HRM Timed Question

In the CIPD spring 2015 Employee Outlook survey (forthcoming), conducted in partnership with Halogen, we asked employees which three L&D practices were most frequently used in their organisation and which three they considered to be most effective. The survey was carried out by YouGov in March 2015, and the findings below refer to responses from 1,993 individuals. The top five most used methods were reported to be: • on-the-job training (selected by 50%) • online learning (29%) • in-house development programmes (25%) • learning from peers (through face-to-face interactions or online networks) (25%) • external conferences, workshops and events (15%). Very large organisations (more than 20,000 employees) are the least likely to offer training to non-employee groups (57%), but there is little variation in organisations of other sizes. Overall, one-third provide training to students (2014: 37%), although this rises to half of manufacturing and production organisations, up from 41% last year. At the same time, however, the proportion of private services organisations offering training to students has fallen (2015: 24%; 2014: 34%), a concerning trend given the high rates of youth unemployment.

CIPD Survey

The belief that investment in people is good business, because people make the difference to organisational performance • i.e. HRM is important.

Characteristics of HRM 1. Investment in People

An emphasis on the alignment of the objectives of the individual employee with those of the organisation • i.e. strategic HRM.

Characteristics of HRM 2. Alignment

The right to manage is legitimised by the need for organisations to survive in competitive environments • i.e. line managers are the main decision makers.

Characteristics of HRM 3. Survival

A unitary employment relations frame of reference consisting of harmony, consensus, commitment & shared employer employee interests i.e. employers & employees are in agreement and are working, towards the same goals.

Characteristics of HRM 4. Relations Frame

The alignment of the HR function with managerial interests & aims, i.e. HRM is a strategic partner within the organisation and works towards the organisation's goals.

Characteristics of HRM 5. Managerial Aims

'The purpose of human resource development is to develop human expertise ... it is concerned with change, learning and improved performance.' (Truss et al., 2012: 163-4)

Definition of Learning and Development

• Meaningful work (the most important) • senior management vision and communication • positive perceptions of one's line manager • employee voice Alfes et al (2010) • Engagement represents more than job satisfaction, commitment or motivation • Engaged employees have an emotional attachment to their work and/or organisation which leads them to expend greater energy • It links to HRM terms such as 'organisational citizenship', 'working beyond contract' and 'discretionary effort' • It is agreed that positive engagement is beneficial to both organisation and individual employee • It is a multidimensional concept which may vary widely between individuals, across workplaces and from country to country.

Employee Engagement Definition

●Leadership which ensures a strong, transparent and explicit organisational culture which gives employees a line of sight between their job and the vision and aims of the organisation. ●Engaging managers who offer clarity, appreciation of employees' effort and contribution, who treat their people as individuals and who ensure that work is organised efficiently and effectively so that employees feel they are valued, and equipped and supported to do their job. ●Employees feeling they are able to voice their ideas and be listened to, both about how they do their job and in decision-making in their own department, with joint sharing of problems and challenges and a commitment to arrive at joint solutions. ●A belief among employees that the organisation lives its values, and that espoused behavioural norms are adhered to, resulting in trust and a sense of integrity. (Engaging for Success Report, MacLeod 2009).

Employee Engagement in Future

Autonomy & empowerment Trust & involving employees Development Helping to develop employees' careers Feedback, praise & recognition Giving positive feedback & praise Rewarding good work Individual interest Showing concern for employees Availability Being there when needed Personal manner Positive approach, leads by example Ethics Treating employees fairly & responsibly Reviewing & guiding Helping & advising employees Clarifying expectations Setting clear goals & defining what is expected Managing time & resources Ensuring resources are available to meet workload Following processes & procedures Understanding & explaining processes & procedures

Employee engagement management competency framework (adapted from Lewis et al, 2012)

