals Numbers and descriptions of employees potentially affected How employees will be selected for redundancy How the dismissals are to be carried out Redundancy payments Other provisions such as redeployment and outplacement. It must be undertaken by the employer with a view to reaching agreement with appropriate representatives on these issues. © ABE and RRC . even when the employees to be made redundant are volunteers. Why is an employer consulting? To share the problem and explore the options: ways of avoiding the dismissals. Where provision is made for the procedure to be applied flexibly. employers should consult with appropriate trade unions or employee representatives. Notices of termination should not be issued until consultation has been completed. How does an employer decide who should be made redundant? It is especially important to ensure that the balance of skills and experience within the remaining workforce is appropriate to the company's future operating needs. reducing the number of employees to be dismissed and mitigating the effects of dismissals. When should the employer consult? In time to be completed before any redundancy notices are issued. What would happen if an employer failed to consult? Each case is judged on its particular circumstances employers.

© ABE and RRC . D.255 Study Unit 12 Employee Communication. C. Communication in Organisations What is communication? What are the purposes of communication? What channels of communication exist in organisations? The Communication Process What are the stages that communication goes through? What does the sender do? What happens in transmission? What are the issues at the receiving end? So where can communication break down? Guidelines for Effective Communications Methods of Communication What sorts of written communication are there? But there are other forms of visual communication apart from the written word How do we select an appropriate method of communication? Why is electronic communication important? Effective Communication What are the rules for making a formal presentation? What are the rules for writing an effective report? What should managers do to be effective listeners? What is a team briefing? What is a staff suggestion scheme? Are company newsletters a valuable way to engage staff? Negotiation What is negotiation? Alternatives to negotiation What are the skills needed for negotiating? What phases does negotiation go through? Key principles of negotiation Key points of negotiation technique Page 256 256 256 258 263 263 264 265 265 265 266 267 267 268 270 272 272 272 275 276 276 277 279 279 279 280 281 282 285 285 B. E. Involvement and Engagement Contents A.

COMMUNICATION IN ORGANISATIONS What is communication? It is the process of transmitting or exchanging information and instructions. describing events. Involvement and Engagement A.  Expressive This function can best be described as: “The way in which one expresses one’s feelings towards another. giving explanations. not only of factual information but feelings and ideas. questions and explanations are all examples of the kind of material that flows through the communication system of an organisation.” For this purpose. show dislike or apportion blame. Notice that to qualify as communication there has to be understanding at both ends of the process.256 Employee Communication. communications may express praise or admiration for other people. reports. it may be persuasion or advice.g. information to another individual or group and. do it faster or slower). evokes a response. they may express sympathy or understanding. orders. where necessary. Communication is often intended to evoke a particular response and is effective only when it does. “Communication is the transfer of information from one person to another with the information being understood by both the sender and the receiver”. A more detailed definition is: Communication is the activity whereby an individual or group conveys. The information may be facts. making reports. This type of communication may take the form of an express instruction or order. consciously or unconsciously. © ABE and RRC . The recognition of unconscious as well as conscious communication. the receiver would be expected to change their way of thinking. Communication can involve the exchange. whenever we interact with others we are communicating. the purposes of communication come under three headings:  Informative This is probably the first purpose that comes to mind and one we can readily understand: giving facts and figures. feelings or ideas. perhaps of their performance or behaviour. not just by or to individuals. do something or not do something. Koontz makes a valuable addition to the definition of communication when he states: What are the purposes of communication? In very broad terms. (Adapted from Eric Moonman “The Manager and the Organisation”) You should note the key points of this definition:     Communication can be by or to a group. Whatever the form. in fact. you expect that the receiver will change their behaviour (e. Alternatively.  Directive As a result of this type of communication. the purpose is to get the recipient to take a particular action or line of thought. produce that response. Ideas.

Involvement and Engagement 257 In all cases. © ABE and RRC . e. All of these broad purposes are easily identifiable in organisations but to appreciate the importance of good communication for organisations. grievance). governments. you are telling other people what your feelings are towards them or about them. or something connected with them. organisations need effective systems and channels of communication.g. which will give early warning of problems. sales figures may influence the level of production when communicated. essential:          To convey information about what is happening.     To establish links between an organisation and its environment – An organisation needs a two-way flow of information with sections of its environment. provide the benefit of the skills and creative ability of staff and encourage cohesion and co-ordination between the various sections of the organisation. Integrating the functions of management to ensure everything it does pulls in the same direction. we must grasp the functions and goals that communication fulfils for them.g.Employee Communication. To create the relationships necessary to enable people to work together successfully and to achieve the objectives of the organisation. especially in specific situations (e. To provide the means for upward communication of feedback from staff to management. both inside and outside the organisation. The functions of communication include:  To bring about change – Certain information is passed from one section or level of an organisation to effect change in the actions of the receivers. towards achieving organisational goals: [(iii) = functional integration]. To provide explanations about the nature and implications of current (and foreseen) problems and to explain changes necessary. such as their work or behaviour. confirm or modify the attitudes of members towards the corporate identity. To facilitate these functions. if existing behaviour is achieving objectives the message may mean: “Don’t change a winning game”. etc. with customers. procedures and modes of behaviour. To create. suppliers. To inform staff of the organisation’s policies and objectives. To stimulate action. To sustain stability – Information may be passed so that activities are continued in the same way. To enable collective decisions to be made and render them acceptable. Linking the sections and departments of the organisations to each other: [(i) + (ii) = structural integration]. e. To lead people into a common purpose – Chester Barnard argued that this linking to achieve objectives was the most important function of communication.g. To integrate the activities of management – This is a wide-ranging function in that it makes communication responsible for: (i) (ii) (iii) Linking the levels of the organisation together. or the corporate image. To lay down rules and regulations governing the organisation. the community.

Involvement and Engagement What channels of communication exist in organisations? All organisations. decisions have to be broken down to explain just what it is that has been decided and what the implications of this are for the level concerned. committee procedures. therefore.e. The nature of messages. They may be set down in the organisation structure. interpret and develop in more specific form and then pass on the information. customers and others necessary for the running of the business. This is so. these lines of communication are officially recognised and they are those which members of the organisation are expected to use. details of requirements for resources. Each level of the organisation must receive. If the instructions are too brief they may not carry the exact meaning of what is required of the subordinates. a private or public enterprise. This process can present difficulties for communication systems. Downward vertical communication follows the line of command: decisions made at the top have to be communicated and explained to the lower levels. problems being experienced. Communication in multinational companies. government and other large organisations tends to be very complex. or the authority and responsibility allocated to particular jobs or sections. whether the organisation is a commercial body. The messages flowing upwards are not orders or instructions. Problems of communication grow as organisations become more complex. Another problem is the time it takes for instructions to reach the bottom of the organisation and the accuracy of the instructions. The formal lines of communication are those that are officially recognised and given official approval. i. etc. the implications of the data have to be abstracted and passed on upwards. in line with organisational goals but as these decisions become translated into action they must be detailed and specific. the flow of information between levels of authority in the organisation. Although not orders. Broad policies become converted into orders and instructions. (a) Formal internal communication This refers to the flow of information within an organisation. a trade union or a social organisation. irrespective of type and size. when the flow is from lower levels back to the top we talk of upward vertical communication. They must also record transactions in the books of the company. nationalised industries. We have seen that decisions taken at the top of an organisation are broadly stated policies. In all cases. if they are too detailed they may be so cumbersome that subordinates are confused. There are several pathways of communication that can occur within an organisation:  Vertical Communication Perhaps the most obvious is what is called vertical communication. so clearly there is considerable room for error. e. Upward vertical communication involves the reverse of the downward process. What starts as detailed specific information at the lower levels has to be compressed into broad policy terms.g. they are likely to consist of information on the progress being made at the lower levels. the rules and procedures for operation of the organisation. The owner of a one-person business must communicate with suppliers of goods. have a need for effective communication.258 Employee Communication. changes as they move down the organisation. When the flow is from the top levels to lower levels we talk of downward vertical communication. these upward-flowing messages may exert pressure on management and affect policies because they reflect grassroots findings within © ABE and RRC .

i. People do not like to be the bearers of bad news to their superiors. Involvement and Engagement 259 the organisation and management must take account of the attitudes of people and groups at the lower levels. Indirect horizontal communication – where communication is between one level in one department and a different level in another.Employee Communication. In Figure 12. The upward flow of information also faces problems. there are considerable risks in this process that something of importance may be filtered out. key details abstracted and then the reduced message passed on.1: Horizontal Communication Department A Department B Top Management Middle Management Assistant Management Supervisors/ Team Leaders Operational staff Direct Horizontal Communication Top Management Middle Management Indirect Horizontal Communication Assistant Management Supervisors/ Team Leaders Operational staff © ABE and RRC . In our example it is between middle management in Department A and foremen and supervisors in Department B. Sometimes any criticisms and problems tend to be watered down as the information proceeds. Direct horizontal communication – where the flow of information is between individuals of similar rank or position. This form of communication may cut across the levels of authority.1 you will see two forms of horizontal communication illustrated. between individuals in different departments or divisions within the same organisation. In our example it is shown between middle management levels in the two departments but it could be between any level in Department A and the similar level in Department B. The time element is also crucial. in different departments.  Horizontal Communication Another important internal communication flow pattern is horizontal communication. because those at one level do not wish to antagonise the people above them in the organisation. At each stage. Figure 12. detailed specific data has to be compressed.e.

