Strategic human resource research paper
QUINCY1010
Lecture2FromPersonnelandIndustrialRelationstoHumanResourceManagementNewModelsforManagingPeoplestudent.pptxFrom Personnel (and Industrial Relations) to Human Resource Management: New Models for Managing People?
Dr Huw Thomas
Week 15
Strategic Human Resource Management MGRCM2011
From Personnel (and Industrial Relations) to Human Resource Management
The “original” and “modern” industrial relations theory
The Changing Role of Personnel/human resource management practice
Models of HRM – American vs. European
A framework for strategic HRM
What do we want from HRM? ‘Balanced’ Employment Relationships within the ‘Geometry’ of Industrial Relations
Efficiency
Voice
Equity
Sources: John Budd (2004) Employment with a Human Face: Balancing Efficiency, Equity, and Voice, Ithaca, NY: ILR Press; and Richard Hyman (2001) Understanding European Trade Unionism Between Market, Class and Society, London: Sage.
Founding Principle of “Original” Industrial Relations Theory
“one principle stands out as the foundation upon which the IR field, in both its positive and normative aspects, is based. Stated in the affirmative … labor is embodied in human beings; stated in the negative … labor is not a commodity” (Bruce Kaufman, 2010, Industrial & Labor Relations Review, Vol.64, No.1, p.79).
Theoretical Base of IR
“Real human beings have bounded rationality and operate in an environment of pervasive uncertainty and imperfect information. As a result, it is impossible to write and enforce complete labour contracts, implying the existence of positive transaction cost … positive transaction cost generates manifold labour problems, inefficiency in the use of labour in production and exchange, inequality and exploitation in the terms and conditions of employment, autocracy in firm governance, and a positive role for institutions to improve both the efficiency and equity of the employment relationship” (Bruce Kaufman, 2008, British Journal of Industrial Relations, Vol.46, No.2, p.334)
Analytical Focus of “Original” IR
The “labour problem” – social control and social welfare
Four solutions
professional/progressive labour management (HRM/human relations)
protective labour law and social insurance
trade unions and collective bargaining
macroeconomic stabilization
A ‘political economy of labour’
From “Original” to “Modern” IR
USA – dropped 1) and 4) by the late 1950s
UK – 1) and 4) never really featured, 2) was less significant
Therefore, on both sides of the Atlantic, MIR is associated predominantly with trade unions, conflict and collective bargaining
PM “separated” from IR in the 1960s, dominated by psychology and organisation behaviour, practical/practitioner focus
The Changing Role of Personnel/ HR Managers
Historic role
Role conflict
From personnel to HRM
8
The Historic Role of Personnel Managers
Welfare function
Humane bureaucrat
Consensus negotiator
Human resource manager
9
The Concerns of the Personnel Profession
“The constant worry of all personnel administrators is their inability to prove that they are making a contribution to the enterprise”
Source: Drucker (1955)
10
The Crisis of Confidence
“There is a crisis of confidence among personnel specialists, as there always has been. Their results are almost impossible to measure and their successes and failures are largely the successes and failures of other people. Furthermore, they operate in a field – how people behave – in which everyone else is an expert with a personal point of view from which they will not depart”
Source: Torrington (1998: 36)
11
The “Vicious Spiral”of Personnel Management
Management policy
of non-involvement of
the personnel department
in the planning process
Line management has Causation of human
poor perception of the resource problems
personnel department
Crisis management Problem solution left
to personnel dept.
Pressure of time and
work on the personnel
department
Source: Legge (1978)
12
The Contradictory Role of HR
“The fact that personnel specialists oscillate between the ‘personnel’ and ‘management’, between ‘caring’ and ‘control’ aspects of the function, can be attributed to their role in mediating a major contradiction embedded in capitalist systems: the need to achieve both the control and the consent of employees”
Source: Legge (1995: 14)
13
Redefining the Role of HR
“to provide fair terms and conditions of employment and satisfying work for those employed. It seeks to achieve both efficiency and justice” (Institute of Personnel Management)
“the personnel management profession is not a career for those who wish to ‘work with people’ … ultimately personnel managers are concerned with the efficiency of the organisation” (Institute of Personnel and Development)
14
“Normative” vs. “Descriptive” Models of Personnel
Normative – what HR managers should do
Descriptive – what HR managers actually do
If there is a discrepancy between normative and descriptive models, do we change the theory or the practice?
