The Association of Business Executives Diploma

HRM(Dip)0610

1.21 HRM(Dip)

Human Resource Management

Morning 9 June 2010

1 Time allowed: 3 hours. 2 Answer any FOUR questions. 3 All questions carry 25 marks. Marks for subdivisions of questions are shown in brackets. 4 No books, dictionaries, notes or any other written materials are allowed in this examination. 5 Calculators, including scientic calculators, are allowed providing they are not programmable and cannot store or recall information. Electronic dictionaries and personal organisers are NOT allowed. 6 Candidates who break ABE regulations, or commit any misconduct, will be disqualied from the examinations. 7 Question papers must not be removed from the Examination Hall.

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@ABE 2010

R/500/3696

Answer any FOUR questions Q1 Employers are cutting back on performance bonuses paid to high earners, reads a newspaper article. Because of the threat of redundancy, a new psychological contract has emerged between the employer and employee. Many managers are agreeing to drastic reductions in their nancial and other benets in exchange for an unwritten promise that they will not be made redundant. (a) (b) (c) Explain the meaning and signicance of the psychological contract. Describe the areas commonly covered by the psychological contract. (5 marks) (10 marks)

Explain how the nature of the psychological contract has evolved over recent years, especially during periods of unusually severe economic pressure. (10 marks) (Total 25 marks)

Q2

No one should do HR planning anymore, says an HR director at a management conference. Because the world of business is now changing so rapidly, HR plans are out of date almost as soon as they are written. (a) (b) (c) Briey describe the purposes of HR planning. Describe the processes involved in assembling a typical HR plan. (5 marks) (10 marks)

Evaluate the argument that HR planning serves no useful purpose during periods of rapid change prompted by economic, technological and commercial uncertainty. (10 marks) (Total 25 marks)

Q3

A friend with an accountancy practice employing 30 staff is considering the introduction of an appraisal system that covers both performance improvement and staff development. He seeks your advice. (a) Outline the conditions which have to be met if an appraisal system is to work effectively. Make special reference to schemes that seek to combine performance improvement and staff development. (10 marks) Describe what would be included in a half-day appraisal skills training programme for your friends managers. Justify your answer. (15 marks) (Total 25 marks)

(b)

HRM(Dip)0610

Q4

According to the UKs Health and Safety Executive, Stress is the adverse reaction people have to excessive pressure or other types of demands placed on them. (a) Explain the difference between pressure and stress, as used in this denition. (5 marks) Describe the typical effects of stress on employees and organisations. (10 marks)

(b) (c)

Discuss the actions that employers can take to reduce the incidence of work related stress among their employees. (10 marks) (Total 25 marks)

Q5

A staff manual contains the following paragraph: Management and trade unions both reject the view that our Disciplinary Policy and Procedure are there simply to punish wrongdoers. By making standards clear and by helping staff to reach those standards, disciplinary processes promote high performance and good behaviour. (a) Show how disciplinary policies and procedures can be designed and implemented so as to promote high performance and good behaviour. (15 marks) Indicate how this might apply to handling the case of a worker on a production line whose output is unacceptably low. (10 marks) (Total 25 marks)

(b)

Q6

You are an HR manager and you receive the following email from the director of your company: I would like you to run some negotiation training for managers, to help them negotiate with each other, their staff and trade union representatives. (a) Assess the extent to which managers need negotiation skills in order to be effective. (10 marks) Without designing the programme in detail, outline and justify the objectives and contents of a basic training course in negotiation skills aimed at line managers. (15 marks) (Total 25 marks)

(b)

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Q7

The UKs Chartered Institute of Personnel and Development denes Continuing Professional Development (CPD) as: A personal commitment to keeping your professional knowledge up to date and improving your capabilities. It focuses on what you learn and how you develop throughout your career. (a) (b) Explain the importance of CPD. (10 marks)

Outline the actions that a manager can take to maintain his or her CPD. Justify your answer. (15 marks) (Total 25 marks)

Q8

Many writers predicted signicant changes to learning and development in organisations in the rst decade of the 21st century, arising from globalisation, the delegation of responsibility from manager to employee, the availability of new technologies, pressure to minimise training costs and time, the integration of learning with work and the move from job-related training to career-orientated learning. (a) Explain how learning and development in organisations have changed during the past decade in response to these and other changes. (10 marks) Examine the processes through which employees can develop and be developed, showing how these processes are evolving in line with changed thinking about how adults learn at work. (15 marks) (Total 25 marks)