© ABE and RRC . It can be useful for the organisation if it wishes to spread information informally. formal and informal. problems or differences of opinion are resolved more quickly and in good spirit Changes. Management will reap the benefit of the creative ability and experience of subordinates Management will receive early warning of potential problems or trouble areas Full scope is given to subordinates to participate in the consultative and decisionmaking processes. e. to test the reaction of workers without making an official announcement or order. Involvement and Engagement Before we move on to consider informal communications. act against the best interests of the organisation) by making known information which should have been kept confidential. adequately and in good time.e. secretaries have access to a great deal of information. anyone who ignores informal communication is likely to get into difficulty. Benefits of good downward communication (i) (ii) (iii) (iv) Everyone is fully aware of the organisation’s aims and objectives Staff are aware of the content and consequences of policy directives Staff properly understand changes in specific responsibilities or working instructions Employees are consulted. in systems or procedures that involve more than one section or department can be discussed. The possession of information that is not yet known to other people can make an individual socially important in the eyes of colleagues. There is a fully informed management team Adequate co-operation and joint action is achieved more easily The risks of damaging inter-section or inter-departmental rivalry are reduced Genuine difficulties. there is in every organisation an informal flow of information and opinion. about changes that are likely to affect them at work. The grapevine can speed up or spread information widely within the organisation. in the form of gossip.g. the popular term for which is the grapevine. agreed and implemented more easily and successfully. In your job from where have you learned most of your useful knowledge and skills: formal or informal communication? There are certain key positions in the grapevine structure and many of these are held by people in relatively low organisational positions. it can also be dysfunctional (i. it is worth summarising the benefits that flow from effective formal channels. such as changes in working conditions or prospects of career advancement. or which is incomplete or distorted. That said. Individuals concerned with the formal passing on of information may also pass along at least part of it to people they know informally within the organisation. However. Benefits of good upward communication (i) (ii) (iii) Benefits of good horizontal communication (i) (ii) (iii) (iv) (v) (b) Informal Internal Communications Whereas vertical and horizontal patterns of communication are the formal paths along which information can flow. say.260 Employee Communication.

etc. For example. Let us consider some examples. People will exchange information and give their views. and so on.  Some members of a committee may meet together. a manufacturing firm will have communications with its suppliers of raw materials and spare parts and with all its customers (e. The subject and the line of communication may be within the authority of the people concerned but the actual manner or circumstances may not be exactly as officially laid down.g. © ABE and RRC . But communication is also involves others. As organisations grow the number of communications links with the outside environment increases. informal discussion with their manager about future prospects. As members of the committee. before the official committee meeting. Organisations have communications links with both their input and output connections. to have an (informal) discussion on the matters to be discussed and perhaps even to agree on how subjects will be approached. For example. though. an order received from a customer (external communication) has to be processed and executed within the organisation (internal communication). They are usually face-toface. is acceptable and may have the following advantages:       Informal executive agreement on a problem or idea can promote rapid and effective action at top management level Disputes can be resolved without involving higher management levels Informal action or decisions usually tend to be more rapid than the. A member of staff may wish to have a private. outside the organisation. Involvement and Engagement 261 When we consider informal communication. it is often found that a considerable amount of communication takes place informally and provided it does not upset formal systems and arrangements. have to be sent to the customer (external communication). wholesalers and retailers) who handle its products. A group of people may happen to meet in the canteen and a discussion on a subject of common interest about work or the organisation will develop. You may question whether informal lines of communication are desirable and whether they are useful. invoice. Informal communication takes place when people get together and discuss a subject of common interest. often cumbersome. who will speak. it would be wrong to write-off everything as simply part of the grapevine. There is much more to it than that. It is important that the external communication system should be integrated with the internal system. There will be no minutes or record of their discussion. then the documents of sale.    These are just a few examples of informal communications. However. These discussions may well be within the authority of the participants but the actual circumstances may not be as officially prescribed and to that extent the communication is informal. process of official decision-making Points can be made that would be too delicate or controversial if made officially Early warning may be given of pending or potential problems or trouble Good ideas are often first put forward informally.Employee Communication. they are authorised to discuss the subjects of the committee but they hold this informal discussion to prepare the way for the official meeting.

Accounts to the Department of Trade and Industry. in fact. In this way. is accurate and is up-to-date. your potential customers must be made aware that you exist. VAT information to the Customs and Excise authorities and many more. prices and terms of business. a structural © ABE and RRC . prices. invoices) is supplied quickly. What has to be divulged can be divided. Involvement and Engagement The quality and quantity of an organisation’s external communications are important for the following reasons. To government departments. may depend on the standard of communication. Successive Companies Acts have contained much of the provision in this respect. whether good or bad. If you don’t tell them. To the public – Since the 1850s there have been laws which require companies to publish details of their financial and trading positions to protect investors and possible suppliers. (ii) (iii)  To increase and improve business For the majority of organisations. merely through drinking their particular soft drink.  To meet statutory requirements Legislation now compels organisations to disclose certain information. you will not get their business! Business improvement will come from good communications. which will include not only advertising or public relations but also the way in which you deal with orders and ordinary routine correspondence. It is the image the company or organisation wants to sell to others. to attract and retain suitable staff against fierce competition from other organisations. agencies and other official bodies – Many organisations are only too well aware of the number and complexity of official returns. Corporate image projection is achieved by using external communications.262 Employee Communication. or with whom it comes into contact. The image can also be linked to the product.  To improve the organisation’s “image” The people with whom an organisation deals. They must know the products or services you offer. availability. That image. etc.g. The image will be improved if: (i) (ii) (iii) (iv) Telephone calls are answered promptly and courteously Correspondence is handled efficiently Letters are neat and well written Information (such as catalogues. the Coca Cola image of young people belonging to a worldwide club. their suppliers and customers are external to the business and the level of business must be directly related to the level of external communications with those people. For example. Examples include Tax Returns to the Inland Revenue. will have an image of that organisation. However. into the following areas: (i) To recognised trade unions – The Employment Protection Act 1975 requires employers to disclose such information to the representatives of recognised independent trade unions as it would be good industrial relations practice to disclose. it is closely linked with the corporate culture within which employees work. Shortages of young people and skilled workers make organisations more attentive to their image and culture. e. broadly. questions can be raised as to whether the corporate image projected via the media and other means of external communication is.

THE COMMUNICATION PROCESS What are the stages that communication goes through? To understand the nature of the problems facing communications systems in organisations. This process is concerned with the transmitting and receiving of messages. When an organisation decides upon the pattern for a given type of communications network. This view argues that a network should contain only those individuals or groups who need to have a given type of information to achieve their objectives.Employee Communication. As with our own image projection. e. or in symbols but in all cases the objective is to transfer the ideas of the sender accurately to the receiver. e. © ABE and RRC . it can draw on the “need to know” concept. The intention was to create a favourable image but unfortunately. using various communication methods and media to achieve the desired effect. In this diagram we see the three key elements in communications: the sender. we all project an image of ourselves to others. the message. In a way. and the receiver. a banana skin is often lurking nearby. Involvement and Engagement 263 or just a cosmetic exercise. we “market” ourselves in day-to-day situations.g. as organisations market themselves through the image they project and the culture they adopt. Communications networks are the patterns of individuals or groups who are the transmitters and receivers of information in a given organisation. If the latter. external factors can sometimes turn that into an unfavourable image. these messages may be in the form of written or spoken language. some sorts of information need to be disseminated widely and this results in a large. confidential financial information is made available to very few individuals. At the other extreme. Is communication always in a straight line? Another way of classifying communications is into types of networks. Each projected an image of that industry via television and newspaper advertising.g. we need to study what actually takes place in the communication process. ready to show us up! Organisations threatened with being taken over often project favourable images of themselves to shareholders and unfavourable images of the prospective buyer. Having said that. complex pattern. then employees attracted to the organisation by its image will be disillusioned upon finding out the reality and more disillusioned than if not attracted by the image in the first place. Figure 12. advertisements for water privatisation that coincided with a drought and fears over water safety. Think of the advertisements for shares in the former nationalised industries when they were being privatised. Some patterns of communication are restricted. B.2 shows the simple mechanics of the communications process.

be clear in their own mind just what it is they mean to say. The sender must have some idea of the frame of reference of the recipient. nor should they insult the receiver by pitching it at too low a level of comprehension. e. In communications. or written clearly. if the medium is written form? © ABE and RRC . When a sender codes a message they need to pitch it at the level of understanding of the receiver and not pitch it so high that the receiver fails to grasp its meaning. email. the most frequently used symbols are words and figures. the sender has a responsibility for the quality of transmission of the message. or bodily movements and signs. They must clarify their ideas. the sender has to decide which medium to use.g. directly or via a third party. telephone.g. a written memo may be delivered by hand to be absolutely sure that it is received (the channel selected is hand delivery). i. memo. tone of voice or facial expressions can also convey certain attitudes of the sender of the message. the sender must have a good appreciation of the receiver and their circumstances. e. The sender must also decide on the channel to use to send the message.2: The Communication Process Environment of channel Channel of message Sender Message transmission Receiver Codes ideas into symbols and transmits Medium of message Receives symbols and decodes into ideas Feedback from receiver Environment of feedback What does the sender do? The sender has certain functions to perform if the communications process is to work smoothly. encoding. have they spoken clearly if the medium is face-to-face. letter or face-to-face conversation. To succeed. e. transmission. Involvement and Engagement Figure 12. Next they must code their ideas into the language or symbols they intend to use. reception or decoding? Having decided on appropriate symbols. The sender must decide which symbols to use for their message.e. Think of an occasion when a message you sent was completely misinterpreted by the recipient.264 Employee Communication. Finally. In close contacts.g. The medium is the means of transmission. to choose symbols that will be understood accurately. The channel is the route the message will take to reach the receiver. bearing in mind that their main objective is to transmit the ideas clearly to the receiver. What went wrong.

