Mullins L.J. Management and organisational behaviour, Seventh edition
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CHAPTER 19 HUMAN RESOURCE MANAGEMENT
785
Principles Indicators Evidence
6 The development of people is The organisation has clear priorities which link the
in line with the organisation’s development of people to its aims and objectives at
aims and objectives. organisation, team and individual level.
People clearly understand what their development
activities should achieve, both for them and the
organisation.
7 People understand how they People can explain how they contribute to achieving the
contribute to achieving the organisation’s aims and objectives.
organisation’s aims and objectives.
Action 8 Managers are effective in The organisation makes sure that managers have the
An Investor in People supporting the development knowledge and skills they need to develop their people.
develops its people of people. Managers at all levels understand what they need to do
effectively in order to to support the development of people.
improve its performance. People understand what their manager should be doing
to support their development.
Managers at all levels can give examples of actions that
they have taken and are currently taking to support the
development of people.
People can describe how their managers are effective in
supporting their development.
9 People learn and develop People who are new to the organisation, and those new
effectively. to a job, can confirm that they have received an effective
induction.
The organisation can show that people learn and
develop effectively.
People understand why they have undertaken
development activities and what they are expected to
do as a result.
People can give examples of what they have learnt
(knowledge, skills and attitude) from development
activities.
Development is linked to relevant external qualifications
or standards (or both), where appropriate.
Evaluation 10 The development of people The organisation can show that the development of
An Investor in People improves the performance of people has improved the performance of the
understands the impact the organisation, teams and organisation, teams and individuals.
of its investment in individuals.
people on its performance.
11 People understand the Top management understands the overall costs and
impact of the development of benefits of the development of people and its impact on
people on the performance of performance.
the organisation, teams and People can explain the impact of their development on
individuals. their performance, and the performance of their team
and the organisation as a whole.
12 The organisation gets better People can give examples of relevant and timely
at developing its people. improvements that have been made to development
activities.
(The Investors in People Standard is protected by intellectual property rights under national and international laws and is reproduced by permission of Investors in
People UK, © 2000. The full publication of the Standard can be obtained from TSO on 0870 850 4477.)
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PART 7 MANAGEMENT OF HUMAN RESOURCES
MANAGEMENT IN ACTION 19.2
Performance management at Autoglass Limited
KEY PRINCIPLES
■ Autoglass has a performance management system which
is fair and equitable, and in line with the company’s values:
it encourages people to give their best.
■ Individual output is a critical component of the overall
product of the business and personal contribution counts
towards remuneration.
■ Performance management is an ongoing process with the
annual review representing a summary of the year’s work.
■ the starting point for performance process should be the
goals/outputs required from the individual (the WHAT),
which in themselves should be stretching but achievable
objectives.
■ HOW the goals are achieved (e.g. teamwork), represents a
critical part of the overall performance mix.
■ Performance management is about dialogue, review and
learning – not paperwork!
■ Performance management matters.
PLANNING PERFORMANCE BY SETTING OBJECTIVES
Purpose
As well as reviewing past perfromance a key part of the per-
formance management process is the setting of personal
objectives. These objectives are set so that the person can
effectively demonstrate their contribution to Autoglass suc-
cess, either individually or as part of a team. These objectives
should always be aligned to the function/department’s busi-
ness plan.
Actions
1
P
rior to the review establish what the targets of the
branch/department in the coming months are to enable an
effective contribution to the Autoglass business plan. If a
non-operational department, consider what your depart-
ment will do to maximise support for Autoglass and
its customers.
2 Having established your department/branch targets con-
sider what actions need to be maintained and what areas
need to improve. Consider how those who report to you
will contribute to these actions.
3Taking into account the areas of improvement highlighted
in the previous sections, determine the number of per-
sonal objectives for the reviewee. These should be agreed
with the reviewee. The number depends on the complexity
of the objectives, and to the weighting allocated to them.
4Cross-reference to the rating performance matrix when
setting objectives.
5 Ensure that the reviewee understands that the objectives
set are a key part of planning performance and that
achievement is key. It is best practice to review objectives
at least quarterly.
6 Balance objectives to reflect areas in which the reviewee
already excels (which you want to maintain) and areas that
are in need of improvement.
FEEDBACK FROM COLLEAGUES
The purpose of gathering feedback from colleagues is to pro-
duce a rounded view of performance over time, and to help the
reviewee to recognise their strengths and development needs.
The emphasis should therefore be on highlighting good
performance and helping reviewees to improve.
Select a number of colleagues who have direct dealings
with the individual e.g. work mates, staff who report to them
etc.
