Human Resource Management (HRM)

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Human Resource Management (HRM)

• What?
• the functional area of an organization that is
  responsible for all aspects of hiring and
  supporting employees (e.g., providing and
  administering employee benefits).
• all the activities related to the recruitment,
  hiring, training, promotion, retention,
  separation, and support of employees.
• functions within a company that relate to people.
  
• Why?
• is the effective use of human resources in order
  to enhance organisational performance.
• the process of evaluating human resource needs,
  finding people to fill those needs, and getting
  the best work from each employee by providing the
  right incentives and job environment, all with
  the goal of meeting the needs of the firm.
• applying human resources within complex systems
  such that people succeed, performance improves,
  and human error decreases.

(Source web definitions for HRM)
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Road map for HRM Leading teams (Spring Semester)
Task / Work process
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Topics HRM Leading teams
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Core functions of HRM

• Job analysis and design
• Recruitment and selection
• Training and development
• Performance management and compensation
• Labor and employee relations

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Examples in the news HR implications?

• Bonus payments in banks
• Swiss Re CEO Aigrain quits after major losses
• SR Technics closes Dublin plant with more than
  1000 employees
• Hitzfeld on managing a national football team as
  a distributed team of club players
• Increasing use of short time work

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Topics HRM Leading teams
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Strategic Human Resource Management

• "a pattern of planned human resource deployments
  and activities intended to enable an organization
  to achieve its goals" (Noe et al., 2005)
• Derive human resource needs (skills, behaviors,
  culture) from strategy formulation
• Strategy implementation by means of HRM
  practi-ces, which further individuals'
  capabilities and motivation as well as actual
  performance

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HRM practices Strategic choices

• Job analysis and design
• e.g. simple vs. complex tasks, specific vs.
  generic job descriptions
• Recruitment and selection
• e.g. external vs. internal recruitment, specific
  vs. general skills
• Training and development
• e.g. focus on current vs. future skills, train
  few vs. all employees
• Performance management and compensation
• e.g. behavioral vs. results criteria, internal
  vs. external equity, input vs. behavior vs.
  output control
• Labor and employee relations
• e.g. GAV vs. individual contracts

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Examples of contingencies in strategic HRM (Snell
Youndt, 1995 Lepak Snell, 1999)

• Input vs. behavior vs. output control
• behavior control only works with low
  uncertainties
• input control most effective with high
  uncertainties
• output control has no effect on performance in
  any condition
• Uniqueness and value of human capital
• traditional, loyalty based employment
  relationship when knowledge and skills are
  firm-specific and of high competitive value
• purely economic employment relationship when
  knowledge and skills are neither firm-specific
  nor of high competitive value

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HRM practices Operational decisions

• Job analysis and design
• e.g. adaptations in job assignments support for
  job crafting
• Recruitment and selection
• e.g. defining specific job requirements
  composition of selection teams
• Training and development
• e.g. individual career planning
  internal/external course offers
• Performance management and compensation
• e.g. defining pay scales specifying appraisal
  "curve"
• Labor and employee relations
• e.g. adjusting contributions/inducements in the
  psychological contract

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HRM as operational leadership taskLinking
motivation, satisfaction and performance
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Topics HRM Leading teams
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Influence of normative assumptions on strategic
and operational HRM

• Example assumptions about human nature (Schein,
  1988)
• Economic man Employees will do whatever affords
  them the greatest economic gain
• Social man Social needs are the prime motivator
  of human behavior, and interpersonal
  relationships the prime shaper of a sense of
  identity.
• Self-actualizing man People seek a sense of
  accomplishment in their work and are primarily
  self-motivated and self-controlled
• Complex man Human needs fall into many
  categories and vary according to stage of
  development and total life situation

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Leadership instruments based on the "complex man"
assumption

• Management by objectives based on goal-oriented
  theories of leadership
• Psychological contract based on social exchange
  theory

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MbO How to make it work

• Coherent company strategy
• Increasing personal resources through job design
  and personnel development for dealing with
  complex goals and tasks
• Sufficient control over the work situation
  (transparency, predictability, means of
  influence)
• Leadership through coaching instead of
  command-and-control
• Systematic, transparent and participative goal
  agreement and evaluation of goal attainment
• Rules for handling conflicts

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Complementing MbO Designing psychological
contracts

• Psychological contracts ...
• complement and super-impose legal contracts.
• contain reciprocal, though not necessarily
  correspon-ding expectations and offers between
  employee and employer.
• are derived from verbal agreements as well as
  from behaviors of contract partners and other
  members of the organization.

• The more corresponding
• and
• the more explicit the agreement
• the sounder the psychological contract.

