Tag: Compliance Management

An appraisal interview is a formal discussion process between an employee and his/her manager. It is one of the best ways for an employee to increase productivity and change work habits. In appraisal interview, the employer and the employee discuss the performances of the individual and the key areas of improvement and how the employee can grow through a feedback mechanism.

A performance appraisal interview is the first stage of the performance appraisal process and involves the employee and his or her manager sitting face to face to discuss threadbare all aspects of the employee’s performance and thrash out any differences in perception or evaluation. The performance appraisal interview provides the employee with a chance to defend himself or herself against poor evaluation by the manager and also gives the manager a chance to explain what he or she thinks about the employee’s performance.

In a nutshell, the performance appraisal interview precedes the normalization process and is subsequent to the employee filling up the evaluation form and the manager likewise doing so. The interview is the stage where both sides debate and argue the employees’ side of the story as well as the manager’s perception.

An appraisal interview gives the employee the chance to shield himself/herself from poor evaluation by the manager. It also gives the manager an opportunity to spell out his/her reviews. It helps the employees to determine whether there is a need for training if they lack in any particular skill and who will be promoted, demoted, retained or fired.

Guidelines for conducting Appraisal Interviews

The following things should be kept in minds while conducting appraisal interviews:

• Value employee’s opinion: Encourage the employee to talk. Ask his/her opinion to improve the situation.
• Don’t tiptoe around: Make sure the employee gets to know what he/she is doing correctly or incorrectly. Advise the employee on how to improve things.
• Use of work data: Use of actual numbers like productivity reports, leaves, orders and so on.
• Don’t get personal: Try and avoid negative sentences that directly affects the employee. Compare the employee’s performance with a standard not with other people.

The Right and Wrong Way to Approach a Performance Appraisal Interview

The performance appraisal interview must be taken seriously and both the employee and the manager must set aside time to go through the process. The manager cannot arbitrarily change the time or the venue and must not approach the interview in a haphazard manner. Despite all these injunctions, it is often the case that the manager has to be reminded about the interview and then he or she hurriedly arranges the meeting. This is definitely the wrong way to approach the interview. Further, the manager must make the time to go through the employees’ self-evaluation and rate the same objectively.

Though there is no right way to conduct the performance appraisal interview, it is incumbent upon the manager to avoid the pitfalls described above. A rule of thumb would be set aside a few days to conduct all the interviews with members of his or her team and ensure follow-ups to the process. The follow-up is needed when the employee is not satisfied with the interview discussion and hence requests for additional time to debate the rating. In some cases, the HR manager may need to step in to ensure that the process is concluded to the satisfaction of the employee and the manager.

Objective Evaluation versus Personal Biases

Though management theorists like to propound the benefits of objective evaluation, it is a fact in contemporary organizations that an element of personal bias enters the evaluation. This is evident from the studies and surveys done by HR consultants like Hewitt that point to the employee’s dissatisfaction with the performance appraisal process as one of the main reasons for leaving the company. To curb the incidence of biases and heuristics playing a role in the appraisal, HR managers typically conduct orientations and trainings to both the Managers and the Employees to sensitize them to these dangers that are sometimes inherent in the process.

On the other hand, the employees should approach the process without unrealistic expectations and expect the Manager to agree to whatever they write on the performance evaluation form. Hence, there is a need for both sides in the interview process to approach the same with an open mind and be as objective as possible. However, this is easier said than done and hence organizations expend resources on making the process as transparent and objective as possible.

A conference is a meeting of people who “confer” about a topic. Conference types include:

Physical

• Academic conference, in science and academic, a formal event where researchers present results, workshops, and other activities.
• Athletic conference, a competitive grouping of teams, often geographical
• Authors’ conference, or writers’ conference, where writers gather to review their written works and suggest improvements
• Conference call, in telecommunications, a call with more than two participants at the same time
• Conference hall, room where conferences are held
• Convention (meeting), meeting of a, usually large, group of individuals and/or companies in a certain field
• Conference, between the two houses of a bicameral legislature
• News conference, an announcement to the press (print, radio, television) with the expectation of questions, about the announced matter
• Parent-teacher conference, a meeting with a child’s teacher to discuss grades and school performance
• Peace conference, a diplomatic meeting to end conflict
• Professional conference, a meeting of professionals in a given subject or profession dealing with related matters or developments
• Settlement conference, a meeting between the plaintiff and the respondent in lawsuit, wherein they try to settle their dispute without proceeding to trial
• Trade fair, or trade conference
• Unconference, or open space conference, who avoids meeting [with more persons], a participant-driven meeting that tries to avoid one or more aspects of a conventional conference

Virtual

• Video conference, with the reception and transmission of audio-video signals by users at different locations.

The Role of Conferences

The role of a conference is to gather like-minded individuals from across the country or across the globe, to learn, discuss thoughts, network, share ideas, create new ideas, and to ignite motivation. The benefits of attending a conference are different for everyone. By attending a conference, individuals are expanding their professional and personal development, and are provided with insightful information that couldn’t be taught internally from within the organization or online.

The Advantages of Attending Conferences

Fresh Perspective: There are many advantages to attending conferences. As Dr. Stephen Covey so eloquently says, “We must never become too busy sawing to take time to sharpen the saw.” Sharpen the Saw meaning preserving and enhancing the greatest asset an individual has – which is themselves. By seeking continuous improvement and renewal professionally and personally, an individual keeps themselves sharp. Essentially the analogy is saying that sometimes individuals must step away from the “work” of their work in order to sharpen their work skills. There is no better opportunity to sharpen one’s skills than at a conference.

