QCF

Unit Title: STRATEGIC HUMAN RESOURCE MANAGEMENT

Learning Outcome:

1. Understand the nature and benefits of taking a strategic approach to the

management and development of people.

Please note that the content of this Lecture Guide is listed in its recommended
teaching order, rather than in numerical order.

Indicative Content:

From the outset tutors should define the term strategy, explain how it differs from
practice or everyday operations, and emphasise to students that adopting a
strategic perspective is crucial to their success in the examination. It would be
helpful to take one or two sample exam questions from recent papers and show
how the marking schemes concentrate on the strategic dimensions of each topic.

1.1.1 The various perspectives on strategy and the forms of HR strategy that
organisations adopt by design or by default, planned or emergent:
Strategy as a set of high-level principles which govern the directions
pursued by the organisation (inspired by its vision and mission).
To bring strategy to life (in case students should believe that strategy is
something entirely remote from everyday experience), tutors may use the
example of a business that has elected to pursue world-class service
excellence as its major competitive differentiator: what difference does this
make to its HR practices in such arenas as recruitment, selection, induction,
training/learning/development, reward/recognition, performance
management and employee relations?
The named example of an organisation whose strategy is built around the
customer experience is Tesco, and a review of its corporate and HR
strategies would be very powerful as a learning/teaching device.
1.2.1 HR strategy as a set of principles and values governing expectations about
the role of people as contributors to organisational effectiveness:
The contingent versus the normative approaches to people management
and development.
The classic Harvard model consisting of six basic components: situational
factors, stakeholder interests, HRM policy choices, HR outcomes, long-term
consequences, and a feedback loop. See Mick Marchington and Adrian
Wilkinson, Human Resource Management at Work, CIPD, 4th edition, 2008,
p. 5 et seq, for an explanation and evaluation of the Harvard model.
1.2.2 The research and the theoretical evidence concerning the positioning for HR
strategies:
Students should be familiar with the approaches developed by such writers
and researchers as Ulrich, Huselid, Purcell, Storey and other key
contributors to thinking about HR strategy.

Examiners tips:

A common problem among students taking this subject is their failure to exhibit a
high-level, strategic orientation; instead, many write exclusively about low-level
issues of HR practice (e.g. about specific performance incentive programmes rather
than about the strategic rationale for incentive programmes). Thus tutors must
consistently compel students to address all these HR issues strategically.

Students should be required to read Chapter 1 (Introduction to Strategic Human

Resource Management) from the ABE Study Manual.
 QCF
Unit Title: STRATEGIC HUMAN RESOURCE MANAGEMENT
Learning Outcome:

1. Understand the nature and benefits of taking a strategic approach to the

management and development of people.

Indicative Content:

1.3.1 The value of HR strategy and its place in an organisations value chain:
How HR strategy can be distinguished from managing people: strategy goes
much wider than managing people, because it has an orientation towards
long-term improvements in the corporate culture, the organisations
reputational asset and bottom-line outcomes; managing people
concentrates on day-by-day performance.
How HR strategy can be distinguished from legal and ethical compliance:
compliance is a necessary but not sufficient component for HR strategy; HR
strategy goes beyond such issues as procedural conformity and obedience to
the law: these may guarantee acceptable people performance, but HR
strategy is concerned with superior levels of performance, loyalty,
engagement and commitment.

1.3.2 Value adding as opposed to value sapping HR activities:

Value-adding HR activities are those which (a) focus on contribution to the
overall strategic, competitive and differentiating purposes of the business, and
(b) lead to improvements in efficiency and/or effectiveness.
Value-sapping HR activities are those which concentrate unduly on legal
compliance, procedural conformity and bureaucratic regulations.

1.3.3 Strategic HRM as a driver, a strategic partner and an agent for both the
leadership and implementation of organisational change.

1.3.4 Key research findings about the connections between HR strategy and
organisational performance:
Brief overview of the work of Purcell, Huselid, Guest and Ulrich as in
Lecture 1.

1.4.1 The HR strategist as executive, advisor or consultant:

The nature of these three roles should be described and explained, with
special reference to the extent of authority associated with each and the
importance of personal power, particularly when acting as advisor or
consultant.