(b)

End of Question Paper

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Diploma Human Resource Management Examiners Suggested Answers Q1 (a) The psychological contact Definitions: (Mutual obligations: Argyris and Schein) Perceptions of the employer and employees about their mutual obligations towards each other. These can be summarised as the expectation that both sides will act fairly, in a trustworthy fashion and deliver on their promises. Unwritten understandings between the two parties are usually informal and imprecise, and may be inferred from history and statements made by either side, e.g. during the recruitment process or in a performance appraisal. (Employee beliefs: Rousseau) Beliefs in the mind of the employee, shaped by the organisation. From transactional (an exchange of relatively short-term, objective payments (in money and kind) for acts by employee) to relational (e.g. relatively longterm, open-ended relationship based on trust, loyalty and concern for employees well-being). Like all contracts, the psychological contract contains both promises and expectations. The important thing is that these are believed to be part of the relationship. Changing nature (see part (c)). Significance: Looks at the reality of the situation as perceived by the parties. It may be more influential than the formal contract in affecting how employees behave from day to day. Tells employees what they are required to do to meet their side of the bargain and what they can expect from their job. Although it may not be legally enforceable, a court may be influenced by it in reaching a judgment. Where an employee believes that management has broken promises or failed to deliver on commitments, this has a negative effect on job satisfaction, commitment and on the psychological contract as a whole. This is particularly the case where managers themselves are responsible for breaches, for instance, where employees do not receive promised training, or performance reviews are badly handled. Managers cannot always ensure that commitments are fulfilled for example, where employment prospects deteriorate or organisations are affected by mergers or restructuring but they may still take some blame, in the eyes of employees. (b) The areas covered by the psychological contract: Tenor of the relationship between employer and employee relational vs. transactional. The image of the model employee (biodata, etc. e.g. expectation you will be partner or leave by age 30). Employees sense of personal identity a person or a number? Provision of outplacement for displaced staff. Importance given to job satisfaction.

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Expectation of honesty and loyalty by both parties. Provision of job security and career development. A fair days pay for a fair days work and contingent reward. Employees willingness to be flexible. Provision of safe and healthy working environment (incl. work intensity, work-life balance and hours of work). Equality of opportunity. Self-management e.g. expectation that employee will take responsibility for CPD; provision of resources for learning and development. Levels of employee engagement, empowerment and communication. Expectation of organisational citizenship. Power afforded to employee representatives e.g. the trade union. (c) The changing nature of the psychological contract Old deal: relational, paternalistic: job for life and promotion if you are loyal, work hard and keep out of trouble. New deal: transactional: I am given a job and I must look after my career; I will be paid in line with my quality, productivity and creativity. Post-new deal: Does recession change mutual obligations? Not in principle, e.g. assumption employer provides job for life will stubbornly remain in many organisations. Different perceptions: However, recessions often expose differences between employer and employee views of the terms. Hence, fear that redundancy might arise is considered breach of the contract by many employees, even in recession, despite employer often indicating that no job is ever secure. Flexibility of terms: There will be more flexibility in psychological than in express contract. (Flexibility is itself a feature of psychological contract.) Procedural vs. substantive: Contract should include assumption of fair treatment by employer, even when times are tough. That is different to job security (e.g. I may lose my job but if I do I know I will be treated fairly). Implicit contradictions: Tough external conditions will expose any tensions within the contract e.g. expectation of fair treatment combined with potentially contradictory expectation that employee will always get an annual bonus. Shattering the previous terms: The dramatic effect of economic pressure of uncertainty on some countries will have created the necessary pressure to replace or adapt the previous assumed terms. Stability reinforces rather than softens the terms. Survivor syndrome: Where some staff are made redundant a new contract will be worked out by the survivors either collectively or openly with employer.

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Q2

(a)

The purposes of HR planning: The right number of the right sorts of people in the right place at the right time and for the right cost. Human resources are considered by most to be the organisations most valuable (and expensive) asset so they need to be deployed with the maximum efficiency and effectiveness. HRP supports this by developing a systematic plan for getting, organising, developing and retaining people. 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.