We are a growing, dynamic, voluntary movement promoting employee engagement as a better way to work that benefits individual employees, teams, and whole organisations. We want everyone working in the UK to want, and be able, to give their best each day, so that each day is a great day at work, and that workplaces in the UK are thriving, growing and developing through the commitment, energy, and creativity of the people that work in them. David MacLeod: "This is about how we create the conditions in which employees offer more of their capability and potential". Employee engagement is a workplace approach resulting in the right conditions for all members of an organisation to give of their best each day, committed to their organisation's goals and values, motivated to contribute to organisational success, with an enhanced sense of their own well-being. Employee engagement is based on trust, integrity, two way commitment and communication between an organisation and its members. It is an approach that increases the chances of business success, contributing to organisational and individual performance, productivity and well-being. It can be measured. It varies from poor to great. It can be nurtured and dramatically increased; it can be lost and thrown away Eighty-six per cent of engaged employees say they very often feel happy at work, as against 11 per cent of the disengaged. Forty-five per cent of the engaged say they get a great deal of their life happiness from work, against eight per cent of the disengaged. (Gallup 2006)

Engage for Success Website

Training is commonly offered to students for future recruitment purposes, through promoting careers in their industry/ organisation, identifying talent, giving them 'an idea of what to expect in the workplace' and assisting students in their career choices. A few also said it helped to raise the company profile and attract potential future customers. Several, however, emphasised genuine intentions to promote social responsibility through supporting the local community, developing students' skills, aiding their employability and engaging with schools to address skills gaps. Training volunteers is generally performance-driven: to increase their skills and understanding of organisational goals - because 'they are essential to our service delivery' - and also to enable them to 'work safely'. Where training is offered to clients, it is commonly to meet core organisational objectives (for example in public health, charitable, education and training organisations). It is used to provide added value. All respondents Private services Manufacturing and production build relationships, enable the business 'to better meet customer expectations' and generate future business.

Example of L&D

A strategic, coherent & comprehensive approach to the management & development of the organisation's human resources in which every aspect of that process is wholly integrated within the overall management of the organisation. HRM is essentially an ideology. (Armstrong,1992).

HRM Definition

Strategic HRM • HR strategies; Human Resource Planning • Employment relations • trade unions; employment involvement; employee participation; employee representation; works councils • Employee Resourcing • Recruitment & selection; induction; employee release; talent management; succession planning • Learning & Development • Organisational development; organisational learning; career development; mentoring; training courses; leadership development. • Performance management • PM systems; appraisals; improving employee & organisational performance • Reward management • Pay; benefits; total reward management; collective bargaining/reward • Health & safety • Employee wellbeing; stress management; union negotiations • Ethics/CSR • Diversity management; harassment; employment law

HRM used in Organisations

HR "has become a servant to short-term performance goals and the mantra of shareholder value rather than the development of longer-term sustainable contributions based on shared values and fairness at work" (Marchington, 2015: 176).

HRM: Critical Perspective

Gap between job requirements and current capabilities. Problem centred approach; profile comparison approach; role analysis. Sources can include workforce analytics, surveys, performance and development reviews. Can be reactive or proactive.

Identifying L&D Needs

"Job design is the process of deciding on the contents of a job in terms of its duties and responsibilities, on the methods to be used in carrying out the job, in terms of techniques, systems and procedures, and on the relationships that should exist between the job holder and his superior subordinates and colleagues." (CIPD Job Design Factsheet, 2016) • The need to harness human resources in innovatory ways to give organisations a competitive advantage has focused attention on the question of job design

Job Design Definition

• The most effective learning and talent development practices are inhouse development programmes (56%) and coaching by line managers (51%). • E-learning is the learning and talent development practice that has increased the most. • The main gaps in skills identified by organisations continue to be business skills/acumen and commercial awareness, and management/leadership skills. • For almost two-thirds of international organisations (64%), learning and talent development is seen as a key driver for the international aspects of the business. • Almost six in ten (59%) organisations undertake talent management activities. These activities tend to be directed at high-potential employees and senior managers. • Funds available for learning and development have decreased for over half (52%) of organisations.

