Human resource management 10th torrington atkinson

A01_TORR9099_10_SE_FM.indd 09/12/2016 15:24 HUMAN RESOURCE MANAGEMENT A01_TORR9099_10_SE_FM.indd 26/11/2016 20:41 At Pearson, we have a simple mission: to help people make more of their lives through learning We combine innovative learning technology with trusted content and educational expertise to provide engaging and effective learning experiences that serve people wherever and whenever they are learning From classroom to boardroom, our curriculum materials, digital learning tools and testing programmes help to educate millions of people worldwide – more than any other private enterprise Every day our work helps learning flourish, and wherever learning flourishes, so people To learn more, please visit us at www.pearson.com/uk A01_TORR9099_10_SE_FM.indd 26/11/2016 20:41 HUMAN RESOURCE MANAGEMENT DEREK TORRINGTON, LAURA HALL, CAROL ATKINSON, STEPHEN TAYLOR TENTH EDITION Harlow, England • London • New York • Boston • San Francisco • Toronto • Sydney • Dubai • Singapore • Hong Kong Tokyo • Seoul • Taipei • New Delhi • Cape Town • Sao Paulo • Mexico City • Madrid • Amsterdam • Munich • Paris • Milan A01_TORR9099_10_SE_FM.indd 26/11/2016 20:41 Pearson Education Limited Edinburgh Gate Harlow CM20 2JE United Kingdom Tel: +44 (0)1279 623623 Web: www.pearson.com/uk First published in Great Britain under the Prentice Hall Europe imprint in 1987 (print) Second edition published in 1991 (print) Third edition published 1995 (print) Fourth edition published 1998 (print) Fifth edition published 2002 (print) Sixth edition published 2005 (print) Seventh edition published 2008 (print) Eighth edition published 2011 (print) Ninth edition published 2014 (print and electronic) Tenth edition published 2017 (print and electronic) © Pearson Education Limited 1987, 1991, 1995, 1998, 2002, 2005, 2008, 2011 (print) © Pearson Education Limited 2014, 2017 (print and electronic) The rights of Derek Torrington, Laura Hall, Carol Atkinson and Stephen Taylor to be identified as authors of this work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988 The print publication is protected by copyright Prior to any prohibited reproduction, storage in a retrieval system, distribution or transmission in any form or by any means, electronic, mechanical, recording or otherwise, permission should be obtained from the publisher or, where applicable, a licence permitting restricted copying in the United Kingdom should be obtained from the Copyright Licensing Agency Ltd, Barnard’s Inn, 86 Fetter Lane, London EC4A 1EN The ePublication is protected by copyright and must not be copied, reproduced, transferred, distributed, leased, licensed or publicly performed or used in any way except as specifically permitted in writing by the publishers, as allowed under the terms and conditions under which it was purchased, or as strictly permitted by applicable copyright law Any unauthorised distribution or use of this text may be a direct infringement of the authors’ and the publisher’s rights and those responsible may be liable in law accordingly All trademarks used herein are the property of their respective owners The use of any trademark in this text does not vest in the author or publisher any trademark ownership rights in such trademarks, nor does the use of such trademarks imply any affiliation with or endorsement of this book by such owners Pearson Education is not responsible for the content of third-party internet sites ISBN: 978-1-292-12909-9 (print) 978-1-292-12911-2 (PDF) 978-1-292-19152-2 (ePub) British Library Cataloguing-in-Publication Data A catalogue record for the print edition is available from the British Library Library of Congress Cataloging-in-Publication Data Names: Torrington, Derek, 1931- author | Hall, Laura, 1952- author | â•… Taylor, Stephen, 1965- author Title: Human resource management / Derek Torrington, Laura Hall, Carol â•… Atkinson, Stephen Taylor Description: Tenth Edition | New York : Pearson, 2017 | Revised edition of â•… Human resource management, 2014 Identifiers: LCCN 2016043893| ISBN 9781292129099 (print) | ISBN 9781292129112 â•… (pdf) | ISBN 9781292191522 (epub) Subjects: LCSH: Personnel management Classification: LCC HF5549 T675 2017 | DDC 658.3–dc23 LC record available at https://lccn.loc.gov/2016043893 10 21 20 19 18 17 Print edition typeset in Sabon MT Pro 10/12.5 pt by SPi Global Printed in Slovakia by Neografia NOTE THAT ANY PAGE CROSS REFERENCES REFER TO THE PRINT EDITION A01_TORR9099_10_SE_FM.indd 26/11/2016 20:41 BRIEF CONTENTS Guided tour xiv Preface xvii Publisher’s acknowledgements Part Human resource management in a changing world xix The nature of human resource management 4 The global context for human resource management 25 Human resource management around the world 43 Strategic human resource management 64 Workforce planning and analytics 88 Employability: the basic skills 111 Part Resourcing: getting people in the right places to the right things 138 Organisational agility and flexibility 140 Recruitment 160 Selection methods and decisions 182 10 Employability: skills in resourcing 203 Part Performance: success through individual and collective achievement 224 11 Employee performance management 226 12 Leadership 247 13 Engagement and retention 266 14 Managing attendance and absence 287 15 Employability: skills in performance 306 Part Development 324 16 Organisational change and development 326 17 The context of employee learning and development 347 v A01_TORR9099_10_SE_FM.indd 26/11/2016 20:41 Brief Contents 18 Learning and development 371 19 Talent and career development 393 20 Employability: skills in development 411 Part Employee relations 422 21 Employee voice 424 22 The legal framework of work 440 23 Equal opportunities and diversity 466 24 Employability: skills in employee relations 485 Part Reward: the contract for payment 500 25 Total reward and setting pay 502 26 Incentives 523 27 Pensions and benefits 543 28 Employability: skills in reward 561 Part Contemporary issues 574 29 Ethics and reputational management 576 30 Managing the human resource function 591 31 Health and well-being 613 32 Managing the international workforce 631 33 Advanced HR skills 650 Glossary 671 Index 679 vi A01_TORR9099_10_SE_FM.indd 26/11/2016 20:41 CONTENTS Guided tour xiv Explaining global diversity in HRM practice 51 Preface xvii Is greater divergence a possibility? 