Saunders SHRM Im

1 Pearson Education Limited 2007

Instructor's Manual

Strategic Human Resource Management:

Contemporary Issues

First edition

Mike Millmore Philip Lewis

Mark Saunders Adrian Thornhill Trevor Morrow

For further instructor material please visit:

www.pearsoned.co.uk/millmore

ISBN: 978-0-273-68168-7 Pearson Education Limited 2007 Lecturers adopting the main text are permitted to download and photocopy the manual as required.


Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies around the world Visit us on the World Wide Web at: www.pearsoned.co.uk ---------------------------------- First published 2007 Pearson Education Limited 2007 The rights of Mike Millmore, Philip Lewis, Mark Saunders, Adrian Thornhill and Trevor Morrow to be identified as the authors of this Work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988. ISBN: 978-0-273-68168-7 All rights reserved. Permission is hereby given for the material in this publication to be reproduced for OHP transparencies and student handouts, without express permission of the Publishers, for educational purposes only. In all other cases, no part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without either the prior written permission of the Publishers or a licence permitting restricted copying in the United Kingdom issued by the Copyright Licensing Agency Ltd, Saffron House, 610 Kirby Street, London EC1N 8TS. This book may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of binding or cover other than that in which it is published, without the prior consent of the Publishers.


Contents

Introduction 9 An overview of the Instructors Manual 9 Strategic Human Resource Management: Contemporary Issues: an overview 10 Rationale and aims of the book 10 Structure of the book 11 Readership 12 Pedagogic features 12

Chapter 1 14 Strategy and human resource management 14 Learning outcomes 14 Chapter summary 14 Teaching and learning suggestions: 15

Comment 15 Student preparation 15 In the classroom 15 Follow-up work 16

Answers to self check and reflect questions 16 References 18

Chapter 2 19 Strategic human resource management: a vital piece in the jigsaw of organisational success? 19 Learning outcomes 19 Chapter summary 19 Teaching and learning suggestions: 20


Answers to self check and reflect questions 21

Chapter 3 23 SHRM in a changing and shrinking world: internationalisation of business and the role of SHRM. 23 Learning outcomes 23 Chapter summary 23 Teaching and learning suggestions: 24

Comment 24 Student preparation 24 In the classroom 24


Follow-up work 25 Answers to self check and reflect questions 25

Chapter 4 27

Evaluating SHRM: why bother and does it really happen in practice? 27 Learning outcomes 27 Chapter summary 27 Teaching and learning suggestions: 28


Answers to self check and reflect questions 30 Answers to part 1 case study Questions: Strategic human resource management at Halcrow Group Limited 33

Chapter 5 38 The role of organisational structure in SHRM: the basis for effectiveness? 38 Learning outcomes 38 Chapter summary 38 Teaching and learning suggestions: 39


Answers to self check and reflect questions 41 Answers to case study questions: DaimlersChrysler AG 42

Chapter 6 49 Relationships between culture and strategic human resource management: do values have consequences 49 Learning outcomes 49 Chapter summary 49 Teaching and learning suggestions: 50


Answers to self check and reflect questions 53 Answers to case study questions: Corporate culture and Group values at DICOM Group plc 56


Chapter 7 61

Strategic human resource planning: the weakest link? 61

Learning outcomes 61 Chapter summary 61 Teaching and learning suggestions: 62


Answers to self check and reflect questions 64 Answers to case study questions: Human resource planning in mergers and acquisitions 67 References 71

Chapter 8 73 Strategic recruitment and selection: much ado about nothing? 73 Learning outcomes 73 Chapter summary 73 Teaching and learning suggestions: 74


Answers to self check and reflect questions 77 Answers to case study questions: Recruitment and Selection at Southco Europe Ltd 80 References 84

Chapter 9 86 Performance management: so much more than annual appraisal 86 Learning outcomes 86 Chapter summary 86 Teaching and learning suggestions: 87


Answers to self check and reflect questions 89 Answers to case study questions: Performance management at Tyco 90 References 93

Chapter 10 94 Strategic human resource development: pot of gold or chasing rainbows? 94 Learning outcomes 94


Chapter summary 94 Teaching and learning suggestions: 95 Comment 95

Student preparation 95 In the classroom 96 Follow-up work 97

Answers to self check and reflect questions 97 Answers to case study questions: INA 101 References 105

Chapter 11 106 Strategic reward management: Cinderella is on her way to the ball 106 Learning outcomes 106 Chapter summary 106 Teaching and learning suggestions: 107


Answers to self check and reflect questions 109 Answers to case study questions: Developing a global reward strategy at Tibbett and Britten group 110

Chapter 12 113 Managing the employment relationship: strategic rhetoric and operational reality 113 Learning outcomes 113 Chapter summary 113 Teaching and learning suggestions: 114


Answers to self check and reflect questions 116 Answers to case study questions: Strategic approaches to the employment relationship social partnership: the example of the Republic of Ireland 117 Further Reading 129

Chapter 13 130 Diversity management: concern for legislation or concern for strategy? 130 Learning outcomes 130 Chapter summary 130 Teaching and learning suggestions: 131

Comment 131


Student preparation 131 In the classroom 132 Follow-up work 133

Answers to self check and reflect questions 133 Answers to case study questions: Making diversity an issue in leafy Elgarshire 138

Chapter 14 140 Downsizing: proactive strategy or reactive workforce reduction? 140 Learning outcomes 140 Chapter summary 140 Teaching and learning suggestions: 141


Answers to self check and reflect questions 143 Answers to case study questions: The demise of MG Rover Cars? 145

Millmore et al., Strategic Human Resource Management: Contemporary Issues, Instructors Manual


Supporting resources Visit www.pearsoned.co.uk/millmore to find valuable online resources Companion Website for students Answers to self-check and reflect questions For instructors Instructor's Manual containing:

learning outcomes and summaries teaching and learning suggestions including comment, student preparation, in the classroom

and follow-up work answers to self-check and reflect questions answers to case study questions references

PowerPoint slides Also: The Companion Website provides the following features: Search tool to help locate specific items of content E-mail results and profile tools to send results of quizzes to instructors Online help and support to assist with website usage and troubleshooting For more information please contact your local Pearson Education sales representative or visit www.pearsoned.co.uk/millmore


INTRODUCTION

An overview of the Instructors Manual

This instructors manual has been designed to help the lecturer utilise the textbook Strategic Human Resource Management: Contemporary Issues as a teaching resource. This Introduction incorporates a brief overview of the text in order to set the context for its utilisation as a teaching resource. Its substantive content, however, comprises a chapter by chapter commentary with supporting ideas and materials for teaching strategic human resource management (SHRM) to undergraduate and postgraduate students of Management and HRM.

Each chapter commentary includes the following features:

Learning outcomes

Chapter summary

Teaching and learning suggestions:

Comment

Student preparation

In the classroom

Follow-up work

Answers to self check and reflect questions

References

In addition, answers are provided to all case study questions and PowerPoint slides are included for all chapters. There is one integrated case covering the Part One chapters (Chapters 14). Answers to the questions for this case appear in this manual immediately after the final chapter of Part One, i.e. Chapter 4. Each Part Two chapter (Chapters 514) has its own specific case study positioned at the end of each chapter. Answers to these chapter case study questions appear in this manual immediately after answers to self check and reflect questions for each chapter.