L&D in Current Organisations (CIPD Report, 2015).

The major changes to L&D over the next two years will focus on closer alignment with the business strategy and more emphasis on monitoring and evaluation. Devolving responsibility to learners and line managers is also commonly among the top changes (particularly in larger organisations), although fewer (15%) include a greater use of self-directed learning (learners identifying and meeting their own development needs) among the top three major changes of the next two years. Organisations that have aligned their L&D strategy to the needs of the business are more likely to anticipate greater use of self-directed learning (22% of those who are 'extremely aligned' compared with 7% of those who are 'not at all aligned').

L&D in the Future

"A Learning company is an organisation that facilitates the learning of all its members and continuously transforms itself." (Pedler et al ,1991) Performance = Ability x Motivation L&D Process: Identification of needs Design of training programme Delivery Evaluation

Learning Definition

1. Ensuring that the organisation has the knowledgeable & skilled workforce it needs. 2. Give employees have the opportunity to develop their abilities & maximise their skills; allow employees to reach their full potential. 3. To accommodate the changing world of work & organisations. 4. To improve organisational & individual responses to change. 5. To creating, disseminating & embodying knowledge as a key strategic resource to be leveraged. 6. To increase levels of innovation & creativity in organisations. 7. To improve organisational & individual performance; increase firm's market value. 8. To enhance employer brand and improve employee recruitment & retention.

Objectives of Learning and Development

Employee engagement was at the heart of the strategy. Clear communication about the need for change was essential to sustain performance improvement. The employee engagement survey provided critical data on where improvements were needed. Action plans were developed locally with employees. Managers discussed the results with their teams and collectively agreed what to do differently. The actions formed part of the manager's performance management objectives. Managers found that the key to their success was to proactively identify, recognise and publicise great performance. Employees seeing their managers take action as a result of the survey, positively improved engagement scores. Participation in the survey increased from a low of 56 per cent, in the first year, to 71 per cent two years later. Positive responses to questions on clarity of roles, how employees contributed to their wider team, and understanding of how they fitted into Serco's vision and strategy all increased each year. More employees now feel that they play an important part in the success of the business, and that they are recognised and valued for their contribution. Through the survey Serco were able to measure the significant impact their leaders had on creating a values-led environment focused on delivering great service. Increased employee engagement was accompanied by a 12 per cent increase in customer satisfaction and significant double-digit revenue and margin growth over the past three years.

Serco Case Study: Employee Engagement

Engaged employees in the UK take an average of 2.69 sick days per year; the disengaged take 6.19.15 The CBI reports that sickness absence costs the UK economy £13.4bn a year.16 ●Seventy per cent of engaged employees indicate they have a good understanding of how to meet customer needs; only 17 per cent of non-engaged employees say the same.17 ●Engaged employees are 87 per cent less likely to leave the organisation than the disengaged.18 The cost of high turnover among disengaged employees is significant; some estimates put the cost of replacing each employee at equal to annual salary. ●Engaged employees advocate their company or organisation - 67 per cent against only three per cent of the disengaged. Seventy-eight per cent would recommend their company's products of services, against 13 per cent of the disengaged (Gallup 2003).19 Public sector employees are less likely to be advocates for their organisation than private sector staff. There is a wide variation in engagement levels in the UK within organisations and companies, and between them. The Corporate Leadership Council (CLC) report that the highest scoring companies record 23.8 per cent of their people in the high engaged category; in the lowest scoring companies only 2.9 per cent of their people are in the highly engaged category, using the same measurement techniques.22 IES found engagement in organisations varied between age groups, between the type of organisation and between different job roles.23 The most recent Workplace Employee Relations Survey (WERS) from 2004 indicates that job-related satisfaction varied across workplaces, suggesting that it was partly determined by the workplace itself not just by demographic or job-related characteristics.

