HRM - Human Resourse Management

Human
Resource
Management
Tony Keenan is Professor of Human Resource Management at Edinburgh Business School,

Heriot-Watt University. Professor Keenan has published many papers on recruitment,
managerial stress and the education, training and career development of professional
engineers. He has also acted as consultant to a number of international organisations
in these fields. He has held the posts of Dean, Director of the Business School and Head
of Department.
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HERIOT-WATT UNIVERSITY
Human
Resource
Management
Professor Tony Keenan
Professor of Human Resource Management,
Edinburgh Business School
First published in Great Britain in 1998

c Tony Keenan 1998, 2003, 2005
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Contents
Module 1 The Origins and Nature of Human Resource Management 1/1

1.1 What is Human Resource Management? 1/1
1.2 The Origins and Evolution of HRM 1/2
1.3 Philosophical and Theoretical Perspectives of HRM 1/5
1.4 HRM as a Strategic Activity 1/7
1.5 HRM as an Operational Level Activity 1/9
1.6 Summary 1/11
Module 2 Models of Human Resource Management 2/1

2.1 Defining Characteristics of HRM Models 2/1
2.2 Matching Models 2/3
2.3 Harvard-type Models 2/7
2.4 Summary 2/12
Module 3 Key Themes in HRM 3/1

3.1 HRM Themes 3/2
3.2 Quality 3/2
3.3 Organisational Structures 3/7
3.4 Flexibility 3/10
3.5 Team Working 3/15
3.6 The Learning Organisation 3/18
3.7 Organisational Commitment 3/20
3.8 Culture 3/23
3.9 Summary 3/27
3.10 Strategic and Operational HRM 3/28
Module 4 Analysis of Performance Requirements 4/1

4.1 Specifying Performance Requirements 4/2
4.2 Core Abilities, Skills and Motivational Characteristics 4/5
4.3 Trait Versus Behavioural Indicators of Performance 4/7
4.4 Job Analysis Techniques 4/10
4.5 Job Analysis and Strategic HRM 4/15
4.6 Competencies 4/16
4.7 Performance and Pay 4/21
4.8 Summary 4/29
Module 5 Recruitment and Selection 5/1

5.1 Selection in Context 5/2
5.2 The Selection Paradigm 5/3
5.3 The Process of Validation 5/6
5.4 The Usefulness of Selection Devices 5/10
5.5 Selection Tools 5/10
5.6 Summary 5/22
Human Resource Management Edinburgh Business School 5

Contents
Module 6 Performance Appraisal and Performance Management 6/1

6.1 Determinants of Performance 6/2
6.2 The Performance Appraisal Process 6/3
6.3 Recording Appraisal Information 6/9
6.4 Carrying Out Appraisals 6/12
6.5 Performance Appraisal in Practice 6/15
6.6 Performance Management 6/16
6.7 Summary 6/18
Module 7 Training and Development 7/1

7.1 Training, Development and Strategic HRM 7/2
7.2 Determining Training Needs and Priorities 7/3
7.3 Design of Training Programmes 7/6
7.4 Evaluation of Training Effectiveness 7/12
7.5 The Relationship between Training and Development 7/19
7.6 Methods of Employee Development 7/20
7.7 Development for Employability 7/23
7.8 Summary 7/23
Module 8 Careers and Career Management 8/1

8.1 The Concept of Career Management 8/2
8.2 Individual Perspectives 8/2
8.3 Organisational Perspectives 8/9
8.4 Gender and Careers 8/18
8.5 Summary 8/22
Module 9 Employee Relations 9/1

9.1 What is Employee Relations? 9/2
9.2 Philosophical Approaches to Employee Relations 9/3
9.3 The Legal Framework 9/6
9.4 Employee Relations Themes 9/7
9.5 Unions and Collective Representation 9/9
9.6 Grievance and Discipline 9/13
9.7 Health and Well-being 9/14
9.8 Techniques for Increasing Involvement at Work 9/20
9.9 Summary 9/24
Appendix 1 Answers to Review Questions A1/1
Appendix 2 Practice Final Examinations and Solutions A2/1
6 Edinburgh Business School Human Resource Management

Module 1
The Origins and Nature of Human

Resource Management
Contents
1.1 What is Human Resource Management? 1/1
1.2 The Origins and Evolution of HRM 1/2
1.2.1 Business Strategy in an Increasingly Competitive Environment 1/2
1.2.2 Personnel Management 1/3
1.2.3 Organisational Behaviour 1/5
1.3 Philosophical and Theoretical Perspectives of HRM 1/5
1.3.1 Hard Versus Soft HRM 1/5
1.3.2 The Nature of Work Motivation and Behaviour 1/6
1.3.3 Organisational Conditions and Effectiveness 1/6
1.4 HRM as a Strategic Activity 1/7
1.5 HRM as an Operational Level Activity 1/9
1.6 Summary 1/11
Review Questions 1/11
Learning Objectives
By the end of this module, you should be able to:
• understand what is meant by human resource management (HRM).
• describe the main factors which led to the emergence of HRM as a discipline.
• explain how HRM is related to business strategy, organisational behaviour,
and personnel management.
• understand the difference between ‘hard’ and ‘soft’ HRM.
• comprehend what is meant by strategic HRM.
• explain what is meant by operational HRM.
• describe the main activities involved in operational HRM.
1.1 What is Human Resource Management?

Despite the fact that ideas and techniques derived from human resource manage-
ment (HRM) have been adopted in a large number of organisations world-wide,
the emergence of HRM as a field is a relatively recent phenomenon whose
origins can be traced back to the early 1980s. Indeed, because HRM is still in
Human Resource Management Edinburgh Business School 1/1

Module 1 / The Origins and Nature of Human Resource Management
its formative stages, there are controversies about what exactly is meant by the
term itself, about precisely what should and should not be included within the
scope of HRM, and even in some instances about the true benefits of some of
its proposed approaches and techniques for organisations and the individuals
employed in them.
Because there is no unanimously agreed definition as to what actually con-
stitutes HRM and precisely how it differs from previous approaches to the
management of people in organisations, no attempt will be made to provide a
comprehensive definition of the term here. However, one way to look at HRM
is as a set of loosely related ideas, concepts, and techniques held together by the
common underlying premise that, within any organisation, maximisation of the
utilisation of human resources is crucial to maintain and enhance competitive-
ness in a world where those who do not compete successfully simply do not
survive. According to this view, unless organisations can make full use of the
potential of their employees, not only will they perform poorly, but their very
existence will be threatened in today’s highly competitive world.
In order to give the reader an insight into the nature of the field, we will
first examine its evolution and development from related fields and activities
such as business strategy, personnel management, and organisational behaviour.
We will then consider the various philosophical strands underpinning HRM
thinking and practice. Finally, the distinction between strategic and operational
level HRM activities will be discussed briefly.
1.2 The Origins and Evolution of HRM

One of the most important catalysts for the emergence of HRM came from
developments in strategic thinking about how businesses would need to adapt
and change to survive in the eighties and nineties. This in turn led to questions
being asked about the role and function of traditional personnel management
approaches to the management of people in organisations. Although HRM was
essentially meant to replace traditional personnel management, the two have
much in common and indeed some critics of HRM have questioned the extent
to which it really is fundamentally different from its predecessor. Finally, many
of the theories and findings from the closely related field of organisational
behaviour have been utilised by HRM theorists and practitioners and these
relationships are discussed briefly below.
1.2.1 Business Strategy in an Increasingly Competitive Environment

From a Western perspective, the early eighties was a time of much soul searching
about the future competitiveness of the Western economies in general, and
Western-based companies in particular. In brief, the Far East, especially Japan,
seemed to have gained significant competitive advantage over the West. This
was seen as a particularly threatening phenomenon because of a number of other
factors, especially the globalisation of markets and the associated intensification
of competition world-wide. Analysis of the Japanese phenomenon seemed to
point towards better utilisation of people resources as a key factor in its success.
1/2 Edinburgh Business School Human Resource Management

It appeared that a number of Japanese management practices such as the focus on

excellence and continual improvement, the provision of an element of autonomy
and influence on decisions for employees, the creation of a culture within the
organisation of shared commitment to the success of the organisation, and so
on, all served to ensure that each individual’s potential to contribute as fully
as possible to organisational success was realised. This, the argument ran, was
what gave Japanese organisations a competitive advantage over their Western
counterparts.
Further impetus to the view that optimisation of human resources is crucial
for success came in the form of the highly influential study of high performing
US companies carried out by Peters and Waterman (1982). The message from
this study largely reinforced that coming from students of Japanese management
practice, since once again, the conclusion was that how people are managed is
the key to competitive advantage and organisational success.
Around this time the political climate in the West, particularly in the UK and
the USA, was changing in ways which encouraged the development of new
thinking about how best to manage organisations. This was the era of the so-
called enterprise culture with its emphasis on individual entrepreneurial activity
as the engine of economic success. In the UK in particular, the collectivism
espoused by the Trade Union movement was seen as a barrier to economic
progress and a millstone around the neck of organisations trying to compete
internationally. Other key elements of the new culture included the prime place
given to market forces and the elevation of the status and role of the consumer
in the overall scheme of things. A notable change here was the extension of
the market-led philosophy and consumerism to the provision of services in
the public sector. Thus, for example, in education students became ‘clients’ and
educational ‘products’ now had to be ‘consumer’, rather than ‘producer’ led. All
of these politically inspired ideas served to create a climate which encouraged
radical new thinking about how best to harness people’s abilities and energies
in the face of the perceived imperative for organisations to restore competitive
advantage.
The general view in all of this was that, as far as people management in
organisations was concerned, radical surgery was the order of the day. Merely
bolting a few new techniques on to an existing system on a piecemeal basis
would not be sufficient. Rather, a whole new philosophy of how to manage
people most effectively was required. In what has now become something of
a cliché people were now ‘the organisation’s most important asset’. New and
better ways to organise activities which would harness workers’ commitment
and energies would need to be developed. Human resource considerations
would need to be linked into the design and implementation of overall business
strategy in a way that had not been the case in the past. Finally, management of
people could no longer be the sole prerogative of personnel specialists. It would
now need to be much more the responsibility of all managers.
1.2.2 Personnel Management

Traditionally, within large organisations at least, responsibility for human resource
matters lay within the personnel function. A typical list of personnel manage-

ment functions carried out in organisations would be very wide and would
include advising on activities such as: recruitment and selection, performance
appraisal, training and development, payment and pension systems, industrial
relations, and so on. These are all critically important functions which are capa-
ble of being carried out at two levels. At an operational level, all of these have
to be conducted as a part of the organisation’s everyday activities. However,
most also have a strategic element, in the sense that they can be integrated into
the overall objectives of the organisation. Take the example of training. At the
operational level, the personnel department would be responsible for adminis-
tering and running courses. At a strategic level, a relevant issue might be the
question of how much should be invested in training, given the direction in
which the organisation is going and what it wants to achieve.
From an HRM perspective, most, if not all, people management issues should
be considered from a strategic as well as an operational perspective. A key
issue which now arises is the extent to which, in the past, traditional person-
nel management has operated at a strategic level. A number of writers have
suggested that the role of personnel in the past in most organisations has been
operational and reactive, rather than pro-active and strategic (Torrington, 1995,
Hendry, 1995). An example of the reactive nature of personnel management can
be seen in the field of industrial relations, an area which greatly pre-occupied
personnel managers in the UK in the seventies. As Hendry (1995) points out,
the majority of personnel managers during that period spent most of their time
fire fighting. A dispute would arise and personnel’s job would be to react to it
and solve the immediate problem. What rarely emerged from personnel depart-
ments was a strategy for dealing with industrial relations problems. To take
another example, in the field of training and development, although personnel
departments frequently have large training and development budgets and are
responsible for running a wide variety of training courses, rarely does one find
a coherent strategy linking training to the organisation’s underlying objectives.
Again personnel’s role is seen as operational, rather than strategic. We saw
above that there was a view in the eighties that radical changes in the way in
which human resources are managed would be needed to increase competitive-
ness. Presumably, personnel managers, with their specialist knowledge, would
be well placed to initiate and influence these changes. Yet Evans and Cowling
(1985) in a study of British personnel managers, found that they were not gen-
erally initiators of major change. Nor were they given a large role in advising
on the form such changes should take.
In summary, it appears that, historically, personnel management has had
only a partial role in the management of people in organisations. It has had
an essential role at the operational level in, for example, advising on and
implementing selection systems, payment methods, training and development
programmes, welfare arrangements, and a host of other activities. It has had
much less impact, however, at the strategic level. Thus its role has been seen
as specialist and technical, rather than strategic. This is seen by many as a key
difference between HRM and personnel management and the rise in popularity
of HRM can be seen as largely a response to the need for a more all-embracing
approach to the management of people in organisations.

1.2.3 Organisational Behaviour

The mission of HRM is to maximise the utilisation of human resources. A key
issue is, of course, how this is to be achieved. There are a number of approaches
which can be taken here, but many of them have their origins in theories and
research findings in the field of organisational behaviour (OB). OB is the study
of human behaviour and experiences in organisations. An example of the link
between OB and HRM is in the area of employee motivation. Many HRM
interventions are designed to increase employee motivation and commitment,
and OB has provided rich insights into the nature of both of these phenomena.
The same can be said for the management of rewards. As we shall see later
in this text, the introduction of team working, which is another popular HRM
innovation, has its origins in classical OB studies of autonomous work groups.
Many HRM theorists stress the importance of culture change in managing people
more effectively, and this is another area where many of the building blocks
relating to both theory and practice come from OB. Many other examples could
be given, but these should suffice to make the point that much of HRM relies
on prior work in organisational behaviour.
In summary, at least three main influences on the field of HRM can be iden-
tified. From the area of strategy, the economic imperative to gain competitive
advantage, both nationally and internationally, led to the realisation of the vital
importance of the need to maximise the utilisation of human resources. This
gave a more central and strategic role to HRM in people management than had
ever been the case for personnel management. Despite the past shortcomings of
personnel management at the strategic level, the techniques used in personnel
management at the operational level have of course had to be absorbed into
HRM in order to ensure the successful implementation of strategic objectives.
Finally, many of the techniques used in HRM are underpinned by theory and
research in OB.
1.3 Philosophical and Theoretical Perspectives of HRM
1.3.1 Hard Versus Soft HRM

As indicated above, a unifying theme of all HRM approaches is the belief in the
critical importance of human resource utilisation in determining organisational
performance. However, when it comes to the question of how these resources can
best be utilised, two distinct approaches have developed. The ‘hard’ approach
sees people as resources just like any other resource possessed by the organi-
sation, the objective being to maximise their benefits and minimise their costs
to the organisation. This goes hand in hand with an emphasis on profit as the
so-called ‘bottom line’. Some examples of the kind of approach taken by propo-
nents of hard HRM will illustrate this emphasis on human resources as costs and
on bottom line profits. Hard HRM might emphasise the desirability of chang-
ing work practices so that fewer people could produce the required amount
of goods or services. This would be seen as to the benefit of the organisation
since surplus employees could be laid off to reduce costs. Full-time employees

cost more than part-time ones, so that a shift to more part-time workers would
also be advantageous from a hard HRM perspective, as would outsourcing. The
latter involves contracting work out to agencies, giving the organisation flexi-
bility to increase or decrease numbers of employees as the need arises without
redundancy or other costs. These few examples should have given the reader
the flavour of the ‘hard’ approach to HRM.
The ‘soft’ approach to HRM, on the other hand, emphasises the human, rather
than the resource, element of the equation. According to this view, people
have enormous potential to increase their contribution to the organisation if the
conditions can be set up to release this potential. In this sense people should
be seen as qualitatively different from other resources. If the organisation can
harness employees’ reserves of creativity and energy, maximise their skills, and
enhance their commitment then this will provide the key competitive advantage
that is required. The emphasis here is much less on people as cost items and
much more on how to increase their productivity by enhancing their ability to
contribute to the organisation. Consequently, proponents of ‘soft’ HRM tend
to focus on methods of enhancing motivation and capability, such as reward
management, training and development, and so on.
1.3.2 The Nature of Work Motivation and Behaviour

Underpinning HRM theories is a set of assumptions about the nature of people
and what stimulates and motivates them in the work environment. However,
as one might expect, not all theories make precisely the same assumptions.
As we shall see later, a common assumption is that the key to producing
enhanced performance is to create the conditions where employees will have a
high level of commitment to the organisation. If commitment is high, a whole
series of positive benefits will flow from this, so the theory goes. Another
common assumption is that people will respond positively if they are given
more power over decision making in the workplace. The reader will be able
to detect other examples of assumptions about human behaviour in relation to
HRM theories later in the text. An important issue to which we will return
in later modules is the extent to which the empirical evidence supports these
beliefs and assumptions.
1.3.3 Organisational Conditions and Effectiveness

An integral part of many HRM approaches is a further set of assumptions
about the ideal organisational conditions required to optimise the management
of people.
For example, it is argued that a key pre-requisite for the development of
employee commitment is the creation of the right kind of organisational culture.
Although, as we shall see later, changing culture is easier said than done,
organisational arrangements to facilitate communications at all levels, systems
designed to provide managers with appropriate leadership skills, and so on, have
been introduced with this aim in mind. The emphasis on culture change is really
part of a more general change theme which views the future as characterised

by an environment which is in a constant state of evolution. This creates a need

for organisations continually to adapt and develop in all sorts of ways if they
are to remain competitive.
HRM is often associated with the introduction of new and innovative forms
of work organisation, such as the introduction of various forms of flexible
working arrangements. One example of this is task flexibility, where traditional
boundaries between jobs are reduced or removed so that, for example, within
a work group, each individual is expected to be able to carry out most or all
of the different work roles. Another influential set of innovations can be seen
in the introduction of a variety of forms of team working. One mechanism for
creating the kind of power over decision making described above is the use of
self-managing work teams in which much of the authority previously invested
in management is devolved to the team.
Proponents of HRM frequently advocate an element of decentralisation where
policies and procedures are determined locally at the level of operating units,
rather than centrally. In this way HRM arrangements can be tailor made to
meet the needs and requirements of individual operating units. A good example
where this approach could be applied is in the matter of the determination of
rates and methods of payment. According to this view, pay bargaining should
take place between employees and management within the operating unit in the
context of local HRM priorities and the prevailing local context. This contrasts
with more collectivist approaches, notably where, for example, pay is determined
on a national level in negotiation with trade unions.
A variant on the theme of decentralisation of activities is the notion that
responsibility for HRM matters should not rest solely with the HRM depart-
ment within organisations. Rather, because of the crucial importance of human
resources, all managers should take some responsibility for HRM.
1.4 HRM as a Strategic Activity

What is the linchpin which puts a particular set of HRM philosophies, approaches
and techniques within the context of a specific organisation? According to the
theories, this is driven by the strategic role of HRM. It is proposed that all HRM
systems and practices should be integrated into a coherent policy and that this
is derived from the overall business strategy of the organisation. The overall
business strategy provides a vision of what the business is about, about where
it should be going in the future, and about how it should go about setting and
achieving objectives to realise the vision. The process of strategy formulation
involves a variety of activities, including the analysis of current strengths and
weaknesses, the evaluation of threats from competitors, and the identification
of potential opportunities for the future. The end result of this process is the
formulation of a set of strategic goals or objectives and the development of a
set of policies and procedures to implement these. Since any strategy can only
realistically be successfully implemented through the people who make up the
organisation, HRM clearly has a critical role to play here. But precisely how
does HRM strategy link into this process of overall strategy formulation?

At one level, the role of HRM is restricted to that of facilitating a pre-

determined business strategy. For example, suppose an organisation develops
a business strategy which aims to gain competitive advantage by producing,
high value added, high quality products. Part of an HRM strategic objective
to support this might be the development of a quality oriented culture within
the organisation. A number of changes could be introduced to help achieve this
objective. For example, communication systems could be introduced continually
to reinforce the quality message. Self-managed teams with responsibility for their
own quality control could be set up. In order to back up the introduction of
self-managed teams, appraisal systems designed to monitor performance might
be changed from being carried out on an individual basis to being done on a
group basis. This example illustrates both the strategic support role of HRM
and the integrative nature of strategic HRM where communication systems,
team working, and appraisal systems are considered as a whole in the light of
the strategic objective. The reader might like to try to map out an HRM strategy
where the strategic plan emphasised high volume low cost products.
Strategic HRM as outlined above has essentially an enabling role in the sense
that it only becomes involved in the process after the overall business strategy
has been formulated. However, there are strong arguments for the inclusion
of HRM at the strategy formulation stage. As indicated above, the analysis
of the organisation’s existing strengths and weaknesses is central to strategy
formulation. Since the organisation’s human resources are a key aspect of its
strengths and weaknesses, the nature of these must influence strategic choices.
To take just one example, the optimal strategic direction for an organisation
with a large pool of highly educated and skilled employees may be quite
different from one where there is a very small pool of such people. At worst,
failure to recognise the people resource input into strategic decisions may mean
that strategic plans are simply not capable of being implemented. At best,
the integration of HRM strategy with overall strategy can optimise the whole
formulation and implementation process.
The notion of strategic HRM as an integrated, universally applicable, approach
to people management is a seductive one. However, some words of caution are
in order here before we proceed to a more detailed examination of what HRM
has to offer. Historically, most HRM concepts and theories originated in the
USA and this raises the question of how far the theories are really applicable in
other cultures. For example, as Guest (1994) has pointed out, there is often an
emphasis on individualism, rather than collectivism in HRM writings (see the
discussion of de-centralisation and local, rather than national, pay bargaining
above for an example). Guest shows how this fits well with American values
but in Europe there is much more of a tradition of collectivism than in America.
This is exemplified by the greater role of the trade unions in many European
countries. Much is made, especially with soft HRM approaches, of the idea that
HRM is mutually beneficial both for the employee and the organisation but some
critics have questioned whether this is always the case as far as employees are
concerned. A cynical view of the techniques advocated might see them as ways
of getting more out of employees without a corresponding increase in rewards
to them. Much is also made of the integrative nature of HRM. It is hard to argue
with the logic of such an approach, but how often does it actually happen in

practice? Some argue that a piecemeal approach to the introduction of many of

the innovative practices we shall be discussing in more detail later in the text is
actually much more the norm than an integrated one. It is also questionable to
what extent human resource strategy is to be found in practice, as opposed to
in theory.
Criticism of HRM has largely focused on strategic level issues and the theories
and philosophies which underpin strategic HRM. On the whole, operational
level issues have been less contentious, especially where, as is often the case, the
practices are already well established from prior use in a personnel management
context. In any case, irrespective of whether or not a practising manager adheres
to a particular HRM theory or philosophy, the operational issues have to be dealt
with effectively on a day-to-day basis. It is to these that we now turn.
1.5 HRM as an Operational Level Activity

The scope of HRM at an operational level is very wide and some selectivity
in what can be covered in this relatively short text is inevitable. This will be
done on the following basis. Areas of activity where well established tools and
techniques exist will be favoured, especially where they are broadly applicable
across different countries and cultures. On the other hand, procedures which
are very culture specific are beyond the scope of the text and these will not
be covered in detail. Finally, some topics have already been comprehensively
covered elsewhere in the MBA Distance Learning series and these will be not
be dealt with in depth in this text.
At the operational level, HRM has much in common with conventional
approaches to personnel management. Nevertheless, an HRM perspective will
often influence both the relative importance attributed to a particular activity and
the precise way in which it is carried out. Thus, while both traditional person-
nel management and HRM accept the importance of effective recruitment and
selection for organisational performance, the emphasis on the qualities sought
in recruits may be different. For example, strategic considerations frequently
emphasise the need for organisations continually to adapt and change to meet
the demands of a changing environment. This implies a greater focus on attitu-
dinal qualities in selection, such as an openness to new ideas and a willingness
to accept and even welcome change, than might have been the case in the past.
To take another example, in the UK and Western Europe the management of
industrial relations and collective negotiations with trade unions has tradition-
ally been central stage in the work of personnel managers. However, some have
argued that the individualistic orientation of HRM and its tendency to assume
that management and workers have common interests serves to undermine the
importance of traditional collective industrial relations. As Guest (1989) puts
it ‘its underlying values . . . would appear to be essentially unitarist and indi-
vidualistic in contrast to the more pluralist and collective values of traditional
industrial relations’. It follows from this that the approach of HRM to industrial
relations would be quite different from that of personnel management.
We noted above that a key element in strategy formulation was the identi-
fication of the organisation’s strengths and weaknesses. Of course to do this

effectively methods need to be developed at the operational level to enable the

organisation to specify in a systematic way what is meant by good performance.
This has to be done at multiple levels ranging from the macro level of the
organisation as a whole, through sub-units such as work teams, all the way
down to the level of individual job roles. Effective specification and measure-
ment of performance is an essential HRM activity at all levels. Its importance
at the macro level can be illustrated with reference to a scenario which will
be familiar to readers from the UK. Within the last fifteen years or so, a large
number of publicly owned organisations have been privatised by government.
One frequent argument for doing this has been that ‘waste and inefficiency ’ will
be eliminated by privatisation. But precisely how was ‘waste and inefficiency’
(i.e. poor performance) measured by the proponents of this view and how valid
was this measure? Similarly, to show that privatisation produced an improve-
ment, it would be necessary to demonstrate by systematic measurement that an
increase in efficiency had actually been achieved. Taking another example at the
small group level, to show that team working is more effective than other work
arrangements it is first necessary to be able to measure team performance sys-
tematically. At the individual job role level, we have already seen that in HRM
much is made of the added value people can provide if properly managed. But
before we can manage them effectively, we need to know what end point we
are trying to achieve. In other words, before we can take steps to enhance the
performance of individual workers, we need to be able to define systematically
what constitutes good performance in an employee in the first place.
As already mentioned, selection is a central operational level HRM activity
in all organisations. Selection is in many ways the foundation upon which all
other HRM techniques are built because it provides the raw material with which
the HRM specialist has to work. Once individuals have been recruited into
the organisation, their performance needs to be managed effectively. Effective
management has a number of elements, often beginning with a systematic assess-
ment of their past performance known as performance appraisal. As we will
see, performance appraisal has traditionally been used for a variety of purposes,
such as assessing training and development needs, setting future performance
targets, salary determination, and so on. More recent HRM approaches seek to
go beyond this by integrating appraisal into a broader scheme of performance
management in which appraisal is linked to organisational objectives as a whole.
Training and development has long been a core area of activity in personnel
management and, if anything, it has assumed greater importance within HRM.
If people are a vital resource then it obviously makes sense to invest heavily in
their training. The planning and management of careers in the mutual interest
of employees and the organisation has also traditionally been seen as being an
important responsibility of the personnel department, at least in the majority of
large organisations. However, as Herriot (1992) has pointed out, the nature of
organisations has been changing in recent years. This has come about partly as a
result of the adoption of HRM theories and practices, but also for other reasons.
These changes have profound implications for careers and career management,
as we shall see when we come to take a detailed look at this topic.
These core operational areas of specification of performance requirements in
a way that can be measured systematically, recruitment and selection, perform-

ance appraisal and performance management, training and development, and

career management, will be dealt with in depth in the modules to follow. It
is recognised that some areas often regarded as important HRM activities will
not be covered in detail in this text. These include payment systems, industrial
relations, and the legal framework within which HRM activities are carried out.
These have not been dealt with in detail either because they are already covered
comprehensively in other Heriot-Watt Distance Learning texts, or because the
HRM practices in question differ fundamentally across cultural and national
boundaries. These topics will, however, be referred to selectively where they are
relevant to other issues being discussed.
1.6 Summary
The main impetus for the emergence of HRM was the perceived need, on the
part of a number of large organisations, to improve their competitive position
both nationally and internationally. Better utilisation of human resources through
the adoption of HRM systems and practices was seen as the key to achieving
this objective. Although HRM has much in common with traditional personnel
management, it attempts to overcome some of the apparent inadequacies of
personnel management as typically practised in the past. This is particularly
true of the strategic approach adopted by HRM. Operational level HRM, which
is concerned with the everyday management of people in organisations, also
shares much with more traditional personnel management approaches. However,
even here there are differences, due mainly to the impact of strategic HRM
considerations on operational activities.
Review Questions
True/False Statements
Each statement requires a single response – ‘True’ or ‘False’.
1.1 An important underlying premise of HRM is the need to maximise the utilisation
of human resources if organisations are to compete successfully.
1.2 It is unanimously agreed that HRM is fundamentally different from personnel

management.
1.3 A major difference between HRM and personnel management is the more
strategic orientation of HRM.
1.4 When a personnel department responds rapidly to threatened strike action by

the labour force and manages to defuse the situation it can be said to be
managing people in a strategic way.
1.5 Historically, traditional personnel management has had less impact at the stra-
tegic level than at the operational level.

1.6 ‘Soft’ HRM emphasises the importance of developing people so that they are
capable of contributing more to the organisation.
1.7 Most HRM theorists agree that the management of people is too important
a task to be in the hands of anyone other than specialists from the HRM
department.
1.8 Task flexibility is the term used to describe the situation where an individual is
expected to carry out a variety of different work roles.
1.9 Strategic HRM argues for an integrated approach to people management in

organisations.
1.10 According to Guest (1994), HRM theories tend to emphasise individualism, rather
than collectivism.
1.11 According to Guest (1989), HRM and traditional personnel management are
likely to have a similar approach to industrial relations.
1.12 Although the nature of organisations has been changing in recent years, these
changes have not had any major implications for individuals’ careers.
Short Essay Questions
1.1 What were the major factors which led to the emergence of human resource
management?
1.2 How does human resource strategy relate to general business strategy?
Apply What You Have Learned: HRM in Action
You are a personnel manager in a large manufacturing organisation in the electronics

industry. The company has plants world-wide, including the USA and the Far East.
You are currently seconded from your normal job on a one year assignment as
special personnel adviser to the organisation’s newly created Scenario Review Unit.
You have just received the following memorandum from the head of the unit. Your
task is to draft a suitable reply.
Memorandum:
From: Head of Scenario Review Unit
To: Special Personnel Advisor

I have just returned from a high level conference on Strategic Human Resource
Management and Achieving Competitive Advantage. They had some very high powered
speakers at the conference from all over the world. They put forward a pretty convincing
case that we really need to fundamentally change how we manage people in our UK
operation. So much so, that I have decided to recommend to our main board that we
put their ideas into practice as soon as possible. I am pretty confident that I know
what is required and I have already worked out the main changes which need to be
made. However, before going to the main board, I thought I ought to run my ideas past

you as a personnel expert, particularly since you have the benefit of all that up-to-date
knowledge you obtained by studying for your Distance Learning MBA. I have outlined
my ideas below. Please let me have your considered comments in due course.
Clearly HRM is the key to improving our use of human resources and is a vast
improvement on the old personnel management approach. Consequently the first thing
we need to do is scrap our existing personnel departments throughout the business,
make the individuals concerned redundant, and get in some new HRM experts. We will
only need one or two new people, however, since HRM theory tells us that line managers
should now be expected to do the bulk of what used to be personnel work. The seminar
speakers suggested that personnel management is not strategic enough, but I think we
may be an exception to this, since we have always been pretty good at reacting to crises.
Anyway, I am producing a business strategy for the UK side of our operation which I
will pass on to the HRM experts so that they can implement whatever is necessary on
the human resource side. By the way, I do not think we should go for this so-called soft
HRM approach – if the workers think we are soft they will walk all over us!
It seems we will need to change the culture of the organisation. As I understand it,
this is quite a straightforward thing to do. Maybe you could take this on and organise a
suitable course for people to go on. Another thing, we will no longer need to employ
those expensive organisational behaviour consultants, since their ideas are obviously out
of date now that HRM has taken over the field. Whatever happens, if we do decide
to adopt a strategic approach to HRM, it is likely to involve a whole new approach to
what we do, rather than introducing a few new ideas on a piecemeal basis. Once we
get the new systems up and running successfully, it might be a good idea to suggest to
our colleagues in the US and the Far East that they should follow our lead and adopt
an HRM approach too.
Does this all seem fine to you?
References
Evans, A. and Cowling, A. (1985). ‘Personnel’s part in organisation restructuring’,
Personnel Management, January, 14–17.
Guest, D.E. (1989). ‘HRM: Implications for industrial relations’, New Perspectives in
Human Resource Management, ed. Storey, J., London and New York: Routledge.
Guest, D.E. (1994). ‘Organizational Psychology and Human Resource Management:
towards a European approach’,European Work and Organizational Psychologist, 4, 251–270.
Hendry, C. (1995). Human Resource Management: A Strategic Approach to Employment,
Oxford: Butterworth-Heinemann.
Herriot, P. (1992). The Career Management Challenge, Oxford: Butterworth-Heinemann.
Peters, T.J. and Waterman, R.H. Jr (1982). In Search of Excellence: Lessons from America’s
Best Run Companies, New York: Harper & Row
Torrington, D. and Hall, L. (1995). Personnel Management: HRM in Action, Hemel
Hempstead: Prentice Hall.

Module 2
Models of Human Resource

Management
Contents
2.1 Defining Characteristics of HRM Models 2/1
2.2 Matching Models 2/3
2.2.1 Fombrun, Tichy and Devanna’s Model 2/3
2.2.2 The Schuler Group 2/4
2.2.3 Evaluation of Matching Models 2/6
2.3 Harvard-type Models 2/7
2.3.1 The Original Beer Model 2/7
2.3.2 The Guest Model 2/9
2.3.3 The Pettigrew Approach 2/10
2.3.4 Evaluation of Harvard-type Models 2/11
2.4 Summary 2/12
Learning Objectives
• describe the defining characteristics of HRM models.
• understand the Fombrun Matching model.
• understand the Schuler model.
• describe the main features of the original Harvard approach.
• explain Guest’s model and its relationship to the original Harvard approach.
• describe the Pettigrew model.
• evaluate the strengths and weaknesses of the Matching and Harvard models.
2.1 Defining Characteristics of HRM Models

Although a number of different models of HRM exist, they can be broadly
classified into two types. First, there are those which are commonly known
as Matching models. One of the earliest and most well known of these is
the model put forward by Fombrun et al. (1984). The second type, which was
developed by Beer et al. (1984) has subsequently become known as the Harvard
model. Both of these models originated in the USA, although as we shall see

Module 2 / Models of Human Resource Management
below, variants on them have been proposed by writers from other countries,
notably Britain. The Matching and Harvard models have somewhat different
underlying philosophies and associated implications for how best to manage
people in organisations. Although this does not mean that their prescriptions
are necessarily fundamentally incompatible, they are not easy bedfellows, and
in practice most organisations are likely to be attracted to one approach at the
expense of the other.
Before proceeding to a detailed comparison of some of the more well known
models, it is useful to consider some of parameters along which they can vary.
This will help the reader to identify the similarities and differences among them.
• All models are directly concerned with strategic aspects of HRM. However,
some are concerned almost exclusively with strategic considerations, while
others also give weight to operational and implementation issues. Also, the
treatment of the relationship between HRM strategy and business strategy
generally differs significantly from one model to another.
• Some models are more prescriptive than others. The more prescriptive
models endeavour to tell managers the ‘best way to do things’. With less
prescriptive approaches, the emphasis is much more on understanding
structures and processes than on telling HRM managers how to do it.
• An important differentiating factor among theories is the extent to which a
‘hard’ versus ‘soft’ approach is taken, as described in Module 1.
• Another important differentiating factor is the extent to which line managers
are assigned responsibility for HRM in the various models.
• Models vary in how far they advocate a departure from traditional personnel
management practice. Thus, while some have taken a radically different
approach, others have been described as being no more than personnel
management in a new guise.
• Models vary in the degree to which they adopt a unitarist approach to
HRM. The unitarist approach takes the position that there are only a small
number of individuals or groups who have a legitimate interest in the fate
of the organisation. Furthermore, these major stakeholders should be the
ones whose point of view should be taken into account in the determination
of business and HRM strategy. At its most extreme, the unitarist view advo-
cates that only top management has a responsibility for devising strategy
and its major priority in making organisations successful is to satisfy share-
holders’ needs (shareholders being the other main stakeholders). Pluralist
approaches, on the other hand, assume a much wider range of stakeholders
whose legitimate interests should be taken into account in the process of
strategy formulation. Examples of this wider community of stakeholders
might include individual employees, trade unions, and society generally.
With these points in mind, let us now proceed to examine some of the major
models of the HRM process.

2.2 Matching Models
2.2.1 Fombrun, Tichy and Devanna’s Model

This model starts with the basic proposition that HRM strategy should be
driven solely by the needs of the business. The general business strategy of the
firm is formulated in an attempt to meet these needs. Thus, general strategy
dictates HRM strategy with little consideration given to reciprocal influence
in the other direction. According to the model, a number of external factors
influence strategy formulation, the three most important of which are economic
political and cultural forces. The organisation’s overall mission and strategy in
turn dictates both its general structure and its human resource policies.
In this way business strategy determines HRM strategy and the latter must be
matched to the former. But how is the latter implemented in practice? The model
emphasises the importance of setting up systems which match the two aspects of
strategy. According to the model, there are four key operational systems which
are essential for implementing HRM strategy. These are: selection, appraisal,
development, and rewards.
The first stage in the process is to take decisions about the optimal competitive
strategy to be pursued. Typically, this is based very much on market-oriented
considerations. The next step is to decide, in the light of the overall strategy,
what performance goals should be set for employees. When the abilities required
to achieve these goals have been determined, new employees can be selected
against them. Once employees are in place, they are subsequently appraised
against these goals. The results of the appraisal are used for reward allocation
in order to motivate individuals to further enhance their performance. The
appraisal process also identifies training and development requirements for
improved performance. These four core activities are meant to operate in an
integrated way, so that there is a coherent HRM strategy, rather than a piecemeal
arrangement.
What are the main characteristics of this model in terms of the parameters
listed above? The model is quite clear on the relationship between general
business strategy and HRM strategy. General strategy dictates HRM strategy
and there is no expectation of any influence the other way. While there is a
certain logic to this, it does imply a rather mechanistic view of people as a
resource who can be readily manipulated to meet the needs of the organisation.
Take, for example, the question of the capabilities or even desires and interests of
the workforce. According to the model, if these do not match the performance
requirements as dictated by the general strategy, then it is the role of HRM
to remedy this state of affairs. But this may be more easily said than done.
Suppose an organisation with a highly skilled and highly qualified workforce
decides to move from a low volume, high quality product to a high volume low
quality product where high levels of skill are no longer needed. If people are
then told that they can no longer exercise their skills but will be carrying out
more mundane tasks than before because this is what the business requires, how
will this affect their motivation and performance? The alternative of replacing
the existing workforce with less skilled people is hardly an easy option either.

If, on the other hand, the model had allowed for the possibility that HRM
considerations might influence general strategy, a broader view of people as
human resources emerges, with possible beneficial results. In the above example,
information about the capabilities of the workforce would be an input into the
general strategic process and would thus become a factor, in addition to market
considerations, in deciding which direction to take in the future.
The model is highly prescriptive, providing managers with a set of guidelines
as to how things should be done. It is also readily identified as ‘hard’, rather
than ‘soft’ HRM. People are seen as resources whose contribution has to be
maximised at the same time as their costs have to be minimised. There is little
mention of the needs or interests of employees in the model.
The approach is essentially unitarist, rather than pluralist. Although the model
does mention the role of political and cultural forces these are given little empha-
sis. There is scant consideration, for example, of possible inputs to the whole
process from the trade unions or any other organisation representing the needs
of the employees. The emphasis is predominantly on market forces determining
strategic need which then dictates HRM practices. In this respect, the approach
represents quite a departure from traditional personnel management, which has
often seen its role as more than just the implementation of policies designed
to meet narrowly defined performance requirements. It has also been seen as
having a legitimate role in meeting employees’ needs and interests, provided
these are compatible with organisational objectives.
2.2.2 The Schuler Group

The Schuler group (Schuler and Jackson, 1987) has attempted to provide detailed
expositions of the performance requirements (called employee role behaviour in
their terminology) arising out of different competitive strategies. The group has
also endeavoured to show how these relate to specific HRM policies. Applying
this approach to Porter’s (1990) generic strategies framework, it suggests a list of
performance requirements and associated HRM policies for the strategic objec-
tives of innovation, quality enhancement, and cost reduction. Thus, for example,
a strategy that emphasises innovation requires employees to be creative, to have
a longer term focus, and so on. The HRM strategies are designed to deliver these
performance requirements. In the example just mentioned, for instance, appraisal
should focus on longer-term and group-based skills because this will help pro-
duce the appropriate role behaviours. A selection of performance requirements
and associated HRM strategies, drawn from the more extensive list to be found
in Schuler and Jackson (1987), is shown below:
Innovation
Where the strategic objective is to encourage a high level of innovation, it is
proposed that the desired performance requirements would include:
• a high degree of creative behaviour

• longer-term focus
• a relatively high level of co-operative, interdependent behaviour.

HRM strategies judged to be appropriate for ensuring that these requirements

are met include:
• jobs that require close interaction and co-ordination among groups of indi-
viduals
• performance appraisals that are more likely to reflect longer-term and group-
based achievements
• jobs that allow employees to develop skills that can be used in other
positions.
Quality enhancement
A somewhat different pattern of performance requirements emerge when the
strategic objective is quality enhancement. Examples of these are:
• relatively repetitive and predictable behaviours

• a moderate amount of co-operative, interdependent behaviour
• a high concern for quality.
The relevant HRM policies in this case are:
• relatively fixed and explicit job descriptions

• high levels of employee participation in decisions relevant to immediate
work conditions and the job itself
• extensive and continuous training and development of employees.
Cost reduction
Illustrative performance requirements here are:
• relatively repetitive and predictable behaviour

• a rather short-term focus
• high concern for quantity of output.
The ideal HRM strategies in this situation are said to include:
• relatively fixed and explicit job descriptions that allow little room for ambi-
guity
• short-term results-orientated performance appraisals
• minimal levels of employee training and development.
The approach of Schuler and his group clearly provides a more detailed
analysis of how HRM policies can be used to implement strategies than that
of Fombrun. This apart, it has much in common with their approach and its
characteristics are similar in terms of the parameters outlined at the beginning
of the module.
To what extent are Schuler’s prescriptions for matching particular HRM poli-
cies to specific business strategies valid and useful? Hendry (1995), addressing
this question, concluded that, while a number of the proposed links seem intu-
itively plausible up to a point, the optimal HRM strategy is unlikely to be

determined mechanistically by the chosen business strategy in the manner sug-

gested by Schuler. According to Hendry, the best HRM strategy will also depend
on an organisation’s particular circumstances. These would include factors such
as the nature of the technology, local and national customs, and so on. As an
example of the latter, he cites the proposed use of appraisal schemes at shop
floor level and points out that this would be ‘foreign to the British environment’
(p. 83). This is likely to make any appraisal linked policy difficult to implement
for this group of workers in the UK.
2.2.3 Evaluation of Matching Models

Boxall (1992) has advanced a number of criticisms of matching models. These
can be summarised as follows.
• The theories have seldom been backed up by systematic research to validate
them. Rather, they have relied on ‘anecdotal illustrations largely unsup-
ported by formal fieldwork programmes’ (p. 67). The Schuler group is an
exception to this since it has carried out systematic surveys to back up
their claims. These studies have provided mixed support for the model,
although they have also highlighted the importance of organisational con-
text in determining practices. Boxall has also questioned the appropriateness
of the research method used by the Schuler group. The interested reader
should consult Boxall (1992) for a fuller discussion of this issue.
• The assumptions of the models are too unitaristic. As Boxall puts it ‘HRM
is seen as something that is “done to” passive human resources rather than
something that is “done with” active human beings.’ (p. 68)
• The process of strategy formulation is not as rationalistic as the models
assume. The idea that strategy is simply a formal planning process which
leads to decisions being made and implemented more or less automatically
may be quite divorced from reality. It is probably more realistic to suggest
that strategy is only partly planned, but it also evolves in an unintended
way as events unfold.
• Also, with particular reference to the work of the Schuler group, assump-
tions about the validity of the generic models on which they are based may
be misplaced since these models have themselves been criticised.
• The models are overly restricted in their definition of the major areas of
concern to HRM. The Fombrun model, for example, ignores many of the
factors which have been shown from many years of research in organisa-
tional behaviour to be important for employee attitudes and performance.
An example here would be leadership and supervisory style. As has already
been alluded to, there is also little attention paid to the whole field of trade
unions and labour relations and their impact on HRM policies and practices.
• Finally, in these models, much is made of the need to fit HRM strategy to
overall strategy. But Boxall argues that if the fit is too close this can lead to
lack of flexibility and an impaired ability to adapt to change.
Despite the telling nature of some of these criticisms, it would not do to
throw out the baby with the bath water. These models have highlighted the

need for an integrated and strategic approach to HRM. They have also shown
how strategic HRM can be informed by general strategy and have demonstrated
how strategy can be used to guide operational level activities. While the models
may be somewhat over-simplified and rudimentary, they have at least shown
the need for, and potential value of, theory in this area.
2.3 Harvard-type Models
2.3.1 The Original Beer Model

While, as we have seen, the matching models were mainly influenced by the
strategy literature, the Harvard approach (Beer et al. 1984) has its roots in the
literature on organisational behaviour. The human relations school in particular,
was an important influence.
The Harvard model typifies the ‘soft’ approach to HRM, with the focus being
on people as individuals whose talents can be nurtured and developed to the
mutual benefit of themselves and the organisation. From this perspective HRM
becomes an important responsibility of all managers, not just HRM specialists.
The main components of the model are shown in Figure 2.1.
Stakeholder
interests
HRM policy HR Long-term

choices outcomes consequences
Situational
factors
Figure 2.1 A simplified illustration of the Harvard framework.
According to the model, HRM policy choices (i.e. strategy) are influenced
by stakeholder interests and situational factors. There are presumed to be
several other stakeholders, over and above shareholders and top managers, who
have a legitimate interest in HRM strategy. These include employee groups,
government, the unions, and the wider community. Thus, unlike the matching
models, not only are the employees’ interests explicitly recognised, but so too are
those of other groups outside of the organisation. As far as situational factors
are concerned, general business strategy is only one of seven relevant factors
listed as important inputs to HRM policy choices. Other influences include
the nature of the workplace, the labour market situation, and even laws and
societal values. Here again this contrasts sharply with the approach taken in
the matching models where everything is driven by business strategy. There are
several areas of HRM activity in which policy choices arising out of stakeholders’
interests and situational factors can be made. These include choices about: the
degree of opportunity for employee influence on decisions, the nature of reward
systems and the type of work systems.

Turning to the postulated HR outcomes of policy choices, there is an acknowl-

edgement of the importance of cost effectiveness which is in line with the pos-
tulates of the matching models. Another outcome is an increased capacity of
employees to meet performance requirements as a result of the augmentation
of their skills and abilities. However, in the Harvard model, neither of these
are regarded as the most critical HR outcome. Rather, the key outcome to be
achieved is increased commitment. According to the model, if HR policies can
succeed in ensuring that employees have a strong commitment to the organi-
sation and what it is trying to achieve, they will perform better in a variety
of ways. For example, they will be more willing to adapt to change and will
respond positively to it. This gives the organisation the crucially important abil-
ity to adapt quickly and effectively to new threats, pressures, and opportunities.
In addition, because committed employees are more self-motivated they require
less ‘top-down’ management.
A cornerstone of the Harvard philosophy is the belief that these HR outcomes
do not just benefit the organisation but their long-term consequences are also
beneficial to the employee. Commitment results in mutuality between employee
and the organisation resulting in the creation of mutual goals, mutual respect
and mutual responsibility. This, along with the opportunity for employees to
influence decisions, and the enhancement of their skills are all meant to lead
to the long-term consequence of increased satisfaction and well-being at work.
The first two long-term consequences then are benefits to the employee and to
the organisation. If the third proposed long-term consequence, that of societal
benefit, can also be achieved, then we truly will have found the holy grail in the
theory and practice of HRM!
How can the Harvard model be classified in terms of the parameters listed
earlier? Unlike the matching models, the role of general strategy is much less
dominant in the Harvard model. In particular policy choices, HR outcomes, and
long-term consequences all input into the strategy formulation process via the
feedback loop shown in the figure. Thus, strategic HRM is not viewed in this
model as purely the servant of business strategy. Instead, HRM considerations
are part of the process itself.
The model is more analytical then prescriptive. It presents HRM policy choices,
rather than recommending the one best way. Indeed from the perspective of the
Harvard model, the specifics of any particular procedure or policy are less crucial
than the general approach which is adopted to HRM. The overall philosophy
of how people can best be managed is the key from their viewpoint. However,
the model does contain prescriptive elements, especially in its advocacy of
commitment as being more or less universally desirable.
As already indicated, this model typifies the ‘soft’ approach to HRM. Also,
in line with its general philosophical position that the key to success is people
management, the model places strong emphasis on the allocation of HRM
responsibilities to individual managers.
The model is much closer to traditional personnel management than the
matching models. This can be seen, for example, in its attempt to take account
of the needs of both the employee and the organisation, in its explicit recognition
of a number of stakeholders in the process, and in its attempt to embrace external

factors such as the labour market, laws, and society in the model.
Following from the previous point, the Harvard model is much more pluralist
than the matching models. It recognises the legitimacy of employees’ interests
as well as those of shareholders, and it accepts the need to take into account the
views of other stakeholders external to the organisation.
2.3.2 The Guest Model
This model is considerably more prescriptive than that of Beer. It is less con-
cerned with the analysis of strategic options than with putting forward a set of
recommendations for good HRM practice. The model has four elements.
First, there are a series of HRM Policies and Practices, many of which one
would expect to find in a traditional personnel department. These are:
• Organization and job design;

• Management of change;
• Recruitment, selection and socialisation;
• Appraisal, training and development;
• Reward systems;
• Communication.
In the model, the human resource policies and practices are designed and
operated in such a way as to achieve the four key Human Resource Outcomes
which constitute the second element of the model. The HRM outcomes are:
• Commitment;
• Flexibility;
• Quality;
• Strategic integration.
We have already encountered commitment as a desired HRM outcome in

the Beer model. Guest’s definition of flexibility includes not only the ability to
modify the way the organisation is structured, but also the facility to vary the
jobs people are asked to do and working arrangements such as hours worked
and the nature of employees’ contracts. Quality in this model does not just
refer to the product being manufactured or the service being provided, but
includes ‘the quality of the workforce, the management of the workforce, and
human resource policies’ (Guest, 1994, p. 257). Strategic integration is also quite
broadly defined, including both the integration of HRM policies and the building
of bridges between HRM strategy and business strategy. As Guest sees it, proper
integration also requires an organisational culture where managers share, or at
least accept, the underlying value system driving the HRM strategy.
The third element of the model is the achievement of a desired list of Organi-
sational Outcomes. These are:

• High job performance;

• High problem solving;
• High innovation;
• High cost-effectiveness;
• Low turnover, absence and grievances.
Finally, the fourth element needed to make all of this come to fruition is
Leadership. This is crucial to ensure the development of the right organisational
culture to and to drive forward strategic HRM as a key goal.
In terms of the parameters listed at the beginning of this module, the Guest
model is broadly similar to that of Beer, apart from the fact that it is somewhat
more prescriptive.
2.3.3 The Pettigrew Approach

Pettigrew and his colleagues (Hendry and Pettigrew, 1990) have taken the
opposite approach to Guest in the sense that they have taken a more analytical
and less prescriptive view than Beer. Consequently, they are more interested in
gaining a better understanding of the structures and processes that influence
strategy making than in what they call the ‘armchair exercise of matching
strategy to HR processes’ (Hendry and Pettigrew 1990, p. 32).
These authors use the term Outer context to describe the wider societal
influences on the organisation. These include:
• Socio-economic factors
• Technical factors
• Political-legal influences
• Competitive factors
Although the Outer context can have a direct influence on the overall Business
strategy content, its main influence is on what they call the Inner context of the
organisation. By inner context they mean factors such as:
• Culture
• Structure
• Organisational politics and leadership
• Task technology
• Business outputs
These organisation-wide context factors in their turn influence the HRM con-
text, which they specify as including:
• Role
• Definition
• Organisation
• HR outputs

Finally, the HRM context has effects on human resource systems, defined in
their terminology as HRM content factors. These include:
• HR flows
• Work systems
• Reward systems
• Employee relations
The authors propose that there is a two-way relationship between HRM

content and the other elements of the model. Thus HRM content is capable
of influencing not just the HRM context but also the overall Inner context
and Business strategy content. The model is also pluralistic in its orientation,
recognising the many influences that can shape strategy. Finally, as already
suggested, the most notable difference between this model and those of both
Beer and Guest is the absence of any real prescriptive element.
2.3.4 Evaluation of Harvard-type Models

A number of well reasoned arguments have been put forward in favour of the
Harvard approach, particularly when compared with the matching alternative.
By way of illustration, Boxall (1992) has made the following positive points
about Harvard-type models:
• They acknowledge that many groups have a legitimate stakeholder interest

in influencing strategy.
• They accept that many other factors in addition to business strategy should
shape HRM policy.
• Although they accept the existence of market forces, they point out that
everything need not be driven solely by them. Management is not simply
a pawn in the face of market pressures and can exert real choices.
• By recognising the importance of societal level influences the door is opened
to consideration of international comparisons of HRM practices. In this
context it is worth noting that both Guest and the Pettigrew group are
writing from a UK perspective while the Beer model emanates from the
USA.
Of course these models also have their critics. In particular, there has to be a
question mark as to how realistic these models are in terms of their assumptions
and their practical application in the real world. Is it really the case that increased
commitment inevitably leads to enhanced performance? Do we know how to
increase commitment anyway? Similarly, culture may indeed be very important,
but do we actually know how to change it? Can the philosophy of shared
common interests really be sustained in real world situations? Some would
argue that conflict of interests is an inevitable part of the employer-employee
relationship whatever HRM practices are adopted. We shall examine a number
of these issues further in the next module.

2.4 Summary
HRM models can be classified as either matching models or Harvard-type
models. The various models which have been put forward can be differentiated
in terms of a number of characteristics, particularly the degree to which they
take a hard or soft approach. Hard HRM sees people as basically no different
from any other organisational resource, whose contribution has to be maximised
while their cost is minimised. Soft HRM, on the other hand, puts more emphasis
on the ‘human’, than the ‘resource’, side of HRM. Soft HRM takes the view that
it is possible to develop HRM policies which will be mutually beneficial to both
organisations and their employees.
Review Questions
2.1 While there are some minor differences of detail, the underlying philosophies
and assumptions of the matching and Harvard models are the same.
2.2 Prescriptive HRM models are more concerned with understanding organisational
structures than with advising managers on how things should be done.
2.3 Unitarist approaches to HRM tend to assume that the main stakeholders in the
organisation are top management and shareholders.
2.4 According to the Fombrun matching model, there are three key operational
systems which are critical for implementing strategy.
2.5 The Schuler and Jackson (1987) model attempts to provide lists of performance
requirements which fit different business strategies.
2.6 According to Boxall, a strength of matching models is the fact that they have
frequently been supported by systematic research validating them.
2.7 A strength of the matching models is the way in which they have highlighted
the need for an integrated approach to HRM.
2.8 Empirical studies by the Schuler group have produced equivocal support for
their model.
2.9 The Harvard approach regards HRM as an important responsibility of all man-
agers.
2.10 In the original Harvard model, business strategy is only one of a number of
factors seen as relevant inputs to HRM strategy.
2.11 According to the Harvard view, high levels of commitment need to be accom-
panied by a strong emphasis on top-down management.

2.12 The Harvard framework as proposed by Beer et al. (1984) considers cost effec-
tiveness to be a desired outcome of HRM policy choices.
2.13 The Guest model of HRM is much less prescriptive than that of Beer et al.
2.14 The strategic model put forward by Hendry and Pettigrew is analytical, rather
than prescriptive.
2.15 Soft HRM models place more emphasis on market forces than hard models.
2.1 Critically evaluate the Fombrun, Tichy and Devanna matching model of HRM.
2.2 What are the defining characteristics of the original Beer et al. model of HRM?

You are the HR Director of a large chain of retail stores. Twelve months ago you
were instructed by the chief executive to carry out a fundamental review of HR
policies and systems. As part of this exercise, you hired a group of management
consultants to examine the current situation and come up with recommendations for
the future. The main recommendation of the consultants was that the organisation
should adopt a Harvard style, soft, HRM system.
You have decided to accept this advice. You have just made a presentation to
the main board of the company having previously circulated the consultants’ report
to all members. At the end of your presentation, you were asked a number of
questions about the proposal. These are listed below. Your task is to answer each
of them in the light of your knowledge of the Harvard approach.
1 Is this soft approach any better than what they call the hard approach?
2 If we use this approach to work out an HR strategy, do we need to take on
board the views of the unions?
3 The report suggests that HR strategy can influence business strategy, but surely
it should be the other way around?
4 The report says that we should give our line managers more responsibility
for people management. But what if they screw up? In any case why is this
necessary?
5 Is it really the case that the right HRM policies are to the mutual benefit of all
employees?
6 Does it really matter whether or not employees are committed, so long as they
do what they are told by their managers?
7 How easy is it going to be to get people to be more committed?
8 What do we risk if we go down this route?

References
Beer, M., Spector, B., Lawrence, P.R., Mills, Q.N. and Walton, R.E. (1984). Managing
Human Assets, New York: Free Press.
Boxall, P.F. (1992). ‘Strategic human resource management: Beginnings of a new theo-
retical sophistication?’, Human Resource Management Journal, 2, 60–79.
Fombrun, C.J., Tichy, N.M. and Devanna, M.A. (1984). Strategic Human Resource Manage-
ment, New York: Wiley.
Guest, D.E. (1994). ‘Organizational Psychology and Human Resource Management:
Towards a European approach’, European Work and Organizational Psychologist, 4, 251–70.
Hendry, C. (1995). Human Resource Management: A Strategic Approach to Employment,
Oxford: Butterworth-Heinemann.
Hendry, C. and Pettigrew, A. (1990). ‘Human resource management: An agenda for the
1990s’, International Journal of Human Resource Management, 1, 17–43.
Porter, M.J. (1990). The Competitive Advantage of Nations, New York: Free Press.
Schuler, R.S. and Jackson, S.E. (1987). ‘Linking competitive strategies with human
resource management practices’, Academy of Management Executive, 1, 207–19.

Module 3
Key Themes in HRM
Contents
3.1 HRM Themes 3/2
3.2 Quality 3/2
3.2.1 Quality as Product Superiority 3/2
3.2.2 Quality as Customer Satisfaction 3/3
3.2.3 Quality in the Guest Model of HRM 3/4
3.2.4 Quality as Organisational Culture 3/4
3.2.5 Total Quality Management 3/4
3.3 Organisational Structures 3/7
3.3.1 Traditional Bureaucratic Structures 3/7
3.3.2 De-layering 3/8
3.3.3 De-centralisation 3/9
3.4 Flexibility 3/10
3.4.1 Different Forms of Flexibility 3/10
3.4.2 The Flexible Firm 3/11
3.4.3 Evaluation of Flexibility in Practice 3/12
3.4.4 Advantages and Disadvantages of Flexible Working Arrangements 3/13
3.5 Team Working 3/15
3.5.1 From Autonomous Work Groups to Self-Managed Teams 3/15
3.5.2 Types of Team 3/16
3.5.3 Potential Benefits of Team Working from an Organisational 3/17
Perspective
3.5.4 Consequences of Team Working for Individuals 3/17
3.6 The Learning Organisation 3/18
3.6.1 The Concept of the Learning Organisation 3/18
3.6.2 Characteristics of the Learning Organisation 3/19
3.7 Organisational Commitment 3/20
3.7.1 The Nature of Commitment 3/20
3.7.2 Determinants of Organisational Commitment 3/22
3.7.3 Commitment, Effort, and Performance 3/23
3.8 Culture 3/23
3.8.1 What is Culture? 3/24
3.8.2 The Relationship between Culture and Performance 3/25
3.8.3 Managing Culture Change 3/26
3.9 Summary 3/27
3.10 Strategic and Operational HRM 3/28

Module 3 / Key Themes in HRM
Learning Objectives
• describe the various ways in which quality has been conceptualised in
HRM.
• understand what is meant by TQM.
• compare bureaucratic and de-centralised organisational structures.
• explain what is meant by the flexible firm.
• describe different types of work teams and explain their potential benefits.
• understand what is meant by the learning organisation.
• explain the term organisational commitment and its relevance for soft HRM.
• explain what is meant by organisational culture and discuss its relationship
with organisational performance.
3.1 HRM Themes

We have seen how the forces for change in the eighties in the form of fierce
international competition, the enterprise culture, the globalisation of market-
places, and so on produced a fundamental re-appraisal of how organisations
should best be managed to regain competitive advantage in the national and
international arena. This module will examine in some detail the key HRM
themes and ideas which emerged from this process, some of which have already
been mentioned in passing in the previous two modules, and will consider how
they have been implemented in practice.
3.2 Quality
One of the most fundamental themes underlying most models of HRM is that
of quality. However, as we shall see, quality is not a simple unitary concept. It
has been conceptualised in a number of different, but overlapping, ways.
3.2.1 Quality as Product Superiority

One of the most influential factors in the adoption of quality as a key theme
arose out of the perceived superiority of Japanese manufactured products, which
were seen to be of higher quality for a given price than those produced in the
West. Other factors were, of course, important in creating a focus on product
quality, such as the writings of a number of American management gurus, such
as Deming (1982) and Juran (1988) who preached the quality message. Product
quality can be defined in a number of ways such as low levels of defects dur-
ing the manufacturing process, reliability in use, and overall value for money.
Product quality has also been defined as conforming to a high design specifi-
cation. When quality is defined in product terms, an important consideration is
the trade off between cost and quality, since high design specifications and the
installation of systems to minimise defects are likely to have a measurable cost
for the organisation.

3.2.2 Quality as Customer Satisfaction

A major rationale for seeking to enhance product quality is the belief that this
is what the customer wants. If quality is overtly defined in terms of meeting
or exceeding the customer’s expectations or requirements and this becomes
the goal, this opens the door for a much broader application of the concept.
Defined in this way, quality can become a key theme not only in manufacturing
industry, but also in the service sector, be it private or public. At first glance,
this is hardly a very original notion. After all, the belief that ‘the customer is
king’ has been around for a long time and certainly pre-dates the arrival of
HRM. However, while the need to please the customer may be self-evident to
the small entrepreneur whose livelihood might well depend on customer loyalty,
the concept may not be quite so salient to many employees in large bureaucratic
organisations who (with the exception of the sales force) are often far removed
from the customer or who do not see their income as tied to customer satisfaction
in quite such a direct way. Seen in this light, one of the outcomes of quality
initiatives in this sphere, such as customer care programmes, is the creation of
heightened awareness of the crucial importance, for all employees, of maximising
customer satisfaction.
Customer focused approaches have also resulted in more all-encompassing
definitions of who constitutes the customer. As well as external customers, for
whom the organisation provides goods and services, there are perceived to
be internal customers within the organisation itself. Thus, for example, when
managers take part in an internal training course, they are the customers whose
needs and expectations need to be met satisfactorily by the training department.
In similar fashion, whenever any department or sub-unit produces work or any
kind of service for another, the latter is a customer whose expectations need to
be met in the same way as external customers.
In the UK, at the instigation of the enterprise-oriented governments of the
eighties, the notion of the service provided to the customer has been widely
adopted within the public sector as a yardstick of quality. From this perspective,
anyone at the receiving end of any public sector activity is defined as a customer.
Thus, in the UK, students have become clients of the universities. Patients in
the National Health Service are now customers and family doctors are given
their own funds and thus become customers who literally buy services (such as
operations) for their patients from the hospital of their choice. While there are
clear potential advantages in this approach if it leads to an increased concern
for the needs of the consumer of public sector services, the public sector (and
to some extent other providers of services), is different in important ways
from the private sector manufacturing industries which spawned these ideas
on quality. For example, let us assume that quality as far as the customer is
concerned is defined in terms of meeting customer expectations and creating
customer satisfaction. Taking expectations first, Legge (1995, p. 213) describes
the difficulties here with respect to healthcare provision. As she points out,
it is not difficult to establish through market research what customers expect
from a new car, but how can a customer (formerly patient) know what he or
she can reasonably expect from a public health service at any detailed level?
As far as customer satisfaction is concerned, a rather different example from

the Heriot-Watt Distance Learning MBA can be used to illustrate some of the
contradictions which result from trying to specify quality purely in these terms.
One potential way to increase customer (i.e. student) satisfaction in this case
might be to set extremely easy examinations which all students pass. Would
this constitute a high quality product? Would difficult examinations, which a
significant number of students fail with resulting low customer satisfaction,
necessarily result in a low quality MBA product? What both of these examples
illustrate is the fact that, while no one would deny the importance of meeting
the customer’s needs, defining quality purely in terms of customer satisfaction
can often be far less straightforward than it seems, especially when applied to
public service organisations and perhaps other providers of services.
3.2.3 Quality in the Guest Model of HRM

While Guest’s model implies both the delivery of quality products and customer
satisfaction, he takes a somewhat different focus in defining quality. He pro-
poses three aspects of quality. These are the quality of staff (to perform well
you need good people), the quality of performance (the product quality and
customer satisfaction elements), and a favourable reputation with the public for
being a good employer in terms of HRM policies. This last aspect can actually
influence the other two quality dimensions in a number of ways. For example,
an organisation which has a good public reputation is likely to attract high qual-
ity applicants when it advertises job vacancies. This enables the organisation to
select good people (quality of staff) who will, by definition, tend to contribute
to the achievement of quality of performance.
3.2.4 Quality as Organisational Culture

So far we have defined quality in terms of its focus on people (i.e. customers),
on products, or on some combination of both. Yet another approach sees quality
as being even more fundamental to an organisation’s functioning than has been
implied so far. According to this perspective, the idea of quality is something
which should be embedded in the organisation’s culture. It is really a philosophy
about how things should be done and is an attitude which permeates all aspects
of the organisation’s functioning. Quality comes first in all things and there is a
continual and unremitting striving for improvement in quality terms at all levels
in the organisation. From this perspective, it is one of the core values of the
organisation. Indeed, some would argue that it should be the defining value of
the organisation.
3.2.5 Total Quality Management

The notion that making quality central to an organisation’s philosophy is likely
to be conducive to high performance is intuitively very appealing. However,
it does beg a most important question. How far can HRM deliver this all-
important quality emphasis, and what techniques do we have at our disposal to
achieve this desired outcome? One well known system which has endeavoured
to achieve this objective is total quality management (TQM).

What is TQM?
As a system, TQM embraces the various perspectives on quality described above.
However, it is most clearly identified with the idea of quality as something which
is fundamental to an organisation’s culture and philosophy. In this sense TQM
is not just about products or services to external customers. Rather, according
to its proponents, it is about a set of values and ways of operating which drive
everything the organisation does. While TQM has a number of variants, most
TQM systems would, at least in theory, include the following:
1 The discipline of TQM applies to everything the organisation does – not

just the provision of goods and services to the external customer.
2 The satisfaction of the needs of both external and internal customers is
given the highest priority.
3 Everyone in the organisation has to buy into the process – from top man-
agement down to the shop floor. Employee involvement and commitment
are seen as central to the success of TQM.
4 The emphasis is on continuous improvement in quality rather than meeting
a required standard. TQM is a long-term strategic activity, rather than a
quick fix.
5 TQM is about a change in culture. It is about changing ‘the way we do
things around here’.
6 The achievement of TQM objectives may require the modification of tradi-
tional organisational structures including devolving power and responsibil-
ity down the organisational hierarchy.
7 New methods of work organisation are often introduced as part of TQM.
These may include more flexible working arrangements and a greater
emphasis on team working.
It is clear from the above that the introduction of TQM can potentially involve
far reaching changes in organisational structures and functioning. It may also
require new employee attitudes, responsibilities, and working arrangements.
According to the theory, TQM is an integrated system requiring wide ranging
changes which mutually reinforce each other. It is not about bolting a few new
procedures onto existing systems.
Does TQM Work?

There is no doubt that TQM has been an extremely influential management
innovation world-wide. Its early applications were mainly seen in Japanese
manufacturing industry, and much of the credit for the superior quality of
Japanese products discussed at the beginning of this module was attributed
to the use of TQM methods. It is therefore not surprising that TQM was
subsequently adopted enthusiastically in the West as part of the drive to compete
successfully, both at home and in the international arena. However, because
something is popular does not necessarily mean that it works. To evaluate
whether or not TQM works we have to look at the evidence from studies of
TQM in action.

There is no shortage of individual accounts of the success of TQM in the

popular management press. However, often these are written by proponents
of the method, and as such, they often have more of a flavour of missionary
zeal than dispassionate analysis about them. It is perhaps more illuminating
to consider the findings from more objective, academically-oriented research on
TQM effectiveness. The results from these studies are more mixed and, while
there have been some reported successes (Hill, 1991), there have also been
reports of TQM failing to live up to its expectations (Wilkinson et al., 1992).
The failure of some TQM initiatives to produce the anticipated benefits has
been put down to a number of factors, including the following:
• failure to adopt a proper integrated approach, with a few TQM concepts

being selected and implemented on a piecemeal basis.
• lack of support from middle managers who see it as more work for them
without any additional benefit.
• insufficient commitment from top management.
• reluctance of management to devolve control and responsibility down the
line.
• employee perceptions of TQM as something imposed on them by top man-
agement.
Whatever the theoretical merits of TQM, and despite its widespread popularity,
it seems clear that there are many implementation problems in ensuring that the
promised quality enhancement is realised in practice.
Total Quality Management and Key HRM Themes

Apart from the overall emphasis on quality, a number of more general HRM
themes have been incorporated in TQM systems. This can be illustrated with
reference to the seven defining characteristics of TQM listed above, as follows.
• new organisational structures – point 6 above.

• flexible working arrangements – point 7 above.
• team working – point 7 above.
• employee commitment – point 3 above.
• culture change – point 5 above.
These are all important themes in HRM thinking and practice. However, each
in its own way has been the subject of controversy, particularly in terms of
its implications for individual and organisational performance. Each will be
examined in detail in the course of the remainder of this module. For now,
the reader is simply cautioned that, whenever any of these concepts is found
wanting, this has implications for our evaluation of the effectiveness of TQM as
a system.

3.3 Organisational Structures

The eighties also saw the emergence of an interest in the potential part played
by non-traditional organisational structures and designs in enhancing competi-
tiveness. While these almost inevitably had implications for HRM, the extent to
which they were influenced by HRM ideas and theories was quite variable.
The well known maxim that ‘structure should follow strategy’ rather than the
other way around suggests that the organisation should first decide what it is
trying to achieve and then put in place structures which will help this to come
about. If this is adhered to, structural changes should flow directly from HR
and business strategy. So, if a decision is taken to go for a high value added
product with considerable emphasis on quality, the optimal structure to achieve
this needs to be identified and implemented. From this perspective, structure
can be seen as instrumental in setting up the conditions which are conducive to
certain kinds of working practices which in turn are instrumental in producing
desired performance outcomes.
There have also undoubtedly been a number of instances in recent years where
new structural arrangements were introduced, not so much as a consequence
of an integrated HR or business strategy, but rather as a result of an economic
imperative to cut costs in the short- and medium-term. Such changes have to
be managed successfully from an HRM perspective irrespective of their origins
or rationale. In reality, regardless of the reason, the introduction of structural
changes is likely to have significant consequences for employee attitudes and
performance.
It is beyond the scope of this module to carry out a comprehensive review
of the wide variety of different structures to be found in modern organisa-
tions. Instead, this module will concentrate on looking briefly at traditional
bureaucratic organisational structures and contrasting these with two innova-
tions which have particular significance for HRM. These are de-layering and
de-centralisation.
3.3.1 Traditional Bureaucratic Structures

The traditional organisational structure, at least as far as large organisations are
concerned, is fundamentally bureaucratic in nature. It is generally hierarchical,
with power, status, and remuneration all increasing as an individual moves
up the hierarchy. The structure is typically pyramidal, with several layers of
management at the bottom and fewer and fewer managerial positions towards
the top of the hierarchy, culminating in the chief executive. There are usually
parallel structures for different departments based on function (e.g. personnel,
finance, marketing). In very large enterprises, such as multinationals, divisions
will have their own parallel structures and hierarchies which feed into and are
overseen by corporate headquarters.
This type of structure clearly has certain advantages. Duties and responsi-
bilities, based on position in the hierarchy, can be clearly spelled out for all
concerned. Similarly, lines of authority are clear and unambiguous. Account-
ability is also fairly transparent in bureaucratic structures. All of this makes for
efficient control of people and processes. Bureaucracies can also have certain

attractive features from the individual’s perspective. For example, there is now
clear evidence that one of the most potent sources of stress for employees is
uncertainty or ambiguity about what is required of them and, while no one is
suggesting that bureaucracies are free of all ambiguity, it is at least relatively
clear to individuals what they are required to do and what their responsibilities
are. Also, the existence of a clearly visible hierarchical structure allows individ-
uals to see potential career paths for themselves in the organisation, allowing
them to aim for specific career objectives.
There are of course downsides to this form of structure, some of which have
implications for the quality issue discussed above. For example, bureaucratic
structures, being highly rules oriented, are widely regarded as being rather
inflexible and resistant to change. But flexibility and change may be just what
is required if the concept of continual improvement is to become a reality.
Hierarchical organisations, by their nature, tend to give more responsibility (and
hence more satisfaction?) to those higher up the ladder. If those lower down
have less responsibility, and by implication, less satisfaction, how are they to
be motivated to deliver quality? Furthermore, where bureaucratic organisations
rely heavily on adherence to standard rules and procedures they are in danger
of stifling the kind of creativity and personal initiative which is a significant
part of the human potential which the Harvard approach to HRM in particular
seeks to unlock.
3.3.2 De-layering
We have seen above that a common feature of bureaucratic organisations is
the presence of several layers of management arranged in vertical hierarchies.
In the late eighties a popular pastime on the part of top management in a
number of organisations was to remove several of these managerial rungs in
the ladder in the process known as de-layering. In this way organisations could
be made leaner and flatter. One justification for this action was the suggestion
that the bureaucratic nature of these organisations had led to over-manning
at managerial level which was inefficient and could no longer be afforded in
times when value for money for the organisation was paramount in order to
maintain competitiveness. In the face of fierce competition, passengers could
no longer be afforded, so the argument ran. Without doubt, over-manning due
to excessive bureaucracy did exist in some organisations and de-layering was
inevitable in the face of increasing competitive pressures. Equally, there were
other cases where this was not so and de-layering was implemented as a pure
cost cutting exercise designed to shed expensive managerial staff while at the
same time increasing the workload for those who remained. Even though the
workload of these managers may already have been high prior to de-layering,
they could be guaranteed to comply with the new requirements for fear of being
next on the HR department’s hit list. In these circumstances de-layering would
seem to be likely to run counter to the soft HRM goal of creating a high level
of commitment among employees. Unless, of course, commitment is defined as
‘loyalty’ based on fear of losing one’s job.
From an alternative viewpoint, de-layering could be construed as a vehicle for
increasing commitment. According to this view, removing a managerial position

affords the opportunity to give more power and responsibility to those at the
level below. Assuming that people value increased responsibility, de-layering
could therefore lead to increased commitment in those who remain. From this
standpoint, it could be argued that one of the main reasons for introducing
de-layering is to generate increased commitment. Of course, even if such a
consequence was unintended, it might still have this positive effect regardless
of management’s intentions.
In conclusion, it is not possible to state in general terms whether or not de-
layering represents good or bad HRM practice. It all depends on the context
and circumstances. If prior over-manning genuinely existed, if this was broadly
accepted as being the case by all concerned, and if de-layering actually increased
the levels of responsibility for the remaining managers in a way that gave them
increased job satisfaction, then it would have clear benefits. However, it is much
less easy to justify de-layering in terms of good HRM practice if it is a pure cost
cutting exercise which results in those who remain experiencing chronic work
overload, low job satisfaction, and reduced organisational commitment.
3.3.3 De-centralisation
We noted above that large enterprises will frequently comprise several different
operating units, each with its own hierarchical structures and each reporting to a
corporate head office. Many of these organisations are engaged in a wide variety
of activities providing a diverse range of products, often embracing a number
of countries and cultures. In these circumstances there is typically considerable
centralisation of power and authority, and corporate head office frequently has
responsibility, not only for business and HRM strategy, but also for a wide
variety of HRM processes and procedures such as industrial relations, company
wide pay scales, corporate recruitment, and so on.
A number of arguments have been put forward urging the abandonment of
these highly centralised structures in favour of systems which devolve power
and responsibility to the business units. Yet again, the threat from increased
competitive pressure is often the impetus to move towards less centralised
structures. First, there are cost arguments directed at the reduction of central
overheads. Perhaps the organisation does not need a hugely expensive corporate
office filled with central support staff in New York, Tokyo, London, or some
other high cost location. A second line of argument revolves around the notion
of quality and the need to serve customers’ requirements better than in the
past. It is the managers of the local business units on the ground who are
most aware of customer needs and who are therefore best placed to act on
them quickly. But to be able to do this they need a degree of autonomy in the
management of their business which is absent where there is a large element
of central control. De-centralisation also sits well with at least some models of
HRM. From an HRM perspective, de-centralisation means devolving power and
responsibility down the line to the business unit. This autonomy not only ensures
that full use is made of people’s abilities, it also serves to increase motivation
and commitment. De-centralisation could also improve the management of pay,
since it gives freedom to local HRM departments to set up whatever pay and
incentive systems fit local needs.