There is substantial standardisation in the Teaching and learning suggestions for each chapter with respect to the Student preparation and In the classroom sections. Although tailored to reflect the particular content of specific chapters these sections inevitably reflect our own teaching style preferences. The style that we most commonly favour involves the student undertaking preparatory reading and related activities with the teaching session using these activities to build on a base level of knowledge. A key element of the teaching session when adopting this approach, however, is to provide sufficient time for students to raise any queries they may have on the reading. Many of the pedagogic features of this book such as self check and reflect questions, follow-up study suggestions and case studies can be used as the basis for preparatory work and/or in-class activities. Other ideas for preparatory and in-class activities can be found in this manual. Our ideas are not meant to be prescriptive but simply represent suggestions that can be customised or substituted as required.



Strategic Human Resource Management: Contemporary Issues: an overview

Rationale and aims of the book

In teaching strategic approaches to the management of human resources (HRM) to a variety of undergraduate, postgraduate and professional students, we found it impossible to find a single text to adopt as a reader in support of their studies. Our dilemma was that available texts explicitly positioned to address the strategic development of HRM practice were either too inaccessible or insufficiently rigorous in their treatment of strategic integration such that their content mirrored more that to be found in the many personnel or human resource management texts available. We therefore set about writing a book to bridge this divide.

However, in stressing the strategic focus of the management of human resources we were faced with a particular difficulty of terminology. Given the overwhelming consensus that the HRM variant of managing human resources is nothing if not strategic, deciding on the title for this book (Strategic Human Resource Management) provided us with something of a conundrum. If the essence of HRM, and its key feature for distinguishing it from personnel management, is its focus on strategic integration then the S of HRM is tautological in that it simply adds the strategic element that is already accepted as a given in HRM! It was therefore with some misgiving that we opted for the SHRM title because of the possible confusion this may cause amongst our readership. However, we justify our decision on two grounds.

First, in our view the term HRM has come to be inappropriately used such that it has been increasingly adopted in place of personnel management without due regard for its differentiating characteristics. In this sense the term HRM is frequently used in the literature too loosely as a simile for personnel management. This has also been reflected in practise where organisations have relabelled their personnel function. It is not unusual to find that Personnel Departments have become HRM Departments, Personnel Managers, HR Managers and Personnel Officers and HR Officers with no commensurate change in their underpinning ideology or in the way functional roles are executed. This is akin to the proverbial case of old wine in new bottles!

Second, this loose use of the term creates the possibility that some texts masquerade as HRM when they essentially cover the same ground found in earlier personnel management texts. Many of these HRM texts and some of the SHRM texts allude to strategic integration but arguably after a nod in that direction proceed to present the material in a relatively standard way without maintaining an explicit strategic focus throughout.

We hope that our readership will agree that the strategic component of HRM underpins the content throughout our book. We have attempted to build on the personnel foundations of HR theory and practice by exploring in detail what is meant by strategic integration, both generally and with specific reference to a selection of key HR levers, and issues around its development and delivery in practise. In order to stress this strategic focus and differentiate our work from those loosely titled HRM texts, we have adopted, with reservation, the title Strategic Human Resource Management.

In writing this book the key concern was to capture the distinctive focus of HRM. Our aims can be summarised as to write a SHRM book that:

maintains a rigorous and critical focus on the S of SHRM throughout rather than resorting to a more traditional, personnel management, treatment of the subject domain;



through its written style and supporting pedagogic features can be readily understood by its potential readership;

conveys the central importance of vertical and horizontal strategic alignment in a way that enables the reader to appreciate the holistic nature of the concept and how it can be applied in practice to recognised specific areas of HR activity; and

grounds the reader in the practicalities of organisational life in a way that enables them to distinguish between SHRM rhetoric and reality.

Structure of the book

The book is divided into two parts. Part One, through four chapters (covering respectively: strategy and human resource management; strategic human resource management; international SHRM; and evaluating SHRM) provides an overview of the SHRM territory. In addressing the substance of their respective chapter titles we have endeavoured in this part to present a holistic view of SHRM. A particular concern has been to surface the complexity lying behind the notion of strategic integration and to explore how this complexity impacts on the conceptual development and practical application of SHRM. In support of our attempts in part one to present a holistic approach to the subject domain we have used one integrated case study to cover all four chapters rather than the chapter case studies that are a feature of part two. This comprehensive, integrated case Strategic Human Resource Management at Halcrow Group Limited appears at the end of part one and hopefully sets the scene for the exploration of the specific key HR levers that follow.

The second part looks in detail at 10 selected HRM levers and critically examines how they too can be conceived strategically and operationalised through organisation practice. The 10 areas selected for part two inevitably reflect our personal views. They are included because we feel that they all represent critical components of SHRM practice. Many of these selected levers (Strategic Human Resource Planning, Strategic Recruitment and Selection, Performance Management, Strategic Human Resource Development, Strategic Reward Management and Strategic Employee Relations) will be found in the majority of HRM texts while others (Organisation Structures, Culture, Diversity and Downsizing) are less frequently covered. In all cases our treatment of the 10 selected topics concentrates on their strategic construction and organisational manifestation and consistently adopts a critical perspective that surfaces the difficulties of putting the rhetoric of SHRM into practice. However, in disaggregating this HRM bundle to examine its constituent parts we have not abandoned the central HRM tenet of horizontal integration. Throughout the chapters making up Part Two we provide cross-references to other HR levers to emphasise their interconnectedness and use other devices, selectively, to reinforce the essence of horizontal integration. For example, in Chapter 8 (Strategic Recruitment and Selection) we provide a specific example to demonstrate how recruitment and selection can help facilitate the horizontal integration of the various HR levers and in Chapter 7 (Strategic Human Resource Planning: the weakest link?) we frequently use the theme of mergers and acquisitions to illustrate the need for joined-up HRM thinking. Also, although each chapter concludes with its own topic-specific case study, it is possible to use the integrated Halcrow case to explore further the strategic connections of the various HR levers presented.



Readership

This book can be used with a range of students from those with little experience of the world of work to more experienced managers. The principal target audience for this book comprises undergraduates, postgraduates and students on professional programmes who are studying the management of human resources either as their subject specialism or as an integral component of more general business and management programmes.

It works well if students have some work experience or already have some knowledge of organisational behaviour. This is nearly always the case with our likely readership. Part-time undergraduate, postgraduate and professional students are nearly always already in employment, or between jobs, and can therefore relate the content of this text to a range of work experiences. Full-time postgraduate and professional students tend to enter such programmes following a period of work experience or, like full-time undergraduate students, have undertaken a work placement and/or part-time jobs prior to or during their studies.

Pedagogic features

The over-riding purpose of Strategic Human Resource Management: Contemporary Issues is to help undergraduate and postgraduate students and students on professional courses get to grips with how the discipline of human resource management can be developed as a powerful adjunct to strategic management. The concern throughout is to help students understand how the management of human resources can be developed strategically, at both the conceptual and practical level, to support the formulation and achievement of an organisations strategic objectives. Each chapter deals with a dimension of strategic human resource management and discusses relevant theory and practical applications using as little jargon as possible. Tables and figures are used to aid this discussion and as a vehicle for enhancing clarity of communication. A comprehensive glossary provides brief definitions and/or explanations of key terms and an index is available to help students find their way around the book and its underpinning literature sources.