Outcomes of Employee Engagement

Six components - stakeholder interests; situational factors; HRM policy choices; HR outcomes; long-term consequences. They are viewed as being fundamentally different from other resources - they cannot be managed in the same way. The stress is on people as human resources. The Harvard approach recognises an element of mutuality in all businesses, a concept with parallels in Japanese people management, as we observed earlier. Employees are significant stakeholders in an organisation. They have their own needs and concerns along with other groups such as shareholders and customers." Proposed that long-term consequences (both benefits and costs of human resource policies should be evaluated at three levels: individual, organisational and societal. Argue that when general managers determine the appropriate human resource policies and practices for their organisations, they require some method of assessing the appropriateness or effectiveness of those policies. Beer et al devised the famous Harvard Map. It shows human resource policies to be influenced by two significant considerations: Situational factors in the outside business environment or within the firm such as laws and societal values, labor market conditions, unions, work-force characteristics, business strategies, management philosophy, and task technology. According to Beer et al these factors may constrain the formation of HRM policies but (to varying degrees) they may also be influenced by human resource policies. Stakeholder interests, including those of shareholders, management employees, unions, community, and government. Beer et al argue that human resource policies SHOULD be influenced by ALL stakeholders. If not, 'the enterprise will fail to meet the needs of these stakeholders in the long run and it will fail as an institution.' It shows human resource policies to be influenced by two significant considerations. The authors also contend that human resource policies have both immediate organisational outcomes and long-term consequences. Managers can affect a number of factors by means of the policy choices they make, including: - the overall competence of employees, - the commitment of employees, - the degree of congruence between employees' own goals and those of the organisation, and - the overall cost effectiveness of HRM practices. Beer et al argue that: "In the long run, striving to enhance all four Cs will lead to favourable consequences for individual well-being, societal well-being, and organisational effectiveness (i.e., long-term consequences). By organisational effectiveness we mean the capacity of the organisation to be responsive and adaptive to its environment. We are suggesting, then, that human resource management has much broader consequences than simply last quarter's profits or last year's return on equity. Indeed, such short-term measures are relatively unaffected by HRM policies. Thus HRM policy formulation must incorporate this long-term perspective."

The Harvard Model (Beer et al, 1984)

• Lifelong learning & human resource development are argued to be central to the effectiveness of organisations. Creating, disseminating & embodying knowledge - tacit & explicit - becomes a key strategic resource to be leveraged in this context. L & D holds the key to unlocking the organisation and its workforce's ability to learn faster than its environment is changing. In summary, learning & development lies at the heart of innovation in organisations (Guest et al, 1997: 3). • Financial results account for only 50-70% of a firm's market value - the remainder is attributed to 'intangibles' such as intellectual property & human capital, which can be enhanced through L & D (Ulrich & Smallwood 2002). • Learning or knowledge management is among Ulrich & Smallwood's (2002:43) seven 'critical organisation capabilities that [create] intangible shareholder value'. • "Well-trained labour forces are productive... cohesive, motivated and ...capable of accommodating change and introducing new technologies." (Graham and Bennet, 1995:254). • Research & development capability is enhanced by L & D activities. • A learning organisation facilitates & supports creative behaviour - allows for mistakes to be made = a learning opportunity.

The Link between L&D and Innovation

Michigan model has a harder, less humanistic edge, holding that employees are resources in the same way as any other business resource. People have to be managed in a similar manner to equipment and raw materials. They must be obtained as cheaply as possible, used sparingly, and developed and exploited as much as possible. Employees being used as a means towards the competitive success of the organisations. Assumes that increasing productivity will continue to be management's principal reason for improving HRM. It requires that human resource strategies have a tight fit to the overall strategies of the business. As such, it limits the role of HR to a reactive, organisational function and under-emphasises the importance of societal and other external factors. For example, it is difficult to see how the current concern for worklife balance could be integrated into this model: Selection: matching people to jobs Appraisal of performance Rewards: emphasising the real importance of pay and other forms of compensation in achieving results Development of skilled individuals

The Michigan model (Fombrum et al, 1984)

Employees are a stakeholder whose interests should be considered when formulating policies (also customers, shareholders, managers and the wider public/community).