1.4.2 Arguments concerning the desirability of creating a dedicated HR function.

The larger the organisation, the more essential it becomes to create a
dedicated HR function. However, it is important that the function does not
confine its activities to legal compliance (see above); perhaps for this reason,
some companies dont have a HR function as such, but have created a
people performance department.

1.4.3 Getting buy-in from stakeholders: the value of both top level and line
management support for the HR strategist:
 Some techniques for securing buy-in are identified in the ABE Study Manual,
but tutors should amplify these and should in particular emphasise the need
for HR strategists to acquire and deploy political skills.
The competencies needed by the HR strategist will include: business
acumen, analytical skills, creative thinking, verbal powers of persuasion, and
interpersonal confidence. Tutors may identify others arising from class
discussion, perhaps related to specific business scenarios explored in case-
studies.

Examiners Tips

Class material should be as authentic as possible, facilitated by real case-studies.

 QCF
Unit Title: STRATEGIC HUMAN RESOURCE MANAGEMENT
Learning Outcome:

1. Understand the nature and benefits of taking a strategic approach to the

management and development of people.

Indicative Content:

1.5.1 Introduction
Tutors should set the scene in this lecture by emphasising the strongly
competitive nature of the globalised business world. Customers grow ever
more demanding; organisations cannot assume that their supremacy in any
given marketplace is guaranteed; technological change can make some
enterprises obsolescent more or less overnight (e.g. many retail businesses
being replaced by new e-commerce companies; TV cathode-ray tube
factories being replaced by plasma and LCD screens).
As a result, organisations can no longer take the performance of their people
for granted. They must continually improve productivity, doing more with less
hence the need for above-average levels of performance, commitment and
engagement.
High Performance Working:
o This is the direct opposite of employment strategies based on short
cycle times, skill minimisation and the belief in one right way
(Taylor/Ford).
o There is a great emphasis on effective people management/leadership
and development, with autonomy being driven down the organisation,
so that workers are responsible for their own quality, learning, team-
building and customer relationships.
o Students should be familiar with the basic HPW models (Pfeffer, Guest,
Purcell).
High Commitment Management:
o Stephen Wood defines HCM as A form of management which is aimed
at eliciting a commitment, so that behaviour is primarily self-regulated
rather than controlled by sanctions and pressure external to the
individual, and relations within the organisation are based on high levels
of trust.
o Tutors should discuss with students the factors which have to be in
place in order to make HCM operate effectively.
High Involvement Management:
o HIM implies that employees have a powerful part to play in corporate
decision-making (their level of participation is often described as the
employee voice).
o This is particularly well illustrated in the case of corporate partnerships
like professional (law, accountancy) firms or the John Lewis Partnership,
where technically the employees are also the owners of the business.
o Undoubtedly ownership influences the behaviour of a workforce, but
high levels of involvement can be achieved without ownership, if staff
genuinely believe they are being consulted and their views are taken
seriously.
o HIM features prominently in discussions about Employee Relations
strategies see the separate Lecture Guide.
Examiners tips:

As always throughout this whole Lecture series, students must be equipped with the
ABE Study Manual. For Lecture 3, the relevant sections are pp.51-53 for High
Performance Working and p. 54 for High Commitment Management and High
Involvement Management (see also p. 177). Tutors should also consult The Impact
of People Management Practices on Business Performance by Patterson et al
(CIPD, 1997) for a list of the 13 practices typically found in HPW businesses.
 QCF
Unit Title: STRATEGIC HUMAN RESOURCE MANAGEMENT
Learning Outcome:

2. Understand the positioning of an organisations HR strategy as the bridge

between its corporate strategy and higher order purposes, and its lower level
human resource activities.

Indicative Content:

2.1.1 The relationship between an organisations mission, vision, values, plans and
goals, and its HR strategy:
Tutors should check that students are already aware of what is meant by
concepts like mission, vision and values. The terms should be clarified.
The need for vertical and horizontal integration, linking business purposes
and HR strategies must be emphasised, and a good way of making the point
is to discuss the likely consequences if integration were not present.
What might happen, for example, if the organisations mission/vision
emphasised business growth, increased profitability and shareholder value,
but the HR strategies in effect promoted high levels of employee rewards and
benefits, and staff development?

