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Human resource management ws all

  1. 1. Lecture Human Resource Management Winter 2013/14 Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 1
  2. 2. Contents 1 Introducing human resource management Defining human resource management HRM and the achievement of organisational effectiveness Major themes in the HRM business environment Major themes in contemporary HRM practice The state of the psychological contract Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 2
  3. 3. 2 Organising a workforce Workforce organisation Flexibility for organisational benefit Work-life integration Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 3
  4. 4. 3 Recruitment and retention Recruitment in a tight labour market Methods of recruitment Employer Branding Staff turnover rates and trends Staff retention strategies Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 4
  5. 5. 4 Selection Selection as a two-way process Selection criteria Selection methods Final selection decision making Validity and use of selection methods Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 5
  6. 6. 5 Performance management Introducing performance management Stages in a performance management system Implementation and critique of performance management Evaluation of performance management systems Examples: MRA and 360-degree feedback Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 6
  7. 7. 6 People development The learning and development context The value of learning and development to organisations and individuals The line manager and learning and development The use of behavioural competencies in learning and development Methods of learning and development Is e-learning the future of learning and development? Prof. Dr. Dr. Human Resource Management WS Irina von Kempski 2013/14 7
  8. 8. 7 Reward management Management objectives Setting base pay The elements of payment Incentives Benefits Does performance-related pay work? Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 8
  9. 9. 8 Employee relations Strategic choices Employee involvement Terminology Information sharing The role and future of trade unions and employee representatives Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 9
  10. 10. 9 Diversity in employment What do we mean by diversity in employment? Why is diversity in employment important? Implications for line managers Achieving sucessful diversity in organisations Managing diversity or emphasing equality? Prof. Dr. Dr. Human Resource Management WS Irina von Kempski 2013/14 10
  11. 11. 10 Human Resource strategy The nature of HR strategy and its link with organisational strategy Theoretical perspectives of strategic HRM What are the people management implications of downsizing? Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 11
  12. 12. 11 Leading people Definitions of leadership and management What are the traits of leaders and effective leaders? What is the ‚best way to lead‘? Do leaders need different styles for different situations? Developing leadership skills Do organisations need heroic or empowering leaders? Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 12
  13. 13. 12 The HR contribution The role of line managers in HR Analysis of HR roles and structures Outsourcing HR HR shared services – what‘s best for line managers and employees? Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 13
  14. 14. 12 Managing people internationally The HRM dimension to international management Different ways of working overseas Managing an international workforce, away or at home? Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 14
  15. 15. 1. Introducing human resource management Defining human resource management The term ‘human resource management’ is not easy to define. It is used in two different ways. •Generically to describe the body of management activities •Widely to denote a particular approach to the management of people. That means a distinctive philosophy towards carrying out people-oriented organisational activities Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 15
  16. 16. The topics of human resource management have been mentioned in the “Contents” and visualised by the cycle discussed. They can be grouped differently taking the role of human resource management as point of view. Then they are best explained by identifying the key objectives to be achieved: •Staffing objectives •Performance objectives •Change-management objectives •Administration objectives Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 16
  17. 17. Staffing objectives Human resource managers (and line-managers) are concerned with ensuring that the business is appropriately staffed. This involves different tasks: •Designing organisational structures •Identifying under what type of contract different groups of employees should/will work •Recruiting and retaining the best •Development of employment packages Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 17
  18. 18. Performance objectives Human resource managers seek to ensure that people are well motivated and committed so as to maximise their performance in their different roles. This involves different tasks: •Training and development •Reward systems •Negotiations with employee representatives/trade unions •Welfare functions •Employee involvement initiatives Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 18
  19. 19. Change-management objectives The third set of core objectives relates to the role played by the HR function in effectively managing change. Change comes in different forms: •Merely structural, requiring reorganisation •Cultural change to alter attitudes, philosophies, norms Both need special activities and special leadership to drive the change process. Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 19
  20. 20. Administration objectives The fourth type of objectives is focused on underpinning the achievement of the other forms of objectives. It is carried out in order to facilitate an organisation’s smooth running. This includes: •Maintaining accurate and comprehensive data on individual employees •Record of their achievement, attendance, training, terms and conditions of employment, personal details •Ensuring that legal requirements (i. e. health, safety, contracts, minimum pay, working time) are met Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 20
