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“The most comprehensive of similar texts covering human resources… Michael Armstrong could well be offering the definitive text in the field… an excellent book.” The Times Higher Education Supplement “If any book is a contender for one of the standard references of the HR profession, this is it… It covers just about everything that might be consider ed broadly relevant to practising HR.” Personnel Today Armstrong’s Handbook of Human Resource Management Practice is the classic text for all students and practitioners of HRM. Now in its eleventh edition, this inter nationally best-selling text has been updated to incorporate new developments in human resource management policy and research. A complete resource for understanding and implementing HR in relation to the needs of the business as a whole, it includes in-depth coverage of all the key areas essential to the HR function, including: This new edition is in full colour and contains numerous learning features designed to help students to reflect on and test their learning. Visit the companion website at www.koganpage.com/resources/academicservices for both lecturer and student resources, including: teaching and learning notes for every chapter; additional case studies; an HR glossary; and a unique guide to taking CIPD exams. Armstrong’s Handbook of Human Resource Management Practice is written for students studying HRM in undergraduate, postgraduate and professional programmes, including CIPD qualifications. It also provides a complete manual of practice for HR professionals. Michael Armstrong is a Companion and former Chief Examiner of the Chartered Institute of Personnel and Development, joint managing partner of e-r eward and an independent management consultant. He has sold over 500,000 books on the subject of HRM (published with Kogan Page). Kogan Page 120 Pentonville Road London N1 9JN United Kingdom www.koganpage.com Kogan Page US 525 South 4th Street, #241 Philadelphia PA 19147 USA 9 780749 452421 ISBN: 978-0-7494-5242-1 Human resource management Michael Armstrong ARMSTRONG’S HANDBOOK ARMSTRONG’S HANDBOOK OF HUMAN RESOURCE MANAGEMENT PRACTICE OF HUMAN RESOURCE MANAGEMENT PRACTICE 11TH EDITION 11TH EDITION • managing people; • HRM processes; • work and employment; • organizational behaviour; • organizational design and development; • people resourcing; • performance management; • human resource development; • rewarding people; • employee relations; • health, safety and welfare; • HR policies, procedures and systems. MICHAEL ARMSTRONG Armst hnbk HR11 aw:Layout 1 6/3/09 16:40 Page 1 ARM S TRONG’S HANDB OOK OF HUMAN RESOURCE MA NA GEMENT PRACTI CE i ii London and Philadelphia ARM S TRONG’S HANDB OOK OF HUMAN RESOURCE MA NA GEMENT PRACTI C E 11TH EDITION Michael Armstrong 11 iii Publisher’s note Every possible effort has been made to ensure that the information contained in this book is accurate at the time of going to press, and the publisher and authors cannot accept responsibility for any errors or omissions, however caused. No responsibility for loss or damage occasioned to any person acting, or refraining from action, as a result of the material in this publication can be accepted by the editor, the publisher or any of the authors. First edition published in 1977 as A Handbook of Personnel Management Practice by Kogan Page Limited Seventh edition published in 1999 as A Handbook of Human Resource Management Practice Eleventh edition published in 2009 as Armstrong’s Handbook of Human Resource Management Practice Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or trans- mitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licences issued by the CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned addresses: 120 Pentonville Road 525 South 4th Street, #241 London N1 9JN Philadelphia PA 19147 United Kingdom USA www.koganpage.com © Michael Armstrong, 1977, 1984, 1988, 1991, 1995, 1996, 1999, 2001, 2003, 2006, 2009 The right of Michael Armstrong to be identifi ed as the author of this work has been asserted by him in accord- ance with the Copyright, Designs and Patents Act 1988. ISBN 978 0 7494 5242 1 British Library Cataloguing-in-Publication Data A CIP record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Armstrong, Michael, 1928– Armstrong’s handbook of human resource management practice / Michael Armstrong. Eleventh ed. p. cm. Rev. ed. of: A handbook of human resource management practice. 