Learning outcomes at the beginning of each chapter provide the reader with clear statements of chapter objectives and benchmarks against which the reader can assess their subject knowledge and comprehension.

Mapping diagrams are incorporated into chapter introductions to provide a visual summary of the chapter content. These mark out the subject territory by identifying key areas of discussion and showing how these are structured in the chapter.

Key concepts boxes are used to help explore conceptual development. These take a variety of forms including, for example, providing subject definitions, identifying key themes, presenting theoretical frameworks and summarising research findings.

In practice boxes are used to illustrate how conceptual understanding can be or is being used to inform organisational practice. These too take a variety of forms and include, for example, case studies reported in the literature, cases drawn from the direct work experiences of the author team, examples sourced from the internet and other news media and, occasionally, hypothetical constructions of practical applications.

Self check and reflect questions enable students to check whether they have understood dimensions of the chapter content. These can all be answered without recourse to other



(external) resources and are designed to encourage the student to interact with the chapter readings. They can also be used either as preparatory activities for subsequent class-based teaching sessions or tackled during the teaching session itself. Answers to all self check and reflect questions are provided as part of this instructors manual.

A summary of key points at the end of each chapter can be used by students before and after reading the chapter to structure their thinking and to ensure that they have digested the main points respectively.

Case studies drawn from a variety of sources are used at the End of Part One and Chapters 514 to facilitate student comprehension and transfer of learning. Case study questions require students to apply their knowledge and understanding of chapter content to a variety of organisational scenarios covering many different types of organisation. As with self check and reflect questions, the cases and accompanying questions can also be used either as preparatory activities for subsequent class-based, teaching sessions or tackled during the teaching session itself. Answers to all case study questions are provided as part of this instructors manual.


C H A P T E R 1

Strategy and human resource management

Learning outcomes

By the end of this chapter you should be able to:

define the term strategy;

describe and evaluate a range of approaches to strategy making;

analyse links between different approaches to strategy and human resource management (HRM);

understand the significance of strategic integration to explore links between strategy and HRM and its multi-dimensional nature;

analyse the resource-based view of the organisation and describe key concepts related to this approach;

describe and evaluate links between resource-based theory and HRM.

Summary

Strategic management focuses on the scope and direction of an organisation, and often involves dealing with uncertainty and complexity.

Strategic human resource management is concerned with the relationship between an organisations strategic management and the management of its human resources. The exact nature of this relationship in practice, however, is likely to be difficult to analyse and evaluate, not least because strategic management is a problematic area.

Four approaches to strategy making were described and evaluated: the classical approach, evolutionary perspectives, processual approach and systemic perspectives. The implications of each of these approaches for human resource management were subsequently analysed.

Strategic integration was used to explore possible links between approaches to strategy and human resource management. Integration has been recognised as a necessary condition for HRM to be considered strategic although it is not sufficient to treat it as the only link to define a strategic approach to HRM. Six possible strands of strategic integration were identified.

Resource-based theory was analysed because of its recognition of an organisations internal resources as a potential source of competitive advantage. Forms of organisational capability were analysed and their relationship to human resource management were evaluated.



Teaching and learning suggestions

Comment

To many students this may not be the most appealing chapter in the book because it does not immediately deal directly with the topic of strategic human resource management (SHRM). This will be the expectation of most students who will want to jump straight in to the topic. That said it is important for all students to have a grasp of the early material in the chapter on definitions of strategy and strategy formulation. Specialist HRM students in particular may find this material valuable as they may have dealt with it in fairly basic form in earlier studies. Those students using the chapter as part of a BA Business Studies or MBA course, for example, may have dealt with the material on definitions of strategy and strategy formulation in other modules so a brisk move to later sections of the chapter exploring links between approaches to strategy and HRM would be advisable. All students should find the sections on resource-based theory and its recognition of an organisations internal resources as a potential source of competitive advantage, and forms of organisational capability useful because of the strong relationship to HRM.

Student preparation

Prior to the class, we believe it is important that students read and make their own notes from the chapter. More specifically we ask students to note those topics that they found particularly complex, or interesting (or both) in order that may form the basis of an initial classroom discussion. The notion of strategy is particularly abstract for students with limited or no work experience. It is also challenging for those students who are in a junior position in their own organisation. In view of this we think it is an important part of student preparation that they think about the issue of strategy in relation to an organisation where they work or one known to them. Indeed, the latter may be easier since they may feel closer to the strategy of a well known multi-national of which they are a customer (e.g. Apple or Microsoft) than to the organisation in which they are an employee. In this regard it is important to emphasise to students that organisation may just as easily mean the department where they work as the corporation.

Completion of the self-check questions for this chapter is particularly useful prior to the class as they may form the basis of group work. They form an immediate link with chapter content and enable the tutor to develop many teaching points from the resultant discussions. It may be very useful to ask students to illustrate the points they make in response to the self-check questions with ideas from the chapters practice and concept boxes.

In the classroom

The danger with running a class on this topic is that it runs the risk of being too abstract. We have found that focus on a case study is an important part of a strategy class for HRM students in particular, because it brings to life the topic and allows the tutor to make a series of valuable teaching points from the chapter. For example, Practice Box 1.5 The impact of environmental concern on motor vehicle manufacturers raises the important issue of the constraints upon the activities of organisations that forms part of the host of considerations that need to be taken into account in the strategy-making process. A case based on this, or a similar, issue may form a useful platform for analysis of strategy.



Follow-up work

The first two of the follow-up study suggestions at the end of the chapter:

1. Undertake a search of practitioner publications (related to HR and management), identify a number of short articles about case study organisations that often feature in these and select, say, two or three of them to identify references to or evidence of any of the strategic management themes discussed in this chapter and their relationships to the management of human resources.

2. Seek out the possibility of talking to a senior manager in an organisation to discuss its approach to strategy making and the relationship between strategy and HRM in this case.

are specifically designed to ensure the practical relevance of HRM is not lost in the consideration of more abstract strategic issues.

Answers to Self-Check and Reflect Questions

1.1 Is it possible to reconcile any of these four approaches to strategy making in practice and if so how might this occur?

Perhaps the first key point to recognise is that these four approaches are theoretical positions and therefore we should not expect any particular organisation to fit neatly into one such position in reality. Discussion in the first part of this chapter also recognised that real organisational behaviour is unlikely to use one approach to the mutual exclusion of other possibilities. Mintzberg et al (1998) recognise that real behaviour will combine deliberate control with emergent learning, for example, while Mintzberg (1987) recognised that in reality a purely deliberate or purely emergent strategy will not exist. Figure 1.1 seeks to illustrate the range of actual strategies that Mintzberg and Waters (1985) identified, from the mainly deliberate to mainly emergent. The first section of the chapter also used the work of Brews and Hunt (1999), which illustrates that good quality planning is likely to combine elements of both formal planning and incrementalism, so that both control and learning can coexist. It was also recognised in the first part of the chapter that theorists who adopt a systemic perspective also agree that organisations should engage in strategic planning; what they question is the universal applicability of the classical approach to formulate strategy. However, we may again refer to the work of Brews and Hunt (1999): their approach to strategic planning recognises the need to undertake this in a flexible manner. In this way, organisations in different countries will be sensitive to their own social, cultural and national institutional systems and adopt an approach to planning that is sensitive to such systemic attributes, perhaps without being aware of the particularistic nature of their actions. It will be multi-national corporations that need to be more overtly sensitive to such systemic differences and to act accordingly. The evolutionary perspective adopts a much more deterministic approach, where management must react to environmental circumstances. However, it was recognised in the first part of the chapter that this perspective has been criticised on the grounds that environmental systems may be more open than is being suggested by this approach to strategy. Where this is the case, this would recognise use of behaviours that include both planning activities and incrementalism to enact more effectively with the environment. These considerations are of course highly abstract but allow us to think about the application of these approaches in practice. You may wish to think about applying these ideas to an organisation that you know.