  21. 21. For covering all the different tasks, different types of HR managers are needed and should be in charge: •Human resource generalists •Human resource specialists •Subcontractors •Consultants and advisers •Line managers Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 21
  22. 22. Human resource management and the achievement of organisational effectiveness HR research has been dominated by study of links between HR practice and organisational effectiveness: Mainly it is discussed, how what happens in the HR field impacts on an organisation’s ability to meet the objectives. The objectives will vary depending on the type of organisation and the situation. •Achievement and maintenance of competitive advantage, commercial success vis-à-vis principal competitors •Ensuring survival Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 22
  23. 23. • Meeting a service need as cost effectively as possible (public and voluntary sector) • A positive long-term corporate reputation • Grow the customer base • Achieving a high level of corporate ethics and social responsibility • Attract and retain a strong management team • Planning for the future by having in place effective succession planning Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 23
  24. 24. Major trends in the human resource business environment We are now entering the era of hyper-competition. This is being driven by two major developments: •Moves towards the globalisation of economic activity on a scale that has not been experienced before. Markets are becoming more and more international with the effect that competition is becoming more and more international too •Technology moves forward. Development in i. e. information technology, energy production, chemical engineering are in process of revolutionising the way many industries operate Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 24
  25. 25. What does that mean for the HR manager? •Practices have to be developed continually and quality has to be improved •Volatility and change is the norm, people in working organisations have to be prepared accordingly •Managing in international workforce effectively with all aspects of human resource management: attract, retain, develop and motivate people in an international environment Other major trends important for the HR function are the labour market trends and the evaluation of employment regulation Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 25
  26. 26. Major themes in contemporary HRM practice Before starting to introduce the various areas of HRM activity, it is helpful to introduce some of the broader underlying issues which are having a significant impact in more general terms: •Skills shortages •Best practice versus best fit •Ethics, regulatory compliance and competitive advantage •Sustainable flexibility Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 26
  27. 27. Skills shortages Dominant feature of the current HRM environment in Germany, UK and other countries is the combination of increasingly competitive product markets with increasingly tight labour markets. Employers have to compete harder to recruit and retain the staff they need. And highly competitive markets for goods and services are putting a premium on operational efficiency. Therefore organisations are unable to compete for talent simply by paying people more money. This is not new, but new now is that the majority of organisations are effected and the problem is long27 term rather than temporary.
  28. 28. Best practice versus best fit The debate between best practice and best fit is both – interesting and significant. Consequences are across the field of HRM. Basically the question is whether or not there is an identifiable ‘best way’ of carrying out HR activities which is universally applicable. The best practice approach states that there are certain HR practices and approaches to the operation which will invariably help an organisation in achieving competitive advantage. Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 28
  29. 29. Following this approach there is a clear link between HR activity and business performance, but the effect will only be maximised if the ‘right’ HR policies are pursued. It is strongly suggested that the same basic bundle of human resource practices or that a general human resource management orientation tends to enhance business performance in all organisations. The main elements of the ‘best practice bundle’ are: •More advanced selection methods •Serious commitment to employee involvement Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 29
  30. 30. • Substantial investment in training and development • Use of individualised reward systems • Harmonised terms and conditions of employment The ‘best fit’ approach is characterised by another way of thinking. There is no belief in the existence of universal solutions. All is contingent on the particular circumstances of each organisation. What is needed is HR policies and practices which ‘fit’ and are thus appropriate to the specific situation of individual employers. What is appropriate (‘best’) for one will not necessarily be right for another. Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 30
  31. 31. Key variables are: •Size of the establishment •Dominant product market strategy •Nature of the relevant labour markets Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 31
  32. 32. Ethics, regulatory compliance and competitive advantage One element is part of an organisation to mange a commitment on the relationship with its people ethically and in accordance with the expectations of the law. This can be a quite costly aspiration: •It tends to reduce flexibility due to the requirement for lengthy procedures to be followed in cases of dismissal, recruiting and managing performance •It restricts the ability of managers to take decisions purely in the interests of the organisation Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 32
  33. 33. The more employment regulation that is introduced, the greater the number of situations in which dilemmas have to be faced and decisions made about how to proceed. Sustainable flexibility A contemporary issue in HRM is an apparent clash between two very different organisational imperatives: •Development of a capacity for flexibility to compete effectively •Approach to management which engenders high levels of commitment to staff, particularly over the long term Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 33