10th ed. 2006. Includes bibliographical references and index. ISBN 978-0-7494-5242-1 1. Personnel management Handbooks, manuals, etc. I. Armstrong, Michael, 1928– Handbook of human resource management practice. II. Title. III. Title: Handbook of human resource management practice. HF5549.17.A76 2009 658.3 dc22 2008053904 Typeset by Saxon Graphics Ltd, Derby Printed and bound in India by Replika Press Pvt Ltd iv Contents in Brief Preface xxv Part I Human Resource Management 1 1. The Practice of Human Resource Management 3 2. Strategic Human Resource Management 25 3. HR Strategies 47 4. Human Capital Management 65 5. The Role and Organization of the HR Function 81 6. The Role of the HR Practitioner 104 7. The Impact of HRM on Performance 135 8. International HRM 150 9. Corporate Social Responsibility 165 10. Human Resource Management Research Methods 174 Part II Human Resource Management Processes 199 11. Competency-based HRM 201 12. Knowledge Management 218 13. High-performance Work Systems 230 Part III Work and Employment 249 14. Work 251 15. The Employment Relationship 260 16. The Psychological Contract 276 Part IV Organizational Behaviour 289 17. The Essence of Organizational Behaviour 291 18. Characteristics of People 299 v vi Brief Contents 19. Motivation 316 20. Engagement and Commitment 335 21. How Organizations Function 357 22. Organizational Culture 383 Part V Organization Design and Development 401 23. Organization Design 403 24. Organization Development 415 25. Change Management 423 26. Job, Role, Competency and Skills Analysis 443 27. Job and Role Design and Development 466 Part VI People Resourcing 477 28. People Resourcing Strategy 479 29. Human Resource Planning 485 30. People Resourcing Practice 495 31. Recruitment and Selection 514 32. Selection Interviewing 540 33. Selection Tests 567 34. Talent Management 579 35. Career Management 590 36. Introduction to the Organization 602 37. Release from the Organization 609 Part VII Performance Management 615 38. The Process of Performance Management 617 39. 360-degree Feedback 643 Part VIII Learning and Development 651 40. Learning and Development Strategy 653 41. The Process of Learning and Development 663 42. Learning and Development Programmes and Events 683 43. How People Learn 700 44. Organizational Learning 713 45. Management Development 720 Brief Contents vii Part IX Rewarding People 733 46. Reward Management 735 47. Job Evaluation 755 48. Market Rate Analysis 783 49. Grade and Pay Structures 795 50. Contingent Pay 815 51. Rewarding Special Groups 839 52. Employee Benefi ts, Pensions and Allowances 849 53. Managing Reward Systems 859 Part X Employee Relations 875 54. The Employee Relations Framework 877 55. Employee Relations Processes 905 56. Employee Voice 935 57. Employee Communications 949 Part XI Health, Safety and Employee Well-being 957 58. Health and Safety 959 59. Employee Well-being 975 Part XII HR Policies, Procedures and Systems 985 60. HR Policies 987 61. HR Procedures 1000 62. HR Information Systems 1010 Appendices 1017 A. Example of Employee Engagement and Commitment Survey 1019 B. Example of Performance Management Survey 1020 C. Example of Reward Survey 1021 D. Learning and Development Activities and Methods 1022 Useful Website Addresses 1031 Subject Index 1034 Author Index 1057 This page has been left intentionally blank viii Contents Supporting resources for instructors and students xix List of fi gures xxi List of tables xxiii Preface xxv Part I Human Resource Management 1 1. The Practice of Human Resource Management 3 Introduction 4; Human resource management defi ned 4; The objectives of HRM 5; Theories of HRM 6; Characteristics of HRM 7; The development of the concept of HRM 13; Reservations about HRM 14; The context of HRM 17; The ethical dimension 19 2. Strategic Human Resource Management 25 Introduction 26; The conceptual basis of strategic HRM 26; Strategic HRM defi ned 29; The resource-based view of strategic HRM 30; Strategic fi t 32; Perspectives on strategic HRM 32; The best practice approach 33; The best fi t approach 35; Bundling 37; The reality of strategic HRM 39; Practical implications of strategic HRM theory 40 3. HR Strategies 48 Introduction 48; What are HR strategies? 48; General HR strategies 49; Specifi c HR strategies 52; Criteria for an effective HR strategy 53; How should HR strategies be formulated? 54; Issues in developing HR strategies 55; Implementing HR strategies 59 4. Human Capital Management 65 Introduction 66; Human capital management defi ned 66; The concept of human capital 66; The constituents of human capital 68; Human capital measurement 69; Human capital internal reporting 75; Human capital external reporting 76; Introducing HCM 77 ix [...]