CIMA E1 Official Learning System - Enterprise Operations Aug 2009
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Overell’s (2003) research into employee appraisals identifi es that most large companies
use such a system. This practice does, however, vary according to the industry (for instance
in fi nancial services, 80% of employees are exposed to them compared with 50% in retail).
Private sector appraisals are conducted mainly to identify training needs, with evaluating
performance secondary. Surprisingly perhaps only 15% of companies use appraisals to
determine pay.
Overell also reports that disturbingly it was once found that in the UK’s Civil Service
that the appraisal system was felt to discriminate against ethnic minority and disabled work-
ers. (As a safeguard management have since set up an independent assessor system, allowing
staff a right of appeal.)
The question of who should appraise and when depends on determining the goal of
appraisal and who is best placed to evaluate the employee’s performance or needs against
these. Managers often save up bad news rather than ‘disciplining’ staff at the time so that
they will have ‘ammunition’ if necessary at the annual appraisal. Moves to more frequent
appraisals run against the problem of time. Nevertheless, some managers do have weekly
team briefi ngs or individual discussions with staff as part of their ongoing managerial role
that can be specifi cally aimed at assessing progress towards objectives.
Setting objectives as part of a performance appraisal (Table 5.14) involves agreement
on SMART objectives (specifi c and challenging, measurable, but achievable, relevant and
realistic and time-bound). A system of ‘management by objectives’ (MBO) is helpful if
the employees are participants in their own objective setting. Otley’s (1987) research into
managers in the budget-setting process indicated that performance collapses if objectives
have been set inappropriately. This means that appraisal of performance is potentially a
very damaging activity for managers who treat it lightly or for organisations who do not
consider the implications. This is particularly true of systems that apply pay to perform-
ance (PRP) based on appraisal interviews. These systems are treated with great suspicion
by trade unions wary of unfair application and treatment.
A number of types of appraisal exist:
Self-appraisal. This often takes place in preparation for a supervisor/appraisee meeting.
This can save managerial time but the value may be questionable (if the appraisee is
too self-critical or too selective and critical incidents have been omitted).
Supervisor/appraisee. Normally the person who allocates work and establishes priorities
and standards appraises. In some cases where there are many workers this may not be
possible.
Table 5.14 Guidelines for setting performance standards
Clearly identify the individual’s main result areas (e.g. fi nance, communication, staff development,
supervision)
Select the vital key tasks from the result areas which, when performed well, ensure that the required
objectives are being achieved
Set standards of performance against each of the key tasks which, when met, are acceptable to all
concerned. Use information from past experience, present conditions and any foreseeable future
changes. Standards must be valid in terms of result in the job
Ensure that standards are realistic and not too easy but present a challenge that is within the jobholders’
capability
Strive for a clear defi nition at all times; standards that can be defi ned clearly minimise doubt and
ambiguity
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180 degree. Often managers, especially those in project teams or matrix organisations
and professional bureaucracies, do not ‘know’ the appraisee suffi ciently well. To some
extent collecting anonymous or named views of colleagues can solve this. This can
also be performed in the open groups session with the emphasis on fi rst how the
group performed and then the individuals’ contribution (or the lack of it).
360 degree. This is where the appraisee prepares feedback on the appraiser as well as
getting 180-degree feedback from colleagues. Problems include potential confl icts,
power, infl uence issues, time and bureaucracy.
5.3.5 Development and training
HRM’s emphasis on employee commitment and fl exibility implies the importance of
investing in employee development and training. (This is consistent with the notion of
viewing human resources as an asset rather than as a cost.)
Learning is a complex process that underpins development, education and training. One
perspective on learning fi rst developed by David Kolb (1984) when he captured a four stage
cycle of concrete experience-refl ection-theorising-active experimenting. Effective learning
involves completing this cycle. Formal lectures for example have little real effect on learning
if they are simply concerned with imparting knowledge which students may not refl ect on
and modify their behaviour accordingly. The matter is complicated by the fact that individu-
als have different preferred learning styles with, for example, some favouring analytical refl ec-
tion, while others may strongly prefer active, practical problem solving, etc. Nevertheless,
the following general principles can guide the design of effective learning programmes:
●
Participants should have both the ability to learn the required skills/knowledge and the
motivation to learn.