Guest (1987) in advocating de-centralisation, argues the case on the basis of

the increased flexibility it helps to create. He espouses flexibility as one of the
keys to reacting effectively to changing circumstances which in turn is seen as
one of the essential organisational requirements for success. Flexibility has a
number of implications for organisational structure, but its ramifications go far
beyond issues of structure. Because of this, it is considered in its own right in
the next sub-section.
3.4 Flexibility
The underlying argument about flexible working arrangements runs as follows.
In highly competitive environments, organisations must be able to respond
quickly and effectively to changes in customer demands, economic circum-
stances, competitor activities, and so on. The imperative is for rapid reaction to
the needs of the marketplace, whether it be in terms of new products, new price
structures, changes in the nature of the labour force, or whatever. The key to
achieving this, according to its advocates, is flexibility.
3.4.1 Different Forms of Flexibility

Flexibility can take a number of different forms. Blyton and Morris (1992) have
proposed four main types of flexibility.
1 Functional flexibility. This involves the concept of multi-skilling, where

employees are required to carry out a wider range of activities than before.
Traditionally, many work roles are specialised and work is organised so that
the activities that can be carried out by a person in a particular job role are
precisely, and often quite narrowly, defined. In addition, a person in one
work role is not expected, or in some cases even allowed by the rules of
demarcation, to carry out work defined as part of another job role. Thus,
for example, it might be laid down that all electrical work, no matter how
simple, is carried out by a fully qualified electrician, and no electrical repairs
of any description can be carried out by anyone who is not fully qualified.
Similarly, in a component assembly situation, the individual who makes the
component does not inspect it. That is someone else’s job role. And so on.
The idea of functional flexibility is that specialisation of roles is reduced and
individuals are trained to carry out a much wider range of activities than
before. In this way traditional demarcation lines are attenuated or removed
and management has the flexibility to move employees from one task to
another as the need arises. For some, this might entail the opportunity to
expand their work to include more highly skilled or responsible activities,
while for others it might require the inclusion of less skilled tasks in the
range of work they are expected to do.
2 Numerical flexibility. An important element of flexibility for the organi-
sation is the ability to expand or contract the labour force quickly as the
need arises. The former enables rapid response to, for example, an unex-
pected increase in demand for a product. The latter allows rapid shedding
of costly staff when they are not needed. To achieve this flexibility requires

the use of a variety of employment practices including the use of part-time

employees in greater numbers than before, contracting out or outsourcing
various activities, and so on.
3 Temporal flexibility. In this case both the number of hours to be worked
and when they are to be worked varies. Approaches here include flexitime
arrangements where the working day can be varied within limits, shift
working, annual hours contracts (where there is a total number of hours
to be worked but when they are actually worked is varied according to
circumstances), and so on.
4 Wage flexibility. This allows the organisation freedom to vary the pay
individuals receive in ways which best allow it to meet its objectives.
For example, linking pay to individual performance, rather than paying
everyone the same regardless of their performance, might act as an incentive
to greater effort and subsequently enhanced performance.
3.4.2 The Flexible Firm

Atkinson (1984) ) has suggested a model of what he calls the flexible firm, which
brings together a number of aspects of flexibility.
A key theme of the model is the notion of core and peripheral workers.
Core workers, who constitute the primary labour market, are the career workers
of the organisation. In relative terms they have high job security. They are
more highly paid than peripheral workers and there is considerable investment
in their training. This is necessary because these employees are expected to
be multi-skilled. They are also expected to have a high level of commitment
to the organisation. Typically they are comprised of managerial and technical
grades and the more highly skilled craft workers. This group provide functional
flexibility through its commitment, creativity, and highly developed skills.
According to Atkinson, there are two peripheral groups of workers. The first
peripheral group, which constitutes the secondary labour market, is normally
full-time, but does not have the security of the core group. They are employed
to carry out a particular circumscribed job role and are not perceived as having
a career as such with the organisation. They are also typically less well remu-
nerated. High turnover among this group is expected and indeed contributes to
numerical flexibility.
The second peripheral group is employed on a part time basis, on job share
schemes, short-term contracts, and the like. Once again, individuals in these
groups tend to be less well paid, not just in with respect to wage rates but also in
terms of fringe benefits. In addition, in the UK at least, they frequently have less
protection in terms of employment legislation. This group may also be required
to provide temporal, as well as numerical, flexibility for the organisation.
The model also includes various outsourcing activities as a means of gener-
ating flexibility. Individuals who are part of outsourcing arrangements are not
employees as such but are contracted to do specific work. In this way they can
be used exactly as and when needed. A wide range of types of person and
tasks can be outsourced, ranging from agency workers such as temporary word

processing staff, to firms contracted to carry out certain activities on a continuing

basis (such as office cleaning), to highly specialised consultants such as design
engineers.
3.4.3 Evaluation of Flexibility in Practice

One issue in the evaluation of flexibility is the question of the usefulness of the
Atkinson model. How robust is it theoretically and how far have organisations
implemented it as a strategy? Leaving aside the Atkinson model, to what extent
have the various types of flexibility been adopted by organisations and how
well have they actually worked in practice?
The notion of core and peripheral workers is a central feature of the Atkinson
model. However, a number of writers have pointed out that the specification of
what precisely constitutes the core and what is peripheral is beset with problems.
What are the defining characteristics of these two groups of employee? Is it the
nature of the employment contract which is crucial? Is it the person’s status
in the organisation, the tasks performed in the role, or what? For example,
suppose those on full-time contracts are designated as core and those on part-
time contracts are defined as peripheral. The trouble with this is the fact that, in
some work environments, part-time employees are often of critical importance
to the effective functioning of the organisation. In these circumstances, does it
make sense to downgrade part-time workers to peripheral status?
As Legge (1995) points out, a further problem when it comes to testing the
model arises because of the mixture of descriptive and prescriptive aspects it
contains. In some places, the model is descriptive in orientation in the sense
that it puts forward flexibility as a description of what organisations are actually
doing in response to competitive pressures, without actually stating that this
is what they should be doing. Elsewhere, the model is prescriptive insofar as
flexibility is proposed as an ideal way to run an organisation in times of rapid
change. This leaves the researcher wishing to test the model unclear as to exactly
what propositions are to be tested.
Leaving aside the prescriptive element of the model, from a purely descriptive
standpoint, what evidence is there that organisations are actually adopting an
Atkinson style core-peripheral strategy as a way of increasing their competi-
tiveness? While, as we shall see below, there has been a significant increase in
part-time working in some countries (for example the UK ) in recent years, it is
not at all clear that this is due to a strategic attempt by organisations to set up
a core-peripheral workforce of the type suggested by Atkinson. For example,
a large scale survey in the UK of Employers’ Labour Use Strategies (Hakim,
1990) indicated that only a small minority of companies had adopted a core-
periphery strategy. Where the use of part-time staff, temporary workers, and so
on had increased, companies were not on the whole adopting these employment
methods as part of an Atkinson-style strategy.
In some ways the notion of peripheral workers is focused on numerical and
temporal flexibility, since this is largely what the peripheral workers provide.
But what about functional flexibility, which is supposedly provided by core
employees? To what extent has this been taken up by organisations? Legge

(1995) reviewed a number of studies and reports which looked at this question.
One of her main conclusions was that ‘While there is evidence that employ-
ers, particularly in manufacturing, are seeking enhanced flexibility from their
employees, this appears to be at the margins of craft skills rather than true
multi-skilling and to have involved job enlargement for semi-skilled employees
rather than up-skilling’ (p.169)
Turning to financial flexibility, the concept of individualised payment based
on some aspect of performance is hardly new. For example, systems of payment
according to the number of units produced (piece work) have been around
for many years. Indeed, in some selling jobs in particular, pay is largely on a
commission basis, being almost entirely a function of sales achieved. Over the
years many variants of individualised pay have been tried with mixed success. In
recent times performance related pay (PRP) linked to performance management
systems has frequently been advocated as an HRM tool. (See Module 4 and
Module 6 for a discussion of PRP and performance management respectively).
3.4.4 Advantages and Disadvantages of Flexible Working Arrangements

Some advocates of flexibility would have us believe that it is a panacea for
every ailing organisation’s problems. On the other hand, critics of flexibility
not only claim that it is not saying anything new, but they also argue that it
gives respectability to management practices designed to increase control over
employees and reduce the quality of their working lives in the interest of cutting
costs.
As is so often the case, the truth probably lies somewhere between these
two extreme positions. Table 3.1 summarises some of the potential benefits and
drawbacks of flexibility from the perspective of three key sets of stakeholders:
the organisations themselves, core workers, and peripheral workers. Notwith-
standing some of the difficulties with the core-peripheral distinction, it is useful
in this context since it highlights two categories of employee for whom the
consequences of flexibility may be very different.
What conclusions can we draw about flexibility as an HRM process? Table
3.1 suggests that there are a number of potential advantages and disadvantages
of workplace flexibility, depending on which particular group of stakeholders
is considered. Clearly it is not a universal panacea which will automatically
solve all of an organisation’s problems overnight. While Atkinson’s model has
value in helping to focus our thinking on issues and alternative forms of work
organisation, the core-peripheral distinction does not hold up well in practice
and few organisations seem to have adopted flexibility as envisaged by Atkinson
as an integrated strategy.

Table 3.1 Possible advantages and disadvantages of flexibility for different

stakeholders
THE ORGANISATION
Advantages Disadvantages
A flexible core means a more easily controlled/ Risk of lack of specialised expertise due to
managed workforce – there is increased multi-skilling.
control over deployment with less reliance on Peripheral workers may lack commitment with
particular individuals to do key tasks. subsequent effects on performance.
Core employees more committed due to Peripheral workers may lack necessary
enriched jobs, career opportunities, and so on. training.
Peripheral workforce gives flexibility to hire or High turnover means frequent recruitment
fire easily and at relatively low cost. with associated costs.
High level skills can be bought in as needed Low commitment and lack of training in
without expensive employment liabilities (e.g. peripheral workers may threaten quality.
pension provision).
Cost savings in low wage costs for part-time
workers.
Individualised pay may motivate workers.
CORE WORKERS
Relative job security. High job demands may result in high levels of
Career opportunities. stress with associated effects on well-being.
Investment in training and wide experience
mean core workers may be highly employable.
Possibility of enriched jobs.
Individualised pay awards may mean that
effort and performance are rewarded.
PERIPHERAL WORKERS*
Flexibility of hours and timing of work may be Lack of security of employment may lead to
convenient for many workers. stress and associated effects on well-being.
Freedom from full-time work requirement Lack of training and development means
makes it easier to have alternative lifestyles. workers have low employability.
Individualised wages means No career structure.
effort/performance may be rewarded. Low pay for sub-contracted and part-time.
groups
Poor financial package – especially non-wage
benefits.
Peripheral workers perceived as ‘second class
citizens’ with low status.
Loss of benefits of trade/labour union
membership.
Employment protection laws may not always
apply.
* It is necessary to distinguish here between groups with commonly available skills (e.g. word processing)
and highly skilled specialist groups (e.g. professional engineers). Most of the above disadvantages apply
mainly to the former group.

3.5 Team Working

We have discussed above some of the potential benefits of introducing structural
changes, such as de-layering, into organisations, and the advantages of flexibil-
ity in its various forms. However, for these potential benefits to be realised in
practice, it may also be necessary to introduce innovations in working arrange-
ments, particularly in terms of the distribution of tasks and responsibilities.
Team working in its various forms is one such innovation.
3.5.1 From Autonomous Work Groups to Self-Managed Teams

The forerunner of teams as currently discussed in the HRM literature is the
small work group. It has long been known that the small face-to-face work
group can have a potent influence on employee behaviour. As far back as the
1930s, the Hawthorne studies demonstrated the powerful effects of informal
pressures from the group in setting ‘appropriate’ levels of productivity for its
members. Much work on groups followed in the fifties and sixties. These studies
focused on a variety of issues including how groups influence individuals, the
process of group cohesion (how much the members want to be in the group),
how leaders emerge in groups, etc. While many of the findings from these
studies had implications for management, the results were not always made
use of by organisations to improve the way in which people were managed.
One possible exception to this was the introduction of autonomous work groups
arising out of the quality of working life movement (QWL). The QWL movement
was a response to the perceived low job satisfaction of workers which was
believed to be due to the mundane nature of many jobs with their low skill
level, lack of control over work processes, and lack of opportunity to take
responsibility for product quality. The idea of autonomous work groups was to
delegate power and influence to the group, while at the same time reducing
direct management supervision and control over activities. In this way, workers
as group members could participate in decisions about their work and could
be given more responsibility so that jobs would be enriched and satisfaction
increased. While the primary aim was to increase the quality of working life, by
implication it was expected that better performance would also result through
increased satisfaction and motivation.
Although the HRM concept of team working has elements in common with the
QWL approach (for example both advocate devolved responsibility to groups of
workers), the focus of interest is very different. Team working in current thinking
is much less about satisfaction and much more about performance. Teams are set
up because they are believed to increase competitiveness through the delivery of
enhanced performance. Any benefits in terms of job satisfaction are of secondary
importance. Thus the power of the group is now being harnessed much more
explicitly to management’s needs than in the past. This difference in emphasis
can be seen in the way in which the purpose of the team is clearly spelled out
in terms of organisational objectives, in the explicit focus on team goals to be
achieved, and in the way in which teams are expected to be accountable for
their performance. The change in emphasis is also seen in the way in which the
role of the team leader, who in some respects effectively replaces the traditional

foremen, is specified. Essentially, the team leader’s role is to facilitate team

performance and act as an intermediary between the team and management.
3.5.2 Types of Team

There are many different forms of team-working arrangements, each with rather
different potential benefits for the organisation and consequences for the indi-
vidual. Some examples of these are given below.
• Production teams are, as their name implies, organised around particular
production processes. Typically they involve an element of multi-skilling
although, as we saw earlier, the extent to which functional flexibility is
achieved in practice can be quite variable. Production teams are frequently
organised on a cellular basis where the team is responsible for a self-
contained aspect of a product.
• Self-managed teams are characterised by the delegation of key functions to
the group. Precisely how much is delegated in this process of empowerment
varies considerably from one team to another. Delegated functions could
include: election of the team leader, formulation of budget requests, respon-
sibility for spending an allocated training budget, the setting of team goals
and targets, etc. By making the group accountable in this way, it is assumed
that commitment and subsequently high performance will result. While
self-managed teams may have considerable potential benefits in terms of
generating high performance, they have to be set up and managed carefully
if they are to be successful. For example, there may need to be considerable
initial investment in training if team members are to be able to carry out
their new roles effectively. If the group is empowered, what about the man-
ager whose power has been taken away? What is the manager’s new role
to be and how can his continued commitment be ensured? Also, creating
strong identity and loyalty within teams may lead to increased inter-team
rivalry and, if this is not managed properly, the advantages gained may be
wiped out.
• Cross-functional teams bring members together for part of their duties,
but individuals still retain their existing position and responsibilities in the
organisation. As the name implies, the members of the team may come from
a variety of different functions. Cross-functional teams can serve to give a
sharper focus to the organisation’s strategy. Suppose an organisation wished
to enhance its customer orientation. Teams could be introduced where the
focus is a particular customer, rather than some aspect of a production
process. For example, where a food producer is supplying in bulk to a
large retailer, a team could be set up purely to look after the needs of that
particular customer. Such teams might comprise people from a variety of
functions, such as production, marketing, finance, and sales.
• Problem-solving teams are formed in response to a particular need to solve
a specific problem. These are temporary by nature, being dissolved when
the problem in question has been dealt with.
• International teams, composed of managers from different countries and
cultures within the business, can enhance functioning by harnessing the

collective wisdom of diverse viewpoints. International teams also help the

organisation to take a more global perspective on business problems.
3.5.3 Potential Benefits of Team Working from an Organisational Perspective

There are, as we have seen, a number of different types of work teams with
different modes of operation, and the perceived advantages of team working
will naturally vary from one type to another. However, in general terms, the
perceived benefits typically claimed for team working include the following.
• A strong theme running through many team-working arrangements is the
notion that, if people are given increased ownership of their task and
additional responsibilities, including responsibility for achieving appropriate
performance objectives, this empowerment of individuals will release their
creative energy and their commitment to attaining high performance.
• By making teams self-regulating and giving them responsibility for enforcing
their own quality standards, a mechanism is put in place for implementing
the quality-focused approach described earlier. It is no accident that team
working is an integral part of most TQM systems.
• Teams can be a vehicle for the implementation of functional flexibility
through multi-skilling of team members. The benefits for team performance
in terms of responding to changing circumstances and requirements are
obvious if team members can genuinely switch roles with each other as and
when it is necessary.
• Financial flexibility can also be a feature of team working through the
introduction of group, rather than individual, bonus systems. Rewarding
the team as a group for achieving performance targets not only helps ensure
that these are met; it is also likely to enhance a general spirit of co-operation
and cohesiveness within the group.
• Also, as already mentioned, the introduction of team working can facilitate
the process of de-layering and the removal of rigid hierarchical structures,
since the team can now be given at least some of the responsibilities previ-
ously allocated to the grades of management which have been removed.
3.5.4 Consequences of Team Working for Individuals

The HR approach to team working would seem to have the potential to benefit
organisations, as we have seen above. However, what are its consequences for
the employee? Insofar as employees value power, responsibility, and ownership
of tasks, then team working will have positive benefits. In addition, there are
added benefits arising out of the group nature of these activities. Not only is
decision making on a participative basis, but responsibility for decision making
is shared among the group, rather than being on the shoulders of one person.
Group members can also give each other mutual support and there is the sense
of working together to achieve a particular set of goals or targets.
Team working may also, however, have some adverse effects, at least for some
individuals. It assumes everyone in the group wants increased responsibility

even though it will not necessarily be accompanied by any significant increase

in remuneration. Does this assumption really hold? Some workers may not want
increased responsibility and the extra work demands it entails. Conversely, some
managers may resent the loss of responsibilities which are now conferred on
the team. Does team responsibility shared by the group lead to mutual support,
or does it, as Legge (1995) suggests, result in ‘a self-policing device through
peer surveillance and control’ (p. 231)? Some skilled workers may regret the
loss of the status previously conferred on them prior to multi-skilling by the
possession of specialist skills. Also, people frequently prefer certain work tasks
or jobs to others, often because they are better at them. But functional flexibility
can reduce the person’s ability to concentrate on what he or she is best at.
To conclude our brief discussion on team working, it seems that although
team working does seem to have a number of potential benefits from the
organisation’s point of view, reservations have been expressed about its possible
adverse impact on at least some team members. Consequently, it may not always
have the powerful effect on employee commitment which its proponents claim.
3.6 The Learning Organisation

Many of the themes we have addressed in this and previous modules suggest
that learning in its various forms can play a crucial role in the effective devel-
opment and implementation of HRM strategies. For example, the whole process
of the development and evolution of strategy can be conceptualised as one of
learning through experience. The ability to adapt constantly to a rapidly chang-
ing world is dependent on the ability to acquire knowledge (i.e. learn) about the
external environment on a regular basis. The various continuous improvement
themes, such as TQM, have at their heart the idea of learning from experi-
ence. Innovations such as empowerment, multi-skilling, and the introduction of
self-managed teams all require extensive training and learning on the part of
employees if they are to be successful.
3.6.1 The Concept of the Learning Organisation

The importance of learning in HRM is seen most clearly in the concept of the
learning organisation. The idea of the learning organisation is that learning itself
becomes a defining characteristic of the organisation. Learning is fostered at
all levels in the organisation and is seen as crucially important with respect
to a wide variety of functions. It is argued that only through a process of
continuous learning and improvement can an organisation survive and flourish.
Consequently, learning becomes a central theme in the organisation’s culture.
According to the theory, the adoption of a learning culture produces an impact
which is more than the mere aggregate of the sum of the training and learning
experiences of the employees within the company. It is a learning ‘Gestalt’ in
which the whole is greater than the sum of its parts. Gestalt was a psychologist
who studied perception. He showed that the perception of objects was not
simply the sum of the perception of their individual components. Rather, the
combination of the parts added something extra over and above what resulted

from simply adding them together and this was necessary for the complete
perception of the object.
3.6.2 Characteristics of the Learning Organisation

Pedler et al. (1991) have suggested that there are five general themes which
characterise a learning organisation.
• Strategy. The formulation and implementation of strategy is explicitly
defined as a learning process which is capable of continuous refinement
and improvement. One mechanism for attaining this is through continu-
ous feedback obtained by means of extensive consultation with a range of
stakeholders including organisation members, customers and suppliers.
• Looking in. As the name implies, this is concerned with the use of internal
procedures to facilitate learning. An example would be the use of accounting
systems designed to give feedback and thus encourage learning. Information
in general should be made widely available to people so that they can learn
what is going on in the organisation.
• Structures. Work roles should not be tightly specified. Rather, they should
be sufficiently loose to allow and even encourage experimentation with new
ideas and new ways of doing things. In this way learning and personal
development can be enhanced.
• Looking out. This emphasises learning through contacts external to the
organisation. All employees who interface with customers, suppliers, and
so on should treat their interactions with these groups as learning oppor-
tunities which allow them to gain insights which will be useful to the
organisation. Activities such as job exchanges and participation in shared
training programmes with customers are also seen as valuable learning
experiences.
• Learning opportunities. The maximisation of learning opportunities is
partly achieved through the development of a learning climate where indi-
viduals are encouraged to challenge traditional ways of doing things and
experiment with new ideas. In contrast to those HRM philosophies which
emphasise the importance of ‘getting it right first time’, it is OK to make
a mistake in a learning climate, since some new ideas will inevitably fail.
Learning climates are also characterised by an approach where feedback
is constantly sought from others, both inside and outside the company, to
maximise learning. Encouragement of self-development for all employees
is seen as an integral part of the provision of learning opportunities. This
involves not only the creation of a culture where this is valued, but also
the provision of resources and other forms of support for self-development
activities.
The concept of the learning organisation is certainly an imaginative one and

has much to commend it in terms of putting learning centre stage in the
drive for continuous improvement. However, achieving the type of organisation
described above would, in many cases, require the kind of fundamental changes
in organisational culture which are by no means easy to achieve. It is not

clear at present how frequently organisations have succeeded in making these

sea changes and, if so, what the consequences have been for organisational
performance.
3.7 Organisational Commitment

The subject of commitment has already been mentioned on a number of occa-
sions in this text. This is an indication of the importance attributed to the
concept, particularly in relation to soft HRM, where it is clearly seen as crucial
to the successful implementation of HRM strategy. According to soft HRM the-
ories, a high level of employee commitment to the organisation’s objectives and
values is essential if high levels of effort and performance and the full realisation
of the individual’s potential are to be achieved.
Given the centrality of this concept to so much HR thinking, it is appropriate
to examine it in detail here.
3.7.1 The Nature of Commitment

One definition of commitment describes it as a strong identification with the
values of the organisation and a subsequent desire to support and further the
objectives of the organisation. It is often contrasted with compliance where the
employee reluctantly accepts what is required by management because there is
little option other than to do so. Thus the former is a positive reaction arising
out of a genuine desire to contribute, while the latter is a grudging acceptance
of management’s control over the way things should be done. The former, so
the theory goes, harnesses the employee’s full potential while the latter does
not. An important question is how far commitment and compliance can really
be distinguished in practice. For example, how can you actually tell for sure
that employees are displaying commitment as opposed to compliance?
Commitment and Related Concepts

Commitment is in fact only one of a series of overlapping concepts dealing with
aspects of a person’s level of involvement at work. These include:
• Work involvement refers to the degree to which the person sees work as
central to his or her life, as opposed to being just something which has to
be done to earn a living. Highly involved individuals also tend to derive
their feelings of self-esteem from their work. A person with high work
involvement will not necessarily have high commitment as defined above,
since it does not imply acceptance of the values of a particular organisation.
• Job involvement refers to a person’s commitment to his particular job or
role, rather than to work generally. For example, a professional engineer
may have high commitment to his particular job of leading a design team,
even though work in a general sense is not central to his life. Likewise,
a person can be committed to a job role without necessarily adhering
particularly strongly to the values of the organisation as a whole.
• Professional commitment involves individuals who, as well as being
employees, are members of a profession, may hold strong commitment

to the values of the profession. In some cases, these values may actually
conflict with organisational values. For example, a value that is widely held
among the scientific community is the notion that a scientist has a duty
to ensure that any new discovery should be placed in the public domain
through publication in scientific journals. In this way findings can be avail-
able to other scientists and can be the subject of their scrutiny. It is easy
to see how this could conflict with organisational priorities and values. For
example, how many organisations would wish to inform its competitors
about the fruits of its expensive research and development activities by
having research findings published in scientific journals?
• Organisational commitment, as conceptualised in HRM models, is seen
as commitment to the organisation as a whole. However, in many cases,
individuals are also likely to have commitments to sub-units of the organi-
sation, such as departments. These loyalties may not always coincide with
corporate values, and in some cases may even conflict with them.
In summary, organisational commitment is only one of a number of concepts
whose focus is the person’s level of involvement or commitment in relation
to work. The precise inter-relationship among these concepts in influencing
employee performance is not clear at the present time.
Types of Organisational Commitment

Definitions of organisational commitment generally propose that it has two
components. The first of these, affective commitment, is concerned with the
person’s attitudes and refers to a positive set of feelings about the organisation.
These arise out of shared values between the person and the organisation. From
a soft HRM point of view, high levels of affective commitment are extremely
desirable.
The second component of organisational commitment is termed continuance
commitment. This is concerned with the person’s behaviour rather than their
feelings and manifests itself in a desire to continue working for the organisa-
tion. At first glance, high levels of continuance commitment would also seem
to be desirable, since high levels of turnover can have a number of adverse
consequences for the organisation. For example, when individuals leave, the
investment in them in terms of training, development, and so on, is lost. How-
ever, high levels of continuance commitment are not necessarily desirable in all
circumstances. It all depends on why the level of commitment is high. Con-
tinuance commitment can be a function of the level of affective commitment,
i.e., if you like the place and are in tune with its culture and values, you do
not wish to leave. Presumably the organisation would wish to hold onto these
individuals. However, according to McGee and Ford (1987), there are two other
factors which can affect the level of continuance commitment. First, people stay
because of lack of alternative suitable employment. In other words, they stay
because they have nowhere else to go. Second, they stay because of what McGee
and Ford call ‘sunk costs’. Individuals who have been with an organisation for
some time will have incurred costs to themselves, both financially, and in other
ways. For example, they might have invested a significant sum in a pension
scheme. In terms of non-financial costs, they could have invested a considerable

amount of time developing company-specific knowledge and skills. And so on.

All of these are sunk costs in the sense that they would be lost if they left the
organisation. These two elements effectively lock people into the organisation.
In this case, is a high level of continuance commitment necessarily desirable
from the organisation’s point of view? Sometimes, if the individual concerned is
a high performer or has skills which make him difficult to replace, the answer
will be yes. But what about those who, perhaps because they have less to
offer, are locked in because of lack of job opportunities elsewhere? In this case
continuance commitment is unlikely to be to the benefit of the organisation.
3.7.2 Determinants of Organisational Commitment

Clearly, if commitment (at least in its affective form) is crucial for organisational
success, it is important to know what determines employees’ level of commit-
ment. Many human attributes are a result of a combination of personal qualities
and environmental influences. In all probability, this is also true of commit-
ment. For example, a person might have high organisational commitment partly
because her existing values (a personal quality) happen to coincide with those
of the organisation, and partly because of steps taken by the organisation to
increase commitment (an environmental influence). Guest (1992) reviewed the
evidence on the correlates of commitment and concluded that both personal
and environmental factors were indeed associated with commitment. Personal
factors associated with commitment included being older and being less edu-
cated. Environmental factors associated with commitment included having a job
which met one’s expectations, doing a job which offered the opportunity for
responsibility, and work involvement.
Personnel policies designed to increase commitment have frequently attempted
to do so through various employee involvement techniques. Guest (1992) lists
the following five major types of intervention aimed at increasing involvement
and therefore commitment:
• Provision of information to employees. The assumption here is that if

people are more aware of what is going on in the organisation they will feel
more involved. A number of methods can be used to improve information
flow, such as setting up regular group meetings to brief people.
• Receiving information from the employee. By improving information flow
in an upward direction, employees’ needs, concerns, and ideas for improve-
ment can be brought to management’s attention. One means to achieve this
is through the use of suggestion schemes.
• Changes in work systems. If working arrangements are altered to provide
increased responsibility, soft HRM theories suggest that this will increase
commitment. The self-managed teams discussed earlier are an example of
this approach.
• Introduction of incentive schemes. Various incentive schemes, such as
performance related pay, profit related pay, and share options have been
introduced in the hope that these will result in greater involvement and
commitment.

• Changes in employee relationships. Of particular interest here is the notion

that commitment can be increased by the adoption of more participative
styles of management which allow employees to have greater involvement
in decision making.
According to Guest (1992), there has not been a great deal of research into
how successful these interventions have been in increasing commitment, and it
is not possible to draw firm conclusions on their impact at the present time.
However, such evidence as is available suggests that, at best, these interventions
have only a limited effect on commitment. Guest concluded that one reason for
this lack of impact was the fact that they were often introduced in a piecemeal
way, rather than as part of an overall HRM strategy.
3.7.3 Commitment, Effort, and Performance

Even if employee involvement policies were able to increase commitment sig-
nificantly, this still leaves open the question of how commitment actually relates
to performance. We have already discussed turnover in relation to commit-
ment and, to the extent that the organisation wishes to have a low level of
turnover, this could be construed as one measure of performance. Of course,
as we saw above, much depends on who leaves and who stays! The evidence
indicates that commitment is correlated with turnover, but the relationship is
small (Guest, 1992).
What about the relationship between commitment and other aspects of per-
formance? It is unlikely that performance and commitment will be directly
linked. Rather, commitment, if it influences performance at all, will presumably
do so because it increases motivation and this in turn influences performance.
Currently available evidence supports the conclusion that there is a correlation
between commitment and performance but the relationship is small. This could
either be because the relationship between commitment and motivation is weak,
or it could be the relationship between motivation and performance that is weak.
In any event, to date, the evidence does not strongly support the contention of
HRM theories that commitment has a pivotal role in determining performance.
According to soft HRM theories, obtaining employee commitment is cru-
cial if organisations are to maximise their use of human resources. However,
not only are there different types of commitment with different potential conse-
quences for performance, there is overlap between commitment and a number of
related concepts. Attempts to increase commitment through increased employee
involvement have had only limited success. While there is evidence that commit-
ment is correlated with turnover and performance, the relationships are small
and the case for a strong link between commitment and performance is not
supported by the available data.
3.8 Culture
We have already encountered the concept of culture several times in this text.
For example, in Module 2, we saw how it is an important element in a number
of soft HRM models. Earlier in the present module, we talked of the idea of a

quality emphasis being embedded in the culture of an organisation and indeed

this was seen as essential for the success of TQM programmes. We also saw that
the theory of the learning organisation can only really become a reality when
it forms part of the organisational culture. Finally, we talked about affective
commitment to the values and aims of the organisation, i.e. to its culture. Given
the central place of culture in so much of HRM thinking, it is appropriate to
examine the concept in some detail at this point.
3.8.1 What is Culture?

In general terms, culture can be defined as a set of shared values and beliefs
held by members of an organisation. These values relate to many aspects of
organisational life, including how people should behave towards each other and
the outside world, the basis of reward allocation, the aims and objectives of
the organisation, and so on. In short, culture represents the whole ethos of the
organisation and how it functions. As Deal and Kennedy (1982) put it, culture
is ‘the way we do things around here’.
According to Schein (1984) culture actually exists at three levels, all of which
interact with each other.
1 Artefacts and creations are regarded as the surface level of culture. These
are visible symbols which send signals to organisation members and the
outside world about the nature of the organisation. They include dress
codes, the physical layout of office space, common behaviour patterns, and
the like. How do such artefacts provide information about culture? Perhaps
a few illustrations will help here. Take the example of a school dress code
which states that all children, without exception, will be required to wear
a school uniform. This sends a signal, both within the organisation and to
the outside world, about the school’s attitude to conformity and discipline.
To take another example, an open plan office arrangement can be used to
symbolise ‘openness’ between different levels of managers. Finally, at the
behavioural level, one assumes that the friendly smile with which one is
accosted by the staff of certain airlines on boarding one of their aeroplanes
is meant to indicate the value placed by the organisation on customer care.
2 Values represent the consensus amongst organisational members about ‘how
we do things around here’. Values are less visible than artefacts and may
not always be overtly stated. Nevertheless, people are consciously aware of
them, and can articulate them fairly readily.
3 Basic assumptions are the key to understanding a particular culture. These
consist of a set of presuppositions about the nature of people, the organisa-
tion, and the environment in which it operates. Although these have been
learned through experience, individuals may have little awareness of them.
Nevertheless, it is these assumptions which, according to Schein, are the
essential defining features of a culture.
Let us return to the idea of shared values. An important question here

is, shared by whom? Corporate culture is embodied in the values espoused,
sometimes publicly, by top management. But is this the same as organisational

culture defined in terms of common values held throughout the organisation?

This may not always be the case. Thus, it is quite possible for the rank and
file to share common values which are different from those of top management.
Apart from possible differences between those at the top and the rest of the
organisation, sub-groups within an organisation may have their own cultures.
For example, accountants may have shared value systems but these might be
quite different from those of engineers. It seems then that the concept of culture
as applied to organisations is somewhat more complex than it appears at first
sight. In particular, espoused culture from the top may not reflect reality in
terms of the wider organisation, and sub-cultures may be at least as potent in
affecting people’s behaviour as any presumed organisation-wide value systems.
3.8.2 The Relationship between Culture and Performance

Proponents of soft HRM in particular argue that organisational performance is
linked to culture. The general assumption is that strong cultures can, under
certain circumstances, lead to better performance. A strong culture is one where
the corporate culture is clearly articulated and unambiguous and where the
values it espouses are genuinely shared throughout the rest of the organisation.
It follows from this that there will be a high level of consensus of values at all
levels in the organisation and sub-cultures will be weak in comparison.
How can strong cultures be developed in the interests of high performance?
The argument runs as follows. Strategic HRM considerations dictate that a
particular culture is conducive to high performance. For example, if quality is
believed to sell products, then this points to the kind of quality oriented culture
embodied in TQM and similar systems. Once the desired values have been
identified, the next stage is to enshrine these in the corporate culture. A variety
of culture change programmes designed to create a strong culture based on these
values is then initiated. If these are successful, employees will have high levels
of affective commitment based on the new shared values, and this will manifest
itself in enhanced performance. There is an appealing logic to all of this, since
it would seem to create conditions where everyone is apparently pulling in
the same direction to achieve mutually beneficial objectives. However, a few
words of caution are in order. While a strong culture may be beneficial when
the strategists get it right, it is likely to be counter-productive when they get it
wrong, since everyone is pulling hard in the wrong direction. Also, the existence
of common values throughout an organisation may be another way of saying
that it lacks diversity of viewpoints. This may be fine under stable conditions,
but it could result in a certain rigidity in responding when circumstances change,
as they inevitably do. Finally, there is an underlying assumption in all of this
that it is in fact possible to change organisational cultures. Indeed, in terms of
practical application, if cultures cannot be managed to increase commitment, the
question of the relationship between performance and culture is of no more than
academic interest.

3.8.3 Managing Culture Change

As has just been mentioned, this is a crunch issue in terms of turning much
of HRM theory into practical reality. As we have seen, we are talking here
about changing values, based on the assumption that changed values will lead
to changed behaviour. Culture change programmes could, of course, be applied
to a wide variety of values and it would not be appropriate to list all of these
here. However, the reader will by now not be surprised to find out that many
culture change programmes are aimed at developing a quality-oriented culture.
Attempts to inculcate more customer-focused attitudes are also popular, as might
be expected from what was said earlier in this module.
Methods Used to Produce Culture Change
A number of techniques have been adopted in an effort to produce culture
change. These include:
1 Leadership. Schein (1985) has suggested that leaders play a crucial role in
determining the culture of an organisation. One of the ways in which they
do this is by example setting. Thus, if leaders always behave in a safety
conscious way, and if safety breaches are dealt with seriously by them, this
highlights the fact that the organisation places high value on safety. Leaders
are also in a position to make key personnel decisions about selection,
remuneration, promotion, and the like, and the basis on which these are
taken sends a strong signal about what the organisation values. If Schein’s
views are accepted, it follows that leaders can be influential in initiating
culture change. Indeed, when radical culture change is the objective, it is
not uncommon for organisations to remove the existing top management
team (or at least the chief executive) and bring in a new team from outside
who have the express remit of bringing about culture change.
2 Communication programmes. The idea here is to get the twin messages
across to everyone in the organisation that there is a need for change, and
that benefits will follow for everyone if change takes place. It is assumed
that, if people can be convinced that both of these statements are true, then
culture change will follow. A variety of forms of communication can be used
to get the message across, such as: briefing sessions from top management;
group discussions among employees focusing on problems and solutions;
training courses focusing on relevant issues such as customer care; and so
on.
3 Personnel changes. Rather than attempting to change existing values, this
approach tackles the problem by recruiting individuals into the organisation
who have values in line with the desired new culture, or who can at least be
socialised into it. However, change induced by this method would usually
be very gradual, since in most organisations the proportion of new recruits
taken on at any one time is usually quite small. Unless, of course, a scheme
for increasing the turnover of existing staff is also put in place. A possible
twin approach might be to offer voluntary early retirement on a selective
basis for staff thought to have difficulty adapting to the new culture. These
would then be replaced by new staff who would either already possess the
desired attitudes, or who could be socialised into the new culture.

4 Reward management. The basis on which an organisation rewards its

members in terms of pay, promotion, and so on can send a powerful
signal to its members as to what its values and priorities are. Consequently,
one way to encourage attitude change is modify the basis of the reward
allocation system in line with the new corporate values. Thus, for example, if
customer care becomes a defining feature of the organisational culture, those
individuals who display high levels of customer care could be rewarded for
their efforts as part of a performance related pay policy. In this way, reward
management is used to encourage individuals to buy into the new value
system.
Do Culture Change Programmes Work?

Given that values are often fairly fundamental attributes of the individual and
that they develop over a relatively long period, it seems reasonable to assume
that real culture change is likely to be very difficult to achieve. However, at the
end of the day, this is a question which can only really be answered by con-
sidering the available research evidence. Unfortunately, while it is not difficult
to find anecdotal reports of successful culture change programmes, systematic
studies of culture change are rather more thin on the ground. On the whole,
writers on the subject have cast doubt on the ability of culture management pro-
grammes to achieve their objectives (Anthony, 1994; Ogbonna and Wilkinson,
1990). However, even if such programmes do not change fundamental values
(and we cannot conclude this with certainty until we have more evidence), they
may nevertheless have beneficial effects for the organisation. Let us take an
example of a customer care programme, designed to make employees attach
high value to customer satisfaction. Suppose those on the programme learn new
improved ways of dealing with customers. They might well proceed to put these
into practice, not because they now really care whether or not the customer is
satisfied, but simply because that is what management requires of them. In this
way, although the declared aim of changing basic values has not been realised,
at least the desired end result of behaviour change has been achieved.
To sum up, organisational culture can be defined as a set of shared set of
values and beliefs held by members of an organisation. Strong cultures exist
where there is a high level of consensus of values throughout the organisation
and where these coincide with corporate values. It has been argued that strong
cultures can lead to high performance, provided the underlying values are in
line with strategic objectives. A number of techniques have been used to induce
culture change along these lines in the anticipation that enhanced performance
will follow. However, it is generally accepted that creating genuine culture
change is a difficult task and to date we have little hard evidence indicating that
it can actually be achieved.
3.9 Summary
In this module, a number of key HRM themes have been examined in some
depth. Quality, as one of the routes to competitive advantage, emerged as a key
theme, particularly as expressed in TQM. A number of arguments have been

put forward in favour of de-centralised organisational structures, compared with

bureaucratic ones. The theory of the flexible firm proposes that flexibility will
enhance competitiveness by allowing organisations to react swiftly and effec-
tively to changing environmental conditions. Advocates of the concept of the
learning organisation emphasise the need for organisations to have the capabil-
ity to adapt constantly to changing circumstances. A number of benefits have
been claimed for self-managed teams, particularly in terms of enhanced com-
mitment and improved performance. However, not only are there a number of
different types of commitment, studies of the relationship between commitment
and performance have generally found weak associations between the two. Suc-
cessful implementation of HRM strategies may require a fundamental change
in an organisation’s culture. While a number of methods have been used in an
effort to change culture, it is generally agreed that it is far from easy to achieve
genuine culture change.
3.10 Strategic and Operational HRM

We have now completed our overview of strategic human resource management.
The remainder of the text will examine HRM at an operational level. However,
because operational activities really have to be carried out in the context of
strategic objectives, reference will be made to the various strategic themes
already discussed at several points in the remaining modules.
Review Questions
3.1 The term quality, as used in HRM, has been conceptualised in a number of
different ways.
3.2 Customer care programmes are primarily designed to heighten the awareness
of the sales team of the importance of maximising customer satisfaction.
3.3 Defining quality purely in terms of customer satisfaction can be misleading

when applied to public service organisations.
3.4 The TQM philosophy emphasises continuous improvement in quality as an

objective.
3.5 Employee involvement is not essential for TQM to be successful.
3.6 TQM sometimes fails because employees feel it has been imposed upon them
by management.
3.7 Bureaucratic organisations are often regarded as inflexible and resistant to

change.

3.8 De-layering inevitably runs counter to the soft HRM goal of increasing commit-
ment.
3.9 According to Guest (1987), one of the advantages of de-centralisation is

increased flexibility.
3.10 Multi-skilling is another name for numerical flexibility.
3.11 Functional flexibility refers to the requirement for individuals to carry out a
wide variety of work roles or activities.
3.12 In terms of Atkinson’s model of the flexible-firm, outsourcing refers to the

practice of sending employees out to customers to deal with problems ‘at
source’.
3.13 One of the problems with performance related pay schemes is the difficulty of
measuring performance accurately.
3.14 According to Legge (1995) research indicates that few organisations have
adopted true functional flexibility.
3.15 According to some critics, flexibility is a management device to increase control

over employees in the interests of reducing costs.
3.16 For core workers, an advantage of flexible working arrangements is the high
investment that is often made in their training.
3.17 A disadvantage of flexible working arrangements for core workers is the relative
lack of job security they have, compared with the situation of peripheral
workers.
3.18 The primary aim of the QWL movement was to generate high performance,
with any benefits in job satisfaction being of secondary importance.
3.19 Problem-solving teams tend to be temporary by nature.
3.20 One of the disadvantages of team working is its tendency to impede the process
of de-layering.
3.21 Not everyone necessarily wants the increased empowerment offered by team
working.
3.22 The essential feature of a learning organisation is the level of support the
organisation provides for employees to go on educational courses related to
their jobs.
3.23 It is ‘OK to make a mistake’ in learning organisations.
3.24 Learning organisations emphasis learning through information gained from

customers.
3.25 From a hard HRM perspective, commitment is seen as crucial for the achievement
of the organisation’s strategic objectives.

3.26 Soft HRM theories take the view that compliance is essentially the same thing
as commitment.
3.27 Although compliance and commitment may be very different concepts theoret-
ically, they are hard to distinguish in practice.
3.28 A high level of continuous commitment is always beneficial for the organisation.
3.29 Guest (1992) found that more educated workers had higher levels of commit-
ment.
3.30 There is evidence that both personal and environmental factors are associated
with commitment.
3.31 Guest (1992) claimed that employee involvement schemes often failed because
they were introduced in a piecemeal way.
3.32 If employee involvement schemes succeed in increasing commitment, this will

automatically lead to improved performance.
3.33 Research has shown that there is a strong link between commitment and
performance.
3.34 Organisational culture refers to shared values, not shared aims and objectives.
3.35 In Schein’s (1984) definition of culture, dress codes would exist at the surface
level of culture.
3.36 According to Schein (1985), one of the ways in which leaders can influence
culture change is by example.
3.37 According to Schein (1985), leaders only have a minor role to play in bringing
about culture change.
3.38 Strong cultures have the advantage of encouraging diversity of views in the
organisation.
3.39 Attempting to produce culture change by recruiting individuals whose values

coincide with the desired culture rarely brings about rapid cultural change.
3.40 Communication programmes have been used to produce culture change.
3.1 Discuss the various ways in which quality has been defined in HRM.
3.2 Describe the main components of TQM. How well does TQM work in practice?
3.3 What are the advantages and limitations of bureaucratic organisational struc-
tures?
3.4 What are the arguments for and against the suggestion that organisations can
improve their performance by developing a strong culture?


You are a management consultant who has been asked to help an organisation
to develop a strong culture. The company is an international airline with one
of the largest fleets in the world. It is currently facing fierce competition and is
anticipating a fairly long period of over-supply in the industry as a whole. It flies to
almost every country in the world, and its passengers come from all over the world.
It also employs staff from a variety of different countries right across the globe. In
addition to head office staff, it has four main categories of employee. These are:
the sales force, pilots, cabin crew, and ground staff. The company has to negotiate
with several different unions, representing the various grades of staff.
The organisation has decided that it wants to develop a quality-oriented culture,
particularly focused on improved customer satisfaction.
Your task is to provide a written summary of the kind of advice you would
give the company. As an external consultant, you would wish to seek further
information and clarification from the airline before committing yourself to specific
recommendations. Your answer should include:
• an indication of the additional information you might require from them

• any general advice you might give them about culture change
• suggested techniques for producing culture change
• any particular circumstances which might need to be taken into account.
References
Anthony, P.D. (1994). Managing Culture, Milton Keynes: Open University Press.
Atkinson, J. (1984). ‘Manpower strategies for flexible organisations’, Personnel Manage-
ment, 16, 28–31.
Blyton, P. and Morris, J. (1992). ‘HRM and the limits of flexibility’, Reassessing Human
Resources Management, eds. Blyton, P. And Turnbull, J., London: Sage.
Deal, T.E. and Kennedy, A. (1982). Corporate Cultures, Reading, Mass: Addison-Wesley.
Deming, W.E. (1982). Quality, Productivity, and Competitive Position, Cambridge, Mass:
MIT Press.
Guest, D.E. (1987). ‘Human resource management and industrial relations’, Journal of
Management Studies, 24, 503–21.
Guest, D.E. (1992). ‘Employee commitment and control’, Employment Relations, eds.
Hartley, J.F. and Stephenson, G.M. Oxford: Blackwell.
Hakim, C. (1990). ‘Core and periphery in employers’ workforce strategies: evidence
from the 1987 ELUS survey’, Work, Employment and Society, 4, 157–88.
Hill, S. (1991). ‘Why quality circles failed but total quality management might work’,
British Journal of Industrial Relations, 29, 541–68.
Juran, J.M. (1988). Juran on Planning for Quality, New York: Free Press.
Legge, K. (1995). Human Resource Management Rhetorics and Realities, Basingstoke: Macmil-
lan.

McGee, G.W. and Ford, R.C. (1987). ‘Two (or more?) dimensions of organizational
commitment: re-examination of the affective and continuance commitment scales’, Journal
of Applied Psychology, 72, 638–41.
Ogbanna, E. and Wilkinson, B. (1990). ‘Corporate strategy and corporate culture: the
view from the checkout’, Personnel Review, 19, 9–15.
Pedler, M., Burgoyne, J. and Boydell, T. (1991). The Learning Company, Maidenhead:
McGraw-Hill.
Schein, E.H. (1984). ‘Coming to a new awareness of organizational culture’, Sloan
Management Review, Winter: 3–16.
Schein, E.H. (1985). Organizational Culture and Leadership, San Francisco: Jossey-Bass.
Wilkinson, A., Marchington, M., Goodman, J. and Ackers, P. (1992). ‘Total quality
management and employee involvement’, Human Resource Management Journal, 2, 1–20.

Module 4
Analysis of Performance
Requirements
Contents
4.1 Specifying Performance Requirements 4/2
4.1.1 Organisational Performance Requirements 4/3
4.1.2 Group Performance Requirements 4/4
4.1.3 lndividual Performance Requirements 4/4
4.2 Core Abilities, Skills and Motivational Characteristics 4/5
4.3 Trait Versus Behavioural Indicators of Performance 4/7
4.3.1 Trait Indicators of Performance 4/7
4.3.2 Limitations of the Trait Approach 4/8
4.3.3 Behavioural Indicators of Performance 4/9
4.4 Job Analysis Techniques 4/10
4.4.1 Questionnaires 4/11
4.4.2 Checklists 4/11
4.4.3 One-to-one Interviews 4/11
4.4.4 Observation and Interview 4/12
4.4.5 Group Interview 4/12
4.4.6 The Conference Method 4/13
4.4.7 Work Diaries 4/13
4.4.8 Work Participation 4/14
4.4.9 Critical Incidents 4/14
4.5 Job Analysis and Strategic HRM 4/15
4.6 Competencies 4/16
4.6.1 MCI Competencies 4/17
4.6.2 Behavioural Competencies 4/18
4.6.3 Organisational Competencies 4/21
4.7 Performance and Pay 4/21
4.7.1 What Pay Means for the Individual 4/21
4.7.2 What Pay Means for the Organisation 4/23
4.7.3 What Constitutes Pay? 4/24
4.7.4 Pay and Individual Work Roles 4/24
4.7.5 Job Evaluation 4/26
4.7.6 Pay and Performance 4/27
4.8 Summary 4/29

Module 4 / Analysis of Performance Requirements
Learning Objectives
• distinguish between organisational, group, and individual performance

requirements.
• distinguish between end results and process criteria.
• understand what is meant by core abilities, skills, and motivational charac-
teristics.
• explain why the trait approach to specifying performance requirements is
being replaced by behaviour focused approaches.
• describe the major techniques of job analysis and explain the conditions
under which each works best.
• discuss the relationship between job analysis and strategic HRM.
• explain what is meant by competencies and distinguish between the MCI,
behavioural, and organisational approaches.
• identify the limitations of competency analysis.
• understand the nature of payment systems and their role in motivating the
individual.
4.1 Specifying Performance Requirements

It is clear from what has been said in the first three modules that the enhance-
ment of performance is a central objective of HRM and many HR policies and
procedures are designed with precisely this in mind. However, this is not to say
that, prior to the emergence of HRM, organisations did not value performance.
It has always been a traditional role for personnel management to facilitate high
performance. What HRM has done is to give the need to maximise performance
a sharper focus and to put it in a wider context than before. In the past, concern
about performance had tended to focus on the individual and improving his
or her performance. Arising out of an awareness that it is not just individuals
but also systems which can contribute to high achievement, HRM has taken a
broader view by also emphasising the importance of group and organisational
level performance.
Before we can design and implement procedures or systems to enhance per-
formance, clearly it is first necessary to specify what exactly we mean by high
performance. For example, we need to know what constitutes a ‘successful’
organisation before we can begin to consider how to create one. To take another
example, if self-managed teams are to be given performance targets, it is first
necessary to specify what is meant by ‘good’ team performance. In the same
way, at the individual level, performance requirements need to be spelled out
in detail before steps can be taken to enhance the contribution the individual
can make to the organisation. The remainder of this module is concerned with
this important issue of how best to identify key performance indicators and
requirements.
Performance can be specified either as desirable end results or in terms of
processes which are assumed to lead to these outcomes. At the organisational

level, one example of an end result might be profit. Process definitions of

performance which could be adopted at this level might include the commitment
level of employees, or the extent to which the organisation has a strong shared
culture. Of course, to have confidence in a process measure of performance,
there needs to be good reason to believe that the process in question actually
does lead to the desired end result. To take another example, this time at the
group level, team performance could be defined in end results terms as levels of
productivity or in process terms with reference to the degree of internal cohesion
or the level of co-operation with other groups. At the individual level, an end
results measure for a salesperson might be the number of new customers won in
a given period. From a process point of view, a salesperson’s performance might
be defined in terms of the skills and abilities needed to sell successfully. The
choice between end result and process criteria of performance will be a function
of the circumstances and the purpose for which performance is being measured.
For example at the individual level, if the purpose is to aid recruitment and
selection, the focus of performance specification is likely to be largely on skills
and abilities, whereas if the purpose is to provide a basis for performance
appraisal, both abilities and results might be relevant.
The issue of performance has been introduced above at the organisational,
group, and individual level. However, organisational and group level issues have
already been discussed in some detail in preceding modules and for this reason
this module will focus mainly on how individual performance requirements
can best be specified. Before proceeding to consider this in detail, we will look
briefly at organisational and group level performance in order to set the present
module in the context of previous ones.
4.1.1 Organisational Performance Requirements

Taking end results criteria first, possible indicators of organisational performance
might include:
• bottom line profit
• dividend to shareholders
• market share compared with the competition
• growth and/or diversification of the business
None of these is a perfect indicator of performance. For example, there is a
danger that concentration on profit levels may result in too much focus on short-
term considerations, rather than longer-term ones. Exclusive use of shareholder
dividends as a performance criteria ignores the interests of other stakeholders in
the organisation. Having a large market share may not be particularly desirable
if it is at the cost of over-reliance on a small number of products. Exclusive focus
on growth does not take into account the fact that there may be an optimum size
beyond which an organisation is in danger of becoming excessively bureaucratic
and unresponsive to changing circumstances. Since all of these indicators have
their strengths and weaknesses, it is probably safest to opt for a composite set of
end results criteria which includes some or all of the above, rather than relying
exclusively on one of them.
Process indicators of performance might include, for example:

• level of workforce commitment

• existence of a strong culture
• the level of employee satisfaction
• the extent to which the workforce is empowered
It is worth reminding the reader again here that process indicators such as
those listed above are really only of value to the extent to which they really
are precursors of end results performance. For example, we saw in the previous
module how the relationship between commitment and performance has not yet
been unequivocally established. This casts doubt on the value of commitment
as an indicator of performance. Once again, the best way forward here might
be to use composite criteria incorporating a number of process measures.
4.1.2 Group Performance Requirements

End results performance indicators might include:
• meeting or exceeding productivity targets
• meeting or exceeding quality targets
• achieving cost savings.
These are all outcome measures, and once again, as was the case with outcome
measures at the organisational level, it would be unwise to rely on any single
indicator as an error free or complete indicator of performance. For example,
consider group productivity. Many of the factors which affect productivity are
actually outside the group’s control. Thus the group may be dependent on the
productivity of previous groups to generate their ‘raw material’, so that unless
these groups are performing highly the group cannot do so. Also, there is always
a risk that high productivity may be achieved at the expense of quality. Given
the fact that the other outcomes also have their limitations, once again what
may be required is a composite set of measures.
Examples of process level indicators of group performance might include:
• group cohesiveness
• level of empowerment
• degree of self-management.
The usefulness of these criteria will again be a function of the degree to which
they are demonstrably linked to performance in terms of end results.
4.1.3 lndividual Performance Requirements

Although HRM has placed more emphasis on viewing performance from an
organisational perspective than was previously the case with traditional per-
sonnel management, the strong emphasis on fully utilising every employee’s
potential clearly dictates an equally strong imperative to measure and enhance
performance at the individual level.
A number of end result measures of individual performance can and have
been used for various purposes. These include:

• productivity
• absenteeism
• turnover.
As in the previous section, over-reliance on any single criteria can be prob-

lematic. For example, a worker using an old machine cannot be expected to
be as productive as one using state-of-the-art equipment. Again quality and
productivity may be inversely related. High turnover can be undesirable insofar
as valuable resources invested in training can be lost when individuals leave.
However, as we saw earlier, much depends on who leaves and why. Very low
turnover can prevent new blood and fresh ideas coming into the organisation.
(From this point of view, what level of turnover would a learning organisation
strive to achieve?) Once again multiple criteria would seem to be the order of
the day.
However, there are further problems with the use of end result measures of
individual performance of the type listed above, at least as far as certain types
of job are concerned. For many job roles, tangible outcomes of the sort listed
above simply do not exist. This is especially true of many managerial jobs,
where, for example, the concept of productivity in an objective sense is simply
not meaningful. How would you measure the productivity of a human resource
manager in a meaningful way? You could quantify a number of the tasks an
HR manager carries out, such as number of selection interviews conducted in a
day, the number of performance appraisals carried out, etc., but these are clearly
trivial in terms of any key performance requirements an organisation would
wish to set for its HR managers.
For these and other reasons, individual performance analysis often tends to
focus on process criteria. (This is not always the case, though, as we shall see
when we come to discuss MBO and goal setting in Module 6.) Returning to
the above example of the performance requirements for an HR manager, the
relevant question is not how we measure productivity as such. Instead, the
focus is much more on identifying the key tasks a person in this role needs to
perform, and the abilities and skills which are needed to perform these well.
The focus is on the qualities needed to produce a desired outcome. From this
perspective, there are two distinct but inter-related aspects to the determination
of individual performance criteria. First, there is the requirement to carry out
a comprehensive analysis of the tasks to be performed in the job. Second, it is
necessary to identify the human qualities which enable a person to carry out
these tasks to a high standard.
The remainder of this module (with the exception of section 4.6.3 below) is
concerned with the specification of individual level performance requirements.
4.2 Core Abilities, Skills and Motivational Characteristics

The rationale for the analysis of individual abilities in relation to job perform-
ance is that it constitutes the first step in the process of enhancing individual
performance to the benefit of the organisation and hopefully also for the individ-
uals themselves. Before continuing with this theme let us pause for a minute to

consider the different types of human abilities that exist and their implications
for HRM procedures and practices.
Some human characteristics are either part of an individual’s genetic make
up or are learned very early in life. Other qualities are readily developed and
changed through everyday experience or through some other means, such as
training programmes. A third type of characteristic is not so much related to
what a person is able to do, but is more concerned with what he is willing to do
in a given set of circumstances. An example of the latter is the level of effort a
person chooses to put into his work. The first of these three types can be thought
of as core characteristics, since they are fundamental to the person. The second
type is more akin to skills, while the third is motivational in nature. These three
categories are not being put forward as representing a comprehensive typology
of human abilities. Nor is it suggested that abilities can always be neatly
classified into only one of these types. For example, there is undoubtedly a
strong core element in problem-solving ability (some people are more intelligent
than others), but people’s ability to solve problems can also be improved by
teaching them problem-solving techniques. Word processing is basically a skill
but some people, presumably because they possess some relevant core attribute,
learn it more rapidly than others. Effort is a choice a person makes according
to circumstances and indeed proponents of soft HRM would argue that the
appropriate circumstances are those which engender commitment. On the other
hand common observation would suggest that some people are inherently lazy,
while others seem to put great effort into everything they do irrespective of the
circumstances.
In what way is this classification of characteristics into three types relevant
for practical purposes? Take core characteristics for example. Since they are dif-
ficult if not impossible to modify, performance in these cannot be significantly
enhanced through HRM procedures such as training, structured experience,
or coaching. Ensuring that these characteristics are present in employees is
therefore primarily a selection problem. Anything which is classified as pri-
marily a skill can, however, be improved through training and development
programmes. To the extent that motivational characteristics are a reaction to the
work environment and context, then this is where action needs to be taken to
enhance performance with respect to these abilities. For example, if high effort
is required, a payment system which rewards effort could help bring about
the desired result. The reader should remember here, however, that effort and
commitment are often only partly a reaction to circumstances and the environ-
ment. Effort and commitment can also be a more fundamental attribute of the
person and, in terms of the terminology we are using here, they could be said
to contain core elements. What this means in practice is that an organisation
can seek to enhance motivational qualities either through changing the environ-
ment, through selection (for the core element), or through some combination
of both. The best approach will depend on individual circumstances. Let us
take an example related to the motivational characteristic of commitment. Soft
HRM theory suggests that this can be increased through environmental manipu-
lations, such as employee involvement programmes. Consider a small business
providing retirement homes for the elderly. Let us assume that the organisation
faces stiff competition from a more profit oriented organisation which has just

entered the market and it decides to change its culture from one where the
predominant value system is one of caring, to one of providing an adequate
service at minimum cost and maximum profit. How easy would it be to change
the value systems of the individuals from a caring orientation to a profit orien-
tation? Given that employee commitment to such a radical change could pose
considerable difficulties might it not actually prove to be more effective from
the organisation’s point of view to offer existing staff who are unhappy with the
new culture suitably generous payments to seek alternative employment and
recruit new staff with the ‘right’ attitudes? Clearly the best approach largely
depends on the extent to which the values in question are core aspects of the
individuals concerned.
4.3 Trait Versus Behavioural Indicators of Performance

Let us consider what a list of the requirements needed to perform a particular
job well might look like. Take for instance the job of middle manager in a large
organisation. There are many tasks a person needs to be able to do in order to
carry out such a job successfully. Included here might be: a set of interpersonal
behaviours needed to manage people effectively; a number of activities related
to the planning and organisation of work; a range of different types of problem-
solving behaviours; and so on. As we shall see later when we look at methods
for eliciting these activities with respect to a particular job, the lists which are
generated are typically rather long, and can easily exceed 100 items. Such a list,
while having the benefit of being comprehensive, is on the other hand extremely
cumbersome to work with in practice, and some method of categorising the
information is clearly necessary.
4.3.1 Trait Indicators of Performance

It is generally accepted that many of the kinds of behaviours we are talking
about here emanate from deeper underlying traits and abilities of the individual,
such as personality characteristics, attitudes and values, intellectual capabilities,
and the like. Effectively each of these source traits can be regarded as being
responsible for a collection of behaviours which co-exist in a person. Thus a trait
such as conscientiousness might lead to a variety of behaviours in an individual,
such as punctuality, meeting deadlines, turning up regularly for work, working
extra hours to make sure the job gets done properly, checking work carefully
for errors before submitting it, and so on. It is not difficult to see the attractions
of using trait type concepts to specify performance requirements, and for many
years organisations did precisely that. Potential advantages of adopting a trait
approach include the following.
• Because traits can encompass quite large groups of behaviours, a relatively

small number ought to be sufficient to give a comprehensive picture of
performance requirements.
• Since traits represent the underlying qualities which are responsible for
the behaviours required for effective performance, focusing on these would
seem to make sense.

• The widespread use of the term trait in everyday language is likely to result
in performance requirements specified in this way being readily understood
by, and therefore acceptable to, all managers.
• Last, but not least, the trait concept is underpinned by a large volume
of psychological theory and research and this gives it an apparent seal of
scientific respectability.
4.3.2 Limitations of the Trait Approach

Unfortunately, it now seems clear that the early enthusiasm for specifying
required performance in terms of traits was largely misplaced. No one is sug-
gesting that there is anything fundamentally wrong with traits as a concept.
The problem was more the way in which descriptions of performance require-
ments, defined in terms of traits, were used in practical situations. A common
use of lists of performance requirements is as a set of criteria against which to
assess individuals for some purpose. An example here would be selection of
new recruits. Another would be the assessment of the performance of existing
employees to determine salary increases, promotion, or whatever. At least six
difficulties have emerged in practice when trait type specifications of perform-
ance were used for this kind of purpose.
1 Traits are inferred, not observed. Consider how you would reach a con-
clusion that a person possesses the trait of conscientiousness mentioned
above. You cannot directly observe conscientiousness in a person. Rather,
you observe certain behaviours, such as punctuality, which you assume to
be indicative of conscientiousness. Provided you observe enough behav-
iours which, in your opinion, indicate conscientiousness, you deduce that
the person possesses the trait. The trouble with this is that all managers
may not use the same list of behaviours to infer a given trait. Thus we have
a recipe for inconsistency amongst managers.
2 Traits were often ill-defined. The inconsistency problem mentioned above
might be alleviated somewhat with careful trait definitions. This could be
done by listing the relevant behaviours associated with the trait. However,
one suspects that this was rarely done in practice when traits were used
to specify performance. It would in any case be difficult to list all of the
behaviours which were sourced by a trait (many of which might in any case
be unrelated to job performance). Even if this were to be done, much of the
parsimony of the trait approach would be lost.
3 Traits were rarely explicitly linked to performance. We have discussed
above the intuitive appeal of the idea that certain important job behaviours
are a function of some underlying trait. But, how do we know precisely
which behaviours are sourced by which traits? The short answer is that we
usually cannot answer this question in an objective way. As a consequence,
one suspects that, all too often, managers were asked to make that link
intuitively, leading to further inconsistency amongst managers.
4 Not all traits are readily measured. Given that traits cannot be observed
directly, and taking into account the fact that they are often poorly defined,
how likely is it that they can be measured with any accuracy in the kind

of contexts we are discussing here? The answer in many cases must be not
very likely.
5 Traits are different from behavioural repertoires. Careful observation of
individuals performing jobs shows that it is usually possible to identify
behavioural repertoires which are particularly pertinent to a particular
aspect of the job or area of activity. For example, let us consider a work
role where the individual has to manage subordinates. Much of the ability
required here presumably relates to dealing with people at a face-to-face
level. Analysis of this aspect of the supervisory role might enable the
observer to identify a cluster of relevant behaviours here, such as, for exam-
ple: persuading others; listening to other people’s ideas; taking account of
other people’s feelings; standing one’s ground in the face of opposition;
providing praise and constructive criticism when appropriate; and so on.
These behaviours cluster together in the sense that they refer to the same
area of activity, i.e. managing subordinates. But do they constitute a trait?
To qualify as a trait these behaviours must be highly correlated in a person.
In other words, to the degree that a person displays one of these behav-
iours, they will tend to display all of them and vice versa. Even a cursory
glance at the above list suggests that this is unlikely to be the case. Why
should being a good listener necessarily mean that an individual will auto-
matically be able to stand his ground in an argument? Are good listeners
necessarily always good persuaders? Common sense strongly suggests that,
in the above example, the use of a trait label to describe this cluster of
behaviours is inappropriate and misleading. The dangers of attaching an
unjustified trait label to a cluster of behaviours can be illustrated by means
of an example from an imaginary selection situation. Assume the cluster of
behaviours listed above is defined as a trait – we could call it ‘leadership’
for the sake of the argument. All of the behavioural tendencies are now
meant to be highly correlated in individuals. This effectively means that if
a person possesses one of them she possesses all of them and vice versa.
Consequently, to assess ‘leadership’ in a selection interview, the recruiter
would only need to obtain evidence about the presence or absence of one of
the behaviours in the cluster. If, as is being argued here, the trait assump-
tion does not hold, this would clearly not be an appropriate way to carry
out this particular set of selection interviews.
6 Many traits are core characteristics. Because the majority of traits tend to
be fundamental attributes, there is a danger that defining performance in
these terms leads to a lack of proper consideration of behaviours which can
be modified and developed – defined above as skills. While this may not
be a problem in terms of selection, it would create great difficulties in other
contexts, such as for example, where the main objective was to develop the
person’s capabilities.
4.3.3 Behavioural Indicators of Performance

What then is the alternative to the use of traits to specify performance require-
ments? We have seen that traits are really given meaning by the behaviours

which are assumed to flow from them. Also, job performance is ultimately
essentially about what the person does in the job, i.e. it is about behaviour.
Consequently, rather than relying on traits which are inferences from behaviour,
why not specify job performance requirements directly in behavioural terms?
However if we do this, we are still left with the problem that such a list of
important behaviours might well be very long. Remember here that one of the
attractions of the trait concept was the fact that it offered a means of categoris-
ing behaviours. Consequently, if we wish to focus directly on behaviour some
alternative mechanism for categorising behaviours into dimensions is clearly
required. There are a number of ways in which this has been attempted, but
most methods are based on the idea of constructing groups of behavioural
repertoires around major areas of activity in the job in question. Thus, there
might be a behavioural dimension centred on interpersonal behaviours simi-
lar to that described above. Other examples of behavioural dimensions might
revolve around activities such as: problem-solving and decision making; plan-
ning and organisation; task management; and so on. The key point here is that
the dimensions are based on areas of work activity, and no assumptions are
made about the extent to which the various individual behaviours which com-
prise the dimension are correlated within individuals. It is probably fair to say
that behavioural approaches are now dominant in the field, although the use of
traits to specify performance is still to be found in a minority of organisations.
4.4 Job Analysis Techniques

Let us assume that we wish to define performance requirements in behavioural
terms. We are still left with the problem of how best to generate a comprehensive
and valid list of appropriate behaviours for the job in question. Job analysis
techniques are designed to fulfil this function. However, it should be emphasised
that not all job analysis techniques focus on behaviour directly. Some methods
produce, instead, a comprehensive picture of the tasks that need to be carried
out in the job. While there is value in this task analysis approach for certain
purposes, in many instances a specification of the behavioural repertoires needed
to perform these tasks will also be required. In practice, tasks and behaviours
often shade into one another and many job analysis outputs contain elements of
both.
Blum and Naylor (1968) list nine methods of job analysis. These are described
below. Before discussing them in detail, it is worth pointing out that no one
method is necessarily superior to any other. Rather, the best method will depend
on a number of circumstances, such as the nature of the job being analysed and
the purpose of the analysis. Also, it will often be appropriate to use more than
one method in order to get as comprehensive a picture as possible. As we
shall see in later modules, job analysis can be used as a basis for a number
of personnel procedures such as recruitment, training and development, and
performance appraisal. However, in practice its use has probably been most
widespread in connection with selection. The nine methods of job analysis
described by Blum and Naylor are discussed below.