Theoretical Base of HRM 3. Stakeholder Theory

Ensuring a firm's human resources are valuable, rare & costly to imitate.

Theoretical Base of HRM 4.The resource-based view

Four components - beliefs & assumptions; strategic qualities; critical role of management; key levers. Includes differences between HRM & personnel management/industrial relations. (Soft approach of HRM). In the words of Storey (2007: 7), it is a specific 'recipe' for the management of people. Price defines HRM in this way, as 'a philosophy of people management based on the belief that human resources are uniquely important in sustained business success. An organisation gains competitive advantage by using its people effectively, drawing on their expertise and ingenuity to meet clearly defined objectives. HRM is aimed at recruiting capable, flexible and committed people, managing and rewarding their performance and developing key competencies' (2007: 32). Organisation success is based on the capabilities and commitment of their employees, therefore they should be treated as valuable assets rather than mere factors of production. HR strategies are dynamic in nature, they take into consideration their business environment changes. Line managers perform HRM in their day-to-day activities. Culture is more important than procedures and systems because it reduces the case of conflict in an organisation thereby increasing understanding and unity. This is primarily important because culture management brings consensus on overall organisation values, beliefs and assumptions. It is essential in flexibility and commitment.

The Storey model (Storey, 2007)

Influences approaches in employee engagement, reward & performance management.

Theoretical Base of HRM 1. Motivation

Reciprocation between employers and employees & influences approaches in reward, performance, leadership.

Theoretical Base of HRM 2. Social Exchange Theory

Shared service activities should be concentrated in a call-centre with supporting intranet to provide administrative and basic support functions to the remainder of the business. Business partners, in contrast, are individuals or small teams who work closely with the managers of business units on key initiatives and change management. Finally, centres of expertise exist as repositories of key technical knowledge on resourcing, reward, employment relations, etc. and can develop policy while providing support to business units and to shared services. At the apex of the three-legged model, according to Ulrich, should be a small, corporate HR team that is responsible for the function as a whole and provides strategic direction.

Ulrich's 'Three-Legged Stool' Model

Four principal roles of HR - strategic partner; culture & change agent; administration expert; employee champion. HR Business Partner Change Agent Administration Expert Employee Advocate HR Business Partner - Opens vacancies and preselects candidates that best fit into the team and supports diversity, widens connections etc. Change Agent -Plans internal communication and intervenes plans to make them achievable and understandable by employees. Plans training sessions for employees and helps them to gain new skills and competencies, required for a changed role, updates job descriptions and job habits etc. Collects feedback from employees, transfers it to teams and requires project teams to introduce changes and adjustments, which are positive for employees. Administration Expert- Deep knowledge of labour law, trade union bargaining, dealing with difficult employees and keeping personal data accurate. Implements all requirements evolving from the changes in the legislation, regulation, work and safety rules, etc. Employee Advocate - Represents employees, protect their interests and make sure that strategic initiatives are well balanced, runs regular Voice of Employee satisfaction survey to identify gaps in the corporate culture. Improve experience of employees in the organisation, manage regular grievance and compliance procedure to ensure that employees endue fair treatment from management.

Ulrich's business partner model (Ulrich, 1997)

It has a wider impact on society: • Most people depend on paid work to maintain their standard of living; their sense of self-worth and place in society • Factors like pay, job security, job satisfaction; development; progression; employee voice depend upon HRM • All managers have some aspect of HRM responsibility within their job description & this is increasing • Therefore effective HR knowledge & skills are vital at: a) Organisational level - the HRM function & HR strategy b) Line management level

Why should we value HRM?