(b)

The processes involved in assembling a typical HR plan: Soft HRP: Defining where the organisation is now. Defining where it wants to be in the future. Analysing its external environment, influences and trends (over which it has no control). Formulating plans to implement necessary changes. These four categories are important stages in the strategic planning process. Soft HRP is concerned with the formulation of the mission, goals, objectives and strategy of the organisation and how variables such as growth, product, life cycle, competitive advantage and HR development will impact on its human resources. Hard HRP concerns the type of activities the HR department will need to carry out to ascertain the appropriate level of human resources; whether its current level is sufficient; whether there is a deficiency in one department over another, etc. Hard HRP activities include: Forecasting: the number of employees required in the future to support the demand for the organisations products and services. It also includes the assessment of the internal and external supply of human resources. Analysis: of how current employees are being utilised throughout the organisation and how this impacts on demand. Monitoring and review: reconciling HR plans with actual practice and facilitating any amendments needed to plans.

(c)

The relevance of HR planning in times of uncertainty The HR Director is correct (see introductory stem of the question) in saying that long term HR planning is more difficult; however in turbulent environments long term planning becomes even more business critical. Relatively stable environments call for relatively stable staffing plans. However, the more turbulent the environment, the greater the importance of trying to anticipate change. Organisation specific skills can take a long time to acquire and anticipation and preparation are critical. A building may take 24 months from idea to occupation; a workforce may take twice as long.
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 Likewise, it can be more expensive to get rid of unwanted people than buildings, plant or equipment. Organisations need to keep flexible and therefore not get locked into any long-term arrangements that reduce ability to flex according to changing needs e.g. long term agreements with trade unions or psychological contracts with existing staff. Rapidly developing markets call for anticipation of what human resources will be needed long into the future e.g. for new product that is only now being researched by R&D. As HR becomes more strategic, it needs to vertically integrate with rapidly changing business plans. Staff continue to be the major cost and as margins become tighter, staff costs come to be under increased pressure and scrutiny. Therefore lean staffing is increasingly important for survival. Turbulent environments can cover bigger social or demographic changes, that lie underneath and emerge only when it is too late e.g. ageing populations or increasing availability of women. As environment pressures increase it is increasingly important to get soft HR planning, so as to produce an organisation that is fit for survival in those challenging environments.

Q3

(a)

Conditions which must be met in order for appraisals to be effective: The system Simple and efficient, with pre-meeting to set the agenda and tone. Clear agenda. Integrated horizontally with day to day life, reviewees career plan and other performance management tools. Integrated vertically with organisational, unit and team business plans. Right mix of objective measures and targets with subjective topics e.g. competencies. Grandparent review, with follow up by organisation if necessary. Reviewers and reviewees Urgent issues have been addressed when they arose during the year. Both parties well trained and appropriately matched. Reviewee leads, reviewer facilitates. Reviewee is knowledgeable. Both motivated and see the value of appraisal not done simply to satisfy HR. Organisation deals with the unmotivated or unskilled. Sufficient time to prepare and carry out time blocked for the discussion. Rapport and confidentiality. Avoidance of discrimination. Willingness to address the difficult issues. Objectives are SMARTER. Willingness to stretch better than our previous best.

HRM(Dip)0610

(b)

Contents of a half-day appraisal skills training programme: Value of appraisal. Appraisal process. Role of reviewer to inspire and facilitate. Role of the reviewee to lead the process. What good performance looks like quality, productivity and innovation. The environment for appraisal including business plans. Preparing for the discussion. Developing a productive relationship the agenda and interpersonal skills. Dealing with difficult reviewees. Objective setting and competencies. Avoiding pitfalls.

Q4

(a)

Pressure as opposed to stress. Pressure is the working of the external environment on the employee physical (e.g. manual labour), emotional (e.g. bullying) or mental (e.g. demanding decision making). Stress is the employees adverse response to that pressure (see (b)). Workers need a certain amount of pressure to be stimulated, but each person will have a different point at which pressure is excessive and results in unhealthy stress.

(b)

The effects of stress. Mental Confusion, difficulty in making decisions, loss of creativity, forgetting. Emotional Anxiety, apathy, depression, boredom, frustration, sadness. Behavioural Displacement behaviours, aggression or passivity, loss of productivity, errors, substance abuse. Physiological Pulse rate increases, headaches, insomnia, rash, increase or loss of appetite. (All linked to the flight, fight or fright response to a threatening stimulus.)