1.2 What is the scope for the strategic integration of HRM in relation to each of the four approaches to strategy making discussed in this section?

Using the behavioural perspective or matching model to explain the link between the classical approach to strategy and HRM suggests that strategic integration may be a feature of this approach, where HRM is not only informed by organisational strategy but is also capable of shaping it, at least to some extent. The processes involved in strategy formation in practice, however, means that a much more complex and messy picture emerges, which may mean that HRM is not strategically integrated and can only adopt a reactive posture. The reality is therefore likely to be highly variable and depends on a range of different factors. Evolutionary perspectives suggest an approach to strategy making that is highly deterministic, so that while HRM would need to be closely matched to an organisations strategy, its approach would be reactive rather than proactive. The processual approach to strategy making is the one that offers the clearest scope for HRM to be strategically linked to organisational strategy. Emergent strategy would, according to this theory, require a proactive HRM approach, which suggests that HRM would capable of shaping as well as responding to organisational strategy. However, the section on the resource-based view of the organisation later in the chapter includes some discussion that evaluates and challenges this assertion. The systemic approach to strategy making recognises that the scope for the strategic integration of HRM with organisational strategy is much less clear: this perspective points to the fact that in many situations HRM will not be conceptualised in a way that is intended to lead to strategic integration.

1.3 Think of an organisational situation with which you are familiar. This may be one in which you currently employed or one that you have worked for previously, or another organisation known to you.

Use the model of the six strands of strategic integration to evaluate, as far as you are able, the extent of the integration of HRM and human resources within the organisation.

Whilst this question is designed to check your understanding of the elements of this model, it requires you to apply this to an organisation known to you and so your answer will be based on your own evaluation. However, you may have been able to include consideration of the following aspects:

The nature of the relationship between organisational strategy and HRM. This may have led to some interesting reflections about the nature of strategy in the organisation as well.

The nature of horizontal integration between HRM policy areas and also between HRM and other functional areas in the organisation.

Whether there is a Human Resource Director and at what level or levels within the organisation.

The nature of line management integration with HR policies.

The integration of employees with the goals of the organisation.

Your judgement about the capacity for the organisation to respond to change as the future unfolds related to the capabilities of its human resource base.

1.4 How would you relate the resource-based view to the dichotomy between the planning school and the learning school that we discussed earlier?

In simple terms, the planning school emphasises a deliberate approach to strategy making, which implies a high level of control over the processes involved in relation to both strategy formulation and implementation. The learning school by contrast places emphasis on strategy as an emergent process, embedded in the knowledge and skills of those who manage and work in the operating divisions, business units or departments of organisations. Resource-based



theorists also stress the importance of learning and knowledge as we saw in the discussion in the final part of this chapter. However, this is not to say that organisations will not seek to develop organisational resources and capabilities deliberately, including core capabilities. Authors such as Prahalad and Hamel (1990) discuss examples of large corporations who have intentionally developed core competencies to achieve competitive advantages over others in their respective industries. In contrast, Muellers evolutionary approach suggests that while organisations may express their strategic intent, their level of control over the subsequent development of organisational capabilities will not be as deliberate and controlled as these other examples seem to imply. These differences of view appear to suggest that there may be a range of views about intentionality and deliberateness amongst resource-based theorists as there is between those who subscribe to the planning school and those who subscribe to the learning school. If there are different positions here these may be seen as having different implications for the role of HRM.

References

Boxall, P.F. (1996) The strategic HRM debate and the resource-based view of the firm, Human Resource Management Journal, 6(3), 5975.

Johnson, G. and Scholes, K. (2002). Exploring Corporate Strategy: Text and Cases (6th edn). Harlow: FT Prentice Hall.


C H A P T E R 2

Strategic human resource management: a vital piece in the jigsaw of organisational success?

Learning outcomes


identify the major principles, which underpin the concept of strategic human resource management (SHRM);

analyse the main theoretical approaches to SHRM;

explain the history and origins of SHRM;

evaluate the studies which aim to establish the link between SHRM and organisational performance.

Summary

The main principles of SHRM include:

a stress on the integration of personnel policies both one with another and with business planning more generally;

the locus of responsibility for personnel management no longer resides with specialist managers but is now assumed by senior line management.

the focus shifts from managementtrade union relations to managementemployee relations, from collectivism to individualism.

there is stress on commitment and the exercise of initiative, with managers now donning the role of enabler, empowerer and facilitator.

The principal theoretical approaches to SHRM are termed: universalist, matching models (closed) and matching models (open). The universalist approach assumes that there are best HR practices that promise success irrespective of organisational circumstances. The matching models (closed) approach specifies HR policies and practices that are relevant to specific organisational situations, whereas the matching models (open) approach defines the employee behaviours necessitated by the organisations overall strategy. These behaviours are to be delivered through the HR strategy.

All of the theoretical approaches to SHRM have their problems. Those concerned with the universalist approach are: defining the best practices to apply; the low regard for organisational context; and the absence of employee input assumed. The problems with the matching models (closed) approach are: the ambiguity that attends the defining of strategy; the essentially managerialist stance assumed; and problems concerned with implementation.



Problems attending the matching models (open) are the models rather idealised nature and, like the other models, their prescriptive tone.

The growth of interest in SHRM was due to a number of factors including: the crisis of under-performance in American industry; the rise of individualism; a decline in collectivism; the rise of knowledge workers with differing work expectations; and a search for more status by personnel specialists.

In an attempt to establish the link between SHRM and organisational performance there have been numerous studies conducted since the mid-1990s in the USA and UK. In general these have been very positive about the relationship between SHRM and organisational performance although most have not offered an explanation as to why certain HR practices are may lead to enhanced organisational performance.


Comment

This is a chapter that should appeal to all students studying an SHRM model irrespective of their practical and academic background. It is rooted in strategic management theory but is a vehicle for examining organisational practice in employment contexts of all types. One of the exciting things about teaching management to students is that it enables them to reflect on organisational practice, which makes sense of whats going on in reality: the oh! that explains why that is done; or now I can see how that idea is linked to this aspect of policy and practice. This chapter offers such opportunities for reflection.

The section on the three theoretical approaches to SHRM will be of particular interest to many students given the critical stance it takes, among other ideas, to that of the universalist approach. Not only is universalism relevant in the study of SHRM it also permeates the whole of the management literature. The section enables tutors to make valuable points about the value of taking an evaluative stance towards the study of management and, in particular, emphasise the value of contingency theory.

Student preparation

As with other chapters, prior to the class, we believe it is important that students read and make their own notes from the chapter. It will be of importance for students to think and make notes upon some of the major themes from the chapter in relation to organisation practice in which they may have been involved.. Some of themes may be: high employee commitment to the goals and practices of the organisation; the securing and training of high quality staff and internal practices to achieve high quality products; and flexibility in terms of organisational structure, employee functions and job content to enable the organisation to respond quickly to change.