59 Publisher’s acknowledgements Summary propositions 59 General discussion topics 60 Theory into practice 60 Further reading 61 xix Part Human resource management in a changing world 2 The nature of human resource m Â� anagement 4 Defining HRM The evolution of the modern HRM 12 HRM and the achievement of organisational effectiveness 17 References 62 Strategic human resource management 64 Strategic HRM 65 The relationship between business strategy and HR strategy 68 Summary propositions 20 Theoretical perspectives of strategic HRM 70 General discussion topics 21 Summary propositions 82 Theory into practice 21 General discussion topics 83 Further reading 23 Theory into practice 83 Further reading 84 Web link 85 References 23 The global context for human resource management 25 References 85 Globalisation 26 Workforce planning and analytics 88 The causes of globalisation 29 The impact of globalisation 30 The contribution and feasibility of workforce planning 89 Conclusions 39 The scope of workforce planning 92 Summary propositions 40 Analysing the environment 94 General discussion topics 40 Forecasting future HR needs 96 Theory into practice 40 Further reading 41 Analysing the current situation and projecting forward 98 References 42 Reconciliation, decisions and plans 101 Workforce analytics and big data 102 Summary propositions 107 Human resource management around the world 43 General discussion topics 107 Global HRM: similarities 44 Theory into practice 107 Global HRM: differences 46 Further reading 108 vii A01_TORR9099_10_SE_FM.indd 26/11/2016 20:41 Contents 109 Internal recruitment 167 References 109 External recruitment 168 Recruitment advertising 173 Web links Employability: the basic skills 111 6.a Being effective with people 112 Evaluation of recruitment activity 175 Summary propositions 117 Summary propositions 176 General discussion topics 118 General discussion topics 177 Putting it into practice 118 Theory into practice 177 6.b Using and interpreting basic analytics 118 Further reading 179 Summary propositions 126 References 179 General discussion topics 126 Putting it into practice 126 6.c Effective writing 127 Summary propositions 130 General discussion topics 131 Rational versus processual approaches to selection 183 Putting it into practice 131 Selection criteria 184 6.d Effective presentation 131 Shortlisting 185 Summary propositions 135 Selection methods 187 General discussion topics 135 Advanced methods of selection 191 Putting it into practice 135 Final selection decision making 198 Further reading 136 Validation of selection procedures 199 References 137 Part Resourcing: getting people in the right places to the right things 138 Organisational agility and flexibility 140 Organisation design 141 Organisation structures 143 Employer flexibility 148 Employee flexibility 152 Summary propositions 156 General discussion topics 156 Theory into practice 156 Further reading 157 References 158 8 Recruitment 160 Determining requirements Rational versus processual approaches to Â�recruitment 162 165 Selection methods and decisions 182 Summary propositions 199 General discussion topics 199 Theory into practice 200 Further reading 200 References 201 10 Employability: skills in resourcing 203 10.a Determining the vacancy 204 Summary propositions 205 General discussion topics 205 Putting it into practice 206 10.b Job analysis 206 Summary propositions 210 General discussion topics 210 Putting it into practice 211 10.c The selection interview 211 Summary propositions 220 General discussion topics 221 viii A01_TORR9099_10_SE_FM.indd 29/11/2016 19:03 Contents Putting it into practice 221 Further reading 222 Reference 222 Part Performance: success through individual and collective achievement 224 11 Employee performance management 226 Performance management or performance appraisal? 13 Engagement and retention 266 Defining engagement 267 The benefits of employee engagement 269 Employee retention 272 The impact of labour turnover 272 Analysing labour turnover 274 Engagement and retention strategies 276 Summary propositions 281 General discussion topics 282 Theory into practice 282 Further reading 284 227 References 284 Theoretical bases of performance management 230 14 Managing attendance and absence 287 Performance management across national contexts 231 The national context 288 The organisational context 290 Stages in a performance management system 232 Process and causes of absence 291 Managing for attendance 293 Performance management: does it improve performance? 240 Ongoing contact during absence 298 Summary propositions 242 Summary propositions 302 General discussion topics 242 General discussion topics 303 Theory into practice 242 Theory into practice 303 Further reading 244 Further reading 304 References 244 12 Leadership 247 Leadership and management 249 References 304 15 Employability: skills in performance 306 15.a The appraisal interview 307 What are the traits of (effective) leaders? 250 Summary propositions 314 What is the ‘best way to lead’? Leadership styles and behaviours General discussion topics 314 Putting it into practice 315 15.b Designing questionnaires 315 Summary propositions 318 General discussion topics 319 Putting it into practice 319 251 Do leaders need different styles for different situations? 