15
HRM: A “New Dawn” for Personnel Management?
New titles
Professionalization and feminisation
Roles, responsibilities and policies
16
HRM: A “New Dawn” for Personnel Management?
New titles
Professionalization and feminisation
Roles, responsibilities and policies
17
HR vs. Personnel Specialists
Strategic involvement
Devolution of personnel activities
Adoption of “high commitment management” practices
Source: Hoque and Noon (2001)
18
Perceptions of the HR Role
Contribution
Focus
Respect
Status
Neglect
Source: Guest and King (2001)
19
Types of Personnel/HR Manager
FUTURE/
STRATEGIC FOCUS
I. Management of IV. Management of
strategic HR transformation
PROCESS PEOPLE
II. Management of III. Management of firm’s infrastructure employee contribution
DAY-TO-DAY/
OPERATIONAL FOCUS
Source: Ulrich (1997: 24)
20
Definition of HR Roles
Source: Ulrich (1997)
| HR Role | Deliverable | Metaphor | Activity |
| Management of strategic HR | Execute strategy | Strategic partner | Aligning HR and business strategy |
| Management of firm’s infrastructure | Building an efficient infra-structure | Administrative expert | Re-engineering organisational processes |
| Management of employee contribution | Increasing employee commitment and capability | Employee champion | Listening and responding to employees |
| Management of trans-formation | Creating a renewed organisation | Change agent | Managing trans-formation and change |
21
Contribution of HR Roles
Source: Ulrich (1997)
| Strategic Partner | Participation in the process of defining strategy and identifying practices that will make strategy happen |
| Administrative Expert | Design and delivery processes for: staffing, training, appraisal, rewards, promotion and management flow Creating infrastructure by improving HR processes: disregarding unnecessary costs, improving efficiency, finding new ways to act |
| Employee Champion | Active in developing intellectual capital Developing practices to help employees contribute both competence and commitment Spend time with employees Train and encourage managers |
| Change Agent | Identify a process for managing change Force a dialogue about required values/behaviour Build a relationship of trust and identify and frame problems |
22
Mapping HR Roles
FUTURE/
STRATEGIC FOCUS
5
5 5
PROCESS PEOPLE
Current quality
Future quality
5
DAY –TO-DAY/ Source: Ulrich (1997: 24)
OPERATIONAL FOCUS
23
Contemporary Roles of HR Managers
Employee advocate
Human capital developer
Functional expert
Strategic partner
HR leader
Source: Ulrich and Brockbank (2005)
24
The Shifting Priorities of (global) HR
The (global) Role of HR Managers
HR professionals should be viewed as functional experts and partners to the business units, similar to corporate finance. At many companies, they have been going through this transformation, but they still need stronger capabilities and larger roles. HR professionals themselves acknowledge that they have big capability gaps in business analytics, business planning, and client relationship management”
BSC/WFPMA (2010) Creating People Advantage, p.5.
Contemporary HR Challenges and HR Capacity
Can HR “get the job done”?
The Evolution of MNCs
Investor Managerial Network
Origins 1920s 1960s 1980s
Key resource capital scale/scope knowledge
Key technique accounting planning exchange
ratios
Key function fin. & acc. corporate planning HRM
Strategic shape pyramid pear pancake
Example DuPont General Electric ABB
Source: Whittington and Mayer (2000)
29
The Structure of MNCs
“Increasingly, the organisational form of MNCs is not one of separate companies in each country with their own national strategies but divisions based on products or services facing end-markets across borders”
Source: Boxall and Purcell (2008: 253)
30
HRM in the MNC
31
International HRM vs. HRM
“the complexity involved in operating in different countries and employing different national categories of employees is a key variable differentiating domestic and inter-national HRM, rather than any major differences between the HR activities performed”
Source: Dowling et al (2008: 19, emphasis added)
32
MNCs and National Culture
“The multicultural nature of MNCs workforces makes their human resource management strategies, policies and practices perhaps one of the most delicate and complicated of all managerial tasks”
Source: Tayeb (2005: 4)
33
Just How International is HRM?