Process
To avoid a paper chase, gather feedback face to face or on
the phone. You should not attempt to gather feedback via
email or ask for written reports.
■ Ask for constructive answers to three simple questions:
– What has the individual done well and how has this
helped?
– What could the individual do better?
– How could the individual develop to be even more
effective?
■ Ask colleagues to be specific with their examples and
follow up their answers by asking questions like: ‘Why was
that?’, ‘What did they do then?’
■ Make notes to refer back to.
■ Relate the feedback to the leadership success factors/
relevant competencies.
Photo: Autoglass Repair Service
CHAPTER 19 HUMAN RESOURCE MANAGEMENT
787
Confidentiality
It is important that you offer confidentiality when asking for
feedback and that this is maintained.
Feedback should therefore be given in general terms without
direct reference to the people concerned, and linked to perform-
ance against objectives and leadership success factors.
SELF-REVIEW
In preparation for the final review meeting, the reviewee
should be asked to reflect on their performance by asking
themselves the following questions:
‘What have I achieved?’
(Refer to personal objectives and the job description.
Refer to scorecard results where these are available)
‘How have I achieved this?’
(Refer to Leadership Success Factors or other rele-
vant competencies)*
‘What are my development needs?’
‘What have I not achieved and why?’
‘What action have I taken following my last review?’
Issue the reviewee with a self-review form at least one week
before the event.
Make reference to the self-review at the review meeting,
exploring differences between your views, colleague’s feed-
back and self-perception.
Encourage the reviewee to track their performance
throughout the year.
*The Leadership Success Factors are:
■ Customer driven
■ Energy, drive and change
■ Analytical thinker
■ Commercial ideas and action
■ Planner and implementer
■ Open communicator
■ Leading and motivating teams
■ Partnership builder
These factors were set out in Management in Action 8.1 of
Chapter 8.
Reproduced with the permission of Simon Fitzgerald, Development and Training
Manager, Autoglass Limited, the UK’s leading vehicle glass repair and
replacement business.
788
PART 7 MANAGEMENT OF HUMAN RESOURCES
Almost 50 years ago, Peter Drucker first raised the question: ‘Is personnel management
bankrupt’? And answered: ‘No, it is not bankrupt. Its liabilities do not exceed its assets. But it
is certainly insolvent, certainly unable to honour, with the ready cash of performance, the
promises of managing worker and work it so liberally makes.’
In view of the work of more recent writers, the changing nature of work organisations and
developments in personnel/HRM, how would you attempt to answer this question today? Set
out clearly your response as fully as possible and give supporting reasons.
Drucker, P. F. The Practice of Management, Heinemann Professional (1955), pp. 267–82.
ASSIGNMENT
1 Critically analyse the extent to which you believe that ‘human resource management’
(HRM) differs from ‘personnel management’.
2 Discuss fully the range and scope of HRM activities within your own organisation. Explain
the underlying philosophies of managerial behaviour which influence the implementation of
HR practices and procedures.
3 ‘Every director a personnel director, every line manager a personnel manager.’ In the light of
this statement discuss what you see as the role and functions of the HR (or personnel) man-
ager in a large business organisation.
4 How would you justify to a group of sceptical line managers a high level of financial provi-
sion for training? Explain the steps you would take in order to ensure the effective
management of training.
5 What are the potential benefits for both the individual and the organisation from a formal
system of performance appraisal? What questions need to be addressed in the design and
implementation of an appraisal system?
6 Critically evaluate different methods of performance appraisal and discuss fully the poten-
tial problem areas.
7 Explain those factors which are likely to influence the nature and contents of an employ-
ment relations policy, and give specific examples from your own organisation. What is
meant by the legal and behavioural perspectives of employee relations?
8 Discuss critically the extent to which line managers should be involved with the responsi-
bility for employment relations. What arrangements exist in your own organisation?
9 Comment critically on the accountability and measurement of the functioning of the HR
department.
REVIEW AND DISCUSSION QUESTIONS
CHAPTER 19 HUMAN RESOURCE MANAGEMENT
OBJECTIVES
Completing this exercise should help you to enhance the following skills:
Review options in dealing with difficult work situations.
Play the role of manager, employee or observer.
Appreciate sensitivities when dealing with issues related to poor performance.
EXERCISE
Working in a team of three people, you are required to participate in the following role-play
exercise.
Role play A: Manager/Kirsty
You are a line manager and Steve is an administrator who reports to you. The other members
of the team, while liking him personally, complain about his disorganisation and the image he
gives the department.
His last appraisal was six months ago and he was rated as just meeting his performance
objectives. Since then Steve’s performance has slipped steadily.