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Using the psychological contract to handle
employment uncertainties

• Communicate and match reciprocal expectations and
  offers
• Early, comprehensive information also on
  uncertain developments (individual and
  organizational)
• Support employability through training, job
  design, and systematic career management
• Distribute risks between organization and
  employee according to individual coping
  capabilities
• Further organizational commitment which allows
  for flexibility and "thinking in options"

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Topics HRM Leading teams
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Purposes of appraisal

• Improving performance
• Making reward decisions
• Motivating staff
• Developing subordinates
• Identifying potential
• Formal recording of unsatisfactory performance
• Note Conscious decision on which purpose(s) to
  focus on is important

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Appraisal criteria

• Assessment of personal characteristics/
  behaviors/outcomes
• Recommendation Focus on assessing behaviors,
  e.g. by means of behaviorally anchored rating
  scales (BARS), and on assessing outcomes based on
  achievement of objectives
• Compare performance between individuals
• rank order
• grouping according to a predetermined percentage
  per evaluation category

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Typical errors in appraising others

• Primacy/recency
• Halo
• Implicit theories
• Stereotypes
• Central tendency and positive skew
• Persistence of impression despite information to
  the contrary
• Attribution errors

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Attribution errors

• Attributionattributing causes to behaviors
• evaluating differences in behavior by comparing
  people, tasks, and situations in terms of causes
  for behavior (dimensions e.g. internal/external
  causes stable/variable causes)
• Examples of attribution errors
• Fundamental attribution error overemphasizing
  the actor as a cause of events
• Protecting self-esteem Underestimating
  person-related causes for ourselves especially
  for failure
• Underusing consensus information little use of
  information from comparisons with others
  behavior
• Confirming expectations e.g. assuming
  person-related causes for behaviors that are
  atypical for a particular situation assuming
  situation-related causes in highly structured
  situations

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Measures to avoid rating errors

• Systematic preparation of appraisal interview
• Conscious reflecting of potential errors and
  their influence on the appraisal
• Use of structured assessment scales (e.g. BARS)
• Open communication climate that also allows
  critical feedback on the appraisal by the
  appraised person

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Topics HRM Leading teams
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Pay is ...

• money
• compensation
• reward
• incentive
• recognition
• Procedural and distributive justice at least as
  important as absolute amount

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Basics for determining pay

• Decomposition of pay into
• base/fixed pay (task-related) and
• variable pay (person-related, e.g. performance,
  experience, social situation)
• Considering value of the work done for the
  company, the market rate for the job, and
  individual needs
• Considering task requirements and qualification
  requirements

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Problems of current job evaluation systems

• Overestimation of intellectual and leadership
  requirements
• Underestimation of physical, social and emotional
  requirements
• Consequence Low evaluation of many
  female-dominated jobs and person-related
  service jobs in general

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Personnel development

• Systematic furthering of personal aptitude in
  relation to individual expectations and
  organizational requirements by means of
• - education/training
• - counselling/coaching
• - management by objectives
• - team development
• - job design

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"Fit human to task"Linking personnel
development to strategic HRM demands

• Analyze requirements
• define goals and target group(s) for personnel
  development
• define required qualification profiles
• identify indivdiual employees who need
  development
• Personnel development intervention
• Evaluation concerning learning, behavior, and
  performance outcomes

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"Fit task to human"Tailoring personnel
development to individual career demands

• Define possible career paths
• e.g. management versus technical career
• Identify individual career needs
• e.g. locals versus cosmopolitans
• Continuous adaptation of career needs and career
  paths

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Topics HRM Leading teams
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Leadership is

• the process of influencing the activities of an
  organized group towards goal achievement.
• the ability of an individual to motivate others
  to forego self-interest in the interest of a
  collective vision (House Shamir, 1993)
• the influential increment over and above
  mechanical compliance with the routine directives
  of the organization (Katz Kahn, 1978)

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Basic leadership functions

• group internal functions
• Task orientation/initiating structure
• Set goals, distribute tasks, check work results
  etc.
• Employee orientation/consideration
• resolve conflicts, support/coach team members
  etc.
• group external functions
• Boundary regulation
• Adjusting external demands in terms of group
  internal demands and possibilities

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Prerequisites of effective leadershipThe
"right" ...

• Person
• extravert, intelligent, emotionally stable,
  conscientious, dominant, self-confident, socially
  perceptive
• However
• Differences on personality dimensions between
  people with/without leadership positions are
  often small (overlapping distributions).
• Personality differences may be causes and/or
  effects of being in leadership positions.
• Different situations may demand different
  personality profiles.

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Prerequisites of effective leadershipThe
"right" ...