2.2.1 Horizontal integration, good practice, best fit, coherence, bundling and other
alignment mechanisms:
Each of these mechanisms must be described and evaluated.
Note in particular that the phrase best practice is here avoided, though it is
briefly explored in the ABE Study Manual (pp. 45-46). Students should learn
to use good practice instead, as best practice has two dangerous
connotations:
1. It can be taken to mean that any other practices, if different, are less-
than-best when actually these other practices may be justified by
specifically contingent factors in the organisation and/or its
cultural/competitive environment.
2. Best practice discourages experimentation and innovation - indeed,
it may promote complacency if it leads to the belief that further
improvement is not possible.

2.3.1 Mutual dependence of HRM and other functional areas at a strategic level:
In reality, HRM strategies and manufacturing strategies may often be in
conflict with each other, especially if HRM strategies focus on people and
manufacturing strategies concentrate on the task. Manufacturing managers
may wish to retain assembly-line, individualised, low-level task design,
whereas HRM professionals want to encourage job enrichment, team-based
systems and multi-skilling.
When creating HRM strategies, therefore, senior HRM executives will need to
acquire and develop the skills of change management see the ABE Study
Manual, pp. 86-88, Skills needed to implement Strategic Human Resource
Management.

Examiners tips:

Students must read the relevant sections of the ABE Study Manual: pp. 43-47 on the
different approaches to achieving strategic alignment, p. 40 on bundling, p. 32-33 on
the matching model of HRM. More in-depth coverage can be found in Human
Resource Management at Work by Mick Marchington and Adrian Wilkinson (CIPD,
4th ed, 2008), Chapter 4 (Designing HRM to fit organisational goals).
 QCF
Unit Title: STRATEGIC HUMAN RESOURCE MANAGEMENT
Learning Outcome:

3. Understand the design, monitoring and evaluation of an HR strategy.

Indicative Content:

3.1.1 Factors in an organisations internal and external environment that will

influence the construction of an HR strategy:
Stakeholders and their influence; technology; social pressures; the
economic climate; competition; the organisations culture; legislation; hard
and soft data; the availability of resources (both internal and external).
Each of the above elements should be described and brought to life with the
use of examples, preferably from named organisations.
These may include: changes made essential in British Airways as a result of
the rapid expansion of low-cost airlines like Ryanair; changes in bookselling
resulting from the spread of electronic book-readers; the impact of
consumer-protection laws and regulatory pressures on the strategies pursued
by supermarkets and financial services companies (banks and insurance).
The impact of alternative competitive strategies should also be investigated
students can be reminded of Porters model of generic competitive strategies
(see ABE Study Manual, pp. 43-44) and invited to consider the implications of
each so far as the development of relevant HR strategies is concerned.

3.2.1 The general principles of design applicable to an HR strategy:

See the ABE Study Manual, pp. 62-63, and p. 67 for HR strategy formulation.

3.2.2 Gap analysis and the techniques of HR planning:

A brief overview of HR planning as a contributor to HR strategy design, since
HR planning may reveal contingent factors which must be taken into account.

3.2.3 Flexing HR strategies for various contingencies:

Continued growth; strategies that harmonise with the business cycle; stability/
stasis; decline; corporate transience (i.e. the deliberately short-lived
organisation).
Again, each of these options should be reviewed with the benefit of live
examples, e.g. businesses set up specifically to prepare for and executive the
2012 Olympics; companies catering for the run-down of nuclear power
stations.
Strategically, these firms will have differing approaches to concepts like
lifetime employment, employee development, staff retention, and people
resourcing.

3.2.4 Adapting HR strategies for special-case scenarios like mergers/acquisitions,

strategic alliances and joint ventures:
Serious difficulties can occur here if existing HR strategies are divergent.
Examples include the relationship between a business and its outsourced
partner providing basic HR administrative functions or customer-facing
contact.
3.2.5 The impact of globalisation/multinationalism on the design of HR strategies:
The framework to be used here derives from Perlmutter (1969) with 4 options:
(1) Ethnocentric head office HR strategies are implemented
everywhere.
(2) Polycentric some autonomy for local subsidiaries is allowed.
(3) Geocentric good practice HR systems adopted from anywhere in
the world.
(4) Regiocentric similar to Geocentric but with emphasis on particular
regions.
 QCF
Unit Title: STRATEGIC HUMAN RESOURCE MANAGEMENT
Learning Outcome:

3. Understand the design, monitoring and evaluation of HR strategy.

Indicative Content:

3.3.1 The inter- and intra-personal and other skills needed by the HR strategist in
order to generate commitment among key stakeholders and business partners
towards a given HR strategy:
Tutors may expand on the basic coverage of this field in the ABE Study
Manual, p. 86 et seq). The ability to act politically is crucial, i.e. the strategist
must under-stand the art of the possible and aim for what is achievable
rather than, sometimes, what may be desirable in absolute principle.

