Personnel Management Transition to HRM

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Task 1 – P1, M2.

One view of the distinction between personnel management and HRM is offered by Bloisi (2007: 12) who sees personnel management as workforce centred and operationally focused. Tasked with recruitment, selection and administrative procedures in accordance with management’s’ requirements, they are functional specialists rather than strategic managers, often with little power or status, acting as a bridge between employer and employee, required to understand and articulate the needs of both. Redman and Wilkinson (2006: 3) see the rise HRM as taking place over the last 20 years, firstly in the US and later in the mid-1980’s in the UK. The 1990’s saw the appearance of HRM journals and university courses, with the then Institute of Personnel Management, the main professional body for personnel practitioners, re-launching its journal People Management with the subtitle the magazine for Human Resource Professionals. After 2000, the professional body became Chartered Institute of Personnel and Development (CIPD), emphasising the transition. Redman and Wilkinson (2006: 4) argue that the rise of HRM reflects changing concerns of management and changing power balance in the workplace with declining trade union membership and management concerns turning towards efficiency and productivity. There is also the influence of organisational change attempting to adjust to global competition with downsizing, de-layering and decentralisation. Organisations are more flexible, less hierarchical and have been subject to continuous change programmes such as business process re-engineering, performance management, culture change and the concept of the learning organisation, all areas where HRM has become involved.

Armstrong (2006: 19) summarised major differences by noting HRM places more emphasis on strategic fit and integration with business strategy, based on a management and business oriented philosophy. HRM attaches more importance to organisational culture and the achievement of commitment, and places greater emphasis on the role of line managers as the implementers of HR policies. HRM is a holistic approach concerned with total organisational interest, while recognising those of individuals, but as subordinate to the total. HR professionals are expected to be business partners as opposed to administrators and treat employees as assets and not as cost overheads.

P2, M1

Armstrong (2008: 9) states that the overall role of HRM is to ensure organisational success through its employees, noting that Caldwell (2004) identified the role in the form of goals to be achieved. These included the management of people as assets fundamental to the competitive advantage of the organisation, aligning HRM policies with business policies and corporate strategy, creation of flatter and more flexible organisational structures capable of rapidly adapting to change, encouraging teamwork and cooperation, empowering employees to manage their own self-development and learning, and improving employee involvement. Also development of reward strategies designed to support performance, building employee commitment, and increasing line management responsibility for HR policies. Foot and Hook (2008: 30) offer a comprehensive list of tasks and activities of the HR practitioner. These include recruitment and selection, learning and development, human resource planning, provision of employment contracts, policies on fair treatment, equal opportunities, managing diversity, managing performance improvement, employee counselling, payment and reward policies, health and safety, employee discipline, grievance, dismissal, redundancy, negotiation, ethic and corporate responsibility and change management among others.

P3

While HRM can initiate policies and practices Armstrong (2006: 97) acknowledges the line manager has implementation responsibility. If line managers feel indifferent or disagree with HR policies, and are compelled to implement them, they do so reluctantly and ineffectively. Purcell et al (2003) pointed out that high levels of organisational performance are not achieved simply by the existence a range of HR policies and practices and any difference made lies in how these are implemented. A factor affecting the line manager role lies in their ability to carry out HR tasks. Special skills are needed to perform people-oriented activities such as defining roles, interviewing, conducting performance reviews, providing feedback and coaching and identifying learning and development needs. Some managers have them and some do not possess these skills, or the organisation fails to provide training. Redman and Wilkinson (2006: 211) argue that line management responsibility for HR issues is not new, as they were always held responsible and accountable for managing people at work. There has been devolution of some HR work to the line partly due to pressure of organisational costs, and to provide a more comprehensive type of HRM arguably best achieved by devolving HR tasks to those managers responsible for implementation.

A frequent criticism of line management is their lack of soft, or people skills, and Torrington et al (2008: 205) state that many voluntary resignations are explained by dissatisfaction on the part of employees with supervisors. People are frequently promoted into supervisory positions without adequate experience of training.