●
It usually helps to provide an overview of the tasks to be learned before dealing with par-
ticular, specifi c aspects.
●
The availability of timely, accurate feedback greatly enhances the effectiveness of most
forms of training.
●
There should be positive rewards or reinforcements when activities are carried out cor-
rectly. These rewards may be internal (e.g. a feeling of accomplishment) and/or external
(e.g. the issue of a certifi cate, a compliment from the trainer, etc.).
●
Active involvement is usually associated with more effective learning rather than simply
listening or reading.
●
Most training will involve a learning curve which may be initially very fl at as the learner
struggles to acquire basic competence or in other cases quite steep when the skills
required for modest competence are learned more quickly, but all learning will involve
periods when there seems to be no improvement in performance (a learning plateau).
●
Training should be as much like the job as possible to minimise problems of conceptual-
ising theory to the workplace.
Management development is sometimes thought of as an activity that only takes place in cer-
tain special situations, such as a short course or studying for an MBA, but in fact it can and
does take place in a much wider variety of contexts. This point can be understood most
clearly if the process is seen as one of self-development which is based on the premise that
‘any effective system for management development must increase the managers’ capacity and
willingness to take control over and responsibility for events, and particularly for their own
learning’ (Pedler et al., 2006). This highlights the possibilities for learning and management
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development sometimes being accidental (unconscious) as well as planned (conscious), and
that it may take place on-the-job as well as outside the normal place of work.
The importance of self-development is reinforced by the emphasis many professional
bodies (including CIMA) are placing on continuous professional development (CPD),
which recognises that being admitted to a professional body does not guarantee profi ciency
forever. Individual members of the profession must take responsibility for their own post-
qualifi cation continuing development and updating. In this way individuals can ensure
they remain up to date in a rapidly changing world and can facilitate career planning.
Education can be seen as a more generic kind of development. In management terms this
often applies specifi cally to accredited training and development leading to a certifi cated
course often through use of a local university. By utilising local case study material and
data assignments help focus learning on the candidate’s own organisation.
The benefi t of an accredited course is that the learning is focussed and progressive, and
leads to a defi nitive end-stage.
Either training or development or both can be accredited by internal or external sources
to produce vocational or generic managerial qualifi cations, though some of this more
general process may be termed education as it is not so goal-specifi c as either training or
development.
Some occupational groups, such as lawyers and accountants, have a tradition of education
and training controlled by professional bodies and this enables them to take advantage of
external labour markets (often national and international rather than just local). Managers
as a group, however, have not succeeded in establishing themselves as a recognised profes-
sion, in large part because of the sheer diversity of managerial roles and responsibilities.
Training can be seen as a formal, often short-term process where the organisation attempts
to increase an individual’s ability to better perform a particular set of tasks. It can take
place off or on the job, or be a combination of both. Much management training is ‘ad
hoc’ based on a specifi c training need identifi ed through appraisal. Many organisations
are moving to preferred suppliers for training in order to control cost and outcomes more
closely. In this way the value adding effect of training is increased.
‘On-the-job’ training from others can be effective if the existing employees have time
to devote to the process, and are themselves competent and know how to impart the nec-
essary skills. Unfortunately these conditions are often not satisfi ed in practice therefore,
other methods such as simulations, class or laboratory-based training or off-site training
may be more effective.
One development in the UK is competence-based training linked to a system of NVQs.
The essence of competence-based training is that it assesses the ability of the trainee to carry
out specifi ed activities to predetermined standards rather than concentrating directly on an
individual’s knowledge and understanding. This development can be seen as a consequence
of the collapse of the traditional apprenticeship system and the uncoordinated proliferation
of vocational qualifi cations. NVQs operate at fi ve level from basic training to professional
level and provide the basis for national training targets specifying the proportion of young
people and employees who will have obtained these NVQs by specifi ed dates.
Whatever form of training or development is used it ought to be part of a systematic
overall training system involving:
●
determining training needs
●
identifying training objectives
●
development of criteria against which to assess performance
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●
developing methods to determine current levels of profi ciency among potential trainees
to enable the right people to be selected for training
●
making arrangements for the location, type and duration of the training
●
devising methods for carrying out the training and encouraging effective learning
●
monitoring the effectiveness of the training and comparing outcomes against criteria.