  34. 34. The key is to focus on ‘mutual flexibility’ by which is meant initiatives which increase an organisation’s capacity to be flexible, but which also benefit employees. It might be provided by the so called ‘work-life balance’. An agenda has to be implemented accordingly, providing employees with part-time working options, flexible working hours, annual hours contracts and temporary career breaks. Another area of development is in multiskilling jobs. Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 34
  35. 35. The state of the psychological contract Growing interest in the psychological contract The term ‘psychological contract’ was coined in the 1960s, since two decades there has been significant interest in it. It is understood as a broad explanatory framework for understanding employee-organisation linkages because of •The shift in focus in the employment relationship to an individual •The pace of change in product markets globally Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 35
  36. 36. HRM has emerged as a mechanism for establishing the relationship between manager and employee at an individual level. This individual level focus is to which the psychological contract is ideally suited. What is the psychological contract? The psychological contract is influenced by: •HR practices: recruitment, training and reward It leads to: •Commitment, motivation and performance Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 36
  37. 37. The state of the psychological contract The ‘old deal’ is: ‘job for life’. The ‘new deal’ is: transactional, focused on pay, swapping employee loyalty and conformance for long hours and high performance. The ‘new deal’ has made significant inroads into the employment relationship and has to be discussed. Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 37
  38. 38. 2 Organising a workforce The traditional nine-to-five working day is in decline. New flexible working time is required and possible because of new flexible working rights legislation. Business is struggling with •Skills shortages •Increasing demands to provide a familyfriendly workplace Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 38
  39. 39. On the other hand the following became the norm •Redundancies •Job insecurity •Stress •Long working hours Therefore the HRM is confronted with significant challenges. Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 39
  40. 40. Workforce organisation Changes in workforce organisation to meet the need for workforce flexibility are required by the employer as well as the employee. Employers •Provide less secure jobs •Use ‘flexible’ workers •Are enabled to greater control of workflow due to new technology •Require flexible working hours to extend capital utilisation 40 •Require ‘24/7’ service availability
  41. 41. Employees •Fact is the increased labour force participation of women •Increasing number of women with childbearing years •Increase of single parent families •Increase of dual career couples •Demographic influences (ageing population in western countries) •Increasing demands for childcare and elder care responsibilities Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 41
  42. 42. Work organisation concerns the design of jobs and working patterns in order to meet both •Employer need for flexibility •Employee need for flexibility The impact is that work organisation is central to the whole employment relationship. Work organisation strongly influences organisational performance. Tight labour markets increasingly require employers to accommodate employee demands for flexibility in order to recruit and retain scare Human Resource Management WS 42 labour. 2013/14
  43. 43. Organising flexibility means taking into account the approach of ‘work-life-balance’ or ‘work-lifeintegration’. Part of the work organisation and flexibility debate is both •Demand-driven flexibility •Supply-driven flexibility Employee-driven flexibility is emerging and becoming more and more critical for employers. Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 43
  44. 44. Flexibility for organisational benefit According to the ‘Model of the ‘flexible firm’’ of Atkinson (1984) different forms of flexibility are necessary •Numerical flexibility •Temporal flexibility •Functional flexibility Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 44
  45. 45. Numerical flexibility Numerical flexibility allows organisations to respond quickly to the environmental changes in terms of the numbers of people employed. Traditional full-time posts are replaced by •Short-term contract staff •Staff with rolling contracts •Outworkers •Leasing personnel By this workforce can be reduced or expanded quickly and cheaply. Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 45
  46. 46. The workforce of an organisation consists of •Core employees, who form the primary labour market. They are highly regarded by the employer, well paid and involved in those activities that are unique to the firm or give a distinct character. These employees have improved career prospects. As peripheral groups •Employees who have skills that are needed but not specific to the particular firm. Organisations rely on the external labour market for these posts. The employee has a job but no career. The scope of these jobs is limited. Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 46
  47. 47. • Employees with limited contracts of employment (i. e. short-term, part-time, job sharers). • Contracting-out the work by temporary personnel from agencies (leasing), outsourcing the entire operation, split of make and buy. Temporal flexibility Temporal flexibility concerns varying the pattern of hours worked in order to respond to • Business demands • Employee needs Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 47
  48. 48. Temporal flexibility is crucial for organisations because of •Increase of opening hours in retailing •Growth of the leisure sector •Internationalisation/globalisation •Increase of export Temporal flexibility can be realised by •Annual hours contracts •Part-time work •Job sharing •Flexible working hours Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 48