Task 2 P4

McKenna and Beech (2002:117) describe the need for HR planning as being defined by the number of staff required to meet the organisation’s future needs as well as the composition of the workforce in terms of the necessary skills. Mullins (2005:797) describes HR planning as a strategy for the acquisition, utilisation, improvement and retention of an organisation’s human resources, preferably an integral part of broader corporate planning. Information needs include the extent and scope of the plan, forecasting period, target dates, and types of occupations and skills required, among other factors. The first stage is an analysis of existing resources. Second, estimation of likely changes in resources by the agreed target date, including losses, current staff development, and external factors such as labour availability, market or legislative change, all of which determine the supply forecast. There follows a forecast of staffing requirements necessary to achieve corporate objectives by target date. Finally a series of measures are taken to ensure the required staffing resources are available as and when needed. The overall process should consider changes such as population trends, for example the ageing workforce, fewer young people entering directly from school, more flexible work and organisational structures, level of competition from other organisations, employment legislation, development in information technology and automation.

P5, M3

Price (2007: 369) explains that the Credit Suisse process involves pre-selection, online testing, and both telephone and face-to-face interviews. Jackson et al (2008: 552) explain that Southwest Airlines uses structured interviews with multiple interviewers who have had extensive training.

Marchington and Wilkinson (2005: 176) list the availability of a wide variety of selection methods including references, application forms, work sampling, assessment centres and graphology believing that no single technique, regardless design quality, is capable of producing perfect decisions capable of certainty as to which individuals will be good performers in a given role. Multiple methods are preferable, and while references may be sought before or after interviews, they remain critical. Online tests, telephone interviews, assessment centres and personality questionnaires, literacy and numeracy tests and those for specific skills are also used according to a CIPD annual survey (CIPD 2004). Most have very low accuracy levels in terms of producing effective decisions, with work sampling offering the best likelihood of success, followed by intelligence tests and structured interviewing. References score poorly as does graphology and a combination of techniques increases accuracy. Jackson et al (2008: 552) suggest that an alternative or complimentary method is the personality test, used to judge likely fit with organisational culture.

P6, D2

The interview remains the most common selection technique with Bloisi (2007: 147) noting that 68 percent of organisations still use interviews with an increase in the more structured types, and towards training of selection teams, with the (CIPD 2005) survey reporting 56 percent using structured, panel interviewing, and 41 percent employing behavioural questioning in structured interviews. McKenna and Beech (2002: 152) see several problems associated with the interview. These include subjective, unsound judgements made by untrained interviewers, early judgement based of first impressions, or the interviewer may have prior unfavourable biases about interviewees, or be positively disposed to them because they like or are attracted to them, the halo effect. Where a panel is used there may be a lack of consensus. Problems include lack of preparation, shortage of allocated time, unsuitable venues and lack of appropriate documentation, such as the applicant’s CV being circulated to all involved, and lack of structure and note-keeping. However, Armstrong (2006: 404) feels the interview provides the opportunity to ask probing questions about the candidate’s experience and evaluate the extent to which their competencies match the job specification, enabling interviewers to offer a realistic preview of the job and gives the candidate opportunities to ask questions about the role, training, career prospects terms and conditions of employment. The face-to-face interview allows an assessment of how the candidate would fit into the organisation and offers the candidate a similar opportunity. Overall, unless no personal contact is required, as in some remote networking roles, the interview remains a critical but flawed part of selection.

P7

Best recruitment and selection practice is promoted by the (CIPD 2011) website. Selection practices involve two main processes of short listing and assessing. CV’s or application forms are used from short listing onwards and awareness of the avoidance of unfair discrimination highlighted. Online techniques may be used to manage application forms and screen candidates. Candidates should be given prior notice of what to expect, regardless of method employed, including the type of assessment and timescale, in addition to a check for disability requirements. Questions should be carefully planned and identical for all, with answers scored and a focus on required attributes and behaviour, with efforts made to put the candidate at ease. Psychological tests should only be considered where appropriate. Assessment centres may be used with various exercises and tasks but should be perceived as fair to the candidate. Reference checks should be undertaken, sometimes by telephone. The general advice is to use a structured approach ensuring perception of fairness to both successful and unsuccessful candidates, with flexibility and job tailoring. All involved should have appropriate training, be adequately briefed about the job, its requirements, and aware of the danger of unfair discrimination.
Price (2007: 369) notes that selection at Credit Suisse focuses on pre-selection, online personality testing and telephone interviews, followed by face-to-face meetings. Structured questions are compared to pre-determined answers and interviewers are trained.