■ 80 per cent of work has to be returned for correction, indicating that it has not been proof-
read or spell-checked.
■ Computer files and cupboards are a mess. Other administrators fear standing in for him
because of his poor organisation.
■ Does not prioritise workload or respond well to urgent requests.
■ Has left a confidential document on his desk overnight twice in the last month.
■ Work area is untidy with papers and half-empty coffee beakers all over the desk.
You have done your research and have determined that his performance is entirely unsatis-
factory. You have asked to see Steve formally in your office so that you can make it clear to
him that if his performance does not improve in all areas then his continued employment with
the organisation is in jeopardy.
Decide how you will approach this difficult situation.
Role play B: Employee/Steve
You are an administrator with eight years’ experience. Your manager has asked to see you
and you are pretty sure that it’s about your performance. She had a chat with you a while ago
and said your work was not up to scratch. You know this is true but you are a friendly person
and most people get on well with you. You usually manage to come up with the goods in the
end. If only some of the people you work for would plan ahead a bit then you wouldn’t have
to rush things so much and therefore make fewer mistakes. Your manager has complained
about the way you file things but you usually find things when they are needed. You enjoy
your work and certainly need the money. You are pretty confident you will be able to get out
of any kind of a scrape with your manager, as you can be quite persuasive when you choose
to be.
PERSONAL AWARENESS AND SKILLS EXERCISE
789
790
PART 7 MANAGEMENT OF HUMAN RESOURCES
Role play C: Observer
The outcome here needs to be that Steve is absolutely clear that if his performance doesn’t
improve dramatically then the usual, formal disciplinary procedure will be instigated.
Watch out for the following from the Manager:
■ clear, assertive but unemotional communication to Steve throughout the meeting;
■ keeping clear of attacking Steve as a person;
■ not allowing Steve to take over and blame others;
■ checking that Steve is clear on the implications of not improving;
■ pointing out clearly where Steve is going wrong and what improvements are expected;
■ giving Steve a deadline and review date.
DISCUSSION
■ What have you learnt from this exercise about the nature and management of performance
appraisal?
■
What do you think is the best way to manage poor performance? What options are available?
■ What other conclusions do you draw from this exercise?
Personal awareness and skills exercise continued
Visit our website www.booksites.net/mullins for further questions, annotated weblinks,
case material and Internet research material.
CASE STUDY 19.1
Beer and sandwiches: personnel management at London
Taverns
London Taverns Ltd is currently the largest inde-
pendent public house operator in the UK with some
50 pubs, hotels and branded restaurants located
within the radius of the M25. The last two years
have seen a period of rapid expansion for the com-
pany and this is set to continue as the company
plans to acquire at least a further 20 outlets either
by one-off purchase or by small takeovers.
London Taverns Ltd was originally a family busi-
ness; the founder’s son is currently chairman and
managing director. A self-confessed ‘maverick’, he
has an inherent suspicion of bureaucracy or any
system which he feels will stifle initiative or the
entrepreneurial culture of the company. This even
extends as far as a reluctance to standardise a com-
pany staff application form.
At present the day-to-day operations of the com-
pany are overseen by a finance director and two area
managers, with a further director handling develop-
ment and acquisitions. The managing director’s
CHAPTER 19 HUMAN RESOURCE MANAGEMENT
secretary is responsible for the majority of matters
concerning recruitment and staff administration.
Monthly and weekly wages are the province of the
finance staff.
On-the-job training of trainees is the responsibil-
ity of each unit with some general training courses
provided by an outside consultant. Since the demise
of the Industrial Training Board, and the require-
ment to provide adequate training to qualify for
levy exemption, even this minimal level of training
has been reduced.
There exist no defined policies or procedures
relating to personnel or training. Only a very few
members of staff belong to a trade union. The
finance director has frequently commented critically
about the lack of a developed personnel function
and on the need for standard systems, clear policy-
making and longer-term strategic planning. In the
past the managing director has not appeared very
interested and has not been persuaded to take any
positive action.
Recently, however, the company has experienced
difficulties in recruiting and retaining both manage-
ment couples and trainees of a suitable calibre. This
has led to problems with some units which have
had to rely on temporary managers. In addition, the
company has been involved in two much publicised
industrial tribunal hearings which they lost largely
because of the handling of disciplinary matters
relating to allegations of sex discrimination.
These problems, coupled with the continued
plans for further expansion, have reluctantly per-
suaded the managing director to agree to the
appointment of a full-time member of staff respon-
sible for personnel matters. The managing director
has resisted the designation of human resource
manager as ‘too grand and likely to give the person
ideas above their station’ but rather grudgingly
accepts the title of personnel manager.