the idea or image in the receiver’s mind should be very like the one in the sender’s mind. a wrong selection can impede effective communication. putting it in writing instead of saying it) or changing the route if there have been problems with a given channel. we may have the problem of underload. So where can communication break down? Problems in the process will mean ineffective communication or no communication at all. An email sent down a chain of command will be corrupted as each successive stage of management reinterpret or revise the message (an age old problem often termed ‘Chinese whispers’). The message may not get through to the receiver.g.Employee Communication. e.e. who feel that their talents are being underused. to know where these obstacles to good communication lie. Only when the sender receives positive feedback can it be assumed that the transmission of the message has been effective.g. the oral message follows the route of sound waves through an environment of noise from other quarters. Involvement and Engagement 265 What happens in transmission? Having been coded from the ideas of the sender into symbols (words. The content of a message should be adequate and appropriate. There is plenty of scope for transmission problems. (a) Networks We have already stated that the extent and pattern of a communications network should embrace all those who need information and feedback to achieve their objectives. The biggest problem with decoding is that the recipient will interpret the symbols using the own frame of reference. the message needs to be decoded. either because it is lost in transit or because the receiver is effectively ‘switched off’ (email wrongly addressed or deleted without reading. clearly received and is pitched at the correct level of understanding. From this feedback the sender will usually be able to tell how their message has been understood. Underload gives rise to boredom and dissatisfaction in receivers.g. oral or visual. Where speed is low and the information is of a simple nature. or the written memo goes through the physical environment of the organisation as it moves from one office to another. Messages are also subject to interference. a situation where the receiver could handle a higher quality and quantity of information. written. ascertaining just who should and who should not be included in a network requires care and constant updating. where the flow of information is so great in quantity. What are the issues at the receiving end? Having been received. However. Normally. (c) Medium and Content It is crucial that management select the appropriate medium. If understanding is poor they will have to retransmit. explaining in a more simply) or changing the medium (e. letter lost in the post etc. It is important.g. Communications experts offer the following guidelines: © ABE and RRC . figures. If the message has been correctly sent.). etc. In contrast we have the problem of overload. e.) the message is taken up by the medium and passed along its selected route – transmission. (b) Load The concept of load is related to the speed and nature of information flow. what they think the message means rather than what was originally intended by the sender. possibly altering the level of understanding (e. therefore. complexity or both that the system cannot cope. the receiver will send back a message to the sender to confirm receipt of the sender’s communication. i. turning the symbols back into ideas. The route of a message involves a particular environment.

complicated messages lose their effectiveness because the receivers lose interest and concentration. apparently. write or do? Guidelines for Effective Communications We can summarise with the following guidelines for good communications:   Include everyone in the network who should be included. “There are far too many managers who are secretive about their intentions and who feel that there is some sort of loss of dignity or face – or even power – in making sure that. A manager must learn two things from these points: (i) (ii) They must take care that their own preconceptions do not unconsciously influence them in framing or interpreting a communication. Use a direct style and simple effective words or symbols. to reduce load at heavily committed points. have subordinates unwilling to communicate with them for. “Action was taken this morning” (passive). (Research shows that a fair proportion of the managers who pride themselves on the “ever-open door to my office”. so that messages can be dealt with in sequence (ideally this should give priority to urgent messages). Long. perhaps. Make messages brief. good reason. do not say. From knowledge of them as individuals.  © ABE and RRC .266 Employee Communication.)  Preconceptions Preconceptions on the part of the transmitter and/or the receiver are a common source of misunderstanding. what will their “inner selves” read into what they say. of their temper. in fact. Status considerations apply. Subordinates may be unwilling to communicate upwards from fear of their senior’s attitudes: fear. (d) Interpersonal problems Some of the most serious barriers to effective communication arise from human attitudes and behaviour:  Lack of Willingness to Communicate Willingness to communicate in the first place may not exist. Rosemary Stewart stresses that. the manager must allow for their subordinates’ preconceptions. It is direct because it shows people initiate actions and it is honest because it states just who took action. or some supercilious trait of the “You’re not paid to think!” type. The wellorganised communications system solves the problems of overload and underload. they do not see and interpret things in the same way. but “I took action this morning” (active expression). perhaps linked with security ones. simplicity is preferable to complexity.g.e. Involvement and Engagement     Never use a long word where a short one will do Avoid jargon if an everyday English word will give the same meaning If you can leave a word out do so Never use the passive tense where you can use the active. all down the line. if our sole possession of information helps us to feel irreplaceable. i. The reason for using the active is that it is more direct and honest. especially where people have different backgrounds and experience. Solve the problem of load either by redesigning the organisation. everyone knows what they are about” wrote Roger Falk in “The Business of Management”. or arrange a system of queuing. e.

Send only what needs to be communicated.       Email Diagram Text message Circular Notice board Static advertising Audio Mixed medium What sorts of written communication are there?     Email Webpage Informal note – This would be sent to close working colleagues Letter – This would normally be used for external communications.  C. Faster does not always mean better communications. The organisation should encourage two way communications. the memo is used internally. The good message has clear. to suppliers or customers. Be swift but not over hasty. there should be no unnecessary messages.g. Involvement and Engagement 267     Be accurate and precise. Be selective in your message transmissions. speed should not be bought at the price of accuracy.Employee Communication. Minimise distortion in communications by using as short a chain as is practicable for a given message. The receiver should not only feed back to confirm receipt of a message but should also request clarification or ask any questions they feel necessary. METHODS OF COMMUNICATION There are two main channels for the transmission of information – visual and audible – and combinations of the two. © ABE and RRC . Visual              Letter Book or manual Newsletter Memo Company annual report Visual website Mime! Telephone Video and television DVD Face-to-face meeting Face-to-face meeting Mixed medium website (either a fixed site or a dynamic one such as a social networking site)       Audio recording Quality circle Team briefing Video conference Video conference MBWA (Management by walking about). accurate facts rather than vague estimates. e.

with the chance to amend first thoughts and easier comprehension through reflection Wider dissemination is easy.g.g. radio. email is free. specialist skills. rarely done thoroughly. etc. e. e. preparation. newspapers. postage. e. permanency can be a drawback. website etc. e.g.  Face-to-face communication The main forms of face to face communication are: (i) (ii) Planned formal talk – A prepared talk on a given topic Unplanned informal talk – When we meet people in our regular activities within the organisation.268 Employee Communication. promotion. appointments. a photograph attached to an email or text message for example. order forms for suppliers Notices – These are used to disseminate information to large numbers of people in the organisation.g. through printing and duplication processes. Involvement and Engagement      (a) Forms – Many internal and external communications are carried out on pre-printed forms. in particular communication with absentees. often placed on notice boards for all to read Reports – These are more formal and aim to be a full and accurate summary of a particular topic of interest within the organisation Press releases or media news – These aim to convey information about the organisation to the public via the media. counselling (iii) © ABE and RRC . Cost of labour. or even instead of written text. This may include management by walking about (MBWA) where a manager (often a senior manager) allots time to spend on the shop floor talking informally with staff at their places of work Interviews – These may be arranged for many purposes. These can be used alongside. printing. amending or cancelling written instructions when they become out-of-date is a formidable task. those away sick Permanency is straightforward. assuming there is a sound filing system Once set up. Advantages of written communication     Careful compilation. an error means full circulation of all addressees again Finally. Training manuals and rulebooks – These set out the rules and regulations of the organisation. A mechanistic approach to organisation management will be assumed to exist if “putting it in writing” seems to be policy in the organisation and there can be excessive formality “Paper breeds paper” Obscurities are harder to clear up. TV. (b) Disadvantages of written communication      But there are other forms of visual communication apart from the written word Yes and technology has caused an explosion in the use of images. diagrams and video clips. Attachments to emails have made merging forms of communication much easier.

committee meetings and quality circles. while a similar feedback from the listeners often conveys a good idea of their reactions. appearance and facial expressions often convey meaning. hand. Body language allied with face-to-face transactions can often reveal much about what is not said and give a more revealing and reliable message. We can interpret what is communicated in one particular way. the meaning is turned upside down. to puzzle out what the transmitter really means. Impermanence can be a drawback if. or some aspect of a complicated topic not clarified When oral communications are conducted face-to-face. Let us consider a few examples. if a severe reprimand. Directness – The personality of each participant is brought to bear. agreement Frown – anger. There is no draft of the message to be pondered over and given to an assistant for their fresh mind to seek possible double meanings or obscurities. Few of us can weigh words and phrases as carefully in oral communication as we do when dictating a letter or memorandum. that there is an alternative meaning. accompanied with a harsh tone is delivered but is concluded with a wink. For instance. body language plays a large part in the transactions. for questions can be raised and answered Immediacy is both an advantage and a disadvantage. Our movements. the person who is speaking can emphasise or give additional information. Thus. (a) Facial Expressions (i) (ii) (iii) (iv) (v) (b) (i) (ii) (iii) (iv) Raised eyebrows – surprise Lowered eyebrows – uncertainty Smiles – pleasure. there is an argument about what was said. Advantages of face-to-face communication (i) (ii) (iii) (iv) Disadvantages of face-to-face communication (i) Perception of meaning is likely to be less accurate. as the receiver has little time to brood over the precise meaning of words and figures. feet may all communicate a message: Nodding or shaking of head “Thumbs up” Pointing. arm. later. disbelief Eyes closed – considering or bored. gestures.Employee Communication. Movements of the body. later. Gestures © ABE and RRC . so feelings and attitudes can be conveyed as well as facts. too often you think later of some important questions not asked. then realise. a misleading message is a danger. So. Involvement and Engagement 269 (iv) Meetings – These can take several forms. (ii)  Isn’t a lot of communication non-verbal? We speak with our voices but “converse” with our bodies.g. groups or sections can hold meetings. Each participant can see their relationship with others over the matters discussed Understanding is surer. e.