3.4.1 The moral, ethical and practical issues in relation to the management of people
in organisations:
Some of the basic principles of ethicality need to be explored, i.e. the fact that
what is ethical in one society may not be acceptable in others.
For example, offering and taking bribes are common practice in some parts of
the world, but definitely seen as unacceptable in the USA.

3.4.2 The rationale for ethical codes of conduct and their enforcement:
The question to be explored here is Why be ethical? Why not act unethically
and hope you will not be found out, or appear to act ethically when in practice
continuing to behave as before?
Corporate consequences need to be evaluated: the likelihood that a majority
of customers will ostracise the companys products if they believe these
products have been made unethically by, say, exploiting local labour
markets.
It is also important to examine the fact that ethical business practices actually
enhance corporate profitability in the longer term because of greater trust
from customers and increased co-operation from willing employees.

3.4.3 The effective management of ethical dilemmas in organisations:

Examples include: whistleblowing.
Managing a multinational workforce, equal opportunities and diversity.
A further example concerns the management of employees in subcontractor
organisations which undertake product manufacturing on behalf of, say, a
global clothes or footwear business (e.g. Nike, Next, Monsoon). There have
been instances where some of these subcontractor businesses have been
found to exploit child labour or impose draconian working conditions on the
workforce.
Tutors should discuss: what are the issues here?

Examiners tips:

Students should read the ABE Study Manual, Chapter 6 (The Ethical Implications of
Strategic HRM), but in addition tutors must incorporate into their teaching some
illustrative examples of ethical dilemmas that occur in organisations, e.g. an
employee sees evidence of financial fraud in the awarding of supplier contracts.
 QCF
Unit Title: STRATEGIC HUMAN RESOURCE MANAGEMENT
Learning Outcome:

3. Understand the design, monitoring and evaluation of a HR strategy.

Indicative Content:

3.5.1 The factors involved in measuring the impact of a given HR strategy.

3.5.2 Tools for measuring the effect of a HR strategy:

The balanced scorecard This approach (derived initially from Norton and
Kaplan, 1996) is particularly well illustrated by Tesco, which has turned the
balanced scorecard into a steering wheel with four quadrants: people,
finance, customers, and operations. In the people quadrant, targets include
recruitment, development, retention, absence and staff morale (taken from
the staff attitude survey).
Models of best practice One example is the list of eight generic HR
practices popularised by Jeffrey Pfeffer (1998): employment security,
selective hiring, lots of communication, employee involvement in decision-
making, lots of learning and development, team-working, generous (but
performance-linked) rewards, and low status differentials.
Competitor benchmarking particularly within a competitive sector, but
conceivably across sectors especially if the organisation is comparing itself
with world-class, leading-edge businesses.
Other approaches, e.g. internal measures (employee surveys) or external
perceptions (customer evaluations about staff performance, commitment,
etc.).

3.6.1 The problems of tracing cause and effect in the management of people in
organisations:
Students should appreciate that single cause/effect relationships are virtually
non-existent in organisations, because causes may have so many effects,
some of them unwanted or unintentional (like the side-effects from taking
medicine).
So simplistic explanations of organisational behaviour should be challenged.
At the same time, HR strategists are often tempted to rely on single
cause/effect explanations, especially if, say, a new method of controlling
employee absence can be linked to a significant reduction in employee
absence levels. But it may be that external events (like rising unemployment
in the locality) have also contributed.

3.6.2 Evaluating the impact of HR inputs, processes, outputs and outcomes:

See again the example of Tesco, which creates targets for each significant
HR dimension, then monitors progress and takes remedial action if required.
However, the analysis of cause/effect connections should always be cautious,
because other factors may have intervened and contributed to the outcome.