Most learn best when they genuinely are motivated to do so. Any training is most likely
to be effective therefore if the individual is involved in agreeing his or her training plan
and in choosing the method or means by which the training is to be provided. There are
potentially many training methods that an organisation may wish to develop and these are
listed in the (Table 5.15).
Table 5.15 Training methods that an organisation may wish to develop
Action learning: learning by doing, for example, participation of person with others in project work or
group assignment, or by secondment to another section/department
Briefi ng group: short exposition by manager to a workgroup, followed by questions and answers, and
discussion
Business games: board games or computer-assisted evolving case studies in which managers assume roles in
a fi ctional business and see the consequences of their decisions in a given situation
Case studies: write-up of a real management situation, with questions for analysis
Coaching: a manager maximises training opportunities in the course of everyday work with their staff
Computer-assisted learning (CAL) or computer-based training (CBT): essentially programmed learning
via interaction with a computer
Delegation: manager actively delegates parts of their own job to subordinates and coaches them in its
execution
Demonstrations and guided practice: supervisor (trainer) shows employee (trainee) how to (e.g. operate
machine); then trainee attempts it with guidance. Films, DVDs and/or video can also be used to
demonstrate off the job
Discovery or experiential learning: essentially learning by doing it for yourself, but within some structured
logical sequence
Distance learning: learning at a distance with interactive texts and exercises
Job or work rotation: involves the employee moving to a new job or new area of work for short periods to
widen experience
Lectures: delivery of a prepared exposition
On-the-job training: training while the job is actually being carried out in the normal work situation
Programmed learning: book/machine that paces reader and checks knowledge through periodic questioning
Role play or behaviour role modelling: person puts him/herself in ‘someone else’s shoes’ for purposes of
practical exercise, usually to develop inter-personal skills, and receives feedback on behaviour (often via
closed circuit television/video)
Rote learning: by oral repetition (could be useful in some instances for non-English speakers or young
trainees)
Seminar or workshop: a meeting of several employees in which all attempt to improve their knowledge in a
specifi c area by sharing information and practice (Seminars usually have an ‘expert’ to lead)
‘Sitting next to Nellie’: learning by copying someone doing the same job
Simulations: attempt to reproduce the conditions of work (e.g. fl ight ‘simulators’ for pilots, war games for
the armed services or desk-top in-tray exercises for executives)
Special projects or assignments: manager/supervisor asks subordinate to research, report and make
recommendations on specifi c topic (or as part of a group project)
Structured work experience: a specifi c programme of work activities (drawn from the job description),
structured in priority order and to be experienced within set time limits
Trainee logbooks: books/diaries in which a record is kept of a trainee’s work programme, performance and
progress
Training manuals: written collection of instructions (e.g. how to operate a machine)
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Training delivery can be provided either in-house, through use of external trainers or
by means of open learning, each method having its own advantages and disadvantages.
In-house training could also include the ‘buying in’ of an external trainer specifi cally to
meet the organisation’s own needs either on or off site.
Exercise 5.7
Identify the advantages and disadvantages of in-house training.
Solution
Advantages Disadvantages
Course content and timing can be tailor-made to
the organisation’s needs
Participants are not exposed to outside infl uences
An organisation’s specifi c technical equipment,
procedures and/or work methods can be used
Participants may be called away at short notice to
deal with work problems
Cost effective (provided there are suffi cient delegates
with the same training needs, and the necessary
resources, expertise of trainers to meet these)
Participants more likely to withdraw at short notice
than for an external course with non-returnable
fees
Easily monitored Inhibits open discussion if immediate colleagues or
bosses are present
Can involve expert sessions from senior managers or
technical staff
Can generate a team spirit and develop culture
Can be linked to specifi c outcomes that are then
monitored by participants
Can be enhanced by incorporating work-based
projects
External provision can include all the courses available at local colleges or universities or
through specialist training companies. Although courses are unlikely to be wholly specifi c
to an organisation’s own needs it does overcome many of the diffi culties associated with
in-house provision. In particular, participants can mix and share problems and experiences
with like-minded people from other organisations. The greatest disadvantage is that such
training is usually provided to all-comers, on an unselective basis, across different types of
industry and every level of ability. It will inevitably be diffi cult, therefore, to make it imme-
diately relevant to the in-company situation and to the particular needs of selected staff.