For people on the other side of the world. one to another country may take several days. deep in thought Quickly – worried. In addition. They may be hours ahead of or behind you so. email Today = fax Tomorrow or within a few days = letter – first or second-class? Distance Distance usually means time. (d) Accuracy Where accuracy of a message (e. a written means is preferable. impatient Even standing up. oral or mixed medium communication. communication by silence. we use them widely but perhaps we may not be fully aware of their significance and how they can be used effectively to give a message. Involvement and Engagement (c) Movements (i) (ii) (iii) (iv) Pacing up and down Slowly – relaxed. you must be aware of the following factors: (a) Speed How soon must your message get to the other end?    (b) Now = telephone. They apply equally whether speaking to one person. This approach implies taking account of the objectives of the communication.e. © ABE and RRC . When considering which means of communication to use (e. email). their daytime is your night time. the resources available. the nature of the information. (d) Appearance We are all aware of our appearance and that of others. you must be aware of the means available to you. they will be in different time zones. the need for speed etc.g. or addressing a meeting. On the other hand. the audience. telephone. As we said before. How do we select an appropriate method of communication? When deciding whether to use visual. some people do not seem to worry how they appear. (c) Time Zone If you are communicating with people in other parts of the world. sitting down or turning your back on the other person. doesn’t that itself give a message? These are just a few examples of non-verbal communication. how important selfpresentation is to the individual and how each person likes to be seen in a favourable light by others. whereas a letter to an address in the same town or area can arrive tomorrow. rather the kind of communication should be appropriate for the circumstances. For example.270 Employee Communication. the culture and structure of the organisation. Do not forget that abstaining or deciding not to speak can often be a very effective way of giving a message. figures or technical data) is concerned. your common working hours in which you may telephone may be very restricted. We should mention one final method of non-verbal communication i. contingency theorists argue there is no single best way to communicate. a whole group. can indicate a message.g. letter.

then you may have a wide choice.g. The above factors may need to be considered when deciding on the particular means of communication to use. Each must have the appropriate facilities. some special skills or training may be required. For example. Anything else would be at prohibitive cost. monthly statements to customers). speaking on the telephone or the writing of letters and reports does not come easily. (j) Skills and Training For particular means of communication. (k) Special Needs Every type of organisation is different and their communications need differ even more. do you provide such facilities “in case they are needed”? (h) Volume of Communications Look at this from two aspects:   How many messages are there in a given period? To how many people are you sending those messages (or. unsuitable and could not be justified. perhaps. but if you are sending communications regularly to a large number of people (e. So. a personalised letter on high-quality paper with embossed heading would be impressive. (i) Impression What sort of impression do you want or need to give to someone (a potential customer or client)? To some recipients. it may be very convenient to give a car phone to a salesperson or an important member of staff who is always out and about but it can be expensive. they may not all be relevant to your organisation and you © ABE and RRC . you will use a written means. the cost of the different means of communication is an important factor and should be considered but do you know how much it costs in your organisation to get a letter prepared and despatched? As an example. Involvement and Engagement 271 (e) Record If a record of a message is required and we have already indicated that it may be vital or mandatory for legal or commercial purposes. unless a spoken message is recorded. it is essential to consider their particular character and requirements and tailor the means of communication to suit. Also. the choice is probably limited to mass email or ordinary letter mail. (f) Secrecy and Security Are secrecy and security important aspects? Do you use recorded delivery. For other people. Of course. the same message)? If it is just one message to one person. For example:   Some organisations rely heavily on the telephone for contacts with customers A mail-order company will use normal letter and parcel services for the bulk of its business. registered mail or special messenger? (g) Cost Obviously.Employee Communication. a telex operator needs to have keyboard skills. and training may be required.

It may be a short presentation of information at a meeting. If they are important and you feel that they cannot be left out perhaps you should redefine the main subject areas in order to include them. you may find that certain factors conflict. What are the rules for making a formal presentation? A manager. today. particularly those working with young people who have grown to be reliant upon the visual image accompanied by sound. say. Don’t worry about order or priorities at this stage. for example. training courses. If they serve no real purpose. This need not be set out in detail as is the case with. you must consider whether or not they can usefully fit into your presentation. compared with traditional systems. has dramatically increased the proportion of information that we take in from images and sound rather than the printed word. the need for speed and accuracy and the special care required for important documents. (a) Objectives All communications should start with a careful consideration of their objectives. If there are points that do not slot easily into the main subject areas. Very often. it is a question of arriving at the optimum solution. it always pays to determine what you hope to achieve as a result of the communication. (b) Content Once you are clear about your objective. more involved conference presentation. they can be fast to issue and are cheap. Weaned on a diet of fast moving media entertainment. team briefing. rather that employers need to be aware of the diversity of expectations within their workforce. D. may lead to increased costs. the Internet and digital imaging technology. as more will lead to something too complicated. they should be omitted. Limit your topics to about three or four main subject areas. However. In addition to there being a greater call for presentations. EFFECTIVE COMMUNICATION In this section we shall consider several areas of communication within organisations: presentations. they are an important and expected communication format. Does this explain the growth of email and text messaging? The advantages of these two systems are that they are both virtually instant and offer ever increasing flexibility. cannot avoid presentations. Take this random list of ideas and highlight the main subject areas. you must be aware of these various factors and ensure that they are given due consideration. However. Only then can you start to plan its form. Nevertheless. you can start work on the content of your presentation. Involvement and Engagement may not have them all at your disposal. or a longer. the audience also tends to be more demanding. Keep it © ABE and RRC . This has an implication for employers. The answer is not that words are out and video clips are in. Effective communication in organisations is no longer solely via the printed word. attention spans tend to be low and boredom thresholds even lower. Begin by jotting down all your ideas. effective listening.272 Employee Communication. Now try to group the other points on your list as secondary points under each of the main subject areas. staff suggestions schemes and in-house journals. report writing. as with all other situations. alongside a global decline in printed newspapers. The effective manager will work hard to polish the presentation tools needed to be a competent public presenter. Why is electronic communication important? The globalisation of television. in such circumstances.

It is a good idea to have a title for your presentation. to suit the reaction of your audience. Choose something short (four or five words maximum) that will arouse interest. This may be in order of importance. Take your time. Your personal appearance. etc. The title should reflect your objective and subject matter. you may find that there is an obvious “natural” order. perhaps pose a problem and then provide the solution. Logical structure. etc. then deliver your talk with spontaneity and enthusiasm. (d) The presenter The way in which you deliver your presentation will affect your success just as much as its structure and content. It is important to be in touch with your audience. If there is a natural order it is important to follow it as it will be the easiest format for your audience to follow. If no logical or natural order is evident then you will have to create the simplest and clearest order that you can. You may wish to write out your introduction and conclusion in full to ensure that it is clear and that you don’t miss anything. Involvement and Engagement 273 as short and simple as possible. do not learn it word for word as it will sound wooden and lacklustre. Your introduction should preview your content so that your audience can follow it more easily. to ensure a clear and logical flow. Your aim is to appear confident and knowledgeable with a clear purpose and a professional approach. while allowing you the flexibility to alter your language and speed. The presentation should have a clear introduction. Do not write your presentation out in full. enthusiastic and confident. middle and conclusion. take a deep breath and smile! © ABE and RRC . Even if you are very nervous. your presentation will sound more convincing. in chronological order. tell them and then tell them what you’ve told them” stands true. or explain a need and then offer the answer. Note any examples you wish to include and write down phrases or points that link the sections. However. clear points and explanation or illustration where necessary will allow the audience to absorb the most from your presentation. Make sure that you are dressed appropriately and comfortably. try to look calm. (c) Structuring a presentation When it comes to putting your points in order and beginning to structure your presentation. Attempt to absorb its outline and any specific phrases or quotes that you want to use to illustrate your points. so that the audience has some idea in advance of what they will hear. The audience’s attention is at its best at the very beginning of your presentation and rises again when they hear that you are coming to an end. By speaking “off-the-cuff” in this way. how you cope with nerves and how you field questions or interruptions will all influence the way in which the audience receives your message. Establish eye contact with as many of them as you can and react to signals you receive from them. Are they getting bored? Are people nodding or shaking their heads? Do the members of the audience seem to be following the points you are making? Remember that first impressions are very important. in order of cause and effect. Your conclusion should highlight the main points that you have made to consolidate the information in their minds. These outline notes will then guide you through your logical sequence of points. body language. The old maxim of “Tell them what you’re going to tell them. Note the main points with brief support information and secondary points.Employee Communication. Try to arrange your points in a way that will flow from one to the next. Now add in the secondary points and begin to build the presentation.

Learn the basic structure of your presentation and the way that the points link together. (f) Rehearsal and delivery It is important to rehearse your presentation before you do it in front of your main audience. e. Don’t add in visual aids for the sake of it. showing a video on a 12” TV screen or holding up a tiny article on the stage of a 500 seat conference centre would be completely pointless and detract from what may have otherwise been a good presentation. Check beforehand that any equipment is working. Be sure to choose something which is suitable for the venue you are using. There is nothing more distracting than a badly used aid in the middle of a presentation. that your slides are in the right order. make sure that they are relevant and effective. Some of the visual aids you might choose would include:              Charts (pre-drawn or done on a flip chart as you talk) Slides (using a data or overhead projector) Before/after pictures Demonstrations Video clip or film Map Blackboard Handout Flip charts Prop Demonstration Audience plant or audience participation Sound effects. This will sound far more “honest” and convincing than learning the speech word for word and then stumbling through it or reading from a script. Watch out for any irritating or repetitious movements or speech patterns. Some people like to rehearse on tape so that they can listen to it and identify any problem areas. such as © ABE and RRC .274 Employee Communication. Rehearse out loud. that your audience plant knows when to ask their question or make their interruption. use these cards as prompts to guide you but choose your words as you go along. This is necessary to:     Time how long it will run Allow you the opportunity to make changes if points seem jumbled Give you practice at using your aids Assess your delivery technique.g. even better. Involvement and Engagement (e) Visual aids It can add interest and variety to a presentation if you use visual aids to help illustrate points. etc. Write these on to small cards and number their order. Your friend can tell you if your ideas are clear and whether you sound convincing. only use them if they help to make a point more clearly. If you can find a colleague with some knowledge of the subject to listen to you it will help. Whichever aids you choose to use. If you can video yourself rehearsing.