253 Transformational leadership: we really need heroes? 255 Followership 259 15.c Analyses of staff leaving the organisation 319 Summary propositions 261 Summary propositions 322 General discussion topics 261 General discussion topics 322 Theory into practice 262 Putting it into practice 322 263 Further reading 323 Further reading References 263 References 323 ix A01_TORR9099_10_SE_FM.indd 29/11/2016 19:04 Find more at www.downloadslide.com Chapter 15  Employability: skills in performance PUTTING IT INTO PRACTICE For this you need a fellow learner who is to practise appraising and being appraised You need to be in similar work so that you can understand what the other person is talking about, but without any hierarchical relationship with each other You also have to trust each other to be ultra-discreet about what you hear A interviews B about what B did at work last week, what went well, what less well, problems and disappointments (15 minutes) B interviews A about what A did at work last week, what went well, what less well, problems and disappointments (15 minutes) This is to obtain information, not to discuss except for clarification You both now separately review what you have learnt and identify two or three issues that the other seems to have difficulty with A and B then take it in turns to lead the other in a discussion about possible ways forward with the difficult issues, following the suggested sequence for the appraisal interview 15.b Designing Questionnaires The appraisal interview deals with the performance of individuals, but collective performance is in many situations more important in affecting the overall effectiveness of the business The work of all employees interacts with that of colleagues, sometimes so closely that they cannot even start until they are all ready and working together, like mechanics in Formula changing wheels on a racing car Here the questionnaire can be used to test the level of engagement that people have with the business In HR, questionnaires are used in different ways, often to test attitudes among employees towards some draft policy initiative, although some organisations use them instead of exit interviews to establish reasons for leaving Other examples are post-course assessments, views on aspects of current working practice, checking understanding of a new payment scheme, or testing the value of a house newspaper The questionnaire is a method of finding out, but very different from the finding out that is deployed in the selection interview that we considered earlier: it is more like the finding out that is used in application forms The source of information, however, is not a sole individual where there is the need to shape the enquiry to the respondent as the interview proceeds The questionnaire is intended to produce aggregate information from a group of people Precise questions have to be prepared in advance with great care so that all respondents will understand them in the same way and provide an inflexible pattern of focused responses In other words, the questionnaire must be designed to elicit responses that are answers to exactly the question presented and not to a similar but different question that the questionnaire has not asked One of the preconditions for accurate responses is that the respondent should feel confident in the neutrality of the inquiry and in his or her anonymity, so that answers will 315 M15_TORR9099_10_SE_C15.indd 315 26/11/2016 20:20 Find more at www.downloadslide.com Part 3  Performance: success through individual and collective achievement ACTIVITY 15.4 For which of the following would an attitude survey questionnaire be an appropriate method of finding out the information required? The most popular dates for a company close-down at Christmas Whether employees are in favour of a proposed merger with another company Suggestions for improving company management The value of team briefing in a company Identifying prospective volunteers for voluntary redundancy be truthful and informative, rather than answers sounding right but being misleading We discovered one survey in XYZ Ltd, a light engineering company, where every sixth question Â� was, ‘Is XYZ a great place to work?’, so it was hardly neutral Preparing a questionnaire In deciding what the survey is to discover, we begin by considering what this form of inquiry can discover There are two basic requirements: Respondents must have sufficient common vocabulary for it to be possible to formulate questions which will have the same meaning to all respondents The questions must be unambiguous, so that all respondents understand what information is sought Careful pilot investigations, development and pre-testing will provide a final schedule of questions that meets these requirements For the inquiry to succeed the respondents must, therefore, be a population with sufficient in common to fulfil the expectations Also, the information sought must be of the type that can be reduced to precise units of response to standard questions Here is a checklist: What will be the reaction of respondents to the subject of the survey? Responses to questions about payment arrangements are likely to be more guarded than responses on the (slightly) less sensitive topic of catering facilities How can the subject be presented to respondents to achieve a high degree of useful responses? In-company investigations are less likely to have problems with response rate than those conducted among the public at large, as the respondents are almost a captive population, but the requirement of anonymity makes it possible that you will get some blank or spoiled responses if the initial reaction to the survey is not positive The presentation of the questionnaire needs not only to make clear its subject and purpose, but also