3.6.3 Using the results of evaluation (to improve future strategic performance and
delivery):
If the results show that targets arent being accomplished, then more drastic
interventions may be needed; but even if results/outcomes are good, the
 quest for continuous improvement and transformational change should
remain relentless.

Examiners tips:

As with all other components of this Lecture Guide, students should be equipped with
the ABE Study Manual and should be required to familiarise themselves with Chapter
5 (Evaluating Strategic Human Resource Management).
 QCF
Unit Title: STRATEGIC HUMAN RESOURCE MANAGEMENT
Learning Outcome:

4. Understand the strategies for people resourcing.

Indicative Content:

4.1.1 The Flexible Firm; employment versus outsourcing; the job/career dilemma
The pressures for workforce flexibility should be reviewed, i.e. changing life-
styles in the labour market, enhanced competition (some of it global), the
inclusion of women as employees, etc. Also, alternative approaches to
workforce flexibility should be explored: shift work, teleworking, job-sharing,
annualised hours, etc.

4.2.1 The search for talent and taking a strategic approach to recruitment:
Recruitment strategies should be derived from the corporate strategy: an
example could be derived from the company which wants to major on service
excellence as its competitive differentiator: what is the impact of this on its
recruitment and selection strategies? The answer should focus on the need
for people who have the right attitudes; different competency frameworks,
etc.

4.2.2 Becoming an employer of choice or an employer brand:

A useful model for analysing the concept of the employer brand is that
developed by the McKinsey consulting organisation (Fields, 2001),
suggesting that there are four different types of employer brand (the
quotations are from Stephen Taylor, People Resourcing, CIPD, 4th edition,
2008, pp. 69-70):
1. Prestige we have a great reputation in our business; working for us will
enhance your long-term career opportunities.
2. Cause we undertake work that is meaningful and socially important;
working for us will provide you with the opportunity to help humankind.
3. High risk / big potential we are a small but growing organisation;
working for us will enable you to grow alongside us to reap big long-term
rewards.
4. Work-life balance we will provide you with a good job, but also allow
you plenty of time to spend doing other things.

4.2.3 Selection that supports strategic objectives:

It is relevant to discuss the likely consequences if selection methods dont
support strategic objectives: the appointment of inappropriate people, etc.
4.3.1 The deployment and redeployment of people, including redundancy and
dismissal.

4.3.2 Promoting employee retention.

4.3.3 Promoting attendance and minimising absence:
It is crucial for tutors to emphasise to students that these topics
redundancy, dismissal, retention and attendance/absence must be dealt
with from a strategic standpoint. As a result, learning detailed information
about, e.g. a dismissal procedure will not be worthwhile.
Examiners tips:

The relevant part of the ABE Study Manual to be read thoroughly in relation to this
lecture is Chapter 7 (The Strategic Approach to People Resourcing). Especially
important is the section on how to become an employer of choice (p. 132) or an
employer brand because of its significance for High Performance Working (HPW).
 QCF
Unit Title: STRATEGIC HUMAN RESOURCE MANAGEMENT
Learning Outcome:

4. Understand the strategies for people resourcing.

Indicative Content:

4.4.1 Succession planning strategies and the support required to implement them
effectively:
Tutors must explore the extent to which succession planning is actually worth-
while, given the volatility of todays labour and competitive markets.
Advantages: if the organisation has people already equipped to take over key
roles, then it is less vulnerable to sudden departures; also succession
planning is beneficial from a talent management perspective.
Disadvantages: the costs may be prohibitive, particularly if the organisation
operates in a turbulent competitive context; other businesses may poach
employees and therefore negate planned succession arrangements.
There are benefits from following a policy in which people are recruited from
other organisations into leadership roles when vacancies come available:
outside talent brings new ideas, a new-broom approach and the perception of
a fresh start.