Generally. If you find it a strain to make your voice heard. Divide it into sections or chapters for clarity and present the report in an easily digestible manner. If you want them to ask questions during your presentation then you should invite them to do so. Make sure you are familiar with any equipment and check that there are back up facilities (such as a spare bulb for the overhead projector. etc.     © ABE and RRC . Be prepared for questions. Link ideas together to create a logical flow of information or ideas to go in the body of the report. different type sizes. using lots of white space. such as research data. You will usually start with the things that would be familiar to the reader. but the background information often confuses. as it can look as though you don’t know the answer or are avoiding the point raised. Add the rest of the introduction and the concluding sections. You should also provide a list of contents so that different sections of your report can be accessed without having to search through the whole thing. consider including it as an appendix outside the main body of the report. Do this in the venue where you are speaking. Consider the intended audience and what they are interested in. arrange for a microphone to be available rather than attempting to shout your way through your presentation. clarity and accurate assessment of the target audience lead to success. etc. If you feel that the reader should have access to certain information. Involvement and Engagement 275 scratching your head. It is a good idea to provide a summary at the beginning to assist a busy “audience” in understanding its basic content. Varying the speed of delivery and volume and tone of your voice are useful tools in speech making. Brainstorm your ideas on to a single piece of paper. As with letters. without concerning yourself too much with structure. If you have assessed your audience effectively when preparing your speech. so that people are encouraged to read it. Part of your rehearsal should include a full practice with any visual or other aids you are using. without having to read all the detail. By suddenly changing the speed at which you are speaking or by a sudden drop or increase in volume you can add emphasis to a point. numbered or bullet points. with the actual equipment that you will be using. What are the rules for writing an effective report? Effective report writing requires many of the same skills as spoken presentations in so far as good structure. It can be off putting to the audience if you leave questions unanswered until the end. you should speak more slowly than in conversation and loud enough so that everyone can hear you. Not only is it more likely to be read if it is short.. why they would read it and how much information they need. Type up the main body. the written report should be made to look appealing and interesting. subheadings. Use natural or logical structure if possible. It is always best to keep the report as clear and simple as possible. try to answer it quickly and get back to your talk as soon as you can. you should have anticipated their questions and built them into your presentation. If you intend to hold a question and answer session at the end you should let the audience know this and ask them to save their questions until then.Employee Communication. Should a question be asked during your speech.) just in case. the result you wish to achieve. waving one hand in the air or constantly saying: “If you know what I mean” “Okay. underlining. When preparing a report you might use the following process:   Consider your objective in writing it.” or “Now then” etc.

It will also take up less disk space and make it faster to download. preferably allowing it to open flat.  Concentrate: Listen attentively to what the other person is saying. have your hands in your pockets or doodle whilst you are listening. A manager or supervisor will pass information to a group of staff at a formal presentation. irrespective of the software they are using. Encourage them: Prompt.276 Employee Communication. rejected and of little value to the team. looking for nonverbal clues such as their body language. What is a team briefing? It is a well-tried method of keeping all staff up-to-date on developments in the organisation and has its origin in the operational briefings given to military personnel. Look the part: Look attentive. Do not interrupt – if you want to ask something or introduce an idea. Our own preconceptions about a person. “Go on. How interesting” will encourage them to feel that their message is being received. be still and look at the person when they are speaking to you. If you are issuing it in electronic form. reassure and support the person speaking to you by your body language and reaction to their message. a defensive reaction may stop us listening to the message properly. or our personal beliefs. The following pointers will help you to improve your listening techniques. wait until they have reached an appropriate gap in what they are saying. listening to how a person sounds and watching how they behave.pdf). and “I see. Don’t slouch. © ABE and RRC . Pay attention. consider converting it into a document format (such as portable document format . “Yes. To be effective listeners we must notice both verbal and non-verbal clues. There are usually strict rules about timing (so that all employees receive their briefing within certain time) and content (sometimes limiting presenters to reading a set text). can all affect our ability to listen properly to what is being said. It makes the individual feel unimportant. Involvement and Engagement The format of a report might be:       Executive summary – one page summary of the report’s objective and findings Contents list with page numbers Introduction and background Main body Conclusion Appendices To make a favourable impression a report should be given a title and bound. What should managers do to be effective listeners? Listening is a very important management skill and one few of us are ever taught. to show your reaction. If the subject is a sensitive or emotive one we may react to the subject matter. which can important if you are using a lot of visual material. I understand”. Look at them without staring and nod/shake your head. Please continue”. etc. attitudes and individual priorities. It is usually followed-up by discussion or a questions session. introducing preconceived ideas before giving the person who is speaking time to say their piece. The method of binding should allow for easy use of the report. If we are being criticised. “Read between the lines” of what they say by listening to their tone of voice and their level of confidence. insignificant.   Little is as demotivating as going to talk to your manager and feeling that they are not listening. That will mean the formatting will be the same for every reader.

Successful team briefings tend to be: (i) (ii) (iii) (iv) (v) Recognised as a key part of the organisation's communication system (not a failsafe) Regular (like weekly or monthly) and in people's diaries well in advance Semi-formal Used to supply up-to-date information on the performance of the organisation Followed-up by feedback to senior managers (to complete the communication loop). That said. What is a staff suggestion scheme? Organisational weaknesses are often felt most strongly by those doing operational jobs. The following success factors are important. Involvement and Engagement 277  How does an organisation make sure team briefing is effective? Anyone with experience of cascading will now how easy it is for the message to be lost if there are too many tiers in the briefing structure.Employee Communication. Briefers need to anticipate the real needs and interests of the hearers and address these. the scheme is to promote innovation by rewarding it but it should not blunt the expectation that professional staff and managers will be innovative in their areas of activity. most large organisations have an electronic facility for employees to make suggestions either via their intranet or via email. It makes organisational sense to tap into that resource of problem identification and solution.  How does a staff suggestion scheme work? Traditionally schemes had a staff suggestion box and employees wrote their suggestions on a card and posted them in the box. it means that people can view it when convenient to them yet it can be released across the world at the same time and there is no risk of the message being lost in transmission. The alternative is a commercially produced programme and that would place it outside the budget of all but the most prosperous organisations. Then schemes became more centralised and policed because those in power ignored good suggestions and it did not suit their agenda.  What can staff make suggestions about? Usually a suggestion would improve the quality of work or service or result in cost savings. It is also sensible to anticipate and prepare responses to issues that are likely to be raised. It can be relatively inexpensive. The usual way of dealing with this is for each award to be subject to approval by a panel. These are also the people who can offer a wide range of solutions to managers.  Can someone suggest something that is within the scope of their normal responsibilities? This is sometimes difficult. electronic postings lack the social element of the team briefing (unless supported by a networking facility on-line). particularly since they see the issues from a different perspective. it demands hardware and know how and the standards set by entertainment television mean that a video clip of the chief executive talking from behind a desk is unlikely to engage every employee. One of the ways of doing this is a staff suggestion scheme. These days.  Have intranets replaced team briefings? Posting a staff briefing on an organisation’s intranet is certainly growing in popularity. who will make a subjective decision on ‘is this what would be expected of someone with their level within the organisation?’ © ABE and RRC .

any such initiative will soon be forgotten.jsainsbury.  Do employers reward only suggests that are implemented? Some offer a reward for each suggestion put forward. and the support show for it by top management. © ABE and RRC . Here are just a couple ‘Dragana Warwick from the Edgware store recommended providing education days for local schools at Sainsbury's bakeries. make a positive statement about the value placed upon the creativity of the workforce.278 Employee Communication. An easy method for submitting the suggestion Time limits for each stage of the decision-making process Adequate reward – both soft and hard. Awards of 25% of annual salary are not unknown and a few organisations will offer a percentage of the first year’s savings made or extra profit generated as a result of the suggestion. serve our customers better and simplify our processes. Many organisations see their scheme as a part of their employee engagement strategy and the very existence of the ‘Each and every letter is read by Chief Executive Justin King. ‘We have received thousands of great suggestions through the scheme. Case Study Sainsbury’s Supermarkets ‘Tell Justin’ Suggestion Scheme Sainsbury's provides all colleagues with an opportunity to 'Tell Justin' – to put forward suggestions as to how they believe the business can be improved. (Extract from the corporate responsibility section of www. Sometimes staff suggestions result in major financial savings and some organisations promise very large payments to staff as an enticement to come up with such ideas. school children were given a behind-the-scenes tour of the bakery section and learned about the principles of baking and production. financial or a benefit in kind (such as paid time off). This means people don't have to pick up broken eggs that other customers have put back on the shelves. Involvement and Engagement  Are staff rewarded for their suggestions? Yes and this is important. People are encouraged to propose how we can drive sales. Successful suggestions are rewarded with a shining star cheque which can be exchanged for shopping vouchers and gifts. She suggested providing crates where broken eggs can be disposed of safely. Her idea is one of many that is being trialled across the country in Sainsbury's stores. On 27 January. The reward can be either enhanced status (through public recognition of their contribution). ‘Rachel Scott works at the Sainsbury's Alphington  What makes a staff suggestion scheme successful? (i) (ii) (iii) (iii) Publicity – Without constant promotion of the scheme and recent successes.

what. come together and. The downside is that static material on-line. establishing frequency of publication. reach an agreement on how to proceed. The benefit of on-line publishing is that it can be hot linked to other sources of material (including social and professional networking sites).Employee Communication. does not appeal to most people. negotiation is essential at many meetings where units with competing demands come together to plan. negotiation is important to HR professionals in working with employee representatives over pay and conditions of service and with senior managers over budget setting. where. changes which are required as part of a current plan or settling a grievance. Many journals combine the two. (iv) (v)  In what format should a journal be published? It has been traditional to print it on paper as a newspaper or a magazine. Many of the communication activities that involve the manager entail negotiation of one sort or another. Involvement and Engagement 279 Are company newsletters a valuable way to engage staff? They are certainly widely used.  What are the benefits of an in-house journal? (i) (ii) (iii)  Dispersal of information – The who. How does an employer set up an in-house journal? Broadly: (i) (ii) (iii) Form an editorial board Formulate an editorial policy and get it cleared within the organisation Decide on administration – sharing the work and responsibility. On a managerial level.   © ABE and RRC . NEGOTIATION What is negotiation? Negotiation is where two or more parties.  At an operational level there may be negotiation over starting salary. E. At organisational level. either on intranets or on the Internet. with opposing objectives. But increasingly journals are published on-line. holidays. approximate number of pages and a procedure for the acceptance or rejection of articles to insure consistency Begin generating material – circulate a request for articles with deadline for submission Choose articles and publish first edition. particularly if it is text only. how and why of the organisation and the sectors in which it operates A Forum for Ideas – What works and what does not in the organisation Organisational development – Everyone can be aware of and engaged in changes without it coming down the hierarchy. when. workload allocation. through a process of purposeful persuasion and constructive compromise. It is necessary to distinguish between company journals published by management (either one organisation or on behalf of the sector as a whole) and those published by staff representatives (either the local union branch or a national union). they are edited and published by management but contain much material submitted by the workforce.