to explain what is expected from the respondent and what will be done with the aggregated information being collected What is the best order in which to introduce topics? The early questions need to be easy for respondents to understand and reply to accurately, as well as getting them ‘on the wavelength’ of the inquiry before proceeding to more complex questions 316 M15_TORR9099_10_SE_C15.indd 316 26/11/2016 20:20 Find more at www.downloadslide.com Chapter 15  Employability: skills in performance What wording of questions will produce precise data? Spend as much time as possible on writing them out, improving them and trying them out on people Here you need to take into account vocabulary and semantics; you need to use words that are unequivocal, where the meaning is not likely to ‘drift’ with the respondent Another consideration is the distinction between questions to obtain facts and questions to seek opinion There is more on this topic later How long will the questionnaire take to complete? The need to know has to be balanced with the ability and willingness of the respondent to reply Some respondents will have difficulty in maintaining concentration and others will have much more to say than the questionnaire provides for It is not much use if the questionnaire is completed fully only by the conscientious and enthusiastic Some people will be fed up after 10–15 minutes, others will still be happily answering after 30 What is the best layout of the survey forms? To some extent this depends on the makeup of the respondent population, but the layout must be clear and easy to follow, with a short explanatory introduction answering the questions, ‘What is it for?’ ‘Why me?’ ‘Is it in my interests to respond?’ ‘How long will it take?’ ‘What I have to do?’ Each section of the form needs to have a short introduction indicating what the respondent is to expect, using phrases such as, ‘Now we turn to . . . ’, ‘Now we have a slightly different type of question . . . ’ Types of question In the skills section, Chapter 6, at the end of Part on face-to-face situations, we made a distinction between closed and open-ended questions It is similar in a questionnaire There will be some closed questions, which ask for specific, factual information, like length of service If the need of the questionnaire is for a precise number of years, it is best done with a box in which the four digits of a year can be written, but if a more general distribution will suffice, there could be a set of choices with a box to tick For example: How long have you been with the company? Please tick the appropriate box: Less than one year n 1–5 years n 6–10 years n More than 10 years n This is easy and more anonymous, giving you the sort of general indication that you need Opinion-seeking questions are harder Face to face you can ask a question like, ‘What you think about . . . ’, and gradually shape and focus answers to clarify what the person means In a questionnaire you have only one chance, so one method is the forced choice approach by asking respondents to pick which one of several statements most closely reflects their personal opinion For example: I understand the new pay arrangements and believe they represent a good way forward I don’t yet fully understand the new pay arrangements, but they seem all right I don’t understand the new pay arrangements and not see the need to change I understand the new pay arrangements, but think they need improvement 317 M15_TORR9099_10_SE_C15.indd 317 26/11/2016 20:20 Find more at www.downloadslide.com Part 3  Performance: success through individual and collective achievement I understand the new pay arrangements and don’t like them at all I will go along with whatever is suggested A different type of forced choice question is where the respondent is asked to rank a series of statements by writing a digit between and 5, and or whatever number of statements is presented, with being closest to the respondent’s personal view and so on There is a need to point out that each digit is used only once An alternative type of question is one that asks, ‘To what extent you agree with . . . ?’, with a scale of 1–5, 1–7, 1–10, or even 1–3 being provided for the respondent to tick the appropriate box The end points of such a scale may be labelled ‘Disagree completely’ or ‘Agree completely’ or other more appropriate wording Some questions may be of the simple Yes/No variety They are closed because there are only two options, but the options must be precise and clear cut Questions such as these save the respondent from needing to find a suitable form of words to express an opinion and to make the process easy The difficulty is to find a range of statements that reflects reliably the attitudes that are likely to prevail among the people completing the questionnaire Devising these statements begins the process of classifying the answers Another method of seeking opinions is simply to ask respondents to put in writing their opinion on a question, but this is difficult Some will not have an opinion at all, some will have a vague idea only, some people write clearly and succinctly while others express themselves poorly on paper Classifying the answers is a nightmare A modification is to provide after a forced choice question a box in which the respondent may add further comments By now you have forced a focus on their thinking, so you may get some additional useful ideas, but don’t count on it, and don’t be seduced into thinking that one interesting statement is representative of all respondents Data analysis When all the forms are complete and gathered together, analysis of the data begins This is basically counting the numbers in each category in each section and making sense of those numbers This will first be done by compiling simple totals of answers, e.g those saying ‘Yes’ and those saying ‘No’ or whatever the question asked There may then be a stage of collating the numbers for different groups and perhaps deploying some of the statistical interpretations, such as moving averages or the standard deviation, described earlier in Part 1, Chapter 10 Whatever is done is for the sole purpose of answering the classic question, ‘So what?’ Analysis is not just for fun, nor to show how clever you are, but to provide a justification for some form of action to be taken, abandoned or changed SUMMARY PROPOSITIONS 15.b.1 Questionnaires require very careful design and piloting to ensure that the Â�questions are clear and consistently interpreted 15.b.2 A variety of different question types may be used, aligned closely with the Â�purpose of the questionnaire 318 M15_TORR9099_10_SE_C15.indd 318 26/11/2016 20:20 Find more at www.downloadslide.com Chapter 15  Employability: skills in performance GENERAL DISCUSSION TOPICS 15.b.1 What is your usual response when asked to complete a questionnaire? What is it about questionnaires that provoke this response? 15.b.2 Questionnaires take a lot of money and time to design and administer In what circumstances is this justifiable, and why? PUTTING IT INTO PRACTICE Visit https://yougov.co.uk/ and find the section on opinion polls This is sponsored by the British government to measure public opinion on a variety of matters of public interest and to demonstrate expertise in polling Navigate to Five recommendations to improve employee satisfaction surveys Read the suggestions and then: 15.b.1 Take one of the open opinion surveys on any subject that interests you and work out, in the light of our suggestions above, how good the questionnaire is and whether it could be improved 15.b.2 Devise a questionnaire of your own on any topic, try it out on a few friends or relatives and then see how you could improve it 15.c Analyses of Staff Leaving the Organisation We discussed the advantages to the organisation of some level of turnover (Chapter 13) but concluded that it is in the interests of most organisations to keep that turnover reasonably low In this section we look at different ways to analyse the extent and nature of turnover, as this gives us an accurate picture of the situation and helps provide some clues to the causes, thus helping us to focus our efforts on turnover reduction A fuller discussion on the reasons for turnover is in Chapter 13 Annual labour turnover index The annual labour turnover index is sometimes called the percentage wastage rate, or the conventional turnover index This is the simplest formula for wastage and looks at the number of staff leaving during the year as a percentage of the total number employed who could have left Leavers in year * 100 = percentage wastage rate Average number of staff in post during year This measure has been criticised because it gives only a limited amount of information If, for example, there were 25 leavers over the year, it would not be possible to 319 M15_TORR9099_10_SE_C15.indd 319 26/11/2016 20:20 Find more at www.downloadslide.com Part 3  Performance: success through individual and collective achievement determine whether 25 different jobs had been left by 25 different people, or whether 25 different people had tried and left the same job Length of service is not taken into account with this measure, yet precisely that has been shown to have a considerable influence on leaving patterns, such as the high number of leavers at the time of induction So, for example, if out of 70 staff left during the preceding year, then the calculation would be: * 100 = 11% wastage rate 70 Stability index The stability index is based on the number of staff who could have stayed throughout the period Usually, staff with a full year’s service is expressed as a percentage of staff in post one year ago Number of staff with one year’s service at date * 100 = per cent stability Number of staff employed exactly one year before So using the example as in the turnover calculation, the stability calculation would be: 62 * 100 = 89% stability rate 70 However, if of the leavers left the same job shortly after being recruited then the stability rate would be: 64 * 100 = 91% stability rate 72 This index, though, ignores joiners throughout the year and takes little account of length of service ACTIVITY 15.5 In an organisation with 250 employees exactly one year ago and an average of 150 employees over the year: What would be the wastage rate and stability index if 18 employees left, each leaving different jobs? If 15 people left, and of these both left the same job, what would be the wastage rate and the stability index? Cohort analysis A cohort is defined as a homogeneous group of people Cohort analysis tracks what happens as some people leave a group of people with very similar characteristics who all joined the organisation at the same time Graduates are an appropriate group for this type of analysis A graph showing what happens to the group can be in the form of a survival 320 M15_TORR9099_10_SE_C15.indd 320 26/11/2016 20:20 Find more at www.downloadslide.com Chapter 15  Employability: skills in performance curve or a log-normal wastage curve, which can be plotted as a straight line and can be used to make predictions The disadvantage of this method of analysis is that it cannot be used for groups other than the specific group for which it was originally prepared The information has also to be collected over a long time period, which produces problems of availability and reliability of data Half-life The half-life is a figure expressing the time taken for half the cohort to leave the organisation The figure does not give as much information as a survival curve, but it is useful as a summary and as a method of comparing different groups Census method The census method