“There is a great deal of resistance to designing and implementing global systems and policies because ‘people are different’, ‘laws are different’ and ‘labour markets are different’. As the complexity of designing and implementing effective HR systems on an international scale cannot be denied, there are many areas where HR professionals have shied away from going global, preferring instead to implement local or regional solutions”
Source: Ryan et al (2003: 85)
34
Theoretical Models of HRM
US models - Michigan
- Harvard
European models - legal regulation
- unions and CB
- management “style”
- firms and institutions
35
US Models of HRM - Michigan
Political
forces
Economic
forces
Cultural
forces
Mission and
Strategy
Organisation
Structure
HRM
Firm
36
The Michigan “Human Resource Cycle”
Selection
Performance
Rewards
Appraisal
Development
37
US Models of HRM - Harvard
Stakeholder
Interests
-shareholders
management
employees
government
community
unions
Situational
Factors
-workforce
characteristics
-business
strategy
-labour market
-technology
-laws and
societal values
HRM Policy
Choices
Employee
influence
Human resource
flow
Reward systems
Work systems
HR Outcomes
Commitment
Competence
Congruence
Cost effective-
ness
Long-term
Consequences
Individual well-
being
Organisational
effectiveness
Societal well-
being
38
The Harvard “Human Resource System”
Work Systems
Human Resource Flow Rewards
Employee Influence
39
US Models Compared
Michigan Harvard
Unitarist Pluralist
Utilitarian- Developmental-
instrumentalism humanism
Human resources Resourceful humans
“Hard” “Soft”
40
Hard or Soft – but Strategically Strong
STRONG
A distinctive approach to
labour management
Strategic interventions to Strategic interventions designed
elicit commitment from to fully utilise labour resources
resourceful humans
Integrated with
business strategy
SOFT HARD
Internal integration
Just another term for personnel
WEAK
Source: John Storey (1992)
41
The Diversity of Management
“the art of managing and organizing has no homeland … Every culture has developed through its own history some specific and unique insight into the managing of organizations and of their human resources”
Source: Laurent (1986) ‘The Cross-Cultural Puzzle of International Human Resource Management’, in T.D. Weinshall (ed.) Societal Culture and Management, de Gruyter, pp.96-7.
42
The Location of the USA within the “Social Space” of the EU
Source: Jens Alber (2006) European Union Politics
43
The Distribution of Legal Origins
Source: La Porta, R., Lopez-de-Silanes, F. and Shleifer, A. (2008) ‘The Economic Consequences of Legal Origins’, Journal of Economic Literature, 46(2), p.289.
Common vs. Civil Law Systems
Common – weaker levels of worker protection (especially worker entitlements to O/T pay, annual leave, redundancy notice/ payment) and fewer limits on managerial prerogative (e.g. flexible and more precarious forms of employment)
Civil – more universal coverage of CBAs (extension to non-union workers) worker/ union representation on company boards
Aggregate Labour Market Regulation Index (Employment Law)
Sources: Cooney, S., Gahan, P. and Mitchell, R. (2011) ‘Legal Origins, Labour Law and the Regulation of Employment’, in M. Berry and A. Wilkinson (eds.) Research Handbook in Comparative Employment Relations, Cheltenham: Edward Elgar, 75-97; Deakin, S., Lele, P. and Siems, M. (2007) ‘The Evolution of Labour Law: Calibrating and Comparing Regulatory Regimes’, International Labour Review 146(3-4): 133-62; and Deakin, S. and Sarkar, P. (2008) ‘Assessing the Long-Run Economic Impact of Labour Law Systems: A Theoretical Reappraisal and Analysis of New Time Series Data’, Industrial Relations Journal, 39(6): 453-87.
Notes: AUS = Australia; UK = United Kingdom; GERM = Germany; FR = France; USA = United States of America
Worker Representation on the Board
Union Membership and Collective Bargaining Coverage, 2008-09
☐ CB coverage and TU member
☐ CB coverage but not TU member
☐ TU member but no CB coverage
☐ No CB coverage and not TU member
Source: Maarten van Klaveren and Kea Tijdens (2010) ‘Trade Union Membership and Collective Bargaining Coverage: Four Options’, Amsterdams Instituut voor Arbeids Studies.