Jackson et al (2008: 552) note that Southwest Airlines uses combinations of techniques including face-to-face interviews, aptitude and attitude testing by panel, and peer and line manager one-to-one meetings. The process is well-designed, structured, tailored to the job and involves all obviously suitable applicants. Neither organisation meets all best practice guidelines but Southwest does demonstrate high levels of staff retention.

Task 3 P8

Price (2007: 471) states that job evaluation is concerned with the tasks involved in fulfilling the job, duties that have to be completed and responsibilities attached. The process involves a comparison of jobs in a formal, systematic way to identify their relative value to an organisation and has its roots in the scientific management movement of Taylor (1947).
It is seen as increasingly inappropriate for the way work is organised today since the content of many jobs varies daily. Traditional job evaluation is focused on unchanging job descriptions and requirements, and if performance and pay are linked to the completion of specific tasks the need for change, endemic in today’s organisation, is ignored as is a flexible approach to customers. Modern organisations favour competency profiles instead.

Factors determining pay include the employer’s compensation strategy, worth of the job, affordability, external factors such as labour market conditions, living costs regional wage rates, cost of living, presence of collective bargaining, and legal requirements (Bohlander and Snell 2009: 419).

P9, D2

Beardwell and Claydon (2010: 520) identify several types of reward systems including individual performance-related pay where employee performance is assessed against pre-set targets or objectives and payments may be consolidated into base and bonus or variable pay. Benefits are doubtful and limitations include the fact that motivation by money alone is not necessarily effective or universally applicable, and problems are associated with measuring performance fairly and objectively. Contribution-related pay is based on both outcomes of work carried out and levels of skill and competence employed. Its advantage is seen as a move towards rewarding employees for their conduct of the work, attitudes and behaviours displayed, which are seen as leading to competitive advantage. Competence-related pay is a method of paying employees for their ability to perform as opposed to paying for performance (Armstrong 2002). Its advantages include the encouragement of competence development which fits the modern less-layered organisations and facilitates lateral career moves. Disadvantages are that assessment of competences may be difficult and links to pay arbitrary. Skill-based or knowledge-based pay is aimed at encouraging employees to gain additional skills or qualifications appropriate to business needs. The advantage is that employees strive to gain relevant skills, but a disadvantage can be cost and the need for a skills requirement analysis to ensure only those skills required are encouraged. Team-based pay is measured on an assessment of team performance rather that at an individual level and designed to reinforce collaborative working and team results. Teamwork is seen as contributing to organisational success, however, among the difficulties are distinguishing individual contribution, and highly performing individuals in low-achieving teams may feel penalised and dissatisfied.

P10, D3

Torrington et al (2008: 263) state that for most people pay is important, if not a sufficient motivator in itself. Maslow (1943) recognises the need to have sufficient money for basic existence as one of the most fundamental in a hierarchy of needs which motivate people. Herzberg (1968) argues that while pay in itself may not motivate, it holds the capacity to de-motivate if insufficient. Marchington et al (2002: 480) explain McGregor’s (1960) distinction between theory X and theory Y managers, with theory X managers believing that workers are inherently lazy and uninterested in their work, and must therefore be highly controlled and offered incentives to get them to work harder. In contrast theory Y managers believe workers can be motivated by goals of self-esteem and desire to do a good job, and that money is less important to them than these types of rewards. Vroom’s (1964) expectancy theory is linked in terms of the effort put in by employees in the expectancy of reward, and is dependent on whether they view the likelihood that their action or effort will lead to the necessary outcome of reward.