4.4.1 Questionnaires
One technique involves the circulation of questionnaires to existing job holders
who are asked to indicate the extent to which a series of statements describes
their job. This may be in terms either of the importance of activities, or their
frequency, or both. This method can be quite time-consuming for employees,
depending on the length of the questionnaire. It can also take a significant
amount of time to develop a suitable questionnaire. However, it does have
the advantage, from the point of view of the job analyst’s time, that it can
be administered to groups of employees, or it can be distributed through the
internal mail for completion and return. This also saves time from the analyst’s
perspective. In addition, this method is particularly suitable where there are
many job holders available to complete the questionnaires. When this is the
case, various forms of statistical analysis can be carried out on the data, which is
another advantage of this method. One potential drawback with this approach is
the fact that there may be important features of the job about which the analyst is
unaware and which are therefore inadvertently omitted from the questionnaire.
Also, employees who have had limited formal education may react negatively
to the requirement to fill in a written questionnaire. This method is therefore
not recommended if significant numbers of job holders fall into this category.
It is sometimes possible to circumvent the need to spend time designing a
questionnaire by purchasing a ready made system. An example here is the
Work Profiling System developed by the well known British consulting firm of
Saville & Holdsworth. This is designed to be applicable to all managerial and
professional jobs. For the job in question, it produces a comprehensive profile
of both the key job tasks and the human abilities required to complete them. It
contains 344 activities grouped into 31 categories. Respondents select the 8 to
10 categories which are most relevant to achieving their job objectives. These
are then ranked in order of importance. Examples of the categories include:
planning, controlling and directing, counselling, and motivating. With reference
to our earlier discussion, the activities are essentially behavioural in nature and
the categories are akin to dimensions.
4.4.2 Checklists
These are similar in many ways to questionnaires, since they require the job
holder to complete a written document. In this case, however, the employee
selects only those items which apply to his job, rather than rating every state-
ment for importance. This avoids the potential problem which exists with ques-
tionnaire methods that, in an effort to be helpful to the analyst, some job holders
might provide ratings for activities which are not actually a significant part of
their job. Otherwise, checklists share many of the advantages and drawbacks of
questionnaires.
4.4.3 One-to-one Interviews

Interviews between the analyst and individual job holders provide a rich source
of qualitative information about the job. They also have the benefit that it is the

job holder who generates the list of relevant tasks or behaviours, rather than the
analyst. Since the individuals actually doing the job will almost certainly know
the job more intimately than the analyst, this is likely to be advantageous. Of
course, it is not necessary for the analyst to restrict his information gathering
to job holders. Superiors and subordinates of the job holder could also hold
valuable insights into key behavioural requirements for the job and they are also
frequently interviewed as part of the process.
A major drawback of this method is its time-consuming nature for both
parties. Moreover, the time requirement for the analyst increases as a direct
function of the number of people interviewed. The qualitative data generated
by this approach is both its strength and its weakness. Its strength is the richness
of the data and the reduced risk of missing important job elements. Its weakness
lies in the difficulty of categorising and quantifying the information.
Given the time involved, interviews as a method of job analysis are probably
better suited to more complex and perhaps more senior jobs It might also be the
preferred approach where there are only a few job holders available to provide
information.
4.4.4 Observation and Interview

With many jobs, much can be learned by systematic observation of job incum-
bents as they carry out their duties. This will of course be more feasible for
some jobs than others. Thus it might be possible to learn quite a lot about the
key behaviours required of someone selling a particular product by observing
successful and less successful salespersons, especially if the observation was
followed up with an interview to explore why the individuals concerned acted
in the way they did. On the other hand, what could an analyst usefully learn
by watching a philosopher thinking? The observational method has the distinct
advantage of being based on actual behaviour, rather than incumbents’ subjec-
tive reports either of what they say they do in the job, or of what they believe
to be important in the job. However, once again it can be time-consuming
especially, as is usually the case, where observation is on a one-to-one basis.
Interviewing job holders to clarify and elaborate on the observational data will
of course add additional time to the whole exercise.
4.4.5 Group Interview

One way to gain interview data from a greater number of respondents in a
given time is to use a group interview. Using this method, perhaps between six
and twelve job holders are interviewed by the analyst at the same time. Apart
from the savings in the analyst’s time, this technique also has the advantage
that respondents may facilitate each other, in the sense that one person’s replies
may stimulate thoughts and ideas in others. However, there are dangers too
in this approach, since some individuals may dominate the group while others
may feel inhibited from responding in front of colleagues. This is likely to be
especially the case as the group gets larger. Apart from these considerations, the
advantages and drawbacks of group interview methods are similar to those of
one-to-one interviews.

4.4.6 The Conference Method

The conference method involves asking a group of experts who are familiar with
the job to generate lists of job tasks and associated behavioural characteristics.
Brainstorming techniques are frequently employed to encourage idea generation.
The fundamental principle of brainstorming is the notion that the generation
and evaluation of ideas are treated as distinct and separate activities. Therefore,
during the generation phase, lists of behaviours are suggested by individuals
without any attempt being made to make judgements as to whether these
are particularly important or relevant for the job in question. Indeed, critical
evaluation is expressly forbidden at this stage. This is to ensure that people are
not inhibited in making suggestions for fear of contradiction and consequently
the maximum possible number of behaviours are generated. Once the generation
phase has been completed the second, evaluation, stage of the process takes
place. It is here that decisions are made about the importance and relevance of
the behaviours which have been generated.
The conference method can include the use of questionnaires as a follow up to
brainstorming. An example of how this whole process might work is as follows.
A series of small groups of experts, each comprising 8–10 people, are asked
to take part in the brainstorming exercise. The lists of behaviours generated,
which might well be over 100 for a managerial job, are then incorporated into
a questionnaire. This is circulated to a new group of experts. There should be
as many individuals as possible in this group. Anything less than fifty or so
would really be insufficient and significantly more than this would be desirable.
In addition to the behavioural lists, the respondents would be provided with
a small number of dimensions, selected to represent major areas of activity in
the job in question. The dimensions chosen would vary according to the job but
some examples of typical ones might include: communicating and influencing;
problem analysis and problem-solving; motivation and commitment; planning
and organising; and decision making. Respondents are asked to complete two
tasks. First, they are asked to rate the importance of each behaviour for successful
performance of the job. Second, they are required to allocate each behaviour to
the most appropriate dimension. A series of rules are then used to eliminate
unsuitable behaviours. For example, a minimum percentage of managers might
be required to rate the behaviour as being highly important before it can be
included in the final list. In addition, for a given behaviour, the majority of
managers should agree about which dimension it belongs to. The final result of
such a procedure might be a list of somewhere between five and ten dimensions,
each containing up to ten or so behavioural statements. Considerably larger lists
of behaviours and indeed dimensions are possible, but if the list becomes too
extensive, there is the danger that what is produced becomes too cumbersome
to be of practical use.
4.4.7 Work Diaries

There may be some important job activities which are so much part of the
routine of the job that they either go unnoticed or seem too obvious to mention
in an interview or as part of a brainstorming exercise. One way to circumvent

this problem is by the use of work diaries. With this technique, the job holder
keeps a daily record of all the tasks carried out. Work diaries have the advantage
of providing a very comprehensive record of job activities. However, apart from
the demands on the job holder’s time, diary records can be very time-consuming
to analyse, especially if there are many trivial items.
4.4.8 Work Participation

In some instances it may be possible for the analyst himself to carry out some or
all of the tasks in the job. This can sometimes highlight activities which the job
holder has been carrying out for so long that he is almost unaware of them. It is
particularly valuable for identifying the abilities required to learn the job, since
learning the job is in effect what the analyst is doing. Obviously this method is
only feasible for certain jobs. Who for example would wish to be a passenger
in an aeroplane when the job analyst was going through her work participation
routine for the job of pilot?
4.4.9 Critical Incidents

The critical incident method (Flanagan, 1954) has been used extensively in job
analysis and indeed in a number of other contexts. Essentially, the technique
asks respondents to describe specific behavioural events that have occurred in
the jobs in question. The events selected should be important for the successful
or unsuccessful execution of the job, i.e. they should be critical incidents.
Individuals are also required to provide examples of particularly effective and
ineffective behaviours associated with these events. Respondents can be anyone
who is familiar with the job, but would typically be either the job holders
themselves or their superiors. Using this method, an extensive list of relevant
and important behaviours for successful performance of the job in question can
be built up. The great strength of this approach is the focus on, and analysis
of, real life events that are exemplars of particularly effective and ineffective
performance in situations which are especially important. However, because
of the emphasis on extreme events, there is a danger with this method that
more mundane, but nevertheless relevant, aspects of the job are overlooked,
and this is one of the potential limitations of the method. We have seen that
many HRM theories advocate the need for constant adaptation and change.
This presumably means that performance requirements will also have to change
to meet new job demands. However, because the critical incidents procedure
relies on the analysis of events that have already occurred, it can only describe
what is required for high performance in the job up until the time when the
analysis is carried out. Consequently, it is not well suited to the identification of
future-oriented performance requirements.
It should be emphasised that these nine methods are not in any way mutually
exclusive and often techniques are used in combination in order to generate as
comprehensive a picture as possible of the job in question.

4.5 Job Analysis and Strategic HRM

From a strategic perspective, it has been argued that job analysis as traditionally
practised, which served the needs of personnel management so well in the past,
may be less able to meet the requirements of current and future HRM. Possible
limitations of traditional job analysis in this respect include:
• Adaptation and change. As we have seen in earlier modules, the need

constantly to adapt and change is a cornerstone of many HRM theories.
We have already mentioned the backward looking orientation of the critical
incident method of job analysis, and its inability to anticipate future per-
formance requirements where job demands are expected to change. How-
ever, most of the other job analysis methods mentioned above also tend to
focus on current performance requirements. In many ways, traditional job
analysis is founded on the implicit assumption that there is a substantial
degree of stability in terms of job requirements. However, if in reality, job
requirements are continuously changing, one could end up in a position
where, no sooner has job analysis been completed, than another analysis is
required as a result of changes in the job!
• Functional flexibility. Traditional job analysis is essentially a technique for
establishing the particular requirements of a specific job. As such, it tends to
emphasise the differences between jobs and hence the specialised abilities
needed to perform each one. But functional flexibility seeks to abandon
specialised work roles with their associated specialised abilities. Instead,
the performance requirement is for people to be capable of performing a
variety of non-specialist tasks across inter-related work roles. Job analysis
is probably capable of being adapted to such a requirement, although
some re-focusing might be necessary. However, before we rush to abandon
traditional job analysis, it should be borne in mind that the scope for
functional flexibility may well be much more limited than its advocates
would have us believe. In the first place, we saw in Module 3 that the
degree to which functional flexibility has actually been adopted in practice
is quite limited. This may be partly a reluctance of organisations to buy into
the flexibility philosophy. But, in addition, in many situations specialisation
of work roles simply makes more sense than the flexible alternative. For
example, take the example of a work team on a commercial aircraft. Would
it be at all practical or sensible to select pilot and cabin crew on common
criteria and train them so that they could freely interchange their roles?
How much would such an exercise cost and what would be the point of
it? No doubt the reader can think of many similar examples. Flexibility
may have distinct advantages in certain work situations, but so too does
specialisation of work roles.
• Diversification of work roles. The term functional flexibility is normally
used to describe the requirement for an individual to take on a broader
range of tasks within a broadly defined set of inter-related work roles. In
addition, however, many managers nowadays are required to be sufficiently
flexible to take on a greater number of completely different, non-related,
work roles over the course of their career. Thus, in the past an individual

might have spent her career moving up the hierarchy in a single function,
such as marketing, within a single division. Currently, and possibly more
so in the future, organisations often expect managers to move from one
job function to a completely unrelated one as the need arises. In these
circumstances one set of specialised skills is no longer enough to meet
performance requirements. This has at least two consequences for the way
in which we approach job analysis. First, since moving across functions
necessitates considerable learning, the ability to learn itself may become a
performance requirement for a variety of work roles. Following on from this,
the focus of interest may move away from the identification of job-specific
abilities in favour of more generic abilities which would be applicable across
a range of jobs.
• Attitudinal qualities. Much of HRM theorising, as we have seen, places
great emphasis on the congruence between personal and organisational
values. From this point of view, a key performance requirement would
presumably be for individuals to possess values which coincide with those
of the organisation. Given the emphasis in HRM theory on the need for
change, it is likely that the willingness to adapt to change and indeed to
react positively to it is an attitudinal quality which might well rank highly
in the list of performance requirements of many HRM managers. Traditional
job analysis has typically not had these kinds of attitudinal qualities as a
strong focus.
• The context of performance measurement. Traditionally, job analysis has
mainly been used in the context of individual performance in narrowly
defined job roles. As such, it proved to be very valuable as an aid to
activities such as selection, performance appraisal, and training. Used in this
way it has helped selectors to know what qualities to look for, appraisers
to know what to appraise, and trainers to identify key training needs. The
arrival of HRM, with its emphasis on the over-riding need to maximise
performance, meant that the whole concept of performance was put in
a much broader context than before. Performance was now seen not just
as the ability to do one’s own day-to-day job well, but also included the
person’s contribution to team activities, commitment to the organisation’s
overall objectives, and so on. In other words, all aspects of performance,
across a wide range of activities, now had to be put under the microscope
if the goal of continuous improvement was to be attained. Seen in this
context, the traditional focus of job analysis was perceived by many as
overly narrow in scope.
4.6 Competencies
As we have just seen, from an HRM perspective, the traditional job analysis
approach did not sit comfortably with the new ways of thinking about organisa-
tions in general and the specification of performance requirements in particular.
Coincidentally, around this time, a number of management researchers and
theorists were developing the idea of competencies as a way of spelling out
performance requirements. For many, this seemed to be the answer they were

looking for, and competencies were taken up by a number of organisations as

the way to specify their performance requirements.
Competencies is an umbrella term which encompasses a number of different,
but overlapping, approaches to the identification of performance requirements.
A common thread running through all of the different approaches is the ten-
dency to specify performance requirements in terms of what individuals need to
be able to do, i.e. with reference to behaviour. Nevertheless, the word ‘compe-
tency’ is used to describe at least three very different concepts, all of which were
intended to be used for different purposes, and each of which developed differ-
ent approaches to eliciting and describing them. Unfortunately, in many cases,
this fact does not seem to have been recognised within the organisations which
have adopted a competency approach, so that the concepts and methodologies
are often used interchangeably creating much confusion (Sparrow, 1997).
According to Sparrow, the three major approaches to competencies are MCI
competencies, organisational competencies and behavioural competencies.
4.6.1 MCI Competencies

The Management Charter Initiative (MCI) originated in Britain in the 1980s. The
impetus for the development of MCI competencies was a national concern for
what was perceived to be the poor quality of much of British management at
the time. This in turn was seen to be at least partly responsible for Britain’s
poor industrial performance. The aim of the MCI was, and still is, to raise the
standard of management throughout the UK as a whole, essentially through
improved management education and training.
As a starting point in this exercise, there was seen to be a requirement to
produce a broad generic specification of what managers at various levels in
organisations needed to be competent to do in order to be able to perform their
jobs to an acceptable standard. Once developed, these competencies could then
be used as minimum standards of managerial performance. If and when these
standards became widely accepted, it was hoped that they would become the
driving force for improved education, training, and development programmes
for managers UK wide. The MCI has produced very extensive lists of these
competencies which are meant to be applicable across different organisations.
The MCI approach can be seen as analogous to a driving test which seeks to
assess whether a learner driver is fit (competent) to drive a car. In the same way
as a driving test examiner has a list of what a driver has to be able to do in
order to be judged a competent driver, the MCI approach provides lists of what
a manager has to be able to do to be competent. The driving test does not set
out to identify individuals who are superior or excellent drivers. It is essentially
measuring the minimal requirements to be able to perform the task of driving
a car to an acceptable level. In the same way, MCI competencies are not about
identifying excellence in managers. Instead, the focus is on minimum standards
required to function adequately. Also, an implicit assumption in driving tests
is that most people will be capable of passing it with appropriate training
and experience (some of course take more attempts than others). This is also
implicitly assumed in the MCI definition of competencies, with the focus being
very much on trainable competencies.

The MCI has on the whole had less impact on organisations than was initially
hoped. At least four reasons can be put forward to explain this state of affairs.
1 Bureaucracy. The MCI approach endeavoured to provide a completely com-

prehensive picture of all of the competencies needed by managers at various
levels. However, the extensive nature of these lists and their complexity
resulted in a system which turned out to be highly bureaucratic and non-
user friendly in practice.
2 Minimum standards. Many organisations are really more interested in
being able to identify superior performance than in specifying minimum
acceptable standards. Excellence is the holy grail, not adequacy. This is
perhaps one of the main reasons for the lack of impetus of the whole MCI
movement.
3 Skills versus core abilities. An approach which focuses more or less exclu-
sively on trainable competencies is going to miss out half the picture, given
the fact that many of the abilities needed for effective job performance are
core attributes which are not really amenable to training.
4 Generic versus organisation-specific competencies. As we have seen, the
MCI version of competencies concentrates on generic managerial compe-
tencies which are common across jobs and organisations. However, it is
quite a commonly held belief that many managerial competencies are both
organisation-specific and unique to particular types of managerial role. The
competencies required of a human resource manager are quite different
from those needed to be a finance manager, and the latter will require a
different set of competencies in one organisation compared with another, so
the argument runs. If this is indeed the case, MCI competencies will be of
limited value. However, while this may be true to some degree, we do not
actually know the extent to which competencies really are organisation or
job specific. Also, we saw above that in some ways, interest in generic com-
petencies is increasing because of the move towards functional flexibility
and the diversification of work roles.
While some of these criticisms of the MCI approach may have some validity,
there is undoubtedly considerable value in setting minimal standards of manage-
rial competencies. MCI competencies can do much to inform those responsible
for management education and training about what managers really need. Per-
haps even more important, the existence of minimum standards will hopefully
do much to encourage those organisations in which investment in the training
and development of managers has been inadequate to improve their standards.
Finally, MCI competency lists are potentially of considerable value for those
smaller organisations which lack the expertise and resources to carry out their
own job or competency analysis.
4.6.2 Behavioural Competencies

Without doubt, the most widely adopted model of competencies is what has
become known as the behavioural competency approach, developed by the
McBer Corporation in conjunction with Harvard Business School (Boyatzis,

1982). This approach in effect addresses most of the concerns raised above
about the MCI system, although since the two developments occurred more or
less in parallel, this was by accident rather than design. The McBer model explic-
itly seeks to identify excellence in performance, rather than minimum standards.
Also, unlike the MCI, the focus is not so much on generic abilities, but rather on
organisation and job-specific competencies. Thus, the normal expectation would
be for each organisation to develop its own sets of competencies for different
managerial roles. The McBer approach does not make any particular distinction
between fundamental competencies and those which are trainable, and both
tend to be present in typical behavioural competency lists. These differences
in emphasis probably explain why, so far as the UK is concerned, behavioural
competencies have been taken up so much more enthusiastically than the MCI
model.
The focus of the McBer model is behavioural, although it recognises that, as we
have already discussed above, many behaviours are likely to be underpinned
by underlying trait and personality characteristics. A number of techniques
have been used in an attempt to measure behavioural competencies. Of those,
probably the most commonly used method of creating competency lists is the
critical incident technique described above in section 4.4.9 on job analysis. It
will be no surprise to the reader, given our earlier discussion on the practical
difficulties of dealing with large disparate lists of behaviours, that it is normal
for behavioural statements (typically called elements) to be grouped together
into dimensions. It is normally these dimensions which are referred to as
competencies. The elements are typically grouped into competencies on the
basis that they jointly affect some important area of performance. In these,
and many other respects, the notion of behavioural competencies is really very
similar to the behavioural approach to specifying job requirements described
above.
Given that the behavioural competency model is not fundamentally different
from previous behavioural approaches, its much greater popularity is probably
as much due to an accident of time and circumstances as to anything else.
The arrival of competencies on the scene coincided with the increased interest
in measuring all aspects of performance. Thus competency analysis seemed
to meet the needs of the time, since it appeared to offer an alternative to
narrowly focused traditional job analysis. It seemed to offer a broader and more
integrated way of assessing performance. It also had the advantage of being
readily understandable to, and therefore user friendly for, the new breed of
general managers who were now expected to take a more direct role in HRM
activities than they had ever been required to do in the past.
While the behavioural competencies approach shared many of the strengths
of the behavioural techniques already in existence, it also shared most of its
weaknesses. Limitations of the behavioural competency approach include the
following.
1 Measurement of competencies. The difficulty of the critical incident or
behavioural event method, which is often the preferred technique for elic-
iting competencies, in dealing with changing future job requirements has
already been explained above. Also, methods for eliciting competencies fre-

quently require managers to identify effective and ineffective performers

and describe their behaviour. This is also a backward looking approach,
since it asks managers to identify who has done well in previous situations
which may no longer be relevant because of changed circumstances requir-
ing new competencies. It is also subjective in nature and, given this fact,
how can we be sure that managers can do it accurately? The answer to
this question is that we cannot be absolutely sure. However, provided the
managers who are to be asked to provide the examples are chosen carefully,
and provided there are enough of them, it is at least possible to obtain a
consensus view of what constitutes effective and less effective performance.
2 Competency dimensions. The necessity for categorising the individual
behavioural statements into dimensions or competencies is not disputed.
However, the way in which this is normally done is problematic. How do
we know which elements should go with which competencies? Often again,
we have to fall back on the vagaries of subjective judgement as to what
looks right.
3 Skills versus core abilities. We have seen that the behavioural approach to
competencies elicits both core and trainable behaviours. However, in many
cases at least, it does not seek to identify which elements are core and which
are trainable and many competencies contain a mixture of core, skill, and
motivational elements. In these circumstances, it is difficult to know what
steps to take to ensure that job holders possess a particular competency or
set of competencies.
4 Generic versus organisation-specific competencies. We have seen that the
McBer model emphasises organisation-specific and job-specific competen-
cies. This raises an important issue already mentioned in this module.
First, to what extent are managerial competencies really unique to jobs and
organisations as opposed to being generic? Perhaps the qualities needed to
be a good manager are broadly similar across a wide variety of jobs and
situations. Unfortunately, there is little evidence available on this question.
Unpublished data collected by this author in a series of competency analyses
for entry level managerial jobs from over 30 widely different organisations,
indicated that approximately 70% of the elements generated were common
to most of the organisations (Keenan, 1997). In another study, data collected
on 286 jobs in 21 countries suggested to a considerable extent the general
nature of competencies even across cultures (Spencer and Spencer, 1993).
However, while these two studies suggest that there is a strong generic com-
ponent in competencies, the jury has not yet reached a conclusion on this
issue and we will need much more evidence before any definite decisions
can be reached.
The behavioural competency model has much to recommend it, although in

essence it is not fundamentally different from previous behavioural approaches
to the identification of performance requirements. It has, however, gained greater
acceptance by organisations, partly because it seemed to meet an identified need.
Despite its undoubted usefulness in identifying performance requirements, some
problems remain particularly with respect to measurement issues.

4.6.3 Organisational Competencies

Yet another approach to competency analysis has as its focus the totality of what
the organisation is competent to do. This strategic competency model endeav-
ours to produce a comprehensive picture of the organisation’s total resources
and capabilities. As such, not only are the competencies of individuals taken into
account, all sorts of other resources are included, such as group competencies,
the quality of the leadership from top management, the strength of the organi-
sational culture and even physical assets such as equipment and facilities. One
of the main arguments for this approach is that it is necessary to have a com-
prehensive picture of the organisation’s capabilities not only in order to identify
where performance enhancement is most needed, but also to inform decisions
about which strategic options the organisation is most capable of implementing
successfully.
4.7 Performance and Pay

In this module we have seen that the analysis of performance requirements is
of critical importance in the management of human resources. However, human
resource management is not just about measuring performance, it is also about
enhancing it. On the one hand, performance improvement can come about by
increasing the skills and abilities of employees and many of the techniques for
doing this will be dealt with in depth in later modules in the text. However,
capability on its own does not guarantee high performance. Individuals must
also have the motivation to perform well. Being able to do something is one
thing, wanting to do it is quite another. It is only when both are present that
maximisation of performance becomes a real possibility.
Traditionally, in the field of personnel management, and more recently in
human resource management, payment systems have been regarded as playing
a crucial role in motivating employees. As we shall see in this brief review,
using pay as a motivator often means linking pay to performance. It is for this
reason that the analysis of performance requirements underpins this important
and complex area of HRM.
4.7.1 What Pay Means for the Individual

At its most basic level, pay constitutes the major factor in determining most
people’s standard of living. A person’s level of pay will not only affect her
ability to feed and support her family, but will also affect a whole range of
lifestyle factors which are dependent on income. As such the importance of pay
for the majority of us is undeniable. Just how important it is compared with
other factors is not so readily determined, as we shall see later.
In addition to its purchasing power, pay also has symbolic meaning for
individuals which goes beyond mere purchasing power. For example, a person’s
level of pay can signify status both inside and outside the organisation. Even
a cursory glance at the majority of organisations would make it obvious that
payment levels and status are closely related. In society generally this also tends
to be the case. It follows from this that people do not just view their pay in terms

of its purchasing power. Within organisations pay can help locate individual
employees in the status hierarchy. A good deal of research in the field of human
behaviour has demonstrated the importance of the concept of perceived fairness
to individuals. One of the more eloquent theories in this area is that of Adams
(1965) which, as it happens, directly relates to the issue of pay and motivation.
According to Adams Equity theory (ref), a powerful source of motivation for
individuals is their sense of equity in relation to other individuals with whom
they compare themselves. According to the theory, these comparisons are made
in terms of both inputs and outcomes. In terms of a person’s work role, inputs
are everything he puts into the job, such as time, effort, and skills. Outcomes are
what he receives in return. Pay is of course a major outcome, but it is seldom
the only one. Others might include status and recognition. The idea is that
people compare the ratio of their own inputs and outcomes to those of others
and when their own ratio fails to match that of the comparison others this leads
to an unpleasant psychological state. This has a variety of consequences for
the person and the organisation. For example, when a person compares himself
to another, if his outcome/input ratio (the amount he gets out divided by the
amount he puts in) is less than the other individual’s he experiences a feeling
of underpayment inequity. This could occur in a number of ways, such as both
parties put the same amount (same inputs) in but the other receives more pay
(other has higher outcomes), or conversely both receive the same pay but the
other person puts in less effort. Perceived inequity can also occur the other way
around when someone’s outcome/input ratio is greater than the comparison
other. This could occur if, for example, the individual receives more pay than
the comparison person, even although both put in the same amount of effort.
This is known as overpayment inequity and is experienced psychologically as
guilt. The theory states that whenever there is inequity the person will act in
such a way as to restore equilibrium. This can be done in various ways. For
example if the person feels underpayment he can react by reducing his work
effort in order to reduce his inputs. Where there is perceived overpayment
inequity, one strategy might be to work harder in order to increase inputs. The
latter strategy will not work of course if the person is rewarded with more pay
for his effort, since in these circumstances he will find himself back where he
started! In general, research has tended to support the main tenets of Adams
theory (Greenberg, 1982). A key lesson from Adams theory for HR managers
is the importance employees place on perceived fairness of pay. Pay is not just
about what the money can buy. It is about a receiving a just return for one’s
efforts.
Adams theory highlights the importance of pay comparisons generally in
determining satisfaction with pay and its ability to motivate. Such comparisons
can be made at a number of different levels and taking account of these not
only makes the HR managers job more complex, it can also limit her room for
manoeuvre when trying to use pay as a motivator. At one level, individuals
obviously make comparison with others doing the same or similar work within
their organisation. Internal comparisons are also made with individuals at dif-
ferent levels of the hierarchy and with those carrying out different work roles.
This leads to the vexed question of pay differentials within an organisation.
How much should a person be rewarded for possessing extra skill for taking

on responsibility, for working in unpleasant conditions, and so on? To some

extent the setting of pay differentials within an organisation is at management’s
discretion, although there are often external constraints on this process. For
example, in certain trades and professions, wage rates are negotiated nationally
by collective bargaining, leading to a ‘going rate’ for the profession. Even where
individuals do not belong to a group where wages or salaries are negotiated
at national level, they naturally make wage and salary comparisons with those
doing similar work in other organisations. The existence of such comparisons
also limits management’s scope to determine pay purely based on internal con-
siderations, since individuals often have to be paid at the going rate to avoid
losing them.
All of this leads to the much-discussed question as to the importance of pay for
motivating people. This is, it turns out, not an easy question to answer. The issue
has often been couched in terms of the relative importance of what is known as
extrinsic rewards, of which pay constitutes a major part, compared with rewards
which are intrinsic to the job, such as for example, a sense of achievement. It has
not proved easy to identify the relative importance of these two types of reward,
largely because researchers have found that different methods of collecting data
yield different results. Suffice to say that both is undoubtedly important and can
have powerful motivational effects on individuals (Gerhart, 1995).
4.7.2 What Pay Means for the Organisation

First and foremost, we must not lose sight of the fact that pay is a cost item
for organisations, and the extent to which the wage bill is a major contribution
to overall costs will have a profound influence on pay policies. Where wage
costs constitute a small percentage of overall costs, human resource departments
clearly have more scope for adjusting pay rates in order to motivate individuals
than is the case where the reverse is the case. Pay is also a vehicle for attracting
and retaining staff. Organisations compete in the marketplace for labour and
talent and as such market conditions inevitably influence pay rates. Once again
we have a constraint on the organisation’s ability to base pay purely on internal
considerations. Pay can also be used as a way of recognising and rewarding
the past contribution of individuals to the organisation. This is one argument
in defence of the pay scales to be found in many organisations. Often implicit
here is the notion that individuals will improve or at least maintain their
performance in anticipation of continued increases in pay in the future, based
on recognition of their past efforts. However, note that there is no explicit
link between pay and performance with this type of arrangement. Nothing is
agreed in advance and any payment increases are purely at the discretion of
management. However, pay can be explicitly linked to performance according
to some pre-agreed formula. There are a variety of such schemes in existence
where pay is used as a direct incentive to improve future performance.
Reflecting back on the theory of Adams, if we regard pay as a key outcome
for individuals, it follows that it can be a useful tool for restoring equilibrium in
situations where the organisation wishes individuals to change their inputs in
some way. For example pay can be used as compensation when the organisation

is endeavouring to introduce changed working practices, such as flexibility, self-

managed teams, and so on. Of course pay might only constitute one element in
the introduction of such changes, and in many cases might not even come into
the picture.
4.7.3 What Constitutes Pay?

In considering what is meant by pay, the regular fixed remuneration the individ-
ual receives on a weekly or monthly basis is usually the first thing that springs
to mind. However, a person’s total remuneration can include a number of other
pay elements, each with different implications for motivation and performance.
While it is beyond the scope of our present discussion to go into all of these in
detail, it would be in order to cover some of them briefly here.
We have already mentioned that, on top of basic pay, there can be additional
sums of money based on individual performance. Some organisations make
additional payments based on team performance. Possibly in order to encourage
a sense of being part of the organisation, an element of pay can be based on the
performance of the organisation as a whole, perhaps in the form of an annual
bonus based on profits. Such payments need not be in cash but can be in the
form of, for example, shares. In some countries, notably the UK, a significant
component of pay can come in the form of what is known as fringe benefits.
Such payments in kind can include provision of company cars, free medical
insurance, free entrance to sports facilities, and so on. These schemes are often
underpinned either by some form of tax break or, in the case of benefits such
as medical insurance, a discount based on to the organisation’s ability to buy in
bulk. Now that people are living longer, an increasingly important element of
pay in many organisations is the provision of pension benefits.
This very brief illustration of components that can be included in a person’s
overall salary package has by no means exhausted all of the financial possibilities
open to organisations for rewarding individuals. However, it should at least
serve to illustrate that, for many people, their overall remuneration package can
indeed be quite complex. This in turn makes it quite difficult for HR managers
to evaluate the precise motivational effect of the individual elements in the
overall financial package. Indeed the perceived benefit of any particular element
will doubtless vary depending on the circumstances of the individual employee.
To take just one example, it seems likely that individuals at the start of their
working life are likely to be less concerned with the level of pension provision
than those in mid-career.
4.7.4 Pay and Individual Work Roles

In most organisations, pay varies significantly according to the work role carried
out by the individual. Chief executives are paid more than maintenance engi-
neers, who in turn probably receive different remuneration from accountants,
and so on.
Partly, of course, such pay differentials are a result of supply and demand
factors in the external labour market. When demand is high and supply is low

for individuals with particular skills, wage rates will tend to be high, the reverse
being the case where there is over-supply and weak demand. Thus for example,
if an organisation employs engineers with highly specialised skills who are in
short supply in the labour market, it is likely that it will need to pay them high
salaries in order to recruit and retain them. Conversely, individuals in work
roles where supply is high and demand low are likely to be paid less highly.
While organisations obviously need to take the external labour market into
consideration in their payment policies, payment differentials according to work
role are by no means purely based on supply and demand considerations.
In most organisations it is generally accepted that individuals in some work
roles contribute more to the organisation than in others and that payment
arrangements should reflect this. While intuitively it seems to make sense that
the rewards people receive should vary according to the work they do and
the contribution they make, assessing what these differential contributions are
and how they should be translated into pay is another matter. Most would
agree, for example, that the chief executive of an organisation should be paid
more than say, a human resource manager. But how much more and based on
what exactly? What is the appropriate pay differential, if any, between the head
of engineering and the chief accountant? How do we measure their different
contributions and how exactly do we attach a monetary value to these? Should
electricians be paid more than secretaries and if so, how much more and on
what basis? And so on.
What we are talking about here is the process of comparing different work
roles in order to determine appropriate pay rates. There are actually two distinct
components in this process. First of all, it is necessary to analyse the similarities
and differences among the various work roles being compared. There are many
factors to be taken into account here. Examples of relevant factors might include:
level of responsibility in the job; length and amount of training required; amount
of stress experienced in the work role; repetitiveness and boredom; length of
working week; working conditions; supervisory and leadership responsibilities;
problem solving requirements in the job; physical demands of the job; and so
on. Although the list of comparative factors is potentially very large, this is in
fact the easier of the two components to deal with. The second component is
intrinsically more difficult. Since the purpose of this exercise is to determine
relative pay, once the relevant factors such as responsibilities, skill requirements,
and so on, have been attributed to the various work roles, it is necessary to
determine the monetary value to be attributed to each of the different factors.
How much should a person be paid for a given amount of stress and how does
this compare with a given level of responsibility, or a given level of physical
demands?
As far as the first component of this process is concerned, detailed descriptions
of the various jobs are essential. Of course, job analysis data can be used to
provide a fairly accurate picture of the similarities and differences between
work roles in terms of duties, responsibilities, demands and so on. However,
these methods tell us nothing about the second component of the process – the
monetary value that should be placed on these factors. To do this we must look
to methods of job evaluation.

4.7.5 Job Evaluation

The main function of job evaluation is to establish, in a systematic way, compara-
tive pay rates across different levels and functions in organisations. As described
above, the process begins by determining the various factors that make up the
job content of each work role to be evaluated. Once the factors have been deter-
mined, job evaluation is used to allocate values to the different factors in terms
of their worth to the organisation. From this it is possible to obtain a total value
for each job position. This is then used to determine relative pay levels for the
jobs in question.
A key problem for all job evaluation schemes is how to determine the values
of the various different job factors, such as responsibilities, skills, and so on. In
practice, this typically boils down to the consensus opinion of a panel of judges
drawn from within the organisation. This then begs the question as to who these
judges ought to be. Conventionally groups of managers have typically fulfilled
this role, although in a number of cases other employees have been included,
such as for example, individuals who actually carry out the work roles. While
the basic principles of job evaluation are as we have just described, a variety
of methods exist to help put the process into practice, the most well known of
which is the Hay Guide Chart Profile Method. For a detailed discussion of this
and other methods the reader is referred to Armstrong and Murlis (1994).
Job evaluation schemes are useful for organisations in a number of respects.
The most obvious advantage is the fact that they provide organisations with a
systematic and rational basis for determining comparative pay across different
work roles. Also, in countries with strong equal opportunities legislation, such
as the UK, they allow employers to demonstrate the rationale behind their wage
policies, if and when they are challenged in the courts. Third, to the extent that
the schemes allow participation of a range of employees in the process of pay
determination, they can also encourage acceptance of pay policies.
Job evaluation schemes also have their drawbacks and limitations. There is no
getting away from the fact that the system of determining the values of different
job factors, even although it might be based to a greater or lesser degree
on consensus, is still ultimately subjective and based on human judgement.
Often job evaluation systems are highly bureaucratic. They can be expensive
to implement, since while on the one hand those groups who turn out to
be underpaid have to receive increases, it is at the same time politically very
difficult to reduce the pay of those who turn out to be overpaid according
to the results of the job evaluation. These schemes were initiated in the days
when organisations had hierarchical structures with clearly defined job roles and
these are the circumstances where they work best. But in organisations with flat
structures and flexible working practices, there are often few clearly defined
work roles. In these circumstances, job evaluation procedures tend to be less
useful. Finally, in terms of using pay to motivate employees, job evaluation
schemes are of limited value, since they essentially reward a person for what he
does, rather than how well he does it. The logic of job evaluation is to reward a
person for being in a particular work role, rather for performing especially well
in that role.

4.7.6 Pay and Performance

We have already seen in this module that performance can be specified at the,
individual, team, and organisational levels. In the same way, pay can be made
contingent on performance at these three levels. People can be rewarded for their
individual efforts, for the achievements of teams of which they are a part, or for
the success of the organisation as a whole. It is important to bear in mind here
that HR managers do not necessarily need to choose one level of performance
contingent pay at the expense of the others. A person’s pay can be composed
of performance at more than one level. Thus, for example, an individual’s pay
could have an element based on individual performance as well as an amount
tied to the overall performance of the organisation.
• Pay and individual performance. There has been a long history of linking
pay to performance in various ways, based on the simple philosophy that
people will be motivated to perform better if their pay is somehow linked
to performance. The early history of tying pay to performance tended to
focus on blue-collar workers, with the use of so-called payment by results
schemes. These had a variety of formats but typically pay would be tied in
some way to output. In its simplest form, payment by results operates on
the basis that the more units a person produced in a given time period the
more he or she was paid. However, while rewarding workers financially
for increased output is not surprisingly likely to lead to higher volumes of
goods produced, there are many problems with the use of these schemes,
at least in their pure form. In the first place, output is rarely purely a
function of the individual’s efforts but is influenced by many other factors,
such as for example the reliability of the machinery being used and this
can lead to feelings of unfairness if individuals receive different amounts
of pay based on factors outside their control. Also, few organisations can
sell unlimited numbers of products and this clearly puts constraints on
the amounts individuals can be allowed to produce. In most organisations
there are large groups of employees who do not directly produce goods but
who provide a vital support role for the production process. How is their
pay to be determined fairly in comparison to those in the front line of the
production process? Finally, and most importantly, common sense tells us
that in many situations, there tends to be an inverse relationship between
quantity and quality. It is in the nature of things that when a person is
working extremely quickly to produce as many units as possible, there is
a real danger that quality will suffer. So by rewarding quantity of output
one is downgrading the importance of quality, which of course does not sit
well with the emphasis on quality and customer satisfaction that is central
to much current HRM thinking these days.
A more recent development in this area has been the introduction of per-
formance related pay schemes. While these have in common with payment-
by-results schemes the central idea that pay is somehow made contingent
on performance, the two are different to each other sin important ways.
For example, unlike payment-by-results schemes, PRP is aimed mainly at
white collar and managerial staff. Secondly, PRP schemes are typically

linked into performance management systems (see Module 6). Under PRP,
a proportion of each manager’s salary is based on a systematic evaluation
of his or her performance over an agreed period, such as the previous
year. Performance is often, but not always, based on the judgment of the
person’s immediate superior. These schemes have grown substantially in
recent years according to Kessler (1994) who has reviewed the evidence
on their use. However, it is a moot point how successful they have been,
given the many difficulties that have arisen with their use. Two particular
problems deserve special mention here. First, there is the problem of the
appropriateness of the performance criteria frequently used as the basis of
the judgement of performance. Job and competency analysis can give us a
good overall picture of the performance requirements in a given work role,
but this is not the same thing as specifying which aspects of performance
should be rewarded with additional pay when individuals within a work
role are being compared. For some jobs there are reasonably objective crite-
ria against which to judge performance from a pay perspective. Thus, for a
salesperson, number of units sold might be such a yardstick. But many jobs
do not contain such clear-cut indicators. For example, what criteria would
or could be used to evaluate performance in the jobs of canteen manager,
training officer, or medical doctor? It is important to remember here that
it is not just a question of defining criteria; it is also necessary to measure
them accurately. Following on from the last statement, the second problem
relates to the vehicle which is used to decide how far each individual has
met the performance criteria, whatever they may be. This is frequently done
in the context of some kind of performance appraisal system. However, as
we shall see in Module 6, there are many difficulties and pitfalls in carrying
out performance appraisal and these bring into question whether appraisal
systems are up to the task of determining what different individuals should
be paid in a valid and equitable manner.
• Pay and team performance. Team-based performance contingent pay
schemes are often run on similar principles to individual based ones, except
that the pay is based on the performance of the team as a whole. Each
individual in the team is thus paid the same amount, regardless of varia-
tions in individual performance. Where an organisation wishes to emphasis
team working, payment on the basis of team performance has the potential
advantage of fostering a team spirit and focusing the mind on the need for
the team to work on a co-operative basis towards a common goal. A further
advantage of team-based payment is the fact that it allows individuals who
are not directly producers, but who are nevertheless vital contributors to
team functioning, to be adequately rewarded. Despite these advantages,
there can be problems with team-based performance contingent pay. From
a motivational perspective, one potential problem is the breaking of the
link between individual effort and individual pay. Specifically, where is
the incentive for a person to increase his or her performance if he is not
rewarded for his individual efforts and instead any rewards are shared with
the group? Conversely, what is to prevent a person ‘free loading’ on the
backs of others by putting in a minimum effort and still sharing in the
rewards of the team as a whole? In relation to the last point, what effects

might the existence of such free loaders have on the morale and motivation
of the rest of the team?
• Pay and organisational performance. A number of schemes linking a pro-
portion of pay to the performance of the organisation as a whole have
been used over the years. Usually, these consist of some form of profit
sharing scheme. Such schemes have the potential advantages of encourag-
ing organisation-wide effort and perhaps helping to foster commitment to
the organisation’s objectives. However, there is the danger that linking pay
to performance defined purely as profits might encourage too much focus
on short-term, at the expense of longer-term, objectives. The limitations of
using profit as a sole criterion of organisational performance have already
been referred to earlier in this module. There is also the slightly tricky issue
of what should happen about profit-related pay in years where the organ-
isation makes no profit or even a loss. There is a danger that, following
several years of profit-related payments, employees develop an expectation
that these will always be forthcoming. In these circumstances, the absence
of such payments in lean years could actually function as a disincentive. In
any event, it is questionable whether these types of payment can ever have
much incentive value for the majority of employees, given the remoteness
of the link between the performance of any one individual and the profits
generated by the organisation as a whole.
4.8 Summary
The analysis of performance requirements is a critical task for operational HRM.
Performance requirements can be specified at the organisational, group, or
individual level and in terms of end results or process criteria. Early approaches
to the analysis of individual performance requirements often focused on traits,
but this is now being replaced by a behaviour-focused approach. Job analysis
is a set of procedures which can be used to identify the key tasks involved
in specific jobs and the human qualities needed to perform these effectively.
The recent popularity of competency approaches is partly a response to the
perceived narrow focus of traditional job analysis. Despite their popularity,
there is a number of measurement and other problems associated with the use
of competencies.
The analysis of performance requirements underpins the use of payment
systems as a motivational tool in organisations. Pay is an important area of
HRM activity and, as the module shows, there are many complexities in the
application of pay policies in organisations.
This module has mainly addressed the question of how the key performance
requirements within organisations might be identified. However, it is one thing
to be able to define in general terms what individuals need to be able to do to
perform well. It is quite another to be able to measure these qualities accurately
in a person. We turn our attention to this question in the next two modules.

Review Questions
4.1 Unlike HRM, traditional personnel management is not concerned with improving
the performance of individuals.
4.2 HRM differs from traditional personnel management insofar as it puts perform-
ance in a wider context and includes group and organisational level perform-
ance.
4.3 End results measures of performance are always preferable to process measures.
4.4 Meeting quality targets and group cohesiveness are both end results criteria of
performance.
4.5 It is usually better to have composite performance criteria, rather than relying
on any one criterion.
4.6 High levels of employee turnover can either contribute to or detract from
enhanced performance, depending on the circumstances.
4.7 One of the problems of using productivity criteria to measure individual per-
formance is the fact that, for managers in particular, many of the key elements
in the job cannot really be quantified.
4.8 It is not possible to have a characteristic which has both core and skill elements.
4.9 Motivational characteristics can only be enhanced by combining environmental

change with new selection practices.
4.10 Core characteristics cannot be significantly changed by training or coaching.
4.11 The idea that there are underlying traits which are partly responsible for a
person’s ability to carry out the activities required in the job successfully is
highly controversial.
4.12 One of the big advantages of using traits to specify performance requirements
is the fact that traits are directly observable.
4.13 One of the weaknesses of the trait approach is the inconsistency it tends
to create amongst managers when they are trying to specify performance
requirements.
4.14 The fact that, when behavioural indicators are used to specify performance
requirements, there is no need to categorise them in any way constitutes one
of the major advantages of this method.
4.15 Job analysis techniques always focus directly on the behaviour of job holders.
4.16 Blum and Naylor (1968) list nine main methods of job analysis.

4.17 A problem with questionnaire methods of job analysis is the difficulty of carrying
out statistical analysis on information collected in this way.
4.18 As methods of job analysis, checklists and questionnaires have little in common.
4.19 The conference method of job analysis uses experts to produce lists of relevant
job behaviours.
4.20 The critical incident method of job analysis focuses on real events which have
occurred in the job in the past and which exemplify either very good or very
poor performance.
4.21 Traditional job analysis has tended to focus on job specific abilities, rather than
generic ones.
4.22 Although the term competency is used to describe three different concepts, all
three were designed for the same purposes.
4.23 The three different approaches to competencies identified by Sparrow (1997)

are: MCI competencies; managerial competencies; and behavioural competen-
cies.
4.24 MCI competencies are often particularly valuable for small organisations.
4.25 The McBer competency approach represented a radical departure from previous
behavioural approaches to specifying performance requirements.
4.26 The critical incident method is one of the most commonly used methods to
elicit behavioural competencies.
4.27 There is now sufficient evidence available to conclude that most behavioural
competencies are generic.
4.28 The organisational competency approach is not concerned with the competen-
cies of individuals.
4.29 One of the advantages of the organisational competency approach is the fact
that it can feed into strategic decision making about what the organisation
might be capable of achieving.
4.30 The organisational competency approach is designed to produce an evaluation

of the organisation’s total capabilities.
4.1 What are the various criteria which could be used to specify performance
requirements at the organisational level? What are the limitations of each?
4.2 What are the disadvantages of using a trait approach for specifying performance
requirements?
4.3 Discuss the potential inadequacies of traditional job analysis from a strategic
HRM point of view.


You have applied for a post as a job analyst with a firm of management consultants.
Imagine that you are attending the selection interview for the job. The interviewer’s
technique is to present you with four situations consisting of requests from different
clients to have a job analysis carried out in their organisations. The four situations
are described below. Your task is to answer the questions as best you can, based on
your knowledge of job analysis methods.
Situation One: A client wants a job analysis carried out for all of the junior
managerial positions in her company. There are currently 120 people in these
positions and the client needs a comprehensive set of competencies to cover all of
these positions. What method(s) of job analysis would you recommend and why?
Situation Two: A client has asked for a job analysis to be undertaken for the job
of painter. The firm is a small one specialising in painting a mile long railway
bridge across the river Forth in Scotland. There are a total of 25 painters, who are
supervised by two foremen. In addition, there is a general manager who is in charge
of the whole operation. Which method(s) of job analysis would you recommend
and why?
Situation Three: A medium sized producer of children’s clothes wants to find out the
essential traits needed to be a successful salesperson in the organisation. Almost all
of the sales occur through retail outlets and the sales force spend most of their time
visiting retailers in order to persuade them to buy the product. There are several
competitors in the marketplace and the performance of the sales force is critical for
the survival of the company. Consequently, the client is prepared to spend significant
amounts of money to get as comprehensive a picture of the successful salesperson’s
key traits as possible. What method(s) would you recommend and why?
Situation Four: A multinational oil company has asked for a competency analysis to
be carried out on senior managerial roles in the organisation. There are approx-
imately 200 senior managers in the organisation, based all over the world. Most
of them have high pressure jobs where a mistake can be extremely costly for the
organisation. The organisation strongly believes in the need to continually adapt
and change in order to survive and has adopted functional flexibility as one way to
facilitate this process. What would you recommend in this case?
References
Adams, J.S. (1965). ‘Inequity in social exchange’, Advances in Experimental Social Psychol-
ogy, ed. Berkowitz, L.
Armstrong, M. and Murlis, H. (1994). ‘Reward Management’, London: Kogan Page.
Blum, L. and Naylor, J.C. (1968). Industrial Psychology, New York: Harper & Row.
Boyatzis, R. (1982). The Competent Manager, New York: Wiley.
Flanagan, J.C. (1954). ‘The critical incident technique’, Psychological Bulletin, 51, 327–58.
Gerhart, B. (1995). ‘Rewards’, Encyclopedic Dictionary of Organizational Behavior, ed.
Nicholson, N., Oxford: Blackwell.

Keenan, A. (1997). ‘Selection for potential: The case of graduate recruitment’, International
Handbook of Selection and Assessment, eds. Anderson, N. and Herriot, P., Chichester: Wiley.
Kessler, I. (1994). ‘Performance pay’, Personnel Management, ed. Sissan K., Oxford:
Blackwell.
Sparrow, P.R. (1997). ‘Organizational competencies: Creating a strategic behavioural
framework for selection and assessment’, International Handbook of Selection and Assess-
ment, eds. Anderson, N. and Herriot, P., Chichester: Wiley.
Spencer, L.M. and Spencer, S.M. (1993). Competence at Work: Models for Superior Perform-
ance, London: Prentice Hall.

Module 5
Recruitment and Selection
Contents
5.1 Selection in Context 5/2
5.1.1 The Importance of Selection 5/2
5.1.2 Strategic HRM and Selection 5/2
5.2 The Selection Paradigm 5/3
5.2.1 Job Analysis 5/4
5.2.2 Decisions on Choice of Selection Tools 5/4
5.2.3 Making Recruitment Decisions and Collecting Data 5/5
5.2.4 Validation Procedures 5/5
5.3 The Process of Validation 5/6
5.3.1 Reliability 5/6
5.3.2 Validity 5/6
5.3.3 Using Correlation Coefficients to Estimate Reliability and Validity 5/7
5.3.4 Meta Analysis 5/8
5.4 The Usefulness of Selection Devices 5/10
5.5 Selection Tools 5/10
5.5.1 Application Forms and Biodata 5/11
5.5.2 Reference Reports 5/12
5.5.3 The Interview 5/14
5.5.4 Psychometric Tests 5/17
5.5.5 Simulations and Assessment Centres 5/20
5.6 Summary 5/22
Learning Objectives
• understand the relationship between strategic HRM and selection.
• describe the selection paradigm and understand its relevance for selection.
• explain how a selection matrix is used.
• describe Muchinsky’s analysis of the usefulness of selection devices.
• understand the concepts of reliability, validity, and meta analysis.
• evaluate the usefulness of application forms, biodata and references.
• distinguish between structured and unstructured interviews.
• understand how psychometric tests are used in selection.
• describe how assessment centres are used in selection.

Module 5 / Recruitment and Selection
5.1 Selection in Context
5.1.1 The Importance of Selection

Effective recruitment and selection will always be crucially important for the
performance of any organisation, regardless of whether it operates along tradi-
tional personnel management lines or from an HRM perspective. Since those
selected into the organisation constitute the raw material for all subsequent
HRM interventions, the effectiveness of selection essentially sets the limits on
how successful many HRM activities can be. In addition, in Module 4, it was
pointed out that many of the key competencies for effective job performance
are core characteristics which are not amenable to modification through training
and development initiatives or whatever. As such, the only way to ensure that
employees possess these competencies is to select for them.
5.1.2 Strategic HRM and Selection

The adoption of particular approaches to HRM, such as flexibility or TQM, will
influence the way in which selection is carried out. For example, they might
affect the importance placed on recruitment, the competencies being sought,
or even the actual methods of selection adopted. The last of these, which is
concerned with how to measure previously defined qualities in individuals who
apply for jobs, is the main focus of this module. However, before we go on
to discuss selection methods in detail, the reader should be aware that HRM
strategies can have an important bearing on the organisation’s whole approach
to recruitment. The following three examples illustrate this point.
Suppose an organisation adopts a flexible firm model. This could result in
different approaches to selection for peripheral and core employees respectively.
For peripheral workers, the task might be to recruit large numbers of individuals
who have relatively low skill levels, and for whom there is likely to be high
turnover. This might point to the need for fairly inexpensive, non-intensive,
recruitment methods such as short one-to-one interviews. In the case of core
workers, on the other hand, the requirement is likely to be for small numbers
of highly skilled and valued employees who are expected to stay with the
organisation for a relatively long period. Here a more time-consuming processes
of selection would be justified, and candidates might for example, be required
to spend a day or more being put through a rigorous set of tests and extended
interviews as part of the selection procedure.
Consider another example. Suppose a commitment-effort-performance model
is adopted in an organisation and high commitment is therefore regarded as
a very important employee characteristic. The fit between the applicant’s per-
sonal values and those of the organisation could then become a key selection
criterion. Assessing the applicant’s attitudes and value system would, under
these circumstances, be a very important element in the selection process. To
an extent it might be possible to do this by means of an interview provided
that the interviewers are highly trained. However, another approach might be to
focus more on applicant self-selection. Using this method, potential applicants

would be provided with a detailed (and honest!) picture of the organisation’s

culture and values and would be encouraged to proceed with an application
only if they were satisfied that these were congruent with their own personal
beliefs and values. It seems likely that this self-selection approach will become
increasingly common in the future as employee attitudes and values assume
more importance in recruitment. However, self-selection need not be seen as
an alternative to conventional selection. Both can easily be incorporated in the
same recruitment exercise, and in this sense they complement each other.
The third example refers to the concept of the learning organisation. As
we have seen above, the idea of the learning organisation implies a process
of continuous development and change. Indeed the notion of the need for
continuous adaptation and change in the face of competitive pressure can be
detected in a number of HRM models and theories. If change is indeed becoming
a permanent feature in organisations, then individuals who respond positively
to change and can cope with it effectively are likely to become highly valued
in organisations in the future. From a selection perspective, the development of
effective techniques for identifying this quality then becomes a very high priority.
Furthermore, if all organisations have to cope with rapid and continuous change
then this particular ability will be universally important, so that we might well
be looking here at a repertoire of required competencies which is generic, rather
than organisation-specific.
There are many other ways in which an organisation’s strategic HRM position
can influence the selection process. In the light of the material discussed in the
first four modules, the reader should be able to identify a number of these.
5.2 The Selection Paradigm

The selection paradigm represents a model of how selection should be carried out
under ideal circumstances. The model essentially describes the steps a recruiter
should go through in setting up a selection procedure for a particular job or a
family of closely related jobs. The model assumes certain conditions which are
likely to be fully met in only a minority of selection situations. In particular, it
assumes that, for the job in question, relatively large numbers of people will be
appointed, perhaps as part of an ongoing recruitment programme. An example
where these conditions could be met might be graduate recruitment where many
large organisations recruit significant numbers of graduates on an annual basis.
However, even in situations where the model cannot be completely applied,
such as one-off recruitment of small numbers of people, the model provides a
useful framework for analysing and informing the selection process. Figure 5.1
illustrates the selection paradigm.

JOB ANALYSIS
DECISIONS ON WHICH ASSESSMENT TOOLS TO USE
RECRUITMENT DECISIONS
VALIDATION PROCEDURES
Figure 5.1 The selection paradigm
5.2.1 Job Analysis

According to the selection paradigm, the first step in the selection process is
to carry out a systematic job analysis along the lines described in the previous
module. This should result in a comprehensive list of the behaviours or compe-
tencies needed for successful performance of the job. From a selection point of
view, a major focus here will be on core characteristics, although qualifications
and experience will also be relevant in many circumstances.
5.2.2 Decisions on Choice of Selection Tools

The next stage is to consider which selection tools the recruiter has at his
disposal and how these relate to the qualities needed for the job in question. In
this context a selection tool is simply something which is capable of providing
relevant information about the desired qualities in candidates. The initial process
of deciding which selection tools are likely to be most useful is based on a
number of considerations and this is discussed below. However, for the moment,
let us assume that this initial choice has been made. A selection matrix is then
constructed comparing possible selection tools with the qualities being sought.
An example of what such a matrix might look like for the post of management
trainee is shown in Figure 5.2. In the interests of brevity, the qualities shown
in the table are presented as dimensions, but in a real life recruitment situation
recruiters would also be given a list of the job behaviours or competencies
which make up each dimension. Some of the selection tools shown in the table,
in particular the interview, will already be familiar to the reader, while others
such as ability tests and simulations may be less so. Briefly, ability tests, which
can take a variety of forms, typically provide a numerical score for a person on
one or more aspects of mental ability. In the case of simulations, candidates are
placed in situations which are designed to mimic certain elements of the job.
For example, aspects of team working might be simulated by asking candidates
to take part in a group discussion. Ability tests and simulations are described
in more detail below.

Selection criteria Selection tools

(dimensions)
Selection Ability tests Simulations
interview
Group In-tray Presentation
discussion exercise
Interpersonal
behaviour l l l
Problem-solving
and l l l
decision-making
Planning and
organising l
Commitment l
Flexibility l
Figure 5.2 A selection matrix for recruiting management trainees
Each mark in the table indicates that a behavioural dimension is capable of

being assessed by a particular selection device. From this the recruiter can decide
which dimensions will be evaluated by each selection tool. Thus, in the above
example, the interview would be used primarily to obtain information about
interpersonal behaviour, commitment, and flexibility.
5.2.3 Making Recruitment Decisions and Collecting Data

The third stage in the selection process, according to the selection paradigm, is
to carry out some actual recruitment and make appointment decisions. Before
it is possible to proceed to the final validation stage, a substantial number of
candidates (at a rough guess at least fifty) need to have been recruited. Also,
before moving on to this stage, successful candidates must have carried out
the job for a period of time long enough for their performance to be evaluated
accurately.
5.2.4 Validation Procedures

Validation is necessary primarily because there is no way of knowing in advance
with certainty how well, if at all, any particular chosen selection device measures
what it is supposed to. Validation is the procedure which allows us to answer this
question. Once validation has been carried out, those selection tools which are
satisfactory in this respect can be retained for future use, while those which are
not can be discarded. In this way selection is a process of continual refinement
and improvement to find the optimal combination of selection tools for any
particular job. In view of the importance of the validation process we will now
consider what it actually means in some detail.

5.3 The Process of Validation

One way to look at selection tools is as measuring devices whose accuracy has
to be determined. It is generally accepted that, for any measuring device to be
accurate, it must be both reliable and valid.
5.3.1 Reliability
Reliability, of which there are several types, refers to consistency of measurement.
Two of the main types of reliability are inter-rater reliability and test-retest
reliability.
1 Inter-rater reliability mainly applies to situations where two or more
recruiters make subjective judgements about candidates and it is essentially
a measure of the amount of agreement between them. A good example
where the use of inter-rater reliability is appropriate is the selection inter-
view. Suppose two interviewers see the same group of candidates for a
job and both rate each candidate for overall performance in the interview.
Assume each candidate has a separate interview with each interviewer and
that each has no knowledge of the ratings made by the other. Inter-rater
reliability is the degree of agreement between the two interviewers in the
scores they give each candidate. Clearly, if there is marked disagreement
between the interviewers, then both cannot be right and both could easily
be wrong!
2 Test-retest reliability refers to the extent to which there is consistency in the
measure over time. In the context of an interview, this could be investigated
by asking an interviewer to interview and rate the same group of candidates
on two occasions separated by sufficient time so that the interviewer could
not remember the second time around what ratings he had given on the first
set of interviews. The degree of consistency from one interview to another,
in terms of the extent to which each candidate tends to get the same or
similar scores on both occasions, is the measure of test-retest reliability. To
take another example, if a company was selecting design engineers it might
give applicants a test of spatial ability as part of the recruitment process.
To assess test-retest reliability, the test would be given on two occasions
and the degree of agreement between the pairs of scores produced by each
applicant is the measure of reliability.
Although reliability is necessary if a selection device is to be satisfactory, it is
not in itself sufficient to ensure that this is the case. The test must also be valid.
5.3.2 Validity
Validity is concerned with whether a measuring instrument actually measures
what it is supposed to. In the present context, a valid selection tool is one which
predicts job performance. The objective of all selection is to identify those who
will perform best in the job. We can now look again at the above example of
the use of a test of spatial ability to recruit engineers to illustrate the distinction
between validity and reliability. The test might be perfectly reliable in the sense

that any engineer taking the test gets exactly the same score when it is taken on
separate occasions. However, if test scores are unrelated to how well applicants
subsequently perform in the job, the test is not measuring what it is supposed
to measure, i.e. job performance. In other words the test lacks validity. In this
context it does not matter whether or not the test looks as if it might be relevant
for identifying who will perform well in the job. All that counts is whether
it actually does so when it is checked out. The two most important types of
validity for our purposes are predictive validity and concurrent validity.
1 Predictive validity can be illustrated by means of an example. Suppose we

use an interview as part of a selection process for management trainees.
Let us say that two hundred candidates apply and fifty are taken on. All
applicants are given a score, say from one to ten based on their interview
performance, and only those scoring between six and ten are recruited.
If the interview is valid, then those scoring highly (e.g. 10 or 9) should
subsequently perform better in the job than those with lower scores. (e.g.
6 or 7). Of course to test this out each individual also needs to be given
a score which represents how well they are performing in the job. The
strength of the relationship between these two sets of scores is the measure
of validity. Since this form of validation works by collecting scores from
applicants at the selection stage and using these to predict job performance
in the future, it is called predictive validity.
2 Concurrent validity can also be illustrated by means of an example. Let
us take an organisation which is only recruiting a handful of people each
year for a particular vacancy. In this situation it would take several years
before a sufficient number of individuals had joined the organisation to
enable a predictive validity study to be undertaken. One solution to this
problem entails applying the selection tool to existing employees rather than
applicants and measuring their job performance at the same time. This is
known as concurrent validity. In the example of the design engineers cited
above, concurrent validity could be estimated by giving the test of spatial
ability to a group of engineers who are already working in the organisation
and relating these scores to their current job performance. Predictive validity
has advantages over concurrent validity, especially since the test is given to
real applicants under selection conditions, although concurrent validity still
yields very valuable information in all but a few circumstances.
5.3.3 Using Correlation Coefficients to Estimate Reliability and Validity

In section 5.2.4, when the selection paradigm was being discussed, it was stated
that selection devices which were found to be satisfactory following validation
should be retained while those which were not should be rejected. The reader
should now appreciate that we are referring here to reliability and validity.
However, we have not yet attempted to define precisely what is meant by
‘satisfactory’ reliability and validity. To do this it is necessary to say a little
about the statistical concept of the correlation coefficient. Statistically speaking,
the correlation coefficient ( r ) is a measure of the strength of the relationship
between two variables. Its use is widespread and its applications go well beyond

HRM. Correlation coefficients can be calculated for any two sets of measures
the reader cares to think of. For example, common observation suggests that
height and weight are related to each other, since tall people tend to be heavier
than short people. However, the relationship is not perfect, since there are some
short fat people and some tall thin people. By correlating height and weight in
a sample of people, a numerical estimate of the strength of the relationship can
be obtained. To take another example, as cars age their efficiency declines as
a result of general wear and tear, and consequently they will tend to consume
more fuel. By taking a sample of cars of different ages, measuring the number of
miles they will travel on a fixed amount of fuel, and calculating the correlation
coefficient, the degree of association between car age and fuel efficiency can be
estimated. In this case, the reader should note that the correlation is negative,
since as one variable (age) increases, the other (number of miles travelled for
a fixed amount of fuel) decreases. Height and weight on the other hand, are
positively correlated, since as one increases, so does the other. Mathematically
speaking, the possible range of correlation coefficients can range from r = +1.00,
which constitutes a perfect positive relationship, through to r = −1.00, which
represents a perfect negative relationship. A correlation of r = 0.00 indicates that
the two variables are completely unrelated.
Returning to the question of reliability and validity, both are concerned with
the estimation of the relationship between pairs of scores. Thus for example,
in the case of inter-rater reliability of an interview, each pair of scores would
consist of the ratings a candidate was given by the two interviewers. For test-
retest reliability, in the example of the spatial ability test given above, the two
scores attained by each individual at different points in time would be the paired
scores. The predictive validity of the same test would be assessed by pairing
each individual’s test score with a subsequent measure of her job performance.
What then would constitute satisfactory reliability and validity? No absolute
answer can be given to this question, since it will depend to some extent
on circumstances. However, as far as reliability is concerned, anything above
r = 0.85 − 0.9 would usually be regarded as good, while correlations below about
0.7 might lead one to question whether reliability was adequate. For various
technical reasons which need not concern the reader, one would not expect such
high correlations in the case of validity coefficients. Here, anything above around
r = 0.5 would be regarded as high, while values between approximately 0.4 and
0.5 would also be typically regarded as good in this context. Even 0.3 would
probably be regarded as adequate in some selection situations, although when
correlations are much below this, it begins to become questionable whether or
not the validity of the selection tool is high enough for it to be of much practical
value to the selector.
5.3.4 Meta Analysis

In many situations, the requirements for the selection paradigm to apply cannot
be met. For example, validity checks cannot be carried out unless a sufficiently
large number of people are carrying out the job in question to allow the relevant
statistical procedures to be undertaken. This is a requirement which is only

likely to be met in a minority of situations. In such circumstances, how does a

recruiter know whether or not a given selection tool has adequate validity?
Fortunately for a recruiter faced with this problem, validation studies are likely
to have been already carried out on most of the commonly available selection
tools and the results made available as publications in scientific journals. Also,
in many cases, the individual studies will have been reviewed and summarised
in the scientific literature. The existence of this information could potentially
solve the problem faced by a recruiter who was unable to carry out an in-house
validation exercise for whatever reason. For example, if a recruiter is considering
using a particular ability test for selection, he could simply consult a review of
validity studies on the test, and if the review had concluded that the test was
generally valid across diverse jobs and organisations, then he could use it with
confidence. If it consistently showed low validity, then the recruiter would
presumably decide not to use it. Unfortunately, for most selection tools, neither
of these alternative scenarios tended to be the case in early reviews of validity
studies. Rather, results were often very inconsistent from one study to another.
Thus an ability test might show high validity for one job, moderate validity
for another, and little or no validity for a third. For many years, this state of
affairs was interpreted as indicating that selection devices are situation-specific,
i.e. what works for one job or organisation will not necessarily work for another
and there is no such thing as a selection device which is valid across a range of
jobs and organisations.
However, this position was challenged by Schmidt and Hunter (1977). These
writers reasoned that the lack of consistency in validity coefficients did not
necessarily show that devices were situation-specific. Instead, they argued that
the apparent inconsistency arose because the different studies were not directly
comparable with each other. For example, if one study employed a highly
reliable measure of job performance and another used a less reliable measure
(the reliability of job performance measures can be estimated by means of the
correlation coefficient just like a selection tool), one could not expect the two
studies to yield a similar validity coefficient, even when the same selection
tool was being used. To take another example, if all of the investigations
looking at a particular selection device are being reviewed, a study where
the results are based on, let us say, twenty individuals should not be given
the same weighting in the overall summary of findings as one based on a
thousand individuals. Schmidt and Hunter give other examples of what they
termed study artefacts which, in their view, resulted in apparent inconsistency
of validity coefficients. They also introduced a statistical procedure called meta
analysis which was designed to produce a more accurate summary of validity
coefficients. By applying a series of post-hoc statistical corrections designed to
remove as many study artefacts as possible, meta analysis makes the studies
reviewed more comparable to each other. When Hunter and Hunter (1984)
used meta analysis in their review of published validity studies of a number
of selection devices, in many cases the validity coefficients became much more
consistent across jobs and organisations than had previously been the case. This
led these writers to conclude that many selection devices were actually quite
robust across a wide range of jobs. With this in mind, they produced estimates
of what they called the ‘true’ validity of a number of selection tools, based on

the results of their meta analysis.

So, do selection devices have a ‘true’ validity regardless of the job, or does
it all depend on the situation? The answer probably lies somewhere between
these extremes. Selection devices are more robust across situations than was
previously thought, but we cannot assume that because a device works for one
job and in one set of circumstances, that it will automatically work in another.
What does this mean in practice for the recruiter? Given that there is some
situation-specificity, then it is advisable to carry out traditional validity analysis
where numbers and resources make this viable. When numbers are small, the
‘true’ validity generated by meta analysis will provide the best information
available as to whether or not to use a particular selection device. Obviously,
the higher the true validity, the more confidence the recruiter can have that the
device should be included in the selection procedure and vice-versa.
5.4 The Usefulness of Selection Devices

Muchinsky (1986) has pointed out that validity is only one of four factors which
should be considered when assessing the usefulness of a particular selection
technique. A second factor is fairness. To be useful, a technique must not
discriminate unfairly against individuals. Unfair discrimination can take many
forms, but two types which have assumed prominence in many countries are
those relating to ethnic origin and sex. Quite apart from considerations of equity,
a device which puts some individuals at an unfair disadvantage as a result of
their sex or ethnic background will have low utility since some potentially
high performers will be rejected while others whose potential is less, will be
accepted. Moreover, basing selection decisions on information gathered using
such a technique would also be illegal in many countries. A third consideration
in terms of usefulness is cost. Other things being equal, a device which is
inexpensive to develop and use is likely to be superior to one which is more
costly. Costs in this context should not just be measured in direct money terms;
opportunity costs in terms of managers’ time are equally, and sometimes more,
important. Finally, there is what Muchinsky calls applicability. Some selection
devices have low applicability in the sense that they are only suitable for use
with a narrow range of jobs. Those with high applicability can be used across a
wide range of jobs. Clearly, provided the other three criteria are met, it is better
to have high than low applicability.
It should not be assumed that these four factors have equal standing when
assessing the usefulness of any selection tool. For example, if a technique has
negligible validity it will be of no value to the recruiter, irrespective of how well
it meets the other three requirements. Clearly, anything which does not allow the
recruiter to identify who will perform the job well has no place in a systematic
selection procedure. Similarly, most recruiters would be more concerned about
the fairness of a device than its cost or applicability.
5.5 Selection Tools

In this section we will consider the main selection devices available to the
recruiter and evaluate them according to Muchinsky’s four criteria of usefulness.