In similar vein to Chapter 1 it is an important part of student preparation that they think about the issue of SHRM in relation to an organisation where they work or one known to them. It would be extremely useful as class preparation for students to talk to an HR manager about one of the two key themes, e.g. to what extent is the HR strategy in y(our) organisation integrated.



Prior to the class, the completion of the self-check questions for this chapter is particularly useful as they may form the basis of group work in the class. The questions create an immediate link with chapter content and enable the tutor to develop many teaching points from the resultant discussions. It may be very useful to ask students to illustrate the points they make in response to the self-check questions with ideas from the chapters practice and concept boxes.

In the classroom

After an initial class discussion based on the student preparation we have found that the topic of SHRM is best illustrated by case study work. For example, one of the central concepts of the chapter lends itself very well to this. This is the so-called open approach to SHRM, which argues the existence of a clear and mutually supportive relationship between organisational strategy and HR strategy. As the chapter explains, using the open approach, the test of the degree to which the HR strategy is truly strategic is a test of its appropriateness to the organisational strategy. The variables in the model: the operating environment (both external and internal) in which the organisation finds itself; the organisational strategy, which requires specific desired employee behaviours to be adopted if it is to be achieved; and the three 'key levers' (structural, cultural and personnel strategies) through which the HR strategy is pursued, may all be identified or suggested, in relation to a case study. This may be the case related to the chapter or another of the tutors choice. We have found the model works really well and illuminates many of the ideas of integration in an interesting way.

Follow-up work

To some extent the follow-up work will be dictated by the content of the classroom work. If the case study, for example, was based on the open approach it may be useful to ask students to work with the ideas in their own organisation or read more about organisations who have pursued HRM and estimate the extent to which the approach adopted by the organisation has been open. Indeed, one of the suggestions for follow-up work in the chapter:

search the specialist practitioner HR literature for case studies that illustrate the way in which clear and cogent organisational philosophies inform HR strategy

may be a useful precursor to such an exercise. What this task does is to enable the student to integrate ideas from Chapters 1 and 2.


2.1. What value would you place in a philosophy statement similar to the BP example above were you searching for employment?

This is one of those questions that we cannot answer because it is obviously personal to you. That said the intention of the HR specialists who write and publish such statements is to enthuse you sufficiently to prompt you to register an interest in the organisation. As such this is an initial step in the recruitment overture and, possibly, a long-term relationship between employer and employee. If this is the case it must be an honest attempt to portray reality. If the philosophy statement is a genuine attempt to describe life for employees in the organisation then it should be of value to employees because it encourages those potential employees who like the sound of the organisation and, just as importantly, discourages those who do not.



2.2. In what ways do you think the presence of employee voice may be helpful to the implementation of universalist HR initiatives?

The central argument behind the concept of employee involvement in the design and implementation of HR initiatives is that better outcomes will result if employees are involved. This is for two reasons. First, at the rational level it seems sensible that if employees understand the reasons for and components of a particular initiative, then they are more likely to be effective participants in the process of implementation. Performance appraisal is a good example of this. It is not unusual for managers to introduce performance appraisal schemes and incorporate training for managers but not employees. The result is often that employees do not understand the part they play in the process, or, more importantly, really understand the reasons why the organisation is introducing appraisal. The second reason is emotional and concerns the notion of ownership. We are all more likely to engage more enthusiastically in the initiative if we have been part of its conception and design rather that it being imposed upon us.

2.3. How influential would you say that the factors noted in Figure 2.4 were in creating the drive to introduce SHRM in major organisations?

The simple answer to this question, of course, is that it is very difficult to say. On the face of it does seem reasonable to assume that all of these factors were influential. Perhaps some (e.g. the crisis in American industry) were more important than others. But we can safely say that these factors were associated with the rise in interest in SHRM. It would too much to say that they caused the growth of SHRM. When considering such questions as this it raises the extreme difficulty of linking changes in a causeeffect manner. Considering the complexity of this problem is a useful introduction to the section, which concluded Chapter 2, that is, on the HRorganisational performance link.

2.4. What practical contribution do you think the studies linking HR and organisational performance listed in this section have made to the practice of SHRM?

Much depends upon the extent to which HR managers take notice of what the studies have concluded. Some may argue that there is little point in academics producing studies such as this if nobody actually in a position to change management policies reads them. We do not take the bleak view that the gap between academia and practice is so wide that the studies will not be of practical benefit. Certainly in the United Kingdom the Chartered Institute of Personnel and Development have done much to commission and publicise the results of the research at conferences and in pamphlets and in-house journals.

In many respects the studies tend to confirm a lot of what we might expect. It seems intuitively correct to say that carefully designed and skilfully implemented HR practices will have an effect upon the bottom-line. But the studies we have outlined go much further than confirming this. They identify the key practices and the combination where these practices may be introduced. They also point to the difference that factors such as the importance of front-line managers may make. Above all, they note some useful measures that may be used to assess HR effectiveness. If some plausible link can be shown, this will contribute greatly to the influence that HR managers can have at the highest levels in organisations.


C H A P T E R 3

SHRM in a changing and shrinking world: internationalisation of business and the role of

SHRM.

Learning outcomes


identify some of the key background issues relevant to the internationalisation of business;

analyse the significance in the growth of multi-national companies;

define strategic international human resource management;

identify the key components of strategic international human resource management;

explain the significance of the capability perspective on strategic international human resource management;

evaluate the importance of the cultural perspective on strategic international human resource management.

Summary

MNCs pursue international business for a variety of reasons in a variety of ways.

The importance of MNCs is not new but their growth in recent years has been rapid and significant.

SIHRM may be better understood by the examination of a model in which classic MNC components and factors relevant to the MNCs external and internal operating environments influence the SIHRM issues, functions and policies and practices, which in turn affect the concerns and goals of the MNC.

The development of key competences by MNCs is important at three levels: organisational, line management and HR professionals.

National cultural differences are an important aspect of SIHRM and have been measured by a number of authors allowing these differences to be categorised.

Strategies for managing cultural differences include: ignoring them, minimising them and utilising them.



The effects of national cultural differences on HR practices can be quite profound with the consequence that the transformability of many of these practices is suspect.


Comment

This is probably the chapter in the book, which will offer the least opportunity for students to engage in reflective learning since most will have no first-hand knowledge of SHRM. The most useful fund of knowledge that most students possess will be that of MNCs with which they are familiar as customers. That said the chapter contains the opportunity for many interesting debates where students and tutors may engage. An example of this is the ethical dimension to the activities of MNCs; a topic which is regularly featured in the news and one on which most of us have strong views. What is less clear from such debates is the role of SIHRM. So the challenge for many tutors will be teasing out valuable learning points related to SIHRM from topics where it is not immediately apparent. But that is not clearly the case with some topics, e.g. culture, which we have found is a subject that interests all students and one that promotes lively debate!

Student preparation

Prior to the class, we believe it is essential that students read and make notes from the chapter.

We use a variety of vehicles to bridge student preparation and class-based activities to enhance their understanding of the chapter content and its overall relationship to managing human resources strategically. As standard, we would ask students to make a note of any queries arising from their reading and to come prepared to raise them during the teaching session. Sometimes this may be formalised by asking students to write down (as questions) the three issues addressed by the chapter where they would like further clarification and guidance.