is an analysis of leavers over a reasonably short period of time – often over a year The length of completed service of leavers is summarised by using a histogram, as shown in Figure 15.1 Retention profile Staff retained, that is those who remain with the organisation, are allocated to groups depending on the year they joined The number in each year group is translated into a percentage of the total number of individuals who joined during that year Age and retirement profile Percentage of leavers Analyses by staff group, whether by seniority or specialism, of potential retirements over the next three to five years can provide an age and retirement profile This is more useful in countries where there is a mandatory retirement age In the UK where there is no mandatory retirement age the calculation can still be useful in indicating the size of the potential risk of staff loss Figure 15.1 Census analysis: percentage of leavers with differing lengths of service 0–1 1–2 2–3 3–4 4–5 5–6 6–7 7–8 Length of service in years 8–9 9–10 10–11 11–12 321 M15_TORR9099_10_SE_C15.indd 321 26/11/2016 20:20 Find more at www.downloadslide.com Part 3  Performance: success through individual and collective achievement SUMMARY PROPOSITIONS 15.c.1 There is a wide range of analyses that can be used to measure staff leaving the organisation These range from calculations of turnover or stability rate to cohort analysis and profiles of retention and age and potential retirement 15.c.2 These analyses can give some clues about the reasons for staff leaving the organisation, but would need to be supplemented by other data such as interviews Â� with employees and managers GENERAL DISCUSSION TOPICS 15.c.1 Under what conditions would it be inappropriate to put time and effort into calculating labour turnover? What is your justification for this? 15.c.2 What categories of employee most warrant the calculation of labour turnover, and why is this the case? PUTTING IT INTO PRACTICE Cohort analysis at City Hotel Refer to Figure 15.2 regarding staff at City Hotel to answer the questions below Leavers Leaver 10 11 12 13 14 15 16 17 18 Number of leavers Figure 15.2â•… Histogram of a census of staff leaving City Hotel over one year Length of Service yr 6m 2m 1m 6m 8m yr 20 yr yr 1m 2m yr 3m yr 6m yr 3m yr 11m yr 6m 11m 1yr 10m up to 6m 7m to 1y 1y1m 1y7m 2y1m 2y7m 3y1m 3y7m 4y1m 4y7m 5y1m 5y7m to to to to to to to to to to 1y6m 2y 2y6m 3y 3y6m 4y 4y6m 5y 5y6m 6m 19y6m to 20y Length of service ➤ 322 M15_TORR9099_10_SE_C15.indd 322 26/11/2016 20:20 Find more at www.downloadslide.com Chapter 15  Employability: skills in performance ➤ Questions 15.c.1 What are the main conclusions that you draw from the histogram? 15.c.2 What other analyses might you want to carry out to give a fuller picture of staff leaving? 15.c.3 What supplementary data would you look for to help explain this pattern of staff leaving? 15.c.4 What potential solutions might there be to reduce turnover in this hotel? FURTHER READING Appraisal interview Fletcher, C (1999) Appraisal: Routes to Improved Performance London: CIPD Fear, R.A and Chiron, R.J (2002) The Evaluation Interview (5th edn.) London: McGraw Hill This American classic ranges widely over evaluation in different situations, including performance appraisal Milliman, J., Nason, S., Zhu, C and De Ciere, H (2002) ‘An exploratory assessment of the purposes of performance appraisals in North and Central America and the Pacific Rim’, Human Resource Management, Vol 41, pp 87–102 This is an interesting piece of work comparing the way in which performance appraisal is carried out in contrasting cultures Ling Sing Chee (1994) ‘Singapore Airlines: Strategic human resource initiatives’, in D Torrington, International Human Resource Management London: Prentice Hall, pp 143–60 Dr Ling Sing Chee’s chapter includes an account of how the Thai office had difficulty in writing negative comments because of Buddhist beliefs about reincarnation, and the office needed to adapt various aspects of its embryonic performance management system to accommodate cultural differences Designing questionnaires Elinci, Y (2015) Designing Research Questionnaires for Business London: Sage Blair, J and Czaja, R.F (2013) Designing Surveys London: Sage Two similar books from the same publisher; both sound and practical REFERENCES Anderson, G.C (1993) Managing Performance Appraisal Systems Oxford: Blackwell Anderson, G.C and Barnett, J.G (1987) ‘The characteristics of effective appraisal interviews’, Personnel Review, Vol 16, No 4, pp 18–25 Maier, N.R.F (1958) The Appraisal Interview: Objectives, Methods and Skills New York: John Wiley Storr, F (2000) ‘This is not a circular’, People Management, May, pp 38–40 Torrington, D.P., Earnshaw, J.M., Marchington, L and Ritchie, M.D (2003) Tackling Underperformance in Teachers London: Routledge Falmer 323 M15_TORR9099_10_SE_C15.indd 323 26/11/2016 20:20 Find more at www.downloadslide.com PART DEVELOPMENT CHAPTERS 16 Organisational change and development 17 The context of employee learning and development 18 Learning and development 19 Talent and career development 20 Employability: skills in development M16_TORR9099_10_SE_C16.indd 324 26/11/2016 20:28 Find more at www.downloadslide.com H aving set up appropriate methods of organisation and systems to ensure performance, we now have to consider in more detail the ways in which the organisation itself can be developed and how people acquire skill, knowledge and effectiveness in their capacity to perform In our fast-changing world, organisations need to be both proactive and responsive to change, and Chapter 16 focuses on how such change can be most effectively implemented, taking account of the natural difficulties which people experience when change is thrust upon them A key feature of development is the national