4.5.1 Utilisation of the Internet and related technologies in the recruitment and
selection of staff:
Overview: how the Internet and email have changed the face of people
resourcing (both recruitment and selection).
Advantages and disadvantages of the Internet when applied to recruitment
and selection (note that a careful distinction must be made between the
advantages and disadvantages for employers, and the pros/cons for job
applicants/candidates).
Perhaps the claims for the revolutionary impact of the Internet have been
exaggerated: Stephen Taylor reports (People Resourcing, CIPD, 4th edition,
2008, p. 226) that in the UK, only 12% of adults first look to the web when
seeking a new job, with 51% who look first in their local newspaper.
Employer websites: some companies maintain vacancy pages on their
existing websites, which involves virtually negligible cost.
Cyber agencies: specialist employment agencies operating principally on the
web (e.g. Monster.com).
Other Internet-based recruitment routes include jobsites linked to newspapers
and journals and jobsites operated by conventional employment agencies.
The strategic advantages and disadvantages of Internet recruitment and
selection should be discussed.
When recruitment is offered through a website, the employer may be
inundated with candidates excessive numbers can be pruned through the
use of online selection tests or deliberately cumbersome application
procedures which deter all but the more determined individuals.

Examiners tips:

Examples and case studies will bring these topics to life, in order to demonstrate, for
instance, which sorts of vacancy can best be filled through e-recruitment. Equally,
the advantages and disadvantages of succession planning need to be assessed from
a balanced and businesslike perspective.
 QCF
Unit Title: STRATEGIC HUMAN RESOURCE MANAGEMENT
Learning Outcome:

5. Understand the strategies for learning and development within organisations.

Indicative Content:

5.1.1 Learning and development strategies:

Induction the strategic purposes for induction (students need not be familiar
with the design of specific induction programmes), especially a focus on
conveying the core values and high-level mission/vision for the employer.
Management development strategies for management development (or
should the organisation simply recruit trained managers externally?).
Workplace, action and self-managed learning.

5.1.2 The learning organisation and the promotion of intellectual capital:

Learning inside the organisation and knowledge management: the concept
of the corporate university.
Corporate universities have been established by some (especially global)
businesses, but whether they can function as genuine universities with
freedom of thought and the advancement of knowledge through research is
more debatable.
Tutors should explore this question: What methods can organisations use in
order to create a learning culture? Certainly this will not be achieved simply
by offering cash incentives; instead, the culture has to encourage innovative
thinking, risk-taking, an outward-looking perspective, a readiness to grasp
new tools.
Techniques include: regular seminars featuring external
thinkers/entrepreneurs; allowing employees to spend 10% of their time on
self-generated projects (used in Hewlett-Packard); creation of ground-
breaking cross-functional project teams.

5.1.3 Performance review as a tool for individual/organisational development:

The purposes of performance review and appraisal and how these
purposes may conflict with each other, e.g. the purpose of employee
development conflicts with any purpose associated with reward.
The methods for appraisal: performance questionnaires, 360 degree
appraisal, self-appraisal, etc.; review of the problems associated with
appraisal.
5.1.4 Talent management:
Deliberate programmes for talent management assume that talented people
may otherwise be tempted to seek employment elsewhere (this is an
assumption which needs to be challenged because it is not invariably true).
Talent management implies some form of succession planning [see previous
lecture] and also the provision of occupational experiences across a variety of
roles.
A strategic issue requiring discussion concerns the extent to which a business
should focus its developmental resources solely on a small group of talented
individuals, or whether it should regard its entire workforce as its talent pool.
The arguments on both sides should be marshalled and evaluated this is
exactly the kind of theme that often arises in the examination.
5.1.5 Linking training and development to succession planning strategies

Examiners tips:

Students must be required to read Chapter 8 (The Strategic Approach to Learning

and Development) of the ABE Study Manual in order to familiarise themselves with
the basic dimensions of the topics pursued in this lecture.
 QCF
Unit Title: STRATEGIC HUMAN RESOURCE MANAGEMENT
Learning Outcome:

6. Understand the strategies for employee relations.

Indicative Content:

6.1.1 The pluralist and unitarist perspectives and the benefits to be gained from
partnership:
The pluralist perspective assumes that conflict in organisations is endemic
and that employee relations are therefore about the prevention and resolution
of conflict.
The unitarist perspective assumes that there is a commonality of interest
which can bind together everyone working in an organisation.
Tutors should explain these alternative views and then seek to stimulate
discussion about (a) the benefits of each perspective and (b) the degree to
which the basic beliefs of each perspective are justified.
Pluralist enterprises will be more likely to have trade unions; unitarist
companies will be characterised by the attempt to recruit people with
appropriate attitudes.