5.5.1 Application Forms and Biodata

At the beginning of the selection process, applicants are typically asked to
provide biographical details about themselves covering previous work history,
education, and so on. They may also be asked to provide more general informa-
tion on interests and hobbies, career expectations, and the like. In many cases a
traditional application form or curriculum vitae is used for this purpose. How-
ever, when a large volume of applications need to be screened out on a regular
basis, some organisations have used an objective method of scoring biographical
information known as biodata.
Application Forms
An application form can be used both as a screening device to decide who
will proceed to the next stage of the selection process, and to help guide the
subsequent interview. Application forms are widely used for all sorts of jobs,
so that we can conclude that applicability is high. There is little direct evidence
available on the reliability and validity of the traditional application form.
However, although hard evidence on validity is lacking, it seems reasonable to
assume that the time invested in designing an application form is likely to have
a bearing on its usefulness to the selector. A survey of employer practices in
this area conducted by the present author in the UK (Keenan, 1995) found that
the typical organisation appeared to devote little time or effort to this task and
poorly designed application forms seemed to be the norm. While this meant that
for these organisations the application form represented a low cost selection tool,
the adverse effects of using badly designed application forms almost certainly
far outweighed any benefits accruing from low costs. This was especially so
given the fact that many of the businesses in the survey were eliminating large
numbers of candidates based on the information contained in the application
form. Clearly, poor pre-selection arising from inadequate application forms is
likely to result in many potentially high job performers being eliminated at the
initial stage of the process. This loss of potentially good recruits has obvious
damaging effects on subsequent stages of the selection process. The point which
seemed to be lost on many of the organisations in the Keenan study is the fact
that selection devices used at the later stages in the process can only be applied
to those who are left after pre-screening, and if the screening process fails to
bring forward a sufficient number of good applicants, then selection will not
succeed. This will be the case irrespective of the validity of the selection devices
used in the later stages.
Biodata
Biodata is one way to take a more systematic approach to pre-screening. This
technique is mainly applicable where large numbers of applicants have to be
screened out. Not only is the process of reading large numbers of application
forms very time-consuming, but the assessments made are highly subjective and
therefore possibly of little validity. The biodata approach offers an alternative
which not only saves time, but which also uses an objective assessment system.
The procedure involves assigning scores to individual items of biographical
information provided by applicants. These scores are then added together to pro-

duce a total for each applicant. Only those with scores above a pre-determined
cut-off point are invited for interview. The procedure for determining how items
are scored is as follows. First, there is a development stage to determine which
of a series of trial items are answered differently by high performing compared
with low performing existing employees. Weights are then allocated to each
item depending on the extent to which it differentiates between the high and
low performing groups. Thus, for example, an item which is answered very
differently by high performers compared with low performers would be given a
larger weighting (and therefore contribute more to the total score) than an item
which was answered only slightly differently by the two groups.
Usefulness of Biodata
The evidence from meta analytic reviews indicates that biodata can be reason-
ably valid (Hunter and Hunter, 1984). However, as far as fairness is concerned,
there are some concerns about possible problems of unintentional discrimination
with biodata. Remember that the weighting given to any item is purely empir-
ical based on the extent to which it is answered differently by high and low
performing existing employees. Let us take an example to illustrate the poten-
tial problem. Suppose that the measure of job performance used to construct a
biodata scale was job tenure, with employees who stay with the organisation
for a long time being classified as more satisfactory performers than those who
do not. Let us further assume that location, measured as distance from place of
work, turned out to be an item which predicted tenure, with those employees
who lived nearer to their place of work tending to stay longer with the company.
Weighting this item on the biodata form in favour of those who live close to the
workplace could be discriminatory should it happen to be the case that locations
close to the workplace were predominantly characterised by members of one
ethnic group, while locations further away were characterised by another ethnic
group. Clearly, the latter would be discriminated against since, by virtue of
where they lived, more of them would tend to be eliminated at the pre-selection
stage.
5.5.2 Reference Reports

A reference is essentially an assessment of a job applicant by a third party, usu-
ally, but not always, the person’s current employer. References can take many
forms. Most are provided in confidence, although in the case of open testimoni-
als, the applicant has sight of the report. In addition to the traditional letter of
reference, which is a narrative statement about a candidate, references can be in
the form of checklists or questionnaires. These have several potential advantages
over the traditional narrative approach. For example, referees can be asked to
rate applicant job-related behaviours previously identified by job analysis as
important and relevant. This concentrates the referee’s mind on the key job
requirements and avoids difficulties arising from his or her misunderstanding of
what the job entails. By using questionnaires, behaviours can be rated on scales.
The quantitative information provided in this way can make it easier for the
recruiter to make a direct comparison among candidates. Also, questionnaires
are often quicker and easier to complete than narrative reports, thus encouraging

referees to respond to requests. Although questionnaires have several potential

advantages over narrative reports, the latter may be more appropriate in certain
circumstances. For example, referees might well be happier with the narrative
approach where the candidate is currently in a very senior position, since they
may feel that the job performance of such an individual cannot be adequately
described simply by ticking boxes in a questionnaire.
How Organisations Make Use of References

Survey evidence makes it clear that references are widely used in selection. For
example, Beason and Belt (1976) found that 82 per cent of companies used them
in the USA, while Robertson and Makin (1986) reported a 90 per cent usage
in the UK. An important issue, however, is how these organisations actually
use reference information. A number of potential uses can be identified. For
example, references could be part of the initial pre-screening process to help
identify who should be invited for interview. Also, information contained in
the reference could be explored further at interview. Finally, references could
be used to verify information provided by the candidate or as a final check on
employability, in case there are any ‘skeletons in the cupboard’. Beason and Belt
found that 69 per cent of organisations took up references after the selection
process was complete but before making candidates an offer, and a further 18
per cent did not ask for them until after they had made an offer of employment.
Keenan (1995), in a study of graduate recruitment in the UK, found a similar
situation with many organisations only asking for references after an offer had
been made. These two studies suggest that, in most cases, references are only
being used for verification and as a final check on employability.
The Usefulness of References

When reference reports are evaluated according to Muchinsky’s four criteria,
they come out relatively poorly on validity. For example, Robertson and Smith
(1989) reported validity coefficients ranging from 0.17 – 0.26 for references.
However, they are low on cost and have wide applicability since they can be
used for almost any job. There is little evidence available on their fairness.
If the evidence indicates that references have low validity does this mean that
we should abandon their use? This is not necessarily the case. Perhaps they
are not being designed and used in the most appropriate way by organisations,
so that their potential is not being realised. For example, we saw that many
companies only request them at a late stage of the process so that their ability
to provide ancillary information for interviewers is lost. Keenan found that only
around 10 per cent of organisations included questionnaire approaches when
asking for references, despite the advantages of doing so as indicated above.
Keenan also found that only a minority of organisations provided referees with
detailed information about job requirements. How can a referee provide sensible
information about whether or not a candidate would do a job well if he or she
knows little or nothing about the job requirements? Given these considerations,
it seems quite possible that, if more thought were put into just how and when
references should be used to optimal effect, they might make a more valid
contribution to the selection process. However, human nature being what it

is, a word of caution is in order here. There are undoubtedly many occasions
when reference reports need to be interpreted with care. Those who provide
references are sometimes inclined to paint an overly favourable picture of the
candidate who may, after all, be a colleague or even a friend. A cynic might
also be inclined to argue that one of the best ways to off-load a poor performing
employee is to provide him or her with a glowing reference. In conclusion, it
would seem that a number of factors are likely to influence the authenticity
of the information contained in references, including the relationship between
candidate and referee, the questions asked of the referee in the first place, and
the format of the reference.
5.5.3 The Interview

The interview is probably the most widely used of all selection devices. How-
ever, it is misleading to discuss ‘the interview’ as if it consisted of a single
standard procedure which is applied in a uniform way to all job situations.
In fact, interviews take a wide variety of forms depending on the job and the
organisation, the training and experience of the interviewer, the place of the
interview in the selection procedure as a whole, and so on.
Interview Dimensions
Before going on to consider how the interview measures up to the Muchinsky
criteria, it is worth considering the ways in which interviews can vary along dif-
ferent dimensions, since these variations might well have important implications
for their usefulness.
• Duration is an important way in which interviews vary, where the length
can range from just a few minutes to two hours or more. In some cases
interviews take place on a one-to-one basis, whereas in others there may be
a panel of anything from two to more than twenty interviewers!
• The type of person carrying out the interview can also be relevant. Impor-
tant factors here include whether the interviewer is an HRM specialist or a
line manager, the amount and quality of training the person has received,
the amount of interviewing experience the person has, and so on.
• The interpersonal atmosphere of the interview can also vary considerably,
ranging from the supportive and friendly on the one hand, to the stress
interview at the other extreme where there is a deliberate attempt to pres-
surise the candidate. Thankfully the stress interview seems to be currently
out of favour in most organisations.
• The focus of the interview can also be quite different from one situation
to another, whether it be on the person’s opinions and attitudes, their
knowledge, their past achievements, or whatever.
• The degree of structure of the interview is a critically important dimension.
Because of its importance, this will be discussed in detail below.
Validity of the Interview
Early reviews of interview validity studies, prior to the introduction of the
meta analysis method, concluded that validity was low or even negligible. In

fact, the first major meta analysis of studies of interview validity reached a
similar conclusion with a reported true validity of r = 0.11 (Hunter and Hunter,
1984). However, in the late eighties and early 1990s the picture changed, with
four major meta analyses all concluding that the interview can have quite
high validity, provided that a structured format is used. Table 5.1 shows the
results of these meta analyses. The difference in validity between structured and
unstructured formats can be clearly seen.
Table 5.1 Summary of meta analytic studies of interview validity

Validity Coefficients
Authors of Review Structured Interviews Unstructured Interviews
r r
Weisner and Cronshaw (1988) 0.60 – 0.63 0.20 – 0.37
Wright et al. (1989) 0.39 No data presented
McDaniel et al. (1994) 0.44 0.33
Huffcut and Arthur (1994) 0.20 – 0.57 Depending on the
degree of structure
Sources:
Weisner, W.H. and Cronshaw, S.F. (1988). ‘A meta-analytic investigation of the impact of interview format
and degree of structure on the validity of the employment interview’, Journal of Occupational Psychology,
61, 275–90.
Wright, P.M., Lichtenfels, P.A. and Pursell, E.D. (1989). ‘The structured interview: Additional studies and
a meta-analysis’, Journal of Occupational Psychology, 62, 191–9.
McDaniel. M.A., Whetzel, D.R., Schmidt, F.L. and Maurer, S.D. (1994). ‘The validity of employment
interviews: A comprehensive review and meta-analysis’, Journal of Applied Psychology, 79, 599–616.
Huffcut, A.I. and Arthur, W. (1994). ‘Hunter and Hunter re-visited: Interview validity for entry-level jobs’,
Journal of Applied Psychology, 79, 184–90.
The Structured Interview

In view of the importance of structure in determining interview validity, it is
important for us to consider carefully what is meant by structure in this context.
Several features of the structured interview distinguish it from other types of
interview, including the following:
• A structured interview is built around a competence (i.e. behaviour) based
job analysis. This provides the necessary behaviour based selection criteria
upon which the interview is focused. Without behavioural criteria it is not
possible to design a proper structured interview.
• All questions asked must be job related and these must be consistently
applied to all candidates. A job related question is linked directly to the
behavioural criteria and focuses on past or intended behaviour of the can-
didate. Thus, for example, if ability to meet deadlines was a performance
requirement, the candidate might be asked to describe a difficult deadline
he had been required to meet in the past. If ability to learn from mistakes
was a criterion, then past mistakes would be investigated. Questions about
motivation to join the organisation, future career ambitions, spare time inter-
ests, and so on, are rarely directly job related as expressed in the criteria
and consequently these are not normally a significant part of a structured
interview.

• With some, but not all, types of structured interview, the interviewers are
provided with a fixed list of questions along with a list of alternative
answers the candidate might give to each of these. When this approach is
adopted, interviewers may also be provided with scoring guides to help
them to interpret answers.
• Interviewers are provided with behaviour based rating scales and candidates
are evaluated on a number of separate dimensions of behaviour. Scores on
the rating scale dimensions are combined to arrive at an overall assessment
of the candidate.
The Situational Interview and the Patterned Behaviour Description Interview

The two most well known types of structured interview are the situational
interview (Latham et al., 1980) and the patterned behaviour description interview
or PBDI (Janz, 1982).
In the situational interview, the candidate is provided with a series of hypo-
thetical job situations and asked to indicate how she would handle them. The
situations are usually obtained using the critical incident method described in
Module 4. The managers who provide the incidents are also asked to indicate
effective and less effective ways of dealing with them and it is these responses
which provide the scoring guides mentioned above. The evaluation of the can-
didate is based on the frequency with which effective, rather than less effective,
ways of handling the incidents are selected. The underlying assumption of the
situational interview method is that the candidate’s intentions are a good pre-
dictor of what he or she would actually do. In other words, it is assumed that
people do what they say they will do.
Rather than asking interviewees to discuss hypothetical events, in the PBDI
they are asked to describe past events that have actually happened to them.
The focus of interest in this case is on the candidate’s past behaviour, and
the underlying assumption is that past behaviour predicts future behaviour, i.e.
what a person will do can be predicted from what he or she has done. The
past situations the candidate is asked to describe must of course be related
to the pre-determined performance requirements. In contrast to the situational
interview, it is not really feasible with the Janz approach to provide scoring keys
for answers since the candidates themselves supply the events at the time of the
interview. Without knowing the nature of the event in advance, there is clearly
no way that a scoring key can be devised.
It is obviously important to establish which of these two approaches is most
useful in practice. The situational interview is based on sound psychological
principles, to the extent that people’s intentions can, in certain circumstances,
predict their future behaviour. This is even more true of the PBDI, since the
principle that past behaviour predicts future behaviour is well established in
the field of psychology generally. Indeed common observation suggests that the
past predicts the future idea is something which many managers probably use
intuitively in their everyday work much of the time. For example, if a manager
has to decide which of his subordinates should be given the task of dealing
with an irate customer, what better way is there to make this choice than by
opting for the person who has been most successful in this role in the past? If

a deadline had to be met to satisfy the requirements of an important customer,

how many managers would give this job to someone who had frequently failed
to meet deadlines in the past? Although research reviews have compared the
validity of the situational interview with that of the PBDI, to date the evidence
does not point to one as being superior to the other from a validity standpoint.
However, from a cost perspective, the reader should note that there is likely to be
a considerably greater amount of time-consuming development work required
in setting up a situational interview than is typically needed for the PBDI. This is
primarily in the form of the preparatory work that has to be done with managers
to identify appropriate incidents and develop scoring keys. Consequently, the
use of the situational interview is only likely to be practicable when the number
of vacancies is sufficiently large to justify the costs involved.
Cost, Fairness and Applicability of the Interview

It can be deduced from the above comparison of the PBDI with the situational
interview, that the extent to which the interview is a high cost method of
selection will very much depend on the type of interview being carried out.
Most interviews do, however, involve quite a lot of expensive management
time, and to this extent there will always be significant costs incurred when
interviews are used for selection. Although research has been carried out on
the fairness of the selection interview, it has proved difficult to arrive at clear
conclusions one way or the other. Thus, Arvey (1979) concluded, following a
review of relevant studies, that ‘available evidence leaves it unclear whether
or not interviews discriminate’. Finally, the interview really comes into its own
when it comes to applicability, since it can be used for almost any job one
cares to imagine. Indeed on some occasions it is just about the only appropriate
selection tool which can be used.
5.5.4 Psychometric Tests

Only a relatively few years ago, many recruiters could go about their business
quite successfully with little or no knowledge of psychometric tests. However,
in many Western countries, the use of these tests is becoming so widespread that
this is now much less likely to be the case. Thus, for example, as far back as 1988
Shackleton and Newell (1991) found that approximately eighty per cent of large
organisations in the UK and France used psychometric tests of ability as part of
their selection process, although not necessarily for all types of applicants.
The Nature of Psychometric Tests

What a recruiter (and indeed the reader) needs in these circumstances is a
basic awareness of the nature of psychometric tests and how they work, rather
than a comprehensive knowledge of all of the technical details of how tests are
designed and administered. Some of the basic features of psychometric tests the
recruiter needs to be aware of include the following.
• Psychometric tests must be constructed using certain well established techni-
cal and statistical criteria. While, as we have already pointed out, a recruiter
need not be familiar with these in detail, before authorising the use of any

particular test in the organisation, she should ensure that a competent per-
son has checked the relevant test manual to confirm that it meets these
requirements.
• Tests are usually primarily concerned with the measurement of core charac-
teristics, rather than skills or motivational characteristics.
• Tests do not really aim to provide a comprehensive assessment of a person
as a whole, but instead they are designed to give as accurate a measure
as possible of specific aspects of the person. An analogy with a clinical
diagnosis in medicine will perhaps illustrate what is meant here. A clinician
might order tests of several aspects of a person’s functioning, such as blood
cholesterol levels, blood pressure, cardiovascular fitness, and so on, in order
to arrive at an overall diagnosis of the individual’s state of health. The
psychometric test result would be analogous to the results from one or
more of these specific tests, rather than to the overall diagnosis.
• Psychometric tests assume that human characteristics such as personality
traits or intelligence can be quantified and that individuals can therefore
be given scores based on their test performance. Thus, to take an example
from personality testing, a person would not be labelled ‘introverted’ or
‘extraverted’ as a result of taking a test, but instead they would obtain a
score indicating their position on an introversion-extraversion continuum.
The two main categories of psychometric test used in selection are ability
tests and personality tests.
Ability Tests
These can be sub-divided into tests of general cognitive ability, tests of special
aptitudes, and physical/sensory-motor tests.
• Cognitive ability tests.This type of test, as the name applies, is designed to
assess a person’s overall mental ability, or intelligence. Overall mental ability
is sometimes split into three components. One of these relates to ability to
deal with verbal concepts. A second is concerned with numerical ability,
while the third measures a person’s ability to comprehend and visualise
spatial relationships. These three components are normally correlated with
each other to some extent so that a person who is good at one also tends to
be reasonably good at the others. However, they are also sufficiently distinct
to allow them to be treated as separate components of overall mental ability.
• Tests of special aptitude. It has long been assumed that, in addition to
general mental abilities of the sort described above, people have specific
mental aptitudes which might make them more or less suited to particular
types of task. Examples of tests which are designed to measure specific
aptitudes would be tests of clerical aptitude or mechanical aptitude.
• Physical/Sensory-motor tests. Some abilities are the result of an interac-
tion between psychological and physical attributes of the person. These
physical/sensory-motor tests can take a variety of forms. For example,
manual dexterity tests measure, among other things, the efficiency of the
brain in using visual and other information from the environment to con-
trol complex hand and wrist movements. There are many jobs for which

manual dexterity is important, such as for example, assembly tasks in the

electronics industry.
Personality Tests
Ability tests are essentially tests of maximum performance in the sense that
they tell us what a person is capable of doing when they are asked to try their
best. Personality tests, on the other hand, are concerned more with a person’s
typical behaviour. Personality is about what people are usually like, rather
what they are capable of if they really try. Personality tests are more diverse
and varied than ability tests and until relatively recently the kind of summary
framework outlined above for ability tests did not exist. However, in recent years
a consensus has begun to emerge that there are five main personality dimensions.
These so-called ‘Big Five’ personality factors are: extraversion; conscientiousness;
agreeableness; neuroticism; and openness to experience.
Validity of Psychometric Tests

How valid are ability and personality tests? Schmidt et al. (1984) carried out
a meta analysis of validity studies of ability tests. Validity coefficients varied
depending on the criterion used to estimate job performance. For general cog-
nitive ability they ranged from r = 0.41 (supervisors’ ratings) to r = 0.71 (work
sample performance). The spread for special aptitudes was from r = 0.21 to
r = 0.31, while for physical/sensory-motor tests the range was from r = 0.15
(job tenure) to r = 0.61 (promotion). To summarise, the evidence indicates that
general ability tests have moderate to high validity, depending on the criteria
used to measure job performance. It is worth noting also, that even though one
might intuitively expect tests of special aptitude to be more valid than tests of
general ability since they are supposedly tailor made to tap particular abilities,
the opposite appears to be the case. It seems that, for most situations, tests of
general mental ability are sufficient and there is no real advantage in looking
for more focused tests. Finally, physical tests generally have adequate validity.
The results of validity studies of personality tests have, unlike those of ability
tests, been disappointing, with very few reported cases of adequate validity.
Low or negligible validity coefficients are much more the norm. For example,
Barrick and Mount (1991) carried out a meta analysis of the Big Five. Only con-
scientiousness showed anything like an adequate validity coefficient (r = 0.22),
the others being so low as to be negligible for practical purposes.
It is important to ask why ability tests are so much more valid than personality
tests in a selection context. It seems unlikely that personality is inherently less
important than mental ability for job performance, although such a proposition
cannot be entirely ruled out. However, a more plausible explanation lies in the
way the two types of test are constructed and in the way individuals behave
when they complete them as job applicants. The underlying requirement when
individuals take an ability test in any context is for them try to perform as well
as possible. This of course is precisely what people are likely to do in a selection
environment when they know that a high score will enhance their chances of
employment. Personality tests, on the other hand, because they are concerned
with typical behaviour and not maximum performance, rely on the person

describing what they are usually like, rather than demonstrating what they are
capable of. However, in a competitive selection situation, all the pressure is in
the other direction. In other words, the motivational conditions produced by
the selection situation encourage faking in order to display oneself in the best
possible light. In the opinion of many test experts, it is difficult if not impossible
to prevent this when people complete personality questionnaires under the
competitive pressure of a selection situation. Some producers of personality
tests claim to have designed tests which are resistant to faking, although others
are sceptical of this claim. After all, if faking can be eliminated, where are the
published reports demonstrating adequate validity of personality tests when
used in selection?
Cost, Fairness and Applicability of Psychometric Tests

Psychometric tests are very time-consuming and expensive to develop and any
organisation devising its own tests will incur considerable costs. However, a
large variety of off-the-shelf tests are available from test producers at reasonable
cost, making the use of psychometric tests a reasonably inexpensive option in
many circumstances. The issue of fairness in psychometric testing is highly
complex, particularly where there are race differences in average test scores, as
has sometimes been found for ability tests. The problem is, it is not always
immediately obvious whether the test is unfair to one particular group or
whether there really are race differences in ability to perform the job in question
and the test scores merely reflect this fact. Probably the safest course of action
for those using psychometric tests in recruitment is to avoid the use of tests
where there is any indication of sex or race differences in tests scores. As far as
applicability is concerned, psychometric tests can and have been used for quite
a wide variety of jobs.
5.5.5 Simulations and Assessment Centres

Simulations are essentially practical exercises designed to have elements in
common with aspects of the job for which the applicant is being selected.
A variety of types of simulation exercise exist covering different aspects of
job performance. For example, if the job contains an important team-working
element, a group discussion exercise could be designed to simulate some aspects
of team working. This might involve six or so candidates being presented with
a problem scenario which they would be required to discuss for perhaps thirty
minutes. Often the group would be told to reach a solution within the allotted
time period. Assessors would observe the behaviour of each applicant and score
their performance against certain pre-determined criteria derived from the job
analysis.
Simulations are most commonly to be found as part of what is known as an
assessment centre and we shall discuss them here in this context. Assessment
centres (ACs) take a variety of forms, but typically they consist of a combination
of interviews, psychometric tests, and simulations. They originated during the
Second World War under the auspices of the War Office Selection Board in
the UK and the Office of Strategic Services in the US. They were largely a

response to the need for sophisticated selection techniques to identify high

calibre individuals for recruitment into the officer ranks. After the war, the
assessment centre method was taken up and developed further by the British
Civil Service and by the American AT & T Corporation. Their popularity has
continued to grow over the years. Robertson and Makin (1986) found that over
20% of UK companies use ACs, while more recently the present author found
that 44 per cent of companies were using ACs for graduate recruitment (Keenan,
1995).
Exercises Used in Assessment Centres
Assessment centres include both individual tasks which the candidate does
alone and interactive tasks which involve others who may or may not be
candidates. Examples of individual tasks include interviews, ability and perhaps
personality tests, and various types of written exercise. An example of the latter
is the in-tray exercise. In this test, the candidate is given a series of memos,
letters, and other documents which are supposed to constitute the in-tray of
a particular manager. The task for the candidate is to respond to the various
documents using his judgement as to how best to deal with the problems
contained in them. Interactive tasks include group discussions (which we have
already described above), presentations to an audience, and role play exercises.
An example of the latter might be where the candidate is assigned the role of
a customer relations manager who has to deal with a complaint from an irate
customer. The candidate then has to deal with the customer, who is not herself a
candidate but who has been specially trained for the role, while being observed
by an assessor.
Defining Characteristics of Assessment Centres
Assessment centres have a number of characteristics which are designed to
increase their effectiveness as selection tools.
• The procedure takes place over an extended time period. The whole process
can take anything from a day up to a week. The theory is that the oppor-
tunity to observe candidates for a longer period than is normally the case
gives assessors a more comprehensive picture of what the person is like.
• Because simulations are included, assessors can observe actual behaviour,
rather having to rely on candidates’ accounts of how they have behaved or
how they think they would behave in a hypothetical situation.
• By using a variety of simulations, the candidates can be observed in a
range of different situations allowing assessors to identify behaviours which
applicants demonstrate consistently across situations.
• There are always several assessors involved in the evaluation of each candi-
date. This greatly reduces the role of individual biases in decisions, since the
judgements of a number of people are pooled when decisions are reached.
• Finally, in ACs it is customary for applicants to be rated on a series of
behavioural dimensions allowing assessors to focus directly on specific
performance requirements. This helps to minimise the danger that decisions
will be made purely on overall impressions of the person, and helps to focus
the minds of assessors on specific, job-relevant competencies.

Usefulness of Assessment Centres

Assessment centres are generally regarded as having high validity. Such evidence
as we have suggests that they tend to be fair, insofar as they do not appear
to discriminate against either sex or against individuals from different racial or
ethnic groups. However, there is a price to be paid for the high validity of
ACs. They have very high costs, not only when setting them up, but also in
the amount of managers’ time needed to run them. Several assessors have to be
involved, they are tied up for one or more days, and frequently only around six
or so candidates can be seen per assessment centre. Finally, ACs have somewhat
limited applicability, being mainly used for professional and managerial jobs.
5.6 Summary
Effective selection is crucially important for organisational performance. Selec-
tion policy will often be influenced by the general HRM strategy adopted by the
organisation. The starting point for any selection exercise should be systematic
job analysis. There are several alternative selection tools available to the recruiter
and it is very important that the right choice of tools for the vacancy in question
is made if selection is to be successful. Key parameters here are validity, fairness,
applicability, and cost. Conventional application forms and references appear to
have little validity, at least as currently used. Biodata are more valid, but there
is a potential risk of unfair discrimination if items are not carefully checked.
The interview can have acceptable validity, but only when used in a structured
format. Ability tests are more valid than personality tests. Assessment centres
generally have high validity, but their cost generally limits their applicability.
Review Questions
5.1 Intensive selection methods are more justified for the recruitment of core
workers, than they are for the recruitment of peripheral workers.
5.2 It is likely that self-selection will become less popular in future as employers
place more emphasis on selecting for attitudinal qualities.
5.3 The selection paradigm is most applicable when a relatively large number of
applicants is being recruited on a regular basis.
5.4 The selection matrix matches required competencies with potential selection
tools.
5.5 The latest statistical techniques allow organisations to carry out validation
studies of their selection procedures even though only a few small number of
people have been recruited.

5.6 Validation procedures allow the recruiter to work out before selection begins
which selection tools will work.
5.7 In selection, a test cannot be valid unless it looks right.
5.8 Inter-rater reliability is the extent to which a recruiter agrees with herself when
assessing a set of candidates on two separate occasions.
5.9 A reliability coefficient of r = .50 for a particular selection device would gener-
ally be regarded as good.
5.10 A validity coefficient of r = .50, obtained for a particular selection device, would
generally be regarded as good.
5.11 It is rare to find reliability coefficients greater than r = +1.00 in selection

contexts.
5.12 Hunter and Hunter (1984) concluded from their meta analysis of selection tools
that most tests are situation-specific.
5.13 Meta analysis sets out to prove that selection devices which work in one organ-
isation will work in most other organisations, regardless of the circumstances.
5.14 When numbers being recruited are small estimates of the ‘true’ validity, as
provided by meta analysis, often constitute the best information available to
the recruiter as to which selection devices to use.
5.15 An application form can be used either as a screening device or to guide the
interview, but not both.
5.16 If pre-screening is badly carried out, then the selection process may not succeed
even when the selection devices used in the later stages of selection are highly
valid.
5.17 According to the available evidence, most organisations only use references as
a final check on employability.
5.18 Reference reports have relatively low validity.
5.19 Structured interviews are more valid than unstructured ones.
5.20 The stress interview is increasing in popularity as jobs become more pressurised.
5.21 In structured interviews, candidates are assessed against behavioural dimensions.
5.22 The situational interview typically has higher development costs then the PBDI.
5.23 Interviews have wide applicability.
5.24 According to Arvey (1979) research has shown that interviews discriminate
against minority groups.
5.25 The PBDI uses the critical incident method to get interviewers to give examples
of effective and ineffective performance.

5.26 The modern recruiter can operate successfully without any knowledge of psy-
chometric tests.
5.27 Only a small minority of organisations in the UK use psychometric tests of ability
as part of their selection.
5.28 Verbal ability, numerical ability, and spatial ability are independent aspects of a
person’s general cognitive ability.
5.29 The two main categories of psychometric tests are ability tests and personality
tests.
5.30 Generally speaking, tests of specific abilities have not proven to be superior in
terms of validity to tests of general cognitive ability.
5.31 An in-tray simulation is typically used to assess ability to work in a team.
5.32 Assessment centres consist solely of a series of simulations designed to measure

various aspects of job performance.
5.33 An example of an interactive task in an assessment centre would be a role play

exercise.
5.34 Assessment centres have high validity and high costs.
5.35 Because they never include interviews, assessment centres avoid many of the
biases inherent in interviews.
5.1 How useful is the biodata method in selection?
5.2 Under what circumstances are references most likely to be useful in selection?
5.3 Explain what is meant by reliability and validity and indicate why these concepts
are important in the field of selection.
5.4 According to Muchinsky (1986), what are the main factors which determine the
usefulness of selection devices?

You are a newly appointed internal human resource consultant in a large bank. For
several years now, the bank has recruited a cohort of MBA graduates on an annual
basis. Successful applicants are expected to become branch managers, following a
period of training and planned work experience. As part of your general induction,
you have been given the task of reviewing the system and making suggestions for
improvement. To help you in this task, you have been given a detailed report from
the recruitment manager indicating what happened last year, and asking for your
comments.
Your task is to write a preliminary report based on the contents of the letter
below.

Dear Colleague
Congratulations on your new appointment and good luck with your first assignment.
I have been asked to brief you on how our recruitment operation for MBAs runs. Your
comments and suggestions would be most welcome. First, let me bore you with some
statistics from last year’s intake.
The recruitment figures for last year were as follows.
Male Female
Number applying 1200 800
Number offered a preliminary interview 150 50
Number invited to final interview 65 35
Number offered a job 25 25
Our feeling last year was that we had plenty of applicants for the available vacancies
and we do not need to take any additional steps this year to encourage more applicants.
What do you think?
Candidates are selected for interview based on the information contained in the
application form. We have tried various interview formats over the years, including
panel interviews, one-to-one interviews, sequential interviews, and so on. We usually
run preliminary screening interviews, followed by a final interview and job offer. We
have never had any shortage of volunteers to do the interviewing, quite the opposite.
Sometimes it is difficult to know who to choose, but I guess it does not matter much as
long as we stick to experienced people.
The bank has always put a lot of emphasis on training and, because of this, all
interviewers are trained for the task. Part of the training involves giving interviewers a
list of the key qualities needed to do the job. These were prepared by the HR Director
herself, and they are pretty comprehensive. They include all the obvious things like
enthusiasm, energy, self-starter, keen to work for the bank, good knowledge of how we
are doing compared to the competition, etc. On the whole the HRM Director’s list seems
to fit the bill pretty well, although there are a few things on it which are quite hard to
spot at interview. Consequently, we took on one or two people last year only to discover
that they had pulled the wool over our eyes by claiming to possess certain abilities they
did not have. Fortunately it took us no time at all to bring them up to scratch on these
by sending them on a couple of training courses.
One of last year’s MBA intake had been told by some professor who claims to be
an expert on interviewing – he has probably never had a real job in his life – that
we ought to use a structured interview. Despite my reservations about some of these
so-called experts, I have decided to try structured interviews for next year, unless you
have any objections. I have structured the interview as follows. Each interviewer on the
panel will always ask questions in the same order and will have the same amount of
time allocated to ask questions. Interviews will not be allowed to run on beyond the set
time. Interviewers will not be permitted to change the seating arrangements between
interviews so that this is standardised for all candidates. All candidates will be allocated
the same amount of time to ask questions. Does all of this sound OK or am I imposing
too much structure on the interview? Another interesting idea the MBA graduate had
was to get applicants to say how they would handle difficult situations. I thought we
should give this a try too, so I have asked interviewers to think up some interesting
scenarios to put to candidates.
I sometimes worry that interviews might not actually be as good at identifying the best
candidates as everybody seems to think. Maybe we would try to check our interviews
out in some way to make sure they are working OK. One idea might be to get this

professor who claims to be an expert to give our process the once over. Would that be
enough, or do you think we would need to do anything else to make sure the interview
is working?
I guess, from the information I have given you, that you will be able to tell how well
our selection is working. I know that top management is keen to know the answer to
this question and this will no doubt be a key part of your report. Is there any other
information you need from me to help you come to a conclusion on this one?
I look forward to your report assessing what we are doing at the moment and making
suggestions, if any, for improvement.
Yours sincerely
A K N Owall
References
Arvey, R.D. (1979). ‘Unfair discrimination in the employment interview: Legal and
psychological aspects’, Psychological Bulletin, 86, 736–65.
Barrick, M.R. and Mount, M.K. (1991). ‘The big five personality dimensions and job
performance: A field study’, Personnel Psychology, 44, 1–26.
Beason, G. and Belt, J.A. (1976). ‘Verifying applicants’ backgrounds’, Personnel Journal,
55, 345–8.
Hunter, J.E. and Hunter, R.F. (1984). ‘Validity and utility of alternative predictors of job
performance’, Psychological Bulletin, 96, 72–98.
Janz, T. (1982). ‘Initial comparisons of patterned behaviour description interviews versus
unstructured interviews’, Journal of Applied Psychology, 50, 275–83.
Keenan, A. (1995). ‘Graduate recruitment in Britain: A survey of selection methods used
by organizations’, Journal of Organizational Behaviour, 16, 301–17.
Latham, G.P., Saari, L.M., Russell, E.P. and Campion, M.A. (1980). ‘The situational
interview’, Journal of Applied Psychology, 65, 422–7.
Muchinsky, P. (1986). ‘Personnel selection decisions’, International Review of Industrial and
Organizational Psychology, eds. Cooper, C.L. and Robertson, I.T., New York: Wiley.
Robertson, I.T. and Makin, P.J. (1986). ‘Management selection in Britain: A survey and
critique’, Journal of Occupational Psychology, 59, 45–57.
Robertson, I.T. and Smith, M. (1989). ‘Personnel selection methods’, Advances in Selection
and Assessment, eds. Smith, M. and Robertson, I.T., New York: Wiley.
Schmidt, T.L. and Hunter, J.E. (1977). ‘Development of a general solution to the problem
of validity generalization’, Journal of Applied Psychology, 62, 643–61.
Shackleton, V. and Newell, S. (1991). ‘Management selection: A comparative survey of
methods used in top British and French companies’, Journal of Occupational Psychology,
61, 275–90.
Schmidt, N., Gooding, R.Z., Noe, R.D. and Kirsch, M. (1984). ‘Meta analysis of validity
studies published between 1964 and 1982 and the investigation of study characteristics’,
Personnel Psychology, 37, 407–22.

Module 6
Performance Appraisal and

Performance Management
Contents
6.1 Determinants of Performance 6/2
6.1.1 Individual Ability and Motivation 6/2
6.1.2 Feedback 6/2
6.1.3 Resource Provision 6/3
6.2 The Performance Appraisal Process 6/3
6.2.1 Purposes and Desired Outcomes of Appraisal Systems 6/5
6.2.2 What is Being Measured? 6/6
6.3 Recording Appraisal Information 6/9
6.3.1 Checklists 6/9
6.3.2 Rating Scales 6/10
6.3.3 Behaviourally Anchored Scales and Behavioural Observation Scales 6/11
6.4 Carrying Out Appraisals 6/12
6.4.1 Who Carries Out the Appraisal? 6/12
6.4.2 The Appraisal Interview 6/14
6.5 Performance Appraisal in Practice 6/15
6.5.1 Limitations of Performance Appraisal 6/15
6.5.2 Maximising the Effectiveness of Appraisal 6/16
6.6 Performance Management 6/16
6.6.1 Performance Appraisal and Performance Management 6/16
6.6.2 Characteristics of Performance Management Systems 6/17
6.6.3 Performance Management as an Integrated System 6/18
6.7 Summary 6/18
Learning Objectives
• describe the main characteristics of performance appraisal systems.
• summarise the purposes and desired outcomes of appraisal systems.
• distinguish between results-oriented and process-oriented performance
appraisal.
• discuss the various methods of recording appraisal information.

Module 6 / Performance Appraisal and Performance Management
• consider the issue of who should carry out appraisals.

• summarise the benefits and limitations of 360-degree appraisal.
• summarise the main features of the appraisal interview.
• discuss the limitations of appraisal.
• explain how its effectiveness can be maximised.
• explain what is meant by performance management.
• describe the relationship between appraisal and performance management.
• describe the major features of performance management systems.
6.1 Determinants of Performance

The last module focused on how selection techniques can be used to recruit
individuals who possess certain core abilities which are required for high per-
formance. It is obviously necessary for individuals to possess these if they are
to perform effectively, but having the pre-requisite core abilities is not in itself
sufficient to ensure high performance. There are many other conditions which
have to be met if this is to come about. Performance appraisal and performance
management are among the key tools available to the organisation in pursuit of
this goal of maximising the performance of individuals in the organisation.
6.1.1 Individual Ability and Motivation

As the reader will be aware from previous modules, core abilities are only one
determinant of an individual’s performance. Learned competencies in the form
of skills and motivational characteristics are equally important if high perform-
ance is to be attained. A well-conducted job analysis will provide comprehensive
information on required skills and motivational characteristics, but the organi-
sation also needs to have systems in place both to assess the extent to which
each individual meets these requirements, and to enable them to improve these
aspects of their performance. Skill deficits can be dealt with by means of appro-
priate training and development or by providing appropriate job experience.
A number of the approaches to HRM which we have discussed in previous
modules have been aimed at increasing motivation. These include performance
based pay systems, increased responsibility in the form of empowerment, and
so on.
6.1.2 Feedback
Even if a person possesses both the required core and learned competencies and
the motivation to do a good job, this will not inevitably lead to high performance.
In addition, the individual needs feedback from the organisation in order to have
a clear picture both of what the organisation requires and of how well he or she is
perceived to be meeting these requirements. Thus, for example, if someone puts
enormous energy and effort into an aspect of the job which is not particularly
important from the organisation’s perspective, while neglecting something which
is critically important, then he will clearly not be performing well. Likewise, to

be able to improve one’s performance, one first needs to know which aspects are
not coming up to expectation and need to be improved. Clearly, to be effective,
feedback needs to be both frequent and comprehensive. Also, it should not be
limited to individual job role requirements as defined by job analysis. This is
because, if job analysis is narrowly focused within the confines of a particular
job role, it may not always provide a comprehensive picture of performance
requirements on its own. For example, there may be requirements which are
organisation-wide rather than being restricted to a particular role. An illustration
here might be the adoption of certain values which are consistent with a desired
organisational culture. At the very least, the individual would need to be
aware of what these values were and the importance attached to them by the
organisation before he could meet this particular requirement.
6.1.3 Resource Provision

Even if all of the above conditions are met, this still does not guarantee that a
job will be carried out to the highest possible standard. This is because even the
most able and committed individual can only do a good job if the organisation
provides adequate resources to make this possible. Resources can take many
forms. Physical resources in the form of equipment, adequate space, and so
on can obviously be important. The provision of adequate human resources
can also be critical. This could take the form of a sufficient number of capable
support staff to carry out a particular operation effectively. In this context, a
person’s line manager is also a human resource, since the amount of support,
advice, and guidance provided can do much to enhance a person’s ability to
carry out the job well. From this perspective, organisations need to review the
resources provided to individuals to ensure that these are sufficient to make it
possible for them to deliver high performance.
It should be clear to the reader from the above discussion that the process
of maximising performance of individuals in organisations is far from straight-
forward. If organisations are to be successful in achieving this highly desirable
outcome, a number of things have to be done. Performance requirements need
to be made clear to individuals, their performance has to be assessed accurately,
and the reasons for less than optimal performance need to be isolated. Training
and development needs have to be identified so that appropriate programmes
can be implemented to meet these needs and adequate resources need to be
provided to allow individuals to fulfil the job requirements to the desired stan-
dard. In addition to all of this, in order to motivate employees to perform at
a high level, assessment of performance may have to be linked to the rewards
individuals receive for their efforts in terms of pay and promotion. Perform-
ance appraisal and performance management are the fundamental tools used by
organisations to achieve these objectives.
6.2 The Performance Appraisal Process

Performance appraisal is the name given to the process of assessing individual
performance in a formal and systematic way. The need for such systems has

long been recognised, and at least in the UK and the USA, the majority of large
organisations have adopted such systems. For example, in data collected from
306 organisations in the UK, Long (1986) found that 82 per cent of companies
used formal appraisal systems.
There are several defining characteristics of performance appraisal systems,
some of which are listed below:
• First, they are formal systems with a set of rules and guidelines which must
be followed in their operation. For example, the time between appraisals
will usually be laid down. It might take place every six months, at yearly
intervals, or occasionally even less frequently. The position of the person
who is to carry out the appraisal will also be specified. Up until recently,
this was usually the appraisee’s immediate superior, but as we shall see
later, increasingly others are being brought into the process. What is to be
appraised is also determined in advance.
• Another defining feature of many appraisal systems is the requirement to
provide a comprehensive assessment of all relevant aspects of performance.
The information collected is recorded in some form, either as a written
report, or in the form of ratings of individual aspects of performance.
• The purposes of the appraisal system and consequently the outcomes to be
expected from it are usually made explicit to both the appraiser and the
appraisee. Thus for example, if pay rises are to be based on appraisal data,
then this should be known up front to all concerned. Similarly, if one of the
purposes of an appraisal system is to establish training and development
needs, then the appraisee should be aware that this is the case.
• The basis of the typical performance appraisal system is a review of past
performance, usually covering the period since the previous appraisal. Often
there will be a direct comparison with the results from the previous year’s
appraisal.
• In most cases, there will be feedback to the appraisee on how he or she
has been assessed. This is most often done in the context of an appraisal
interview. The interview will typically include a discussion not only of past
performance, but also of what needs to be done to improve performance in
the future.
While the above list should give the reader an idea of what is meant by
an appraisal system, it should be emphasised that appraisal systems can differ
markedly from one organisation to another. To put it another way, an organ-
isation has a number of options in terms of the design and use of appraisal
systems. Some of these are relatively unimportant, while others are very signifi-
cant in terms of the usefulness of the system from the point of view of both the
individual and the organisation. We shall now look in more detail at some of
the more important ways in which appraisal systems can differ and how these
differences might affect how appraisal is used as an HRM tool.
Five major features of appraisal systems are discussed below. These are:
• the purposes and desired outcomes of appraisal

• what is actually to be measured

• how the information is to be recorded

• who carries out the appraisal
• the appraisal interview
It should be appreciated here that these are to an extent inter-dependent.

In particular, the purposes of the appraisal will have a marked influence on
most other features of the system. The different aspects of the system will also
interact in other ways. For example, if an interview is to be carried out, this
will influence the decision as to who should carry out the appraisal. How the
information is recorded will be partly a function of what is to be measured.
6.2.1 Purposes and Desired Outcomes of Appraisal Systems

Appraisal can be used for a variety of purposes and can lead to a number
of different outcomes for both the individual and the organisation. The most
important of these are listed below.
• Reviewing past performance. A primary, and more or less universal, pur-

pose of appraisal is to review past performance in a systematic way. Linked
to this is the intention to use the information collected to help improve
current and future performance.
• Assessing training and development needs. One possible way to improve
many aspects of performance is through training and development of indi-
viduals and the identification of such needs is often an integral part of
appraisal. Thus, Long (1986) found that no less than 97 per cent of British
organisations had this as an aim of appraisal.
• Target setting. There is good evidence that setting goals and targets can
enhance performance, provided they are specific and sufficiently hard to
stretch the individual without being perceived as impossible to achieve
(Locke and Latham, 1990). However, if goals are too difficult, individuals
may lose their commitment to them and performance drops off. It is there-
fore not surprising that many systems of appraisal build goals, in the sense
of performance objectives, into the process.
• Evaluating potential. There are many reasons why it is important for
organisations to have systems for assessing each employee’s potential for the
future. Apart from the organisation’s need to ensure that the most suitable
individuals fill internal vacancies, if every effort is made to fulfil each
individual’s potential this is likely to be a motivating factor for employees.
• Pay determination. We saw in Module 3 that over the years there have been
many schemes designed to link pay and other rewards to performance in
some way or another. Clearly, since appraisal sets out to assess performance,
if pay is to be based on performance one of the functions of appraisal
could be to help determine individual remuneration. This appears to be
an important feature of the appraisal systems of many organisations in
the USA, although only 40 per cent of British companies reported using
appraisal for this purpose (Long, 1986).

A Word of Caution
We shall examine the limitations of appraisal systems in some detail later in the
chapter. In the meantime, two issues arising from what has just been discussed
deserve a mention here.
First, it is important to contrast the use of appraisal for training and develop-
ment purposes on the one hand with its use for reward allocation and promotion
potential on the other. In the case of the former, there is, at least in theory, the
opportunity for all appraisees to benefit from the appraisal. This is quite differ-
ent from the situation when appraisal is used to allocate rewards, since there
will inevitably be winners and losers as a result of the process. In this case, the
appraiser’s role is one of judge, whereas when appraisal is used for training
and development, the appraiser’s role can be likened much more to that of a
helper. Clearly, the reaction of appraisees to the whole process, and indeed the
extent to which they will be willing to co-operate wholeheartedly with it, is
going to be very different depending on whether the main focus is on training
and development or on reward allocation. This has led some commentators to
suggest that these two functions must somehow be kept separate if appraisal
is to be effective. Some have argued that appraisal should not be used at all
in the process of salary determination, while others have suggested appraisal
information can be used for both purposes, provided that they are some how
differentiated from each other. One possible way to do this might be to set
up separate arrangements to deal with each. It has to be said, however, that
advocates of the latter approach are often less than crystal clear about exactly
how this can best be done.
The second issue relates to the use of appraisal for evaluating promotability.
The problem is the fact that there are some circumstances where the usefulness
of appraisal data for the identification of suitability for promotion can be limited.
This is particularly the case where the abilities required for the promoted position
are very different from those needed for the job the appraisee is currently doing.
Since appraisal essentially reviews performance in the individual’s current job,
this tells us little about performance potential in the promoted position, since in
this case different abilities are needed for effective performance. An increasingly
popular way of dealing with this problem has been to use a variant of the
assessment centre (AC) technique, described in Module 5 in connection with
selection, to measure potential for promotion. These modified ACs are usually
called development centres to distinguish them from selection-type assessment
centres and to highlight the fact that they are also used to assess development
needs as well as promotion potential. Long (1986) found that, while 71 per cent
of organisations were using performance appraisal to assess future potential,
only about 20 per cent of companies were making use of development centres
for this purpose.
6.2.2 What is Being Measured?

In Module 4, the distinction was made between performance defined in terms
of end results and performance defined in terms of processes believed to lead
to these desirable outcomes. Examples of end results measures were sales or

productivity levels. Process measures included both the tasks to be performed

and the personal qualities needed to perform these effectively. As far as personal
qualities were concerned, these were further sub-divided into traits on the one
hand and behaviours or competencies on the other.
In terms of what can be measured in the context of performance appraisal,
end results measures and process measures in the form of traits, tasks, and
behaviours have all been used in different performance appraisal systems, either
individually, or in various combinations.
Results-oriented Performance Appraisal

Long (1986) in a survey of performance appraisal in the UK, found that results-
oriented systems were fairly popular, being used by 62 per cent of organisations.
In addition to carrying out a review of results achieved since the previous review,
such systems frequently include targets to be achieved by the next appraisal
period.
One well known example of a results-oriented approach is management by
objectives (MBO). Performance appraisal is often the lynch pin of MBO sys-
tems. The essential feature of MBO is joint goal setting between appraisee and
appraiser. According to Rogers and Hunter (1991), there are three important
components of MBO.
• The first is goal setting, which, it is claimed, helps improve performance by

directing attention and action towards desired outcomes.
• Second, the process of joint goal setting encourages participation which pro-
motes understanding and gives managers access to important information
known only to subordinates.
• Third, appraisers can give appraisees accurate feedback which reduces
uncertainty and improves learning.
Rogers and Hunter conducted a meta analysis of MBO effects on productivity

and found that out of 70 studies in the review, 68 showed gains. However,
the support of top management was critical to the success of the programmes.
Where this was present, the average gain was 56 per cent. Where it was absent,
the gain was only six per cent. Despite the fact that the Rogers and Hunter
meta analysis showed that MBO can have beneficial effects on productivity, the
technique no longer enjoys the popularity it once did and it now seems to be only
practised in a minority of organisations. Thus, Long (1986) found that, although
results-oriented appraisal was popular, only 20 per cent of the organisations in
his sample were using MBO. It seems probable that there has been a further
decline in its popularity since then. What accounts for this apparent paradox?
Partly it is due to the strong influence of fad and fashion in the adoption and
rejection of new management techniques. Typically, any new approach is hailed
as the holy grail which will solve all of management’s problems. Subsequent
experience inevitably indicates that initial expectations were over-optimistic and,
as a consequence, the popularity of the technique wanes. The history of MBO
is no exception to this trend and, as the limitations of the technique became
apparent, its popularity declined.

What then were the problems of MBO in practice? Often joint goal setting
turned out to be impracticable, turning out to be an unsatisfactory compromise
between the appraisee’s efforts to establish easy objectives and senior manage-
ment’s desire for tough objectives to be set, with the appraiser caught in the
middle. The implicit reward-punishment psychology in the technique was found
to be potentially destructive of the very trust that is needed for the system to
work. Also, and perhaps most importantly, the emphasis on a few, quantifiable,
end result type objectives as the be all and end all of appraisal led to the neglect
of process-oriented aspects of performance.
As always, it is important not to throw out the baby with the bath water, and
the relative demise of MBO should not lead us abandon the notion of setting
objectives per se, particularly as we saw earlier, there is good psychological
evidence that goal setting can be a powerful motivational tool. Rather, we
should not limit goals to ‘hard’, quantifiable, end results such as productivity
but should also include ‘soft’ process measures of performance in tasks which,
while not end results in themselves, may nevertheless contribute towards the
attainment of these. In this way, it is possible to adhere to a results-oriented
approach while focusing on process variables. No doubt this is frequently the
case and nowadays this probably partly explains the fact that only about a third
of those in Long’s sample who were using results-oriented appraisal reported
using MBO. Of course it is also possible that some of these organisations were
evaluating previous results but not actually setting specific targets for the future.
Process-oriented Performance Appraisal

In the early days of performance appraisal, it was common for appraisers to eval-
uate appraisees on the basis of personality traits. We have already encountered
the use of traits to define performance requirements and some of the problems
this approach creates have already been outlined in Module 4. In addition to the
difficulties attached to the use of traits already described in Module 4, there are
added problems when it comes to appraisal. First of all, when asked to assess
colleagues with respect to something as complex and fundamental to a person’s
self-concept as personal traits, many managers probably feel that they are being
asked to play God and are uncomfortable with this state of affairs. Even assum-
ing that managers are actually capable of assessing traits, the core nature of most
traits makes their inclusion in performance appraisal problematic. Quite simply,
what is the point in focusing performance appraisal on qualities that the person
cannot do anything about? To do this would seem to be essentially demotivat-
ing, not to say demoralising. Apart from anything else, any form of target or
goal setting would be ruled out. Given the clear drawbacks of the personality
trait approach, one might be forgiven for assuming that it is no longer in use in
the vast majority of organisations. Unfortunately, Long’s research, which is the
most recent data available, shows that this is not quite the case. He found that
29 per cent of organisations were using personality trait based approaches.
The arguments put forward in Module 4 for a behavioural or competency
based approach clearly hold for performance appraisal. The fact that the appraiser
will in all probability have to justify any evaluations made to the person being
appraised in the appraisal interview gives added force to the argument for

focusing on behaviour, since behaviours, unlike traits, are directly observable.

Clearly, it is easier to get agreement between appraiser and appraisee on phe-
nomena which can be observed, rather than on ones which are merely inferred.
In addition, behaviours are directly and intimately linked to task performance
– when focusing on behaviour the appraiser is essentially evaluating how well
the person has performed in key tasks. Consequently, it is comparatively easy
to link process-oriented performance targets to behaviour-focused appraisal.
Long reported that 52 per cent of organisations were using behaviour-oriented
appraisal in 1986, and given the increasing popularity of competencies since
then, it seems likely that the proportion of organisations using behaviour-focused
methods is significantly higher today.
6.3 Recording Appraisal Information

Given the formal nature of appraisal systems, organisations need to have sys-
tematic procedures for recording the judgements made by appraisers. Typically,
although not always, this information will be seen by the appraisee and indeed
may have to be agreed by both parties. The way in which information is col-
lected and recorded will, of course, depend to some extent on the purposes
of the appraisal system and the size of the operation. For example, if it is a
requirement that a number of employees are to be directly compared with each
other for some purpose such as salary administration, then rating systems of
one form or another might be used to assign scores to individuals. On the other
hand, if only one or two employees in a particular job role are to be appraised,
or if the main aim of recording information is to guide the appraisal interview,
then a narrative report might be more appropriate. Of course both of these
methods of recording information can be combined within a single system.
A variety of rating systems exist, varying in complexity and sophistication.
We shall concentrate here on systems which attempt to rate behaviours, rather
than traits, given the arguments outlined above in favour of the behavioural
approach. As a general rule, organisations are only likely to invest in the
more sophisticated systems where there are sufficient numbers of individuals in
similar job roles being appraised to justify the cost of putting such systems in
place.
6.3.1 Checklists
One approach to rating is to use checklists derived from job analysis or some
similar procedure. A checklist consists of a comprehensive list of behaviours or
competencies which are relevant for the job in question and the appraiser has
to scan the list and select those which apply to the person being appraised.
A problem with this approach is the fact that some behaviours may be more
crucial for effective job performance than others, so that a mere list of the
behaviours selected is likely to have limited value. Weighted checklists attempt
to get around this problem by assigning values to each item to reflect its relative
favourability. The values are typically arrived at by asking managers and/or job
holders to rate items for importance.

Checklists dichotomise behaviours as either present or absent in the person,

rather than existing in some amount, and in some ways this is unrealistic. For
example, suppose a relevant behavioural requirement for the job of schoolteacher
is ‘the ability to be clear and understandable in explaining ideas to pupils’. It
may be too crude simply to classify a person as being either able or unable to
do this. A more relevant question might be the extent to which a person can
do this, compared to other teachers. In other words, the issue is not black and
white and people are likely to vary in how well they can perform this task.
6.3.2 Rating Scales

Rating scales take into account the need to quantify behaviours illustrated by
the above example. They are designed to produce a series of numerical scores
reflecting the degree of attainment of certain performance requirements. The
typical scale would contain somewhere between four and nine points and labels
of some description are normally used to anchor the points. Anchors can take a
variety of forms as shown in Figure 6.1.
TIMEKEEPING
POOR QUITE EXCELLENT
GOOD
TIMEKEEPING
WELL AVERAGE WELL
BELOW ABOVE
AVERAGE AVERAGE
1 2 3 4 5
TIMEKEEPING
LOW HIGH
Figure 6.1 Examples of anchors used with rating scales
It is known that rating scales are prone to a number of rating errors on the
part of appraisers. These include:
• Leniency is used to describe the situation where appraisers are reluctant
to use the negative end of scales and as a consequence rate appraisees too
positively. This behaviour is quite understandable given the fact that the
appraisee is usually allowed access to the ratings.
• Central tendency is another source of bias. In this case appraisers avoid
both extremes of the scales preferring instead to endorse less controversial
choices around the midpoint.
• The halo effect is another common bias. The notion here is that, if a
person is perceived as having an exceptionally favourable quality, their
other qualities are evaluated more highly than they otherwise would be. In
other words, the exceptional attribute casts a halo over other attributes. The

reverse effect occurs with negative attributes. In this way, appraisees tend
to be labelled in a global way as all good or bad, rather than being seen as
the more complex combination of strong, weak and intermediate qualities
which more accurately reflect reality in most cases.
6.3.3 Behaviourally Anchored Scales and Behavioural Observation Scales

Given the shortcomings of the judgement process when appraisers use conven-
tional rating scales, attempts have been made to design improved systems which
would reduce some of the problems. Two examples of alternative systems are
behaviourally anchored rating scales (BARS) and behavioural observation scales
(BOS). The BARS approach is based on the idea that the anchor points on scales
are imprecisely defined and that this creates inconsistency of judgement. For
example, what exactly does ‘excellent’ mean and what distinguishes it from
‘very good’? The solution to this problem is to provide benchmarks along the
scales. These are created by asking managers to rate the favourability of a series
of behavioural statements with reference to a particular scale. The average score
for each behaviour, as judged by the managers, is then used to benchmark the
scale by indicating what kind of behaviour merits particular scores on the scale.
Figure 6.2 provides an example.
There is some evidence that the BARS method can improve judgements, but
this has to be counterbalanced against the time and cost of setting up such a
system.
The BOS method is less time-consuming to set up than BARS. It rests on
the assumption that accuracy can be improved if appraisers are asked to rate
individual behaviours they have observed in appraisees. They may, for example,
be asked to state how often they have observed a certain behaviour. The
expectation is that, by asking the appraiser merely to report what has been
observed, the element of subjectivity, and hence biases, will be reduced. Part of
a BOS scale is shown in Table 6.1.
Table 6.1 Behaviourally anchored scales and behavioural observation scales:

university teacher (sub-section: lecturing)
Almost Almost
never always
Provides relevant, up-to-date, reading 1 2 3 4
material
Controls audience effectively 1 2 3 4
Uses humour to maintain student 1 2 3 4
interest
Uses real-life examples to illustrate 1 2 3 4
practical applications of material
Provides opportunities for questions 1 2 3 4
and discussion
Uses visual aids effectively to structure 1 2 3 4
lectures

FAVOURABLE
6
Takes a genuine interest in
students and their problems
Builds student self-esteem by
praising good performance
Is approachable and easy

to talk to
4
Is occasionally unavailable
to students for consultation
Often fails to return work

promptly to students
2
Shows bias against certain
students
UNFAVOURABLE
Figure 6.2 Behaviourally anchored scales and behavioural observation scales:

university teacher (sub-section: relationships with students)
To date, we simply do not have enough evidence to say with certainty which
of these two methods works best, although both seem to be an improvement on
earlier methods.
6.4 Carrying Out Appraisals
6.4.1 Who Carries Out the Appraisal?

Traditionally, appraisal has been carried out by the individual’s line manager or,
less commonly, the line manager’s boss. The latter is often known as grandfather
appraisal. Appraisal by one’s line manager is still probably the most common
arrangement at the present time. However, a person’s immediate boss is not
in a position to observe all aspects of his performance. For example, he or
she is unlikely to be present during the majority of the person’s interactions
with peers and subordinates and therefore cannot directly evaluate these key

aspects of performance. From a broader perspective, it could also be argued that

both internal and external customers could usefully provide feedback for the
appraisee. Finally, it has been suggested that the individual’s own self-appraisal
can provide a valuable input to the process in some circumstances.
There are no absolute rules as to which of the above should be included in
the appraisal process and much depends on circumstances and on the purposes
of the appraisal system. For example, if the allocation of rewards is a major
purpose of the system, it would be problematic if peer and self-ratings were
included (for reasons which should be obvious to the reader). The type and
level of employee being appraised will also have a bearing on this issue. In
the past, appraisal was typically regarded as mainly appropriate for managerial
grades, although according to Long, its application to non-managerial groups is
increasing. Since the nature of appraisal is likely to be different depending on
job level, it follows that the choice of appraisers will reflect this fact.
360-Degree Appraisal
If the main aim of appraisal is to provide the maximum amount of feedback,
information should be collected from as many sources as possible for transmis-
sion to the appraisee. This brings us to a relatively recent innovation in the field
known as 360-degree appraisal. Under this system the appraisee receives feed-
back from all directions, so to speak. Thus superiors, peers, subordinates, and
internal and external customers will all be part of the process. There are several
potential advantages of this approach. First, since everyone who is involved
with the job holder gets the opportunity to provide feedback, a complete picture
of all relevant aspects of performance can be obtained. Assuming that there is
agreement from the different sources about key aspects of performance, manage-
ment can have more confidence in the judgements made than if they had come
from a single source. Likewise, the existence of agreement among appraisers
makes it more likely that the appraisee will accept the feedback as accurate,
since he or she cannot readily dismiss any critical aspects as being due to bias
or misperception on the part of a particular individual.
There are, however, potential difficulties in setting up and operating 360-
degree appraisal. With the requirement for several people to provide infor-
mation on each person being appraised, the procedure can easily end up being
overly cumbersome and time-consuming. Given the sensitive nature of appraisal
information, it is clearly crucial that the anonymity of those who are in a non-
supervisory relationship with the appraisee be preserved. Otherwise, how, for
example could a subordinate be expected to give authentic feedback to his or her
boss? Given this last point, it is also very important that appraisees are trained
to concentrate on constructive, rather than destructive, feedback. Finally, 360-
degree appraisal can only really be used for certain purposes. Thus, while it is an
excellent vehicle for providing comprehensive performance feedback, it cannot
by itself be used to set performance targets. These can really only be determined
by negotiation in an interview. This clearly involves much more than the written
feedback which usually constitutes the raw data in 360-degree appraisal systems.
Given this last comment, this is an appropriate point at which to turn our
attention to the appraisal interview.

6.4.2 The Appraisal Interview

The vast majority of appraisal systems include an interview between appraiser
and appraisee as a central component of the process. The nature of this interview
will, of course, be dependent in large measure on the purposes of the system.
However, typically the interview begins with feedback to the person on his or
her performance over the review period, as judged by the appraiser. This is
likely to lead to the exploration of a wide variety of issues, such as the extent
to which both parties agree that the evaluation is accurate, the reasons for the
level of performance achieved, the barriers to enhanced performance, what can
be done to improve it, and so on. In a well conducted interview, there should
be at least as much upward communication from appraisee to appraiser here as
there is the other way around. Also, a key objective of the interview is to get
to a point where there is substantial agreement between both parties about the
major issues, including how performance can be improved in future.
Following on from the last point, the exploration of issues frequently leads
to the identification of training and development needs and indeed, as we saw
earlier, this is often an explicit objective of appraisal systems. In this respect, the
appraisal interviewer is cast in the role of helper, especially where, as ought to
be the case, the required training is actually provided as a result of the appraisal
process.
Our earlier discussion contrasted the role of helper with that of judge. The
latter occurs where appraisal is being carried out primarily for the purposes
of assessing potential or for salary review, and the outcome of the interview
influences how much or how little a person should be rewarded for their past
endeavours. This creates a very different, and potentially much more adversar-
ial, relationship between interviewer and interviewee. Consequently, appraisal
interviewers have to be highly skilled to carry out this kind of interview suc-
cessfully. The potentially confrontational nature of this type of interview prob-
ably explains why many appraisers are reluctant to carry out interviews with
appraisees (Rowe, 1964).
As we have already noted in our brief discussion of MBO, the setting of
objectives or targets is often an integral part of the appraisal interview and the
difficulties of getting agreement on demanding but realistic objectives also calls
for considerable skill on the part of the interviewer. Of course, objectives can
also be formulated in terms of training and development targets to be met. Seen
in this broad context, it is hard to see how a meaningful appraisal interview can
be carried out without target setting in some form or another.
Whatever the precise functions of the appraisal interview, it is almost always
going to be a delicate and difficult process requiring considerable skill and
careful handling. However much the focus of the interview is on helping the
person being appraised, some judgmental element is almost inevitable. The
mere suggestion that performance can be improved in future carries with it
the implication that there have been performance shortfalls in the past and
appraisees will naturally have a tendency to react defensively to feedback of this
nature. Bear in mind also that, at the end of the day, appraiser and appraisee are
colleagues who must maintain amicable working relationships with each other
after the whole appraisal exercise has been completed. Clearly it is vital, given

the central role of the interview in the whole appraisal process, that interviewers
are highly trained to carry out this most difficult and demanding task.
6.5 Performance Appraisal in Practice
6.5.1 Limitations of Performance Appraisal

Few would argue with the underlying premise of appraisal systems that organi-
sations need to have a formal set of procedures for systematically evaluating the
performance of individuals if people are to be managed properly. However, this
is not to say that such systems will always work well in practice, and indeed
the experience of many organisations leads one to suspect that this may be the
exception rather than the rule. Frequently encountered problems when attempts
are made to implement appraisal in practice include:
• There are inherent difficulties when developmental and reward allocation
functions of appraisal are carried out simultaneously due to the contradic-
tory roles of judge and helper required of the appraiser.
• Systems which include salary determination as part of the process create
winners and losers which can lead to defensiveness and resentment on the
part of appraisees, so that the whole exercise becomes a negative experience
to be avoided if possible. This can result in a general lack of co-operation
on the part of the appraisee. Since many of the desired organisational
outcomes of appraisal, such as setting agreed performance targets, depend
on appraisee co-operation, this can severely limit the usefulness of the
system.
• The ability of appraisal information to identify promotion potential is limited
when the abilities required for promoted positions differ markedly from
those needed to carry out the appraisee’s present job.
• Systems which focus on employee development can fall into disrepute if the
organisation fails to provide the appraisee with the necessary training and
development. The point is, identifying needs and ensuring that individuals
are given the opportunity to undergo the necessary training to meet these
needs are not one and the same thing. Unless such provision is made,
appraisees see few benefits of appraisal for themselves, resulting in a rapid
loss of enthusiasm for the whole process.
• Human judgement is fallible and there are problems of judgement bias
whatever method is used to carry out appraisee evaluations.
• As we saw earlier in our discussion on results-oriented appraisal, the process
of mutual target setting can be fraught with problems, with targets turning
out to be an unsatisfactory compromise between the appraisee’s efforts to
set targets which are easily achievable, and management’s attempts to do
the opposite.
• Last, and perhaps most important of all, many appraisal systems can also
be criticised for their piecemeal nature. Often they are one-off, isolated,
annual or six monthly events which are not well integrated into other HRM
activities to do with management of people and their performance.

6.5.2 Maximising the Effectiveness of Appraisal

We have outlined above some of the ways in which appraisal can go wrong. It
is now necessary to consider how these difficulties can be overcome, or at least
minimised. A number of suggestions can be put forward here, including the
following.
• In order to create the necessary atmosphere of trust and co-operation, the

purposes of the appraisal system must be clearly communicated and fully
understood by all stakeholders, as must its benefits to the organisation and
the appraisee.
• The reward allocation and developmental functions of appraisal should be
dealt with separately, to minimise the judge-helper dilemma.
• Systems should be set up to ensure that any identified training and devel-
opment needs are delivered as promised.
• Evaluations should focus on skills and motivational characteristics, rather
than core ones, and should be based on observable behaviours and task
performance, rather than traits.
• If rating systems are to be used, BARS or BOS systems are to be preferred
to other types of scales.
• Targets should be realistic and achievable and not limited to end results
criteria.
• Intensive training should be provided for appraisers, especially in inter-
viewing skills and human judgement processes.
• Multiple raters, for example, as employed in 360-degree appraisal systems
should be used where possible, since this can help to average out individual
judgement biases and can provide a broader spectrum of job behaviour to
be used in making judgements.
• For purposes of identifying promotion potential, development centres should
be introduced in tandem with the appraisal system so that behaviours not
observable in the appraisee’s current job can be evaluated.
• The appraisal system should be part of an integrated system of performance
management.
6.6 Performance Management
6.6.1 Performance Appraisal and Performance Management

We concluded the previous section by suggesting that a good appraisal system
should be an integral part of a more general system of managing performance
in the organisation. This is because, in the first place, performance appraisal
is only one of a number of HR techniques which can be used to enhance
performance, and some system is necessary to pull all of these together so that
they complement and reinforce each other. Also, it should be borne in mind that
performance appraisal tends to concentrate on certain aspects of performance

to the relative exclusion of others. For example, while it is not inevitably

the case, there is a tendency for appraisal systems to focus very much on
performance in the person’s circumscribed job role. However, as the reader will
be aware from previous modules, the concept of performance is much broader
than this embracing as it does team level performance, contribution to wider
organisational objectives, and so on. Because appraisal tends to concentrate
on what has happened over a fixed term – essentially the intervening period
between appraisal interviews – the emphasis is very much on the short-term
meeting of targets or objectives, rather than on the medium-term development
of the individual. These few examples illustrate both that performance has many
sides to it and that performance appraisal is only one piece of the jigsaw which
needs to linked in to all the other HR techniques which together constitute the
concept of performance management.
6.6.2 Characteristics of Performance Management Systems

Although there is general acceptance of the idea of performance management as
a way of integrating a number of processes designed to enhance performance
in a broad sense, there is no precise specification of exactly what constitutes
performance management. Consequently, a performance management system in
one organisation may look quite different from one in another.
In the absence of a detailed specification of what exactly is to be encompassed
within performance management, let us start from the position that it is a system
designed to enhance performance in its broadest sense both in the short term
and in the longer term. We can now begin to highlight some of the elements
which might constitute an effective performance management system. Some of
these are as follows.
• Performance management is not intended to replace appraisal. Indeed,
performance appraisal is a crucial component of any good performance
management system.
• An important role for performance management is to ensure that individual
performance is linked to strategic HRM objectives. In part this may involve
communication of the organisation’s vision, values, purposes and so on,
to individuals. It may also involve helping individuals to recognise the
part they are required to play in these and agreeing objectives with them
accordingly.
• We have seen in earlier modules the importance placed by HRM theory and
practice on teams and team working. It follows from this that a key aspect
of performance management is the enhancement of team performance and
the individual’s contribution to it.
• In line with its longer-term perspective, one of the concerns of performance
management is the overall development of individuals, rather than just the
provision of training to meet their immediate needs. A number of methods
can be used to develop people in this way. In the first place, development
centres could be used in addition to conventional appraisal interviews
to determine what these needs are. Planned programmes of experience
in various work roles could be initiated to help develop new skills and

competencies for the future. Provision of internal educational opportunities

and encouragement to take advantage of available external educational
opportunities could also be used to help develop the individual.
• Another aspect of performance management which links directly to the
process of developing the individual is succession planning. As individuals
are promoted, retire, or leave the organisation for other reasons, there is
a need to fill the internal vacancies which these create. Provided that the
organisation has a clear picture of the potential of individuals, a succession
planning process can be set up so that particular individuals can be groomed
to fill those future vacancies which can be anticipated.
• Performance management can have an enabling function by creating con-
ditions which will help individuals to meet targets and objectives. Often
the appraisal system can do the job of setting these, but other processes
need to be put in place to try to ensure that they are met. An example
would be the setting up of systems to provide the person with regular
and frequent support, advice, and perhaps coaching from his line manager.
Mentors could also be charged with providing support and assistance in
this context. Regular reviews of progress with constructive feedback would
also be part of this process.
• Performance management systems typically also include the management
of financial incentives within their overall remit, frequently by means of
some kind of performance-related pay system.
• Last, but not least, the defining feature of performance management is the
integration of all of the above elements into a single, comprehensive, system
covering all aspects of the enhancement of performance.
6.6.3 Performance Management as an Integrated System

The reader should be aware that some of the processes listed above can be found
in organisations which have not formally adopted a performance management
approach. However, in these circumstances, the procedures are typically imple-
mented in a piecemeal, unco-ordinated way, rather than as part of an integrated
system which brings them all together under a single umbrella. It is this inte-
grated approach which is the essence of the performance management concept.
Bevan and Thompson (1992) found that 20 per cent of the organisations they
surveyed reported having performance management systems in place. However,
they also reported that, in many of these organisations, there was a general
lack of integration of the various activities which were meant to constitute
performance management. In other words, a number of them had not really
adopted performance management in the true sense of the phrase. Hence, not
for the first time in this text, we find that there is often a considerable gap
between theory and practice in human resource management.
6.7 Summary
Systematic performance appraisal can have a number of functions including
reviewing past performance, identifying training needs, setting performance

targets, and influencing salary and promotion decisions. There is a number of

ways in which performance appraisal systems can differ, such as who carries
them out, what is to be assessed, what the objectives are, and what information is
to be recorded. Appraisal systems suffer from a number of problems when they
are implemented in practice. For appraisal to be effective it should be embedded
in a more wide-ranging system of performance management. The scope of
performance management is much broader than appraisal. It is continuous
rather than episodic; it embraces team performance and organisational goals
more directly; and it has much more of an enabling role than performance
appraisal. Its real defining feature, however, is the way in which it is meant to
integrate a number of HRM processes concerned with performance enhancement
under the same umbrella.
Review Questions
6.1 Feedback to the individual about organisational requirements can help the
person to improve his performance.
6.2 A job will always be carried out to the highest standard provided the organisa-
tion gives the individual adequate human and physical resources.
6.3 Data collected in the UK by Long (1986) showed that a minority of companies
used performance appraisal systems.
6.4 According to Long’s (1986) findings performance appraisal in the UK is more

likely to focus on training and development than on pay.
6.5 Locke’s research indicates that goal setting always increases performance.
6.6 Asking appraisers to become involved in deciding what training appraisees

should receive casts them in the role of judge.
6.7 The easiest way to resolve the judge-helper dilemma in appraisal is to keep
considerations of pay separate from the issue of promotability.
6.8 Appraisers have sometimes been described as fulfilling the role of helper
because they help deserving appraisees to get big pay rises.
6.9 Performance appraisal systems have made use of both end results and process
measures of performance.
6.10 Performance appraisal seldom plays any part in MBO systems.
6.11 Rogers and Hunter (1991) found that the support of top management had little
impact on the success of MBO programmes.
6.12 One of the main features of MBO is the provision of feedback to appraisees.

6.13 One of the advantages of goal setting is the way in which it focuses the person’s
attention on what the organisation wants.
6.14 One of the advantages of using checklists to rate appraisees is the fact that
they allow the appraiser to estimate the extent to which a person exhibits the
characteristics being assessed.
6.15 The maximum number of points on a rating scale never exceeds six.
6.16 Behaviourally anchored rating scales were developed in an attempt to overcome

some of the limitations of conventional rating scales.
6.17 The BOS method of rating appraisees is more time-consuming to set up than
BARS.
6.18 Research indicates that behaviourally anchored rating scales work better than
behaviour observation scales.
6.19 BOS scales attempt to reduce rating biases by asking appraisers to report on
behaviours they have actually observed in appraisees.
6.20 Because some of the data come from subordinates, management are unlikely to
have as much confidence in the information derived from 360-degree appraisal,
compared with systems where only the immediate superior does the appraising.
6.21 Anonymity is particularly important when subordinates appraise their superiors.
6.22 An important objective of the appraisal interview is to achieve the agreement

of both parties as to how appraisee performance can be improved in the future.
6.23 Performance appraisal works best when integrated into a performance man-
agement system.
6.24 Training for appraisers should focus entirely on interaction skills to enhance
their interviewing capability.
6.25 Because the domain of performance management is only loosely defined, per-
formance management systems can vary considerably from one organisation to
another.
6.26 An important role for performance management is to link individual perform-

ance to strategic objectives.
6.27 Performance management is similar to performance appraisal insofar as both

concentrate very much on short-term objectives.
6.28 One of the functions of performance management is succession planning.
6.29 Performance management is not concerned with reward allocation systems.
6.30 Bevan and Thompson (1992) found that most organisations in their survey had
well integrated performance management systems.

6.1 What are the main purposes of performance appraisal systems?
6.2 Describe the main methods used to record information in appraisal systems and
discuss the strengths and limitations of each of them.
6.3 What is performance management and how is it different from performance

appraisal?
6.4 What are the benefits and limitations of 360-degree appraisal?

You work in the corporate headquarters of a large multinational organisation in
the chemical industry as an HRM trouble-shooter. HRM is largely a de-centralised
activity in the three major divisions of the company. However, as part of a new HRM
strategy, it has been decided that certain systems should in future be standardised
throughout the organisation. One of these is performance management.
You have been asked to review the current systems in the three divisions, identify
what each does best, and come up with proposals for an optimal system which can
be used throughout the organisation. You have written to each of the divisional
HR managers asking for a written report summarising the main features of their
systems. Their replies are shown below.
Your task is two fold. First, you are asked to write a report evaluating each
system. Second, you have to make preliminary recommendations, based on your
analysis of the existing systems, for a new organisation-wide approach.
Report from Industrial Chemicals Division

The main strength of our HR philosophy in this division is our informality and the
friendly and relaxed atmosphere that exists throughout our division. People like
working here and this makes them more co-operative and productive.
Our performance management system reflects our philosophy of informality. For
example, we have no restrictions on when, or how often, the appraisal interview
takes place. We leave this entirely up to individual managers. Because the person’s
immediate boss knows the job better than anyone else, we leave it up to him to
decide what to assess and what to talk about in the interview, if and when he
decides to have one. We do not require anything to be written down, since this
only creates unnecessary paperwork. As far as I can tell, appraisees really like this
way of doing things. Top management also likes it because it lets them keep a
friendly eye on how people are getting on.
Report from Agricultural Division

Our system works extremely well – it ought to given how much the external
consultants charged us to install it. The main strength of the system is the highly
sophisticated rating system they put in for us. It is based on the MCI competencies
framework, which I am sure you are familiar with. We find the system to be very
cost effective from the point of view of manager’s time, since the appraisal interview

schedule they gave us is very comprehensive and allows us to tackle a large number
of issues in the one session, including pay, promotion, and training and development
needs. Everyone is set specific, quantifiable, performance targets which they have
to meet over the next twelve months.
All of this is incorporated in what the consultants call performance management.
This allows us to be systematic in following up the appraisal in various ways. The
main elements of our performance management system are:
• Everyone is allocated a mentor to help with problems.