  49. 49. Functional flexibility Functional flexibility refers to a process in which employees gain the capacity to undertake a variety of tasks (multifunctional worker). The approach has been developed in Japan. Advantages are •Reduction of monotonous assembly-line work •Increase of motivation •Increased usage of working capacity of the employee •Employees are becoming multiskilled Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 49
  50. 50. That means •Employees are kept busy throughout their working day •Absence is more easily covered •Employees being more stretched, fulfilled and productive Organisations need to invest in training significantly to achieve multi- functionality within the workforce. Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 50
  51. 51. Work-life integration A number of high-profile organisations seek to position themselves as ‘employer of choice’ by adopting such as work-life integration policies. Options for achieving work-life integration are •Flexibility in terms of the number of hours worked •Exact timing of hours worked •Location at which the work is carried out Work-life integration means different things to different people, depending on their age, life circumstances, values, interests, personality and so on 51
  52. 52. Options for achieving work-life integration •Part-time •Flexitime •Compressed work •Annual hours •Term-time work •Job share •Self-rostering •Shift swapping •Unpaid leave •Sabbatical •Work from home •Informal flexibility 52
  53. 53. Benefits of work-life integration In some instances work-life integration practices lead to •Raising moral •Increasing level of job satisfaction •Reduction of absence, esp. unplanned absence •Positive impact on retention •Positive impact on recruitment •Positive impact on motivation •Increasing level of performance •Increasing effectivity •Improve of productivity and quality Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 53
  54. 54. Barriers to work-life integration The demand for flexible work options is much greater than the take-up (take-up-gap). Reasons for that are •Work-life integration strategies cost the company money •Difficulties in setting up teleworking at home •Tight management and measurement of home-based teleworkers is necessary •Access to work-life balance is limited to certain groups of employees •Usage in a fire-fighting manner •Limiting the career development 54 •Management/managers
  55. 55. Manager’s role in work-life integration Often line managers are those who will be the one who decides whether or not work-life integration becomes a reality because of their attitudes and management practices. The manager has to reconciling performance and flexibility. They have to •Be fair •Make decisions on who might work flexibly in an acceptable way •Taking care of the company’s performance Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 55
  56. 56. 3 Recruitment and retention In recent years the Western Europe economy has experienced a strong period of economic growth leading to the development of relatively tight labour market conditions. Recruitment and retention issues have moved to the top of the HR agenda. Therefore more money is being spent on these areas of activity, leading to substantial growth in the recruitment industry. Elsewhere in the world some of the largest economies are experiencing historically unprecedented rates of economic growth. Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 56
  57. 57. The Chinese economy is growing by appr. 11 per cent a year, the Indian by appr. 7 per cent a year. Skills shortages are the consequence, recruitment and retention issues are rising to the top not only on the HR agenda. Contents of this chapter are •Major contemporary developments in the field of recruitment •Different approaches that can be adopted •Circumstances in which each is most appropriate to use •How organisations address the need to retain their staff •Policy prescriptions to reduce unwanted turnover 57
  58. 58. Recruiting in a tight labour market The Chartered Institute of Personnel and Development did a survey of recruitment practice and found out that the majority of companies are experiencing recruitment difficulties, particularly when it comes to finding appropriated management and professional staff. The employer is more and more required to ‘sell’ its jobs to potential employees so as to ensure that it can generate an adequate pool of applicants. Jobs have to be presented in an attractive way in terms of 58
  59. 59. • Rate of pay • Likelihood of career development • Quality of the employment experience The recruitment process is not by any means finished at the point at which a pool of applicants has been received. It continues through the shortlisting and interviewing stages until an offer is made and accepted. The offered job has to be ‘sold’ to the applicants but it is important to avoid overselling. This would be an easy trap to fall into and counterproductive. Resource Management WS Prof. Dr. Dr. Human 59 Irina von Kempski 2013/14
  60. 60. A balance always has to be struck in recruitment between putting over an attractive message to the target labour market and ensuring that people are not misled in any way about the what to expect if their applications are accepted and a job offer made. In case of vacancies the like-for-like recruitment is the most obvious tactic. Appropriate may be also •Reorganise the work •Use overtime •Mechanise the work •Make the job part time •Subcontract the work 60 •Use an agency to supply a temporary worker
  61. 61. Methods of recruitment Internal recruitment Vacancies are often filled internally. Sometimes organisations advertise all vacancies publicly and consider internal candidates along with anyone from outside of the organisation who applies. Management of internal recruitment practices is difficult to carry out effectively and smoothly in practice. Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 61
  62. 62. External recruitment Once an employer has decided that external recruitment is necessary, a cost-effective and appropriate method of recruitment must be selected. There are a number of distinct approaches to choose from, each of which is more or less appropriate in different circumstances. Most employers use a wide variety of different recruitment methods at different times. Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 62