This is true whether the manager is negotiating with staff or customers. deadlocks and conflicts and all the combative vocabulary of warfare. It is too easy to “win” a battle and lose a war! The member of staff who feels they have lost in a negotiation with the manager is liable not only to be demotivated but also likely to unsettle the other members of the team with complaints and grievances. It is essential to determine the central issue(s) and focus tightly upon them without allowing distractions to obscure and © ABE and RRC . we are seeking win/win solutions. we are all on the same side! The art of good negotiations is for both parties to win. as in business negotiations the targets are agreement and compromise and the negotiating parties should be seen as partners rather than enemies. etc. allowing the loser to withdraw with dignity. Yes Joint No Consultation Management sound out others about their ideas. The power to choose remains with management Probably Management Communication Management tell the staff what is to happen Opposing objectives The power to choose  Probably What does ‘opposing objectives’ mean? This does not mean disruption. This is unfortunate. Involvement and Engagement How a manager presents objectives and strategies to their team and negotiates the detail of their implementation and outcome can have a significant impact on the motivation of staff. However.280 Employee Communication. feud. Alternatives to negotiation In a management/staff relationship. quarrel. When seeing negotiations as a process for resolving conflicts. Both parties should leave satisfied from a successful negotiation. The word “negotiation” seems to carry images of winners and losers. it does not follow that they have no common interest overall. then the skilled negotiator provides an avenue of retreat. Because parties differ on an issue. If one side loses then negotiation has not taken place. Conflicts can be of: (a) (b) Interests – Where terms of doing business have not been settled or are being renegotiated Rights – Where there is a difference of interpretation about an existing agreement. if there is the perception of a loser. the alternatives are: Negotiating Style Joint problem solving Management and staff (or staff representatives) come together without a predetermined solution. it is essential to focus on the issue that is in conflict and not upon the total relationship.

compromise outcome. It is one of the earliest skills used by children seeking an extension to their bedtime curfew or some extra spending money from parents or getting extra time for school work. that does not mean accepting a resolution at any price. who will you be dealing with and what are they like? What is their business? What are their desired objectives from these negotiations likely to be? (iii) (iv) © ABE and RRC . this is the likely. a modified payment system or a revised holiday schedule. Know your business. This is the worst settlement you would accept – any lower and you will refuse to settle. The successful manager must work hard to perfect the skills of negotiation.  So is negotiation about winning and losing? No. If it’s a member of your team or a colleague you probably have a lot of information already but try to put yourself in their shoes. The essentials of good negotiating skills are:    (a) Preparation Control Tactics. Be sure your agreement with a member of your own team does not have implications for personnel and policy that take it outside your authority. What are the skills needed for negotiating? We are all experienced negotiators. Be fully informed about all aspects of your business/project that are relevant to the negotiation. Preparation As with so many activities the key to success lies in thorough planning. Know the other party. What are their concerns likely to be? What do you think they will want from the negotiation? If it’s an external client. Given the leverage that the other side have. Make sure that you are aware of the limits of your authority. You must always assume that both or all parties have an interest in resolving any conflict and finding a win/win solution.g. (i) Know your objectives. e. Have all necessary information at your fingertips before you start negotiating. Have you the authority to make these decisions on behalf of others? You must never agree to something in negotiations only to have to renege on it later. However. It is possible that you could be offered a deal which affects or involves another area of the business. Try to find out as much as you can about the other party. Involvement and Engagement 281 complicate the negotiation.Employee Communication. What would the best possible outcome be for you? What would you be prepared to accept if this is not achievable? We usually talk in terms of: Ideal Realistic Fallback (ii) An outstandingly good outcome for you. It would be only too easy to let a negotiation with a member of the team become a grievance interview. they are a key tool. Know how far you can go. You will find you can learn many negotiation techniques by watching others.

Do not get angry. a sales contract with a new supplier. or a revision of your contract with your search and selection agency. Negotiation relies on identifying. strategy. Whose home ground should it be on? Neutral territory may be best if there is conflict. a settlement over a dispute where tempers are running high. Control should be established in the following areas: (i) Venue The venue chosen for negotiations should be carefully considered. Both parties will be weighing each other up at the beginning of a negotiation and such things as the seating arrangements. the type of outcome required and the relationship between the two parties. how you bid.282 Employee Communication. Involvement and Engagement (b) Control in negotiations In a negotiating situation you are meeting another party with a common interest in arriving at a mutually satisfactory arrangement. (c) Tactics in negotiation Successful negotiating can be like a game. If one party is unhappy with their side of the bargain they will carry out their duties begrudgingly and it will be even harder to agree the next time the deal needs to be revised. at the preparation stage: (i) (ii) (iii) The other party’s needs Your needs The point of balance © ABE and RRC . Will you sit in easy chairs and chat over a coffee. What phases does negotiation go through? This is a good question because it suggests that there is some ritual involved. accurately. or have you set out pens and paper on opposite sides of a boardroom table ready for a battle? (iii) Attitudes You must maintain self-control throughout negotiations. Be professional at all times. concessions they may make. the hospitality offered and the way you greet each other all influence how the other party sees you. depending on the personalities involved. sticking points. tactics and point scoring but unlike a game. (ii) Atmosphere What kind of mood do you wish to create? A friendly atmosphere is most helpful if you wish to hold productive discussions. The type of negotiation you are in will affect your style in opening discussions. how you interact with the other party and how you close. The way in which negotiating situations are handled differs greatly. Your office with you behind the desk is a formal setting and there is likely to be a perception of “unfair” power in the mind of your team member and a win/lose scenario. It may be a salary review with a valued employee. Each should come away satisfied with the deal that they have made. with strategies. This will vary from culture to culture but the general rules are:  Research Research the other party and form assumptions concerning their position. Every negotiation will be different but many of the same rules will apply. the comparative positions of strength of the two parties. there should not be winners and losers. likely requirements. The ideal result of successful negotiations should be that both parties are winners. rise to the bait or insult the other party.

etc. confirm. it can be useful to come back to these areas of agreement to re-establish a more conspiratorial or co-operative attitude. and how their cost can be minimised The cost of a concession to one party is not likely to equal its perceived value in the eyes of the other. Use non-committal terms such as “What if . Later in your discussions. Use this initial phase to: – – – – –  Test assumptions Exchange information Explore interests and inhibitions Listen and watch for signals Recognise. reward signals.Employee Communication. “consider”. Adopt a style of your own which is suitable to the individual circumstances of each negotiation. personalities. This will introduce a mood of co-operation. the importance or urgency of the required outcome... A day off in lieu of overtime may be valued more highly yet cost less to the firm than overtime payments.  Preparation (i) (ii) (iii) (iv)  (i) Define your objectives. enlarge. Discuss and signal In due time.”. Is the other party relaxed and confident. comparative positions of strength between the two sides. Involvement and Engagement 283 (iv) (v) (vi) Their likely initial stance How they can be moved from their initial stance to the point of balance Value of your potential concessions to the other party (vii) Benefits of their potential concessions to you (viii) Concessions they could/will give. if things appear to be proceeding slowly or if there is conflict. through to those you must get Consider what concessions you might make and what you require in return Decide what information you require and what information you are going to disclose Prepare a simple strategy to achieve your objectives – but keep it flexible.. © ABE and RRC . Opening the negotiations How do you begin? Do you wish to “lay your cards on the table” straightaway or do you want to spend time sounding out the “opposition”? In most circumstances it is best to have a period of relaxed chat in order to break the ice. i. from those you would like to get. It is a good idea to begin by touching on areas on which you are both agreed. “maybe”. Propose and package Proposals are suggestions that advance the negotiation.e. move into the next phase. or anxious? Are they taking control of these early discussions or allowing you to lead? (ii) Interaction between parties The way you interact with the other party depends on the variables mentioned above. They move the parties to the negotiation closer together. demonstrating how much common ground there is between you.

Summarise it. Involvement and Engagement Never interrupt. Both high and low bids must be defensible. if you are “selling”. ask a high price or high commission levels. causing offence to the other party and souring the negotiation.284 Employee Communication.. Agree an action plan. Most styles are variations on one of three patterns: Tough battler: Uses emotive and emotional language – words and body language. next time round the shoe may be on the other foot and you will be made to pay for your bullying tactics. Can you give us the figures please? Cooperative: Is always looking for the common ground between the two parties and building from this. This is usually only possible as a tactic if you are in a position of strength and it may or may not work. This “take it or leave it” attitude can appear arrogant and even if you get away with it this time. then we have a deal” The final concession should be traded for an agreement Agree what you have agreed. Question. then” as in “If you will take only one week’s holiday at Easter. one which matches the expressed interests and inhibitions of the other party. The best response to a proposal is a considered counter-proposal. There are two basic choices: go high or go low. The key form is “If . (i) (ii) (iii) State conditions before offers. Another way of planning and executing your tactics is to consider your style. “If you do that. Threatens and demeans the ‘opponent’ ‘If you aren’t careful you will have a strike on your hands!’ Intellectual: Concentrates upon the facts of both sides (the ‘adult’ style) ‘It might be useful to look at the cost implications of your proposal. What are negotiating tactics at this stage? This will depend on personal style and on how strong a position you are in. if we can do it. (i) Bidding high Go straight in with your optimum solution. Both parties can then move towards a settlement within these parameters. Is this the same as negotiating style? No. This is particularly true in the work environment where such an approach can be very demotivating. We recognise the pressures on your side to get the budget sorted and certainly our members would like the extra money in their pay next month..’  Bargain and agree A stage of trade and exchange. write it down. If you are “buying”. clarify. Care should be taken to ensure this bid is not too low as to be derisory. (ii) Bidding low It is normal practice during negotiations for the “buyer” to start with a low bid that establishes the floor for negotiations. Re-present the same proposal but in a different form. then we will grant the extended holiday request for September”. summarise and then respond. ‘It strikes me that both sides stand to benefit from an early settlement. A proposal is stronger than an argument. offer them a low price. © ABE and RRC .