The finance director feels strongly that it is
important to have a clear picture about the new per-
sonnel manager’s first priorities, the systems and
policies for the company and the longer-term objec-
tives for the appointment. The managing director,
however, seems less concerned about these aspects
and is more worried about the personality of the
person to be appointed, and their position within
the structure of the company.
YOUR TASK
The managing director has now engaged you, as an
outside consultant, to advise on the appointment of
the personnel manager. He also expects you to pro-
vide him with a clear idea of the duties and
responsibilities attached to the position, the first pri-
orities, and the extent to which the person appointed
should be involved in longer-term strategic policies
and procedures.
791
CASE STUDY 19.2
Nothing succeeds like success: accelerating performance at
Sisson Systems
In business organisations, as elsewhere, success
tends to breed success. However, a growing sense of
corporate self-confidence can breed problems of its
own. How does a company prevent pride in its
achievements (especially through sustained growth
in profitability and customer retention) from degen-
erating into complacency and stagnation so that, in
effect, success breeds failure?
Few people have more cause to dwell on this
issue than Michael Smith, the Chief Executive of
Sisson Systems. Sisson is a hugely successful and
professionally run business with operations in many
fields, such as retailing, information technology,
facilities management, and financial services. Much
of Sisson’s growth has been fuelled by acquisitions;
however, it has achieved at least 20 per cent growth
rate in each of the last 15 years. It has an enviable
reputation for both quality and service; surveys
show that its various customer groups are delighted
with much of what Sisson does for them.
Michael Smith became Chief Executive at Sisson
about six months ago. It was his first appointment
at this level, and he is anxious to build on the
progress made in the past and, if possible, achieve
even more. He would like Sisson Systems to be
viewed as a ‘benchmark’ for service standards, prod-
uct innovation, customer ratings, and employee
commitment; to this end he is supported by a
PART 7 MANAGEMENT OF HUMAN RESOURCES
broadly compatible group of Directors on the Sisson
board, who have appointed Smith in the expecta-
tion of continued improvement.
On the other hand, the success of Sisson Systems
may itself be eroding the effort of some of the com-
pany’s senior executives. ‘In organisations that are
successful, people begin to believe that the reason
they are successful is them’, says Michael. Indeed, it
would be natural for each of the company’s divisional
managing directors – each with their own strengths
and weaknesses – to begin to think that their style
was the reason for their division’s performance.
Eventually, Sisson Systems could break down into a
collection of separate power groups, each with its dis-
tinctive sub-culture. If this were to happen, reasons
Michael, then the added-value from the overall image
of Sisson Systems would be lost.
Michael believes in ‘one culture, one organisa-
tion’, and as a result is emphatically opposed to
giving too much latitude to any part of the com-
pany. He wants to sustain uniformity by finding the
best (human resource) management practices
through a process of evaluation, and imposing them
on the Sisson Systems workforce as a whole. Of
course, he concedes that this concern for centralised
control is unfashionable, but he is able to point to
the track record of the company as the ultimate jus-
tification for his approach.
Sisson Systems uses incentive schemes, share
option opportunities and the like in order to stimu-
late managerial/executive performance. But, in
Michael’s view, reward itself can sometimes reduce
the hunger for success. As people become older and
more settled – Sisson Systems has many such people
in senior roles, who have devoted the vast majority
of their careers to the company – then they may
lose their dynamism. ‘In my own personal experi-
ence’ says Michael, ‘the most difficult people to
motivate are well adjusted people. Someone who is
happy is extremely difficult to motivate.’
YOUR TASKS
Imagine that you are a management consultant who
has been engaged by Michael Smith in order to
address the human resource management issues
which are currently on his mind. Write a report for
Michael Smith in which you answer each of the fol-
lowing questions (posed by him):
(a) How may Sisson Systems continue to inspire and
stimulate exceptional performance from managers
and executives who, in Michael Smith’s phrase,
are ‘well adjusted’ and ‘happy’, but who may have
become too complacent with the continued suc-
cess of the company.
(b) How could the company identify and (humanely)
release those employees who seem to have little
left to contribute to the company.
(c) How can the company’s human resource manage-
ment policies and systems effectively maintain a
balance between centralised corporate control
and empowered divisional freedom.
792
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83. Slater, L. ‘Realising Your Assets’, Digital Britain:
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FT
Use the Financial Times to enhance your understanding of the context and practice of management
and organisational behaviour. Refer to articles 1, 7, 11, 13, 21, 22, 23 and 25 in the BUSINESS PRESS
section at the end of the book for relevant reports on the issues explored in this chapter.