• People are rotated around jobs whenever a suitable opportunity arises. This
makes life more interesting for them and helps to prevent boredom setting in.
• People are given whatever training they ask for, provided it is not too expensive.
• If someone wants to develop themselves by going on an educational course
such as an MBA, we try to support them as much as we can.
Our performance management system works really well. Perhaps it should be

adopted by the other divisions.
Report from the Pharmaceutical Division

We are not entirely happy with our system, which has only recently been installed,
and had intended to review it anyway even if this corporate initiative had not come
up.
Our system was set up as a result of a strategic HRM review which was carried out
in conjunction with our three year review of general business strategy. Within the
overall performance management system there are a whole range of activities which
are meant to operate in an integrated way. The idea is to have a comprehensive
set of procedures in place for the complete management of the person, including
their development for the future.
Because we have this comprehensive system of performance management, we
have been able to reduce the role of performance appraisal itself considerably.
Not only do we now only do it every couple of years, rather than annually, we
have been able to abandon the time-consuming 360-degree appraisal we used in
the past and have returned to supervisor only assessment. Because we now have
performance management, we have been able to take training issues completely
out of appraisal. This has been much appreciated by line managers, since they no
longer have to deal with complaints about training courses which were promised at
the previous annual review but not actually provided. We have, however, continued
to use our very valuable rating system to record performance over the previous year.
Senior management finds it extremely helpful to have this information available,
particularly as it provides data on qualities which are crucial for success as a manager
in our division, such as enthusiasm, leadership, determination, and so on.
References
Bevan, S. and Thompson, M. (1992). ‘An overview of policy and practice’, Person-
nel Management in the UK: An Analysis of the Issues, London: Institute of Personnel
Management.

Locke, E.A. and Latham, G.P. (1990). A Theory of Goal Setting and Task Motivation,
Englewood Cliffs, NJ: Prentice Hall.
Long, P. (1986). Performance Appraisal Revisited, London: The Institute of Personnel
Management.
Rogers, R. and Hunter, J.E. (1991). ‘Impact of management by objectives on organiza-
tional productivity’, Journal of Applied Psychology Monograph, 76, 322–36.
Rowe, K.H. (1964). ‘An appraisal of appraisals’, Journal of Management Studies, 1, 1–25.

Module 7
Training and Development
Contents
7.1 Training, Development and Strategic HRM 7/2
7.2 Determining Training Needs and Priorities 7/3
7.2.1 Levels of Analysis 7/3
7.2.2 Methods of Collecting Information on Training Needs 7/5
7.2.3 Determining Training Priorities 7/5
7.3 Design of Training Programmes 7/6
7.3.1 Determining Training Content 7/7
7.3.2 The Training Process 7/8
7.4 Evaluation of Training Effectiveness 7/12
7.4.1 Evaluation Criteria 7/13
7.4.2 Experimental Designs 7/16
7.5 The Relationship between Training and Development 7/19
7.6 Methods of Employee Development 7/20
7.6.1 Development Centres 7/20
7.6.2 Self-development 7/21
7.6.3 The Learning Contract 7/21
7.6.4 Planned Work Experience 7/21
7.6.5 Action Learning 7/22
7.6.6 Coaching and Mentoring 7/22
7.7 Development for Employability 7/23
7.8 Summary 7/23
Learning Objectives
• understand the role of training and development in implementing HRM
strategies.
• understand the importance of training needs analysis.
• describe how training needs analysis can be carried out.
• explain how designers of training courses determine training content.
• explain how learning principles are relevant to the design of training
courses.
• describe the different criteria which can be used to evaluate training.

Module 7 / Training and Development
• explain the use of quasi-experimental designs in training evaluation.

• explain the difference between development and training.
• describe the main methods used in employee development.
• explain the concept of development for employability.
7.1 Training, Development and Strategic HRM

Training and development can be seen as two inter-related yet distinct activities
within HRM. For the purposes of our present discussion, we will assume that
the primary concern of training is the design and delivery of programmes to
enhance specific aspects of performance and to deal with particular performance
deficits. Employee development, on the other hand, has a broader perspective
in the sense that it looks at the individual as a whole, not just at specific aspects
of performance. Also, employee development does not focus purely on the
individual’s current job; it is also concerned with preparing the individual to
take on other, perhaps more senior, roles in the organisation in the future.
In Module 1, we distinguished between strategic and operational level HRM.
Although in one sense training and development are essentially operational
activities, they have a crucial enabling role in ensuring the successful implemen-
tation of HRM strategies. A few examples will illustrate this point.
1 The broad theme of the need to maximise the utilisation of human resources
implies that people need to be thoroughly trained and developed in order
to be able to make their fullest possible contribution to the organisation.
2 The high demands placed on core employees and the extent of the organ-
isation’s dependence on them clearly implies a need for extensive training
and development of individuals in these roles.
3 The new responsibilities which characterise self-directed teams, the intro-
duction of empowerment generally, and the requirement for flexibility, all
point to the need for extensive training if these forms of work organisation
are to be put into practice successfully.
4 As we saw, many HRM models highlight the need for constant adaptation
and change. Training is likely to be a key element in achieving the difficult
task of gaining acceptance of change.
5 Training is likely to be a key weapon in attempts to change organisational
culture and ensuring employee commitment to the changes.
6 Commitment is one aspect of the broader concept of employee motivation
generally. It has often been suggested that human beings have a strong
motivation to fulfil their potential and that organisations which facilitate this
process will motivate their employees. By enhancing a person’s capabilities,
training, and even more so development, clearly contributes towards this
goal.
7 As we saw in the last module, provision of appropriate training and devel-
opment is a key aspect of performance management systems.
8 Finally, training and development are essentially about learning and, as
such, are likely to have a pivotal role in learning organisations as described
in Module 3.

Quite apart from any strategic level issues, training and development should
be fundamental activities at the operational level in all organisations, even in
those which have never even heard of strategic HRM. Going back to the notion
of core abilities, skills, and motivational abilities, we have seen that the main
way in which the organisation can ensure that individuals had the necessary
core abilities is by means of selection. While some selection for skills might take
place in certain circumstances, in most organisations there are likely to be many
crucially important skills which need to be developed by means of appropriate
training programmes. This will be both in the context of specific circumscribed
tasks and in the broader context of the development of individuals.
We have already seen, in the context of performance management, the impor-
tance of taking a systematic and integrated approach to HRM activities. How-
ever, we also saw in that same context that, all too often, the approach taken by
organisations seems to be piecemeal and fragmented. This need for a systematic
approach applies equally to training, and again one suspects that the reality as
practised in a number of organisations does not quite match up to this ideal.
What, then, would a systematic approach to training in an organisation look
like?
Three main areas of training activity can be identified, each of which has to
be tackled in a planned and organised way. All three are inter-related, and an
integrated approach demands that they are set up and run in such a way as
to complement and reinforce each other. The three areas are: determination of
training needs and priorities; design and delivery of training programmes; and
evaluation of training effectiveness. Let us now consider each of these in turn.
7.2 Determining Training Needs and Priorities

This is really the first stage in setting up and implementing a training pro-
gramme. Given that the resources any organisation can devote to training will
inevitably be finite, it is self-evident that training should be targeted at the areas
of greatest need. It follows from this that, before any attempt is made to run
any training courses, training needs should be identified in a methodical and
systematic fashion. Unfortunately, this is not always done, and training courses
are often designed and implemented without any serious consideration being
given to the real needs of the organisation and those who work in it.
7.2.1 Levels of Analysis

Training needs can be identified at three distinct levels.
1 The organisational level

As we have already seen, the strategic approach to HRM emphasises the
need for an integrated approach to all activities, including training. From
this perspective, to determine training needs, it is necessary to consider
the organisation’s strategic objectives, and to identify the abilities skills and
attitudes individual employees need to possess to make the maximum con-
tribution to the fulfilment of these objectives. Once this is done, the next

stage is to identify areas where existing abilities, attitudes, and so on, do

not match current or future requirements. These then constitute areas of
training needs. If a systematic exercise in determining organisational com-
petencies has already been carried out (see Module 4) this can be used as
a starting point here, since the level and range of existing individual com-
petencies identified in that exercise can be compared with the performance
requirements derived from the strategic objectives.
Organisational level training needs emanating from the necessity to support
HRM strategy will frequently, but not inevitably, result in organisation-
wide training programmes. For example, a strategic imperative to move
towards a total quality focus would very likely require training directed at
all employees in the organisation. The exact form of such training could, of
course, be modified for different employee groups depending on level and
function.
Given the extent to which organisations have to adapt to respond to chang-
ing circumstances in today’s highly competitive world, analysis of training
and development needs at this level may also involve trying to anticipate
future requirements. If the competencies required for the future are different
from those required at present, then analysis of training needs should reflect
this.
2 Work role level
We saw in Module 3 that, in most organisations, the extent to which func-
tional flexibility is being practised is limited. For the most part, work is
organised into specialised work roles, such as secretary, craftsman, foreman,
sales person, finance director, and so on. Even in situations of high func-
tional flexibility, most large organisations will have some specialisation of
work roles.
Clearly, in this situation, job demands will differ from one role to another,
as will the skills and knowledge needed to meet these to a high standard.
Consequently, the training needs will differ from one role to another and this
constitutes the second level of analysis. In this case, training would clearly
not be organisation-wide but would be provided for everyone performing
the work role in question.
3 Individual level
Within any given work role, performance will vary from one person to
another. Consequently, at this level, training needs are likely to be individ-
ualised according to each person’s skills profile. In addition to the question
of the person’s ability to perform his or her current job well, the issue of
the individual’s potential to take on other work roles in the future needs
to be taken into account here. It is at this point that training, employee
development, and indeed performance management, interface.
In this case training would not be provided on an organisational or work
role basis, but would be targeted at individuals who had certain needs in
common, irrespective of their particular job.

7.2.2 Methods of Collecting Information on Training Needs

There are several methods of collecting information about training needs, the
preferred method being largely determined by which of the three levels of
analysis described above is the focus of interest. At the organisational level, an
analysis of organisational competencies can provide information which, when
set against current and future strategic objectives, highlights training needs in
this area. At the work role level, training needs can be established by means of
systematic job analysis. This can provide information on key task requirements
for a particular job and the abilities needed to carry these out successfully. Once
this has been accomplished, the next step is to isolate those abilities which are
skill based, since it is these which will be the focus of training efforts. A well
designed and executed performance appraisal system can be used to obtain data
on individual level needs, both in terms of current work role performance and
with respect to development needs for the future.
So far we have concentrated on the use of information which has been col-
lected for a variety of purposes, not all of which are to do with the determination
of training needs. However, many organisations also conduct a training needs
analysis in which information is collected on a systematic basis purely to meet
training requirements. Such an analysis can take a number of different forms.
One popular, two-stage, approach is to begin by carrying out in-depth inter-
views with a sample of carefully selected individuals. These might be those
who are carrying out the jobs in question, their immediate supervisors, or even
other individuals who have a knowledge of the particular work role. The idea is
that the interviews generate qualitative information on training needs. In order
to obtain a quantitative estimate, and therefore a more comprehensive picture,
of the extent to which the needs which have been identified apply across the
organisation as a whole, the next stage is to carry out a questionnaire survey
with a much larger sample of individuals. While this approach does have the
disadvantage of being more time-consuming than the utilisation of existing infor-
mation, it does have the distinct advantage of being directly focused on training.
A dedicated training needs analysis is particularly valuable, indeed some would
say absolutely essential, when the organisation’s strategic HRM objectives are
poorly articulated or when performance appraisal and performance management
systems are not well developed. Needless to say, the imperative for carrying
out dedicated training needs analysis is even greater when these systems do not
exist at all!
7.2.3 Determining Training Priorities

Any form of training needs analysis is likely to generate an extensive list of
requirements. However, since the resources that can be devoted to training are
clearly finite, some mechanism is required for deciding on priorities amongst
them. Unfortunately, no completely objective method exists to do this, and an
element of subjective judgement is inevitable when such decisions are taken.
Some skills are more critical for successful job performance and for meeting
the organisation’s objectives than others and perhaps the first task of the HR

specialist who carries out the needs analysis is to identify these critical com-
petencies so that they can be given priority. Another factor to be taken into
consideration is the size of the gap between the desired level of performance
and the level which actually exists. The greater the disparity between the two,
the higher priority should be allocated to training in the area in question.
Another important consideration is whether or not an effective training pro-
gramme exists or can be developed for a particular set of competencies at a
reasonable cost. The point here is that the mere fact that something is critically
important, and that a large gap exists between what is present and what is
desired, in no way guarantees that it will be possible to produce the desired
changes by means of training. Clearly, if this cannot be done, it would be better
to divert precious training resources to where they can have more impact, even
if the competencies in question are less critical. The reader will by now be
aware that core characteristics are not modifiable by training or other means.
But, these apart, some learned behaviours may be so well established that it is
unrealistic to expect them to change as a result of a short training experience.
For example, we have mentioned the importance of attitudes and values many
times already in this text. But some attitudes may be so well ingrained over
such a long period as to be virtually impossible to change. Similarly, many
interpersonal behaviours (often confusingly called skills in the HRM literature)
have been learned so early in life and reinforced over so many years that they
have become a fundamental aspect of the person which would be unaffected by
even the most sophisticated of training interventions.
How then can one decide whether it is possible to influence a particular set
of behaviours or attitudes by means of training interventions? One question
to be asked here is whether a training course or programme can be found,
either in-house or commercially, which looks as if it might fit the bill. Given
the proliferation of external training consultants in the marketplace, at least in
the UK and the USA, the answer to this question is very likely to be yes. Even
a cursory glance at the trade press of the training world reveals a plethora
of training courses on offer covering just about everything under the sun.
However, the fact that someone is prepared to offer a training course on some
topic or other is no guarantee that it will actually have the claimed effect on
behaviour and performance, no matter how appealing it may be on an intuitive
basis. Unless the training provider, whether internal or external, can provide
convincing evidence as to the efficacy of the programme, its adoption and use
will be essentially an act of faith on the part of whoever is responsible for its
authorisation. We shall return to this crucial issue of the evaluation of training
effectiveness later in this module.
7.3 Design of Training Programmes

Once training needs have been identified and priorities established, the next
stage is to design an appropriate programme or series of programmes as the
case may be. The first step in this exercise is to work out what the content
of the course or programme is to be. In other words, what are the delegates
expected to learn on the course? After this has been resolved, the next stage is

to determine the training process. The training process is concerned with how
the previously defined learning content can best be delivered.
7.3.1 Determining Training Content

The best method for deciding on the content of training will depend on a num-
ber of factors. For example, if the objective is to impart knowledge, the approach
might well be very different from when the aim is to change attitudes or behav-
iour. In some circumstances deciding on content is relatively straightforward,
while in others it is much more difficult.
Defining what needs to be learned in broad terms is usually not too prob-
lematic. However, broad definitions often tell us little or nothing about what
the content should be. For example, suppose it was decided to train a group
of managers in interviewing skills. The term ‘interviewing skills’ is too broad
to tell us much about what should be included in such a course. To answer
this question it would be necessary to break down ‘interviewing skill’ into its
component parts. These might include: preparatory skills before the interview
starts; knowing which questions to ask and how to phrase them; being able to
relax candidates; being able to make accurate judgements about candidates; and
so on. To take another example, it is a simple enough matter to decide that there
may be a need for assertiveness training for some managers. It is quite another
to specify all of the behavioural repertoires that constitute assertiveness. Yet the
latter information is what is needed to work out the most appropriate training
content for such a course.
At the work role level, a well conducted job analysis can provide a breakdown
of the kinds of broad definition we have been talking about into their component
parts. However, even the tasks or skills identified by job analysis can sometimes
be too broadly defined to allow the precise content of the training to be specified.
One way of dealing with this, for certain kinds of job at least, is to break the
tasks identified by job analysis into smaller elements which are then linked to
specific skills. An example of this approach is hierarchical task analysis (HTA),
developed by Annette et al. (1971). HTA starts off by describing the main
operations involved in the task to be performed. Each of these is then further
subdivided into smaller task elements. The sub-division process can be carried
out several times, so that the main operations which comprise the task are
broken down into ever smaller units of behaviour. It is this process of dissecting
the task into smaller and smaller units of behaviour in a hierarchical fashion
which gives the procedure its name. Since it is possible with this method to go
on sub-dividing tasks into ever smaller units, at some point a decision has to
be taken that the level of specificity is sufficient and no further sub-division is
necessary. The more a task is broken down into fine detail, the more the training
can be focused on those particular aspects of the task. Therefore, a decision has
to be made as to how much detail is necessary for each task. In order to make
this decision, Annette suggests that each task should be considered in terms
of both its level of difficulty and the cost to the system if the operation were
not carried out properly. An operation is regarded as difficult if there is a high
likelihood that an untrained person would be unable to carry out the operation
successfully. If this is the case, then the task should be sub-divided further. The

task should also be broken down further if the cost of failure is high. For any
given task element, the joint effect of these two factors should be considered,
since one can offset the other. For example, a high probability of failure might
be tolerated if the cost of failure is very low and vice versa.
While the hierarchical task analysis approach is a valuable tool for establishing
the content of training, it is clear that it is not applicable to all types of job.
In particular, it is most suited to work roles where the nature of the work and
the tasks to be done are clearly defined and unambiguous. A classic case where
this is not the case and where it is difficult to envisage how HTA could be
usefully applied, is managerial work. We have already provided two examples
of specific aspects of managerial activities in the form of interviewing skills and
the need to be assertive and have hinted that the problem of defining training
content in these cases is not entirely straightforward. However, leaving aside
these two specific examples, what about managerial work more generally? If
a trainer were charged with the task of preparing individuals to carry out a
managerial job, the first step in establishing the appropriate content for such a
training programme might be to ask the deceptively simple question – ‘What
do managers do?’ However, while the trainer might be forgiven for expecting
a straightforward answer to this question, the research which has been carried
out on this problem of specifying what a manager actually does has shown that
this is not the case. Stewart (1976) described a number of frequent managerial
activities such as liaison, maintenance of work processes, innovation, and setting
job boundaries. Mintzberg (1973) proposed ten distinct managerial roles in three
categories. These categories are decision making, interpersonal and information
processing. While the ideas of these writers and others working in the same
area are useful, the problem from a training perspective is, once again, the broad
nature of the categories, making them of limited value for identifying detailed
training content. Furthermore, a number of writers have pointed out that, to
a significant extent, managers themselves define the boundaries of their jobs
(Hales, 1986). Finally, the reality of much everyday management may be quite
different from what is suggested by some of these idealised models which depict
managerial work as a series of logical administrative and organising processes.
Real life management is much more unpredictable, complex, and varied than
these models seem to imply.
7.3.2 The Training Process

The second issue to which we must now turn our attention is the learning process
itself. Assuming that we know what is to be learned from our analysis of training
content, the next stage is to decide how learning can best be accomplished so
as to be maximally effective. There are different ways in which effectiveness
can be measured in this context, such as the length of time it takes to master
the material or how long learning is retained before it begins to fade. There are
certain general learning principles which can be applied across a wide range
of different types of learning tasks and these should be utilised when training
courses are being designed. However, it is also the case that the nature of the
learning process, and therefore the choice of training method, will be different
depending on what it is that has to be learned. For example, learning a set

of accounting rules is likely to involve a different kind of learning from that

needed to acquire a new set of interpersonal behaviours. Training programmes
therefore need to take into account the type of learning involved in acquiring
the skills which are to be developed. Finally, not everyone is the same when it
comes to learning and a method which suits one person may not suit another.
Therefore, in deciding how learning can best be accomplished, the designer of
the training programme in question must also take into account the type of
learner at whom the course is aimed.
General Learning Principles

A considerable amount of psychological research has been carried out into how
learning occurs and how to maximise both speed of learning and retention of
what has been learned. However, not all of this work is equally valuable for the
design of training programmes. This is because much of the research was carried
out under artificial laboratory conditions which had little in common with real
life work environments. Nevertheless, provided that this caveat is borne in
mind, many of the findings from this research can provide useful guidelines for
the design of training programmes. Some of the more well established learning
principles are reviewed briefly below.
• There is a good deal of evidence that learning and performance are enhanced
if the person being trained is rewarded in some way whenever the task to
be learned, or some part of it, is performed correctly. Such rewards can
take a variety of forms, such as praise from the trainer, mutual support and
reinforcement from other trainees, and so on.
• One of the reasons why rewards aid learning is the fact that they effectively
provide the learner with feedback as to what is the correct or desired
behaviour. There is no doubt that feedback is critically important for many
types of learning. Of course, to be of maximum benefit to the learner,
feedback can and should involve more than simply the identification of
correct responses. In particular, feedback should be used to make it clear to
the individual precisely where and why he is going wrong in his attempts
to master the task in question.
• Some of the early research on the role of rewards in learning seemed
to imply that human learning was a mechanistic process which occurred
more or less automatically when rewards were provided. The corollary
of this was that no learning could take place in the absence of rewards.
Bandura (1977) has strongly criticised this view of human learning and
has shown that a great deal of human learning occurs through imitating
the behaviour of others without any apparent reward. Bandura’s research
and ideas have given rise to a very popular method of training called
behaviour-modelling training (BMT). Following on from Bandura’s work,
the underlying assumption of BMT is that people learn from observing the
behaviour of another person, often another trainee, who performs the task
in question well. While Bandura does not regard rewards as necessary for
learning to take place, he nevertheless concedes that successful modelling
will only occur if there is some motivation to strengthen the modelled

behaviour. To put it another way, the trainee needs to have some reason to
model his behaviour on another person.
• We have already discussed the value of setting goals and objectives in the
module on performance appraisal. Objective setting can also be applied in
most training contexts as a means of motivating individuals, including BMT.
As has already been pointed out in connection with performance appraisal,
for maximum effect, goals should be difficult enough to challenge the
individual, but not so hard as to be perceived as unattainable.
• Passive learning, such as listening to lectures given by trainers or reading
training material, can be appropriate in some training contexts. However,
most of the learning principles we have discussed so far, such as rewarding
of desired responses, modelling behaviour observed in others, providing
feedback on performance, and so on, treat learning as essentially an active
and dynamic process where the learner is involved in carrying out various
tasks. From this perspective, the emphasis is on learning by doing with
active participation by delegates being seen as the key to effective learning.
The above list is meant to be selective and in no way covers all of the
principles of learning uncovered by researchers over the years. It does, however,
include the ones which have most frequently been applied in the actual design
and execution of training programmes in organisations.
Types of Learning
It is clear from everyday observation that human beings engage in a wide
variety of different kinds of learning task, both in their everyday environment
and in the workplace. Learning to drive a car, for example, is a very different
task from learning the principles of quantum mechanics, which in turn is very
different from learning how to take account of other people’s point of view in a
team leadership situation. While general learning principles will to some extent
apply across these diverse situations, it is also the case that the ideal method
for facilitating learning acquisition will differ greatly depending on the type of
learning involved.
One useful classification of learning is the CRAMP taxonomy (ITRU, 1976).
This proposes five different types of learning as follows.
• Comprehension. This involves understanding, rather than mere memo-
rising. Thus, the learner comes to understand how and why something
functions the way it does. For example, a forecourt attendant could be
taught, as part of his training, not to put unleaded petrol in cars over a
certain age. This would only be classified as comprehension if the person,
at the end of the training, also understood why unleaded petrol should not
be added to older cars.
• Reflex learning. This type of learning largely involves co-ordination between
perceptual and motor activity. Two major functions of the human brain are
the analysis of information from the senses (perception) and the control of
muscular movements of the body (motor activity). Reflex learning largely
involves making connections between perception and motor activity to allow
the execution of complex tasks. Many of the activities which the lay person

would classify as skills come about through reflex learning. For example,
the ball control of the skilled footballer is a result of a long period of reflex
learning in which a high level of eye, foot, and body co-ordination is even-
tually attained. Many craft jobs, such as those of painter, joiner, or welder,
include skills which have been developed through reflex learning.
• Attitude development. We have seen numerous examples throughout this
text, but particularly in the various discussions of strategic HRM, of the
importance of attitudes and the need to produce attitude change in employ-
ees. Examples of strategically desirable outcomes where an important com-
ponent of the change process might involve training to modify attitudes
include attempts to increase commitment, TQM programmes, and customer
focus initiatives.
• Memory training. An example of memory training could be the task of
remembering not to put unleaded petrol into cars of a certain age, described
above in the section on comprehension. If the individual in question was
trained to remember what had to be done, but was given no insight into
why the task had to be carried out in that particular way (comprehension),
this would constitute memory training. Memory training can be regarded
as surface knowledge, rather than deep understanding, and it can often be
accomplished by a process of rote learning. For example, a Distance Learn-
ing MBA student could memorise large sections of this text using a process
of rote learning, without really grasping the underlying concepts. However,
it is unlikely that the student in question would pass the examination, since
the examination questions are designed to test comprehension, in addition
to memory.
• Procedural learning. This is similar to memory training insofar as it involves
recall without deep understanding. In this case, however, it is a set of
procedural rules which have to be memorised. For example, a bank teller
needs to know the procedure which must be gone through if, at the end of
a day’s trading, the amount of cash left in her till is inconsistent with the
amount recorded as having been paid out to customers. To take another
example, an examination invigilator has to know the procedures for dealing
with certain eventualities, such as students turning up late or wishing to
leave early. In neither of these cases is it strictly necessary for the person
to know why the procedures are set up in the way they are (although, of
course, it may be advantageous for them to do so).
The optimal training method will depend to an extent on the nature of the
learning involved in the particular task or set of tasks to be learned. For example,
reflex learning may require repeated practice of the task or components of it,
followed by feedback on performance. Attitudinal learning, on the other hand,
might be carried out by first conducting a questionnaire survey of existing
attitudes in the organisation and following this up by a discussion and analysis
of the findings in a series of small groups.
Finally, the reader should note that, where individuals are engaged in a
comprehensive training programme, several different types of learning may be
required at different stages of the programme. For example, consider a training
programme for apprentice electricians. An electrician needs an understanding

of the nature of electricity as a source of heat and power. She also needs craft
skills learned in a reflex manner. An appropriate attitude towards safety issues
is also clearly important, as is a knowledge of various procedural rules, such as
how often safety inspections on plugs and appliances have to be carried out.
Types of Learner
When designing a training programme, it is important to take into account not
just the type of learning involved but also the type of person who will be the
recipient of the training. For example, an approach which works well for young
workers may not always work so well with older members of the workforce. A
good illustration of this would be in the area of computer skills, where many
young people are already computer literate when they first enter work and might
be expected to be easily trained in this area. Many older people, on the other
hand, do not have this basic familiarity with computers, and might well find the
task of learning these skills quite daunting. Consequently, considerable support
might need to be built into such programmes for older workers if they are to
be trained successfully. Individuals with less formal education, such as blue
collar employees, are likely to respond more favourably to practically oriented
sessions than to formal lecture presentations. Conversely managers, with their
greater exposure to formal education might be expected to be quite comfortable
with a lecture format.
Individuals also have different learning styles and, where feasible, this should
be taken into account when designing programmes. Building on the work of
Kolb who suggested that there are four stages in the learning cycle, Honey
and Mumford (1989) found that individuals differed in their preferences for the
various learning styles which characterised each stage. The four learning styles
associated with stages in the learning cycle are as follows.
• Activists are enthusiasts about learning by doing. Because of their pref-
erence for trying things out they respond well to methods which involve
carrying out either the actual tasks which are to be learned or simulations
of them.
• Reflectors prefer to learn by observing, listening and analysing rather than
by doing. They would rather observe and analyse tasks than actually carry
them out.
• Theorists are good at constructing theories and concepts based on analysis
and evaluation of information.
• Pragmatists are characterised by their desire to apply what they have
learned to real world situations. They do not respond well to concepts
and theories which have little direct practical application.
7.4 Evaluation of Training Effectiveness

It should by now be clear to the reader that designing and executing high quality
training programmes demands considerable time and expertise. However, even
if all of the procedures outlined above have been gone through in a professional
manner, this does not in itself guarantee that the training will actually achieve

its purpose. No matter how intuitively appealing a programme may be, nor
how well grounded in theory and best practice, it is still necessary to evaluate it
systematically to be sure that it is effective and is actually delivering the goods.
The need for systematic evaluation is really driven home when one considers
the very large sums of money many organisations spend on training. At the end
of the day, such spending can only be justified as an investment provided the
training can actually be shown, through a process of systematic evaluation, to
have produced the desired results.
Despite its crucial importance, evaluation remains one of the most problematic
areas in the field of training. The first and most fundamental problem which
arises here is the question of which evaluation criteria should be used to evaluate
any particular training programme. To put it another way, what measurable
outcomes of training can be used to evaluate its efficacy? A second, and equally
important problem concerns the choice of the most appropriate experimental
design to adopt to ensure that the results of the evaluation provide a fair and
valid assessment of what the training has achieved.
7.4.1 Evaluation Criteria

Kirkpatrick (1967) has suggested four possible criteria which can be used for the
evaluation of training.
1 Trainee reactions
This approach is based on trainees’ judgements of the usefulness of the
programme. Typically, the information is collected by means of a question-
naire filled out at the end of the course. Questions asked might include
overall impressions of the course, perceptions of the trainer, assessments of
the extent to which both the course objectives and the trainee’s personal
objectives had been met, and so on. This approach has some advantages.
In particular, it is easy to set up, it is inexpensive, the data are easy to ana-
lyse, and it provides rapid feedback to whoever is responsible for training.
Experience suggests that this approach can frequently result in favourable
evaluations of training programmes which, at least from the perspective of
the training provider, could be seen as an advantage.
There are, however, a number of limitations with this approach. First, the
favourable evaluations just mentioned could occur for spurious reasons and
hence give a misleading impression of the true value of the course. For
example, trainees who found the programme to be an enjoyable experience
might rate it positively for this reason, irrespective of whether or not they
had actually learned anything. The opposite might occur if the experience
was unpleasant. Delegates might also feel that saying the course was not
valuable amounted to an admission of failure on their part and might there-
fore be reluctant to do so. Trainees are often aware that the trainer’s superior
might well scrutinise the course evaluations and consequently they may be
unwilling to give unfavourable evaluations for fear of creating difficulties
for the trainer with his boss. Training evaluation questionnaires frequently
use rating scales and this opens the door to many of the rating biases dis-
cussed in Module 6. Another problem with this approach relates to what

is known as external validity. A learning experience has external validity

when what has been learned transfers beyond the immediate training situ-
ation to the work environment. For example, if delegates report that they
learned how to be more assertive, do they actually act in a more assertive
way when they go back to the workplace? To put it another way, has the
training led to actual changes in performance in the job? Unfortunately,
while they may give some indication of attitude change, trainee reactions
tell us nothing about actual changes, if any, in job behaviour.
2 Learning
The second of Kirkpatrick’s criteria is focused on knowledge and involves
the assessment of the extent to which the material provided on the course
has been absorbed and can be reproduced when tested. Often the method
of collection of the information is by means of some kind of written test. As
with trainee reactions, this method is quick and inexpensive. There are not
the same problems of bias in this case, since what is being tested is whether
or not the delegate knows the correct answers to a series of questions, rather
than their impressions of the value of the training.
However, there is still a question mark over external validity when learning
criteria are used, since theoretical knowledge of how something ought to be
done does not necessarily guarantee that actual behaviour in the workplace
will change. For example, someone may be fully aware of all the safety
precautions which should be observed when carrying out a series of tasks,
but may still not comply with them. Even when behaviour change takes
place as a result of new knowledge, there can be problems of external
validity. This can be the case if the knowledge being provided on the
course is actually inappropriate for its purpose. For example, suppose a
course provided delegates with an outdated theory of leadership which
subsequent research had shown to be inappropriate. If a person changes his
leadership style along the lines suggested, this may result in a drop off in
performance as a result of training, rather than an improvement.
3 Behavioural change
The problem of external validity highlights the importance of evaluating
whether or not training has resulted in observable changes in behaviour
back in the workplace. This brings us to the third of Kirkpatrick’s criteria,
namely behavioural change. This involves collecting systematic information
on any changes in behaviour which have occurred following training. With
this approach it really is possible to demonstrate that the training has
changed what people actually do and consequently information obtained
about external validity. However, detecting behavioural change is neither
quick nor easy. It might, for example, involve time-consuming, in-depth
interviewing of every trainee’s boss and perhaps also his peers and even
subordinates to obtain details of observed changes in behaviour following
the training. Since time is money, this type of evaluation is inevitably more
expensive than the other two criteria mentioned above. Also, referring
back to the example above where inappropriate leadership behaviours were
transferred onto the job, it is clear that changed behaviour by itself does not
inevitably mean that the person has become more effective. To show this

it is necessary to demonstrate that behavioural changes are in the desired

direction. Even when this is achieved, there is still the question of how
much benefit has accrued to the organisation in terms of bottom line, end
results measures such as cost savings or profit increases. This leads us to
the last of the four evaluation criteria.
4 Results
This refers to changes in end results outcomes following training. These
might include higher productivity, reduced turnover or absenteeism of sub-
ordinates, increased profitability, and so on. While in some ways this might
seem to be the ideal criterion, it too has its limitations. In particular, the
end results which are typically used to measure organisational outcomes are
frequently affected by factors which are outside the control of the individual
and therefore cannot be attributable to training. The reader is referred to
Module 4 for a detailed discussion of this issue.
Table 7.1 Advantages and limitations of Kirkpatrick’s four evaluation criteria

Advantages Limitations
Trainee reactions Easy to set up Favourable ratings may occur
Inexpensive for spurious reasons
Data are easy to interpret Use of rating scales may result
Feedback is rapid in response biases
Easy to show positive results External validity unknown
Learning Relatively inexpensive External validity unknown

Data are easy to interpret
Feedback can be rapid
Behavioural External validity can be Time-consuming
determined Changes in behaviour may
not necessarily benefit the
organisation
Results External validity can be Difficult to rule out
determined extraneous factors
Real benefit to the
organisation can be
demonstrated
Table 7.1 summarises the advantages and limitations of the four Kirkpatrick
criteria. Although behavioural and results criteria are in some ways more robust
than learning and trainee reactions, not least because of their ability to provide
information about external validity, all four have their place in evaluation.
Having said this, the greater focus on external validity of behavioural and
results criteria could lead one to expect that these would be frequently used in
training evaluations. However, judging from a survey of the training evaluation
procedures adopted by organisations in the US, this is far from being the case.
Campbell (1971) found that the assessment of trainee reactions and, to a lesser
extent, learning were very popular. However, the use of behavioural and results
criteria were much less so. It seems that, when it comes to training evaluation,

most organisations opt for the least expensive and less time-consuming options,
rather than the more robust ones.
Kirkpatrick’s model has been around for quite a long time now, and it is
important to ask how well it has stood the test of time. Alliger and Janack (1989),
reviewing developments in the intervening period since the model was first
proposed, concluded that trainers using the model have made three assumptions
which do not necessarily hold.
1 First, they have assumed that the four criteria are arranged in such a
way that the value of the information obtained increases as we move from
reactions through to results. While considerations of external validity would
imply that this would usually be the case, they point out that this is not
necessarily always true. For example, if a programme is only concerned
with attitude change – such as a course designed to improve morale – then
trainee reactions could provide all the information that is needed to evaluate
the programme.
2 Second, it has been assumed that the four levels are linked in a causal
sequence. In other words, positive reactions cause learning to occur, learning
in turn causes behaviour change, and so on. The other side of this coin is
that, if trainee reactions are negative, no learning will occur and there will
be no behaviour change. Again, they question whether this will inevitability
be the case, pointing out that negative experiences which cause trainees to
react adversely to the course can nevertheless lead to learning and behaviour
change. By way of illustration, making mistakes in front of other trainees
could easily qualify as a negative experience, but the resulting feedback
when these are pointed out could result in learning and behaviour changes.
3 Finally, the presumption has been that all four criteria are positively cor-
related with each other in the sense that, if a large effect is observed for
one criteria, a large effect will also tend to be observed for the others, and
vice versa. Alliger and Janak point out that there is little evidence to either
support or refute this particular assumption
What is notable about the Alliger and Janack review is the fact that, although
they make some important points about how some trainers may have misinter-
preted the model, they do not fundamentally criticise the model itself. To this
extent Kirkpatrick’s model seems to have stood the test of time and it will no
doubt continue for some time to be a valuable tool for those charged with the
very important role of evaluating training.
7.4.2 Experimental Designs

Once a decision has been taken about which of Kirkpatrick’s four criteria are to
be used to evaluate training, the next stage is to consider how best to collect the
information in order to ensure that the results can be relied on to give a true
picture of the effects of the training.
The procedure we are about to describe for carrying out this task is analogous
to the techniques used to conduct a scientific experiment. Suppose a scientist
has decided to carry out an experiment to investigate some phenomenon of

interest. The experiment will usually involve the manipulation of some variable
or other. Once this has been chosen, the scientist will have to decide what
is to be measured in order to evaluate the effects of the manipulation. This
might be followed by consideration of a series of questions such as when the
measurements should be taken, how often they should be taken, and so on. A
simple example will illustrate the approach. Suppose the scientist is a doctor
who is interested in the effects of a certain drug on the human body. The
variable to be manipulated is therefore the drug in question. A decision might
be taken to test for the drug’s effects by measuring changes in blood pressure.
One possible experimental design would be to give the drug to a single group
of patients to test for its effects, in which case blood pressure could be measured
before and after drug administration. However, one potential problem here is
the possibility that the testing procedure itself might temporarily affect people’s
blood pressure even in the absence of any drug. For example, they might react
to the injection itself. In this situation, the scientist needs to consider whether it
is necessary to have a separate group of patients who are put through exactly
the same test procedure, except that they do not receive the drug. This control
group allows any effects of the procedure itself to be picked up.
In training terms, the training experience is the variable of interest and is
analogous to the drug in the above example. The choice of one of Kirkpatrick’s
criteria constitutes what is to be measured, and therefore corresponds to blood
pressure in the example. It would also be possible either to measure the same
group of people on a before and after basis as above, or alternatively to have a
separate control group of people who do not receive the training. However, it is
important not to push this analogy between training and laboratory experiments
too far. Most training takes place in real life organisational settings, and it is
rarely possible to conduct a true experiment of the type which might take
place in a laboratory. Campbell and Stanley (1963) have used the term quasi-
experimental designs to describe procedures which adhere to the principles
of experimental design, but which are necessarily somewhat removed from
pure experiments because of the kinds of real life, practical constraints which
exist when training evaluation programmes are carried out. Table 7.2 illustrates
some of the quasi-experimental designs proposed by Campbell and Stanley for
possible use in training evaluation. Where the word ‘test’ is used in the table
this indicates that information has been collected in the form of one or more of
Kirkpatrick’s criteria or any other equivalent measure of training effects.
1 After within design. The first approach shown in the table is known as a
‘within group’ design. This simply means that information is only collected
from delegates who have been on the course and there is no separate
control group. The first of these is the simplest design of the four shown.
Data are collected at one point in time, after the training has taken place.
Unfortunately, it is often difficult to place much reliance on information
collected in this way. An example will illustrate the difficulty. Suppose the
course in question is a customer care programme, and delegates are given a
questionnaire at the end of the course in which they are required to indicate
how they would deal with a number of customer-related situations. Even if
the replies are closely in line with the training objectives, we learn little about

Table 7.2 Quasi-experimental designs for evaluation of training effectiveness

Experimental design Sequence of events
Test Training Test
programme
After within
Trainees * *
Controls
Before after within
Trainees * * *
Controls
After between
Trainees * *
Controls *
Before after within & between
Trainees * * *
Controls * *
the effectiveness of the course simply because, for all we know, delegates
might have answered the questionnaire in exactly the same way even if
they had not been on the programme. In other words, we know nothing
about the trainees’ level of ability and knowledge before the programme
and therefore we cannot be sure that the training itself has had any effect.
2 Before after within design. The second design shown in the table is also
a within group design. By taking measurements before the training begins
as well as at the end, information is collected on the trainees’ knowledge,
attitudes, or whatever before the start of the training. By examining changes
between the pre- and post-training period, a more reliable indication of the
effects of the training can be obtained. However, this design has at least
two problems. First, it is possible that something in the external environ-
ment, rather than the training programme itself, could have influenced the
individuals concerned. Suppose an organisation decides to train a group of
managers who have responsibilities for negotiating with trade union rep-
resentatives. Let us further assume that the organisation believes that the
managers in question are too sympathetic to the union’s position and there-
fore give away too much in negotiations. A course is therefore designed to
change attitudes in a more company-oriented direction, in the hope that this
will result in a tougher approach to bargaining. Before and after measures
of the managers’ attitudes to trades unions are taken and significant changes
in the desired direction are observed. On the face of it, the training pro-
gramme seems to have produced the desired effect. However, let us further
suppose that, during the intervening period between the two data collec-
tion points, there is a transport strike which causes great inconvenience to
the public, including the delegates on the programme. This event, rather
than the training itself, might well have produced the observed changes
in attitudes. This sequence of events could therefore lead to the situation
where the training programme was credited with an effect which it had not
actually produced.

The second problem with this design can also be illustrated by means of an
example. Let us take a course designed to change the leadership style of a
newly appointed group of leaders of self-managed teams. Before embark-
ing on the training, delegates are given a series of examples of leadership
situations and asked how they would deal with them. This measure is then
repeated at the end of the programme. Assuming that there were no impor-
tant external influences which could have affected questionnaire responses,
it is tempting to conclude that any observed changes demonstrate an effect
of training. However, there is another way in which these results could be
explained. Suppose the very act of completing the questionnaire stimulated
trainees to think about the leadership situations in question. Further reflec-
tion on these in the intervening period between the two administrations led
them to change their views on how best to handle these particular issues.
The observed change would thus be a result of this reflective process, rather
than the training programme itself. It is known that some questionnaire-
type measures can indeed have this kind of effect. They are known as
reactive measures, for the obvious reason that individuals respond to them
in some way, so that any possible effects of training are confounded with
changes due to the measuring instrument itself.
3 After between design. In this design, in addition to the trainees, there is
a separate control group of employees who are not being trained but who
are also asked to complete the training effectiveness measures at the end of
the training period. The effectiveness of the training can then be estimated
from the size of the difference between the responses of the training and
control group. By using this method, many of the problems of within group
designs can be avoided. However, it does assume that delegate and control
groups are similar at the outset and this requires careful matching of the two
groups at the beginning. Also, for technical reasons of a statistical nature,
between group studies are less sensitive when it comes to identifying small
effects of training than within group studies.
4 Before after within and between design. In the final design shown in the
table, both training and control groups are given the relevant test before
as well as after the training. This is quite a sophisticated design which
incorporates the benefits of both the within and between approaches and
avoids most of the problems mentioned above. For example, it is possible
to check that the control and training groups are properly matched by
inspecting their pre-training scores. Reactions to the measure itself or an
influence of the external environment would be indicated if the control
group scores changed over the training period. The use of two within
measures on the trainee group provides the sensitivity to pick up small
effects. Unfortunately, this type of design is complicated to set up and run
and for this reason one suspects that it is rarely used in practice.
7.5 The Relationship between Training and Development

Although training is an essential feature of most employee development pro-
grammes, development implies much more than just the provision of training

courses. This is particularly the case for those in professional and managerial
roles and consequently much of the discussion in the remainder of this module
applies particularly to these groups. There are several reasons why training by
itself is insufficient to ensure that individuals have the opportunity to fulfil their
potential to the benefit of themselves and the organisation. These include the
following.
• Participation in formal training programmes is only one of many ways in

which individuals can learn new attitudes, skills, and abilities.
• Many of the competencies managers in particular require are difficult, if
not impossible, to develop effectively simply by sending them on relatively
brief training courses.
• In many ways, training methods are more suited to improving specific,
often quite narrowly focused, skills in relation to a particular job, rather
than on developing the individual as a whole.
• Because training is often oriented towards the solving of immediate prob-
lems, such as getting people up to scratch on some important aspect of
their performance which needs improvement sooner rather than later, its
time frame is often quite short term. Developing people is less about imme-
diate need and more about longer-term considerations.
There are several approaches which can be taken to develop managers in

addition to the provision of training. Some of the most common of these are
discussed below.
7.6 Methods of Employee Development

It should by now be clear to the reader that training is a key element in employee
development and this point will not be laboured further. We therefore turn our
attention to some of the other methods organisations can use to facilitate the
development process.
7.6.1 Development Centres
In Module 6, we discussed the difficulty of using performance appraisal to

identify potential for promotion in circumstances where the abilities required
in senior roles were completely different from those required in the job the
appraisee was currently doing. Development centres, in which individuals are
given a series of tests and exercises designed to assess competencies relevant
to the senior roles in question, were suggested as a way around this problem.
Used in this way, development centres can help map out both individuals’
development needs and their potential for the future. As such, they can be a
valuable starting point in the employee development process.

7.6.2 Self-development
As a method of assessing each individual’s strengths and weaknesses, develop-
ment centres can assist the organisation in fulfilling its responsibility to develop
its employees, and in this respect they perform a useful function. However,
as part of their overall philosophy of managing people, many organisations
take the view that development should not be the sole responsibility of the
organisation, but that individuals should also take some responsibility for their
own self-development. One aspect of this is to encourage individuals to analyse
their own strengths and weaknesses in their current work role. Another is to
invite them to consider ways in which they might develop themselves to take
on new roles in future. Going hand-in-hand with these activities would be a
self-examination of ways in which their capabilities could be enhanced through
training, the provision of appropriate work experience, or whatever. Of course
for this self-analysis process to work successfully, the organisation would need
to provide support for the individual. This could take a variety of forms. For
example, short courses in how to carry out self-analysis could be set up, per-
haps led by a specially trained facilitator. Another alternative would be to set
up self-development groups. This would involve bringing together a group of
managers, with or without a facilitator, to discuss their personal development
needs and how they might be fulfilled.
7.6.3 The Learning Contract

Consistent with the notion of managers taking some responsibility for their
own development is the idea of the learning contract. This involves a manager
making a formal commitment to a set of learning goals to be achieved within
a specified time frame. The contract might include not just the final goals to
be achieved, but also what will be done to achieve these, the resources needed
from the organisation to support the activity, and how the learning outcomes
will be measured. The reader should note here that the ultimate responsibility
for making the contract work lies with the individual, not the organisation.
7.6.4 Planned Work Experience

One more or less universally accepted way to develop people is through the
provision of work experience. Of course, a considerable amount of learning
will take place ‘on the job’ whatever the nature of the work the person is
doing. However, to qualify as a development activity, the experience needs to
be properly programmed, i.e. it needs to be planned and systematic. In this
context, a starting point in planning such a programme might be an analysis
of the future work roles anticipated for the individual, perhaps identified as a
part of the formal appraisal system. Once the range of experience required to
achieve the necessary learning had been specified, the next step would be to
design an appropriate regime for the individual. This would typically include
a specification of the work roles to be included in the programme, the optimal
time to be spent in each, the competencies to be developed, and the expected
learning outcomes at each stage.

7.6.5 Action Learning

An interesting variant on work experience as a means of developing people is
the concept of action learning, as devised by Revans (1972). A basic tenet of the
Revans concept is the idea that managers learn a great deal through problem-
solving. The approach involves temporarily exchanging managers between dif-
ferent organisations and presenting them with an existing problem in the new
organisation. Their task is to find the optimal solution to the problem. Typically,
the problem would be a difficult one which the organisation has been struggling
to solve. From the organisation’s perspective, the expectation is that the man-
ager will bring new ideas to bear on the issue and a fresh way of looking at it.
From the manager’s point of view, she is faced with the challenging situation of
having to tackle a difficult task in an unfamiliar environment and possibly in the
context of a very different organisational culture. It is not hard to see how this
arrangement offers considerable opportunities for learning and development on
the part of the managers who are involved in the process.
7.6.6 Coaching and Mentoring

From a subordinate’s point of view, one of the hallmarks of a good boss is
the extent to which he or she adopts an active coaching role as an aid to
management development. Coaching in this context can cover many aspects of
the job. It can also take a number of forms, such as:
• counselling and support when things go wrong

• ensuring that the individual has a varied range of work experience
• providing feedback on performance
• offering ideas and advice on how to improve performance
• helping the person to make the right political connections.
The coaching role of a manager with respect to her immediate subordinate is,
in some respects, constrained by the nature of the power relationship between
them. For example, a subordinate may not wish to admit difficulties and prob-
lems to, or seek help from, the person who is responsible for his appraisal.
As we saw in Module 6, performance evaluations can, and often do, include
recommendations about issues which are crucially important for the individual,
such as salary and promotions.
These potential difficulties can be circumvented by the adoption of a mentor
system. A mentor is normally more senior to the person being mentored, but the
two are not in a direct line management relationship to each other. The mentor
can, of course, perform many of the same coaching roles described above for
the immediate supervisor. However, if the mentor has not actually performed
the job in question, his lack of direct experience of the job may limit the amount
of advice that he can give. On the other hand, the mentor can do things which
the line manager coach cannot. For example, one of the roles of a mentor might
be to monitor the performance of the person’s immediate manager to ensure
that the latter actually takes the time and trouble to carry out his coaching
duties properly. In addition, as mentioned above, the absence of a supervisory

relationship between mentor and those being mentored may mean that the latter
feels more able to seek help with problems and difficulties.
7.7 Development for Employability

A recent innovation in a number of organisations is the idea of development
for employability. The notion here is to provide the employee with a wide
range of transferable skills which would be valued by other organisations. In
other words, one objective of employee development in this context is to make
the individual more employable outside of the organisation. At first glance
it would seem to be irrational for an organisation to devote time and money
developing someone just so that another organisation can reap the benefits. Why
then have organisations adopted this policy? It is really an attempt to motivate
employees in the face of the profound changes to work organisation brought
about by the new HRM policies and practices discussed at length in the early
modules of this text. In particular, the need for organisations constantly to adapt
and change and the adoption of numerical flexibility in order to facilitate this
change have meant that the old idea that a person has a job for life within
the one organisation is disappearing, if it ever existed. Also, flatter organisation
structures means that, in many circumstances, prospects of internal promotion
are much more limited than in the past. If security and advancement are no
longer available to employees in the way they once were, what kind of deal
can the organisation offer the employee to maintain motivation? One answer is
to offer development which will not only improve the employee’s performance
within his current organisation but, by providing a range of transferable skills,
will also enhance the person’s marketability and therefore his chances of being
employed elsewhere. While there is some logic to this approach in terms of
compensating the individual for loss of security and advancement opportunity,
it can clearly be something of a risk strategy. For example, there is a clear
danger that individuals with highly marketable skills might just decide to leave
for lucrative offers elsewhere at times which are less than convenient for the
organisation. This might well be during periods when their services are most
needed.
7.8 Summary
In addition to being core operational level activities, training and development
are critically important for the successful implementation of a number of HRM
strategies. Training needs analysis which is systematic and the determination
of training priorities should constitute the first stage of any major training pro-
gramme. For a programme to be effective, appropriate training content and
process have to be determined. Formal evaluation of training outcomes is essen-
tial and this involves decisions about which criteria to use and about how best
to collect the necessary information. Development differs from training insofar
as its scope is broader and it has a longer-term perspective. A variety of tech-
niques can be used to develop individuals, including: action learning; coaching
and mentoring; and planned work experience. Development for employabil-
ity attempts to motivate individuals by providing them with transferable skills

so that they can more readily change organisations with a view to advancing
their careers. We concluded the module by touching on the interface between
employee development and the individual’s lifetime career both within the
organisation and outside of it. It is to this last question which we turn in the
next and final module of this text.
Review Questions
7.1 Training and development are unrelated activities within HRM.
7.2 Employee development has a narrower focus than training, since it is only
concerned with improving specific aspects of performance.
7.3 By enhancing a person’s capabilities, training can contribute towards the HRM
objective of motivating the individual.
7.4 Training is only worthwhile when an organisation takes a strategic approach to

HRM.
7.5 Determining training needs and priorities is usually the second stage in setting
up a training programme.
7.6 Organisation-wide training is carried out in exactly the same way for all levels
of employee in the organisation.
7.7 Individual level training needs analysis is only concerned with individuals who
have particular problems in coping successfully with their job.
7.8 The preferred method of collecting information about training needs is largely
a function of the level at which the needs have been analysed.
7.9 Dedicated training needs analysis collects qualitative, but not quantitative,
information about training requirements.
7.10 Training needs and training priorities are essentially the same thing.
7.11 Priority should always be given to providing training directed at the competen-
cies which are critical for effective job performance.
7.12 In designing training courses, it is necessary to decide on the training process

first, before going on to consider training content.
7.13 Breaking tasks down into component parts helps little in determining appro-
priate training content. It is the broad overview of what needs to be learned
which counts.
7.14 In hierarchical task analysis, a task is defined as difficult if there is a high

probability that an untrained person would be unable to carry out the operation
satisfactorily.

7.15 Hierarchical task analysis can easily be applied to managerial work.
7.16 Mintzberg proposed that managerial work could be broken down into the three
categories of interpersonal, decision making, and planning and organising.
7.17 Reflex learning essentially involves co-ordination of sensory information with

motor activity.
7.18 One thing both memory training and comprehension have in common is the
fact that they both involve understanding.
7.19 Kolb suggested that there are three stages in the learning cycle.
7.20 There are certain learning principles which can be applied across a wide spec-
trum of learning tasks.
7.21 The nature of the learning process will be different, depending on what has to
be learned.
7.22 The term evaluation criteria refers to those training outcomes which can be
measured in order to assess how successful the training has been.
7.23 Campbell (1971), in a survey of how organisations evaluate their training

programmes, found that trainee reactions and learning were the most popular
of Kirkpatrick’s four evaluation criteria.
7.24 Alliger and Janack (1989) reviewed developments in the intervening period
since Kirkpatrick put forward his original model for training evaluation and
concluded that the model is fatally flawed.
7.25 An advantage of Kirkpatrick’s trainee reactions criteria is the rapid feedback it

provides for trainers.
7.26 A drawback of Kirkpatrick’s trainee reactions criteria is the fact that it is the
trainer’s boss, rather than the trainer herself, who gets to see the evaluations.
7.27 Kirkpatrick’s learning criteria tests whether the training material has been
absorbed, rather than whether it can be reproduced.
7.28 Increased profitability would be defined as a results criteria for the evaluation
of training in Kirkpatrick’s model.
7.29 A learning experience has external validity when what has been learned trans-
fers to the workplace.
7.30 When ‘within’ designs are used in experiments to evaluate training, there is no
separate control group.
7.31 It is generally agreed that responsibility for employee development lies with
the organisation, rather than the individual.
7.32 At the end of the day, it is up to the organisation to make sure that the terms
of the learning contract are delivered.
7.33 All ‘on the job’ experience qualifies as planned work experience.

7.34 One of the functions of coaching is to provide feedback on performance.
7.35 Mentoring, but not coaching, can help an individual to make political connec-
tions in the organisation.
7.1 What is meant by the term training content? Describe one method of deter-
mining training content.
7.2 To what extent is it true to say that training and development have a crucial
role in the implementation of HRM strategy?
7.3 Describe the various ways in which training needs can be analysed.
7.4 What general learning principles can a trainer utilise when designing and
running training courses?

You are a training manager for a large organisation which is about to begin an
extensive recruitment campaign. You have decided that a number of your managers
require training in interviewing skills. You have asked a recruitment consultant to
provide you with a short outline of the kind of course she would offer. She has sent
you the following summary of the approach she would take.
The course begins with a two-hour lecture from the trainer on the principles of good
interviewing, in which delegates are given advice on how best to plan for and conduct
a selection interview. This is followed by a series of role play scenarios. In the first of
these, one of the delegates interviews a ‘candidate’ for a particular post. The episode
is filmed on closed circuit television with other delegates and the trainer observing the
interaction. The video recording is replayed in order to review the performance of the
manager and advice given on how performance can be improved. Both positive feedback
on what was done well and negative feedback on what was done badly are provided.
Delegates participate in the feedback process along with the trainer. The whole episode
takes about 45 minutes The process is repeated for each delegate until all have been
exposed to the role play situation. This completes the first day of the course. On day
two of the course, the whole process is repeated so that all trainees have at least two
opportunities to carry out the role play. Once all of the role plays have been completed,
the course ends with a one hour lecture on the evaluation errors interviewers make when
they assess candidates. There is even a pass-fail criteria set for the course and delegates
who have not reached the required standard, as judged by the trainer, are deemed to
have failed the course. Those who fail are not allowed to take any part in selection
interviews in the organisation until they re-take and pass the training course.
Your task is to identify the main learning principles involved in the method she is
proposing and to comment on how valuable these are likely to be in ensuring the
success of the programme.

References
Alliger, G.M. and Janack, E.A. (1989). ‘Kirkpatrick’s levels of training criteria: Thirty
years later’, Personnel Psychology, 42, 331–41.
Annette, J., Duncan, K.D., Stammers, R.B. and Gray, M.J. (1971). ‘Task analysis’, Training
Information Paper No. 6, London: HMSO.
Bandura, A. (1977). Social Learning Theory, Englewood Cliffs, NJ: Prentice Hall.
Campbell, J.P. (1971). ‘Personnel training and development’, Annual Review of Psychology,
Palo Alto, California: Annual Review, 1971.
Campbell, D.T. and Stanley, J.C. (1963). Experimental and Quasi-Experimental Designs for
Research, Chicago: Rand McNally.
Hales, C.P. (1986). ‘What do managers do? A critical review of the evidence’, Journal of
Management Studies, 53, 88–115.
Honey, P. and Mumford, A. (1989). The Manual of Learning Opportunities, Maidenhead:
Peter Honey.
Industrial Training Research Unit (ITRU) (1976). Choose an Effective Style: A Self-
instructional Approach to the Teaching of Skills, Cambridge: ITRU Publications.
Kirkpatrick, D.L. (1967). ‘Evaluation of training’, Training and Development Handbook, eds.
Craig, R.L. and Bittel, L.R., New York: McGraw-Hill.
Mintzberg, H. (1973). The Nature of Managerial Work, London: Harper & Row.
Revans, R.N. (1972). ‘Action learning – a management learning programme’, Personnel
Review, 1, 36–45.
Stewart, R. (1976). Contrasts in Management, Maidenhead: McGraw-Hill.

Module 8
Careers and Career Management
Contents
8.1 The Concept of Career Management 8/2
8.2 Individual Perspectives 8/2
8.2.1 Career Choices and Decisions 8/2
8.2.2 Career Stages 8/5
8.2.3 Work Role Transitions 8/6
8.2.4 Career Expectations and the Psychological Contract 8/8
8.3 Organisational Perspectives 8/9
8.3.1 The Organisation’s Responsibility for Career Management 8/9
8.3.2 Career Management Methods 8/10
8.3.3 New Forms of Work Organisation and the Psychological Contract 8/14
8.3.4 An Alternative Approach to the Psychological Contract 8/16
8.3.5 Career Management in Perspective 8/17
8.4 Gender and Careers 8/18
8.4.1 Gender, Careers and Organisational Effectiveness 8/18
8.4.2 The Career Choice Process 8/19
8.4.3 Career Opportunities 8/19
8.4.4 Are there Performance-related Differences between the Sexes? 8/21
8.5 Summary 8/22
Learning Objectives
• distinguish between individual and organisational perspectives on careers.
• describe Holland’s theory of career choice.
• describe the concept of career anchors.
• understand what is meant by career stages.
• explain the theory of work role transitions.
• explain what is meant by the psychological contract.
• describe techniques which can be used to help individuals to manage their
careers.
• compare the career choices and opportunities of men and women.
• understand what is meant by the glass ceiling effect and its possible causes.

Module 8 / Careers and Career Management
8.1 The Concept of Career Management

One of the objectives of employee development discussed in the previous mod-
ule was to prepare individuals for future roles in the organisation. The possibility
of using development to make individuals more employable elsewhere was also
touched upon. Both of these activities can obviously contribute to the broader
career development of the individual and this illustrates the fact that employee
development and career management are overlapping activities. Of course the
time perspective of careers and career management is considerably longer than
that implied by employee development, spanning as it does the whole course of a
person’s life. Also, the balance of individual versus organisational responsibility
is different when career, rather than development, issues are being considered.
The idea of individuals taking some responsibility for their own development
was discussed in the previous module in the context of self-development pro-
grammes. This can be taken even further when it comes to career management,
and many would see the onus of responsibility in this case as being primarily
on the individual, with the organisation’s role being very much secondary and
supportive. This issue will be discussed in more detail below.
It follows from what has just been said that careers and career management
can be considered from two somewhat different, but inter-linked, standpoints.
These are the perspectives of the individual and those of the organisation. A
number of important aspects of careers can be identified from the individual
perspective. These include the process of career choice, the different career stages
a person goes through in his or her working life, what the individual expects
from the organisation, and what he or she is prepared to offer in return. From
an organisational point of view, the organisation is equally entitled to ask what
it can reasonably expect from the employee. The organisation should also give
due consideration to what it is able to offer in return. In addition, an important
concern at the organisational level is how best to assist individuals in the whole
process of managing their careers.
8.2 Individual Perspectives

In this section we will first consider the process of career choice. We will then
go on to analyse the various stages and transitions a person goes through in the
course of his or her working life once that choice has been made. The question
of career expectations will also be dealt with, especially in relation to what has
become known as the psychological contract between the individual and the
organisation.
8.2.1 Career Choices and Decisions
Holland’s Theory of Career Choice

One of the most well known theories of career choice is the one developed by
Holland (1992). This is basically a matching theory in which different occupa-
tions are believed to be congruent with particular personality types. A major
postulate of the theory is that career satisfaction and career success will be a

function of the extent to which the individual’s personality type and occupation
of choice are well matched.
Holland proposed that there are six personality types which are particularly
relevant to occupational choice. Also, he suggested that work environments and
therefore occupations can be classified according to the six types. The personality
types tend to reflect both what a person will enjoy and also what he or she will
be good at. The personality types are:
1 Realistic. Those with this personality type enjoy outdoor activities involving
physical strength and exertion. Occupations requiring a large element of
outdoor physical work would be congruent with this personality type.
2 Investigative. Individuals who lean towards this category enjoy working
with abstract concepts and tasks requiring logical analysis. An occupation
which would fit well here would be that of physical scientist.
3 Artistic. This describes people who are imaginative and are good at express-
ing feelings and emotions. Matching occupations are found in vocations
involving the arts.
4 Social. These types tend to exhibit warmth in relationships and enjoy
helping others. The caring professions, such as nursing, would be congruent
with this type.
5 Enterprising. These types also enjoy working with people, but they prefer
a controlling rather than a helping role. They can be contrasted with inves-
tigative types, in the sense that they are doers, rather than thinkers. Many
managerial roles in organisations would match this type.
6 Conventional. Individuals described by this type are rules and procedures
oriented. They are organised, rather than creative. Occupations with a high
administrative component would be congruent here.
According to Holland’s theory, people are not described in terms of one single
type, but rather they are categorised by the types that they most resemble.
Holland proposes that people can best be described in terms of the three types
which they resemble most and all three are relevant to career choice. Selecting
an occupation which is congruent with these will, according to the theory, tend
to result in a satisfying and successful career for the person. As far as this last
point is concerned, the research evidence indicates that there is only a weak
relationship between congruence on the one hand and satisfaction and success
on the other (Tranberg et al., 1993). Nevertheless, despite the limited support for
this prediction, the evidence suggests that other aspects of the theory seem, on
the whole, to be reasonably well founded.
Schein’s Theory of Career Anchors

The existence of underlying personality types which are relevant to career
choices, such as those identified by Holland, does not preclude the influence of
other factors on career attitudes and decisions. According to Schein, one such
important factor is the effect of work experience on the development of what he
calls career anchors. A career anchor is a central aspect of a person’s self-concept
and consists of his or her self-perceived abilities, motives, attitudes, and values.

According to Schein’s theory, when individuals make occupational choices, they

do so in accordance with their dominant career anchor.
Schein (1993) described eight career anchors as follows.
1 Technical/functional competence. The self-image of individuals with this
career anchor is tied to the technical content of their work and their beliefs
about their competence to carry it out. For this type of individual, the
ideal job is one which fits their specific functional area of expertise. An
example would be the professional scientist who wishes to build a career
as a technical specialist.
2 Managerial competence. Those who have this anchor are primarily con-
cerned with competence in managing other people. These individuals are
not fundamentally interested in technical work but see such jobs as a means
to the end of obtaining a managerial post.
3 Security. In this case, what is valued is stability, predictability, and continued
job employment. This is more important than the content of the work itself.
4 Creativity. The key motivation for those with this career anchor is the need
to produce something new, which is completely their own. This could be a
new product or service, or even a new enterprise.
5 Autonomy. Individuals with this career anchor want to control their own
lives and they do not react well to the rules and regulations that typify life
in many large organisations.
6 Pure challenge. The main need here is to win against strong competition
or to succeed when the odds are stacked against you.
7 Dedication. In this case, the congruence between the person’s social, polit-
ical, or other values, on the one hand, and the organisation’s values on the
other, is of paramount importance.
8 Lifestyle integration. The key driving force in this case is to ensure that
there is an equilibrium between work and non-work activities, so that a
balanced lifestyle is maintained.
Schein’s theory has a number of implications both for individuals and for
organisations. In particular, knowledge of a person’s career anchors can be a
useful aid to career decision making. For example, suppose a technical person
is offered a managerial position within an organisation. Would this be likely
to fulfil her needs and could she offer what the organisation wants? This
would depend to some degree on whether the individual had a technical or a
managerial career anchor. To take another example, the decision to give up a
secure job and set up one’s own business would make more sense for someone
with a creativity anchor than it would for a person whose leanings were towards
security. To take an illustration from an organisational perspective, suppose, as
part of a drive to increase flexibility, it is decided to offer some managers
the opportunity to resign from full-time employment and to become occasional
consultants for the organisation. It is likely that, other things being equal, those
managers whose career anchor revolved around life style integration would be
likely to respond positively to such an offer.

8.2.2 Career Stages

It is widely acknowledged that individuals go through a series of stages in their
careers, from entry into occupational life through to eventual retirement. Mod-
els of career stages have implications for both individuals and organisations. In
particular, it is likely that individuals will have different needs and therefore dif-
ferent expectations of what the organisation should provide for them, depending
on their career stage. Also, what they are prepared to offer the organisation may
be different from one stage to another.
Super’s Career Stages

Some years ago, Super (1957) proposed that there were four major career stages.
These were:
1 Exploration. This occurs roughly between the ages of 15 and 24 and is the
period where initial occupational choices are made.
2 Establishment. This is the period when the person makes his mark on the
organisation and generally consolidates his value to it. The age range here
is around 25–44.
3 Maintenance. The age range here is from 45–64. The major pre-occupation
here is to hold onto one’s established position, perhaps in the face of
thrusting competition from younger, up and coming, managers.
4 Disengagement. Involvement with work gradually becomes reduced and
the individual becomes less of a central player and more of an observer.
The suggested age here is 65 plus.
While the sequence of events proposed by Super seems quite plausible, the
proposed age ranges are probably in need of modification in the changed circum-
stances of the modern world. In particular, the age at which the disengagement
stage begins should perhaps be revised downward in the light of the current
trend for careers to become shorter. There are a number of reasons for this
trend. It is partly because of a fashion in some organisations to favour younger
employees at the expense of older ones in the (probably mistaken) belief that
the former have more to offer. This has led to a situation where older employ-
ees are frequently targeted when there is a need for downsizing. From the
employee’s perspective, increasing affluence, at least in the West, has made it
possible for many people to opt out of full-time employment in middle age.
Finally, the advent of flexible work practices, where former full-time employees
can be re-engaged on a part-time basis as and when needed, has reinforced these
trends.
Greenhaus and Callanan’s Career Stages

Greenhaus and Callanan (1993) proposed a five stage model of careers which
has some parallels with Super’s model.
1 Occupational choice. This is the stage of preparation for work and it lasts
until the person is about 25 years old. Holland’s theory of career choice is
clearly applicable to this career stage.

2 Organisational entry. This is the period where the individual has to make
important decisions both about occupations (what kind of work do I want
to do?) and organisations (what kind of organisation do I want to join?).
Individuals can be faced with difficult choices at this time since, because
of their lack of experience of the world of work and of organisations, they
often have insufficient information upon which to make informed decisions.
This is not helped by the tendency of many organisations to focus too
much on selling themselves to potential employees and too little on giving
applicants a realistic picture of what they expect and what they have to
offer.
3 Early career. This occurs between 25 and 40 years. During this career stage,
the person needs to become established by learning how the organisation
ticks. It is a time of organisational socialisation where the individual learns
about how things work, about the organisation’s culture and expectations of
employees, and so on. This is a period of achievement, where the individual
not only develops various organisational competencies, but he or she may
well also be given increasing responsibility and power in the organisation.
It is a stage where organisational help with career management can be
particularly important.
4 Mid-career. This stage spans the period between the ages of 40 and 55
years. While for some this is a time of continued advancement, for others
their career will plateau, with little prospect of further promotion. This may
well lead to decreased motivation and reduced job satisfaction. Given that
career plateaus are inevitable for many, at least within organisations with
pyramidal structures, they represent a major challenge for career manage-
ment.
5 Late career. This period begins around the age of 50. Clearly, career plateau
effects will be experienced by even more individuals at this stage, and
maintaining motivation and performance is likely to be an even greater
challenge for organisations. This situation can be exacerbated if the kinds
of stereotypical views mentioned above about the relationship between age
and performance are widely held within the organisation. In fact, many
would argue that any decline in performance at this career stage is more
likely to be attributable to low motivation as a result of career plateau effects
than to any inherent deficits due to ageing per se.
8.2.3 Work Role Transitions

Each of the career stages described above encompasses long time periods extend-
ing over several years. Clearly, individuals are likely to experience important
career events within these stages. One such event for many is the experience
of changing work roles. This can come about when a person moves from one
company to another or to a completely new job with the same organisation. It
will be apparent to the reader that many of the developments in HRM practices
described in earlier modules of this text are likely to result in an increased fre-
quency of both job and organisation moves compared with what has occurred

in the past. For example, the globalisation of operations can lead to a require-
ment for international job re-locations. The increased pressure for change and
innovation generally is likely to lead to the creation of new work roles. In
addition, downsizing and de-layering are likely to lead to an increased tendency
for individuals to find themselves having to make inter-organisational moves.
The introduction of innovative HRM practices also means that major work role
changes can occur even though the person ostensibly remains in the same job
and with the same organisation. Thus, the introduction of functional flexibility
requires individuals to take on expanded work roles. To take another example,
empowerment brings with it new responsibilities to which the person has to
adjust. We have also seen that the introduction of self-managed teams results in
major changes in work roles and responsibilities.
There are a number of potentially adverse consequences of these transitional
experiences for the individual, many of which have knock on effects in the
organisation. These can include increased stress levels, reduced job satisfaction,
and lowered performance. Nicholson and West (1988) have put forward a theory
of work role transitions to describe the processes of adjustment which take
place when a person has to change job or work roles. Their theory states that
the individual goes through a four stage adaptation process when faced with a
major work role transition. Each stage presents rather different problems for the
individual. It follows from this that the potential strategies which individuals
and organisations can adopt to cope with these problems are also rather different
at each stage.
1 Preparation. This refers to the period preceding the job or role change.
Common problems at this stage include unrealistic expectations and anxiety
arising out of uncertainty about the nature and demands of the new role. A
number of strategies can be adopted by both individuals and organisations
to deal with these reactions. One thing the individual can do is carry
out a systematic self-appraisal against job requirements. This might help to
alleviate worries about coping with the new job demands. An offer from the
organisation of advance meetings and contacts with new colleagues can also
be beneficial. One of the most useful ways to reduce unrealistic expectations
is by means of a realistic job preview (RJP). The idea of an RJP is to provide
the person with accurate information about job duties and demands in the
new role. It is especially useful in this context if information is provided
about sources of satisfaction and dissatisfaction in the job. There are various
ways of providing an RJP. These include incorporating it as part of the job
interviews, giving specially arranged briefing sessions, or including it in the
advance meetings mentioned above.
2 Encounter. This takes place during the initial weeks and months in the new
role. If the preparatory stage is not well handled and the individual enters
the new role with unrealistic expectations, then this can be a period of
regret over the decision that has been taken. The person can also experience
feelings of uncertainty and ambiguity at this time as he seeks information
about what is expected of him. In this context, it is not just duties and
responsibilities which matter, it is equally important to be fully conversant
with organisational politics and culture. An active information seeking

strategy on the part of the individual is likely to aid adaptation at this

stage, as is social support from colleagues and supervisors.
3 Adjustment. During the adjustment stage the individual develops his or
her own method of doing the job. This can happen in two ways. First, it
can come about through personal development, in which case the indi-
vidual changes her attitudes and behaviour to fit in with the demands of
the role. Adjustment can also come about through role development. Here
the individual successfully modifies or redefines the role to bring it in line
with her preferred way of working. A person adopting the first approach
essentially accepts that ‘this is the way things are done around here’ and
adjusts accordingly. Adopting the second approach is more akin to saying
‘there must be a better way to do this’ and making changes accordingly.
The second approach is clearly more innovative and, to the extent that
organisations value innovation, this may be the approach which is encour-
aged. Of course, personal and role development are not mutually exclusive
and elements of both will often be found in practice. The extent to which
one or other predominates will depend on a variety of factors, such as
the nature of the role itself, and the motivational orientation of the person.
For example, Nicholson and West suggest that people whose motivational
make-up includes a strong desire for control over the environment will tend
to favour role development.
4 Stabilisation. By the time the person reaches this point, there is thorough
familiarity with all aspects of the role. The individual may have been
carrying it out for some considerable time and this leads to the danger of
boredom and demotivation. The creation of special projects and assignments
is one way the organisation can take action to counteract these effects. More
radically, it may eventually be decided that the time has come to move the
person to yet another job role, whereupon the transition cycle will begin
again.
8.2.4 Career Expectations and the Psychological Contract

Several times so far in our analysis of careers from the individual’s perspective,
the importance of employee expectations has been touched upon. For example,
when people make occupational choices they presumably do so in anticipation
of certain needs being satisfied. What a person hopes to obtain from carrying out
a particular work role will also, presumably, depend on their dominant career
anchor. Finally, as we have just seen, many of the problems of adjustment to
work role transitions can be laid at the door of unrealistic, and thus unfulfilled,
expectations.
At a more general level, the whole notion of having a career within a particular
organisation is associated with employee expectations of what the employer will
provide for them over the span of their career in return for their services. Of
course, the organisation too is entitled to have expectations of the individual
in return for what it provides. A number of writers have suggested that these
expectations of what is wanted and what should be offered form part of an
unwritten or psychological contract between employee and employer.