qualifications and credit framework (NQF) within which vocational skills can be acquired (Chapter 17) Here the individual employer relies on, and attempts to influence, the provision of the education and training system and the arrangements M16_TORR9099_10_SE_C16.indd 325 of professional and other bodies, which specify the appropriate standards for vocational competence In Chapters 18 and 19 we consider how individuals are developed further within the business, especially in management development, where the skills and knowledge needed tend to be much more specific to the organisation within which they are employed, where the methods of development are geared to the ongoing processes of the business Talented people are key to organisational success and they require focused development in planning and supporting their career development as well as their current performance (Chapter 20) At the end of each chapter you will find a Theory into Practice case study which will help you to put these ideas into context and explore them more thoroughly 26/11/2016 20:28 Find more at www.downloadslide.com CHAPTER 16 ORGANISATIONAL CHANGE AND DEVELOPMENT THE OBJECTIVES OF THIS CHAPTER ARE TO: Review the nature of change, the traditional model of planned change and the limitations of this model Explain how organisations may be designed to be more responsive to change Explore the employee experience of change and the impact this may have on the success of change Examine the nature of change when the organisation is conceptualised as a human living system Explore organisational development (OD) as a specific approach to change in organisations, describe its evolution and consider its future Summarise the role of HR professionals in change M16_TORR9099_10_SE_C16.indd 326 26/11/2016 20:28 Find more at www.downloadslide.com Chapter 16  Organisational change and development We are all now familiar with change as a constant in our world and that its pace is ever increasing In the latest WERS survey almost half the organisations experienced technological change over the previous two years and over a third experienced changes in each of the following areas: work techniques, work organisation and product/service innovation (van Wanrooy et al 2013) Inevitably, therefore, leaders find themselves Â�leading, promoting, encouraging and stimulating change, with a belief that they can ‘manage’ change All change, no matter how small, presents a challenge for everyone in the organisation For leaders there is the challenge of making the required changes happen, and for everyone else there is the challenge of coping with changes over which they often have no control and for which they have potentially no desire Such changes invariably involve them in engaging in new activities, behaviours and thinking, and the even more difficult task of letting go and unlearning old activities, behaviours and thinking It is therefore unsurprising that it is frequently reported that upwards of 70% of change programmes fail (see, for example, Balogun et al 2014) Soltani and colleagues (2007: 153) found that: very few change programmes produce an improvement in bottom-line, exceed the company’s cost of capital, or even improve service delivery while Beer and Nohria (2000: 133) recognise that the consequences of such programmes exert a heavy toll both human and economic However, change is considered to be a necessity in our complex world, for example changing the culture of financial institutions after the 2008 global financial crisis, and change in response to public spending cuts in many parts of Europe Stephen Moir, Deputy Chief Executive of the Yorkshire Ambulance Service, notes that the HR function has the opportunity and responsibility to ‘help to encourage and facilitate radical long-term thinking and embed the cultural changes we all need’ (Maclachlan 2012: 14) In this chapter we explore the ways in which organisations approach change; explore some of the reasons why change may be unsuccessful; and review current approaches to improving that success rate We consider OD as a specific approach to change which may bring added benefits and conclude with a summary of the HR role in change The nature of change and the role of planned change There are many reasons why a business has to change, such as competitor behaviour, customer expectations, development of technology and communications, response to a crisis, or a need to maximise shareholder value and for a thorough analysis of the causes of change see, for example, Myers and colleagues (2012) Sometimes change is an initiative to seize an advantage and make something happen (proactive); on other occasions it is an attempt to catch up with what is already happening (reactive) Other distinctions are made, for example whether the push for change comes externally or internally The change may be revolutionary, sudden and dramatic, or incremental; it may be planned or evolutionary However, underlying all of this is the fundamental reason for change, which is to enable organisations to survive and thrive in our complex global world 327 M16_TORR9099_10_SE_C16.indd 327 26/11/2016 20:28 Find more at www.downloadslide.com Part 4  Development Table 16.1╇ Aspects of change Structure, size and shape Formal and informal systems Processes and procedures Culture, values and beliefs People and behaviours at all levels The nature of change has also been hotly debated and the emphasis has increasingly been on transformational change Transformational change is sometimes equated with revolutionary change, but evolutionary change can equally be transformational Change may involve movements in organisational shape, size, structure which are technically termed ‘hard’ aspects, and which are very visible and perhaps more straightforward to implement, requiring less persuasion