48
Union Density, Collective Bargaining Coverage and Key Bargaining Level(s)
| Country | UD | CBA | CB Level |
| Malta | 51% | 61% | C |
| Germany | 18% | 59% | I |
| Luxembourg | 41% | 50% | I+C |
| Ireland | 31% | 44% | C |
| Czech Rep. | 17% | 38% | C |
| Romania | 33% | 36% | I+C |
| Slovakia | 17% | 35% | I+C |
| Latvia | 13% | 34% | C |
| Estonia | 10% | 33% | C |
| Hungary | 12% | 33% | C |
| Bulgaria | 20% | 30% | C |
| UK | 26% | 29% | C |
| Poland | 12% | 25% | C |
| Lithuania | 10% | 15% | C |
| Country | UD | CBA | CB Level |
| France | 8% | 98% | I+C |
| Belgium | 50% | 96% | N |
| Austria | 28% | 95% | I |
| Portugal | 19% | 92% | I |
| Finland | 74% | 91% | I (C) |
| Slovenia | 27% | 90% | I |
| Sweden | 70% | 88% | I (C) |
| N’lands | 20% | 81% | I (C) |
| Denmark | 67% | 80% | I (C) |
| Italy | 35% | 80% | I |
| Spain | 19% | 70% | I (C) |
| Greece | 25% | 63% | I (C) |
| Croatia | 35% | 61% | I+C |
Source: L. Fulton (2013) Worker Representation in Europe, Labour Research Department & ETUI
Dimensions of Management “Style”
Democratic Autocratic
Employee Job
centred centred
Management Style in Europe
Democratic
Germany
(production)
Employee Job
centred centred
Britain France
(financial) (technical)
Autocratic
Source: based on Lane (1989)
Models of Industrial Relations
Pluralism (UK)
Employers Unions Relation State Role
fragmented fragmented distributive small abstentionist
variable variable bargaining variable
Etatism (France)
Employers Unions Relation State Role
weak weak contestation large interventionist
divided divided
Neo-corporatism (Germany)
Employers Unions Relation State Role
concentrated concentrated integrative medium facilitating
strong/stable strong/stable bargaining
S
U
E
E
U
S
S
U
E
IR in Europe at the “Click of a Mouse”
See also: Eurofound (European Foundation for the improvement of Living and Working Conditions)
Liberal vs. Coordinated Market Economies
“liberal market economies are distinguishable from coordinated market economies by the extent to which firms rely on market mechanisms to coordinate their endeavours as opposed to forms of strategic interaction supported by non-market institutions”
Source: Hall and Soskice (2001: 33)
54
Institutional (beneficial) Constraints
“an economy can perform well only to the extent that it is embedded in a well-integrated society … a society exists only to the extent that it is capable of imposing normative constraints, or social obligations, on the pursuit of individual interest”
Source: Streeck (1997: 199)
Productivity and Labour Market Regulation in the EU
Sources: Eurostat and OECD
56
Conceptualising HRM
Reading
Boxall & Purcell, Chts.1 and 2;
Wilkinson et al, Cht.1.
France
Denmark
Finland
Austria
Italy
Greece
Sweden
Portugal
UK
Spain
Ireland
Netherlands
Germany
Belgium
0
0.5
1
1.5
2
2.5
3
3.5
4
5060708090100110120130
Productivity (GDP per hour worked, 2002) relative to EU
average
Strength of Employment Legislation (late
1990s, OECD ranking)
Chart2
| 102.7 |
| 124.2 |
| 107.3 |
| 95.6 |
| 113.7 |
| 106.2 |
| 70.2 |
| 110.6 |
| 113.8 |
| 113.1 |
| 60.7 |
| 80.4 |
| 93.8 |
| 88.1 |
Growth v. soc. prot.
| country | productivity | empl prot |
| Austria | 102.7 | 2.3 |
| Belgium | 124.2 | 2.5 |
| Denmark | 107.3 | 1.5 |
| Finland | 95.6 | 2.1 |
| France | 113.7 | 2.8 |
| Germany | 106.2 | 2.6 |
| Greece | 70.2 | 3.5 |
| Ireland | 110.6 | 1.1 |
| Italy | 113.8 | 3.4 |
| Netherlands | 113.1 | 2.2 |
| Portugal | 60.7 | 3.7 |
| Spain | 80.4 | 3.1 |
| Sweden | 93.8 | 2.6 |
| UK | 88.1 | 0.9 |