... Armstrong’s Handbook of Human Resource Management Practice route map 1 Part I Human Resource Management This part describes the basic features and characteristics of human resource management, strategic human resource management and HR strategies (Chapters 1, 2 and 3) This provides the framework within which the detailed descriptions of HRM strategies, policies, processes and practices that occupy most of this... and practice Human resource management defined Human resource management (HRM) is a strategic, integrated and coherent approach to the employment, development and well-being of the people working in organizations Other definitions of HRM Human resource management involves all management decisions and action that affect the nature of the relationship between the organization and its employees – its human. .. of the HR function and the HR practitioner are examined in Chapters 4 and 5, and Chapter 6 deals with the impact of HRM Chapter 7 covers human capital management and the part ends with an analysis of international HRM, corporate social responsibility and HRM research methods Part I contents 1 The practice of human resource management 3 2 Strategic human resource management 25 3 HR strategies 47 4 Human. .. xix Supporting Resources for Instructors and Students As a reader of Armstrong’s Handbook of Human Resource Management Practice, you have automatic access to a range of additional resources designed to enhance your experience and use of the book Full details are provided below For lecturers and instructors Resources include: • Session outlines for each of the 62 chapters • Glossaries of key concepts... sales staff Comparison of shop floor payment-by-result schemes A pay matrix Industrial relations negotiations/commercial negotiations 759 763 767 790 805 830 842 845 865 923 xxv Preface This eleventh edition of Armstrong’s Handbook of Human Resource Management Practice contains many additions and revisions It covers major developments in the theory and practice of human resource management in the last... objectives of HRM • Define the policy goals of HRM • Describe the characteristics of HRM • Understand how HRM developed as a concept • Appreciate the reservations expressed about HRM • Understand the context in which HRM operates • Appreciate the ethical dimensions of HRM 4 Human Resource Management Introduction The practice of human resource management (HRM) is concerned with all aspects of how people... objective of people resourcing strategy 480; The strategic HRM approach to resourcing 480; Integrating business and resourcing strategies 481; The components of people resourcing strategy 482; Bundling resourcing strategies and activities 482 Human Resource Planning Introduction 486; Human resource planning defined 486; Aims of human resource planning 487; Use of human resource planning 488; Approaches to human. .. further resources for both students and lecturers Students can expand on their learning and are provided with help and advice on taking examinations Lecturers are provided with a range of resources, including PowerPoint slides and support notes for teaching xxvi Preface I Human resource management 1 Practice of HRM 2 Strategic HRM 3 HR strategies 4 Human capital management 5 Role of HR function 6 Role of. .. strategic management, human capital and industrial relations theories This foundation has been built with the help of a multitude of research projects The aim of this chapter is to provide a general introduction to the practice and underpinning concepts of HRM It covers the definition of HRM, the objectives of HRM, HRM theory, the characteristics of HRM, the components of HRM systems, the development of HRM... HR strategies 47 4 Human capital management 65 5 The role and organization of the HR function 81 6 The role of the HR practitioner 104 7 The impact of HRM on performance 135 8 International HRM 150 9 Corporate social responsibility 165 10 Human resource management research methods 174 2 This page has been left intentionally blank 3 1 The Practice of Human Resource Management Key concepts and terms . 978-0-7494-5242-1 Human resource management Michael Armstrong ARMSTRONG’S HANDBOOK ARMSTRONG’S HANDBOOK OF HUMAN RESOURCE MANAGEMENT PRACTICE OF HUMAN RESOURCE MANAGEMENT. xxv Part I Human Resource Management 1 1. The Practice of Human Resource Management 3 2. Strategic Human Resource Management 25 3. HR Strategies 47 4. Human