Students may also be asked to do one or more of the following:

address pre-set questions and write their answers briefly in note format;

complete the self check and reflect questions and come to the session prepared to share and discuss their responses; and

familiarise themselves with the chapter case study (or an alternative case supplied in advance) and come to the session prepared to tackle the case questions.

Our outline answers to self check and reflect questions follow in the next substantive section of this chapter guide.

In the classroom

Clearly the approach adopted to student preparation can be followed through into the classroom. A starting point that we find useful is to discuss the issues arising from the students preparatory reading. This avoids providing lecture input that simply repeats what students have already grasped, reinforces the value of reading as an essential prerequisite for class-based discussion and provides a platform from which further class-based activities can be launched.



However, when adopting this approach, we find it useful, once student queries have been exhausted, to provide a snappy summary of key issues.

Where preparing answers to self check and reflect questions, has been set as part of preparation for the teaching session, at least two alternatives present themselves. First, students can be asked to contribute individual responses that are then subjected to plenary discussion. This is our preferred approach because it makes students more accountable for their personal learning and reserves any group work for case study analysis. Second, students can be formed into groups to share their individual answers and draw conclusions from their discussions. However, if preparing answers to self check and reflect questions was not part of preparatory work but consideration of the questions is to feature as part of the taught session, we would favour the group approach as a more stimulating approach. In all cases student responses can be considered against our suggested answers, which themselves can be usefully critiqued.

Greater topicality can be achieved by capturing the big business news stories of the week and discussing any SHRM issues that are likely to arise.

Follow-up work

The pedagogic features adopted throughout this book are intended to offer up a number of alternatives for follow-up work whilst at the same time leaving the lecturer free to add or substitute their own ideas.

If they have not already been used as part of class activities any prior preparation of answers to the self check and reflect questions will serve as a useful reinforcement to chapter content.

There are also a number of follow-up study suggestions after the chapter summary that can be undertaken by students either individually or in groups and an extensive list of references provides many opportunities for further reading.


3.1. The reasons that companies pursue a strategy of internationalisation are not new. Historically, empires have been built on thriving international trade. Yet the rate of growth of international trade has grown apace in recent years. Why should this be?

The first reason is the growth of technology, in particular air transport and information technology. These have made communications immeasurably easier in the past 1015 years. Secondly, there is easier movement across borders now than in previous generations. The free movement of goods and services across the EU is a perfect example of this. Thirdly, there has been a development of support services including banks and government agencies. Banks now speed financial exchanges electronically across continents in minutes making economic exchanges efficient and less risky. Government agencies provide support for businesses in terms of finance and advice. Finally, the increase in communication has facilitated global brands and the desire of consumers to purchase those brands. For example, the Apple I Pod started life in 2002/2003 in the United States but it was a matter of weeks before demand grew across the world to the extent that Apple could not meet demand.



3.2. As a senior HR manager in a major MNC what arguments would you anticipate using to defend your company against the anti- globalisation lobbys position that globalisation was a disadvantageous to your companys employees?

Inevitably your opponents would cite the examples of MNCs, which exploit child labour and vulnerable adult employees by paying poor wages and compelling them to work long hours. But even where MNCs locate production facilities in developing countries you could argue that terms and conditions of employment are often much better than in local companies. You could argue that, for example, in south-east Asia the migration of rural workers to the cities (similar to the British industrial revolution of the 18th and 19th centuries) is evidence that the opportunities provided in a developing economy are more attractive than remaining among the rural poor. In addition, you could argue that the opportunity to develop international careers is an extremely attractive one for many managerial, professional and technical employees.

3.3. In what other ways may the expatriate managers at DecoStore have established tacit knowledge?

HCN employees will learn tacit knowledge through the ways in which expatriate managers interpret policies and procedures. All managers in all organisations follow some procedures very closely and pay scant attention to others. This teaches employees a good deal about what the organisation sees as important and what it does not. Of course, this has the potential to lead to confusion among employees. But the ways in which this confusion is accommodated in the minds of employees is part of the learning process, which helps them to sort out what is important and what is not.

Tacit knowledge will also be imparted to employees through the patterns of power and influence, which exist among expatriate managers. Which of them is the most powerful? From where does that power emanate? Who wins the battles for scarce resources? Who gets his (usually) or her own way? The answers to these, and other similar, questions will assist the employees to understand power patterns and gain important tacit knowledge about how the organisation works at an informal level.

3.4. Which of the line manager competences do you think are particularly important for HR professionals?

Of course, all of them are important. Increasingly, international business knowledge and the ability to take the role of innovator by seeing old problems in new ways and trying new methods of solving them are important as HR professionals operate strategically rather than pursue a narrower specialist focus. Indeed, the former perspective has been the focus of this chapter. However, the final section of this chapter, on the cultural perspective to SHRM, emphasises the importance of both cultural adaptability and perspective taking (i.e. taking into account the views of others). Perhaps the key role of the HR professional is to ensure that senior and line management develop and practise these competences.

3.5. Of what value is this general grouping of national cultures to managers in their SIHRM activities?

You may argue that all they do is confirm the general sort of assumptions that managers have about different cultures. If so, this is in itself is of some value. But more importantly what such research does is to provide managers with valuable insights, which they can use in SHRM decision making. These decisions may be concerned with issues of structure (e.g. the extent to which the organisation may decentralise its foreign operations with local HR managers and staff) or HR practices (e.g. whether to impose a standardised reward structure across different countries). Such cultural information may not determine decisions but they have the virtue of concentrating managers minds upon the consequences of some of their decisions.


C H A P T E R 4

Evaluating SHRM: why bother and does it really happen in practice?

Learning outcomes

By the end of the chapter you should be able to:

explain the importance and contribution of evaluation to strategic human resource management;

identify the range of different purposes an evaluation can serve;

assess the barriers to evaluation and their causes;

identify the various stakeholders in any evaluation and their need both to contribute and to receive feedback;

assess the choices to be made in respect of the evaluation process and make suitably informed decisions;

outline a range of strategies and data collection techniques involving both primary and secondary data, which may be used to evaluate strategic human resource management; and

identify the complexity of issues associated with feeding back the findings of evaluations.

Summary

Evaluation has the potential to make an important contribution in relation to the implementation of specific HR initiatives but also to wider SHRM.

Evaluation takes place continuously on an informal and personal basis and will affect peoples choices and behaviours at work.

There are a number of valid reasons relating to organisational culture, unchallenged assumptions and previous experience that explain why planned formal evaluation of strategic HR has rarely taken place.

A planned systematic process of evaluation should be included at the beginning of the implementation process for all HR interventions.

Within evaluation of SHRM a distinction can be made between typical evaluations and action research. While both use the same strategies and data collection techniques, action research has explicit foci on involvement of participants and subsequent action. Both can make use of both secondary and primary data.



Prior to evaluating SHRM it is important that a clear understanding of the precise purpose and objectives of the evaluation is reached. This needs to reflect the context and purpose of the evaluation and be agreed between those undertaking the evaluation and the sponsor.

Evaluation of SHRM involves multiple stakeholders and cannot be divorced from issues of power, politics and value judgement.

Feedback typically involves cascading a summary of findings from the top-down the organisation. Alternatively the findings can be shared first with those who generated the data. This can help promote ownership of subsequent actions. Issues that cannot be dealt with may be fed up from the bottom to high levels of the organisation.