• Behavioral style
• task-centred and employee-centred
• democratic rather than autocratic
• transformational rather than transactional
• However
• Individualized leader-member-exchange is also
  crucial.
• Different situations may demand different
  behavioral styles.

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Prerequisites of effective leadershipThe
"right" ...

• Instruments
• Management by objectives
• Systematic performance management
• Standardized HRM processes for selecting,
  appraising, compensating, developing people
• However
• Instruments can support, but not replace personal
  leadership.
• Most instruments tend to work better in stable
  situations.

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Topics HRM Leading teams
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Core concept of job designSelf-regulating teams

• Teams several people who work together over a
  period of time to reach common goals and who
  share a sense of belonging together
• Self-regulation individual and collective
  autonomy in order to coordinate work processes
  and to cope with process variances and
  uncertainties locally

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Prerequisites for good team work

• Adequate common task
• Complexity higher than individual competencies
• Clear performance criteria
• Collective decision competence
• Shared goal orientation
• Positive goal coupling
• Goal transparency and feedback
• Adequate group composition
• Different perspectives on the task
• Shared language
• Development of group rules
• Adequate group size
• Support for team development (form, storm, norm,
  perform)
• Explicit handling of conflicts between individual
  and collective autonomy

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Team diagnosisCharacteristics of effective teams

• Goals are clear and accepted
• Individual and team goals melt together
• Responsibilities are clear and change depending
  on situational demands
• Leadership is seen as a shared responsibility
• Conflicts are dealt with
• Team learns and develops
• Contributions are recognized and valued
• Communication is open and engaged
• Group processes are reflected upon and discussed

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Changing leadership roles depending on stage in
work processes

• Providing structure at the start of a process
• Deciding in critical phases
• Coach/motivator in on-going work processes
• Team member ( no leadership) in routine
  processes
• Moderator in decision processes
• Evaluator at the end of a process

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New demands on leadership in distributed teams
Increasing complexity of situation also requires
increasingly complex leadership behaviors
situated and shared leadership
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Topics HRM Leading teams
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What is meant by team diversity?

• Demographic diversity differences in observable
  attributes such as age, gender, ethnicity
• Psychological diversity differences in
  underlying attributes such as abilities,
  personality, attitudes, values

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Why are organizations concerned with diversity
management?

• demographic change
• e.g. problems in recruiting personnel
• globalization of business
• e.g. international supply chain relationships and
  mergers/acquisitions/international cooperations
• increasing service orientation
• e.g. responding to special needs in regional
  markets and of particular target groups
• new concepts of organization
• e.g. increasing mix of functions/professions in
  work teams

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Success of Diversity Management ?

• Studies on the relationship between team
  diversity and performance
• Negative effects through social categorization
• Positive effects through increased information
  however sharing information is generally
  difficult
• With time negative effects of demographic
  diversity (? social categorization) decrease and
  positive effects of psychological diversity (?
  information sharing) increase (Harrison et al.,
  1998)
• Cultural majorities profit from cultural
  minorities more than vice versa in student groups
  (Brodbeck, 2005)

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Success of Diversity Management ?

• Studies on the relationship between team
  diversity and performance (contd.)
• Positive attitude towards diversity is important
  to achieve positive effects (Van Dick et al.,
  2008).
• More complex tasks are dealt with better by
  heterogeneous groups (Bowers et al., 2000).
• Group goals support performance in diverse
  (individualists/collectivists) and non-diverse
  teams (Crown, 2007)
• No studies available on diversity and firm
  performance

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Topics HRM Leading teams
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"Benchmarking" Characteristics of HRM in
successful companies (Pfeffer, 1998)

1. Employment security
2. Selective hiring
3. Self-managed teams and decentralization
4. High compensation contingent on organizational
   performance
5. Extensive training
6. Reduction of status differences
7. Sharing information

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Topics HRM Leading teams
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Sample questions for exam preparation

• written, closed (!) book, 1.5 h
• Friday June 5, 815 - 945, HG G3
• five essay questions, four have to be answered
• sample questions
• (1) Coaches of successful football teams are
  often taken as models for effective leadership in
  companies. Based on the leadership concepts
  dicussed in the lecture, is this justified?
• (2) What would you do when conducting a
  performance appraisal interview in order to avoid
  attribution errors?
• Exam counts for 50 and semester project for 50
  of total course grade.

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Master thesis topics

• Currently offered thesis topics
• Analysis of organizational routines in high-risk
  operations
• Organizational dynamics of regulation in the
  finance sector
• Collaborative planning and the role of
  information uncertainty in Air Traffic Management
• Planning and coordination in health care
• It is always possible to directly contact any
  member of the research group org.ar.t to discuss
  possible topics, see also the description of
  research on our webpage www.oat.ethz.ch