  63. 63. Usage of various methods of recruitment •Advertisement in local press •Corporate website •Recruitment agencies •Specialist journals and trade press •Employee referral scheme •Word of mouth •Jobcentre •National newspaper advertisements •Apprentices work/work placements •Search consultants Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 63
  64. 64. Methods of obtaining a job •Hearing from someone who worked there •Reply to an advertisement •Direct application •Private employment agency •Jobcentre Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 64
  65. 65. Informal recruitment is not generally considered to constitute good practice. This is because in using the approach an organisation denies itself the opportunity to select the best possible candidate from the wide pool of applicants. The approach is also strongly criticised on ethical grounds because it has the effect of favouring friends and relatives of existing employees. When seeing purely from the perspective of the employer seeking a good worker cheaply and quickly, it is understandable that it is used extensively. 65
  66. 66. There is plenty of research evidence which suggests that informal recruits are often stronger performers than those who are recruited formally and they are less likely to leave at an early date too. Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 66
  67. 67. Employer branding In recent years considerable interest has developed in the idea that employers have much to gain when competing for staff borrowing techniques long used in marketing goods and services to potential customers. In particular, many organisations have sought to position themselves as ‘employer of choice’ in their labour markets with a view to attracting stronger applications from potential employees. Central is the development over time of a positive ‘brand image’ of the organisation as an employer. Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 67
  68. 68. The ‘employer branding’ consists the four p’s of the marketing mix •Product •Price •Promotion •Placement adapted for recruitment and retention. Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 68
  69. 69. Staff turnover rates and trends The length of service is discussed extensively. It is said that the ‘job for life’ is rare and long term employment is decreasing. Even if it depends on the specific situation in the different countries job tenure in Western Europe countries shows that more than 50 per cent of employment ends before 5 years of service are fulfilled. On the other hand nearly 25 per cent of the employees stay more than 12 years with their company. Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 69
  70. 70. Reasons for staff turnover are •Outside factors •Functional turnover •Push factors •Pull factors Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 70
  71. 71. Staff retention strategies Organisations are more and more confronted with resignations. The strategy against this trend are staff retention strategies. They consist of •Pay •Managing expectations •Induction •Family-friendly HR practices •Training and development •Improving the quality of line management Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 71
  72. 72. 4 Selection Recruitment, the attraction of candidates to apply for a position, and selection, the decision over which candidate to appoint to a position, are typically line-manager responsibilities. Thus it becomes increasingly critical for linemanagers to understand selection processes and their role in them. They have to understand •The flaws in various selection methods •The need to exercise subjective judgement within an apparently objective process Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 72
  73. 73. While the perfect method of selection still does not exist, HR and line managers continue to use a variety of imperfect methods to predict which applicant will •Meet the demands of the job most successfully •Be the best fit with the work group and culture of the organisation Poor selection and therefore an early termination is costly due to •Poor performance •Additional training •Demotivation of others •High levels of absence •At least more than € 7.000 as cost of filling a vacancy 73
  74. 74. Selection as a two-way process The various stages of a selection process provide information for decision by both the employer and the potential employee. Labour market shortages have promoted a concern for the organisation’s image and the treatment of applicants during the recruitment and selection process. The employer has to be concerned with •The job to be done •The work 74 •The organisational context
  75. 75. Employees are influenced by •The recruiter’s ability to supply adequate and accurate information •The way the recruiter managed interaction: control of interaction, listening, ability to allow candidates to present themselves effectively Employers are influenced by the candidate’s •Hard skills •Soft skills •Personality Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 75
  76. 76. Selection criteria Unless the criteria against which applicants will be measured are made explicit, it is impossible to make credible selection decisions. It will be difficult to adopt the most appropriate selection procedure and approach, and difficult to validate the selection process. Selection criteria are •Person specification •Competency-based criteria Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 76
  77. 77. Selection methods There are a wide range of selection methods. The mechanics of each method is different, they are differently effective and have a different ‘predictive validity’. The most popular selection methods are clearly based around interviews and application forms, with assessment centres and other forms of testing also being used. Overall more traditional methods as well as more advanced methods are to be considered. Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 77
  78. 78. Traditional methods of selection Often referred to as ‘the classical trio’, traditional methods of selection comprise •Application form •Interview – face-to-face or telephone interviewing o Structured o Half-structured o Unstructured •References – factual check, character reference Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 78
  79. 79. Advanced methods of selection The increasing cost of selection, coupled with the increasing recognition of the problems associated with ‘the classical trio’, have led organisations to consider more sophisticated methods of selection. Some of them are •Testing o Aptitude/ability tests o General intelligence tests o Special aptitude tests o Attainment/achievement tests o Personality tests 79