From the individual’s point of view, security of employment would presum-

ably be high on the list of expectations in terms of the psychological contract.
Otherwise how could a career with a single organisation be possible? At least
as far as managerial and professional employees are concerned, one assumes
that the organisation would also be expected to provide the opportunity for
progression up some kind of hierarchical ladder. These anticipated advance-
ment opportunities would also presumably be time related, in the sense that
they would be seen as being associated with age and career stage. It should be
stressed here that we are talking about opportunities, rather than rights, since
there is no suggestion that employees would expect everyone to progress at the
same rate or to the same level.
If relative job security and opportunities for progression are the essence of
what the individual expects the organisation to provide to meet his needs, what
might the individual expect to give the organisation in return? First, they might
offer loyalty to the organisation, conformity to its rules and requirements, and
general good citizenship behaviour. They may even offer the kind of commit-
ment which, as we have seen in earlier modules, many HRM theories regard as
critical if human resources are to be optimally utilised. By devoting many years
of their working life to the organisation, individuals build up a wide range of
organisation-specific skills and a wealth of organisation-specific experience. This
is yet something else the individual has to offer the organisation in this context.
This brief summary of the psychological contract from the individual’s per-
spective has offered some suggestions as to what the individual needs and
expects and what he or she can provide in return. However, the crucial question
is: are modern organisations willing and able to provide what is expected, and
do they need and desire what is being offered? We shall return to this issue
once we have reviewed careers and career management from the organisation’s
perspective.
8.3 Organisational Perspectives
8.3.1 The Organisation’s Responsibility for Career Management

Although in many ways career management is ultimately the responsibility of
the individual, it is also in the organisation’s best interests to take a facilitative
role in the management of careers. Pay-offs to the organisation for assisting in
the career management process include the following.
• Gaining employee commitment is frequently seen as a prerequisite for the
successful implementation of many HRM practices. One way to nurture
commitment is by satisfying employees’ needs. Since building a rewarding
career is clearly an important need for many employees, anything the
organisation can do to facilitate this process should have beneficial effects.
• Quite apart from motivating existing employees, organisations need to
attract high calibre recruits and those organisations which are seen to
provide career, as well as job, opportunities are likely to be particularly
attractive to potential applicants.

• From a succession planning perspective, systems are needed to identify

and nurture potential within the organisation. While there are some cir-
cumstances where vacancies are best filled from outside the organisation,
many are best dealt with by promotion from within. Quite apart from the
motivational effects of promoting internally, some senior positions may also
require such a wide range of organisational competencies, acquired over
many years and in many positions, that promotion from within is the only
realistic option. The long-term perspective required here takes us beyond
the medium-term concerns of performance management and management
development and into the realm of career management.
8.3.2 Career Management Methods

The twin objectives of career management are to help individuals to fulfil their
career potential to their satisfaction and to help ensure that the organisation
has appropriately qualified people to step into senior roles when necessary.
Some techniques of career management attempt to address both of these aims,
while others are more focused on one rather than the other. Because in many
ways career management overlaps with performance management and employee
development, it should be no surprise to the reader that the techniques used in
these areas also overlap.
Development Centres
Development centres have already been mentioned in two modules in this text.
Their use, alongside appraisal systems, for identifying those with potential for
promotion was discussed in Module 6. In Module 7, we saw how knowledge
derived from development centres could feed into the employee development
process. Development centres can also be used as part of the long-term career
planning process. However, as described in Modules 6 and 7, the main function
of development centres was to evaluate individuals’ strengths and weaknesses
for purposes of helping the organisation fulfil its future staffing needs. This
strong emphasis on evaluating the person for the organisation’s benefit does
not fit too well with the notion of career management as described above.
Career management is in many ways more about the individual’s, rather than
the organisation’s, needs. Indeed this is one of the main reasons why career
management is seen as ultimately the individual’s responsibility.
What kinds of difficulties might be encountered when development centres
focusing purely on evaluation are used as part of the career management pro-
cess? In the first place, such an emphasis is likely to lead participants to view the
whole exercise as being carried out primarily for the organisation’s benefit, rather
than their own. This in turn is likely to influence people’s whole attitude to the
experience. Because development centres are expensive and time-consuming to
run, the organisation may only be able or willing to put a proportion of man-
agers through the centre. This not only raises the tricky problem of how best
to select individuals to attend; it also risks demotivating those who are not
selected for the centre. Demotivation can also occur for those who are invited,
but who do not perform particularly well at the centre, and who subsequently

feel that their promotion opportunities have been curtailed. Someone in this
position could easily be forgiven for feeling aggrieved that all of his efforts and
achievements in the job over a number of years apparently count for less than
his performance on a few exercises conducted over two or three days.
One way to reduce some of these problems would be to put more emphasis
on meeting the individual’s needs, at least in those instances where development
centres were being used as part of a career management programme. A step in
this direction would be to have more or less open access to the centre, rather
than restricting it to a small number of people identified as having potential.
The centre could include sessions in which individuals had the opportunity to
think about, and perhaps reassess, their own career expectations and aspirations.
There would still be an evaluation element in the process, but this would be as
much for the benefit of the individual as for the organisation. Thus, the results
of tests and exercises could be used to provide an indication to individuals
as to how their abilities match up to various possible career options. At the
end of the development centre, all of the information gathered might then be
reviewed with a senior manager. The latter would be expected to take very
much a counselling oriented approach designed to help individuals both to firm
up their own career plans and objectives and to take steps to implement them.
It should by now be clear to the reader that there are many different ways
in which a development centre can be designed and run, depending on its
intended purpose. In particular, the extent to which it is intended to meet the
needs of the organisation, versus those of the individual, will be an important
consideration here. Often a delicate balance will have to be struck between these
two frequently competing requirements.
Fast Track Schemes

Fast track schemes attempt to identify individuals with particularly high poten-
tial as early as possible so that they can be placed on an accelerated career route.
They are sometimes known as organisational ‘high flyers’. Their fast track status
usually ensures that they are given enhanced training and development in order
to facilitate their rapid advancement to positions of responsibility. The rationale
behind such schemes is quite straightforward. Assuming that those identified
really do have unusual potential, the enhanced development opportunities they
are given further increases their capabilities. These two factors combined lead
to rapid career development, which not only means that the organisation is
harnessing the high flyers’ full potential for its benefit, but it also results in high
rewards and presumably high satisfaction for the individuals themselves.
Two important issues arise here. First, to what extent is it possible to identify
such individuals accurately early in their career? Second, do they actually fulfil
their promise and, if so, is it for the right reasons? One possible way to identify
who should be put on the fast track is to put existing employees through
development centres. Alternatively, one could try to identify them at the entry
point into the organisation, as part of the selection process. In this case, the
allocation to a fast track would take place at the outset of a person’s career. The
first of these two approaches seems more likely to succeed, if only because there
is also a track record of performance in the organisation to take into account,

in addition to the evidence from the development centre. Of course, there is

no such luxury when fast track individuals are being sought at the selection
stage. Given the complexity of the selection process and its propensity for error,
identification of candidates for a fast track route at this stage seems likely to be
somewhat problematic.
There is not a great deal of hard evidence that those on the fast track really do
have accelerated careers, although there are enough examples of this happening
to suggest that it is at least true in some cases. But does this advancement occur
in the way the rationale for such schemes suggests? Remember, the theory is
that the career advancement of people who are already specially gifted would be
further accelerated by providing them with enhanced training and development.
However, if those identified as fast track really were highly able, perhaps they
would have advanced just as far in the organisation even without any special
treatment. Conversely, those placed on the fast track could have been wrongly
identified as being particularly gifted, and still have made rapid progression.
This could happen in two ways. First, the enhanced training and development
they received increases their performance capability so much that, irrespective
of their original potential, they are able to progress rapidly up the hierarchy.
Alternatively, perhaps the mere act of publicly labelling someone as ‘fast track’
becomes a self-fulfilling prophesy. This could work as follows. Let us suppose
that the line managers of a group of fast track individuals believe that the
original assessment is correct and that they do indeed have unusually high
potential. Because of this, they are viewed in more favourable terms than they
otherwise might have been. For example, they receive more favourable appraisal
than their performance merits (‘He must be good – he is a high flyer!’). In this
way the initial label is reinforced by the appraisal system and this in turn then
feeds into the promotion system. On the same basis, fast track individuals could
be singled out for demanding job roles (‘She is fast track therefore she must be
able to handle this assignment’). Being given demanding job roles enriches the
person’s portfolio of experience, which in turn enhances promotion prospects,
and so once again we have the potential for a self-fulfilling prophesy.
What can we conclude about fast track schemes? While there is undoubtedly
a place for fast track schemes in career management, the identification of who
should be placed on such schemes should be carried out with considerable
care, and it is doubtful whether this can really be done satisfactorily at the
recruitment stage. Selection techniques are just not that foolproof. Once fast
track individuals have been identified, great care must be taken to avoid the
self-fulfilling prophesy trap. Finally, the consequences of such schemes for the
motivation of those not on the fast track must be considered, either by offering all
a fair opportunity to get ‘on the bus’ – perhaps by means of open development
centres – or by ensuring that promotion opportunities remain for those not in
the scheme.
Coaching and Mentoring

The role of coaching and mentoring in relation to short-term management devel-
opment has already been mentioned in Module 7. Both of these can also be
incorporated into career management programmes. There are several ways in

which an effective coach or mentor can benefit the individual from a career
point of view. These include generally promoting the person’s interests, increas-
ing their visibility with important people, alerting them to career opportunities
within the organisation, and recommending them for promotion.
Career Counselling
If individuals are to plan and manage their careers effectively, it is important
that they have an accurate and comprehensive picture of their own strengths,
weaknesses, capabilities, and potential. A number of the organisational practices
we have already discussed, such as performance appraisal and development
centres, provide this feedback. However, as we saw above in our discussion
of development centres, in many cases such feedback tends to be focused
on the organisation’s needs, with those of the individual often being seen as
being of secondary importance. Career counselling reverses this tendency with
the emphasis being placed firmly, indeed in some cases exclusively, on the
individual’s requirements. In some instances the counselling role is undertaken
by the human resources department, possibly, as we saw above, as part of a
development centre. However, in order to ensure that the counselling is entirely
in the individual’s interest, some organisations have preferred to buy in outside
expertise to carry out this role. This is particularly likely to be the case where
the counselling is of the out-placement variety. The objective of out-placement
counselling, which is frequently initiated as part of a redundancy programme,
is to assist the person to develop his career outside of the organisation.
Career Development Workshops

This is yet another method aimed at increasing individuals’ self-awareness of the
career options and opportunities that might be available to them. Once again,
the process is very much focused on individual, rather than organisational,
needs. For this reason, the workshops are often conducted off site with the
confidentiality of the whole process being emphasised. Typically, a series of
tests and exercises will be included in the workshops and the group should
be small enough (around 4 – 10 people) to allow for extensive discussion and
feedback among group members over a number of sessions.
A wide range of career options can be explored in these workshops, not all
of which need be limited to the person’s existing organisation. This freedom
to consider career alternatives outside the organisation is, of course, consistent
with the individual focus of this approach to career management.
Career Workbooks
These can be used either as an alternative to the workshop approach, or they
can be used to complement it. In any case, the aim is very similar insofar as
both are designed to increase the individual’s self-awareness of job and career
opportunities. Workbooks have the advantage that people can work through the
questions and exercises contained in them at their own speed and in their own
time. What they lack is the detailed feedback from others in a similar situation
which characterises the workshop approach.

Educational Opportunities
Organisations can support the development of employees’ careers by encour-
aging them to embark on continuing education programmes of various types.
Of particular interest here would be programmes which enhance promotion
prospects or which make it easier for a person to change career direction. Some
programmes will be closely related to the person’s current job, such as for
example, an MSc course designed to up-date an engineer’s technical knowledge.
Other programmes are more developmental, in the sense that they widen the
individual’s career horizons. An example here might be an MBA degree under-
taken by a technical specialist who wants to develop into a manager. There may
even be no immediate or obvious connection between the programme and the
workplace, such as when a person embarks on a course to improve his language
skills purely out of personal interest.
Organisational support for this kind of activity can take a variety of forms
including financial assistance, time off to attend college or university, or even the
provision of an in-company learning resource centre. The latter might include a
variety of self-learning materials such as interactive computer learning packages,
distance learning materials, and so on.
8.3.3 New Forms of Work Organisation and the Psychological Contract

In our earlier discussion of the psychological contract, it was suggested that
individuals embarking on a career have traditionally expected organisations to
provide both job security and opportunities for advancement. In return, the
individual would offer loyalty, perhaps commitment, and a wealth of organisa-
tion specific expertise. The crucial issue now becomes whether or not modern
organisations can actually meet these expectations and whether they want what
is offered in return.
In traditionally run hierarchical organisations there was no great difficulty in
meeting these expectations with proper career management. Also, such organi-
sations presumably valued what the individual was prepared to offer in return.
However, there are good reasons for thinking that the situation is changing radi-
cally as organisations adopt new HRM philosophies and practices. Indeed, some
have argued that we may be moving to a situation where careers as previously
understood will no longer exist. Let us consider some of the major implications
of recent approaches to work organisation for the career concept, as in the notion
of job security and career advancement opportunities.
The strong emphasis on the importance of bottom line profits and the need
to squeeze as much as possible out of the human resource embodied in some
HRM theories, does not fit well with the concept of organisations as having the
long-term interests of employees as a high priority.
The emphasis on the constant need to adapt to the external environment carries
with it the implication that labour force requirements will fluctuate according to
circumstances, with a resulting loss of job security.
Adapting to change by expanding and contracting the labour force as condi-
tions require it is seen as one of the key advantages of flexibility and outsourcing.

In particular, flexibility results in minimal job security for all those in peripheral
work roles.
As we have seen, a number of organisations in the 1980s reacted to intensified
competition by downsizing. Making large numbers of people redundant in this
way not only ended job security for those who lost their jobs, but it presumably
sent a strong signal to those remaining about their likely future. No doubt many
of those that remained in employment were left wondering when it might be
their turn.
The trend in some organisations towards teams being assembled on a tempo-
rary basis to work on a series of short-term projects is also likely to reinforce
perceptions of employment as short term and unstable, rather than long term
and secure.
By making organisations flatter and reducing the number of hierarchical lev-
els, the career ladder is automatically truncated with fewer opportunities for
advancement.
If the flexible firm contains only a small number of core jobs, this likewise
limits the career openings to precious few individuals.
Not only is the imperative for constant change and innovation likely to reduce
feelings of job security, it also has the potential to undermine policies of promo-
tion from within. This is because one obvious way to encourage innovation is
to recruit individuals for senior positions from outside the company, in order to
inject fresh ideas and thinking into the organisation.
The irony of all of this is the fact that, while on the one hand organisations
may be finding it increasingly difficult to deliver their side of the bargain, they
may now demand greater commitment from the employee. Thus, we have the
paradoxical situation where a number of HRM approaches emphasise the need
to engender high levels of commitment in employees, while at the same time
advocating forms of work organisation which are likely to lead to the lack of it!
Herriot (1992) has suggested that this leaves organisations with four very
difficult balancing acts to contend with when managing individuals and their
careers. These are:
1 Adaptability versus support. Individuals are supposed to be highly adapt-

able in response to change. Herriot argues that, if people are to do this
successfully, the organisation must provide adequate systems of support for
them.
2 Loyalty versus respect for individuality. Organisations value loyalty, at
least in core staff. But people are individuals, with different needs and
preferences, and these must be properly taken into account. For exam-
ple, people’s personal preferences should be given due consideration with
respect to the jobs they are asked to do.
3 Knowledge and skills versus recognition and tolerance. Organisations
need to utilise fully the individual’s knowledge and skills if they are to
maintain competitive advantage. However, if they expect people to deliver
these, these skills must be properly rewarded. Also, at least as far as
professional employees such as scientists and engineers are concerned, the
organisation needs to accept that these individuals will also have values

and priorities associated with their chosen profession and these may well
be different from those of the organisation.
4 Feedback versus trust and autonomy. The imperative to deliver the best
possible service to the customer means that, more than ever, organisations
are dependent on employees providing them with detailed feedback about
customers and the state of the marketplace. In return, the organisation
needs not only to show trust in the employee’s judgement, but should also
be willing to delegate more responsibility to employees when dealing with
customers.
8.3.4 An Alternative Approach to the Psychological Contract

More recently, Herriot (1995) has suggested that employees feel resentful when
they perceive that organisations do not fulfil their part of the psychological
contract, i.e. they fail to offer job security and a career structure, even though
they still expect employees to deliver their side of the bargain in terms of loyalty
and commitment. In particular, employees feel a strong sense of unfairness in
these circumstances, since they are asked to give more than they get in return.
They also feel a sense of powerlessness because they have had no say in these
new work arrangements. Herriot proposes that people have three options when
faced with these circumstances.
1 Get safe. If you do not feel secure in the job, one way to adjust to the
situation is to keep your head down, do everything by the book, and avoid
risks at all costs. In other words, this option effectively kills off the kinds
of innovation and creativity which many organisations value so much.
2 Get out. Another option is to get out at the first opportunity. At first glance,
this might not seem to be such a bad thing for some organisations if they
have a need to slim down the workforce. The trouble is that those who go
are likely to be the ones who have most to offer another employer, i.e. the
ones the organisation least wants to lose.
3 Get even. A natural human response to being treated unfairly is to try to get
even with the perpetrator of the unfairness. People working in organisations
are no different from anyone else in this respect. The easiest way to get
even and restore a sense of fairness in these circumstances is simply to
provide less to the employer, so that balance is restored. This can be done
by reducing loyalty, effort, commitment, and anything else the organisation
wants.
Given the dysfunctional nature of these responses for organisations, not to
mention for the individual, it is clearly important to find some alternative
approach to career management which will reduce or eliminate the feelings
of inequity and powerlessness which lie behind them. Herriot proposes that
a new psychological contract needs to be struck. Unlike in the past, where
the contract was implied rather than stated, the new form of contract should
be made explicit and should be openly negotiated between both parties. This
would require, on the one hand, the organisation being up-front about what it
wants and what it is prepared to offer. On the other hand, the employee needs

to specify what she is prepared to accept and is willing to offer in return. By

way of an example of what this new kind of contract might look like, Herriot
suggests that, because of the need for flexibility and innovation, the organisation
of the future may want individuals to engage in a continuous learning process.
In return, since this enables individuals to enhance their job-relevant knowledge
and capabilities, the organisation can offer increased employability elsewhere in
return. Other arrangements which might be offered might be part-time deals
allowing the individual to pursue other non-work interests, and contracting
deals permitting the person to pick and choose which projects he wants to work
on. The employee has to decide whether what is offered is acceptable in the
light of what is asked in return. If not, the employee may make a counter offer.
Whatever the deal on offer, the two key elements are that it is up-front and that
it is negotiated
According to Herriot, this process of negotiating or contracting is likely to be
a complex and ongoing one and will need considerable skills on the part of both
parties. He suggests that the process should take place in four stages:
1 Exchange of information. This involves both parties articulating to each

other what is wanted and what is on offer. This allows both of them to see
if there is enough of a match for a coming together to take place.
2 Negotiation. At this stage both sides engage in bargaining in an effort to
get the best possible deal they can.
3 Monitoring the deal. This is a process of review, the main purpose of
which is to make sure that both parties deliver what is promised. The
review would also take into account any changed circumstances which
might warrant a renegotiation of the deal. For example, an organisation
might want to negotiate increased functional flexibility because it hopes
to introduce a team-based approach. From the other side, an individual
might, perhaps because of changed family circumstances, wish to go on to
a part-time contract in place of a full-time one.
4 Renegotiation or exit. The result of the monitoring will determine whether
or not renegotiation will need to take place. If the gulf between the two
parties is too large, negotiations may be broken off leading to what he calls
exit. Herriot envisages a series of such renegotiations occurring during a
person’s career with the organisation.
Given the complexity of this negotiation process, not only would significant
organisational initiatives need to be put in place for it to work but, in addition,
individuals would need considerable skills to be able to carry out their part of
the process to good effect. Herriot regards helping both sides to learn how to
carry out this process effectively as one of the key tasks of HR professionals of
the future.
8.3.5 Career Management in Perspective

After reading the preceding section, the reader could be forgiven for wondering
whether, in a few years time, careers as such will not exist and terms such
as promotion and career advancement will cease to be meaningful. However,

while all things are possible including such a scenario, it is by no means certain
that this will be the case. In the first place, not all large organisations have
opted for the strategic HRM-inspired organisational arrangements and work
practices we have just been discussing. Many companies still operate along
traditional hierarchical lines and they may well continue to do so. After all,
we do not know for certain whether traditional working arrangements are
necessarily always inferior to, or less efficient than, some of the approaches
advocated by HRM theorists. Research on innovative work methods and new
forms of structural arrangement is in its infancy. Consequently, the verdict is
not yet in on whether they will ultimately turn out to deliver what they promise
and eventually become universally adopted. In any case, as has been pointed
out in earlier modules, even where de-layering, flexibility, team working, and
the like have been introduced, the changes have often been less far-reaching
than the theory advocates. To conclude this section, a wide range of career
scenarios currently exists in different organisations and may well continue to do
so for the foreseeable future. Granted the old idea of a lifelong career in one
organisation may be largely a thing of the past. Despite this, many organisations
still take a long-term view when recruiting, at least for certain valued categories
of employee. They also continue to take responsibility for providing this valued
group with opportunities for career development and advancement.
8.4 Gender and Careers
8.4.1 Gender, Careers and Organisational Effectiveness

There is now a large body of research on the experiences of women at work,
of which the question of women’s careers is only a part. Much of this research
has concluded that women are disadvantaged in the workplace compared with
men. In some societies it is self-evident that this is the case. However, much
of the research pointing to the disadvantaged position of women has actually
focused on Western societies, such as the USA and Europe, where fundamental
cultural or religious barriers to equality of the sexes do not exist.
The issue of the career opportunities available to women compared with
men is a complex, and in some ways emotive, one. Consequently, there is
always a potential danger that personal and political considerations can influence
how the facts are interpreted. Nevertheless, if women are disadvantaged in
terms of career opportunities, this has important implications for organisational
effectiveness, quite apart from the obvious unfairness of such a situation. Let
us suppose that career advancement is influenced by a person’s sex, rather
than being based purely on ability. This goes against the fundamental HRM
requirement to maximise the utilisation of human resources, since this would
dictate that all positions – especially crucially important senior ones – should be
filled by the best people available, irrespective of sex or any other non-relevant
factor.
Before we proceed to a detailed discussion of career issues with respect to
gender, a word of caution is in order in relation to the various career models and

theories outlined above. Most of these were developed on the basis of research
into male employees and we cannot necessarily assume that they will always be
directly applicable to the careers of women.
8.4.2 The Career Choice Process

In most societies, including the West, women’s work has been characterised by
what has been called horizontal segregation. This is another way of saying that
men and women have traditionally worked in different occupations. This might
not matter very much from a career perspective were it not for the fact that,
typically, jobs carried out by women have been less skilled, of lower status, and
less well paid than those of men. Women have also been traditionally over-
represented in part-time work roles. In terms of the flexible firm model, this
would presumably make women over-represented in the peripheral, rather than
the core, workforce.
There is evidence that this situation may be changing as far as some occu-
pations are concerned, at least in Western societies. For example, according to
Gutek (1995) in 1959, thirteen per cent of managers in the USA were women,
whereas by 1992/3 the figure had risen to 42 per cent. The corresponding 1992
figure for Canada was 34 per cent women, while in the UK 23 per cent of
managers were women. However, in Japan in the same year, only seven per
cent of managers were women. Undoubtedly, there are a number of reasons
for this development, many of which relate to changing attitudes and values in
society.
8.4.3 Career Opportunities

This opening up of initial career choices for women can only be welcomed, but
this is not to say that they also enjoy equal career opportunities. There is some
evidence to suggest that this is not the case and that women’s work is also
characterised by vertical segregation. That is to say, women tend to be found
in lower levels of the occupational hierarchy.
This is clearly illustrated with respect to managerial positions. Despite the fact
that, as we have just seen, women are increasingly embarking on managerial
careers, relatively few hold top management positions. Data from the US put
the figure at less than five per cent in high ranking positions. More worrying
still, a recent report suggests that over the last decade the number of women in
senior management positions has increased by less than two per cent. (Gutek,
1995). This apparent barrier to women achieving top management positions has
become popularly known as the glass ceiling. This neatly describes the position
many women find themselves in, where they rise so far up the organisational
hierarchy, before finding themselves impeded from further advancement by an
invisible barrier. They can see through the glass ceiling to where they want to
be, but they just cannot get there.
Although the statistical evidence shows clearly that women are currently
under-represented in senior managerial positions, the statistics alone do not
tell us why this is the case. Nor do they throw any light on whether this

will continue to be the case when the emerging cadre of relatively young
female managers work their way through the system. If these young women
are eventually going to break through the glass ceiling, no doubt they will have
a number of disadvantages to overcome. Ragins and Sundstrom (1989) have
suggested that women in this situation face three levels of disadvantage. These
are:
1 Organisational factors. A number of organisational procedures and poli-
cies can impede the progress of women managers. Ragins and Sundstrom
suggest that these include selection policies which either deliberately or
inadvertently discriminate against women. They also point out that where
women, for whatever reason, are denied the same training and development
opportunities as men, then they will be disadvantaged. How can discrimi-
natory practices of this sort be prevented, or at least minimised? One way
would be to have in place the kind of systems for selection, development,
performance management, and so on, which have been described in previ-
ous modules of this text. It would then be up to the organisation to take
steps to ensure that these are applied in the same way to all managers.
2 Interpersonal factors. In a male dominated environment, the nature of the
social relationships between men and women will mitigate against women
gaining the same quality of experience and support in the workplace as is
available to men. For example, an opposite sex mentoring relationship will
be quite different from, and perhaps less beneficial than, a same sex one.
In a male dominated organisation the latter may not always be available to
women managers. Male managers benefit from membership of the informal,
all male, social networks which are often found in male-dominated organi-
sations. On the surface, such networks do little more than provide a sense
of camaraderie amongst their members. However, on closer scrutiny, they
can provide subtle, but important, benefits for members. In particular, they
can offer the kind of support, contacts with ‘important’ people, and access
to privileged information which so often smooth the process of climbing
up the career ladder. As these authors see it, if you are ineligible to join
the club, you are clearly at a disadvantage as far as career advancement is
concerned.
3 Individual factors. Home-work conflicts can clearly impede a woman’s
career progress if she is in a position where she is expected to shoulder
the major responsibility for looking after the children. This is a particular
problem if she takes a career break to have a family, since she will very
likely come back into the workplace to find herself left behind by her male
counterparts. Responsibility for childrearing and not being the primary
breadwinner can also mean that a woman may not have the necessary
geographical mobility to take advantage of career opportunities when they
do present themselves.
All of this presents a real challenge for HRM managers if they are to ensure
fair and equal opportunities for both sexes. In fact there may be an even more
complex problem if, as has been suggested, there are fundamental differences
between men and women in their attitudes and behaviour at work. We will
consider this in more detail below.

8.4.4 Are there Performance-related Differences between the Sexes?

As we have seen, women as a group are less successful than men, both in
terms of representation in high status occupations, and in terms of advancement
up the organisational hierarchy. The thrust of our argument so far has been
that this is because they are disadvantaged in a variety of ways. However, an
alternative explanation might be that men and women are basically different
and that male qualities are more appropriate for senior roles in organisations.
The three most commonly suggested sex differences in this context relate to
commitment, personality, and management style.
Gender Differences in Commitment

In view of the emphasis many organisations place on commitment, if there are
indeed sex differences in this respect, then this might to some extent ‘explain’
women’s lack of career success. Given the nature of society and its expectations
of women as having the primary responsibility for childrearing, it would be
understandable if some women felt torn between their families and their careers
with the result that their commitment to the latter was less than that of men.
However, although some studies have reported differences in work attitudes
between men and women, careful analysis of these studies indicates that, in
a number of instances, the conclusions are misleading. For example, there is
evidence that commitment increases with seniority, and since there are more
men than women in senior positions, this could easily account for the observed
differences. In fact, some researchers have concluded that most of the gender
differences in commitment reported in these studies have indeed been due to
this kind of confounding factor (Bruning and Snyder, 1983; Lekfkavitz, 1994). To
reinforce this point of view, some recent investigations have produced evidence
that women in managerial roles are often just as committed as men (Gutek,
1995).
Personality Differences between the Sexes

Common observation indicates that there are personality differences between
men and women. For example, men are generally regarded as more aggressive,
competitive, and dominant than women. Conversely, women are often seen as
more caring, nurturing, and co-operative than men.
Let us assume that these differences do indeed exist. What implications do
they have for women’s careers? It has been proposed that, because senior man-
agerial jobs happen to be male dominated, those responsible for promoting
individuals in organisations assume that ‘male’ attributes are required for some-
one to be a good manager. To get ahead in these circumstances, according to
this view, a women has to possess these male qualities. There is some evidence
to support this suggestion from research showing that both sexes associate the
traits of sucessful managers with stereotypically male traits (Brenner et al., 1989).
It is important to add a word of caution here. While it may be the case that
certain characteristics make it more likely that a person will advance up the
managerial hierarchy, this is not the same thing as saying that these characteris-
tics make someone a good manager. In other words, it is perfectly possible for a
set of qualities to be assumed to be relevant to managerial effectiveness without

this assumption having any basis in reality. We shall return to this question in
the next section.
Gender Differences in Management Style

Personality is likely to be one of a number of factors which influences a person’s
managerial style. If so, it might be expected that males and females would
have different management styles reflecting differences in their personalities.
Based on what has been said above, it could be suggested that a typical male
oriented style would tend to be dominant and competitive, while a typical
female style would be participative and co-operative. We have already seen
how successful women managers seem to conform closely to the so-called male
managerial style. However, there is in fact little if any, hard evidence that this
style of managing is actually particularly effective from the organisation’s point
of view. Indeed, there are some intuitively appealing reasons for suggesting
that the management style claimed to be favoured by women might actually
be more effective, at least for certain purposes. For example, would a style
which emphasises participation and co-operation not be more conducive to
increasing commitment and motivation in subordinates than one which is based
on dominance and competition? If this were so, it would be ironic indeed
if women were forced to adopt a male oriented managerial style in order to
succeed in the organisation. However, all of this is based on the presumption
that there really are clear-cut gender differences in management style. Everyday
observation of men and women in the workplace would seem to indicate that
this is indeed the case. Despite this, most of the research evidence actually
points in the opposite direction, suggesting that men and women managers do
not differ greatly in management style.
To summarise this section on gender and careers, it is clear that women take
up different occupational roles from men and are under-represented in senior
positions in organisations. Women face a number of disadvantages in their
efforts to advance up the career ladder and these undoubtedly contribute to the
glass ceiling effect. It is quite possible that there are real gender differences in
attitudes and behaviour in the workplace, although research has often cast doubt
on this suggestion. If significant gender differences in workplace behaviour
are ultimately shown to exist, there would of course be nothing untoward in
this. Indeed, such differences could contribute to a healthy diversity within
organisations. The problem arises when unwarranted assumptions are made
about the superiority of the apparent attributes of one sex compared to those of
the other, with respect to their suitability for more senior roles in organisations.
To make such assumptions in the absence of any supportive evidence is not only
unfair, but is also damaging to the basic HRM objective of optimisation of the
utilisation of human resources.
8.5 Summary
Career management can be differentiated from employee development by its
longer time perspective and the greater onus it puts on the individual to take
responsibility for managing his or her own career. Theories of career choices and

decision making provide a number of insights into the career process from an
individual perspective. The theory of work role transitions highlights a number
of ways in which major work role changes impose strains on the individual
and suggests how these can be minimised. A number of techniques can be
used to help individuals to manage their own careers, including coaching and
mentoring, development centres, fast track schemes, and career workshops.
The psychological contract consists of an implicit set of assumptions held by
individuals and their organisations about what each side has to offer the other
and can expect to receive in return. Recent changes in HRM practices seem
to be making it more difficult for organisations to deliver their side of the
psychological contract, particularly in terms of job security and opportunities
for career advancement. As far as the latter is concerned, there is clear evidence
that female managers are under-represented in senior positions in organisations
compared with men. A number of reasons have been put forward to explain this
phenomenon including various ways in which women may be disadvantaged
in terms of career opportunities.
Review Questions
8.1 Holland (1985) developed a well known theory of career stages.
8.2 Holland (1985) proposed that there are four personality types and associated
occupations.
8.3 According to Holland, realistic types enjoy outdoor activities.
8.4 According to Holland, enterprising types do not enjoy working with people.
8.5 In Schein’s (1993) theory, those who have a security career anchor see stability
of employment as almost as important as the content of the work.
8.6 In Schein’s (1993) theory, individuals with an autonomy career anchor can react
badly to rules oriented organisations.
8.7 Career stages are important because individuals are likely to have different
expectations from their employer depending on their career stage.
8.8 According to Super (1957), during the establishment stage of a person’s career,
a major preoccupation is to hold on to one’s established position.
8.9 Career plateau effects are most likely to occur in mid- and late career.
8.10 In Greenhaus and Callanan’s (1993) theory, lack of experience of working life
means that people are faced with difficult choices at the organisational entry
stage of their careers.

8.11 Although the theory of work role transitions states that a person goes through
a four stage adaptation process when work roles change, the problems the
person has to face at each stage are similar.
8.12 The main function of realistic job previews is to give the individual honest
information about pay and promotion opportunities before joining the organi-
sation.
8.13 Encounter is the first stage in Nicholson and West’s theory of work role transi-
tions.
8.14 In Nicholson and West’s theory of work role transitions, regret is one of the
emotions a person can experience at the encounter stage.
8.15 In Nicholson and West’s theory, people who have a strong need to control
the environment prefer to deal with the adjustment stage by means of role
development.
8.16 Employees are often provided with a written psychological contract when they
join the organisation.
8.17 Development centres which concentrate on evaluation frequently place restric-

tions on who can attend.
8.18 When a development centre is being used as part of a career management

programme there should be more emphasis on the individual’s needs, compared
with when it is being used for other purposes.
8.19 There is really only one way to run a development centre properly, irrespective
of its purpose.
8.20 The rationale behind fast track schemes is the idea that even unexceptional
people can move rapidly up the organisational hierarchy provided they are
given enhanced training and development.
8.21 The difference between career counselling and other forms of feedback is
the priority given to the needs of the individual, rather than those of the
organisation.
8.22 A paradox of some modern organisations is the fact that, at a time when
they particularly value commitment from their employees, they are adopting
practices which are likely to have the opposite effect.
8.23 According to Herriot (1995), one way in which employees cope with lack of job
security is to avoid risks at all costs.
8.24 Herriot (1995) suggests that one of the key tasks for future HR professionals is
to train people to negotiate new style psychological contracts.
8.25 Since most career models are based on research on male employees, we cannot
automatically assume that they are applicable to women’s careers.
8.26 In Western societies, the proportion of women in management is increasing.

8.27 There is evidence to suggest that successful women managers tend to conform
to the stereotype of the typical male manager.
8.28 Most of the research evidence indicates that male and female managers do not
differ greatly in their styles of managing.
8.29 Although acting on unwarranted assumptions that men make better managers
than women may be unfair, it does not conflict with the fundamental tenet of
HRM to maximise the utilisation of human resources.
8.1 Explain the Nicholson and West (1988) theory of work role transitions. How can
the strain of going through work role transitions be minimised?
8.2 Why can managers expect to have to make more work role changes at the
present time than in the past?
8.3 How useful are fast track schemes as an aid to career management?
8.4 In what ways does the adoption of certain popular HRM practices make it
difficult for organisations to meet employees’ career expectations?

You are an HRM manager in a computer software company. The recently appointed
chief executive is of the view that female managers are disadvantaged in the
organisation as far as career opportunities are concerned. You have been given a
special assignment to investigate the extent of the problem and to find out why it is
occurring. You will also be asked to make recommendations as to how the situation
might be remedied.
The company has about 2000 employees, most of whom are of graduate level
education. About 30 or so graduates are recruited each year. Most can expect to
take up their first management position after about five years. The organisational
structure is fairly traditional, with several levels of managerial hierarchy arranged in
a typical pyramid structure. Most promotions are made from within the organisa-
tion – with the notable exception of the new chief executive. As far as training is
concerned, most technical courses are run in-house, but people are sent on external
courses for management training. Even without conducting a systematic investiga-
tion, it is clear from casual observation that males are over-represented at senior
levels in the hierarchy. An exception to this is the chief executive who is a woman.
Your task is two-fold:
1 Indicate what information you would seek to collect in order to establish the
extent of the problem and the reasons for its occurrence. It might be useful
to frame your answer in terms of the kinds of questions you would ask of
appropriate people in the organisation.
2 On the assumption that there is a problem of the sort the chief executive has
outlined, indicate what steps might be taken to eradicate it.

References
Brenner, O.C., Tomkiewicz, J. and Schein, V.E. (1989). ‘The relationship between sex role
stereotypes and requisite management characteristics revisited’, Academy of Management
Journal, 32, 662-9.
Bruning, N.S. and Snyder, R.A. (1983). ‘Sex and position as predictors of organizational
commitment’, Academy of Management Journal, 26, 485-91.
Greenhaus, J. H. and Callanan, G. A. (1993). Career Management, Fort Worth, Texas:
Dryden Press.
Gutek, B.A. (1995). ‘Women at work’, Encyclopedic Dictionary of Organizational Behaviour,
ed. Nicholson, N., Oxford: Blackwell.
Herriot, P. (1992). The Career Management Challenge, Oxford: Butterworth-Heinemann.
Herriot, P. (1995). ‘The management of careers’, Strategic Prospects for HRM, ed. Tyson,
S., London: Institute of Personnel Development.
Holland, J.L. (1992). Making Vocational Choices, Odessa, Florida: Psychological Assessment
Resources.
Lefkowitz, J. (1994). ‘Sex-related differences in job attitudes and dispositional variables:
Now you see them. . .’, Academy of Management Journal, 37 323-49.
Nicholson, N. and West, M.A. (1988). Managerial Job Change: Men and Women in Transition,
Cambridge: Cambridge University Press.
Ragins, B.R. and Sundstrom, E. (1989). ‘Gender and power in organisations: A longitu-
dinal perspective’, Psychological Bulletin, 105, 51–88.
Schein, E.H. (1993). Career Analysis: Discovering Your Real Values, London: Pfeiffer and
Co.
Super, D.E. (1957). The Psychology of Careers, New York: Harper & Row.
Tranberg, M., Slave, S. and Ekeberg, S.E. (1993). ‘The relation between interest congruence
and satisfaction: A meta analysis’, Journal of Vocational Behaviour, 42, 253–64.

Module 9
Employee Relations
Contents
9.1 What is Employee Relations? 9/2
9.2 Philosophical Approaches to Employee Relations 9/3
9.2.1 The Political Context 9/3
9.2.2 Frames of Reference 9/4
9.2.3 Collectivism v Individualism 9/5
9.2.4 Power, Influence, and Involvement 9/5
9.3 The Legal Framework 9/6
9.4 Employee Relations Themes 9/7
9.5 Unions and Collective Representation 9/9
9.5.1 Union Growth and Decline in the 20th Century 9/9
9.5.2 Union Recognition 9/10
9.5.3 The Future of Unions in Organisations 9/12
9.6 Grievance and Discipline 9/13
9.7 Health and Well-being 9/14
9.7.1 The Business Case for Promoting Health and Well-being at Work 9/15
9.7.2 Physical Aspects of Well-being 9/16
9.7.3 Psychological Aspects of Well-being 9/17
9.7.4 What can Organisations do to Maximise Health and Well-being at 9/18
Work?
9.7.5 Lifestyle Programmes and Well-being 9/20
9.7.6 Well-being and Organisational Culture 9/20
9.8 Techniques for Increasing Involvement at Work 9/20
9.8.1 Dimensions of Involvement 9/21
9.8.2 Communication and Consultation 9/21
9.8.3 Financial Arrangements 9/22
9.8.4 Participation in Decision-making 9/22
9.8.5 How Successful Are Involvement Techniques? 9/23
9.9 Summary 9/24

Module 9 / Employee Relations
Learning Objectives
• understand what is meant by employee relations.

• describe different philosophical approaches to employee relations.
• be aware of the role of employee involvement in employee relations.
• appreciate the legal framework within which HR managers working in this
area must operate.
• describe the growth and decline of the unions’ influence in employee rela-
tions and their role in current HRM.
• understand the role of formal grievance and discipline procedures in organ-
isations.
• describe the main organisational threats to physical and psychological well-
being and discuss what can be done to minimise these.
• summarise the main methods organisations can use to increase employee
involvement.
9.1 What is Employee Relations?

In previous modules of this text, the focus of attention has mainly been on the
application of HRM techniques to individuals or groups in order to influence
their attitudes and performance. The emphasis so far has been on dealing with
people individually in an effort to maximise organisational performance. For
example, in Module 3 flexibility, empowerment and commitment were analysed
in relation to individual performance requirements. To take another example,
although Module 4 touched briefly on organisational-level issues with respect
to the analysis of performance requirements, the main thrust of the module was
concerned with performance at the individual level. In subsequent modules,
topics such as recruitment and selection, performance appraisal, and training
and development were all approached from an individual-centred perspective.
Notwithstanding the importance of individual-centred HRM processes, there
are also many HRM activities which are most appropriately dealt with on a
collective basis. This is because, in any organisation, there are always a vari-
ety of issues which are applicable to employees as a whole. For example, no
organisation can function without rules and procedures covering the everyday
conduct of employees in the workplace. Obvious examples here would include
rules relating to time-keeping, attendance at work, appropriate and inappropri-
ate behaviour in the workplace, and so on. Of course, such rules and procedures
would normally embrace not just employees’ obligations but also their entitle-
ments, such as the right to a safe workplace, the right to adequate recompense
for their efforts, and so on. Since these rights and obligations apply more or
less equally to all members of the organisation, they are best handled on a
collective basis. It is this collective approach to HRM which constitutes the field
of employee relations.
Aside from the rather obvious regulatory requirements in organisations alluded
to in the previous paragraph, many other HR policies and procedures are best

dealt with on a collective basis. For example, we saw in Module 4 that, despite
the existence of individual pay incentives in many organisations, many aspects
of pay are frequently agreed collectively between workers and management.
The importance of communication has been mentioned already in this text and,
although organisational efforts to communicate may be ultimately aimed at
individuals, the communication techniques are often applied collectively across
the organisation. Although at one level organisational commitment is about the
relationship between a person and the organisation he works for, nevertheless
many of the intervention strategies used to foster commitment are applied on a
collective basis. Many other examples could be given of the collective applica-
tion of HRM, but these few should suffice to give the reader sufficient idea of
what is being talked about here.
According to the definition used here, any HRM process or procedure that
is implemented on a collective basis falls within the scope of employee rela-
tions, even although such procedures might well affect organisational members
individually. As such, the field of employee relations embraces a much wider
range of activities than can be covered in a single module. Consequently we will
concentrate on a small number of key employee relations themes of particular
interest to contemporary human resource management.
9.2 Philosophical Approaches to Employee Relations
9.2.1 The Political Context

Perhaps more than any other HRM activity, employee relations has been shaped
and influenced by political and economic factors in society generally. This is
particularly true with respect to those aspects of employee relations which
impinge on issues of how power, influence, and economic rewards should
be shared between different stakeholders in organisations. Historically, from a
societal and political point of view, the two relevant parties in the distribution
of power and rewards in organisations have typically been seen as employers
and their representatives in the form of senior management on the one hand,
and employees on the other. Traditionally, one of the important functions of
employee relations in many organisations has been to manage the relationship
between these two parties.
However, in many countries, these issues of the distribution of power, influ-
ence and economic rewards are politically charged involving attitudes in the
wider society about the fundamental nature of organisations and how they
should be run. Often these matters have been seen as so important that govern-
ments have sought to influence them by various means such as, for example, by
means of legislation. These political measures have often had a profound effect
on employee relations. A comprehensive analysis of governmental influences on
employee relations would not be appropriate here, especially since the extent
of government involvement has varied hugely across countries and societies.
However, given the importance of the government’s role in employee relations
in a number of societies nowadays, illustrative examples of how it can affect
HRM practices will be provided where appropriate in this module.

9.2.2 Frames of Reference

Fox (1974) has proposed three different frames of reference with respect to
employee relations. According to this author, not only do these imply very
different HRM approaches to employee relations itself, but they can also pro-
foundly influence management styles generally in organisations. These are as
follows:
• The unitarist approach regards employers on the one hand and employees
on the other as part of the same team with ultimately the same shared
interest in the success of the organisation. According to this model, conflict
between the two parties is not inevitable and can be avoided with proper
management.
• The pluralist view is somewhat different. In this case, employers and
employees are both seen as legitimate stakeholders in the organisation,
but with different, rather than shared, interests. To put it simply, employers
need to minimise costs and maximise profit in order to ensure the organ-
isation’s survival. Employees, on the other hand, need to maximise wages
and have job security in order to ensure their economic survival and well-
being. Under this scenario, conflict is inevitable but manageable. The key
to successful employee relations under this scenario is to set up appropri-
ate systems for collective interactions between the parties so that conflict
between employers and employees can be institutionalised. By this means
organisations can function satisfactorily, even although conflict still exists at
some level.
• The radical position is strongly influenced by the writings of Karl Marx. In
this case conflict in organisations is viewed as not only inevitable but also
as a part of a wider class and power struggle in society. Since organisational
conflict is identified with conflict in society generally, it cannot be seen in
isolation and consequently it cannot be institutionalised as suggested by the
pluralist position.
According to the model, these different philosophical positions reflect wider
issues in society and spawn different approaches to employee relations. An
example here might be attitudes towards unionisation of the labour force. The
20th century has, in many countries, seen unions play a role in the repre-
sentation of employees in many important matters, ranging from pay and job
security through to health and safety at work. For those holding the pluralist
and radical viewpoint, having unions represent employees’ interests could be
seen as an appropriate way of managing the conflict believed to be inherent in
the employer-employee relationship. Thus both perspectives might well perceive
union involvement in organisations as beneficial or even necessary. Of course,
while both radical and pluralist approaches could be seen as conducive to the
idea of unions representing employees, they imply a very different union man-
agement relationship. Thus, while the pluralist approach suggests that a cooper-
ative relationship between unions and employers is possible given appropriate
working arrangements, no such accommodation would be deemed appropriate
under a full blown radical position where union-management encounters are
seen as ultimately boiling down to an inevitable class struggle. But what about

the place of unions in a unitarist philosophy? While a unitarist view would not
seem to be fundamentally incompatible with union representation of the work-
force, the advantages of a union presence are less clear in this case. From this
perspective, since both employers and employees are ultimately seen as having
common interests, and since conflict is not inevitable, it can be avoided by good
management practice. Consequently, the case for collective representation in the
form of unions is not as strong from a unitarist perspective as it is from either
a pluralist or radical point of view.
The unitarist approach as described here has some elements in common with
the soft HRM models outlined in Module 2, insofar as the latter also espouse the
philosophy of shared common interests. However, a word of caution is in order
here with regard to the use of the term ‘unitarist’ in these two contexts. The
reader should not confuse the term unitarist as it has been used here with its
use in Module 2. In Module 2, the term unitarist was used to describe models
which endorsed the notion of only a small number of legitimate stakeholders in
an organisation, an idea which is, in fact, associated with hard HRM models.
This is quite unlike the definition of unitarist adopted by Fox, where it refers to
the notion of common interest among employers, managers and the workforce.
9.2.3 Collectivism v Individualism

We have indicated at the beginning of this module that some HR activities are
best undertaken on a collective basis while others are best tackled individually.
Even so, HR managers are still left with considerable scope as to how much
they emphasis the collective, as opposed to the individual, in terms of their
philosophical approach to people management. To put it another way, the
extent to which organisations wish to nurture a collective or individual culture
will affect their approach to employee relations. In this respect, in Module 1,
we have already contrasted the USA with Western Europe, with the former on
the whole being individually oriented while the latter has traditionally taken a
more collective approach (Guest, 1989). Related to this we also saw in Module 2
how HRM models originating in The USA often emphasise individualism rather
than collectivism.
9.2.4 Power, Influence, and Involvement

Much has been written about how power and influence on decision-making
in organisations should best be apportioned between employers and employ-
ees. At one extreme, there is the view that the legal owners of an organisa-
tion, acting through their representatives (usually senior management) should
be all-powerful and have complete and absolute control over all aspects of
decision-making. A radically opposite perspective questions the legitimacy of
conventional legal concepts of ownership, arguing that those who produce the
goods or services of an organisation are its true ‘owners’, rather than pri-
vate individuals or shareholders. According to this view it is the former who
should control decision-making in the organisation. In reality, neither of these
two extremes are to be found in many modern organisations and most oper-
ate somewhere between the two. In fact, as we shall see later in this module,

employee influence on decision-making can take many different forms, each

with its own implications for how organisations function.
As Boxall and Purcell (2003) point out, the history of employee contributions
to decision-making has taken a number of different forms over the years. Thus,
in the 1960s and 1970s, the predominant theme was worker participation. The
issue was how employees, while not having ultimate control over decisions,
could nevertheless have a meaningful input into the decision-making process.
In the seventies there was also, particularly in Western Europe, interest in mod-
els of industrial democracy, where the focus was more on systems which gave
employees formal entitlement to a direct voice in decision-making. On the other
hand, the eighties were characterised by two major developments which had
a powerful influence on the issue of the employee’s role in decision-making in
organisations. The first of these was the well-documented decline in power of
the unions in many countries. We will return to this issue later. The unions have
long perceived of employee influence on decisions as a right on grounds of legit-
imacy and fairness. Employees make an essential contribution to the success of
organisations and therefore have a right to a say in decisions that affect them, so
the argument runs. However, with the decline of union power, it is probably fair
to say that the concept of influence as ‘right’ lost some of its impetus. The second
key trend in the eighties was the decline of traditional personnel management
and the emergence of HRM, with its emphasis on individualism as opposed to
collectivism, and its strong predilection for maximising the utilisation of people
resources in order to increase competitiveness. These changes inevitably led to
a re-orientation of employee relations priorities. Concepts such as participation
became less centre stage and less important in their own right. Rather, they were
seen as one of a number of possible techniques which could be used to enhance
employee involvement in the affairs of the organisation. In short, increasing
employee involvement became one of the key objectives of employee relations.
Employee involvement was seen to be valuable in a number of respects. For
example, it could act as a conduit for the generation of ideas, as a pressure valve
for the release of employee grievances and sources of dissatisfaction, as a source
of communication generally, and as a way of encouraging individuals to feel
part of the organisation. But perhaps most important of all by allowing people
to feel that their needs feelings and opinions were valued by the organisation,
involvement was seen as contributing to the high levels of commitment which
were believed to be so important for individual and organisational performance.
9.3 The Legal Framework

In recent years, legal matters have become an increasingly important feature of
employee relations in many other countries. Although of course there are many
national and international differences in the law as applied to HRM issues, there
are also areas of commonality. This is especially true with reference to advanced
western societies. In order to illustrate how important the legal dimension has
become, a brief synopsis of the legal framework of employee relations in the UK
is provided below.
Of course, in the UK as in many western societies, government legislation
relating to the workplace is not a new phenomenon. For example, there is a

long history of health and safety legislation dating back to the Victorian era.
Nevertheless, there has been a marked increase in legislation concerned with
employee relations activity in recent decades. In part this was a consequence
of the growth of trade union influence in Britain in the decades after the
Second World War, with the sixties and seventies perhaps representing the era of
maximum trade union power. Collective bargaining between management and
unions was the name of the game at that time and unions represented employees’
interests right across the spectrum of employee–employer relationships. This
was also a time of considerable industrial conflict and this had a powerful
impact, not just on those working in organisations, but also on the economic
performance of the country and on society generally. One result of all of this
was the increased intervention of the state in organisational life in the form of
legislation to curb what was seen as the adverse effects of union/management
strife on the economy and society. Another important element in the growth of
employee relations related legislation in the UK and in much of Western Europe
has been the arrival of a series of initiatives origination in the European Union
with respect to working life. Here are just a few examples of some of the areas
of activity within employee relations in particular and HRM generally, which
are affected by UK legal requirements or European Union Directives: financial
remuneration and minimum wage rates; discrimination in employment with
respect to sex, race and disability; health and safety at work; maximum working
hours and rest periods; redundancy and dismissal; industrial disputes and the
right to strike; and trade union membership rights. At the present time, the
situation in Britain is such that there is a legal dimension to almost every aspect
of employee relations. Quite simply, in the modern world, it is inadvisable
for managers to embark on any aspect of employee relations without making
themselves fully conversant with the relevant legal restraints and requirements.
9.4 Employee Relations Themes

As has already been indicated, given the wide scope of employee relations this
module has had to be selective and restrict itself to a small number of key
themes. Also, rather than attempt to cover all of the possible perspectives on
each theme, the focus of this module will be on a single perspective, that of
employee involvement. We have touched on employee involvement a number
of times in earlier modules in relation to various HRM initiatives relating to
work organisation and working practices. As the reader should be aware by
now, much has been made of the importance of involvement, commitment and
the like in recent HR thinking. Because of this and due to the fact that many
involvement initiatives are best carried out on a collective basis involvement has
become closely associated with the practice of employee relations in recent years.
So much so that, for some employee relations functions, increasing involvement
is the primary objective of the activities in question. However, many employee
relations activities are undertaken for other reasons, although spin-offs in terms
of involvement outcomes are often anticipated.
Employee representation, particularly in a union context, is one of the employee
relations themes we will discuss in this module. Notwithstanding the individu-
alistic philosophy frequently encountered in much HR thinking, it is nevertheless

a fact of life many organisations tolerate and even encourage formal representa-
tion of employee collective interests. In the majority of cases, unions carry out
this role. Although, as we shall see, the influence of the unions has diminished
in recent years, large numbers of employees continue to be represented collec-
tively by them and they still have an important role in many organisations. On
the other hand, many organisations nowadays are union-free and an important
issue for them is how best to fill the vacuum left by the absence of unions.
Grievance and discipline is the second employee relations theme to be covered
in the module. Both employers and employees have rights and responsibilities
towards each other and, unless these are upheld by both parties, no organisation
can function effectively. Organisations need rules and regulations about appro-
priate behaviour in the workplace. Employees on the other hand have the right
to be treated in a fair and equitable manner, including receiving a fair recom-
pense for their contribution to the organisation. Human nature being what it is,
there are occasions when both parties fail to meet these rights and obligations.
For this reason well-run organisations need to have systems in place to allow
employees on the one hand to express their grievances and employers on the
other to discipline rule breakers.
An increasingly important theme in employee relations is well-being at work.
There are of course growing legal requirements on employers to ensure that
organisational demands do not impinge adversely on employees’ physical and
mental well-being. Also, most would agree that organisations have a moral
obligation to avoid the creation of conditions which have adverse effects on the
health of its members. Aside from these issues, as we shall see later, employee
health can have a significant impact on performance and for this reason alone it
is an important employee relations theme nowadays.
With reference to the themes of employee representation, grievance and disci-
pline, and well-being discussed above, while all of these have important impli-
cations for involvement, increasing involvement is not necessarily the primary
reason for, or objective of, employee relations activities in these areas. However
other employee relations initiatives clearly do have increasing involvement as
their major focus and these constitute the final theme of the module. Com-
munication falls into this category. The theme of communication runs through
many aspects of HRM and has already been touched on in previous modules.
In the present context we will look at communication issues in more depth,
focusing particularly at collective attempts at improving communication with
the aim of increasing employee involvement. Traditionally, communication has
often been thought of as an activity from the top down. But there are also vari-
ety of approaches organisations can use to provide an ‘employee voice’ in the
workplace through forms of upward communication. We have already touched
on the issue of influence of decision-making in organisations from a philosoph-
ical point of view. We now return to this topic and will examine its use as a
technique to increase involvement. Finally, the evidence on the extent to which
involvement initiatives have succeeded in practice will be examined.

9.5 Unions and Collective Representation

The role of unions in employee relations provides a good illustration of how
it is simply a convenience to compartmentalise employee relations into distinct
themes as we have just done. In reality, most of the topics we will discuss
overlap and are inter-connected. Thus, many unions have in the past perceived
themselves as having a legitimate interest in most, if not all, of the themes
listed above. Thus, for example, employees who are involved in grievance and
discipline procedures are routinely represented by their unions. In line with their
traditional concern for the welfare of their members, health issues have long
been of interest to unions. In highly unionised workplaces especially, unions
have often seen themselves as the main vehicle for communication between
management and the workforce. Finally unions have often argued in favour of
what they see as employees’ legitimate rights to participate decision-making.
9.5.1 Union Growth and Decline in the 20th Century

HRM takes place in and is influenced by the wider society of which it is a
part. Nowhere is this more true than in the area of union-management rela-
tionships. Political, economic, cultural and legal factors can all impinge on the
management/union relationships in important ways. This is well illustrated by
the history of the trade unions in the UK. In the last century, the growth of the
trade unions in the UK was inextricably linked with the political forces of the
time. This was not just because early trade union thinking was often influenced
by the Marxist analysis of the nature of industry and capital which was popular
at the time, but also through the development of close links with the British
Labour Party.
In the UK, union power grew steadily in the first half of the 20th century,
with the sixties and seventies probably representing the zenith of their influence.
At that time the unions were a powerful force in many organisations and union
muscle was frequently exercised in pursuit of wage increases, many of which
seemed ill-affordable for the companies concerned. Restrictive labour practices
were widespread in highly unionised workplaces and labour flexibility almost
non-existent. Industrial action in the form of strikes was almost endemic. All
of this was made worse by the fact that it coincided with a period of relative
lack of competitiveness and economic decline in the face of tough overseas
competition. Many were quick to blame this economic demise on the perceived
excesses of the unions and indeed the sixties and seventies were periods of
considerable angst for employers, government, and society generally about the
poor state of industrial relations in Britain. Government responded, not only
by setting up independent investigations into the state of industrial relations in
the UK (e.g. Donovan, 1968), but also with a series of attempts at legislation
aimed at reducing strike activity, removing restrictive practices and generally
curbing perceived union excesses. All of this was designed, perhaps somewhat
optimistically, to put workforce relations on a more stable and harmonious
footing.
It is clear that union power and influence in the UK, and indeed in many
other countries, has declined in the eighties and nineties. A few examples will

highlight the extent of this decline. In 1979, union membership stood at 55.4%
(Marshall and Cox, 1992) and by 1995 this had decreased to 32% (Brown et al.,
1997). Also, the proportion of workplaces with no union members increased from
27% in 1984 to 47% in 1998 (Culley et al., 1999) There is no doubt that successive
government legislation has played a significant part in this diminution of the
unions. However, in addition to the impact of the law, a number of other reasons
can be put forward for this decline in membership and the concomitant reduction
in influence and power. Among these were the periods of high unemployment
experienced at this time and the growth of service industries at the expense of the
traditional union stronghold of manufacturing. The philosophy of individualism
embraced by the new HRM trends and the introduction of new work practices
such as flexibility also served to undermine traditional union influence.
Although union influence has declined in the UK and in a number of other
countries during the latter part of the 20th century, this trend has by no means
been universal. For example, some countries such as, for example, Denmark and
Finland experienced an increase in union membership between the seventies and
the nineties (Bratton and Gold 1999). There are also instances of countries, such
as France, where membership has been in decline, even although the proportion
of the workforce covered by collective bargaining is increasing (Bratton and
Gold 1999). Given that virtually all developed economies in Europe have had
to face similar competitive pressures during the period we are discussing, these
differences in the fate of unions are at first a little surprising. One might
have expected that organisations, regardless of their country of origin, would
react in a similar fashion to competitive pressures, resulting in broadly similar
outcomes with respect to the unions. According to Hollinshead and Leat (1995),
many of these apparent discrepancies can be explained by the different cultural
and political characteristics of the countries concerned. This nicely illustrates
the point made at the start of this section about the particular importance of
political and cultural factors in determining the course of management union
relationships.
9.5.2 Union Recognition

Notwithstanding the existence of government legislation in a number of coun-
tries requiring union recognition in certain circumstances, it seem clear that
the general decline of union power and influence has given management more
discretion than it had in the past when it comes do agreeing or otherwise to a
union presence in the workplace. Given this management flexibility over union
recognition, from an HRM perspective, this then raises the issue as to whether,
on balance, a union presence is likely to increase or decrease organisational
effectiveness. As is so often the case in HRM, there is no simple yes or no
answer to this question and much depends on the circumstances faced by indi-
vidual organisations. Thus examples can be found in the literature of successful
union-free organisations where the majority of employees are both involved and
productive (Kochan et al., 1986). Likewise, there are also cases of organisations
which have succeeded in setting up successful union-management partnerships,
as evidence from a large UK workplace survey (WERS, 1998) demonstrates
(Millward et al., 2000).

Taking the case for recognition first, the existence of successful union–
management partnerships suggests that, in a well-managed organisation, a
union’s role in representing its members can be a positive one. As will become
increasingly clear as we progress through this module, any well run organisation
should have in place systems which allow organisational members to have their
collective interests expressed. Issues such as pay, health and safety, grievances,
discipline, and so on cannot really be managed sensibly without taking into
account employees’ views and interests. In the past unions have frequently ful-
filled this role and, in a well-managed organisation, there is no reason why, in
principle, their contribution in this regard cannot be a positive one. The same
can be said for negotiations about the modifications to working practices which
are often necessary when competitive pressures lead organisations to adopt
radically different forms of work organisation.
Aside from these specific issues unions, as representatives of their members,
can provide an important communication channel generally between manage-
ment and the workforce. This applies not just to downward communication,
but also to upward communication where they can act both as a vehicle for
providing information on emerging issues and problems, and as a forum for
discussing and resolving these. Another argument in favour of union recog-
nition comes from the observations of Marchington and Wilkinson (1996) who
make the important point that decisions agreed between management and work-
force representatives have more legitimacy than imposed ones. It is not hard
to see the connection between perceived legitimacy of decisions and employee
involvement. Another argument for union recognition, albeit from a somewhat
more negative perspective, relates to instances where there is a groundswell of
support from organisational members for union recognition. In these circum-
stances, management’s refusal to comply with its employees’ wishes could well
be damaging to any attempts to engender the involvement and commitment
they are so often striving to achieve.
Let us now turn to the case against union recognition. Despite the potential
benefits of union recognition outlined above, many organisations still prefer
to operate on a union-free basis. One explanation for this is the concern of
senior management that the existence of a union in an organisation erodes
management’s decision-making prerogative. There is no doubt that this can and
does happen, although this does not mean that such an outcome is inevitable.
Also, traditionally demarcation and long-term security of employment have
been priority aims for unions in their pursuit of their members’ interests. These
do not sit well with many current HRM practices, with their emphasis on
functional and numerical flexibility in the pursuit of enhanced competitiveness.
In more general terms, there is the whole issue of the compatibility between the
collectivist orientation of the unions and the individualist focus typical of much
contemporary HRM thinking. A good example of this individual orientation is
the strong trend in countries such as the UK away from indirect communication
with employees through their unions or other representatives. In its place there
has been a move towards direct communication between management and the
workforce, using procedures such as attitude surveys, team briefings, problem-
solving groups and the like (Millward et al., 2001). We will return to this issue
later in the module.

Whatever our views about the relative merits and drawbacks of unionised
versus union-free workplaces, one thing seems clear. Unions have in the past
fulfilled an important role in providing a voice for the collective interests of
their members with respect to a whole range of issues of concern to them. The
removal of the unions from the picture is therefore likely to leave a vacuum
organisations need to fill in some other way. For HRM to be effective in non-
union workplaces, alternative systems need to be in place to allow employees
an appropriate voice in matters which concern them. It is seldom a good idea
to throw out the baby with the bathwater.
9.5.3 The Future of Unions in Organisations

Given the possible drawbacks of recognising unions, their waning membership
and power, and the growth of direct communication techniques in place of
indirect ones, the question arises as to what, if any, the future role will be for
unions in organisations.
According to Boxall and Purcell (2003) unions in the UK now face a difficult
choice. On the one hand, they could try to continue with their traditional roles in
the face of a dwindling membership at the risk of finding themselves increasingly
marginalised. Alternatively they could seek new forms of relationship with
management based on cooperation and joint problem solving. However, as
Boxall and Purcell point out, in to-day’s circumstances management is very
much in the driving seat and it is they who are likely to be the principal
initiators of any new management union relationships and who would most
likely set the parameters for its operation.
As was mentioned above, some large organisations seem to function effec-
tively without any union presence. A number have managed to introduce mod-
ern HRM ideas such as various forms of flexibility, continuous change and
improvement policies and the like, in a non-union environment. However, often
these organisations have also put in place policies to give employees the kinds
of benefits typically obtained through unions, such as equal opportunities and
no redundancies policies. The interested reader will find detailed descriptions
of organisations that have successfully adopted this approach in Foulkes, (1980)
and in Kochan et al., (1986).
Given that it seems feasible to manage organisations successfully in a union-
free environment, the key question which now arises is the extent to which
modern HRM practices, particularly soft HRM with its strong emphasis on
individualism, direct communication with organisational members, and so on,
can usefully co-exist with union recognition Alternatively, are unions redundant
in to-days organisational world? It is early days to give a definitive answer to this
question. However, as mentioned above, there is evidence from a large survey in
the UK that sophisticated modern HRM practices and union recognition can co-
exist successfully in organisations. Indeed there are indications from this same
survey that, in some instances, the combination of sophisticated HRM practices
and union recognition can have a strong effect on performance.

9.6 Grievance and Discipline

Grievance and disciplinary procedures are in a sense a mirror image of each
other, insofar as the former is about actions a person can take when he or she
feels that the organisation has behaved unreasonably towards him, while the
latter provides a set of procedures which allow the organisation to act when
it believes that an individual has behaved inappropriately with respect to its
rules. By setting up formal procedures for grievance and discipline, both parties
have mechanisms in place for dealing with situations where they perceive that
their legitimate expectations of the other are not met. These processes fall
within the remit of employee relations because they are applied collectively
to everyone, even although of course any particular grievance or disciplinary
incident typically relates to an individual or individuals rather then the whole
organisation. Why might it be a good idea for an organisation to put in place
formal procedures for the handling of issues of grievance and discipline? After
all, surely a good manager ought to be able to deal effectively with such
situations informally as they arise. Even if it is the case that some highly
skilled managers can deal relatively effectively with problems of this type on
an informal basis, there are nevertheless sound arguments for putting in place
formal arrangements to deal with these issues.
Taking the issue of grievances first, simply from the perspective of fairness
or justice, one could argue that there should be systems in place to investigate
sources of employee dissatisfaction. Grievances often relate to sensitive or deli-
cate issues and an individual may be reluctant to come forward to discuss these
on his own initiative, especially if he considers his boss to be unsympathetic or
unhelpful. Indeed, in some instances the boss herself may actually be the focus
of the grievance. One of the objectives of well-designed formal systems is to
encourage individuals to express their feelings under such circumstances.
What constitutes a well-designed grievance system? There are no hard and fast
rules about this and procedures vary from one organisation to another. However,
the following guidelines could be regarded as a minimum requirement for an
effective system:
• There ought to be clearly articulated, agreed, rules of procedure so that all

know what is to be done when a grievance arises.
• There should be a right of access to someone other than one’s immediate
boss. This is because the individual may be reluctant to approach her boss,
may not see him as independent, or may even see him as the source of the
grievance.
• The individual bringing up the grievance should have the opportunity to be
represented by someone who can argue his case, be it a union representative
or some other party.
• There should be an entitlement to a considered and unbiased response from
management.
• When a grievance is upheld, appropriate and prompt action should be taken
by management to rectify the problem.

A critically important feature of grievance procedures is perceived fairness,

especially from an involvement perspective. Sources of dissatisfaction usually
have to be quite important to individuals before they will go to the lengths
of going through a formal grievance procedure. Consequently, employees are
unlikely to feel a strong sense of involvement with any organisation that does
not make a genuine attempt to deal fairly with issues which, as the individuals
see it, are clearly of considerable importance.
Turning to the issue of discipline, clearly managers cannot manage effectively
unless individual employees conform to legitimate managerial authority. Since
it is obvious that not everyone will conform to all of management’s legitimate
requirements on every occasion, disciplinary action needs to be taken from time
to time. Organisations typically have a wide range of disciplinary options avail-
able to them, ranging from mild verbal rebuke all the way through to dismissal.
Some of the disciplinary options, such as for example dismissal, obviously have
severe personal consequences for individuals. Indeed, even mild rebukes can be
damaging to motivation, especially if they are perceived as unwarranted (accu-
rately or otherwise). Given these considerations, it would seem unwise to rele-
gate all disciplinary activities to ad hoc decisions of individual managers. Much
better to have formal procedures which apply equally to all. While a strong case
can be made for the advantages of having formal disciplinary arrangements in
organisations simply from the perspective of managerial effectiveness, it should
also be borne in mind that, in some countries such as the UK, there are also legal
obligations on organisations to set up appropriate disciplinary arrangements.
Turning to the question of what a well-designed disciplinary procedure might
look like, as was the case with grievance procedures, there is no simple formula
for setting up a formal system and the optimal arrangements will depend on the
circumstances under which any particular organisation is operating, including
any legal requirements which may exist. However, by and large the principles
laid out above with respect to grievance also apply to disciplinary procedures
and one would expect a properly designed scheme to be clearly set out, to offer
right of access to appropriate people, to offer the individual the right to have a
representative act on his behalf, and so on.
9.7 Health and Well-being

As western societies industrialised, a key concern of the emerging unions was
to protect workers against the perceived excesses of employers’ exploitation of
them in the interests of profit. Aside from pay issues which were naturally very
important, another important area of concern for unions was the health and
safety of workers. Few would disagree that in the early days of industrialisation
employers often paid scant attention to the health and safety of the workforce.
Health and safety provisions were essentially a cost item for employers seeking
to minimise costs and to get the most out of their workforce. Not only was work
physically demanding but long and unsocial hours of work allowed expensive
equipment to be fully utilised. All of this helped to maximise productivity
and increase profits. Purchasing and installing safety equipment and limiting
workers exposure to unhealthy work environments cost money and as such

were to be avoided. Perhaps most important of all, these working conditions

existed in a context in which neither those who owned the factories of the
time, nor society in general, saw worker health as particularly the employer’s
responsibility.
Many factors combined in the course of the twentieth century to change
this situation radically to the point where health and safety issues are now of
considerable importance in modern organisations. Much of this change was due
to the efforts of the unions. Another critical factor was the impact of legislation
over the years. For example in the UK, health and safety legislation predates
most other legislation related to the workplace. Indeed a whole raft of laws
covering just about every aspect of health and safety and work now exists in the
UK. According a report published by to what was then known as the Institute
of Personnel and Development (now known as the CIPD) in 1997, health and
safety has become the most highly regulated aspect of employment in the UK.
Activities covered by UK health and safety legislation include: provision and
use of safety equipment, arrangements to ensure that workers do not undertake
dangerous activities, use of harmful chemicals, control of fire hazards, and so
on. Further protection exists for UK employees in the form of European Union
initiatives on health at work, such as, for example, the Working Time Directive
designed to limit the number of hours employees are required to work. In
addition to the unions’ efforts and the effects of legislation, changing attitudes
of society generally have also had an impact, to the extent that it is now widely
accepted in society that employers have a responsibility for health and well-being
at work. All of these forces have led to the situation where employers take on
considerable responsibility for health and safety in the workplace nowadays,
and rightly so. However, this is not to say of course that employees have no
responsibilities in this regard. Most would agree that they to must bear their
share of responsibility in these matters, for example by adhering to practices
designed to ensure a healthy workplace.
9.7.1 The Business Case for Promoting Health and Well-being at Work
From one perspective, health and safety issues at work could be seen as simply
a cost item, with employers having to bear the burden of health and safety
provision as a consequence of a combination of legal requirements and union
pressure. Such a narrow view ignores the fact that, even putting aside ethical
considerations, a sound business case can also be made for investing resources
in health and well-being in organisations.
In terms of physical well-being, many examples could be given of the negative
impact of adverse, health threatening, working conditions on the effectiveness
of the individual. For example, dangerous environments can lead to injuries,
impair performance and lead to absence from the workplace. The existence of
hazardous chemicals can cause health problems, which can also result in lowered
performance and absenteeism. Poor working conditions, such as excessively long
hours, can be responsible for fatigue and reduced mental alertness making the
individual prone to making costly mistakes and errors.
Working arrangements that impair the psychological well being of individuals
can equally have an impact on effectiveness. Take the case of sources of stress at

work, a topic much studied by organisational psychologists in recent decades. It

is well documented that the workplace can be the locus of significant stress for
individuals and that this can have many consequences for employees’ well-being
(Cooper, 1996).
Common sense suggests that these adverse psychological states have the
potential capacity to impair performance in a number of ways. When, as mount-
ing research evidence suggests, chronic stress begins to undermine physical well-
being, presumably the adverse consequences for effectiveness described above
with respect to physical health come into play.
Up till now, we have focused on the direct effects of employee health and
safety on effectiveness. However, it seems reasonable to suggest that there
are also indirect effects of organisations’ employee well-being policies which
could be just as important for performance. For example, if an organisation is
perceived by its members as going to the trouble to look after their well-being,
it seems likely that this would have a positive spin off in terms of employee
feelings of involvement. Likewise, when organisations pay scant attention to
employee well-being issues, this is hardly likely to be conducive to creating high
involvement and commitment in individuals.
We have argued here that there are sound ethical, legal, and competitiveness
arguments in favour of organisations giving priority to issues of employee health
in the workplace. Nevertheless, it is important not to lose sight of the fact that,
at the end of the day, most health and safety initiatives have cost implications
for organisations. Consequently, as is so often the case given the finite nature of
resources, costs and benefits have to be weighed up when allocating resources
for employee health and well-being.
9.7.2 Physical Aspects of Well-being

It is undoubtedly true that modern organisations in advanced economies are
infinitely safer places to work in than their counterparts in earlier times. By and
large, employees in developed societies are protected form many of the more
obvious physical hazards in the workplace. Physical health at work continues
to be an area of major concern for HRM, but compared to the situation which
existed in the past, HR policies and procedures can now be built around a
framework of legislation which sets out what needs to be done in this area. For
example, the UK Health and Safety at Work Act 1977 provides a comprehensive
coverage of what is required to protect physical health in the workplace. A brief
reference to a few of its main categories of provision will give the reader an
overview the types of physical health issues organisations in the UK need to take
on board nowadays. Broadly speaking, under the Act, employers are charged
with the responsibility for, among other things: providing safe equipment which
employees are trained to use properly; ensuring that employees are not required
to carry out dangerous activities; and providing a safe and healthy environment.
Obviously these are very broad categories and they encompass a wide range of
activities within organisations.
European regulations on health and safety impose additional requirements on
organisations in the UK, such as carrying out risk assessments, monitoring risk

prevention measures, training and informing employees on safety matters, and

the avoidance of excessively long hours of work.
Generally speaking, in a country such as the UK, any organisation which
has HRM policies and provisions in the area of physical well-being which
conform to both the letter and the spirit of the law is well on the way to
providing a healthy physical environment for its workforce. However, while
most workplaces nowadays may be physically safe places, other threats to
employee well-being are increasingly being identified in organisations. While
these are often ostensibly psychological in nature, they can also ultimately have
physical health consequences. It is to these that we now turn.
9.7.3 Psychological Aspects of Well-being

As we have seen, in a number of countries including the UK, the historical
focus of both union and governmental concern about well-being issues at work
was understandably on improving working conditions with respect to physical
health. However, in more recent times, there has been an increasing realisa-
tion of the importance of psychological well-being at work. Partly this has
been because, now that workplaces are no longer the dangerous and physi-
cally demanding places they once were, priorities have shifted towards issues
of psychological health. However, this is not the only reason for the upsurge
in interest in psychological well-being in organisations. In addition, decades of
research into stress at work have resulted in an increasing awareness of the
importance of psychological well-being for individuals’ attitudes and perform-
ance in organisations. A further impetus in this area has come from concerns
about the possible effects of the new working practices introduced by HRM in
recent years and discussed in earlier modules of this text. Finally, there has also
been an increasing realisation in recent years that people’s behaviour at work
cannot be seen in isolation from events elsewhere in their lives. For example,
adverse psychological circumstances at home can have effects that spill over
into the work environment with consequences for behaviour and performance
in organisations. (Slikeu and Frank, 1986). Doubtless the reverse is also true in
the sense that pressures at work can impact on the individual’s home life.
As we have seen, psychological well-being in organisations has typically
been investigated in relation to stress and its effects. A series of studies have
demonstrated how organisational practices can create stress. These investigations
have also provided us with evidence about the effects of organisational stress, on
psychological well-being. (Cooper and Payne, 1980) However, it is important to
realize that what is stressful for one individual may not necessarily be stressful
for another. Take the example of empowerment. As we have already indicated
in Module 3, while some individuals respond positively to empowerment, for
others it represents an additional burden of responsibility without the incentive
of added reward. In stress terms, the latter but not the former might well find
empowerment to be stressful and a source of anxiety and dissatisfaction. All
levels of employee in organisations have the potential to suffer from stress at
work. Traditional sources of stress in organisations, as identified by research,
are many and varied (Cooper and Payne, 1980). They include: work overload
where the individual has too much to do and not enough time to do it; low level

repetitive work; conflict and uncertainty related to the individual’s work role;
bullying in the workplace; and so on. Consequences of stress in organisations
are also varied, some of the most commonly reported ones being feelings of
tension, anxiety, and low job satisfaction (Cooper and Payne, 1980).
While many of these traditional sources of stress are no doubt still relevant,
additional sources of pressure on individuals have been emerging recent years,
many of which relate to changes in methods of work organisation. Take for
example the case of flexibility. We have already discussed the advantages of
numerical flexibility from an organisational perspective in Module 3. However
from the point of view of well-being, it could be argued that these benefits
come at the cost of stress for those in the peripheral workforce, for example
in the form of the unsettling effects of job insecurity. In similar vein, many
contemporary HRM practices such as de-layering can result in a lack of career
advancement opportunities with consequent adverse psychological effects on a
significant number of individuals. As already mentioned, while some might
find empowerment a challenge, for others it can be perceived as a burden.
While arguments about the stressful consequences of many contemporary HRM
practices seem well grounded in logic, a note of caution is in order here. It
has to be admitted that research which specifically addresses the links between
these new forms of work organisation and stress on individuals is still pretty
thin on the ground. We need more hard evidence on this issue. Hopefully, this
will become an increasingly important research agenda in the future.
9.7.4 What can Organisations do to Maximise Health and Well-being at Work?