Comment

An immediate problem facing the delivery of this topic is the overall lack of attention it receives in the HRM literature, the topic of evaluation rarely being considered in any depth. This is problematic as we discuss in the chapter. Evaluation is rarely included in a planned evaluation and, on those occasions when it is, the findings are rarely utilised at all, let alone strategically. This observation forms part of the opening section of this chapter and part of the justification for its inclusion as a discrete chapter. It is also a point we believe must be emphasised to the students. In this chapter we argue that the evaluation of HR strategies needs to involve those affected within the organisation as fully as possible. This is not to say that evaluation can only be undertaken by people within the organisation. Rather it implies that where people external to the organisation are used, their role should be to help those within to perceive, understand and act to improve the situation. As part of this we recognise that, depending upon the purpose of the evaluation, one or a number of research strategies might be more appropriate. Evaluation may take place over a range of time horizons. These we suggest can range from one-off case studies perhaps answering the question Where are we now? through cross-sectional studies, which benchmark HR practices, to longitudinal evaluations perhaps using a series of employee attitude surveys. Similarly, we recognise that to address particular strategic objectives some data collection techniques are likely to collect more appropriate data than others.

Student preparation

Prior to the class, we believe it is essential that students read and make notes from the chapter. We have found that producing mind maps of the chapter content is a useful approach to note taking and encourages students to reflect on the internal integration of the subject content of the chapter.

We use a variety of vehicles to bridge student preparation and class-based activities to enhance their understanding of the chapter content and its overall relationship to managing human resources strategically. As standard, we would ask students to make a note of any queries arising from their reading and to come to the teaching session prepared to raise them. Sometimes this may be formalised by asking students to write down (as questions) the three issues addressed by the chapter where they would like further clarification and guidance.



Students may also be asked to do one or more of the following:

address pre-set questions and write their answers briefly in note format;

complete the self check and reflect questions and come to the session prepared to share and discuss their responses; and

familiarise themselves with the chapter case study (or an alternative case supplied in advance) and come to the session prepared to tackle the case questions.

Our outline answers to self check and reflect questions follow in the next substantive section of this chapter guide. Pre-set questions that we have found useful for structuring student reading, preparatory activities and classroom discussion for the topic of evaluating strategic HRM include:

1. How would you justify the need for evaluation of a new HR initiative to the head of Human Resources?

2. Why do organisations fail to evaluate HR initiatives?

3. What are the purposes of evaluation?

4. Outline the range of evaluation strategies that could be chosen to evaluate an HR initiative?

In the classroom

Clearly the approach adopted to student preparation can be followed through into the classroom. A starting point that we find useful is to surface and discuss the issues arising from students preparatory reading. This avoids providing lecture input that simply repeats what students have already grasped, reinforces the value of reading as an essential prerequisite for class-based discussion and provides a platform from which further class-based activities can be launched. However, when adopting this approach, we find it useful, once student queries have been exhausted, to provide a summary of key issues.

Where preparing answers to self check and reflect questions has been set as part of preparation for the taught session, at least two alternatives present themselves. First, students can be asked to contribute individual responses that are then subjected to plenary discussion. This is our preferred approach because it makes students more accountable for their personal learning and reserves any group work for case study analysis. Second, students can be formed into groups to share their individual answers and draw conclusions from their discussions. However, if preparing answers to self check and reflect questions was not part of preparatory work but consideration of the questions is to feature as part of the teaching session, we would favour the group approach as a more stimulating approach. In all cases student responses can be considered against our suggested answers, which themselves can be usefully critiqued.

Where case study work has featured as part of preparatory activities, similar approaches to those suggested for self check and reflect questions can be adopted. Our approach here would be to start with a more general exploration of the integrative case at the end of Part One: Strategic Human Resource Management at Halcrow and use this to focus upon evaluation issues, in particular those highlighted by Questions 6 and 7. However, in doing this it is important to recognise the length of this case and ensure that students have read it prior to the class.



Follow-up work

The pedagogic features adopted throughout this book are intended to offer up a number of alternatives for follow-up work while at the same time leaving the lecturer free to add or substitute their own ideas.

If they have not already been used as part of class activities, any prior preparation of answers to the self check and reflect questions and/or the questions suggested for student preparation and/or the integrative case Strategic Human Resource Management at Halcrow will serve as a useful reinforcement to chapter content. Our outline answers to the self check and reflect questions follow in the next substantive section of this chapter guide. Answers to the integrated Part One case study questions are included after this chapter.

There are also a number of follow-up study suggestions after the chapter summary that can be undertaken by students either individually or in groups and an extensive list of references provides many opportunities for directed further reading.


4.1 Think about the last time you were asked to evaluate a course in which you were participating. Possible course could be a module on your current programme or a training course at your workplace.

a. What aspects of the course were you asked to comment about?

b. How do you think your evaluation and that of your fellow students was used subsequently?

a. Inevitably your answer will depend upon the course that you choose. However, it is likely that it will focus upon the operational aspects of the course such as the quality of the teaching, the usefulness of handouts/module guides, support facilities such as library and information technology, the strengths of the course, the weaknesses of the course, the quality of the teaching facilities and, for many one day courses, the quality of the lunch. What is less likely to have been included is some form of evaluation of how much you felt you had learnt or how you felt that the course would contribute to your work life or you future career.

b. Your knowledge of how the evaluations were used subsequently is likely to be less certain, although it is probable that the data were used to improve the course. What is likely to be less clear is whether the wider impact of the learning was considered.

4.2 List the arguments you would use to justify the need for an organisation to justify evaluating SHRM interventions.

There are a wide variety of arguments you could list here. Some of the most frequently cited include:

to help organisations respond to their external and internal environments in a timely and positive manner by providing the information to plan strategically;

to provide a mechanism for capturing individual learning and to enable experience to contribute to organisational learning;



to provide an opportunity for analysis and reflection before making adjustments to HR interventions;

to improve management decision making;

to gain acceptance and commitment to SHRM initiatives;

to help create new insights and shared understanding;

to overcome what may be subjective evaluations by enabling assumptions held to be tested and shared.

4.3 Before you read on based on your own experience make a list of reasons why you might be reluctant to undertake an evaluation of an HR process.

As you read this section compare the reasons you have listed with those we identify. To what extent are they the same or similar to those you have identified?

The list of reasons that you are likely to have compiled as your own reasons for being reluctant to undertake an evaluation are:

difficulties of undertaking evaluation

HR is widely considered to be virtually unmeasurable,

there is no consensus regarding universally relevant HR indicators,

organisations do not possess the necessary skills to produce a competent or credible evaluation;

perceived lack of a need to evaluate

people know the results will be positive,

gut feelings are often perceived to be sufficient,

managers often prefer to rely on their informal information channels,

managers tend to focus on implementation rather than evaluation;

difficulties associated with dealing with negative outcomes

previous evaluations have been divisive and negative,

a blame culture exists within the organisation,

a risk of being unpopular with peers.

4.4 Outline the relative advantages of action research and more typical approaches to evaluation from the perspective of the HR manager sponsoring an evaluation.