  80. 80. • Group selection methods o Group methods to provide evidence about the candidate’s ability − To get on with others, − Influence others − Express themselves verbally − Think clearly and logical − Argue from past experience and apply themselves to a new problem − Identify the type of role they play in 80 group situations
  81. 81. oAssessment centres •Work sampling/portfolios •Other methods oGraphology oBody language Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 81
  82. 82. Validity and use of selection methods Selection method and predictive validity Selection method Predictive validity Usage % Assessment centres Structured interviews Work samples 0.68 47 0.62 88 0.55 80 Ability tests Personality questionnaires 0.54 72 0.38 92 Unstructured interviews References 0.31 92 0.13 45 Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 82
  83. 83. The different methods show different predictive validity as a single used method. Modern and advanced methods of selection achieve a higher level of validity by combining different methods, i. e. assessment centres. If a company does not want to use advanced methods of selection they might use a combination of a couple of different traditional methods to come to more valid results than using only one or two methods. This is the approach of the modern model: multimethodical selection process. Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 83
  84. 84. 5 Performance management The term ‘performance management’ is used in two different ways: 1. To imply organisational targets, frameworks like the balanced scorecard, measurements and metrics, with individual measures derived from these. 2. To align the individual and the organisation, with the developmental and motivational approach The focus in this chapter is on the second understanding. 84
  85. 85. Introducing performance management The idea of performance measurement is not new. It exists since years and annual review of objectives between manager and team member has been revolved. The traditional performance appraisal systems are usually •Centrally designed by specialists •Backwards focused on historic performance •Elaborating forms completed as a record of the process (no “living” documents) Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 85
  86. 86. In the last two decades the concept of performance management has emerged to a system •Future-oriented •Strategically focussed •Applied to all employees in an organisation •Line-manager owned The focus of performance management is •To maximise current performance •To maximise future potential •A preoccupation which arises from the pressure of globalisation •To survive in an international marketplace 86
  87. 87. Defining performance management Performance management can be defined as proposed by Clark (2005): “Establishing a framework in which performance by human resources can be directed, monitored, motivated and refined, and that links in the cycle can be audited”, wherein performance means both behaviour and results. Therefore managing performance requires a focus on •The outcomes, the ‘whats’ •The behaviours adopted, the ‘hows’ Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 87
  88. 88. Characteristics of performance management systems Performance management systems (PMS) are closely tied into the objectives of the organisation, so that the resulting performance is more likely to meet organisational needs. PMS is integrated with performance planning, which links an individual’s objectives to business objectives. The employees efforts are directed towards organisational priorities. The employee is enabled to be successful by •Development plans •Coaching •Ongoing review 88
  89. 89. Performance has to be •Assessed •Rewarded if successful •Reinforced For a successful performance management goal setting is key. The theoretical base on goal setting includes two aspects •Goals are seen to provide motivation – this view is based on goal setting theory originally developed by Locke in 1968 •Individuals will be motivated to act provided they expect to be able to achieve the goals set 89
  90. 90. Characteristics of performance management systems •Top-down link between business objectives and individual objectives •Line manager driven and owned rather than being owned by the HR function •A living document where performance and development plans, support and ongoing review are documented as work progresses, and prior to annual review •Performance is rewarded and reinforced 90
  91. 91. Stages in a performance management system Definition of business role Job description - Objectives of department/group - Formal assessment and reward Planning performance Annual assessment - Link to pay - Individual objectives - Development plans - Delivering and monitoring - Ongoing manager support - Ongoing review 91
  92. 92. Business mission, values, objectives and competencies Before it is possible to plan and manage individual performance the organisation will have made significant steps in identifying the performance required of the organisation as a whole. In most cases this will involve a mission statement so that performance is seen within the context of an overriding theme. Many organisations will also identify core values of the business and the key competencies required. Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 92
  93. 93. Organisational objectives are particularly important, as it is common for objectives contribute to their achievement. The objective-setting cascade Board level Functional level Department level Team level Individual level The direction of objectives cascading is top down, of feedback going upwards. Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 93
  94. 94. Planning performance: a shared view of expected performance Individual objectives derived from department or team objectives and an agreed job description can jointly devised by manager and employee and may focus on outcomes or behaviours. Objectives which are outcome/results oriented are tightly defined and include measures to be assessed. The objectives are designed to stretch the individual, and offer potential development as well as meeting business needs. 94