Open learning has two meanings. One interpretation is learning for which no rigid
entry qualifi cations are required. Increasingly it is used to mean learning that enables
people to learn at the time, place and pace which meets their needs and their require-
ments. It can take the form of a whole range of updating and training facilities that can
be used in the workplace, at home or in some combination of the two. Employees can be
offered a range of study packs or courses, in print, video, audio and/or computer-based
programmes, selected according to the individual’s training needs. Open learning can be
fi tted around workplace operations and does not involve any absence from the site. Open
learning can complement an existing training provision and assist greatly in your train-
ing role. With the increasing growth in numbers of DVDs, and personal computers, both
at the workplace and at home, open learning is becoming increasingly available to every-
one. However, developing good open learning material is expensive. Usually it will only be
fi nancially viable if the same material is appropriate to large numbers of people.
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Information technology and particularly the Internet and Intranet systems have pro-
vided new opportunities for training and development at relatively low cost (Prithcard,
2003), for example:
●
UK DIY products retailer B&Q (with 20,000 staff) uses computer-based training with
locally run DVD-ROMS. B&Q also uses networked management tools to keep track of
training progress.
●
Car producer Ford uses e-learning powered by an intelligent search and retrieval system
(Ford Learning Network). This allows all its 335,000 employees worldwide to access
training material in a wide range of subjects from engineering to fi nance. It also contains
a search facility to assist with work-related problems.
Finally, managerial control needs to be exercised over training just as for any other activ-
ity. A professional service from those who provide it should be insisted upon. There are
fi ve dimensions to this control:
●
drawing up training plans
●
checking that training takes place according to these plans
●
checking on the quality of training and success in achieving the stated objectives
●
managing the tasks of the learner back in the work situation so that the effects of train-
ing are reinforced
●
checking that the results of training justify the resources allocated to it.
Regrettably much training is not subject to systematic planning, and careful evaluation
is the exception rather than the norm. It is generally recognised that there are four levels at
which training can be evaluated (Kirkpatrick, 1998):
1. Reaction – evaluates how well the trainees liked the training.
2. Learning – measures the extent to which trainees have learned the principles, facts and
theories covered in the training.
3. Behaviour – concerned with the extent to which behaviour changes as a result of the
training.
4. Results – considers what benefi ts (e.g. better quality, reduced costs, etc.) result directly
from the training.
These levels will not necessarily be independent of each other, but each dimension rep-
resents a rigorous evaluation. When designing methods of evaluation the most common
approach is simply to measure outcomes at one or more levels after the training. The limi-
tation of this design is that it makes it diffi cult to know whether the outcomes being meas-
ured are a result of the training or not. This can be overcome to an extent by measuring
outcomes before and after the training: a pre/post measure evaluation.
Some organisations devise well thought out mechanisms to aid development and career
advancement such as formal mentoring. A mentor is (according to Daft, 2000) ‘a higher
ranking senior organisational member who is committed to providing upward mobility
and support to a protégé’s professional career’. Mentors under such arrangements can act
in a number of roles, including coach, counsellor, sounding board and facilitator.
Note: In some organisations the learning benefi ting from, mentoring is
referred to as a mentee, in others a protégé.
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Both training and development might also be seen as part of the reward system, possibly
in a short-term way (e.g. the exotic location of a training course) or longer term as devel-
opmental assignments (especially overseas).
Exercise 5.8
Outline the steps you would follow to devise an appropriate management development
programme for a group of qualifi ed accountants. What activities other than formal train-
ing courses might be appropriate for such a management development programme?
Solution
A systematic review of the management development programme appropriate to a group
of qualifi ed accountants would involve:
●
determining their management development needs
●
identifi cation of the organisation’s management development objectives
●
developing criteria against which to assess performance
●
fi nding ways of selecting the appropriate people for the training programme
●
identifying methods of management development to encourage learning
●
making arrangements about location, type and duration of training
●
devising ways of monitoring effectiveness.
Other than formal training courses the programme could include an emphasis on self-
development so that the accountants pay systematic attention to learning opportunities on
and off the job.