6.1.2 The mechanisms to promote employee involvement and engagement:

Engagement should be defined as an attachment to the employer that goes
beyond the instrumental; typically it has three dimensions:
(1) Cognitive support for the organisations strategy and its ways of doing
business;
(2) Affective pride in working for the organisation; and
(3) Behavioural the motivation to work hard to help the organisation to
succeed.
Employee engagement cannot be taken for granted employers must earn it
by creating suitable HR mechanisms like the seven generic practices found
in HPW businesses (Pfeffer see earlier lecture).

6.1.3 Improving communication between employer and employee:

Methods of downward communication: announcements, team briefings, etc.
Methods of upward communication: grievance procedures, suggestion
schemes.
Methods of two-way communication: team meetings, feedback systems.

6.1.4 Strategies for responding to poor performance and misconduct

Proper routes for handling poor performance must involve initially the search
for causes, which will reside in one or more of the following elements: lack of
support/ training, lack of understanding about what was required, lack of
ability, lack of skill, or inappropriate attitudes.

6.1.5 The evaluation of employee relations success:

The success of employee relations strategies can be measured (indirectly),
for example by negative scores (levels of turnover, absence, sickness rates,
etc.) but also by more positive indices that could be identified in employee
attitude surveys, customer feedback, etc.
Examiners Tips:

Students should be required to read Chapter 9 (The Strategic Approach to

Employee Relations) in order to prepare themselves for this lecture, so that they can
participate fully in discussion. Note that in the above outline there is no mention of
trade unions: these can be introduced into the session, but should not become a
major theme. As with all other lectures, tutors should refer to examples of good and
bad employee relations practices, using companies like Honda, Toyota, Standard
Chartered Bank (high levels of employee engagement).
 QCF
Unit Title: STRATEGIC HUMAN RESOURCE MANAGEMENT
Learning Outcome:

7. Understand the strategies for performance management and reward.

Indicative Content:

Tutors must carefully make sure that students learn important lessons about the wide
range of reward and recognition strategies that organisations may use, and do not
over-simplify matters by assuming that reward is solely concerned with wages,
salaries, bonus payments, financial incentives, etc. To this end, candidates should be
fully informed about the outcomes of Herzbergs research which shows that money is
a hygiene factor; further, relying solely on monetary inducements is a strategy which
ultimately no organisation can afford.

7.1.1 The purposes behind reward and recognition strategies:

To improve individual and organisational performance.
To encourage value-added performance, i.e. continuous improvement, and
behaviour that makes a visible difference to the organisations reputation so
far as customers are concerned.
To support the cultural direction of the business.
To achieve integration across the whole range of HR and corporate
strategies.
To empower individuals and teams, encouraging them to act discretionally.
To compete effectively in the labour market.
To achieve fairness and equity among groups of employees and individuals.
To promote team-working, by stimulating co-operation and mutuality at work.
To encourage flexibility in the efficient use of human resources.

7.1.2 The methods through which the strategic purposes of reward/recognition may
be accomplished:
These methods should be linked to each of the purposes described above.

7.1.3 Total reward and the combined effectiveness of financial and non-financial
rewards:
The concept of total reward is particularly crucial in this part of the tuition
programme and syllabus: it refers to the whole package of rewards,
incentives, benefits and motivators/hygiene factors which influence employee
behaviour, including such soft aspects as feelings about whether managers
can be trusted.

7.1.4 Performance management, including performance appraisal as a tool for

measuring contribution and recognising achievement the Balanced Scorecard:
The strategic dimensions of performance management and appraisal should
be examined not the detailed implementation and design processes.

7.1.5 The evaluation of performance management and reward strategies:

Existing methods/strategies must be reviewed regularly.
Examiners tips:

A very valuable source of new thinking and research on this subject is Rewarding
Customer Service? Using Reward and Recognition to Deliver your Customer
Service Strategy by Michael West et al (Institute of Customer Service and Chartered
Institute of Personnel & Development). Though the title suggests a focus on
customer service, the content is much more generic and suitably strategic in style.
Also crucial to student learning is Chapter 10 (The Strategic Approach to Reward
and Recognition) from the ABE Study Manual for this subject.