  95. 95. Often organisations use the ‘SMART’ acronym for describing individual objectives or targets. S – specific M – measurable A – appropriate/achievable R – relevant/realistic T – timed Moving staff to a different view of how their personal objectives contribute to team and organisational objectives is an important part of the performance management. 95
  96. 96. The critical point about a shared view of performance suggests the handing out a job description or list of objectives to the employee is not adequate. Performance expectations need to be understood and, where possible, to involve a contribution from the employee. That employees might achieve their goals, necessary and imperative is the planning of •Support •Development/personal development plan •Resources 96
  97. 97. Delivering and monitoring performance The manager’s role is key in the performance management. His role is to enable the employee by i. e. •Organising the resources •Off-job training •Being accessible •Ongoing coaching Sometimes the situation will demand that the expected performance needs to be revised. Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 97
  98. 98. Formal performance review/assessment Regular formal reviews are needed to concentrate on developmental issues and to motivate the employee. An annual review and assessment is needed, of the extent to which objectives have been met. This may well affect pay received. Methods and instruments on which to base performance review are •Managers give an overall rating to staff at all •Linking ratings with behavioural at work Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 98
  99. 99. Reward Performance management may have a number of aims, the most common are •Developmental (training, employee growth) •Judgemental (pay, promotion) The functioning of rewards depends on the question if employees motivation is intrinsic or extrinsic triggered. Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 99
  100. 100. 360-degree feedback A special kind of performance measurement is the 360-degree feedback. It is a all-round feedback given by the stakeholders of the employee concerned. The stakeholders are •Supervisor/manager (= higher level) •Colleagues (= equal level) •Customers (= equal level) •Team-members (= lower level) 100
  101. 101. The formal process is a survey using a carefully constructed questionnaire of all the contributors of feedback. The questionnaire has to answer on certain requirements. Each question •Has to be relevant to the recipient’s job •Should be concise •Should be used to measure a particular competency •Should set standards Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 101
  102. 102. 6 People development Remedying skills deficiencies requires that both organisations and individuals commit themselves to people development, yet this has often been a neglected area. Therefore the value that employee development has for employers and individuals to be explored. The focus is on •The line managers role •Competencies in people development •Specific development methods and e-learning 102
  103. 103. The value of learning and development to organisations and individuals The problem with people development is that it is very difficult to provide compelling evidence that it really does improve performance and provide a clear business benefit. Supporters claim that it improves recruitment, motivation and retention; enhances individuals’ skills, knowledge and attitudes appropriate for the job they are doing to enable them to do it better; and prepares employees to take on different and sometimes higher-level roles in the organisation. 103
  104. 104. Learning and development can bee seen as an investment in improving business performance. In a more general sense the pace of change in business today means that there is a constant need for new skills to be developed in order for the organisation to remain competitive. Continuous development is a key part of enhancing the value of the employee capital in any organisation and this is generally seen as the way in which organisations gain competitive advantage. Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 104
  105. 105. In the everyday business problems are associated with development activities. •People may require time off the job •Costs of internal learning •Costs of external learning •Costs of development specialists, courses and materials •Employees might be provided with skills and qualifications they need to get a better job elsewhere Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 105
  106. 106. Learning and development has changed during the last decades. In the past the focus was on instructor-led training, with an emphasis on trainers identifying the content of what is delivered to learners. The modern approach to learning and development is to implement self-directed development with the emphasis on integrating learning with job tasks. So it becomes highly relevant to the job and job performance. This involves learners and their managers taking the lead and identifying what they need to learn. 106
  107. 107. The line manager and learning and development As the focus of learning and development has shifted from the development specialist or the HR-function to the line manager and from the trainer to the learner, the importance of learning on the job has risen. The role of the line manager becomes critical as they work with an individual •To determine the learning needs •To agree on the best ways to meet the needs •To support and enable the application of skills learned •To provide ongoing feedback, guidance, coaching and review 107
  108. 108. Line managers are also increasingly responsible for their group’s learning and development budget. The line manager has a coaching role too. Coaching is an informal approach to individual development based on a close relationship between the individual and one other person, internal or external. The coach is often the immediate manager, who experienced in the task, and as a coach helps the learner to develop by giving them the opportunity to perform an increasing range of tasks, and by helping them to learn from their experience. 108
  109. 109. They work to improve the learner’s performance by • Asking searching questions • Actively listening • Discussion • Encouragement • Understanding • Counselling • Providing (‘inside’) information • Providing honest feedback Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 109