Change may also involve ‘softer’ aspects such as rewards, values, beliefs, systems, procedures, roles, responsibilities, culture, tasks and behaviour, which are potentially more difficult to manage In Table 16.1 we have summarised the different aspects of the organisation which change might affect While transformational change may involve all of the aspects shown in Table 16.1, transformational change is more than this and involves fundamentally new ways of Â�understanding what the organisation is for and is doing, requiring a re-examination of its mission and a vision of a different future state of the organisation Transformational change is about the change in mental models of what the organisation is about, sometimes referred to as change in the organisational paradigm, a completely different way of Â�looking at things ACTIVITY 16.1 Think of a major change which you have experienced at work, university, school or in any other organisation (You may even consider your family to be an organisation.) Consider all of the different aspects of that change and then draw a table similar to Table 16.1 and allocate the different aspects of the change to each box It has been assumed that leaders can plan and manage change given the right processes and tools to use There is a variety of models in the literature, and used by consultants, with most focusing on such stages as: • identify the need for change; • define the 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; • implement required actions; • manage the transition; • constantly reinforce changes, sustain momentum and measure progress 328 M16_TORR9099_10_SE_C16.indd 328 26/11/2016 20:28 Find more at www.downloadslide.com Chapter 16  Organisational change and development For more examples and details on such processes see, for example, Cameron and Green (2015), Balogun et al (2014; 2015) and Al-Haddad and Kotnour (2015) Such models make this top-down change process sound very straightforward with a logical approach to what needs to happen, and may well involve a good degree of training to prepare people for what will happen and what they will need to However, as we highlighted in our introduction to this chapter, change is often both painful and unsuccessful In beginning to understand the great difficulties of achieving change it is helpful to address the limitations of the planned change model On a practical level we have little time for such lengthy processes in our world of constant change and there is little opportunity to reinforce and embed a change as another change may be following closely on its heels and indeed may be happening at the same time Organisations need to become more responsive to the need for change as well as proactive where possible A second difficulty with the planned approach to change is its underlying assumptions It can be seen as allied to the metaphor of the organisation as a machine which emphasises rationality and ignores emotion (see e.g Lewis et al 2008; Morgan 2006) The machine develops a problem: the owners of the machine work out how to fix it: they put the plan into action and repair the machine It is based on a scientific logical approach to problem solving in organisations, which may be appropriate for some problems, but is often inappropriate as it neglects the important fact that the organisational machine is made up of human beings who have a will of their own Binney and Williams (2005) suggest that this approach deals inadequately with the unintended consequences of change, its messiness, the gap in perceptions between leaders and followers, the fact that visions often not inspire They also point out that it is based on the assumption that change is something which is done to organisations (and hence the people that make them up), rather like the assumption that leadership is done to followers rather than with them The machine metaphor also focuses change on the observable, in other words behaviour, and does not allow for employee thinking processes, and fails to consider the employee experience of change and employees’ potential contribution to change In the next three sections we address the above limitations of the planned change model How can organisations be responsive to change? On a very practical level one way of trying to enable organisations to be more responsive to change is to design them so that they can change more easily Designing the structure and processes of the organisation so they can be quickly responsive to change and constantly adaptive (see, for example, Zheltoukhova 2014), is critical and together, with flexibility of labour which we focused on in Chapter 7, such approaches underpin an agile organisation Lawler and Worley (2009) suggest that, given the increasing pace of change, organisations need to anticipate change and constantly reconfigure, and hence require a built-in capacity to change continuously To this Lawler and Worley suggest that organisations need to design themselves so that they can ‘adjust their strategic intents, structures and human deployments as a matter of routine’ (p 28), and need to develop the ability to think creatively about the future to achieve sustained success 329 M16_TORR9099_10_SE_C16.indd 329 26/11/2016 20:28 ... acknowledgements Part Human resource management in a changing world xix The nature of human resource management 4 The global context for human resource management 25 Human resource management around... WORLD CHAPTERS The nature of human resource management The global context for human resource management Human resource management around the world Strategic human resource management Workforce planning... (1984) Strategic Human Resource Management New York: Wiley Guest, D (2001) Human resource management: When research confronts theory’, International Journal of Human Resource Management, Vol