P11

For those employees not subject to an automatic annual increment when conditions allow, a common practice in monitoring and rewarding is annual review with their immediate supervisor, a limited and often superficial process. Bloisi (2007: 259) describes performance appraisal as a means of measuring and evaluating performance, which requires aiming at enabling decision-making on employee performance and determining any training or development needs. Frequently seen as an annual event, to be effective it should be continuous and involving two-way dialogue, and is frequently used as a guide to reward.

Armstrong (2000: 11) argues that performance appraisal as a means of monitoring has been discredited because it was frequently operated as a top-down bureaucratic system owned by HR rather than line managers. It was often backward-looking; concentrating on past performance, rather than future development needs, and with inadequate links to business needs. Employees have resented the superficial nature of the procedure and managers have lacked the necessary skills to conduct appraisals.

Jackson and Mathis (2007: 335) suggest appraisals can be formal or informal, with the informal being conducted whenever necessary and the day-to-day relationship between manager and employer offers such opportunities. However, in today’s sometimes networked organisation, this may be impossible. Team appraisal can be useful as having peers involved can overcome the problem of the manager’s inability to be present to observe. Comparative methods may be used to compare performance levels of their employees against one another. Management by objectives allows the manager to set, agree and monitor employee progress against targets, either job or behavioural in nature. In all cases, an important criterion is that managers receive adequate training in employee monitoring and feedback skills. 360-degree feedback may be used as basis for monitoring and reward and according to Swart et al (2005: 213) is a process where different groups within the work situation, such as peers, subordinates and supervisors and possible internal and external customers appraise an individual and offer feedback.

Task 4 P12

The Trades Union Congress (TUC 2008) provides a guide to employment rights in the UK. The employment contract signed at time of offer will normally give the notice amount required on departure which must be at least one week after a month’s employment, rising progressively up to 12 weeks after 12 years or more, with most employees being entitled to receive pay. This can be waived by receipt of payment in lieu of notice. If the reason is for misconduct, it has to be substantial and can be without notice, and immediate departure may be required. After a year’s employment written reasons for dismissal must be provided, or if dismissed while pregnant or on maternity leave. Failure to comply with the employment regulations opens up the possibility of the employee taking their case to an Industrial Tribunal.

Apart from complying with employment legislation in voluntary resignation situations best practice is also to conduct an exit interview to establish where possible the main reasons for resignation and to discover if the organisation could have done anything to prevent the resignation, facilitating learning for the future (Taylor CIPD 2002: 71). Exit interviews provide a more useful picture of departure grounds when the employee has secured another position. Most employers retain records for several years following departure, and many ensure all access is removed, especially in the case of IT staff. Foot and Hook (2008: 112) add the provision of a preparation for retirement program to assist the transition of departing for employees, and provision of programmes to keep ex-employees in touch.

B&Q comply with all the legal requirements of exit in terms of providing paid notice, or payment in lieu, in addition to paid holiday entitlement. If the departure is involuntary reasons for dismissal are provided in writing and all access to property and systems are shut down on the date of departure, regardless of reason. Property is normally returned on departure date or earlier. No exit interviews are conducted, and no follow-up is practiced for departed employees, which compares badly with best practice.
Rolls-Royce complies with all legal requirements and notice in addition to holiday entitlement. All departure reasons are documented and an exit interview conducted notes of which are retained for analysis as to reasons. All access to property and systems are removed on date of departure and any company property is required to be returned. Overall the company complies reasonably with best practice.

P13

Redman and Wilkinson (2006: 367) argue that regardless of methods used, fairness and justice remain key issues in redundancies. Recent trends have seen a move away from seniority and a reduction of last-in-first-out towards selection based on skills and performance. Certified absence counts against an employee in the selection process as much as unauthorised absence according to the IRS survey (2004). Torrington et al (2008: 223) adds attendance record to the list and reports that a more recent approach involves drawing up a new post-redundancy organisational structure and inviting all employees to apply for the jobs that will remain. Early retirement and voluntary redundancy are also favoured.

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