  110. 110. Boundaries to the manager’s coaching role: •The extent to which the manager takes a counselling role (when does it become more personal) •Enhancing of the relationship between the line manager coach and the individual •Adopting different (managerial) styles/behaviour at times Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 110
  111. 111. Methods of learning and development Off-job methods •Education •Training courses • Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 111
  112. 112. Learning on the job •Coaching (manager’s coaching, other coaching internal or external) •Mentoring •Peer relationships •Self-development •Self-development groups •Learning logs •Learning contracts •E-learning • Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 112
  113. 113. People development is not only important for company’s developments it can also contribute to (organisational) change. In such a process the role of leaders is key. They can plan and manage change by giving the right process and the right tools to use. The tools and processes have to be defined by focussing on the following stages: Prof. Dr. Dr. Irina von Kempski Human Resource Management WS 2013/14 113
  114. 114. • • • • • Identify the need for change Define the company’s current state Envisage the future desired state Identify the gap Diagnose capacity for change including barriers and how they can be overcome • Plan actions and behaviours needed to close the gap This list of stages is by principle applicable for any development task and not only for change management processes. 114
  115. 115. 7 Reward management Reward is central to the employment relationship. Most of the employees work mainly because it is their only means of earning the money they need to sustain them and their families in the style to which they are accustomed. How much employees are paid and in what form therefore matters hugely to them. It helps determine which jobs people choose to do, which employers they seek work with and, to a significant extent, how much effort they put into their work. Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 115
  116. 116. Effective reward management is therefore very important for employers. Getting it wrong makes recruiting and retaining good people much harder, demotivation can easily arise. Pay also matters to the employer because money spent on salaries, benefits and other forms of reward typically amounts to well over half an organisation’s total costs. Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 116
  117. 117. There are two central questions that employers should ask when determining the approach they intend to take in managing reward: •What principals should the company use to determine how much each person in the organisation should be paid? •What form should the reward package the company offers take? This is not an area of HR activity in which ‘best practice’ is readily identified. It is necessary for managers to devise distinct reward strategies which are tailored to meet the needs of their circumstances and the expectations of the people, 117 employees and applicants.
  118. 118. What kind of payment system the company choose is one of the most difficult decisions to take. Manager’s thinking has to start about what objectives should be achieved. These are likely to include the following: •To minimise expenditure on wages and salaries over the long term •To attract and retain staff of the desired calibre, experience and qualifications •To motivate the workforce so as to maximise organisational performance •To direct effort and enthusiasm in specific directions and to encourage particular types of employees behaviour •To underpin and facilitate the manager of organisational change Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 118
  119. 119. There is no one payment system or form of incentive that can achieve all of the objectives for all groups of staff in an organisation. Total pay includes normally three components: •Base pay •Incentives/variable pay •Benefits Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 119
  120. 120. Setting base pay One of the most important decisions in the development of reward strategies concerns the mechanism or mechanisms that will be used to determine the basic rate of pay for different jobs in the organisation. Base pay can be designed in accordance to •External market comparisons/external relativities (‘the going rate’) •Internal labour market mechanisms/internal differentials (pay of fellow employees) •Job evaluation (size and significance) •Collective bargaining Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 120
  121. 121. Incentives/variable pay One of the most fundamental questions is whether or not the company wants to use an incentive payment system at all. The major types of incentive payment systems are •Payment by results •Performance-related pay •Skills-based pay •Profit sharing with cash-based schemes (bonus on annual profits) and share-based schemes Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 121
  122. 122. Benefits Benefits or ‘fringe benefits’ include additional perks, allowances and entitlements mostly paid in kind rather than in cash. Often benefits are provided as •Occupational pensions (defined benefit schemes, defined contribution schemes) •Flexible benefits/cafeteria plans Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 122
  123. 123. Performance-related payment Performance-related payment is difficult to implement but it is possible. It is one of a range of tools that have a useful if limited role to play in some situations. Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 123
  124. 124. The following conditions are favourable: •Where individual performance can objectively and meaningful be measured •Where individuals are in a position to control the outcomes of their work •Where close team-working or corporation with others is not central to successful job performance •Where there is an individualistic organisational culture Nowadays companies implement performancerelated pay even if these conditions are not or only partially given. The different components should be part of a 124 strategic rewarding.
  125. 125. Strategic reward (Torrington, D. et al., 2009, p. 171) Prof. Dr. Dr. von Kempski Irina Human Resource Management WS 2013/14 125

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