5.3.6 Career planning
Career planning has traditionally been viewed as an organisation-driven activity that ena-
bles human resource managers to concentrate on jobs and building career paths so pro-
viding for logical progression of people between jobs. These career paths, particularly for
people such as management accountants, have tended to be mainly within one specialised
function and represent ladders on which individuals could progress within their functional
specialism. Organisational career planning suffered severe setbacks from the layoffs dur-
ing the recession of the late 1980s and early 1990s. In addition these core concepts have
increasingly been challenged due to a number of other developments including:
●
Non-traditional organisational structures emerging. These fl atter organisation struc-
tures have removed some career paths entirely and reduced opportunities in other
areas. Additionally these structures imply a need for multi-skilling and teamwork at the
expense of promotion ‘ladders’ found within traditional hierarchies. Increasingly work-
ers are seeking to be ‘multi-skilled’ often developing a good understanding of more than
one function rather than specialists.
●
The development of general management skills and the concept of cross-functional
career paths long been accepted as the norm in Japanese fi rms.
●
Increasingly, career development has become led by the individuals themselves. An
individual philosophy of building a portfolio of experience qualifi cation and networks
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arose in order to develop a career outside a single organisational structure. This indi-
vidual career planning focuses on individuals’ goals and skills. It considers ways in which
each individual might expand his or her capabilities and enhance career opportunities
both within and outside a particular organisation. (Within the UK the Association of
Graduate Recruiters recently warned that career paths no longer exist: only crazy paving
that the individual lays himself or herself!)
Given this background, it is unsurprising that succession planning as an alternative to
external recruitment may be seen as of decreasing HR signifi cance. Problems have in any
case always been associated with succession planning, including:
●
Retention. Unlike other assets that have received investment, employees who are well
trained especially those who are over-trained in anticipation of future developmental
moves and are highly marketable.
●
Individual failure. A failed assignment damages the individual, the company and the
working relationships. ‘Failure’ may be attributable to one of a number of HR defects
including poor control or managerial judgement, the over-promotion of individuals, and
defective appraisal monitoring systems.
●
Timing. One person failing to move because of personal circumstances can hold up the
development of others unless some other kind of arrangement can be made. Slow pro-
motion or development can lead to frustration and (for instance) graduate staff leaving
shortly after becoming useful to the organisation. As the process depends on political
expediency, many talented staff fi nd that their present manager is reluctant to release
them.
●
Size of organisation. For a multi-national organisation, extensive relocation can be fi nan-
cially costly and for the family potentially distressing, demotivating and stressful. For
many in small organisations a feeling of ‘waiting for dead people’s shoes’ (as the old
expression has it) may exist.
●
Overseas postings. The issues of combining multi-cultural groups and three types of
employee (the parent country nationals (expat), the home country national and the
third country national) may prove problematic. Planning the correct combination of
these staff is virtually impossible because of competing priorities and so many fi rms
merely rely on the ability of all employees to ‘mutually adjust’ to each other and the new
situation.
Exercise 5.9
List the advantages and disadvantages of:
(a) recruiting leaders from outside the organisation
(b) developing leaders from within.
Now read the article that follows. The extract argues strongly for developing leaders
from within and identifi es a number of things that an organisation might do. (Note that
the use role-play and psychometric testing is normally associated with an assessment cen-
tre used in selection, and 360 degree feedback with performance appraisal. Here the tech-
niques are suggested within the context of career development.)
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5.3.7 Employment practices
Dismissal is termination of a worker’s employment with or without notice by the employer.
Dismissal without notice is usually wrongful because it breaches the contract of employment.
For a dismissal to be fair, the employer must show that the reason for it is of a type accept-
able under statute. In the UK a fuller consideration involves whether the employer also acted
reasonably in the circumstances. Factors considered reasonable include both the interest of
business effi ciency and the likely effects of possible courses of action on someone’s behaviour.
It is important to follow agreed procedures wherever they exist, and to treat people consist-
ently and fairly. To defend itself against claims of unfair dismissal, an organisation also needs
to have kept a written record of all of the stages in any disciplinary procedure.
If an individual’s employment contract is terminated it must be done in a way which
follows the correct procedures otherwise the employee may be able to claim compensation
for unfair or wrongful dismissal. ‘Constructive dismissal’ involves an employee resigning
because the employer has made matters so diffi cult for them which equates with having in
effect terminated their contract of employment.