Does the result of negotiations need to be announced to another party. the press. such as formalising the agreement into a contract and getting a copy signed by both sides. Discuss any follow up that may be required. the workforce. Involvement and Engagement 285  Closing negotiations Once an agreement has been reached. e. who will make this announcement? How and when should it be done? Agree when the deal will fall due for renegotiation if necessary. it is still a good idea to write out the main points and get both sides to sign as part of the closing of negotiations. Trade it reluctantly Leave the other party feeling they’ve done a good deal.g. to be certain that both sides have the same understanding. Confirm any arrangements for monitoring progress or reviewing performance. failure to agree is inevitable and it is better to “agree to disagree” and move on. Key principles of negotiation              Negotiate only with those in authority Be prepared to trade Be calm Don’t compromise your objective Don’t oversell Don’t show your thoughts on your face Don’t underestimate your opponents Always appear reasonable Keep the meeting to your plan Be courteous – don’t rush the other side Tell it like it is and say clearly what you mean Appear relaxed and enjoy yourself Listen carefully to all the other side says and the way they say it. When a formal contract is not required. though. too Watch for danger phrases such as: (i) (ii) (iii) “A few small details” “It’s in your interest” “Fairer to both sides” © ABE and RRC . Sometimes. If this is the case. other partners? If so.Employee Communication. Key points of negotiation technique    Never donate a concession. Each must know what they have promised and what the other party is expecting of them so that there is no room for misunderstandings at a later date. Thank and congratulate each other on a job well done! (ii) (iii) (iv) (v) (vi) Remember that it will not always be possible to come to an agreement with the other party. it may be worth trying again at a later date. it is important to follow the steps below: (i) Summarise what you have agreed.

The charity has:        250 full and part-time field workers spread evenly across the UK. Exercise – Designing a communications structure You are called in by a national charity because of your expertise in managing the communications aspects of the relationship between employer and employees. others are spending those funds 100 staff are based at the organisation's HQ in the Midlands News on the flow of donations is important to the field-workers The corporate strategy is reviewed and revised annually There are important organisational values that need to be reinforced. Involvement and Engagement     Aim high – once you start backing down it’s difficult to climb back up again Maintain neutrality in early stages Absorb an attack by making notes Anything the other side accepts as a constant can nearly always be made into a variable. © ABE and RRC .286 Employee Communication. working from home Some are fund raising. Design a nationwide communications structure for the charity. but The scope for sharing best practice between field workers is considerable.

E. (Continued over) © ABE and RRC . Safety and Welfare Contents A. Tensions Between the Legal. the manager or the worker? The Size of the Challenge How big a challenge is H&S? The H&S Responsibilities of the Employer What are the main areas covered by the law in the UK? What does the Government do apart from legislate? What is the role of the H&S inspector? Is an employer required to make changes irrespective of the cost? Does the legislation just consist of legal statutes? How should employers give safety training? How important is record keeping.287 Study Unit 13 Health. monitoring and evaluation? Stress What is stress? What effects does stress have on employees? Physical Emotional Behavioural Mental Is stress recognised as a problem that employers should address? What can employers do to combat stress? Occupational Health Does an organisation benefit from initiatives to promote a healthy workforce? What about occupational health provision? What about an employee assistance programme? Page 289 289 289 289 289 290 290 290 290 291 291 291 292 292 292 293 293 294 294 294 294 294 294 294 295 295 295 295 B. Ethical and Business Implications of H&S What is the case for taking H&S seriously? How important is organisational culture to H&S? What if an employer did not know something was a health or safety risk? Who is responsible – the employer. C. D.

I. G. © ABE and RRC .288 Health. Working Hours Substance Abuse Is substance abuse a real issue for an employer to address? What are the advantages of tackling substance abuse? Who is at risk? How can an employer spot abuse? What should a policy on substance misuse include? Can we screen employees? The H&S Responsibilities of the Employee Does an employee have H&S responsibilities? Is there a role for trade unions? Risk Assessment What is risk assessment? Is there a difference between a hazard and a risk? 296 296 296 296 296 296 297 298 298 298 298 298 298 298 H. Safety and Welfare F.

some liability can pass to the employee. In such organisations it is only an offence if you get caught. what does it contain and what would you change in it? If your organisation does not have such a policy. However. because that makes their job easier and makes them more productive. Safety and Welfare 289 A. there is little doubt that many employees. why not? Do you believe it should have one? What if an employer did not know something was a health or safety risk? This would be a defence should a claim subsequently be made. Exercise Does your organisation have a health and safety policy? If so. Litigation can be costly and even result in imprisonment. The business case: Absence from work due to injury or illness is costly. with the acquiescence of managers. However. Many organisations take H&S very seriously and it is a part of their culture. Training and the reasonable expectation of professional behaviour by managers and professionals are both ways in which the employer’s liability can be passed to an employee. endangering themselves and others. a poor internal or external reputation for safety or welfare results in poor recruitment.Health. Taking a stakeholder view of the organisation. Likewise. © ABE and RRC . Who is responsible – the employer. the manager or the worker? The employer is usually vicariously responsible for the actions of their staff. TENSIONS BETWEEN THE LEGAL. keeping within the laws on the minimum standards on how human beings can be treated and behaving in ways that society considers acceptable. The legal case: The ethical case: How important is organisational culture to H&S? Very important. as long as the employer acted reasonably upon the level of knowledge that existed at the time. it has a social duty to take care of its most valuable resource. retention and motivation. if someone clearly acted outside what could reasonably have been expected by the employer. take short cuts. ETHICAL AND BUSINESS IMPLICATIONS OF H&S What is the case for taking H&S seriously? Organisations have always experienced the tension between maximising profit.

welfare. most of the developments in H&S are being driven by European legislation and the scope has widened to include minimum paid holiday and wages. Hours were long and the work physically hard. important regulations have been created to cover:     Hazardous substances Noise Manual handling (lifting and carrying) Violence in the workplace © ABE and RRC . Today in Europe. 1400 prosecutions brought. stress. C. even today. Following this. given that human resources management.290 Health. Legislation and social pressure resulted in significant improvements. harassment. What are the main areas covered by the law in the UK? In 1974 Parliament brought together various pieces of legislation into the Health and Safety at Work Act. THE SIZE OF THE CHALLENGE How big a challenge is H&S? The official figures for the UK (population 60m) in 2006/7 were: Injuries 241 killed at work 274. safety and welfare at work’ of all workers and members of the public on their premises. bullying and even employee consultation. the management of H&S. Working days lost Enforcement 36 million days were lost (1. Ill health 2. barbaric. by modern standards. as far as is reasonably practicable. The quality of life of workers is seen in its widest perspective. THE H&S RESPONSIBILITIES OF THE EMPLOYER The way employers have responded to these tensions has changed over time. This is understandable. the health. as a professional subject. The treatment of workers in the early part of the Industrial Revolution in the western world is considered. workers were little more than a part of the physical machinery of production and as equally expendable.2 million people suffering from an illness they believed was caused or made worse by work 2037 people died of mesothelioma (a form of cancer) and thousands more from other occupational cancers and lung diseases. H&S often resides within the HR department. Safety and Welfare B. 30 million due to work-related ill health and 6 million due to workplace injury. emerged in the first half of the twentieth century from the work done by welfare professionals: caring for the all-round needs of employees. For many employers.5 days per worker). It places all employers under a general duty ‘to ensure.000 reportable injuries (1 worker in every 1000).

What is the role of the H&S inspector? They visit premises to inspect. unless that would be unreasonable e. leave and flexible working provisions Safety management (e. with a view to compensating the victim. Local authorities in the UK bring some prosecutions. a few cases are brought under criminal law. to establish safety committees. Alongside their routine inspections. to maintain records and to have a written policy). an inspector is also called in when certain injuries or death have occurred. inspects premises and brings prosecutions. Is an employer required to make changes irrespective of the cost? No. to give advice and to warn. A breach of a notice is a serious.Health. using a piece of machinery) until some specified improvements have been made. What does the Government do apart from legislate? There are two government bodies responsible for H&S at work. which is aimed at preventing occurrences. criminal offence. The Commission proposes legislation. Prohibition notice – The forbidding of certain activities (e. But they can also issue official notices:   Improvement notice – An instruction to make a specific improvement to H&S by a set date. to consult with trade unions. All activities must be subject to a risk assessment and improvements made to eliminate the risk. beyond the reasonable means of the organisation. whilst the Executive gives advice and support. Most offences are considered under civil law. Safety and Welfare 291         Fire Ventilation and temperature Sanitation Signage Provision of first aid (equipment and trained staff) Risk assessment Working hours. © ABE and RRC .g.g.g.

complied with a code could be used as evidence in court if a prosecution is taken. Rare. where it should be a part of management development) and for those with special responsibilities. How important is record keeping. Failure to comply with a code is not an offence in itself. However. Usually associated with a particular regulation. at team meetings and in appraisals Through specialist training for those moving into jobs which are particularly vulnerable (including management positions. How should employers give safety training? Through three routes:    Induction – Setting the scene for an organisation that is safety conscious On the job – Via colleagues and managers.292 Health. The structure is as follows: Codes of practice Practical advice to employers and others.  Umbrella Act of Parliament enabling Government to make regulations etc. Safety and Welfare Does the legislation just consist of legal statutes? No. © ABE and RRC . Approved Code of Practice on Control of Substances Hazardous to Health.  More detailed legislation that can be passed through Parliament relatively quickly. monitoring and evaluation? These are key to knowing where the most vulnerable processes are carried out and also to spot trends before they become entrenched.  Regulations (secondary legislation)  Primary legislation  Control of Substances Hazardous to Health Regulations 2002.  Health and Safety at Work Act 1974. such as fire wardens or site safety coordinators. Numerous.