There is no single prescription for the management of well-being that can be
universally applied to all organisations. The reality is that an organisation’s well-
being policies are likely to be shaped by a number of factors, such as the size of
the organisation, the nature of its activities, its workforce characteristics, and its
existing culture and management style. External factors are also important here,
one of the most important of which is often the health and safety legislation in
force at the time.
We have already seen how, as far as physical well-being is concerned, in
many parts of the world, health and safety legislation is now so comprehensive
that any organisation, provided it complies with compliance with both the letter
and the spirit of the law would be well on the way to ensuring a healthy
physical environment for its workforce. In this sense, the legal system already
provides organisations with a framework for action with respect to physical
hazards and there is no need for a detailed discussion of these issues here. It
is probably fair to say that on the whole the legislation is less well-developed
and comprehensive with respect to psychological well-being. This is partly for
historical reasons where earlier priorities were naturally focused on physical
health, but it is also due to the fact that matters of psychological well-being are
more subtle and generally less well understood than their physical counterparts.
In these circumstances, it makes sense for us to focus our attention here on how
organisations might best safeguard the psychological welfare of their members.
Historically speaking, the approach of traditional personnel management to
the psychological well-being of individuals has tended to be reactive rather

than pro-active. Instead of actively seeking to identify organisational threats

to psychological well-being with a view to eliminating or at least ameliorating
their effects, these issues were dealt with as and when they were brought to the
attention of management. Bearing in mind the reduced role of unions nowadays
in representing their employees and their welfare, such an approach in the
present employee relations climate puts the onus very much on individuals to
complain about their adverse psychological reactions to the work environment.
Of course there is nothing inherently wrong in reacting to problems in this
way, but such a policy is predicated on the assumption that individuals have
an accurate insight into the causes of their feelings of distress or dissatisfaction
at work. It also assumes that individuals will always be willing to bring such
matters forward to management.
Rather than having a purely reactive policy to psychological well-being at
work, it would perhaps be more effective to also adopt a pro-active approach
to managing to this type of issue. What form might such a pro-active approach
take? Continuing with our focus on stress, one example of a pro-active approach
might be to monitor stress and its effects on different types of employee on a
systematic basis. This could be done in a number of ways such as, for example,
by conducting questionnaire surveys. Another method which could be used
would be to conduct interviews with individuals in the organisation about the
stresses they were experiencing.
Continuing with this proactive approach, once key sources of stress had been
identified, the next stage would be to take steps to deal with the problem. This
then brings us to the question of how best to alleviate the damaging effects of
stress on the individual. There at least two ways this could be tackled. However,
it should be emphasises that these are not mutually exclusive and they can be
combined in various ways. The first of these is predicated on the assumption that
the sources of the stress are inherent in the work situation and as such cannot
really be eliminated or reduced significantly. Let us take an example to illustrate
what is meant here. Suppose an organisation found evidence of stress induced
by their policy of numerical flexibility but took the view that such flexibility was
essential in order to remain competitive. In these circumstances the way forward
would be to take steps to improve the abilities of the individuals concerned to
cope successfully with the stress. Possible actions here might include various
training initiatives, such as for example courses in relaxation techniques.
Other actions might include individual counselling. The key feature of this
approach is the assumption that the level of stress is given and the individual
has to be helped to change in order to cope with it. The second approach is
somewhat more radical. Here it is assumed that stress in organisations is not
inevitable in the sense that the particular organisational arrangements that cause
the stress can be altered without necessarily compromising competitiveness.
Going back to the example of flexibility given above, under this scenario, the
goal would be to reduce the amount of flexibility in order to alleviate the stress.
This might well mean that the organisation would need to engage in a trade-off
between the benefits of flexibility and the benefits of having a less stressed
workforce. Finally, it is worth mentioning again that these two approaches to
the management of psychological well-being are not mutually exclusive and the

best programmes probably combine stress reduction and enhancement of coping

ability in order to maximise the impact of the interventions.
9.7.5 Lifestyle Programmes and Well-being

In the previous section, the management of employee well-being was discussed
in terms of interventions designed either to modify certain specific working
practices or to enhance the individual’s ability to cope with the adverse effects
of these. Another complementary way to approach health issues at work is
to endeavour to enhance both the physical and psychological well-being of
employees through the medium of lifestyle programmes. This is more broadly
based insofar as it does not focus on specific jobs or forms of work organisation.
Instead, the aim is to facilitate a healthy lifestyle generally in organisational
members. Examples of this approach include health screening programmes, the
provision of opportunities to improve fitness, and the introduction of healthy
eating and lifestyle principles. Individual counselling opportunities dealing with
both work and non-work problems which impinge on well-being have also been
introduced in some organisations under this general heading (McKenna, 2000).
9.7.6 Well-being and Organisational Culture

We have outlined above a number of specific policies organisations can adopt
to maintain and enhance the well-being of their members and have warned of
the necessity of complying with legal requirements in this regard. However,
important as these specific initiatives are, it is essential not to lose sight of
the overriding importance of organisational culture in this as in so many other
areas. It seems clear that well-being will be most thoroughly addressed when
its importance is embedded in the culture of the organisation. Any organisation
that wishes its well-being policy to bear fruit in terms employee involvement is
most likely to succeed where genuine concern for employee well-being is seen
as a fundamental part of ‘the way we do things around here’. Specific measures
aimed at particular health problems are often necessary, but they are seldom of
themselves sufficient in the absence of the right culture.
9.8 Techniques for Increasing Involvement at Work

In this module, involvement has been an underlying factor linking the various
employee themes we have discussed. The case for increasing involvement from
a competitiveness perspective has already been put forward, the argument
being that there are attitudinal and performance advantages of high employee
involvement. However, even aside from competitiveness issues, involvement
should also be of interest to HRM for at least two other reasons. First, there are
issues of human rights and legitimacy. From an ethical standpoint employees,
as important stakeholders in the organisation, have a right to be involved in
organisational matters which affect them. Second, in a number of countries,
such as for example the UK, there are often legal requirements on employers
both to keep employees informed and to consult them on important issues. Done
properly, one would expect one of the effects of this to be increased involvement.

9.8.1 Dimensions of Involvement

The use of the term ‘involvement’ has only become popular relatively recently
in the HRM literature. However, it is worth pointing out that, with respect
to personnel management, there is a history of activities aimed at information
exchange, employee consultation, influence on decision-making and so on, which
nowadays would be seen as involvement initiatives. In other words, a number
of the techniques we will be discussing are not new, they have simply been
given more focus and a greater imperative by bringing them together under the
umbrella term of involvement.
According to McKenna and Beech (2002), involvement varies according to
three dimensions. These are degree, level and form. The dimension of degree
refers to the amount of influence employees are given over decision-making
in the organisation. Involvement can be at various levels including the indi-
vidual, teams, departments, and all organisational members collectively. Lastly,
with respect to form, a key distinction is between direct and indirect involve-
ment. In the case of the former, the organisation endeavours to engage directly
with individual employees, without going through intermediaries. With indirect
involvement, on the other hand, intermediaries such as, for example, unions are
used. Not surprisingly, at least as far as the UK is concerned, the predilection
of many HRM models for individualism over collectivism has led to a strong
move towards direct involvement and away from indirect involvement in recent
years (Millward et al., 2000).
How have organisations attempted to increase employee involvement? For
our present purposes, we will group employee involvement initiatives into three
categories. These are: communication and consultation; financial incentives; and
influence on decision-making.
9.8.2 Communication and Consultation

Communication in organisations frequently takes place in a downward direc-
tion. The objective of downward communication is to provide information to
employees about what is going on in the organisation generally, or to sell previ-
ously taken decisions to them. Vehicles for downward communication include
in-house journals and company newsletters, e-mail circulations, and briefing
sessions with groups of employees. A popular type of briefing session is known
as team briefing. The purpose of team briefings is to distribute information
from management to employees throughout the organisation. This is done on a
face-to-face basis by means of a series of regular briefing sessions which might
take place, for example, on a monthly basis. The teams should be small enough
to allow face-to-face communications (say up to about 15 or so people) and are
typically led by the team’s supervisor.
Clearly downward communication has its value in terms of keeping organi-
sational members informed, but it also has its limitations. In particular, it does
not tap into one of the most valuable sources of information in the organi-
sation, namely the knowledge and opinions of those on the receiving end of
the communication. For this reason, many organisations have also put in place
upward communications arrangements. These not only access useful sources

of information for management, but they can also have a important function
in making employees feel that their knowledge and views are valued by the
organisation. Examples of upward communication include suggestion schemes,
surveys of employee attitudes and opinions, customer care programmes, and so
on. Upward communication can also be an integral part of many of the HRM
working practices we have discussed in earlier modules in this text, such as for
example, TQM (see Module 3).
The distinction we have drawn here between upward and downward commu-
nication, while useful, is to some extent a simplification, since some techniques
can contain elements of both. For example we have classified the team briefing
method as primarily downward communication. However team briefings should
provide team members with the opportunity for questions and discussion, which
is essentially a form of upward communication.
9.8.3 Financial Arrangements

In Module 5 we discussed a variety of financial incentives such as profit sharing
and share ownership in the context of performance and pay (motivation?). By
strengthening the connection between organisational members’ rewards and the
performance of the organisation, it could be argued that such arrangements also
function to increase employee involvement. Since we have already covered these
schemes in Module 5, they will not be discussed further here.
9.8.4 Participation in Decision-making

Participation in decision-making is not a new concept in HRM. There is a
long history of different initiatives that have been tried in this area ranging
all the way from, on the one the one hand, cosmetic exercises which were in
reality little more than downward communication dressed up as participation, to
experiments with worker directors and even worker control. Boxall and Purcell
(2003) have proposed five overlapping questions which need to be considered
with respect to participation schemes in organisations. The first of these is
concerned with the amount of participation and influence over decision-making
we are talking about. The second relates to the types of decisions to be influenced
by employees, while the third focuses on the level in the organisation at which
decisions to be taken. Then there is the question of who is to be involved. For
example are we talking about direct or indirect involvement? Finally, there is
the question of the mechanisms which are to be put in place to ensure that all
concerned comply with the new arrangements.
According to these authors, the first of these five questions, namely the
amount of influence, is the most critical one since it will affect the operation of
the other four. As the history of participation initiatives shows, the amount of
influence employees have been offered has varied considerably, with very differ-
ent repercussions for both parties. For example, having the opportunity to make
suggestions, which may or may not be ignored by management, is completely
different from having the entitlement to vote on or even veto certain specific
decisions. This in turn is far removed from arrangements where management
and the workforce jointly make all decisions in the organisation.

9.8.5 How Successful Are Involvement Techniques?

As we have seen, there are a number of different techniques organisations can
use to increase employee involvement. These can clearly be used in various
combinations and the exact mix of initiatives will vary from one organisation to
another. Furthermore, not only are there differences in the resources organisa-
tions allocate to their involvement programmes, there are large variations in the
enthusiasm with which they are introduced. Last, but not least, organisations
vary considerably in the extent to which involvement initiatives are embedded
in the culture of the organisation. The presence of all of these variables means
that, despite the existence of a considerable amount of research on the topic, it
is impossible to give an unequivocal answer to the question as to whether or
not, in general terms, involvement interventions work. It is not so much that
we lack research data. Rather there are simply too many types and levels of
involvement intervention to allow us to come up with a straightforward yes or
no answer to the question posed above. Perhaps it would be more meaningful
to consider what we know about the circumstances under which attempts to
enhance employee involvement are more or less likely to have an impact.
So what can we conclude about involvement interventions from the research
which has been done so far? First of all let us flag up some of the gaps in our
research knowledge in this area. First of all, we know more about some types
of involvement intervention than others. For example, participation has long
been a popular research topic, and quite a lot has been written about its effects.
Also, we have more information about the impact of involvement programmes
on opinions and attitudes than about their effects on performance. Indeed some,
studies have restricted themselves to the opinions of the managers implementing
the programmes without directly questioning those at whom the programmes
were directed.
As far as participation is concerned, there is good evidence that participation
can have a positive effect on employees’ attitudes. For example, Gallie and White
(1993) conducted an extensive survey of employees in the UK and concluded
that participation was of fundamental importance to employees’ attitudes to their
organisations. However, we saw earlier that a wide range of types and levels
of participation exist and we need to know more about how these differences
affect employees. For example, there is some evidence that individuals are
more interested in influencing decisions which affect their immediate workplace
situation than in those which relate to the bigger organisational picture or
which are more remote from their daily activities (Hanson and Rathkey, 1984).
Holden (2004) concluded, from a review of several surveys of participation
encompassing a number of countries, that typically ‘employee involvement is
very limited and is likely to take the form of information to and consultation
with the workforce’. Holden argues that, even although managers may accept
that employee involvement in the form of participation is desirable, they also feel
that their need to maintain their prerogative over decision-making outweighs
its perceived benefits. A similar disparity between what is seen as beneficial
in principle and what occurs in practice was observed in a study by Ramsey
(1996). According to the findings of this survey of 400 organisations, although
managers rated team briefings, opinion surveys and the like more highly as

forms of communication than techniques such as memos and notice boards, it

was the latter that they actually used more frequently when communicating
with employees.
Both Holden’s findings and those of Ramsey point to discrepancies between
the perceived benefits of employee involvement and the extent to which organi-
sations are willing to adopt procedures that ensure that involvement is a reality.
This in turn raises the question as to the extent to which, in many organisa-
tions, employee involvement is really embedded in the overall culture of the
organisation. Marchington (1989; 1995) provides evidence that, in practice, many
involvement systems in organisations were no more than add on arrangements
with little real impact on the individuals they were intended to influence. How-
ever, when such systems were integrated with other organisational procedures
and were part of the organisational culture, Marchington et al., (2001) found that
managers reported that they had a positive impact.
In conclusion, the balance of the evidence suggests that some types of involve-
ment intervention can have positive effects on employee attitudes, especially
when they go beyond mere downward communication and where they are
integrated into the general culture of the organisation. However, the evidence
suggests that these conditions are perhaps not met too often in practice!
9.9 Summary
The term employee relations refers to those policies and procedures which are
applied to employees collectively. The way in which an organisation pursues its
employee relations activities will be influenced by the political and legal context,
by the frame of reference it adopts and by its preference for collectivism as
opposed to individualism. A key theme underlying much of modern employee
relations is involvement. The decline of the influence of the unions in the 20th
century and the growth of new HRM philosophies and techniques has meant
that the role of unions in modern organisations is being re-appraised. Health and
well-being at work continues to be an important element in employee relations,
and there are a number of steps organisations can and should take to maximise
well-being at work. There are a number of techniques organisations can use to
increase employee involvement, although it appears that ‘the piecemeal nature
of some organisations’ interventions in this area limits their effectiveness.
Review Questions
9.1 All HRM policies in organisations are best dealt with on a collective, rather than
individual, basis.
9.2 In many countries, employee relations activities are significantly influenced by

political forces.

9.3 In all three of Fox’s frames of reference conflict can occur between employees
and employers in employee relations.
9.4 In Fox’s frame of reference, union representation will only ever exist where
management takes a radical or a pluralist approach.
9.5 According to most contemporary HRM thinking, all employee relations activities
should have employee involvement as their primary objective.
9.6 Union-management are activities in organisations are often influenced by the

wider societies of which they are a part.
9.7 There has been a universal decline in union power and influence in the latter
part of the 20th century.
9.8 With the growth of direct communication and related HRM practices, it is now
clear that there can be no role for unions in the organisations of the future.
9.9 The WERS 1998 survey produced evidence that modern HRM practices and union
recognition can co-exist successfully in organisations.
9.10 The only reason formal grievance procedures are necessary in modern organi-
sations is because grievance always relate to sensitive and delegate issues.
9.11 Feelings of tension and anxiety are common causes of stress in organisations.
9.12 Stress can affect employees at all levels in an organisation.
9.13 A pro-active approach to managing psychological well-being at work typically

involves taking active steps to monitor pressures on individuals.
9.14 All approaches to stress management assume that the key priority is to remove
the sources of the stress or at least reduce it.
9.15 Specific measures aimed at employee well-being are likely to be more successful
when they are embedded in the organisation’s culture.
9.16 The case for increasing employee involvement is purely and simply one of
increasing competitiveness.
9.17 Team briefings are only concerned with downward communication.
9.18 According to Boxall and Purcell (1993), the single most important question
which needs to be considered with respect to participation is the amount of
influence employees have on decisions.
9.19 There is evidence that employees have more interest in influencing decisions
which have an immediate effect on them compared with decisions which relate
to wider organisational matters.
9.20 We currently know more about people’s opinions about the value of the effects
of participation than we do about its effects on actual performance.

9.1 Explain Fox’s (1974) frames of reference and discuss their relevance for employee
relations.
9.2 How valuable is participation as a technique for increasing employee involve-

ment?
9.3 Discuss reactive and proactive approaches to the management of psychological

well-being at work.

You are a human resource consultant who has been asked to advise a large organ-
isation on a key aspect of employee relations. The company is currently union-free
but has been asked by some of its employees to consider union recognition. The
managing director has called a meeting of senior staff to canvass their opinions.
You have been invited to attend the meeting.
Below are listed the statements of various managers at the meeting. You task is
to comment on their views and make suggestions as to the best way forward.
Chief Executive.
While I have an open mind on the issue, most of my fellow chief executives in other
companies tell me that unions are out-dated and all the best run organisations are
union-free nowadays. Also, I am the one who is responsible to the board and I would
be against having a union if it meant that it would be muscling in on my right to decide
what is best for the organisation. I am all in favour of participation as long as I decide
what happens!
Production Manager.
We are doing pretty well at the moment, so why change things. Everybody knows
that unions are a disruptive influence and always try to bias the workforce against
management. I know some companies find unions useful for things like grievance
procedures, but we have good managers here and we can handle grievances and the
like informally.
Finance Manager.
Once we let them in the door in no time at all they will be making unrealistic and
unreasonable wage demands. Before you know it we will either have endless strikes or
will give in to their demands and become uncompetitive.
Marketing Manager.
This will not affect my team too much, although we have to think about our image
here. I agree with the chief exec here (as usual!). None of the top companies bother
with unions nowadays and we shouldn’t either.
Safety Engineer.
Unions used to have a useful function in the bad old days when they kept us on our
toes as far as safety was concerned. Although the government pretty much does that for
us nowadays with all the various safety laws, I still think it would not be a bad thing
(even though it might make my job harder) if the unions were also keeping an eye out
for any health problems on their members’ behalf. After all, these days you can’t be too
careful where safety is concerned.

Personnel Manager.
I am in favour. The workers need somebody to look after their interests and nobody but
the unions can do this. Also, I have heard rumours that quite a few of our lads want to
have a union and if we oppose them on this its going to make it even harder to get
them committed to our future plans, especially the move to greater flexibility.
References
Boxall, P. and Purcell, J. (2003). Strategy and Human Resource Management, Arrowsmith:
Bristol.
Bratton, J. and Gold, J. (1999). Human resource Management: Theory and Practice, 2nd edn.,
Basingstoke: Macmillan.
Brown, W., Deacon, S. and Ryan, P. (1997) ‘The effects of British industrial relations
legislation, 1979–1997’ National Institute Economic Review, 161, 69–83.
Cooper, C. L. (1996). Handbook of Stress, Medicine, and Health, Boca Raton, FL: CRC Press.
Cooper, C. L. and Payne, R. (eds.) (1980). Current Concerns in Occupational Stress,
Chichester: John Wiley.
Culley, M., Woodlands, S., O’Reilly, A. and Dix, G. (1999). Britain at Work: The 1998
Workplace Relations Survey, London: Routledge.
Foulkes, F. K. (1980). Personnel Policies in Large Non-Union Companies, Prentice Hall:
Englewood Cliffs, NY.
Fox, A. (1974). Beyond Contract: Work, Power and Trust Relations, Faber and Faber:
London.
Gallie, D. and White, M. (1993). Employee Commitment and the Skills revolution, London:
Policy Studies Institute.
Guest, D. E. (1989) ‘HRM: Implications for industrial relations’, New Perspectives in
Human Resource Management, ed. Storey, J., London and New York: Routledge.
Hanson, C. and Rathkey, P. (1984). ‘Industrial democracy: a post-Bullock shopfloor
view’. British Journal of Industrial Relations, 22, 154–168.
Holden, L. (2004). ‘Employee involvement and empowerment’, Human Resource Manage-
ment: A Contemporary Approach, eds. Beardwell, I. Holden, L. and Clayton, T., Harlow:
Pearson Education Limited.
Hollinshead, G. and Leat, M. (1995) Human Resource Management: an International and
Comparative Perspective, London: Institute of Management.
Institute of Personnel and Development (1997) Europe: personnel and development, IPD
Brief, July.
Kochan, T., Katz, H. and McKersie, B. (1986) The transformation of American Industrial
Relations, New York: Basic Books.
Marchington, M. (1989). ‘Joint Consultation in practice’, Personnel Management in Britain,
ed. Sisson, K., Oxford: Blackwell.
Marchington, M. (1995). ‘Involvement and participation’, Human Resource Management:
A critical Text, ed. Storey, J., London: Routledge.

Marchington, M., and Wilkinson, A. (1996). Core Personnel and Development, London: IPD
Marchington, M., Wilkinson, A., Ackers, P. and Dundon, T. (2001). Management Choice
and Employee Voice, London: CIPD.
Marshall, A. and Cox, B. (1992). The Trade Union Movement in the UK 1992, Oxford:
Malthouse.
McKenna, E. (2000) Business Psychology and Organizational Behaviour, 3rd edn. , Hove:
Psychology Press.
McKenna, E. and Beech, N. (2002). Human Resource Management, Harlow: Pearson
Education Ltd.
Millward, N., Bryson, A. and Forth, J. (2000). All Change at Work: British Employment
relations 1980–1998 as portrayed by the Workplace Industrial Relations Survey Series, London:
Routlege.
Ramsey, H. (1996). ‘Involvement, empowerment and commitment’, Handbook of Human
Resource Management, 2nd edn, ed. Towers, B., Oxford: Blackwell.
Royal Commission on Trade Unions and Employers’ Associations (1968) London: HMSO
(Donovan Commission).
Slikeu, K. and Frank, C. (1986). ‘Manning the psychological first aid post’, Management
Today, February.

Appendix 1
Answers to Review Questions
Contents
Module 1 A1/1
Module 2 A1/4
Module 3 A1/8
Module 4 A1/14
Module 5 A1/19
Module 6 A1/24
Module 7 A1/30
Module 8 A1/34
Module 9 A1/38
Module 1
1.1 True see Section 1.1
1.2 False see Section 1.2
1.3 True see Section 1.2.2
1.4 False see Section 1.2.2
Human Resource Management Edinburgh Business School A1/1

Appendix 1 / Answers to Review Questions
1.1 Human resource management (HRM) had its origins in the advanced West-
ern economies, particularly the United States. In the early 1980s, there was
an increasing awareness among many organisations in the West that they
were not competing effectively, both at home and internationally, and that
this was threatening their very survival. Also, there was a realisation that
the increasing globalisation of markets would lead to further intensification
of competition in the future. A major reason for this lack of competitiveness
was seen to be the success of Japanese companies in penetrating markets
world wide. Furthermore, better utilisation of human resources by Japanese
organisations was believed to be key to their competitive advantage.
HRM thus developed out of a conviction that the key to increased competi-
tiveness was better utilisation of people in organisations. HRM was seen as
a replacement for traditional personnel management, as practised in many
organisations, since the latter was felt to be incapable of delivering the
required improvements in the management of people in organisations.
In addition to the influence of the Japanese phenomenon, a number of
important research studies of successful companies in the West, notably that
of Peters and Waterman, pointed to people management as a critical factor
in achieving excellence in organisational performance.
Another influence on the development of HRM was the effect of politically
inspired changes in the West in the form of the so-called enterprise culture.
This encouraged new thinking about how organisations should be run. In
particular, prime place was given to market forces in the scheme of things,
along with a greater emphasis on value for money and customer satisfac-
tion. All of this had implications for how people should be managed and
reinforced the idea that organisations should replace traditional approaches
to people management with something which was more in tune with the
spirit of the times.
All of these factors led to the evolution of the field of HRM which, although
it still had much in common with traditional personnel management, dif-
fered from it in certain very important respects. According to proponents of
HRM, these differences are the key to ensuring the delivery of the complete
utilisation of human resources which is necessary to secure competitive
advantage for organisations.
1.2 Strategic HRM sets the various HRM philosophies, approaches, and tech-
niques which could be adopted by an organisation within the context of
its overall business requirements. In this respect, one of its functions is to
integrate a range of HRM techniques in pursuit of the overall objective of
supporting the organisation’s business strategy.
A1/2 Edinburgh Business School Human Resource Management

Strategy formulation involves a number of activities such as an analysis

of the organisation’s strengths and weaknesses, a review of threats from
competitors, and a consideration of possible future opportunities. A key
aspect of strategy formulation is the development of a vision as to how
the organisation should develop in the future. Once the vision has been
articulated, the next stage in the process is to consider how the desired
changes for the future can best be implemented in order to make the vision
become a reality.
The function of HRM strategy is to support business strategy. It can do so
at both the formulation and the implementation stage. As far as formulation
is concerned, what the organisation is going to be able to do and the best
direction to go in will depend greatly on its available human resources.
Consequently, one of the functions of HR strategy is to provide those
responsible for overall strategy with an analysis of the organisation’s human
assets. This information would then be taken into account along with the
organisation’s other assets to arrive at a comprehensive evaluation of its
strengths and weaknesses.
Once the basic strategy has been formulated, HR strategy can have a key
role in the implementation process. For example, suppose an organisation
wanted to implement a strategy of moving away from its current emphasis
on high volume, relatively low cost, products towards an emphasis on low
volume, high quality, products. A number of HRM techniques could be put
in place to ensure this change was successfully implemented. These might
include: devising and running training courses to ensure employees can
produce to the new quality standard; setting up communications systems to
get the quality message across; moving to a system of self-managed teams
with responsibility for their own quality control; and so on. The point here
is that all of these activities would be integrated as part of an overall HR
strategy designed to ensure the successful implementation of the strategic
business decision to focus on quality.
HRM in Action
A number of points could be made in response to the memorandum, including

the following:
1 There may well be good reasons to adopt an HRM approach, but we should
not necessarily accept everything outside experts recommend without think-
ing carefully about the extent to which the recommendations apply to our
particular circumstances.
2 Although in a sense HRM is designed to ‘replace’ personnel management,
the two have much in common. In particular, much of the expertise required
is common to both. This is particularly true at the operational level. Indeed
it has been argued by some that HRM and personnel management are not
as fundamentally different as is often made out. Consequently, we will not

need to make large numbers of personnel staff redundant if we switch over

to an HRM approach.
3 Following on from the previous point, although it is true that proponents of
HRM advocate greater involvement of line managers in people management,
this does not mean that we will no longer need specialists in the field. In
other words, line managers are not meant to replace HRM specialists.
Both specialists and line managers would have a responsibility for people
management if an HRM approach were implemented.
4 Reacting quickly to crises is not strategy. The latter is essentially proactive,
rather than merely reactive.
5 Strategic HRM should not just be about implementing predetermined busi-
ness strategies. It should also play a part in formulating strategy. This
is because the optimum future strategy will be partly determined by the
human resources the organisation has available. General business strategy
and HRM strategy should have a mutual influence on each other.
6 The term ‘soft’ HRM should not be taken literally. It is not meant to imply
that the organisation should be soft on people. It is much more about
treating people as a unique resource and setting up conditions to enable the
organisation to utilise their potential to the full. Perhaps we should consider
adopting a soft approach.
7 It might well be necessary for us to try to change the organisational culture.
However, this is unlikely to be an easy task and it is doubtful whether a
few training courses will be sufficient to do the job.
8 According to HRM theory, it is quite right to emphasise the need for a
whole new approach, rather than making piecemeal changes.
9 As far as the organisational behaviour consultants are concerned, HRM has
borrowed heavily from organisational behaviour theory and research in the
past, and will probably continue to do so in future. Consequently, we might
well still have a use for consultants in this area, even if we do adopt an
HRM approach.
10 Much of HRM thinking originated in the USA and was stimulated by
the apparent success of Japanese management techniques. In these circum-
stances, it may well be that our US and Far East colleagues are already
ahead of us on this one. Perhaps we ought to check this out. They might
be able to advise us!
Module 2

2.1 The Fombrun model typifies what is known as ‘hard’ HRM, with the
emphasis being very much on the ‘resources’ rather than the ‘human’
aspect of HRM. Bottom line profit is the main consideration and people
are seen as no different from any other resource. In this model, everything
is driven by business strategy. Thus, for example, general strategy dictates
HRM strategy with no influence in the other direction. The model is highly
prescriptive in that it offers advice to managers as to how things ought to
be done.
On the positive side, the model argues for the integration of various HRM
activities in pursuit of overall business objectives. It also points out the need
to link HR strategy into overall business strategy. However, the model can
be criticised in a number of ways. For example, it takes little account of the
needs of employees. They are seen simply as resources to be utilised for the
organisation’s benefit. In this respect, it contrasts with traditional personnel
management which saw itself as having a legitimate interest in the welfare
of employees. The model is very unitarist in orientation, recognising only
a small number of legitimate stakeholders. For example, little mention is
made of trade unions or wider society. The one way relationship between
business strategy and HRM strategy is also problematic, since it precludes

information about the organisation’s strengths and weaknesses in terms of

human resources being taken into account at the strategy formulation stage.
Boxall (1992) has put forward a number of criticisms of matching models
in general, most of which apply to the Fombrun model. He points out, for
example, that only rarely have the models been backed up by systematic
research. Second, he suggests that strategy formulation is not as rationalistic
as the models assume. The models are over-restrictive in the sense that
they ignore a number of variables which have been shown by research
in organisational behaviour to affect employee attitudes and behaviour.
Finally, Boxall suggests that too close a fit between HRM strategy and
business strategy, as proposed in matching models, is likely to lead to lack
of flexibility.
2.2 The Beer et al. model of HRM, popularly known as the Harvard model, was
heavily influenced by the organisational behaviour literature, particularly
the human relations movement. The model typifies what is known as ‘soft’
HRM. In this respect, it emphasises the human, rather than the resource,
side of the HRM equation. The key to competitive advantage, according
to this view, is fully to realise people’s potential and so maximise their
contribution to the organisation. The model is very pluralistic insofar as it
recognises that there is a wide range of stakeholders in the organisation,
apart from senior management and shareholders. It also recognises that
general business strategy is only one of a number of factors which should
influence HR strategy. The model is somewhat prescriptive, but not overly
so compared with some others. For example, managers are presented with
policy choices rather than being told what is the single best way to do
things.
There is a strong emphasis on employee commitment in the model, which
is believed to lead to self-motivation and a willingness to adapt to change.
Furthermore, it is proposed that, if the right HR policies are adopted, these
will be to the mutual benefit of everyone in the organisation. The emphasis
on mutual benefit, and the general willingness to take employees’ inter-
ests into account makes the Harvard approach quite similar to traditional
personnel management. Because of the perceived importance of effective
management of human resources for achieving competitive advantage, the
model proposes that all managers should have some responsibility for HR
matters.
HRM in Action
A number of points could be made in your reply to the questions. Some of these
are listed below:
1 Is this soft approach any better than what they call the hard approach?
Since there is not a great deal of research testing out the different approaches,
it is not possible to give a definitive answer to this. However, the soft

approach takes account of a lot of well-founded research in the organisa-

tional behaviour area, which is good. Also, the soft approach takes more
account of both the employees’ interests and those of trade unions. Con-
sequently, it would probably be easier to get people to buy into than hard
approaches. It seems to have been more widely adopted than the hard
approach, which perhaps tells us something.
2 If we use this approach to work out an HR strategy, do we need to take
on board the views of the unions?
Not only should we consider the views of the unions, the Harvard model
suggests that there are a number of other groups who have a legitimate
interest in what we do, and at least some of these should be consulted.
3 The report suggests that HR strategy can influence business strategy, but
surely it should be the other way around?
It actually works both ways. Of course business strategy should affect HR
strategy. But HR strategy can input to general strategy too. For example, an
analysis of the capabilities of our current workforce could indicate which
alternative strategies are more likely to be implemented successfully.
4 The report says that we should give our line managers more responsibility
for people management. But what if the line managers screw up? In any
case why is this necessary?
They argue that it is necessary because competitive pressures are so great
nowadays that we need to get the maximum out of people if we are to
survive. All managers need to be involved in helping to ensure that this
happens. Clearly there will need to be a considerable investment in training
our managers if we are to avoid possible screw ups.
5 Is it really the case that the right HRM policies are to the mutual benefit
of all employees?
This is a debatable point. Some would argue that there are always going to
be some conflicts of interests between, for example, the shopfloor and top
management. However, the Harvard theorists believe that this can be done
with the right policies. No doubt it can be achieved to some degree and it
sounds like a good ideal to strive for.
6 Does it really matter whether or not employees are committed, so long as
they do what they are told by their managers?
The theory is that if employees are committed they will give their maximum
because they want the organisation to succeed, rather than just complying
with management’s demands. According to the theory, this comes about
because people who are committed share the values of top management.
7 How easy is it going to be to get people to be more committed?
Accepting the idea that commitment is desirable is one thing; changing
people’s level of commitment is another. While there are several suggested
ways of doing this, success is not necessarily guaranteed.

8 What do we risk if we go down this route?

We are making changes based on ideas which, while they may be intuitively
sound, are not backed up by that much systematic research. We have to
face the fact that some of the ideas may be wrong! It may be more difficult
to put the theory into practice than the consultants suggest. We could
for example spend a great deal of time and money trying to increase
commitment without actually succeeding in increasing it sufficiently to
make much difference in practice. The notion of mutual benefit requires
us to convince the workforce that there is something in the new system
for them. Will we be able to do this? Our managers are currently very
busy most of the time and they may not welcome the additional work that
responsibility for human resources would entail.
Against all of these arguments, we have to consider the risks if we do not

change. These ideas seem to be gaining widespread popularity and if they do
indeed make businesses more effective, then we could lose out badly to our
competitors if we fail to take them on board.
Module 3


3.1 Quality has been defined in a variety of ways in HRM theory. Four common
approaches are discussed in this essay.
Quality is often defined in terms of product superiority. The idea of quality
as product superiority came about largely as a response to the perceived
superiority of Japanese products. It is reasonably straightforward to define
what is meant by quality here. Relevant aspects of quality include a low
level of defects in manufacture, high reliability of the product in service,
and long life of the product. In essence, product quality is about providing
the customer with value for money.
Quality can also be defined as customer satisfaction. In this case the key
requirement is to meet customer expectations. When this definition is used,
quality criteria can be applied beyond manufacturing industry to include
both service industries and the public sector of the economy. The term cus-
tomer is usually defined broadly in this context, to include not only external
customers who buy services, but also internal customers who receive ser-
vices from other parts of the organisation. An important problem which
often arises when customer satisfaction is adopted as a quality criteria in
the service and public sectors is how best to define quality. For example,
there could well be high customer satisfaction among students on a particu-
lar degree programme if the pass rate was 100%, but would this necessarily
mean the degree was a high quality product?
Guest proposes three aspects of quality. The first is the quality of the staff
in the organisation. The second is the quality of performance (this relates to
product quality and customer satisfaction as described above) and the third
is s good reputation with the public as being a good employer.
Finally, quality has been defined as organisational culture. The idea here is
that quality is a fundamental feature of everything the organisation does.
This is often associated with an underlying philosophy which emphasises
the need for a continual striving for improvement in all aspects of the
organisation’s functioning.
3.2 Total quality management is a system designed to make quality central to an

organisation’s culture, so that all aspects of its functioning are driven by the
need continually to maintain and improve quality. TQM is not just about the
provision of goods and services. It applies to everything the organisation
does. Highest priority is given to meeting the requirements of the customer
– both internal and external. Everyone in the organisation should be com-
mitted to TQM, not just top management. The emphasis is on continued
improvement, rather than just reaching a required standard. It is also about
changing the culture of the organisation and creating a whole new set of
attitudes. In this sense it is not about providing a quick fix to a short term
problem. New forms of organisational structure and new forms of work
organisation often accompany the introduction of TQM. Examples of the

latter might include introducing team working, empowering workers lower

down the hierarchy, and adopting more flexible working arrangements.
It is difficult to say how well TQM works in practice. Many anecdotal
reports of its success exist in the form of case studies and the like. There
are, however, fewer systematic studies of its effectiveness in the literature
and the results from these are rather mixed. Where TQM has failed, reasons
put forward for its lack of success have included not enough integration
of activities, not enough commitment from top management, not enough
commitment from middle management, and a feeling by employees that the
system had been imposed on them.
3.3 Traditional bureaucratic structures are typically hierarchical, with power,

status, and salary increasing as one moves up the hierarchy. The structure
is usually that of a pyramid, with fewer and fewer people in each layer
from the bottom to the top of the hierarchy.
Bureaucratic structures have a number of potential advantages. One of
these is clarity. Because they are formal, rules oriented systems, it is clear
what everyone’s responsibilities are. Lines of authority are transparent, and
accountability is also clear to everyone. From the organisation’s point of
view, this has advantages in terms of efficiency. Everyone knows what they
have to do; managers know their areas of responsibility and what they
will be held accountable for. From the individual’s point of view, there is
good evidence that uncertainty in terms of duties and responsibilities is a
source of stress, and since this tends to be relatively low in bureaucratic
organisations, this could be seen as an advantage of this type of structure.
One of the most important drawbacks of bureaucratic structures is the fact
that their strong rules orientation makes them inflexible and resistant to
change. Power and responsibility are concentrated higher up the organi-
sation in bureaucratic organisations. Consequently, those lower down may
have less responsibility than they want and can cope with, and this may
become a source of dissatisfaction. Finally, the emphasis on rules and pro-
cedures which typifies many bureaucratic organisations can stifle creativity
and personal initiative.
3.4 Organisational culture can be defined as the shared values which are held
by the members of an organisation. Deal and Kennedy described it as ‘the
way we do things around here’. A strong culture can be said to exist when
two conditions prevail. First, the corporate culture – defined as the values
top management would like everyone in the organisation to share – is
clearly articulated and communicated to everyone. Second, these values are
genuinely shared among all members of the organisation.
The argument that strong cultures result in high performance rests first
and foremost on the idea that the strategy formulation process can identify
a particular culture as being the key to improved organisational perform-
ance. This being the case, provided this corporate culture is transmitted to
organisational members and they accept it, high performance should result.

The argument also depends on certain assumptions about the link between
shared culture and individual performance. The key factor here is commit-
ment. It is assumed that if individuals endorse the corporate culture, this
will result in employee commitment, and this will, in turn, ensure high
performance.
Clearly, the above line of argument falls down if the identified corpo-
rate strategy and associated culture are not actually the optimal ones for
the organisation. In this case, a strong culture could actually be counter-
productive, since it could result in everyone pulling hard in the wrong
direction. Also, the logic of the argument depends on the assumption that
it is actually possible to change organisational culture at will. This may in
fact not be the case. If everyone has common values, this could be another
way of saying that there is a dearth of diversity of viewpoints in the organi-
sation. This may, in turn, result in a lack of flexibility in reacting to changed
circumstances. Finally, even if strong cultures result in high commitment
levels, the proposed relationship between performance and commitment has
not actually been unequivocally demonstrated by systematic research.
HRM in Action
Your task was in four parts:
• indicate any information required

• give general advice about culture change
• suggest techniques which could be used to produce culture change
• indicate particular circumstances which might need to be taken into account.
Additional Information Required
Examples of relevant questions to put to the organisation in preliminary discus-

sion might include:
1 Has the quality strategy been carefully thought through as part of an overall
HRM/business strategy? Or is it a quick fix solution?
2 Is the organisation clear about what is meant by the term ‘strong culture’?
3 What kind of culture exists at present?
4 What about sub-cultures?
5 Why does the organisation believe that culture change is the answer to its
problems?
6 What exactly are its problems anyway?
7 Have the unions been informed of the organisation’s intentions? How have
they reacted?

8 Have the workforce in general been informed? What has been the initial
reaction?
9 Which customers are we talking about when we talk about quality? External
customers? Internal customers? Or what?
10 How much does the organisation think it will need to invest in terms of
time and money to achieve the desired objective?
General Advice About Culture Change
Examples of points which could be made here include:
1 True culture change is very difficult to manage and may not be achievable.
2 However, employees may, as a result of training or other interventions,
change their behaviour in the desired direction without changing their
underlying values. This would still be useful for the organisation.
3 Any change may only last for a limited period and may require further
interventions to maintain it.
4 It might not be a good idea to push the idea of shared values too far. A
little diversity can be a counterbalance to the kind of rigidity in thinking
which can be a feature of overly strong cultures.
5 Customer satisfaction should include internal customers. It is best to create
a quality culture which applies to everything the organisation does.
Culture Change Techniques
It is not possible to make detailed recommendations at this stage until more

precise information is available. However a number of general suggestions can
be made.
1 First, the desired corporate culture must be widely communicated to every-

one in the organisation.
2 Successful culture change depends crucially on leadership and steps must
be taken to ensure that managers are committed to the new culture.
3 A variety of methods of communicating the new culture should be adopted.
These include briefing sessions, training courses, group discussions, and
so on. It is important that these are not just top-down exercises. The
opportunity for employees to express their views and have these genuinely
taken into account is important if a successful outcome is to be achieved.
4 It may be necessary at some stage to consider making personnel changes
to ensure the new culture is adopted throughout the organisation. For
example, if some employees do not wish to accept the new culture they
could, if eligible, be offered early retirement to be replaced by new staff.
The Airline’s Circumstances
Points which could be raised here for discussion might include:

1 The airline employs multicultural staff recruited world-wide. People from

different cultures have different values and this needs to be taken into
account. For example, the idea of quality in customer care may be more in
tune with some cultures than others.
2 The airline employs staff in a number of quite divergent work roles. In
these circumstances important sub-cultures may exist in the organisation
reflecting the very different education and background of the people in
these work roles. These will have to be taken into account in the design of
the change programme.
3 Direct face-to-face customer contact is more important in the airline busi-
ness than in many others. Consequently, while the culture change pro-
gramme should be organisation-wide, particular attention should be paid
to employee groups in direct contact with customers.
4 The existence of several unions complicates matters and special efforts will
need to be made to ensure that they are involved in, and supportive of, the
programme.
Module 4

4.1 Performance requirements can be specified either in terms of end results (i.e.
desired organisational outcomes, such as profit) or in terms of the processes
which are assumed to lead to these outcomes. An example of the latter
might be the commitment level of employees, based on the assumption that
high commitment leads to high performance. Neither of these is inherently
better than the other, although process criteria do depend on assumptions
about the link between the criteria and organisational outcomes.
Taking end results criteria first, one of these might be bottom line profit.
One limitation of this criterion is the tendency to focus on the short term.

At the end of the day, long-term viability may be more important than
profits over a short period. Dividends to shareholders could be another
end results criterion. This also carries with it the danger of focusing on
the short term. Furthermore, shareholders are not the only stakeholders in
organisations and concentration on dividends excludes other stakeholders
from the equation. Market share could be used as a criterion. However,
having a large market share might not always be a good thing from the
point of view of the long-term health of the organisation if, for example,
high market penetration had been achieved at the cost of having a very
small product range. Even using company growth as a criterion has its
limitations, since organisations which become too large can end up being
highly bureaucratic, leading to inflexibility and an inability to respond
quickly to changing circumstances.
There are a number of possible process criteria of performance at the organ-
isational level. One of these is the extent to which employees demonstrate
high commitment. The problem with this criterion is that it makes assump-
tions about the relationship between commitment and performance which
have not been unequivocally established. Other possible process criteria
include the extent to which the organisation has a strong culture, the level
of job satisfaction of the workforce, and the degree to which employees
are empowered. These all have the same limitation as commitment as a
criterion, i.e. their value is dependent on the extent to which assumptions
about their relationship to performance are true in practice.
4.2 The use of traits to describe the human qualities needed to perform jobs to
a high standard was highly popular for a number of years. The rationale for
this was the idea that traits were the source of many of the job behaviours
which were believed to be necessary for effective performance at work. To
take just one example by way of illustration, meeting deadlines, working
extra hours if necessary, putting in extra effort, and a host of other desirable
behaviours, could all be assumed to be a result of the underlying trait of
conscientiousness.
Despite their intuitive appeal, the use of traits in practice proved to be prob-
lematic in a number of ways and as a consequence the popularity of this
approach is in decline. One of the difficulties arose because of the fact that
traits are inferred, rather than directly observed. Since different managers
rarely used precisely the same information to infer the existence of a par-
ticular trait, there tended to be a lack of consistency among the managers.
Often traits were poorly defined, leading to further inconsistencies amongst
the managers using them. Ultimately, what is of interest in this context is
actual observable performance. However, only rarely was the link between
particular traits and specific aspects of performance explicitly spelled out, so
that individual managers were left to their own devices to make this crucial
link. Given the inferential nature of traits, and the frequent lack of proper
definitions of what exactly constituted each trait, it is not surprising that
there were often serious problems when it came to measuring them. Many
important areas of work activity require the person to possess a repertoire

of behaviours in order to be able to execute them effectively. For example,

to be a good leader there are a number of things a person must be capa-
ble of doing. However, to call leadership a trait is misleading since these
behavioural repertoires will not always coincide in the same person. Yet
this is what one would expect if leadership were indeed a trait. For exam-
ple, presumably a good leader needs to be, among other things, assertive
and willing to listen to other people’s point of view. But assertive people
are not always good listeners. Finally, many traits are core characteristics.
Consequently, if performance is defined purely in terms of traits, there is a
danger that insufficient emphasis will be placed on skills and motivational
characteristics in the analysis of performance requirements.
4.3 From a strategic HRM perspective, many organisations need constantly to

adapt to changing circumstances. Consequently, there is a need to be able
to predict future performance requirements in new situations which might
be quite different from the previous ones. However, most traditional job
analysis techniques are designed to focus on past and present requirements
and are not well suited to the prediction of future needs in a changed envi-
ronment. Job analysis tends to focus on job-specific abilities, but functional
flexibility requires individuals to be capable of carrying out a range of roles.
Also, taking a longer-term perspective, people are now much more likely to
be required to take on a number of completely different jobs over the span
of their careers than has been the case in the past. Because of this, generic
abilities are becoming more important than the job-specific abilities which
tend to be the focus of traditional job analysis. Much of HRM theorising
stresses the importance of attitudinal qualities. However, job analysis has
not usually placed much emphasis on attitudinal qualities. Finally, from a
strategic HRM perspective, job analysis has been seen to be too narrow in
its focus, concentrating as it does on performance of everyday job roles.
From an HRM point of view, performance is seen as much broader than
this, including elements such as contribution to team effort, commitment to
the organisation’s overall objectives, and so on.
HRM in Action
One possible set of answers to the four situations is as follows.
Situation One
Since the client wants a comprehensive analysis, it is recommended that
more than one method of job analysis is used. As there are over 100 junior
managers in the organisation, a questionnaire method would be feasible
and cost effective. A questionnaire could be designed for the purpose of
the analysis, or one could be bought off the shelf. For example, the Work
Profiling System can be used for all types of managerial position. Diaries,
the conference method, and observational approaches would all be suitable
techniques to use in addition to questionnaires.

Situation Two
The number of individuals is small, ruling out a questionnaire approach.
In any case, the education level of the job holders would probably rule this
out as the first option. With such small numbers interviews might be the
best method. Everyone in the organisation could be interviewed, including
management. Given that much of the work is likely to be carried out some
considerable height above ground level, work participation by the analyst is
not recommended! In view of the likely importance of safety considerations
in this job, the use of critical incidents might be useful for drawing out
examples of good and bad performance in this area. It is unlikely that this
particular occupational group would respond well to being asked to keep
diaries.
Situation Three
This client seems to be thinking in terms of using traits to specify perform-
ance requirements. He should be advised of the difficulties this is likely
to create and urged to adopt a behavioural approach, possibly within a
competency framework. Given the critical nature of the sales role in this
company, it would be important to make the job analysis as comprehensive
as possible. Therefore, we should consider using several different job analy-
sis techniques. Since the sales force spend most of its time out of the office,
their managers will have limited contact with it, particularly with respect
to the all important area of interactions with customers. Consequently, they
will not be able to supply much useful information for the job analysis.
They may be able to tell us who generates most business, but we really
need to know why this is the case. Interviews with the salespeople would
be useful, especially if they were asked to provide examples of particularly
successful and unsuccessful sales episodes. Work diaries could also be valu-
able here. If successful and less successful salespersons could be identified,
observational techniques could be used to gain insights into precisely how
sales are made (or not made as the case may be). As salespersons, they are
likely to be an articulate group which would point to the use of a series of
brainstorming sessions using a conference type method. No information is
provided about the size of the sales force. This would be required before a
final decision could be taken about which job analysis methods should be
used.
Situation Four
All of the traditional job analysis methods are somewhat limited here for
two reasons. First, functional flexibility implies the need to identify generic
qualities, whereas job analysis has usually focused on job specific qualities.
Second, if the organisation is constantly changing, we need to predict what
new competencies will be required in the future. As you know, traditional
job analysis is not really geared up to do this. Of course some methods
are likely to be more limited than others in this respect. We might, for
example, want to reject critical incident methods for this reason. On the
other hand, we know that any mistakes these managers make can have

severe consequences and critical incidents might be a good way of getting

at these. A questionnaire method would be a possibility, given the numbers
involved and the nature of the group. It might be a problem getting these
managers to give up their time to be interviewed, given the amount of
pressure they seem to be under. In any case, they are scattered around
the globe. However, some kind of group interview or conference method
might be feasible, if managers can be persuaded to give up their time.
This could be combined with a brainstorming approach. Observational and
participative methods would seem to be ruled out on cost grounds, given
the managers’ locations.
Module 5


5.1 Biodata is a system which is used for pre-screening applicants based on the
biographical information contained in specially designed application forms.
The information can be scored objectively and the process is less time-
consuming than screening conventional application forms. The technique is
most useful when large numbers of applicants have to be dealt with.
In terms of Muchinsky’s (1986) criteria for evaluating the usefulness of a
selection device, evidence from meta analysis indicates that biodata can
be reasonably valid. However, there is a question mark over its fairness.
Because of the way in which the weightings for the scoring key are derived,
it is possible for biodata to discriminate against, for example, particular eth-
nic groups without the selector being aware of the fact. Biodata is expensive
to set up because of the time-consuming nature of the procedure used to
establish the weightings. However, once this has been done, applicants can
be screened much more quickly than would be the case with conventional
application forms, resulting in cost savings. The applicability of the method
is limited by the high set up costs and it is only really suitable where the
volume of applicants is large.
5.2 Research indicates that references generally have low validity (Robertson
and Smith, 1989). However, they have high applicability and relatively low
costs. There is little research evidence on their fairness.
One factor which could affect their usefulness is the format in which they
are presented to the referee. This is commonly in the form of an open-
ended request for information in the form of a letter. However, the use of
a questionnaire format where the reviewer is asked to rate the person on a
series of numerical scales could result in more useful information, at least
in some circumstances. In the first place, the referee could be asked to rate
a set of competencies which have previously been identified as essential
for the job. Second, the use of a numerical scoring system should make it
easier to compare one candidate with another. Also, a questionnaire takes
less time to complete than an open letter and thus referees are more likely
to respond to the request.
The stage in the selection process at which references are sent out is also
important. Many organisations only send them out at a late stage in the
process, such as when an offer is about to be made. This means that
their ability to provide additional information for the interviewer before the
interview takes place is lost.
Research has also shown that only a minority of organisations provide

the referee with detailed information about performance requirements for
the job in question. It is hard to see how the referee can provide very
much useful information about the candidate in the absence of this essential
information.

The question of who provides the information is also important here. For
example, if the referee is a personal friend of the candidate this could obvi-
ously result in an overly positive reference. Providing glowing references
can also be a way of off-loading a less effective employee on some other
unsuspecting organisation. Careful selection of the referee is clearly yet
another factor which is important if the usefulness of references is to be
maximised.
5.3 According to the selection paradigm, the ideal selection procedure goes
through four stages. These are: job analysis; deciding which assessment
tools to use; making recruitment decisions; and validation procedures. Vali-
dation is crucially important because, whichever selection tools are chosen,
there is no way of being sure that they will actually work. Validation is
the process which tells the selector how well a particular measuring tool
actually works in practice.
Reliability, which is expressed as a correlation coefficient, is a measure
of the extent to which any measuring instrument, including a selection
device, is consistent. Inter-rater reliability measures the extent to which
different individuals are in agreement with each other in their assessment
of candidates. An example here might be the degree of agreement between
two interviewers in their evaluation of a group of candidates. Test-retest
reliability refers to the extent to which there is consistency in the measure
over time. Thus, if a group of candidates were interviewed on two separate
occasions and were given similar scores each time, this would indicate high
test-retest reliability.
Validity, which is also expressed as a correlation, estimates the extent to
which the selection tool actually measures what it is supposed to. To con-
tinue with the example of the interview, this is meant to measure potential
job performance. Consequently, an interview would be deemed to be valid
if there was a high correlation between interview ratings and subsequent job
performance. This example illustrates what is known as predictive validity
in which the candidates are tested and their performance is assessed on a
later occasion after they have begun working in the organisation. In some
circumstances the selection test can be given to existing employees and their
job performance is assessed at the same time. This is known as concurrent
validity.
5.4 The first and most important of Muchinsky’s four factors which determine
the usefulness of selection devices is validity. To be of any value at all, a
selection tool must have acceptable validity. Without this, the remaining
criteria are essentially irrelevant. Assuming there is adequate validity, the
second factor is cost. Other things being equal, an inexpensive selection tool
is to be preferred to an expensive one. Costs here include managers’ time
in carrying out the selection in addition to direct financial costs. Third, tests
should be fair and should not discriminate against individuals on grounds
of ethnic background, race, sex, or any other quality which is not relevant for
job performance. Quite apart from obvious ethical and legal considerations

here, unfair selection is inefficient since it leads to the situation where the
candidate(s) who would perform best in the job could be rejected in favour
of less able individuals. Finally, applicability refers to the extent to which
the selection device can be used for a wide variety of jobs. Again, other
things being equal, devices with wide applicability are more useful than
ones with narrow applicability.
Once again, it should be emphasised that these four factors are not of equal
importance. As mentioned above, the most important of the four is validity.
Many organisations would also see fairness as being very important, with
cost and applicability often regarded as less critical.
HRM in Action
Your task was to write a preliminary report about your organisation’s selection
procedure, based on the contents of a letter sent to you by the recruitment
manager. A number of important issues are contained in the letter which could
be the substance of the report. These include the following:
1 The statistics presented raise important issues about the fairness of the
selection system. More females are eliminated at the initial screening stage
and an investigation should be conducted to ensure that there is no bias
here. Conversely, women do better at interview and this could possibly
indicate a bias in the opposite direction. It should be emphasised that we
do not know that there is unfair discrimination here, since those females
who are attracted to the bank might just happen to be more able than their
male counterparts, or vice versa. Consequently an investigation is called
for.
2 Given the large number of applicants shown in the statistics, it might be
worth considering some sort of biodata approach for the screening stage.
This would cut the time needed to screen applicants significantly and it
might also prove to be more valid then what you are doing at present. It
should be noted, however, that biodata has the potential to be discriminatory
and this would need to be checked out carefully before we actually used
biodata to select people.
3 You say that the later stages of selection are more important than the early
stages. I know of no research which has shown this to be the case. After
all, in your final selection you can only choose from amongst those who are
left and if you have eliminated the best people through poor pre-selection,
it makes little difference how good your final selection is.
4 It is questionable whether choosing interviewers on the basis of them being
‘willing helpers’ is really the best way to proceed. Surely we should be
thinking more in terms of who are best able to do the job.
5 Similarly, how do you know that experience actually makes someone a
better interviewer? This may be true, but we do not know that it is the case.

6 The way you have established the qualities needed in the candidates is a
cause for concern. There seems to have been no systematic job analysis
which is really essential if selection is to be successful. Also, the qualities
you do list are not expressed as behaviours or competencies. It is now
pretty well established that performance requirements are better expressed
as necessary behaviours than in trait type terms as you seem to have done.
7 You mention your concern that some people misled your interviewers about
certain qualities they claimed to possess which you were easily able to
remedy by training. The real issue here is why you were selecting people
against qualities which are easily developed in training. Selection should
really be focused on abilities which cannot be learned. If you can easily
train someone to do something then you hardly need to waste time selecting
candidates for that quality.
8 It is true that structured interviews are much more likely to be valid than
unstructured ones. However, what you have described is not a structured
interview in the technical sense. Structured interviews require behavioural
job analysis, consistently applied job related questions, and behaviour based
rating scales. You do not mention any of these as features of your interviews.
I strongly recommend that we adopt a proper structured interview approach.
9 You talk about your interviewers thinking up scenarios which they would
ask candidates to respond to. What technique was used to develop the
scenarios? Did they use the critical incident method?
10 If you really want to check out how well your interviews are actually
working you need to carry out a validation study – or at least refer to the
findings from meta analysis. That is what your professor will tell you if he
knows what he is talking about.
11 Finally, you should be aware that there are other selection devices which
we should consider using in addition to the interview, such as psychometric
tests, assessment centres, and the like.
Module 6


6.1 Performance appraisal systems can have a variety of different purposes.

First and foremost, a central feature of performance appraisal is to review
the person’s past performance over the period since the last appraisal. This
information is then used as a basis for considering how performance can be
improved in the future. Many appraisal systems are designed to identify the
individual’s training and development needs. Thus, Long (1986), in a survey
of organisations in the UK, found that 97 per cent of them used appraisal for
this purpose. Once these needs have been identified, it is important for the
organisation to take steps to ensure that the individuals concerned actually
receive the training they require. Many appraisal systems are used to set
performance targets to be achieved within a fixed period (usually the date of
the next appraisal). Organisations need to have some means of identifying
potential in individuals. Appraisal offers one way of doing this. Appraisal
can also be used as part of the process of pay determination, assuming that
the organisation wishes to link pay to performance. It is not being suggested
here that every appraisal system will be designed with all of these functions
in mind. It is likely that appraisal will be used for different purposes in
different organisations. Indeed it is particularly difficult to combine the
training and development functions with the reward allocation functions
of appraisal within the one system. This is because the former casts the
appraiser in the role of helper while the latter casts her in the role of judge,
and these two roles tend to be contradictory.
6.2 There are different ways in which information from appraisals can be
recorded. The best method in any situation will depend on a number
of factors, such as the number of individuals to be appraised, or the pur-
pose of the appraisal system. Where the numbers involved are small a
simple narrative report from the appraiser may suffice. As the number of
individuals to be appraised becomes larger, the use of some form of rating
system is more likely to be the preferred option. One approach is to use a
checklist of competencies relevant to the job in question. The appraiser can
then indicate which of these are possessed by the appraisee. By means of
weighted checklists, the fact that some competencies are more critical than
others can be taken into account.
One of the difficulties with checklists is the fact that they dichotomise
competencies as being either present or absent, whereas many behaviours
are more appropriately seen as being continuous variables. Rating scales
attempt to get around this problem by asking appraisers to rate the extent to
which the appraisee possesses the qualities being assessed. Unfortunately,
traditional rating scales are prone to a number of rater errors, including
leniency, central tendency, and the halo effect. Behaviourally anchored rating
scales (BARS) can reduce some of these effects. This is achieved by giving
raters behavioural examples, known as anchors, illustrating how each scale
should be used. The drawback of the BARS approach is the time it takes to
develop the anchors. Another attempt to reduce rating errors is by the use

of behavioural observation scales (BOS). In this case, raters are restricted

to assessing behaviours they have actually observed. Research does not yet
allow us to draw firm conclusions as to whether BARS scales are better than
BOS scales or vice versa.
6.3 Performance management attempts to integrate a number of techniques for

enhancing performance, one of which is performance appraisal, into an
overall system for managing the individual’s performance. A feature of
performance management is the idea that performance should be defined
broadly, in terms of the person’s overall contribution to the organisation.
It is not intended to replace appraisal and indeed performance appraisal is
usually an essential element of performance management. Compared with
conventional appraisal, it is much more concerned with how the individual’s
performance can be linked to the requirements laid down by strategic HRM
objectives. Likewise, the broad definition taken of performance includes
a focus on the individual’s contribution to team performance. Compared
with conventional appraisal, there is more of a focus on the person’s longer
term development, rather than just immediate training needs. Consequently,
performance management is more directly involved with the succession
planning process than is appraisal. Another defining feature of performance
management is its emphasis on enabling individuals to meet their targets
and objectives. This is done in a variety of ways including the provision
of support, advice, mentoring, and coaching. Performance management is
also typically at the centre of pay determination, often in the context of
some form of performance-related pay system. Perhaps the key defining
feature of performance management is idea that all of the various processes
which relate to performance enhancement should be integrated under the
one umbrella.
6.4 The underlying premise behind 360-degree appraisal is the belief that the
individual benefits from receiving as much feedback as possible about his
performance. This means that appraisal information should come from
as many sources as possible – ideally from every significant person the
individual interacts with, be it inside or outside the organisation. The major
benefit of the approach is the comprehensive feedback the person receives
covering all aspects of performance. Furthermore, because the information
comes from many sources it is more difficult for the appraisee to refuse to
accept it. Also, since the evaluations come from many sources, management
can have greater confidence in their authenticity than would be the case
if they only came from a single source (provided of course that there was
some agreement amongst the various appraisers).
One of the limitations of 360-degree appraisal is its time-consuming nature
and the difficulties of processing the large amount of information collected.
Also, great care has to be taken to protect the anonymity of subordinates
providing feedback to their superiors. It is also important, with subordi-
nate appraisers in particular, that training is given in the need to provide
constructive, rather than destructive, criticism. Finally, 360-degree appraisal

can only really be used for certain purposes. Its value in terms of feed-
back is undisputed. However, other aspects of appraisal such as target
setting clearly require much more in addition to the written feedback which
typically results from 360-degree appraisal systems.
HRM in Action
Your task was to review the reports sent to you outlining the performance
management systems in the three divisions of the organisation. You were also
required to put forward recommendations for a single, organisation-wide system
in the light of your analysis of the reports.
The following are some of the points you might have made in your report.
Review of Existing Systems
Taking the Industrial Chemicals Division first, they do not actually appear
to have a performance management system, or even anything resembling a
performance appraisal system. There do not seem to be any clear objectives or
expected outcomes of the so-called appraisal. Nothing is done to a specified
time scale, which is a basic feature of all such systems. There is nothing laid
down as to what is to be measured. Simply stating that the manager knows best
is no excuse for not establishing what is to be appraised by some systematic
method, such as job analysis. Without a proper record of the appraisal interview
– assuming it actually takes place – there is no way of knowing what has
been agreed between both parties. Nor can there be any check that performance
targets have been met or that undertakings to provide training and development
for the appraisee have been fulfilled. Informality and friendliness may be a good
thing, but they are not a substitute for having proper management systems in
place.
Our Agricultural Division at least seems to have some kind of system in place,
although from their report they do not seem to have been well advised by their
consultants. The use of an MCI competency model seems misplaced in this
context. MCI competencies are concerned with minimum standards, whereas
we presumably are much more concerned with excellence in performance. Also,
the MCI approach focuses on generic competencies, to the neglect of the kind
of organisation-specific competencies which are likely to be important to us.
They have attempted to combine the training and reward allocation functions
within the one appraisal interview, which might well lead to problems in the
future if it has not already done so. Acting simultaneously as judge and helper
is a difficult balancing act and it is doubtful if many appraisers can carry it off
successfully. Although they seem to have adopted some of the techniques used
in performance management, there is little sign of the integrated approach which
is the essence of performance management. Much of what is done seems to be
ad hoc in nature and sometimes dependent on the initiative of the employee.
Thus, people have to ask for training. People are rotated around jobs to prevent
them getting bored, rather than as part of an overall plan to develop them. And
so on.

A strong feature of the approach taken by the Pharmaceutical Division is

the attempt to build performance management around their strategic HRM
objectives. It is also notable that they claim to have an integrated approach to
managing performance. However, the fact that they seem to have assumed that
performance management somehow does away with the need for performance
appraisal is somewhat worrying. In actual fact, performance appraisal is a critical
element in the whole performance management process. On the face of it, they
appear to have discarded the best elements of their previous appraisal system
and kept the less useful aspects. For example, they have discarded 360-degree
appraisal in favour of the more limited single appraiser approach. Once every
two years would seem to be too infrequent to allow the appraisal to serve
any useful purpose. The opportunity to receive training and development as
a result of appraisal is one of its most positive features from the appraisees’
point of view and removing it could markedly reduce their enthusiasm for the
whole process. In any case, how else are training needs being determined in this
division? Lastly, it looks very much as if they are using the rather old fashioned
and largely discredited trait approach to specifying performance requirements.
Preliminary Recommendations
Based on my review of what is happening in the divisions, and in the light of

modern thinking on performance management in organisations, the following
recommendations are put forward.
1 A proper performance management system should be set up. It should be

linked to HRM strategy and should cover all aspects of performance. All of
our techniques for enhancing performance should be integrated within the
overall system.
2 An effective appraisal system is a cornerstone of good performance man-
agement and this must be set up as a priority.
3 We should adopt a competency model for our activities in this area, but the
McBer approach is the preferred option to the MCI system.
4 The precise functions of appraisal and performance management should be
clarified and communicated to all concerned. Objective setting, training and
development, pay determination, promotion, and career succession planning
are all elements which need to be looked at here.
5 The key parameters of the system must be spelled out and adopted in all
divisions. These will include for the appraisal: when the appraisal takes
place; who does it; and how the information is recorded (BARS or BOS
systems might be worth considering here). For performance management
key parameters should include among other things: which performance
enhancement techniques are to be used to enable individuals to succeed in
meeting the targets set in appraisal; how the succession planning system
will operate; the system of pay determination; and the mechanisms to be
set up to ensure that all activities are properly integrated.

Module 7

7.1 The term training content refers to the detailed specification of what the
person is required to learn on a training programme. This can be specified
in different ways, depending on the objectives of the course. For example,
it could be defined in terms of knowledge or in terms of what delegates
need to be able to do at the end of the programme. Broad definitions of
what is required, such as ‘interviewing skills’ are usually inadequate since
they tell us little about what should actually be included in the training. It
is therefore necessary to break down broad skills or overall tasks into their
specific components.
One method for achieving this is hierarchical task analysis (HTA) devised
by Annette et al. (1971). This technique works best when the tasks to
be performed are clear and unambiguous. It begins by listing the main
operations to be performed in whatever it is which has to be learned. These
broad tasks are then broken down into smaller components which are then
sub-divided further. This process of sub-division can be carried out several
times, so that the tasks are broken down into very fine detail. Clearly, it
is necessary to have a system for deciding when no further sub-division is
necessary. This is based on the joint operation of two factors: the difficulty
of the task; and the cost of making a mistake in carrying out the task.
If the operation is difficult in the sense that an untrained person would
be unlikely to carry it out successfully, then it is broken down further.
Likewise, if the cost of making an error is high, the operation should be
further sub-divided.