(c)

Reducing stress. Stress monitoring and evaluation e.g. via annual staff survey. Stress risk assessments carried out at each level. Stress reduction plan. Train staff and managers about symptoms, causes and treatment. Provide opportunities for healthy exercise, diet and rest room facilities. Provide counselling or employee assistance programme. The UK Governments six standards for minimising stress are: Demands manage workload, work patterns and the work environment. Engage with staff, matching their abilities to the demands.

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 Control give staff a say in the way they do their work and allow them to influence the pace and the timing of breaks; give variety and development. Support organisation, line management and colleagues encourage and resource employees. Information and feedback are provided. Relationships positive working relationships to deal with unacceptable behaviour (e.g. bullying) and minimise unfairness and conflict. Role staff understand their roles and there is minimal conflict between roles. Change organisational change (large or small) is managed and communicated. Staff are frequently engaged when faced with change and concerns are appropriately addressed.

Q5

(a)

Discipline policy and procedure design and implementation Why Explain to staff and managers that the regulations are needed for the benefit of employees (e.g. health and safety to promote safety; bullying to protect staff from abuse). Promote good behaviour or efficiency by encouraging remedial training or support to improve behaviour or performance. Who Get cooperation of trade unions when drafting disciplinary procedures. Clarify the authority levels for each of the various disciplinary actions. Make roles clear and reinforce those roles. What Provide clear guidance about minimum standards. Help managers and employees understand that the process promotes industrial harmony rather than the adversarial approach to disciplinary action. When Promote early action before positions become entrenched and maintain short deadlines for action. Where Disciplinary action to be taken as close to workplace as natural justice will allow e.g. appeals must provide for sufficient degree of independent scrutiny. How Explain that the procedure reflects natural justice. Emphasise positive nature of procedure in staff induction and management training. Clarify employers standards e.g. what constitutes gross misconduct. Train investigators and promote quality investigations. Disciplinary panels to accept only cases (except gross misconduct) where every remedial action has been taken. Disciplinary hearings to be as positive, supportive and non-adversarial as practicable.

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(b)

Training and communication HR managers to ensure procedures are positive and provide natural justice. Staff and managers must be told of the positive purposes of disciplinary action in induction and management training. Local managers to provide clear guidance about minimum productivity requirement. Act quickly Take remedial action early, rather than towards end of probationary period. Identify the underlying problems Involve employee in identifying the real reasons for low productivity by allowing time to open up. Remedial support and training Support and training to be given to the employee to raise productivity. Temporary acceptance of under-performance where it is outside the control of the employee (e.g. welfare issues). Local manager to maintain positive relationship rather than resorting too early to over-formalised disciplinary action. Point employee towards trade union for support. Disciplinary panel to accept the case only if every remedial action has been taken. Use qualified people Clarify and keep to authority levels for each of the various disciplinary actions counselling, warning and dismissal. Action to be taken by immediate line manager wherever appropriate. Any investigation of facts to be carried out by competent person. Set clear targets Set reasonable but clear deadlines for objective, measurable improvement. Allow appeals Any appeals must provide for sufficient degree of independent scrutiny by moving up the chain of command. Positive tone Any disciplinary hearing to be as positive, supportive and non-adversarial as practicable.

Q6

(a)

The need for negotiating skills Managers negotiate at three levels operational (on day-to-day casework issues usually substantive agreements), managerial (dealing with relatively permanent policy and procedure usually procedural agreements) and strategic issues. Individual bargaining e.g. varying contract terms. Grievances e.g. managing change or reaching a compromise. With other managers e.g. reorganising work between sections. Group problem solving e.g. between departments at working levels. Commercial or service contracts with external suppliers or customers. Collective bargaining e.g. pay settlements.

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(b)

Training course outline Objective Managers to be able to use negotiating techniques when they are appropriate and to do so efficiently, effectively and economically to reach a settlement that pays due regard to the parties long term relationships with each other. Outline content Definition: two or more parties with opposing objective who, through purposeful persuasion and constructive compromise, reach a mutually agreed settlement. (Differentiates between negotiation and other means of communication.) Alternatives to negotiation: imposition, consultation, joint problem solving. (Shows alternatives which managers can choose.) Long term context: Importance of deciding the need for a long-term relationship with the other party. (Essential when dealing with others in your organisation, as in this case). Choosing a style: intellectual, conciliatory or tough battler. (Gives managers some choice.) Objective: win: win (rather than win: lose or lose: win). Ideal, realistic and fall-back. (Essential parts of preparation.) Importance of preparation (Negotiation depends upon good preparation.) Stages:- 1. prepare 2. present 3. search for common ground 4. agree 5. record. (Shows stages so that managers can prepare an agenda and sense which stage the negotiation has reached.) Roles: in the negotiation team. (Sharing roles is necessary. If manager is operating alone he or she must adopt all the roles.) Skills: Interviewing (incl. listening and body language) Note taking. Presentation. Selling. Assertiveness. Thinking and strategic. (Helps managers to see the range of skills they will need to prepare and use.)