Wrong – Counselling may help individuals who are suffering from work-related stress but it is unlikely to tackle the source of the problem.7 million working days lost per year. or conditions ascribed to work-related stress. front line prevention by the organisation is better than third party cure. one person’s pressure is another’s stressor. 6. Research has found that support at work.Health. Stress is a mental illness A little bit of stress is good for you Stress only happens to wimps All you need to do is go for counselling to stop work-related stress. There are some myths about stress: Work-related stress is not a serious problem Wrong – In the UK. as many as one in five people are suffering from high levels of work-related stress. Wrong – Stress is the natural reaction people have to excessive pressures or other types of demand placed on them. it is likely to result in stress. There's nothing employers can do to stop work-related stress © ABE and RRC . back pain and heart disease. Pressure is applied to you from outside. It all depends on the circumstances we are in at the time. If for you it is excessive. As a first step. it can lead to mental and physical ill health. The cost to Britain's economy is estimated at approx. Preventing it is good for employee health and well-being and good for business. While it is not an illness. particularly from managers for their staff. if it is prolonged or intense. Safety and Welfare 293 D.8 billion (1995/96 prices). is the second most common type of work-related ill health reported. Everyone is different. they can consult with their staff or trade unions to identify problems and work towards agreed solutions. Wrong – Employers can take steps to prevent work-related stress in their organisations. Some pressure is positive and motivates. An estimated half-million individuals report experiencing stress at a level they believe made them ill. Wrong – Anyone can suffer from stress. STRESS What is stress? According to the UK Government: The adverse reaction people have to excessive pressure or other types of demand placed on them You will notice this distinguishes stress from pressure.7 billion and £3. It costs society between about £3. That's around 5 million workers. Wrong – Ill health due to work-related stress. has a protective effect. such as depression.

smoking Losing interest in food Relationship problems Emotional Mental Difficulty in making decisions Difficulty in concentrating Memory not as good Loss of self-confidence Racing thoughts Irrational fear or panic Denying feelings Creativity impaired Is stress recognised as a problem that employers should address? It is in the UK and the Government has targets for reducing stress in the population. how is it affecting staff Be aware of the nature of individuals. Safety and Welfare What effects does stress have on employees? Stress manifests itself in four ways: Rapid pulse Sweating Pounding heart Gritted teeth/clenched jaw Headaches Backaches Restlessness Insomnia Fatigue Shortness go breath Diminished appetite Skin rashes Anxiety Depression Feelings of inadequacy Anger over small issues Guilt Feeling there’s not enough time Feeling driven but decreased drive Frustration Boredom Diminished energy for caring No time for joy or laughter Sadness Physical Behavioural Irritability Absent-mindedness Over-reacting Aggression Passiveness/apathy Taking longer More accidents/mistakes Dealing too much with trivia More food. to include well-being issues Offer confidential counselling for those who might need it Include management responsibilities in management development Develop a coherent overall prevention policy Look at the type and rate of change. coffee. adapt work to individual Manage relationships at work © ABE and RRC . do they promote stress? Provide training (including in induction). What can employers do to combat stress?           Be clear where the hazards are Minimise risks by designing them out Look at the way staff are monitored and managed. alcohol/drugs.294 Health.

flexible working hours. What about occupational health provision? The presence of qualified medical staff is both reassuring for employees and increases the likelihood that health promotion messages will be listened to. fairness at work. drugs and smoking Workplace issues – Work demands. either by telephone. family. Why should an organisation have an EAP? An EAP might help individuals. harassment and bullying. financial. personal and interpersonal skills. to assist in the identification and resolution of employee concerns that might affect performance. Safety and Welfare 295    Look at the traditional organisational culture. such as:   Personal issues – Health. is it healthy? Provide professional occupational health support Offer employment flexibility where possible. E. What about an employee assistance programme? An EAP is a programme available to employees but paid for by the employer. They will also be able to advise on trends and bring outside expertise into an organisation. © ABE and RRC . interactive website or (more rarely) by face-to-face surgeries. alcohol.Health. anxiety. work life balance and stress. These are provided by an outside organisation and discussions are confidential. OCCUPATIONAL HEALTH Does an organisation benefit from initiatives to promote a healthy workforce? There is little evidence that employers in the UK have benefited because of resistance to changing lifestyles by employees. working relationships. leave and sabbaticals. emotional. advice and information. It usually provides counselling. managers and organisations to:              Cope with work-related and personal problems and challenges that impact on performance at work Improve productivity and workplace efficiency Decrease work related accidents Lessen absenteeism and staff turnover Promote workplace co-operation Manage the risk of unexpected events Position the organisation as a caring employer Recruit and retain staff Reduce grievances Assist in addiction problems Improve staff morale and motivation Demonstrate a caring attitude to employees Assist line managers in identifying and resolving staff problems. legal. relationship.

In all. with 12% having used an illicit drug at least once in the last year. limited night working hours and provided mandatory rest breaks. What are the advantages of tackling substance abuse?       Reducing the cost of absenteeism or low productivity Creating a more productive environment by offering support to those employees who declare a drug-related problem Improving employee morale Reducing the risk of accidents caused by impaired judgement Enhancing the public perception of your organisation as a responsible employer Contributing to society’s efforts to combat substance misuse. Among 16 to 24 year olds. gave paid leave. Why? G. up from 10% in 1988. Who is at risk? Any member of an organisation is at risk.296 Health. 36% of 16 to 59-year-olds have used one or more illicit drugs in their lifetime. It is a myth that managers or professionals are not affected. At the time of writing the Working Time Regulations were considered to have had little effect upon the UK’s ‘long hours’ culture. SUBSTANCE ABUSE Is substance abuse a real issue for an employer to address? In 2002 more than a quarter of men in the UK reported that they drunk over the recommended maximum 21 units of alcohol a week. They limited the working week to a maximum of 48 hours (unless the employee opted out). Most of these would be in employment. 28% have used an illicit drug in the previous 12 months. How can an employer spot abuse? The following are signs to look out for:        Sudden mood changes Unusual irritability or aggression A tendency to become confused Abnormal fluctuations in concentration and energy Impaired job performance Poor time-keeping Increased short-term sickness absence © ABE and RRC . Safety and Welfare F. or if it could increase the risks of accidents at work or have an impact on the health and safety of the general public. But should what employees do in their lives outside work concern employers? The answer to this question is ‘yes’ but only if the level of use has an impact on individuals’ attendance or performance. WORKING HOURS The UK’s Working Time Regulations are subject to frequent revision to increase the benefits of the employee. while 17% of women consumed over the 14 recommended units of alcohol for their gender.

) Who is responsible for carrying out the policy. Statements which make it clear that:    Confidentiality Help Absence for treatment and rehabilitation will be regarded as normal sickness You recognise that relapses may occur The policy will be monitored and reviewed regularly in consultation with workplace representatives. © ABE and RRC .Health. (Note: all managers and supervisors will be responsible in some way. including managers. A statement encouraging those with a drug problem to seek help voluntarily. How your organisation expects employees to behave to ensure that drug misuse does not have a detrimental effect on their work. Responsibility A statement assuring employees that a drug problem will be treated in strict confidence. customers or management Dishonesty and theft (arising from the need to maintain an expensive habit). but it will be more effective if a senior employee is named as having overall responsibility. Safety and Welfare 297   A deterioration in relationships with colleagues.) Definition Rules Safeguards A definition of drug/substance misuse. and types of work. You might explain that:    If help is refused and/or impaired performance continues disciplinary action is likely Dismissal action may be taken in cases of gross misconduct Possession/dealing will be reported immediately to the police and that there is no alternative to this procedure. (NB. What should a policy on substance misuse include? The following is an outline: Aims A statement on why the policy exists and to whom it applies. subject to the provisions of the law. Information Disciplinary action A commitment to providing employees with general information about the effects of drugs on health and safety. A description of the support available to employees who have a drug problem. the policy must be seen to apply equally to all staff. The circumstances in which disciplinary action will be taken.

for training and cannot debar someone from being a representative. For example. The employer is obliged to allow them reasonable time off for their activities. electricity. Hence. unless the employee is working in a thunderstorm. an open drawer. RISK ASSESSMENT What is risk assessment? A careful examination of what could cause harm to people. Safety and Welfare Can we screen employees? Usually only if you have their ‘in principle’ agreement.298 Health. Risk is the chance that somebody could be harmed by that hazard and how serious the harm could be. Is there a role for trade unions? A recognised trade union has a legal right to appoint safety representatives and managers must consult with these representatives. H. So the risk assessment directs that staff should not work on the roof in a thunderstorm. © ABE and RRC . such as chemicals. communicate with an inspector and sit on the local H&S committee. A hazard is anything that may cause harm. THE H&S RESPONSIBILITIES OF THE EMPLOYEE Does an employee have H&S responsibilities? Yes. They can inspect. It involves five steps: Step 1 – Identify the hazards Step 2 – Decide who might be harmed and how Step 3 – Evaluate the risks and decide on precautions Step 4 – Record your findings and implement them Step 5 – Review your assessment and update if necessary. the likelihood of it happening is negligible. working from ladders. investigate complaints. so that a responsible person can weigh up whether enough precautions have been taken. Is there a difference between a hazard and a risk? Yes. However. to look after their own safety and that of others. failure to follow the organisational policy and procedures can be an offence for which the employee can be prosecuted. being struck by lightning whilst working on a roof is a hazard. I.

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