Your answer to this question is unlikely to be in the same format as ours. For both typical evaluation and action research, we would hope your answer makes reference to the need to gather data in a rational and systematic manner to find out the extent to which the HR intervention(s) has achieved its objectives. In addition we would have expected you to include at least some of the following advantages for typical evaluation and action research, although we recognise our list is not exhaustive:



A typical evaluation may be advantageous to an HR manager sponsoring an evaluation when:

an evaluation was not considered to be a necessary part of the SHRM intervention;

the HR manager is uncertain whether s/he will wish to act upon the findings of the evaluation;

the HR manager requires the evaluation to be undertaken by people who are obviously separate from the organisation so that the findings are more likely to be seen as objective rather than biased by the sponsors beliefs;

there is a desire to maintain close control of the evaluation process;

there is a desire to maintain close control of the findings and the extent to which these are fed back to their employees.

In contrast action research may be advantageous to an HR manager sponsoring an evaluation when:

the evaluation process is seen as an integral part of facilitating strategic change with regard to HRM;

there is a wish that employees work alongside those undertaking the evaluation throughout the process;

there is a desire to engender employees ownership of the findings and any subsequent changes;

there is a desire to develop evaluation expertise within the organisation;

the HR manager intends that the knowledge gained from the evaluation is transferred to other aspects of SHRM within the organisation;

there is a desire to adopt a process consultation approach.

4.5 Outline the advantages that are likely to accrue to an organisation using a range of techniques, rather than just one, to obtain data to evaluate SHRM.

One technique on its own is unlikely to provide sufficient data to fully evaluate SHRM. While secondary data can be used to benchmark the evaluation against an industry or perhaps national context there is often still a need to collect a range of data.

By selecting appropriate techniques, the data collected can be matched to the objectives of the evaluation more closely. Different techniques are better at collecting different types of data. For example, to gather information from a large number of people and answer what? questions questionnaires are an efficient method. However, to explore the same situation in more depth and gather information to answer why? or how? questions, techniques such as unstructured interviews are likely to be more appropriate as the interviewee can talk freely about events.

Using different data sources also enables the finding to be triangulated. If all the findings suggest the same outcome then you can be more certain that the data have captured the reality of the situation rather than your findings being spurious.


P A R T 1 C A S E S T U D Y

Strategic human resource management at Halcrow Group Limited

Answers to Case study questions

1. Provide a brief overview of Halcrow Groups strategy.

Like many other former civil engineering companies Halcrow has extended its range of disciplines to cover architecture, project management, environmental science, transport planning and other non-engineering but related skills. To reflect the future needs of the business Halcrows operations were brought together in 2001 as four main business groups: Consulting, Property, Transport and Water.

The structure of the company was seen as an important component in delivering the strategy. It changed to a matrix structure. There are eight geographical regions meaning that appropriate employees or teams may be brought together for specific projects throughout the world. Each of the four business groups is led by a management team comprising five people including a Group board director or managing director. Within each business group, professional and technical (Professional and Technical staff are assigned to technical skills groups, the leader of whom is responsible for their training and career development. Employees are also assigned to an office in one of the regions. These vary in size from less than 10 to more than 500 employees. The business groups and regional offices are supported by Corporate Support Services, comprising all the corporate and business support functions, including HR, and located predominantly within the United Kingdom.

In 2004, Halcrow launched their change programme, Act now, which was designed to help the group to continue to develop in a dynamic and sustainable way. The focus of Act now was to align employees behaviours and approaches to Halcrows purpose, values, codes of behaviour and business principles thereby improving individual, team and overall business performance.

2. Outline the linkages between Halcrow Groups strategy and its strategic human resource management.

The focus of the Halcrow change programme, Act now, was to align employees behaviours and approaches to Halcrows purpose, values, codes of behaviour and business principles. The intention was that this would improve individual, team and overall business performance.

This change programme is intended to be continuous rather than having a specific end date. It emphasises the need for flexibility and the sharing of good practices and learning throughout the group, the centrality of employees to achieving this and the need to monitor and evaluate. The Act now change programme is central to everything that Halcrow plan to do in relation to the HRM strategy. The overriding concern is to change the organisations culture. It is often said that the Group is full of people who are professional engineers and who take pride in a job well done. In essence, technical excellence has previously taken precedence over commercial success. By the very nature of their training Halcrow people tend to be concerned with detail rather than seeing the bigger picture. This has served the group well. But a recent client satisfaction survey commissioned by the group did not show Halcrow in a uniformly glowing light. It reported that Halcrow emerged as technically excellent and a safe pair of hands but that clients were looking for much more than technical competence and a track record. They



wanted business partners whose behaviours were aligned to their own needs. In addition the group was also seen as rather grey. The challenge for Halcrow is to retain the reputation for technical excellence and reliability while becoming increasingly commercially aware, flexible and, above all, more responsive to customer needs. It is a challenge, which the SHRM strategy, through the change programme, is designed to meet.

Overall, the key change issue that is driving SHRM is the need for Halcrow to be more responsive in the light of a more competitive industry. Therefore, the principal aim of the new HR initiatives is to generate more competitive employee behaviours which, in turn, is envisaged will generate better all round employee and business performance.

3. What obstacles do you think that Halcrow management will face as it works to change the Groups culture from one dominated by technical excellence to one that also embraces commercial awareness?

Obstacles related to changing the culture highlighted in the case include:

The knowledge and understanding (and qualifications) of the workforce need to be developed to ensure that employees have the requisite commercial skills. At present approximately 80% of Halcrows employees are classified by the group as professional and technical (P and T) staff who have a minimum of an undergraduate degree in engineering or a related subject and are also members of a relevant professional institution.

The focus of employees is on a job well done. As noted in the case, the group is full of people who are professional engineers and who take pride in a job well done. In essence, technical excellence takes precedence over commercial success. Although Halcrow needs to retain its reputation for technical excellence and reliability, the organisations employees must become increasingly commercially aware about the groups profit performance, flexible and, above all, they need to be more responsive to customer needs in the light of a more competitive industry.

This is all occurring in an environment in which Halcrows customers are taking technical excellence for granted when making decisions about which consultancy group to employ. In view of Halcrows reputation for technical excellence this is also an obstacle.

4. What measures might Halcrow take to increase its retention of young professional graduates?

Based on the available data, labour turnover amongst young professional graduates is clearly perceived as a critical problem within Halcrow with the potential to frustrate the achievement of its strategic business plans. The sustainability of their commitment to continued dynamic growth and quest for superior business performance as a route to competitive advantage are being jeopardised by the high levels of labour turnover being experienced amongst Halcrows cadre of graduate engineers and, more generally, across P and T staff. This problem of labour turnover assumes greater significance within the prevailing organisational context, characterised by: a shortage of high quality consultants throughout the construction and engineering sectors; fierce competition for such labour; progressive decline in the number of students studying relevant degree courses; and increasing client expectations that projects require a stable staffing base to support their delivery.

Despite the frequent reference to the problem there is little hard data available in the case on the extent of labour turnover or its causes. Further, apart from benchmarking within their business sectors, there is no evidence of any broader external comparisons that might shed more light on the problem. Therefore, a useful starting point for increasing the retention of young professional graduates is the use of thorough evaluation to address these gaps. However, and in fairness, steps have already been taken in this direction. Employee survey results have



highlighted feedback, recognition and employee involvement and engagement as being particularly problematic areas requiring attention. There is also reference to problems concerning the managerial environment, the leadership and management skills base, organisational culture, the attractiveness of the financial sector as an alternative career pathway, increasing concerns over staff development and the lack of succession planning together with a clear acknowledgement within the company that these issues require attention.

The cursory analysis above at least prov

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