When analysing whether dismissal is fair or a breach of contract, a number of issues are
relevant, including:
●
Conduct. A well-documented and fair disciplinary procedure is the best way of handling
conduct problems. Large organisations especially need to demonstrate why they did not
transfer the employee or counsel them.
●
Capability. Normally an employer would have to demonstrate what standards there were,
how the employee failed to meet them, detail the informal/formal warnings and any
remedial action it tried to take, for example, extra training, or transfer. It is diffi cult to
show that loss of effi ciency has had an effect on the business.
In the war for talent, identifying and nurturing the bright young things under your
nose is not just a strategic manoeuvre, it’s your lifeblood.
Fail in this and your most promising people will achieve their potential elsewhere,
leaving you with a vacuum at the top of your organisation……………
Line managers are the best-placed people to spot talent, says Lucy McGee, a direc-
tor of HR consultancy DDI. ‘Historically, HR has tried to own the process, but the
guys at the edge of the pitch are the best placed to identify tomorrow’s stars.’
. . . . . .
Look to the future. ‘Don’t assess high potentials for what you need now or what
has worked in the past – think about the business’s future needs’, says Yapp. IBM
used to make computers, now it’s all about services.
Evaluate your assets. Once you’ve conducted your trawl, establish just how good
the chosen few really are. Role-playing, psychometric tests and 360-degree appraisals
are often used.
. . . . . .
Fast forward. The next job is to create an accelerated development plan that brings
them up to speed in the required areas. They’ll need extensive support.
Keep it open. If the process is secretive, people will think it’s unfair.
Source: Extracted from Brainfood: Crash course in . . . developing future leaders, Management Today,
September 1, 2005 p. 24 Haymarket Business Publications Ltd.
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●
Breach of statutory duty. Continuing the employment might place the employer in breach
of a statutory duty, e.g. under health and safety legislation. In such cases, there may be a
valid ground for dismissal.
●
Some other substantial reason. Possibilities include dishonesty, refusal to transfer elsewhere
within the organisation, etc.
●
Redundancy. A dismissal on the grounds of redundancy may be justifi ed on any of
the following grounds: cessation of business; cessation of business in the place where the
employee was employed; cessation of the type of work for which he or she was
employed.
Before any employee is declared redundant, ‘good’ employers will have considered and dis-
cussed all possible alternatives with the relevant trade unions or staff representatives such as:
●
reducing overtime (with excess work passed instead to other under-utilised employees)
●
limiting future recruitment for vacancies that arise
●
retraining (for new roles)
●
transfers (to jobs in other departments)
●
job-sharing (between two or more people)
●
a shorter working week
●
more effective HR planning in the future.
If despite these measures redundancies are still inevitable, then an organisation may decide to:
●
offer early retirement to eligible employees (provided that the rules of the occupational
pension scheme allow it)
●
target part-time and temporary employees fi rst
●
ask for volunteers by offering attractive terms (voluntary redundancy). This option may
attract older workers, since cash incentives tend to be linked to length of past service.
An employee’s post can be made redundant if the employer ceases to need it. This should
however be viewed as a last resort.
A claim of ‘unfair dismissal’ due to redundancy may be justifi ed if:
●
other employees in similar circumstances within the organisation were not dismissed
(i.e. the selection for redundancy was unfair), or
●
an inadmissible reason for redundancy was used, (e.g. such as the person was chosen
because he or she was member of a trade union or took part in legitimate trade union
activities), or
●
the organisation did not follow an agreed procedure or an agreement justifi ed by ‘custom
and practice’.
In the UK, legislation demands that redundancies are fair and consultation must take
place. Once employees and the relevant trade unions have been consulted, managers may
also wish to contact the local newspaper, as an informed controlled press release is better
than stories based on speculation which could be damaging to the organisation’s reputation
and image. The best method to inform any employee of redundancy is to tell them person-
ally. Since any person who is to receive a redundancy payment must be given a statement
in writing detailing the full amount to be paid and how it was calculated. Employees eli-
gible for redundancy pay are entitled in some countries to reasonable time off work, with
pay, to look for other work. Management may also like to invite local employment agency
advisers to come to the premises, and a good counselling service support individuals should