7.2 There are a number of reasons for suggesting that this is broadly true. In the
first place, the focus of much of HRM strategic thinking is to find ways of
maximising the utilisation of human resources in the organisation. Increas-
ing the individual’s capabilities through training and development is clearly
one way of enhancing his or her potential contribution to the organisation.
Core employees often have a crucial role in the organisation and, given
this fact and the high demands placed on them, considerable investment in
their training and development is necessary if they are to carry out their
roles to the standard required. New forms of work organisation, such as
self-managed teams, make additional demands on employees. Extensive
training is often needed before they can cope with these successfully. Train-
ing is a key element in ensuring that individuals can adjust successfully to
the constant changes which characterise many modern organisations. Many
HRM strategies require fundamental changes in organisational culture and
training is one of the main methods used to induce culture change. Training
enhances a person’s capabilities and this is likely to have a positive effect on
employee motivation and possibly also the much sought after organisational
commitment. Finally, many organisations rely heavily on performance man-
agement systems for the successful implementation of their strategies, and
training and development are key elements in these systems.
7.3 Training needs can be analysed at three levels. At the organisational level,
training needs are mainly determined by the organisation’s HR strategy.
Given the HR strategy, what do individuals need to be able to do? If
an organisational competency analysis has been carried out, this should
highlight the gaps between what currently exists and what is required in
the light of HR strategic objectives. The training effort can then be directed
at areas where the gaps are widest. When training needs are analysed at
this level, the subsequent training would typically be carried out on an
organisation-wide basis.
Training needs can also be analysed at the work role level. A basic tool for
analysing needs at this level would be job analysis. The notion here is that
training needs will be different depending on the work role. Salespersons
will have different needs from production engineers, whose requirements
will in turn be different from those of receptionists. In this case train-
ing would be organised around work roles, rather than across the whole
organisation.
Within any given work role, performance will vary from one individual to
another. Consequently, training needs analysis can also be carried out at
the individual level. One important source of information here is perform-
ance appraisal reports. In this case, training would be organised around
individual needs, rather than on a work role or organisation-wide basis.
So far we have suggested that training needs analysis can be carried out by
utilising information already available from organisational competency anal-
ysis, job analysis, or performance appraisal. It is also possible to carry out
a dedicated training needs analysis by systematic collection of information
solely for that purpose. This could, for example, be done by carrying out

in-depth interviews with job holders and their supervisors about training
needs. This qualitative data could then be used to produce a questionnaire
on training needs which would then be circulated more widely to gen-
erate information of a quantitative nature. While this approach is clearly
more time-consuming than utilising existing information, it does have the
advantage of being directly focused on the issue of training.
7.4 A considerable body of research exists on how learning occurs and on

how best to facilitate it. Many of these research findings can be applied
to training. Research indicates that learning and performance are enhanced
when the learner is rewarded in some way. Trainers can use a variety of
rewards to encourage learning, such as for example, praise when tasks
are carried out correctly. Feedback is critically important for learning. This
should involve not just indicating to individuals when they have carried out
a task correctly. Feedback should also be provided about how and why the
person has gone wrong when the task is not performed correctly. Behaviour
modelling training (BMT) is based on Bandura’s research which showed that
a great deal of learning takes place by observing the behaviour of others.
Research indicates that setting specific goals and objectives can increase
learning, mainly by enhancing motivation. This is yet another learning
principle which can readily be incorporated into the design of training
programmes. Although learning can occur in a passive manner, such as by
listening to lectures, many skills are best learned by actively involving the
learner in a process of learning by doing. Many training courses make use
of this principle.
HRM in Action
Several learning principles seem to be operating here. While there is some pas-
sive learning in the form of listening to lectures, the major part of the course
involves active participation by delegates, rather than passive reception of infor-
mation. The emphasis on active learning is a sound principle on which to base
the course. Each person receives knowledge of results in the form of feedback on
his performance from observing the video, from the trainer, and perhaps from
other delegates. Positive and negative rewards operate in terms of praise for
examples of good interviewing technique and constructive criticism when there
are instances of poor interview technique. Once again these are sound learning
principles. Behaviour modelling (another sound learning principle) can clearly
occur, since delegates, by watching the video and listening to the trainer’s com-
ments, can observe examples of both good and poor interviewing technique. The
knowledge that other delegates are observing one’s performance, and the fact
that the whole process is being recorded on videotape, should provide a motiva-
tion to succeed. The existence of a pass-fail criterion should certainly ensure that
the training provides a challenge to the individuals and could further enhance
the motivational properties of the programme. Overall, the proposed approach
seems to be based on sound learning principles.

Module 8

8.1 As a result of the changing nature of organisations, managers now need to

make more work role changes than they used to. According to Nicholson
and West (1988), work role changes irrespective of whether or not they
require a move to a new organisation, tend to be stressful for the individ-
ual. The theory postulates that the individual goes through four stages in
adapting to a new work role.
The first, preparation, stage takes place before the actual role change has
taken place. It is often characterised by unrealistic expectations and feelings
of anxiety about the demands of the new role. One way in which the
individual can alleviate stress at this stage is by carrying out a systematic
self-evaluation against the demands of the job. Organisations can also help
by providing information in advance about the nature of the new work role.
One way to do this is by means of realistic job previews.
The second stage, encounter, occurs during the initial period in the new
role. Typical strains at this stage include regret, if the job does not live up
to expectations, and uncertainty about the job and the surrounding context.
The organisation can help here by providing social support for the person.
One self-help technique might be to develop an active information-seeking
strategy.
The third, adjustment, stage is when the individual develops his own way
of doing the job. This can come about either by the individual changing to
fit the demands of the job (personal development) or by redefinition of the
job to suit the individual’s needs (role development).
The final stage is known as stabilisation. The person is now so thoroughly
familiar with the new role that there is a danger of boredom and subsequent
demotivation occurring. The organisation can counter this by putting the
individual onto special assignments, or even by moving her to a new role,
whereupon the whole cycle begins again.

8.2 Work role changes can occur either within a single organisation, or they can
involve the individual moving from one organisation to another. A number
of factors have contributed to the increased requirement for such changes
in recent times. First, the globalisation of markets and the accompanying
expansion of organisations across different countries and cultures, has meant
that managers are required to be much more mobile than in the past. Often
these geographical moves also involve changes in work role. The processes
of downsizing and de-layering have meant that large numbers of employees
have found themselves having to find jobs with other organisations. The
adoption of new work practices such as functional flexibility require radical
changes to traditional work roles, as does the introduction of self-managed
teams. Modern organisations often find themselves having constantly to
adapt and change in order to survive. These changes frequently require the
redefinition of work roles for a number of employees.
8.3 Fast track schemes attempt to identify highly talented individuals early in
their careers, either at the selection stage, or soon after they have joined
the organisation. The individuals are then given enhanced training and
development with a view to moving them rapidly up the organisational
hierarchy. Although the logic behind the concept is reasonable – take the
best people and give them special treatment so that they can be groomed for
senior positions – the evidence for their success is largely anecdotal. Even
when fast track individuals do progress rapidly, this may not always be
for the reasons put forward. For example, simply labelling a person as fast
track may result in managers assuming that they are talented, regardless
of their true ability. Also, perhaps even individuals who are not especially
able would rise rapidly up the organisation if given enhanced development
opportunities. Finally, there is also the risk of demotivating those who are
not selected for the fast track.
8.4 In the past, employees have typically looked to organisations to provide

security of employment and the opportunity for career advancement. Both
of these are becoming increasingly more difficult to guarantee in many
modern organisations. In general terms, the emphasis some HRM theories
adopted by organisations place on bottom line profit and individuals as
resources just like any other asset, does not sit well with the idea of the
organisation giving priority to the long-term interests of its employees. The
emphasis on the constant need to change carries with it the implication that
labour requirements will also fluctuate according to circumstances, leading
to loss of security of employment. The adoption of numerical flexibility
inevitably results in low job security for peripheral workers. Downsizing
not only leads to job losses for many; it can also create a feeling of lack if
security in those remaining. Organisation of work teams around short-term
assignments is also likely to lead to feelings of insecurity in individuals. By
reducing the number of managerial hierarchies, de-layering automatically
reduces career opportunities. Since there are only a small number of core
employees in the flexible firm, it follows that there are only career oppor-
tunities for a few individuals in this type of organisation. Many modern

organisations place high value on innovation. One way to increase innova-

tion is to recruit outside individuals with new ideas to influential positions
in the company. This can clearly undermine any policies of promotion
from within, so that career opportunities are reduced for those inside the
organisation.
HRM in Action
Your first task was to indicate the information you would seek to obtain in order
to evaluate the extent of the problem and the reasons for its occurrence. The
following are examples of appropriate questions which could be asked.
1 What is the proportion of male and female managers at each level of the
hierarchy? Is there a glass ceiling effect, with similar proportions of men
and women in promoted positions up to a certain level, but with male
domination of the most senior positions? The answers to these questions
should provide the basic data on the extent of the problem.
2 Are broadly the same numbers of males and females recruited each year?
You would need this information going back over a number of years. If
the numbers are unequal and favoured men, this could at least partly
explain the figures. If more men are recruited, one might expect more to
be promoted, since there are more of them to choose from. However, if
this were so, it would then be necessary to explore whether the recruitment
was fair. For example do the proportion recruited match the proportion
applying? If not, why not?
3 If the organisation is male dominated, to what extent are informal male
networks in operation? The existence of these could help men achieve
promotion to the detriment of women.
4 What criteria are adopted for sending people on external management
courses? Do the criteria ensure that women get their fair share of opportu-
nities to attend such programmes?
5 How does the organisation support women with their family responsibilities.
Is there a crèche or similar facility for helping with child minding? Is there
a system for allowing women to take a career break? Does promotion
depend on geographical mobility and, if so, what steps are taken to ensure
that women who have young children do not lose out because of lack of
mobility?
6 Is there any evidence from appraisal records, or from any other source, that
the abilities of existing female managers differ in any way from those of
their male counterparts in ways which are related to promotion? If this is
so, the reasons for these differences would have to be investigated.
7 Does the organisation have a male dominated culture, and if so has it
affected attitudes towards the suitability of women for promotion?

Your second task was to make recommendations as to how the situation

might be remedied. Clearly, your detailed recommendations would depend on
the outcome of the investigation. Consequently, only general suggestions can be
put forward here. Some possibilities are as follows.
1 All HRM procedures, including selection, appraisal, training, and perform-

ance management, should be reviewed to ensure that they conform to best
professional practice. This should help ensure that the most able people are
selected, developed, and promoted, regardless of sex.
2 Following on from this review, all procedures should be regularly monitored
from a gender fairness perspective.
3 Any existing coaching and mentoring systems should be reviewed to make
sure that women are not disadvantaged in any way. This could occur if, for
example, a woman did not have a same sex mentor.
4 If there is any evidence of stereotyping of women by male managers, then
an intensive training programme aimed at attitudinal changes should be
initiated.
5 Where possible, facilities should be provided to support women who have
a dual work and family role. An example here might be the provision of
crèche facilities if demand was sufficiently high.
Module 9
9.1 False. 9.5 False. 9.9 True. 9.13 True. 9.17 False.
9.2 True. 9.6 True. 9.10 False. 9.14 False. 9.18 True.
9.3 True. 9.7 False. 9.11 False. 9.15 True. 9.19 True.
9.4 False. 9.8 False. 9.12 True. 9.16 False. 9.20 True.
9.1 Fox (1974) put forward three frames of reference which represent different
approaches to employee relations. According to Fox, these not only influence
employee relations, but they can also have an impact on management
styles. The first approach of these is the unitarist approach. The underlying
assumption here is that in the end of the day employers and employees share
the same common interest in the success of the organisation. Because of this,
conflict between these two parties is not inevitable and it is possible for both
to work together harmoniously. The pluralist approach is different insofar as
employers and employees are regarded as having different interests and, as
a consequence, conflict is unavoidable. However, according to the pluralist
position, conflict can be contained and managed successfully. This can be
achieved by institutionalising the conflict. This can be done by putting in

place systems that allow for collective interactions between employers and
employees.
The radical position is different again. It is similar to the pluralist posi-
tion in that it regards conflict as inevitable but it is different because it
regards conflict as much more deep rooted. The radical position takes the
Marxist view that conflict in organisations is symptomatic of a wider class
and power struggle in society. These frames of reference are important
for employee relations because they affect the approach that is taken to
employee relations. This can be illustrated with reference to the implica-
tions of the three positions for the role of unions in organisations. From
a pluralist perspective, unionisation can offers benefits to the organisation.
Since the goal is to manage the inevitable conflict which arises because the
interests of employees differ from those of employers, it is useful to have an
appropriate body to represent the interests of the former collectively. This
is of course the role of unions in organisations. Turning to the radical posi-
tion, unionisation would probably be even more strongly favoured, since it
is they who would defend the employees interests in the power struggle
with employers. Of course in this case the objective would not be to make
the conflict manageable as such, since cooperative relationship is not seen
as feasible in the face of such deep-rooted conflict. Turning to the unitarist
position, the advantages of unionisation are not so immediately obvious,
since the interests of employers and employees are seen as being the same.
According to this view, if there is no conflict, employees do not need unions
to defend their interests. Of course this does not mean that unionisation is
incompatible with a unitarist position. The advantages of a union presence
are simply less clear-cut in this case.
9.2 Participation is only one of a number of techniques which can be used

to increase employee involvement in organisations. Other methods include
communication and financial incentives. There are in fact several different
types participation in decision-making, and this makes it difficult to pro-
vide a simple answer to the question posed here. According to Boxall and
Purcell (2003), these differences include: the amount of influence employ-
ees have; the types of decisions involved; the level at which the decisions
are taken; which employees are involved; and the methods used to make
sure everyone complies with the arrangements. Notwithstanding these com-
plications, there is good evidence that participation can affect employees’
attitudes in a favourable way (Gallie and White, 1993). However, research
suggests that individuals are more interested in being involved in decisions
which affect their immediate workplace situation than decisions which are
more remote from their everyday jobs (Hanson and Rathkey 1984). How-
ever, some surveys indicate that, because managers rate their own control
over decision-making higher than the apparent benefits of participation, the
amount of employee involvement is often quite restricted (Holden, 2004).
Another example of the difference between what managers believe to be
beneficial and what happens in practice comes from Ramsey (1966). He
found that managers often opted for relatively ineffective communication

techniques, such as memos and notice boards, instead of methods they

themselves thought were more effective, such as team briefings.
9.3 6 In the past, the reactive approach to the management of psychological well-
being at work has typically been favoured by personnel management. From
this perspective, the personnel manager’s role is to react to any situation
which endangers the psychological health of employees as and when it is
brought to his attention. In another words, there is no active attempt to
identify threats to well-being. It is simply a case of waiting for problems
to crop up. This puts the onus very much on individuals to come forward
with information about threats to their psychological well-being, especially
since nowadays the role of unions, who in the past might have acted on
their behalf, is much reduced. Obviously personnel managers should react
to problems when they crop up, but a pro-active approach argues that
they should do more than this. After all, individuals may not have much
insight into the causes of any feelings of distress they may have. Even
when they do, they might not always be willing to come forward. Proactive
approaches seek to take the initiate by setting up systems to investigate
and monitor threats to the psychological well-being of the workforce, rather
than just waiting for problems to emerge. In the case of stress for example,
one of the key causes of psychological ill effects in organisations, such a
proactive approach might involve questionnaire surveys designed to assess
stress and its effects on employees. Another possibility would be to conduct
interviews with individuals about the stresses they were encountering in
their jobs. The next stage with a pro-active approach could be to initiate
steps to reduce the problems identified. One way to achieve this might
be to reduce or eliminate the sources of stress. For example, if it turned
out that empowerment was stressful for individuals, it might be possible
to reorganise work roles in order to reduce the amount of empowerment.
Of course in some circumstances the organisation might take the view that
it is not possible to reduce the level of stress. In the above example an
organisation might take the view that empowerment, although stressful,
was essential in order to maximise the utilisation of its human resources.
An alternative way to reduce the threat to psychological well-being might
be to accept the level of stress as given and to provide employees with the
means to cope more effectively with it. Possible ways to enhance coping
might include appropriate training or counselling programmes. Of course
stress reduction improving coping ability are not mutually exclusive and
organisations could use a combination of both in the management of stress.
HRM in Action
There are of course a number of approaches a consultant could take to an

assignment of this nature and the summary below represents one possibility.
As a consultant to this organisation your role is purely to give advice and the
tone of your responses should reflect this. Both the chief executive and the mar-
keting manager have expressed the view that unions are ‘out of date’. However,

it might be a good idea to begin your response by pointing out that, while it is
true that unions are less common and less powerful than in the past, a number
of organisations have managed to combine modern HRM practices and union-
isation successfully. Consequently, one should not really rule out recognition
on these grounds. Developing this theme, it would be valuable to explain that
while the finance and Production managers are to some extent correct in their
views, insofar as unions have often been confrontational in the past especially
with respect to wage issues, this is much less the case these days. You might
further point out that management can dictate the agenda much more than in
the past with respect to the union’s role in the organisation and partnership,
rather than confrontation, could well become the norm in future. The chief
executive is worried about a loss of his decision-making prerogative and this is
certainly a danger. But this fear is probably exaggerated in to-day’s world of
weakened unions. In any case, any potential loss of decision-making autonomy
must be balanced against possible gains from having employee feel that they
are part of the decision-making process. This brings us to the chief executive’s
last point. A diplomatic consultant might ask the management team to clarify
exactly what they mean by participation in the context of their organisation.
It might be useful to follow this with a short discussion of the various forms
participation can take, while simultaneously pointing out that there is evidence
that certain types of participation can have beneficial effects.
The production manager’s argument that the organisation is doing ‘pretty
well’ and does not need to change flies in the face of much of HR thinking
which suggests that continuous change and improvement is essential to remain
competitive. This is not to say that this company should automatically recognise
unions, but simply that it should be aware of the need for continuous improve-
ment, and should assess the proposal in this light. The production manager also
implies that formal grievance procedures are unnecessary. As a consultant who
has knowledge of modern HRM thinking, you should be well able to summarise
the various arguments in favour of formal grievance procedures. It might be
useful at this stage to put your discussion of grievance procedures in a wider
context. As we saw in the module, unions provide a voice for the collective inter-
ests of their members with reference to a variety of issues, of which grievance
is just one. Consequently, if they decide to stay union-free, they should have
alternative arrangements in place, not just with respect to grievances, but also to
allow employees an appropriate voice in other matters of importance to them.
As one might expect, the safety engineer is aware both of the valuable role
unions played in safety in the past and of their usefulness in keeping manage-
ment ‘on their toe’ in this respect. However, it would be worth exploring with
her how much she is aware of current concerns nowadays about psychological
well-being at work. Does she realise that legal provisions are less comprehen-
sive when it comes to psychological well-being? One also wonders here to what
extent the organisation’s approach to employee health is reactive, rather than
pro-active.
The personnel manager appears to appreciate that unions have a role in
looking after employees’ interests. However, as the companies ‘expert’ in these
matters one would have hoped that he would have spelled out what this

role is in a little more detail for his colleagues. In these circumstances this
job really falls on you, the consultant. Your review ought to include not just
specific activities such as pay bargaining, grievances and the like, but also
a union’s more general role as a communication channel generally between
employees and management. You could also take the opportunity here, if you
have not already done so to summarise the advantages and disadvantages of
union recognition. (Alternatively you could deal with this at the end of your
consultation, by way of summary.). You should also question the personnel
manager’s statement that only the unions can look after employee’s issues.
(Diplomatically of course!) The success a number of union-free organisations
have had putting in place alternative employee voice systems testifies to this.
The personnel manager is also aware of the dangers of the adverse effects on
employees of denying their apparent desire to become unionised. But this raises
a number of questions. First of all do we know how widespread this desire is?
Are we talking about a few politically motivated individuals or is this the view
of the majority of employees? What facts has the personnel manager gathered on
this? We need hard facts here. The statement that there are ‘rumours’ that ‘quite
a few’ workers want this change if far to imprecise for our present purposes.
Second, mention is made of employee commitment to the organisation’s future
plans. What are these plans? What exactly does the personnel manager mean by
‘greater flexibility’? What systems are currently in place to encourage employee
involvement in the organisation generally? Of course we are now touching
on the essential nature of the organisation’s employee relations policies and
practices and the extent to which they are involvement focused. At first glance
this looks as if you are straying beyond your brief as a consultant, which is
to advise on union recognition. This is not really the case however, since the
decision to recognise a union or otherwise should be seen not only context of
an organisation’s employee relation’s policies, but also in relation to the culture
of the organisation as a whole.

Appendix 2
Practice Final Examinations and

Solutions
Contents
Examination One A2/1
Examination Two A2/13
This section contains two practice final examinations with solutions. Each exam
is in two sections:
A Multiple choice questions

B Essay questions
Section A: Multiple choice questions

25 questions each worth 1 mark.
Total marks available in Section A 25 × 1 = 25
Section B: Essay questions
3 essay questions worth 25 marks each.
Total marks available in Section B 3 × 25 = 75
Total marks available = 100
Pass mark = 50% of 100 = 50 marks
Examination One
Section A: Multiple Choice Questions
1 Which of the following would be given more emphasis with an HRM

approach, compared with a traditional personnel management approach?
A Collective negotiations with unions
B Selecting employees for attitudinal qualities
C Employee pay
D Performance appraisal

Appendix 2 / Practice Final Examinations and Solutions
2 Which of the following is a characteristic of the Fombrun et al. matching

model?
A It is pluralistic
B It is a ‘soft’ model
C It assumes that HRM and business strategy have a mutual influence on
each other
D It is a prescriptive model
3 Which of the following is a correct description of bureaucratic organisations?

A They are hierarchical in nature
B They are highly flexible
C They encourage innovation
D They are only to be found in multinational corporations
4 Which of the following is an advantage of flexible working practices, from

the point of view of peripheral workers?
A The high levels of training and development provided for peripheral
workers
B Part-time working means freedom to have alternative lifestyles
C Low levels of stress
D High wages
5 Which of the following is a benefit of team working, from the point of view
of individual team members?
A The responsibility for all decision making is allocated to the team leader
B Because the work is completed more quickly, there is the opportunity
for more free time
C Group members are able to give each other mutual support
D Team working allows individuals to specialise in what they do best
6 Which of the following is true of total quality management (TQM)?

A It typifies a ‘hard’ HRM approach
B Its objective is to produce high pay levels for employees
C It gives high priority to maximising customer satisfaction
D It is only relevant for certain groups of employees in the organisation

7 Which of the following is true when interview methods of job analysis are
used?
A The analyst must only interview job holders
B It is less time-consuming for the analyst than questionnaire methods
C Because the interview method is so comprehensive there is little point
in using any other job analysis methods in addition to it
D The analyst obtains qualitative information about the job
8 Which of the following is true of self-managed teams?

A Responsibility for key functions is delegated to the team
B Individuals in the team always have specialised work roles
C Empowerment means that there is no need for a team leader
D They have replaced TQM as a way of ensuring high product quality
9 Which of the following is correct?

A The behavioural competency approach emphasises excellence in per-
formance, rather than minimum standards
B Behavioural competencies are only concerned with core abilities, not
with skills
C Research has shown that organisation-specific competencies do not
exist.
D Compared with traditional job analysis, the behavioural competency
approach is very narrowly focused
10 Which of the following refers to the reliability of a selection test?

A The extent to which applicants can be relied on to complete the test
honestly
B The degree to which applicants will get similar scores when given the
measure on two separate occasions
C The extent to which applicants can be relied upon to react favourably
to the selection test
D The extent to which the recruiter can rely on the test to indicate what
the person’s core competencies are

A References cannot be used as part of the pre-screening process in selec-
tion
B References can provide information to be explored at interview
C References have high validity as selection tools
D References can help the recruiter to assess the validity of the other
selection devices being used


A Traditional job analysis has focused strongly on attitudinal qualities
B Strategic HRM has led to a move away from the identification of job-
specific abilities in favour of more generic abilities
C Strategic HRM has removed the need for traditional job analysis
D Thanks to strategic HRM thinking, specialisation of work roles is now
obsolete
13 Which of the following statements is correct of Muchinsky’s (1984) analysis

of the usefulness of selection devices?
A Validity is only one of five factors to be taken into account when
assessing the usefulness of a selection device
B Applicability refers to the extent to which a selection device can be
used in different organisations
C Cost is the most important factor in determining the usefulness of a
selection device
D Opportunity costs can be just as important as direct monetary costs in
determining the utility of selection devices

A When interviewers combine the role of judge and helper in an appraisal
interview, this ensures that the appraisee will not feel defensive
B It is best to focus on behavioural characteristics, rather than traits,
during appraisal
C Only process criteria can be used to set targets in appraisal interviews
D The appraisal interviewer should concentrate on core characteristics,
rather than motivational ones
15 Which of the following contributed to the decline in popularity of MBO?

A The use of process-oriented objectives, rather than results-oriented ones
B The implicit reward-punishment psychology of the technique
C The problems of persuading appraisees to accept easy goals
D There was insufficient emphasis on quantifiable aspects of performance
16 Which of the following limits the usefulness of appraisal for evaluating

promotability?
A Some individuals may not want to be promoted
B The skills required for the promoted job may be very different from
those needed to perform the appraisee’s current job successfully
C Some appraisers may not be very good at adopting the helper role
which is necessary to assess promotability
D Individuals may need training in order to carry out more senior jobs


A Development centres cannot be used in conjunction with performance
appraisal
B Development centres can complement appraisal systems to identify the
promotability of managers
C Development centres cannot be used to identify core competencies
D Development centres have little in common with assessment centres
used for selection purposes
18 According to the CRAMP taxonomy, which of the four options below would
describe the the kind of learning needed to pass the Distance Learning MBA
examination in human resource management?
A Feedback
B Reflex learning
C Attitude development
D Comprehension
19 Which of the following statements is correct?

A Systematic evaluation of training is only really essential when a training
programme is not well grounded in theory
B To evaluate a training programme inevitably costs a large sum of money
C Evaluation is one of the most problematic areas in the field of training
D Training evaluation schemes must always take into account the organi-
sation’s HRM strategy
20 According to Alliger and Janack (1989), which of the following represents a

false assumption made by trainers about Kirkpatrick’s criteria?
A Only two of Kirkpatrick’s four criteria can assess external validity
B Trainee reactions can be biased in various ways
C The criteria are arranged in such a way that the value of the information
obtained increases as we move from reactions through to results
D Trainees dislike it when their superiors are asked to observe their
behaviour
21 Which of the following represents a career stage in the Greenhaus and

Callanan model?
A Disengagement
B Occupational choice
C Disestablishment
D Establishment

22 Holland’s theory and accompanying research has shown that:

A There is a strong relationship between congruence and satisfaction
B There is a weak relationship between congruence and performance
C There is a strong relationship between being an enterprising type and
being a high performer
D People are best described in terms of the single personality type which
they most resemble
23 According to Nicholson and West’s (1988) work role transition theory, which
of the following helps individuals to adjust during the preparation stage?
A Social support from colleagues
B A realistic job preview
C Project work
D An active information-seeking strategy
24 Which of the following correctly describes the glass ceiling effect?

A It occurs because women are not as ambitious as men
B Women rise so far up the organisational hierarchy before being con-
fronted by an invisible barrier which impedes further progress
C It only applies to women who have had a career break
D It does not apply to career women
25 According to Herriot, when employees believe that the organisation has not
delivered its part of the psychological contract, they feel:
A Relieved
B A sense of unfairness
C Low self-esteem
D Intolerance
Section B: Essay Questions
Each question is worth 25 points.
1 What are the similarities and differences between traditional personnel man-
agement and human resource management?
2 Describe the main types of workforce flexibility. What are the advantages
and disadvantages of flexibility from the organisation’s point of view?
3 What are the limitations of performance appraisal systems in practice? How

can the effectiveness of performance appraisal be maximised?

Answers to Section A: Multiple Choice Questions
1 B see Section 1.2.2
2 D see Section 2.2.1
3 A see Section 3.2.1
5 C see Section 3.5.4
12 B see Section 4.5
13 D see Section 5.4
19 C see Section 7.4

Answers to Section B: Essay Questions
1 Compared with personnel management, HRM is a recent innovation and in

many ways it was intended to replace traditional personnel management.
However, despite distinct differences between the two approaches, they
have much in common.
The management of people in organisations can be carried out at both a stra-
tegic and an operational level. Considering strategic level functions first, it is
here that the clearest differences are seen between HRM and traditional per-
sonnel management. Indeed, in many ways it was the supposed weaknesses
of personnel management at this level which stimulated the development
of HRM. A number of writers, such as Torrington and Hendry have argued
that, historically, the role of personnel management has been operational
and reactive, rather then strategic and proactive. A good illustration of the
reactive nature of personnel management, at least in the UK, can be seen in
the field of industrial relations. In many organisations personnel manage-
ment’s role was to react to industrial relations crises, rather than to come
up with strategic solutions to industrial relations issues. Another example
of the operational focus of much of personnel management is in the field
of training and development where personnel departments are typically
charged primarily with running programmes, rather than with developing
strategies to link training to the organisation’s overall objectives. HRM can
be contrasted with this approach in the sense that it places high priority
on the development of human resource strategies which both feed into the
process of overall strategy formulation and facilitate the implementation
of business objectives. An underlying theme behind most strategic HRM
thinking is the idea that effective management of people is crucial to the
attainment of competitive advantage. This in turn has led to the notion that,
unlike in the past, responsibility for people management should not just rest
with specialist personnel departments, but should extend to all managers.
There are many similarities between HRM and personnel management at
the operational level. For example, most of the operational activities for
which personnel management has traditionally taken responsibility – such
as recruitment, performance appraisal, training and development, and so on
– are also the responsibility of HRM. Indeed, many of the techniques used to
carry out these activities on an everyday basis are the same, whether they are
being operated within an HRM or a personnel management context. This is
so much so that some have even argued that the differences between HRM
and personnel management are more cosmetic than real. Others, however,
point out that, while HRM and personnel management may carry out the
same functions and use broadly similar techniques, there are important
differences in the approach taken to these activities. For example, because
HRM takes a strategic view, priority is given to the integration of the
various operational activities within overall systems. The development of
performance management systems as a way of integrating a variety of
activities such as appraisal, employee development, payment systems, and
the like, illustrates this. Furthermore, an HRM perspective can influence

both the importance placed on a particular activity and the way it is carried
out. For example, take the field of selection. If employee commitment is
placed high on the agenda, selection criteria may have to be modified to put
greater emphasis on attitudinal qualities than hitherto. Suppose a strategic
decision was taken to place high priority on the organisation’s ability to
change rapidly in the face of competitive pressures. The ability to adjust
to change could subsequently become an important personal quality in job
applicants. In the field of training, a strategic decision to install self-managed
teams might mean that greater priority might need to be attached to training
than had hitherto been the case. To take a rather different example, Guest
has argued that the individualistic philosophy of HRM thinking results in a
very different approach to industrial relations from that traditionally taken
by personnel management.
In conclusion, while HRM and traditional personnel management do indeed
have much in common, they also differ in a number of ways which have
profound implications for the way in which people are managed in organi-
sations.
2 Flexible working arrangements are designed to allow organisations to

respond quickly and effectively to changes in environmental circumstances.
Blyton and Morris have suggested that there are four main types of flexibil-
ity. Functional flexibility involves broadening the individual’s work role so
that he carries out a wider variety of work tasks than before. The specialised
work roles which typify traditional forms of work organisation are removed
so that each individual, within a work team for example, is capable of
performing a wide range of work tasks. A major advantage of functional
flexibility is the fact that, because people have multiple skills and because
demarcation lines no longer exist, management has the freedom to move
individuals from one task to another as the need arises.
A second form of flexibility relates to the numbers of people employed
in the organisation at any one time. Numerical flexibility exists when the
organisation is able to expand and contract the number of people on the
payroll quickly whenever it is necessary to do so. It is easy to see the
advantages of numerical flexibility for the organisation. If demand for a
product suddenly increases, the labour force can be expanded accordingly.
Similarly, costs can be minimised if individuals can be taken off the payroll
rapidly if demand for a product drops. A number of employment arrange-
ments can be set up to achieve numerical flexibility. One of these is to have
a significant number of individuals on part-time contracts which can be eas-
ily terminated. Contracting out various activities can also create flexibility,
since the required services need only be bought as and when needed.
Temporal flexibility refers to the situation where both the number of hours
to be worked, and when they are to be worked, are varied according to the
organisation’s requirements. An example of temporal flexibility would be so-
called flexitime working, where the starting and finishing time can be varied
within certain limits. Adopting a variety of shift working arrangements
would also constitute a form of temporal flexibility. Yet another example

would be the use of annual hours contracts in which the total hours to be
worked over a certain period is fixed, but when they are actually worked
can be varied according to circumstances. Once again, the advantages of
temporal flexibility for the organisation are clear. Quite simply, labour need
only be paid for when it is needed. Shortages of labour at peak times can
be avoided, as can over supply of labour during less busy periods.
Wage flexibility allows the organisation the scope to vary the way in which
individuals are paid in line with its objectives. For example, in some cir-
cumstances it might make sense to introduce performance related pay as
an incentive to greater effort and enhanced performance. In other circum-
stances some other form of remuneration may be more appropriate.
Before looking in a little more detail at the advantages and disadvantages
of flexibility, it is perhaps worth referring to the distinction between core
and peripheral workers, as drawn by Atkinson in his theory of the flexible
firm. Core workers are likely to be particularly valued by the organisation.
Considerable sums are likely to have been invested in their training, they are
often multi-skilled, and they will probably be operating under conditions
of functional flexibility. They have relatively high security of employment,
and typically have reasonable career opportunities with the organisation.
Peripheral workers are less central to the organisation’s requirements. They
tend to have little job security and are not seen as having a career in
the organisation. It is this group which allows the operation of numerical
flexibility in Atkinson’s model. Considering the advantages of flexibility
first, it should ensure that the organisation has a more easily controlled and
managed workforce. It should, in theory at least, be possible to obtain high
commitment from core employees, given the investment in their training
and the career opportunities offered to them. The existence of the peripheral
workforce gives the organisation the ability to hire and fire individuals
easily at relatively low cost. In addition, high level skills can be bought in
as needed in the form of part-time peripheral workers, without incurring
expensive employment liabilities. There may also be cost savings, since
part-time workers are traditionally paid relatively low wage rates. Finally,
performance-related pay could enhance motivation if properly operated. In
addition to the potential advantages of flexibility, there is also a number
of potential disadvantages of this approach. Multi-skilling carries with it
the risk that the organisation may leave itself short of specialised expertise.
Peripheral workers may lack commitment and this could adversely affect
their performance. Peripheral workers may also lack the necessary training
to do their jobs to a high standard. The high turnover of the peripheral
group means that high recruitment costs are effectively built into the system.
3 Performance appraisal is the term used to describe the process of assess-

ing individual performance in a formal and systematic way. Although the
systems used in different organisations can be quite varied, there are a
number of features which are common to most of them. The person’s
immediate superior usually carries out the assessment, although others may
be involved. There should be a formal system of recording the data col-

lected. Normally there is an appraisal interview at which past performance

is reviewed, and targets for the future set. The assessment of training and
development needs can be included as part of the appraisal, as can issues
related to pay and promotion.
A number of common problems of appraisal systems have been identified.
When assessment of training and development needs on the one hand, and
reward allocation (in terms of pay or whatever) on the other, are carried out
simultaneously, the appraiser is being cast in the opposing roles of helper
and judge. This creates a number of problems for the appraiser. In fact, any
system which includes salary issues can be problematic due to the fact that
there are inevitably winners and losers. This can create defensiveness and
lack of co-operation on the part of appraisees. In some circumstances, the
abilities required for promoted positions differ markedly from those needed
to carry out the existing job of the individual being appraised. When this is
the case, a review of past performance in an appraisal context provides little
information about the person’s promotability. Unless identified training and
development needs are actually acted upon in the form of the provision of
appropriate programmes (which does not always happen), appraisees are
liable to see few benefits of appraisal from their point of view. Consequently,
they are unlikely to co-operate wholeheartedly in the process. As was
mentioned above, evaluations of the appraisee are usually recorded in
some way. However, the fallibility of the human judgement process means
that there are inevitably inaccuracies in the assessments which are made.
Some appraisal systems place considerable emphasis on joint goal setting.
However, this process is fraught with problems. At the end of the day,
the targets which are set often end up being an unsatisfactory compromise
between the appraisee’s attempts to set easily achievable targets and the
appraiser’s efforts to do the opposite. Finally, many appraisal systems are
poorly integrated with other key HRM activities and this severely limits
their usefulness.
Maximising the effectiveness of appraisal largely involves setting up proce-
dures to deal with the difficulties outlined in the previous paragraph. At
a general level, however, if appraisal is to work it can only do so in an
atmosphere of trust. Consequently, it is very important that the purposes
of the system and its potential benefits for all interested parties are clearly
spelled out. By keeping the reward allocation and development aspects of
performance evaluation completely separate, the judge-helper dilemma can
be avoided. It is important that checks are put in place to monitor that rec-
ommendations for training and development are actually followed through
within an agreed time frame. As far as the assessment of the appraisee’s
past performance is concerned, the emphasis should be on aspects of per-
formance the person can do something about, such as skills or motivational
qualities. In addition, a behavioural or competency framework should be
adopted. As far as recording information is concerned, assuming that rating
scales are to be used, the BARS or BOS approach is likely to give the best
results. If a results-oriented approach is to be adopted, care should be taken
that any targets set are realistic and achievable. Appraisal interviews are

very difficult to carry out successfully, and in view of this fact, training for
interviewers is essential. It is best not to rely purely on the judgement of
a single individual, such as the person’s immediate boss, when perform-
ance is being evaluated. The use of multiple appraisers not only allows all
aspects of the person’s performance to be evaluated, it also helps to iron out
any individual judgement biases which may be present. The promotability
problem mentioned in the previous paragraph can be tackled by including
some form of development centre as part of the whole process. Finally, per-
formance appraisal is likely to be much more effective when it is embedded
within an overall system of performance management.

Examination Two
Section A: Multiple Choice Questions
1 Which of the following was one of the factors responsible for the emergence
of HRM?
A The human problems created by rapid technological change in organi-
sations
B The need to develop better techniques to select, train, and develop
people
C The emergence of new theories in organisational behaviour about how
to improve the job satisfaction of workers
D A belief that better management of people is the key to gaining com-
petitive advantage
2 Which of the following is one of Guest’s (1994) four key outcomes of HRM
policies?
A Innovation
B Strategic integration
C Quantity of output
D Profit

A Corporate culture is synonymous with organisational culture
B Subcultures have less influence on employee behaviour than
organisation-wide cultures
C Strong cultures create diversity of viewpoints in an organisation
D The term organisational culture refers to shared values which are held
throughout an organisation
4 Which of the following do autonomous work groups and modern HRM

teams have in common?
A An explicit focus on team goals to be achieved
B The view that job satisfaction of group/team members is of secondary
importance to the prime objective of delivering enhanced performance
C Delegation of responsibility to the work group
D The role of the team leader

5 Which of the following describes the concept of affective commitment?

A The degree to which a person sees work as central to her life
B The extent to which an individual is committed to his work team
C The extent to which a person identifies with, and shares the values of,
the organisation
D The degree to which the individual is prepared to do what management
requires
6 Which of the following constitutes a limitation on the value of productivity

measures as a way of specifying group performance requirements?
A Team members may be more interested in maintaining group cohesion
than they are in achieving productivity targets
B High productivity may be achieved at the expense of quality
C Factors outside the control of the group may influence employee satis-
faction
D Commitment may not be related to productivity
7 Which of the following correctly describes the Schuler model of HRM?

A It is a Harvard style model
B Systematic studies have been carried out to test its usefulness
C It has little in common with the Fombrun model
D It is a ‘soft’ HRM model
8 Which of the following is correct of the MCI approach to competencies?

A It emphasises generic competencies which apply to all managers
B It is mainly concerned with helping managers to obtain increased job
satisfaction
C It focuses on core abilities, rather than skills
D It is concerned with excellence in performance, rather than the achieve-
ment of minimum standards
9 Under which of the following circumstances would questionnaire methods

of job analysis be unsuitable?
A The job holders to be surveyed are well educated
B The number of job holders to be surveyed is small
C The analyst needs quantitative information
D Statistical analysis has to be carried out on the data collected

10 Which of the following refers to the validity of a selection test?

A The consistency of applicants’ test scores over time
B The extent to which recruiters agree as to how well candidates have
performed
C The correlation between test scores and subsequent job performance
D The extent to which different recruiters giving the test to the same
applicants agree about who are the best candidates
11 Which of the following is true of the structured interview?

A Interviewers are free to ask whatever questions they like
B Motivation to join the company and stated career ambitions are essential
questions to be asked
C The candidate is put under stress to assess whether or not he can
handle pressure
D It is based on selection criteria derived from systematic job analysis
12 Which of the following correctly describes psychometric tests of ability?

A They provide a qualitative assessment of a person
B They are concerned with the assessment of core characteristics, skills
and motivation
C They are concerned with all aspects of a person’s functioning
D They generally have higher validity than personality tests

A Functional flexibility describes the practice of expanding and contract-
ing the labour force rapidly as the need arises
B In Atkinson’s model of the flexible firm, peripheral workers have the
same level of job security as core workers
C Numerical flexibility refers to multi-skilling whereby individuals are
required to carry out a large number of tasks
D Annual hours contracts constitute a form of temporal flexibility
14 Which of the following is true of appraisal systems?

A Systems which include pay review as part of the process often create
defensiveness on the part of the appraisee
B The use of a BARS or BOS rating system eliminates inaccuracies in
appraisers’ judgments
C When performance management is introduced into an organisation,
regular appraisal is no longer necessary
D Appraisees typically try to set difficult targets in order to give them-
selves a challenge


A Research shows that the PBDI is more valid than the situational inter-
view
B Both the PBDI and the situational interview are based on sound psy-
chological principles
C Both the PBDI and the situational interview use scoring keys with
predetermined answers
D The situational interview requires candidates to describe situations they
have experienced in the past
16 Which of the following is true of 360-degree appraisal?

A It always uses the BARS system
B It eliminates the halo effect
C People outside of the organisation can contribute to the appraisal
D It is only used for setting performance targets

A In a learning contract, the organisation makes a formal commitment to
a set of learning goals
B A learning contract includes a statement as to how learning goals are
to be achieved
C A learning contract contains a clause about the financial rewards the
manager will receive once he has completed the contract
D The purpose of learning contracts is to ensure that all employees agree
to accept the philosophy of the learning organisation

A There is no place for appraisal schemes within performance manage-
ment systems
B Performance management has a shorter time perspective than perform-
ance appraisal
C Performance management does not concern itself with the management
of financial incentives
D One of the functions of performance management is to ensure that
individual performance is linked to strategic HRM objectives
19 According to Guest (1994), which of the following is true of HRM theories?

A They are not applicable to European countries
B They emphasise individualism
C They emphasise collectivism
D They have highlighted the inadequacies of the Japanese approach to
managing people in organisations


A The underlying assumption of behaviour modelling training (BMT) is
that people learn from observing the behaviour of another person
B According to Bandura, rewards are essential if learning is to take place
C For maximum learning to take place trainers should set goals which
are very easy for trainees to achieve
D Feedback should not be given to trainees about where they are going
wrong, but should focus exclusively on reinforcing what they are doing
correctly
21 When evaluating training programmes, which of the following can be

assessed using Kirkpatrick’s trainee reactions criteria?
A External validity
B Trainees’ views about the value of the programme
C How much trainees learned during the programme
D Changes in trainee behaviour back in the workplace
22 Which of the following has influenced the trend in recent years for careers
to become shorter?
A Bureaucratic forms of organisation
B A belief in some organisations that younger workers contribute more
than older ones
C Self-managed teams
D Development for employability schemes
23 Which of the following correctly describes a difference between employee

development and career management?
A There is greater onus on the employee to take responsibility for his
own development, whereas the organisation has more responsibility
for career management
B The time perspective of career management is longer
C Career management, unlike employee development, is concerned with
the whole person
D Career management can only occur in large organisations
24 Which of the following represents a sound reason for promoting from

within?
A It creates diversity
B Some senior jobs may require the person to have a large number of
organisational competencies
C It creates functional flexibility
D It creates culture change

25 Which of the following statements accurately reflects available research

evidence?
A There are clear sex differences in commitment and this explains why
women are less successful than men
B Women who do not have families consistently show higher levels of
commitment than men
C Most studies showing sex differences in commitment are difficult to
interpret in terms of career success because of confounding factors
D The number of women in managerial roles is decreasing
Section B: Essay Questions
Each question is worth 25 points.
1 What are the defining characteristics of the different models of HRM? How
would you describe the original Harvard model of Beer et al. in terms of
these characteristics?
2 Under what conditions is the interview a useful method of selection?
3 Describe the main methods of job analysis. What are the advantages and
limitations of each of them?

Answers to Section A: Multiple Choice Questions
1 D see Section 1.1

Answers to Section B: Essay Questions
1 There are a number of models of the HRM process in existence. However,

they can be broadly defined as belonging to one of two types. First of all,
there are several matching models, of which the most well known is the one
put forward by Fombrun and colleagues. Second, there are several variants
of what has become known as the Harvard model, originally proposed by
Beer et al. There are at least six defining characteristics which distinguish
the various models from each other.
First, although all of the major models address strategic aspects of HRM,
some are exclusively concerned with strategic considerations while others
also consider operational and implementation issues. In addition, while
all models have something to say about the relationship between strategic
HRM and overall business strategy, the nature of the relationship which
is presumed to exist between the two differs markedly from one model to
another.
The models also vary in the extent to which they are prescriptive in the
sense of offering mangers advice on how things ought to be done. Some
are highly prescriptive, whereas others are more analytical, insofar as they
are more concerned with understanding structures and processes than in
making specific recommendations.
Perhaps the most important single differentiating feature amongst the vari-
ous models is the extent to which they take a ‘hard’ versus ‘soft’ approach
to HRM. The hard approach puts considerable emphasis on the resources
side of HRM. Bottom line profit is seen as the major consideration, and
people are seen as no different from any other resource in this respect. Soft
HRM on the other hand, emphasises the human rather than the resource
side of the equation. People are in this sense a unique resource and the
key to competitive advantage is to realise their potential fully so that their
contribution to the organisation can be maximised.
Another important differentiating factor amongst the various models is
the role assigned to line managers in the implementation of HRM. Some
models propose that, because effective management of people is so critical
to organisational success, all managers must take responsibility for HRM
matters. Others make little mention of any special HR role for managers
outside of the HR function.
Some models represent a radical departure from personnel management as
traditionally practised. For example, some of the proposals put forward by
certain of the matching models seem a far cry from traditional personnel
management. At the other extreme, some models look like not much more
than personnel management dressed up in new clothes.
Finally, there is the extent to which the models adopt a unitarist or pluralist
perspective. The unitarist viewpoint assumes that there are only a few
legitimate stakeholders in the organisation, principally the shareholders and
top management. Pluralist approaches assume a much wider community of

legitimate stakeholders, including for example ordinary employees, labour

unions, and even the wider community.
The original Harvard model typifies the soft approach to HRM, with people
being viewed as the unique resource which makes the crucial difference
between the success and failure of an organisation. Partly because of this
emphasis on the importance of people, it advocates that all managers should
have a responsibility for HRM. As far as the relationship between business
strategy and HRM strategy is concerned, unlike some other models, it
regards general strategy as only one of a number of inputs into the process
of HRM strategy formulation. The model is not particularly prescriptive
in its orientation. Thus, for example, the model talks in terms of HR
choices, rather than advocating the one best way to do things. The Harvard
model is closer to personnel management than some others. This can be
seen in its emphasis on taking the needs of all employees into account
and in its inclusion of the trade unions as legitimate stakeholders in the
organisation. Following on from the last point, the Harvard model is notable
for its pluralist approach. Thus, not only does it recognise the legitimacy
of employees’ and unions’ interests, it also takes into account the views of
other groups outside the organisation such as government and the wider
community.
2 The usefulness of any selection device, including the interview, can be

assessed with reference to the four criteria suggested by Muchinsky. The
first of these, validity, is the most important. Validity, which is expressed
as a correlation coefficient, is an estimate of how well the selection device
predicts job performance. Unless a technique has some validity, it will not
be of any use in selection, no matter how well it appears to match up
to the other three criteria. Fairness is also an important criterion against
which to evaluate a selection tool. To meet this requirement there must be
no unfair discrimination against individuals. The third factor is cost, with
inexpensive selection methods being preferred to expensive ones, other
things being equal. Finally, a selection device has wide applicability when it
can be used for a large number of different types of job, which Muchinsky
sees as an advantage.
Before considering the results of studies of the interview, it is worth pointing
out that there is a wide variety of different types of selection interview and
not all are likely to be equally useful. For example, interviews can vary in
terms of their duration, the type of person carrying out the interview, the
interpersonal atmosphere created, the focus of the interview, and the degree
of structure of the interview. Research has shown that the last of these,
structure, is critical as far as the usefulness of the interview is concerned.
Early research on the interview, before the advent of the structured inter-
view, indicated that the interview had low or even negligible validity.
However, the picture changed dramatically with the increasing use of struc-
tured interviews. This is most clearly seen from the results of the various
meta analyses which were carried out in the late 1980s and early 1990s. For
example, Weisner and Cranshaw reported validity coefficients of around

.60 for structured interviews, compared to values of around .20 – .37 for
unstructured ones. Both Huffcutt and Arthur, and McDaniel, also reported,
in separate studies, very acceptable validities for interviews – provided they
were structured.
The question which now arises is ‘What exactly is a structured interview?’
A structured interview has four main characteristics. First of all it should
be built around a thorough competency/behaviourally-based job analysis,
so that the interviewer knows precisely what she is looking for. Second,
all questions must be job related and must be consistently asked of every
candidate. Broadly speaking, two types of job related questions have been
used. The first type, which are used in what has been called the PBDI (Janz),
asks candidates about specific events which have happened to them in the
past. The events must, of course, be related to the required competencies.
Thus if ability to meet deadlines was a competency, then questions focusing
on meeting deadlines in the past would be asked. This approach is based
on the well established psychological principle that past behaviour predicts
future behaviour. The second type of job related question asks candidates
how they would deal with a series of carefully selected job situations.
This is known as the situational interview (Latham), and it is based on
the principle that people actually do what they say they will do. To date
we do not have enough evidence to say which of these two approaches
is the more valid. The third characteristic of some types of structured
interview is the use of a fixed list of questions along with the alternative
answers which could be given by candidates to each question. This third
characteristic only really applies to the situational interview, at least as far
as the provision of alternative answers is concerned. Finally, in structured
interviews, interviewers are provided with behaviour based rating scales
against which candidates are assessed, usually on a number of dimensions.
Turning to Muchinsky’s third criterion of fairness, we do not have a clear
cut answer to this question at the present time (Arvey). Most interviews
require significant amounts of expensive management time and in this sense
the interview can be described as a fairly costly method of selection. On
the other hand, interviews have wide applicability, being appropriate for
almost any kind of job.
In conclusion, while historically interviews appeared to be of little real use
in selection, the advent of the structured interview has caused their value to
be re-assessed. It now appears that, provided a structured format is used,
interviews are indeed a useful method of selection.
3 Job analysis aims to provide a comprehensive and valid list of what is

required for effective performance of a particular job or set of jobs. Blum
and Naylor list nine main methods of job analysis. The first of these,
questionnaires, involves asking job holders to indicate the extent to which
a series of statements applies to their job. Questionnaire methods have the
advantage, from the point of view of the analyst’s time, that they can be
administered to large groups of employees simultaneously. In this sense
they are most useful when there are many job holders available to complete

the questionnaires. When this is the case, and when the information is in
an appropriate format, valuable statistical analysis can be carried out on
the data. One drawback of this approach is the time it takes to construct
the questionnaire. Also, important features of the job may be left out of the
questionnaire inadvertently. Finally, questionnaires are not well suited for
use with job holders who have had little formal education.
Checklists have much in common with questionnaires, except that in this
case the employee selects only those items, from a large list of statements,
which apply to his particular job. This avoids the potential problem with
questionnaires that job holders, in a misguided attempt to be helpful, might
provide ratings for activities which are not actually part of their job. Apart
from this, the advantages and limitations of checklists are similar to those
of questionnaires.
Interviews carried out on a one-to-one basis have the advantage that they
provide a rich source of qualitative information about the job. Also, it is the
job holders themselves – rather than the analyst – who provide the list of
relevant activities. Since they inevitably know the job more intimately than
the analyst, this has the advantage that important aspects of the job are
unlikely to be missed. Interviews can also be conducted with others who
know the job well, such as immediate supervisors. A major drawback of
this approach is its time-consuming nature for all concerned. Also, because
the data generated is qualitative, categorising it can be problematic.
Depending on the type of job, much can be learned by observing individuals
actually carrying it out. This would typically be followed up with a series
of interviews with job holders. A clear advantage of this approach is the
fact that it is based on actual job behaviour, rather than on what people say
they do. Once again, however, we are talking about a very time-consuming
procedure. In addition, it is clearly a method which cannot be applied to
all jobs. For example, how much could be learned about the job of novelist
simply by watching as person typing material into a word processor?
Group interview methods involve discussing the job with individuals in
groups. This is clearly more economical in terms of the analyst’s time. It
also has the benefit that one person’s responses can suggest sides to another.
On the other hand, some individuals may dominate the group, leading
to biased information. Aside from these considerations, the benefits and
drawbacks of this method are similar to those listed above for one-to-one
interviews.
The conference method typically uses brainstorming techniques to obtain
lists of job tasks and associated behaviours from groups of experts who
are thoroughly familiar with the job in question. Questionnaires can also
be incorporated into this method, with items being derived from the brain-
storming exercise. This combination of two techniques is a strength of this
approach.
Work diaries are particularly valuable in situations where the analyst sus-
pects that there are important features of the job which are so routine that

they may go unnoticed when the techniques we have described so far are
used. By asking job holders to keep a daily record of all of the tasks they
carry out, a very comprehensive record of work tasks can be built up. This
of course can be very time-consuming, not just for those who keep the
diaries, but also for the analyst who has the job of reading and analysing
them.
Depending on the nature of the job, it may be possible for the analyst
herself to carry out part, or even all, of the job. This can be valuable for
highlighting aspects of the job which the person doing the job is no longer
aware of because of the length of time for which he has been doing it. A
clear limitation of this method is the fact that it is only feasible for certain
kinds of job.
The critical incident technique requires respondents, who might be job
holders or their superiors, to describe specific behavioural events which have
actually occurred in the job in question, and which are critically important
aspects of the job. Examples of particularly successful and unsuccessful
ways in which the events were tackled may also be requested. The major
strength of this method is its focus on real events which exemplify excellent
and poor performance in job situations which are particularly important.
However, this focus on extreme events brings with it the risk that more
everyday events, which might still be important, are overlooked. Also,
because it concentrates on past events, the method is not well suited to the
identification of future-oriented performance requirements.
Finally, if there is a need to obtain as comprehensive as possible an analysis
of the job, the analyst will often use a combination of these methods.

Index
ability tests 5/4, 5/6, 5/9–10, 5/18, 5/19 behaviour observation scales (BOS) 6/11–12
action learning 7/22 behaviour performance indicators 4/9–10
Adams, J.S. 4/22 behavioural change 7/14–15
adaptation 4/15 behavioural competencies 4/18–20
affective commitment 3/21 behavioural repertoires 4/9, 4/10
after between design 7/19 behaviourally anchored rating scales (BARS )
after within design 7/17–18 6/11–12
Alliger, G.M. 7/16 behaviour-modelling training (BMT) 7/9
Annette, J. 7/7 Belt, J.A. 5/13, 5/13
Anthony, P.D. 3/27 Bevan, S. 6/18
application forms 5/11 biodata 5/11–12
appointment decisions 5/5 Blum, L. 4/10
appraisal systems 1/10, 2/6, 6/3–16 Blyton, P. 3/10
behaviour focused appraisal 6/9 BMT (behaviour-modelling training) 7/9
interviews 6/4, 6/14–15 BOS (behaviour observation scales) 6/11–12
limitations of 6/15–16 Boxall, P.F. 2/6, 2/11
measuring effectiveness of 6/16, 6/16–17 Boyatzis, R. 4/18
personnel involved 6/12–13 brainstorming 4/13
process-oriented 6/8–9 bureaucratic organisations 3/7–8
promotion potential identification 6/6, 6/15, business strategy 1/2–3, 1/8, 2/3, 2/3
6/16
purposes and outcomes 6/5–6 Callanan and Greenhaus career stage model
recording information 6/9–12 8/5–6
results-oriented 6/6–8 Campbell, D.T. 7/17
and reward allocation 6/6, 6/15 Campbell, J.P. 7/15
360-degree appraisals 6/13, 6/16 career management 1/10
and training and development needs 1/10, career anchors 8/3–4
6/5, 6/6, 6/15 choice and decisions
aptitude tests 5/18 Holland’s theory 8/2–3
Arvey, R.D. 5/17 Schein’s theory 8/3–4
assessment centres 5/20–22, 6/6 coaching 8/12–13
AT & T Corporation 5/21 concept of 8/2
Atkinson, J. 3/11 counselling 8/13
attitude development 7/11 development centres 8/10–11
attitudinal qualities 4/16 development workshops 8/13
autonomous work groups 3/15 educational programmes 8/14
employee expectations 8/8–9
Bandura, A. 7/9 fast track schemes 8/11–12
Barrick, M.R. 5/19 future for careers 8/17–18
BARS (behaviourally anchored rating scales) mentoring 8/12–13, 8/20
6/11–12 organisation’s responsibility 8/9–10
Beason, G. 5/13, 5/13 psychological contract 8/8–9, 8/14–17
Beer, M. 2/1, 2/7–9 stages of careers 8/5–6
before after within and between design 7/19 work role transitions 8/6–8
before after within design 7/18–19 workbooks 8/13
behaviour and work motivation 1/6 change programmes 3/5, 3/26–27, 4/15
behaviour focused appraisal 6/9 checklists
Human Resource Management Edinburgh Business School I/1

Index
for job analysis 4/11 decision-making teams 3/17

for recording appraisal information 6/9–10 de-layering 3/8–9, 3/17
coaching 7/22–23, 8/12 Deming, W.E. 3/2
cognitive ability tests 5/18 Devanna, M.A. 2/3–4, 2/6
commitment development centres 6/6, 6/17, 7/20, 8/10–11
and de-layering 3/8–9 development for employability 7/23
gender differences 8/21 development workshops 8/13
Harvard philosophy 2/8 disciplinary procedure 9/13–14
and recruitment 5/2 discrimination 5/10
and the psychological contract 8/15 diversification of work roles 4/15–16
and total quality management 3/5 downsizing 8/15
and work motivation 1/6, 7/2 dress codes 3/24
communication programmes 3/26
competencies 4/16–21 educational opportunities 8/14
behavioural 4/18–20 employee development 7/20–23
Management Charter Initiative (MCI) 4/17–18 action learning 7/22
organisational 4/21 coaching 7/22
competitiveness 1/2 development centres 7/20
compliance 3/20 development for employability 7/23
comprehension 7/10 learning contract 7/21
concurrent validity 5/7 mentoring 7/22
conference method 4/13 purpose of 7/2
continuance commitment 3/21 self-development 7/21
continuous improvement 3/5 and training programmes 7/19–20
contracting 8/17 work experience 7/21
core abilities 4/5–7, 4/18, 4/20 employee relations 9/2–24
core characteristics 4/9 collectivist v individualist approach 9/5
core workers 3/11–12, 5/2 definition 9/2
corporate culture 3/24 legal framework 9/6–7
correlation coefficients 5/7–8 philosophical approach 9/3–6
cost reduction 2/5 pluralist approach 9/4
costs radical approach 9/4
of interviews 5/17 unitarist approach 9/4
of psychometric tests 5/17–20 employee representation 9/9–12
and quality 3/2 unions 9/9–12
and recruitment 5/10 employees
sunk costs 3/21 career expectations 8/8–9
counselling and careers 8/13 involvement techniques 3/5, 3/22, 3/23
Cowling, A. 1/4 motivation 1/5, 1/6, 3/23, 4/5–7, 6/2
CRAMP taxonomy 7/10–12 relationships 3/23
critical incident method 4/14 role behaviour 2/4
cross-functional teams 3/16 Employers’ Labour Use Strategies 3/12
culture 3/23–27 empowerment 3/17, 7/2
change programmes 1/6, 3/5, 3/26–27 end-results 4/2–3, 6/6–9, 7/15
corporate culture 3/24 enterprise culture 1/3
definition 3/24–25 Evans, A. 1/4
and performance 3/25 experimental designs 7/16–19
and quality 3/4
customer satisfaction 3/3 fairness 5/10, 5/12, 5/17, 5/20
fast track career management 8/11–12
Deal, T.E. 3/24 feedback 6/2–3, 8/16
de-centralisation 1/7, 3/9–10 financial flexibility 3/13, 3/17
I/2 Edinburgh Business School Human Resource Management

Index
Flanagan, J.C. 4/14 human resource management

flexible working arrangements 3/5, 3/10–14 definition 1/1–2
advantages/disadvantages 3/13 origins and evolution 1/2
definition 2/9 Hunter, J.E. 5/9, 5/12, 5/15, 6/7
evaluation of 3/12–13 Hunter, R.F. 5/9, 5/12, 5/15
Flexible Firm 3/11–12
forms of flexibility 3/10–11 incentive schemes 3/22
task flexibility 1/7 individual ability 6/2
flexitime arrangements 3/11 individual development 6/17
Fombrun, C.J. 2/1, 2/1, 2/3–4, 2/6 individual level training needs 7/4
Ford, R.C. 3/21 industrial relations 1/4, 1/9
functional flexibility 3/10, 3/17, 3/18, 4/15 information provision 3/22
innovation 2/4
Gerhart, B. 4/23 international teams 3/16
glass ceilings 8/19 inter-rater reliability 5/6
globalisation 1/2, 8/7 interviews
goal setting 6/5, 6/8, 6/14, 7/10 appraisal 6/4, 6/14–15
graduate recruitment 5/3, 5/13, 5/21 costs 5/17
grandfather appraisals 6/12 group 4/12
Greenhaus and Callanan career stage model one-to-one 4/11–12
8/5–6 recruitment 5/14–17
grievance procedure 9/13–14 and training needs analysis 7/5
group interviews 4/12 involvement techniques 3/5, 3/20, 3/22, 3/23,
Guest, D.E. 1/8, 1/9, 3/9, 3/22 9/20–24
HRM model 2/9–10, 3/4 communication 9/21
Gutek, B.A. 8/19, 8/21 consultation 9/21
participation 9/22
Hakim, C. 3/12 success 9/23–24
Hales, C.P. 7/8
halo effect 6/10 Jackson, S.E. 2/4
hard HRM 1/5–6 Janack, E.A. 7/16
Harvard models 2/1, 2/7–11 Janz, T. 5/16, 5/16
Beer model 2/7–9 Japanese management practices 1/2–3
evaluation of 2/11 job analysis 4/10–14
Guest model 2/9–10, 3/4 checklists 4/11
Pettigrew approach 2/10 conference method 4/13
Hawthorne studies 3/15 critical incident method 4/14
health and well-being at work 9/14–20 group interviews 4/12
lifestyle programmes 9/20 observation 4/12
maximisation 9/18–20 one-to-one interviews 4/11–12
organisational culture 9/20 and performance 4/16
physical aspect 9/16–17 questionnaires 4/11, 4/13
psychological aspect 9/17–18 and recruitment 5/4
Hendry, C. 1/4, 2/5, 2/10 and strategic HRM 4/15–16
Herriot, P. 1/10, 8/15, 8/16, 8/17 work diaries 4/13
hierarchical task analysis (HTA) 7/7–8 work participation 4/14
hierarchies 3/7, 3/8 job involvement 3/20
’high flyers’ 8/11 job roles 1/10, 3/10
Hill, S. 3/6 Juran, J.M. 3/2
Holland, J.L. 8/2–3
home-work conflicts 8/20 Keenan, A. 4/20, 5/11, 5/13, 5/21
Honey, P. 7/12 Kennedy, A. 3/24

Index
Kirkpatrick, D.L. 7/13–16 continuance commitment 3/21–22

determinants of 3/22–23
Latham, G.P. 5/16, 6/5 and motivation 3/23
leadership 3/26, 4/9, 7/19 nature of 3/20–22
learning 7/8–12, 7/14, 7/21 and performance 3/23
learning organisations 3/18–20, 5/3 related concepts 3/20–21
Legge, K. 3/3, 3/12, 3/12, 3/18 organisational competencies 4/21
Locke, E.A. 6/5 organisational level training needs 7/3–4
Long, P. 6/4, 6/5, 6/6, 6/7, 6/8, 6/13, 6/19 organisational structure 3/5, 3/7–10
loyalty 8/15 bureaucratic 3/7–8
de-centralisation 3/9–10
McBer model 4/18–19, 4/20 de-layering 3/8–9, 3/17
McGee, G.W. 3/21 outsourcing 1/6, 3/11
Makin, P.J. 5/13, 5/21
management by objectives (MBO) 6/7–8 part-time working 1/6, 3/12, 3/12
Management Charter Initiative (MCI) 4/17–18 passive learning 7/10
management style 8/22 Patterned Behaviour Description Interview
managerial roles 7/8 5/16–17
Matching HRM models 2/1, 2/3–7 pay 4/24
evaluation of 2/6 and job evaluation 4/26
Fombrun, Tichy and Devanna 2/3–4 meaning and the individual 4/21–23
Schuler group 2/4–6 meaning and the organisation 4/23–24
memory training 7/11 and performance 4/27–29
mentoring 6/18, 8/12, 8/20 pay bargaining 1/7
meta analysis of selection tools 5/8–10 pay systems 3/9
Mintzberg, H. 7/8 and appraisals 6/5, 6/6, 6/15
models of HRM incentive schemes 3/22
defining characteristics 2/1–2 performance related pay (PRP) 3/13
Harvard models 2/1, 2/7–11 piece work 3/13
Matching models 2/1, 2/3–7 wage flexibility 3/11
Morris, J. 3/10 Pedler, M. 3/19
motivation 1/5, 1/6, 3/23, 4/5–7, 6/2 performance
Mount, M.K. 5/19 behavioural indicators 4/9–10
Muchinsky, P. 5/10, 5/13 and culture 3/25
Mumford, A. 7/12 determinants of 6/2
and job analysis 4/16, 6/3
Naylor, J.C. 4/10 and organisational commitment 3/23
needs analysis 7/5 and pay 4/21–29
needs identification 7/3–4 requirements 2/4–6
Newell, S. 5/17 group 4/4
Nicholson, N. 8/7, 8/8 individual 4/4–5
numerical flexibility 3/10, 3/12 organisational 4/3–4
specifying 4/2–3
objective setting 6/5, 6/8, 6/14, 7/10 reviewing past performance 6/5
observation of job incumbents 4/12 trait approach 4/7–9
Ogbonna, E. 3/27 performance management systems 6/16–17
one-to-one interviews 4/11–12 performance related pay (PRP) 3/13
operational level HRM 1/9–11 peripheral workers 3/11, 3/12, 5/2
organisational behaviour (OB) 1/5, 2/6, 2/7 personal development 8/8
organisational commitment 3/20–23 personality
affective commitment 3/21 and appraisal systems 6/8
and compliance 3/20 and career choice 8/2–3

Index
gender differences 8/21–22 Schein, E.H. 3/24, 3/24, 3/26, 8/3–4

tests 5/19, 5/19 Schmidt, N. 5/9, 5/19
trait approach to performance 4/7–9 Schuler, R.S. 2/4–6, 2/6
personnel changes 3/26 selection matrix 5/4
personnel management 1/3–4, 1/5 selection paradigm model 5/3
Peters, T.J. 1/3 selection tools
Pettigrew, A. 2/10 ability tests 5/4, 5/6, 5/9, 5/18, 5/19
physical-motor tests 5/18 applicability 5/10, 5/17, 5/20
piece work 3/13 application forms 5/11
Porter, M.J. 2/4 appointment decisions 5/5
predictive validity 5/7 assessment centres 5/20–22
privatisation 1/10 biodata 5/11–12
problem-solving teams 3/16 choice of tool 5/4
procedural learning 7/11 fairness 5/10, 5/12, 5/17, 5/20
processes 4/2 importance of selection 5/2
process-oriented appraisal systems 6/7, 6/8–9
interviews 5/14–17
product superiority 3/2
and job analysis 5/4
production teams 3/16
meta analysis 5/8–10
productivity 6/7
personality tests 5/19, 5/19
promotion potential identification 6/6, 6/15,
psychometric tests 5/17–20
6/16
reference reports 5/12–14
psychological contract 8/8–9, 8/14–16
psychometric tests 5/17–20 reliability of 5/6, 5/7–8
public sector organisations 3/3 selection and strategic HRM 5/2–3
self-selection 5/2
quality 1/8, 2/5, 2/9, 3/2–6 simulations 5/4, 5/20, 5/21
as organisational culture 3/4 situation-specific 5/9
costs 3/2 usefulness of 5/10
customer satisfaction 3/3–4 validation procedures 5/5–8
product superiority 3/2 self-appraisals 6/13
in the Guest Model 3/4 self-development 7/21, 8/2
total quality management 3/4–6 self-managed teams 3/15, 3/16
quality of working life (QWL) 3/15 self-selection 5/2
questionnaires 4/11, 4/13, 5/12 sensory-motor tests 5/18
sex discrimination 5/10
race discrimination 5/10 Shackleton, V. 5/17
Ragins, B.R. 8/20 shared values 3/24, 3/25
rating scales 6/9, 6/10–11
simulations 5/4, 5/20, 5/21
realistic job preview (RJP) 8/7
situational factors 2/7
reference reports 5/12–14
situational interviews 5/16–17
reflex learning 7/10
skill deficits 6/2
resource provision 6/3
skills 1/8, 2/7, 4/5–7, 4/18, 4/20, 7/3
responsibility 3/18
Smith, M. 5/13
results-oriented appraisal systems 6/7–8
social networks 8/20
Revans, R.N. 7/22
reward allocation 3/27, 6/6, 6/15 soft HRM 1/6
rewards aid learning 7/9 source traits 4/7
Robertson, I.T. 5/13, 5/21 Sparrow, P.R. 4/17
Rogers, R. 6/7 Spencer, L.M. and S.M. 4/20
role development 8/8 stakeholder interests 2/7
Rowe, K.H. 6/14 Stanley, J.C. 7/17
Stewart, R. 7/8
Saville & Holdsworth 4/11 strategic competency model 4/21

Index
strategy needs analysis system 7/5

business strategy 1/2–3, 1/7–9, 2/3, 2/3 needs identification 7/3–4
competitive advantage 1/5 priority determination 7/5–6
formulation and implementation 3/19 purpose of 7/2
and role of HRM 1/7–9 and strategic HRM 7/2–3
and training programmes 1/4 and strategy 1/4
stress 3/8 systematic evaluation 7/13
structured interviews 5/15–16 and types of learner 7/12
succession planning 6/18 trait approach to performance 4/7–9
Sundstrom, E. 8/20 Tranberg, M. 8/3
sunk costs 3/21
Super, D.E. 8/5 value systems 3/24, 3/25
vertical segregation 8/19
target setting 6/5, 6/7, 6/14, 7/10
task flexibility 1/7 wage flexibility 3/11
team working 1/7, 1/10, 3/5, 3/15–18 Waterman, R.H. 1/3
autonomous work groups 3/15 weighted checklists 6/9
benefits 3/17 West, M.A. 8/7, 8/8
consequences for individuals 3/17–18 Wilkinson, A. 3/6
self-managed teams 3/15, 3/16 Wilkinson, B. 3/27
types of team 3/16–17 within group design 7/17
temporal flexibility 3/11, 3/12 women’s careers 8/18–22
test-retest reliability 5/6 choice process 8/19
Thomson, M. 6/18 opportunities 8/19–20
360-degree appraisals 6/13, 6/16 performance difference between sexes 8/21–22
Tichy, N.M. 2/3–4, 2/6 work diaries 4/13
Torrington, D. 1/4 work experience 7/21
total quality management 3/4–6 work groups 3/15
trade unions 1/7, 2/6 work involvement 3/20
trainee reactions 7/13 work organisation 1/7, 8/14–16
training programmes 7/2–20 work participation 4/14
and appraisals 1/10, 6/5, 6/6, 6/15 Work Profiling System 4/11
content 7/7–8 work roles 3/19, 4/15
designing 7/6–12 training needs 7/4
effectiveness evaluation transitions 8/6–8
criteria 7/13–16 work systems 3/22
experimental designs 7/16–19 workbooks for career management 8/13
external consultants 7/6 workforce capability 2/3
learning process 7/8–12

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Human

Tony Keenan is Professor of Human Resource Management at Edinburgh Business School,

Release HM-A2-engb 1/2005 (1014)

Edinburgh Business School

Tel + 44 (0) 131 451 3090

The right of Professor Tony Keenan to be identified as Author of this

Release HM-A2-engb 1/2005 (1014)

All rights reserved; no part of this publication may be reproduced, stored

Typesetting and SGML/XML source management by CAPDM Ltd. (www.capdm.com)

Module 1 The Origins and Nature of Human Resource Management 1/1

Module 2 Models of Human Resource Management 2/1

Module 3 Key Themes in HRM 3/1

Module 4 Analysis of Performance Requirements 4/1

Module 5 Recruitment and Selection 5/1

Human Resource Management Edinburgh Business School 5

Module 6 Performance Appraisal and Performance Management 6/1

Module 7 Training and Development 7/1

Module 8 Careers and Career Management 8/1

Module 9 Employee Relations 9/1

Appendix 1 Answers to Review Questions A1/1

Appendix 2 Practice Final Examinations and Solutions A2/1

6 Edinburgh Business School Human Resource Management

The Origins and Nature of Human

1.1 What is Human Resource Management?

Human Resource Management Edinburgh Business School 1/1

1.2 The Origins and Evolution of HRM

1.2.1 Business Strategy in an Increasingly Competitive Environment

1/2 Edinburgh Business School Human Resource Management

It appeared that a number of Japanese management practices such as the focus on

1.2.2 Personnel Management

Human Resource Management Edinburgh Business School 1/3

1/4 Edinburgh Business School Human Resource Management

1.2.3 Organisational Behaviour

1.3 Philosophical and Theoretical Perspectives of HRM

1.3.1 Hard Versus Soft HRM

Human Resource Management Edinburgh Business School 1/5

1.3.2 The Nature of Work Motivation and Behaviour

1.3.3 Organisational Conditions and Effectiveness

1/6 Edinburgh Business School Human Resource Management

by an environment which is in a constant state of evolution. This creates a need

1.4 HRM as a Strategic Activity

Human Resource Management Edinburgh Business School 1/7

At one level, the role of HRM is restricted to that of facilitating a pre-

1/8 Edinburgh Business School Human Resource Management

practice? Some argue that a piecemeal approach to the introduction of many of

1.5 HRM as an Operational Level Activity

Human Resource Management Edinburgh Business School 1/9

effectively methods need to be developed at the operational level to enable the

1/10 Edinburgh Business School Human Resource Management

ance appraisal and performance management, training and development, and

1.2 It is unanimously agreed that HRM is fundamentally different from personnel

1.4 When a personnel department responds rapidly to threatened strike action by

Human Resource Management Edinburgh Business School 1/11

1.9 Strategic HRM argues for an integrated approach to people management in

Short Essay Questions

Apply What You Have Learned: HRM in Action

You are a personnel manager in a large manufacturing organisation in the electronics

From: Head of Scenario Review Unit

To: Special Personnel Advisor

1/12 Edinburgh Business School Human Resource Management

Human Resource Management Edinburgh Business School 1/13

Models of Human Resource

2.1 Defining Characteristics of HRM Models

Human Resource Management Edinburgh Business School 2/1