Q7

(a)

The importance of Continuing Professional Development Future will not be like the past professionals must be learning to be ready for it. Indeed, the rate of change in HRM is increasing exponentially and practitioners must be up-to-date. In a knowledge-based role like HR responsibility for learning rests principally with the learner, and so CPD is critical. CPD is not urgent and is normally unsupervised and therefore tends to get overlooked (hence some professions require evidence of CPD or even certificate learning events as CPD hours towards a set number of annual hours).

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 CPD expands abilities and therefore career-proofs practitioners. It benefits both the job and the career. CPD learning is usually incremental and cumulative rather than revolutionary and obvious. Therefore it is not immediately apparent if CPD is being neglected. CPD learning is holistic and unsystematic and therefore CPD benefits from a systematic structure to make it happen. (b) Methods for maintaining CPD: Course (face to face, e-learning or distance learning). (Lead by expert.) Qualification (usually linked to a course.) (Recognition of attainment.) Reading (journals, books, e-mails, others publications or policies) and internet search. (Relatively inexpensive and targeted learning.) Observation of others successful and unsuccessful. (Real life and often subconscious.) Talking to others structured and unstructured. (Cheap, personal and dynamic.) Feedback. (Tailored to your performance.) Reflection and theorising. (Free and personal.) On the job experience (planned experimentation and unplanned experiences). (Free and tailored to real work.) Project work. (Contributes to organisational success as well as learning. Can get learner noticed for good or bad.) Simulation and role playing. (Unreal but relatively safe.) Visit or field work. (Time consuming and can be inefficient but live situation.) Coaching. (Expensive but very focused on perceived needs and practical.) Mentoring. (Develops mentor as well as learner. Usually free and quite tailored to work situations.) Networking. (Inexpensive and practical but can be inefficient use of time.)

Q8

(a)

Changes in learning and development New things to learn L&D developed different skills sets for employees in response to knowledge based economies. Employee development becomes a key Employee development has become more important because people have become the primary source of competitive advantage. New ways to learn ICT used to deliver learning. New ways of promoting learning have emerged, particularly around action learning and learning close to the workplace. As organisational life becomes less planned and messier, the systematic training cycle has become less and less relevant. Coaching and mentoring have flourished.

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Roles would change The focus has moved from the subject to be learned (training) to the learner (self-directed learning). A new psychological contract has emerged, in which the employer would expect to retain good people for a shorter time but would be expected to contribute to developing employees employability. L&D professionals have become more involved in internal communication and organisation development. The emphasis of the training manager has move from delivery to facilitation. Evaluation has grown L&D budgets have been squeezed and more proof of return on investment required. Evaluation has grown and training budgets have had to be stretched further. Integration has improved Horizontal integration between L&D and HRM has improved. L&D has become more aligned with the needs of the business. Globalisation Organisations are increasingly operating in a global environment, calling for staff training in understanding other cultures. National context has changed National governments continue to review, resource and direct learning. Growing emphasis upon vocational qualifications and key skills. In western economies employers have been increasingly expected to deliver post-school training in key skills. (b) Employee development Formal courses and qualifications Courses have become less popular as new ways of learning are adopted. Qualifications have become more important however, and efforts have been made to standardise and recognise more of them. Use of ICT Learning from the internet (and other communication tools such as online social networks and iPods) has increased. Technology has allowed greater simulation, e.g. in training pilots and doctors. Reading of printed material (e.g. newspapers) has decreased. Social learning Networking (structured and unstructured) has increased as a result of greater access to networking technologies. Self-directed learning Self-directed learning, involving reflection and theorising, has increased as learning becomes more individualised and tailored.

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Learning by doing Action learning and project work have grown as employers confidence in off-theshelf learning declined. Coaching and mentoring Coaching and mentoring have increased as learning became more tailored to the individual.

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