Networking: Developing a strong professional network has become one of the key prerequisites for professional success. In fact, research indicates that successful managers spend 70% more-time networking than their less successful counterparts and that people with rich social networks are better informed, more creative, more efficient, and better problem-solvers than those with limited social networks. Industry conferences provide a tremendous opportunity to network. Attendees from other companies and from other areas of the country can become valuable resources for referrals, new ways of thinking, solutions, and best practices.

Learning: Another advantage of conferences is that they provide a blended learning environment with multiple opportunities for individuals to learn and engage in a wide array of formats. Conferences typically provide special guest speakers, breakout sessions, one-on-one engagements, group outings, and events for social interaction. The learning facet of a conference can expose attendees to new ways of operating and can help them discover ways to be even more productive. Whichever way an individual learns best, there are multiple ways to learn something new and impactful.

Spark New Ideas: Conferences are a great way for employees to be inspired by fresh ideas, to start rethinking the status quo, and to hopefully leave ready to tackle business challenges in creative and innovative ways. Conferences also allow individuals to share their progress, hurdles they’ve come across, and techniques devised for solving them. After hearing from leading experts and visionaries on how they found success, attendees are inspired and encouraged to think outside the box, which leads to successful outcomes for the organization.

One of the assessments and evaluation techniques for a candidate is interview. It is a type of oral exami­nation. Selection interview is the next process to conduct of tests. Even though written tests and psy­chological tests are conducted, still one-to-one communication between individuals always remains the crucial part in selection of a candidate. Behavioural traits, presence of mind and psychological bearing capacity can be tested through interview.

Selection interviews are typically conducted onsite at the hiring company. The purpose of a selection interview is to determine whether a candidate will be selected for the position he or she is interviewing for. A selection interview is typically more rigorous than a screening interview. At this point, a company is trying to decide whether or not you should either be moved to the next step in the hiring process or an offer is going to be extended, so there will be more scrutiny than with a screening interview.

Role of Interview in the Selection Procedure:

Critical Analysis of the Personality of Candidates:

As the candidate is going to be in front of the interviewer or a panel, face-to-face communication is facilitated. The interviewer can observe the behaviour, style, approach, promptness and sharpness of the candidate.

Providing Details about the Company to the Candidate:

As the company would like to know the detailed information about the candidate, the same way, the candidate is also eager to know about the work culture, the nature of the job, working schedules, etc., in the company. Interview provides the opportunity to the candidate to know more about the company.

Accurate Final Selection:

Interview facilitates to obtain additional information about the candidate through personal contact. After the detailed scrutiny of all the information about the candidate, the final selection can be made easily.

Use of Experience and Knowledge of Expert Interviewers:

Whenever the interviews are conducted, there is generally a panel of interviewers consisting of more than three members. All of them are working for the company for a long time, and when the selection interview takes place, it is their knowledge and experience which is going to give the best results in terms of a suitable and appropriate candidate.

Types of Interview:

Informal interview:

There is no specific procedure followed in this case. They are conducted at any place, and any types of questions can be asked to the candidate.

Formal Interview:

It is held in formal atmosphere with pre-decided and planned procedures and questions.

Situation Interview:

An imaginary situation is told to the candidates and they are asked to respond to it.

Stress Interview:

It is conducted to evaluate the behaviour of the candidate under stressful conditions. How does a can­didate react to stress? Whether they remains quiet and calm or becomes stressed, can be judged by creating different stressful conditions around, and the case with which they gets out of it indicates their stress-handling capacity in future.

Directive Interview:

It is structured interview. A same set of questions is repeated for every candidate to make the compari­son among the answers received from them.

Non-directive Interview:

It is non-structured interview. There is no specific format, and any questions can be asked to candidates. Candidates are free to express themselves under this type.

Panel Interview:

A selection committee appointed for interviewing candidates is called a panel. It generally consists of three or more members who collectively perform the task of selection. The final decision is taken with the consent of all panel members.

Group Interview:

Candidates are supposed to form groups, and one group together will be interviewed at one time. It is a sort of group discussion. The person’s ability to lead, their presence of mind and communication can be evaluated under this technique.

Depth Interview:

All the minute details of important nature are asked to a candidate to have the extensive information about them.

Advantages of Organisation Structure:

1. The activities of the individuals and the groups will become more rational, stable and predictable.
2. An orderly hierarchy in which people are related in a meaningful sequence will result. Individual responsibility will be known clearly and the authority to act would be defined.
3. Individuals will be selected on the basis of ability to perform expected tasks. Simplification and specialisation of job assignment is possible in more effective way.
4. Directional and operational goals and procedures will be determined clearly and energies devoted to their achievement.
5. Available resources will be utilised in the most effective way.
6. Such an organisation may make the treatment of the individual workers more democratic because patronage and favouritism are reduced.
7. Workers will benefit from planned superior subordinate- relationships in which each work receives essential support and direction.

Demerits of Organisation Structure:

• Individual creativity and originality may be stifled by the rather rigid determination of duties and responsibilities.

Workers may become:

• Individual creativity and originality may be stifled by the rather rigid determination of duties and responsibilities.
• Workers may become less willing to assume duties that are not formally a part of their original assignment.
• Very often the fixed relationships and lines of authority seem inflexible and difficult to adjust to meet changing needs.
• They produce anxiety in individual workers by pressing too heavily for routine and conformity.
• They become too costly in terms of time and human dignity in order to implement organisational rules and regulations.
• Inter-personal communication may be slowed or stopped as a result of strict adherence to formal lines of communication.
• Organisations tend to fail to account for important differences in workers as human beings.

These drawbacks can be reduced through careful planning and efforts by supervisors to be responsive to human problems created by formal organisational structures. 

Human Capital Management (HCM) is a strategic approach to optimizing the workforce by treating employees as valuable assets whose development enhances organizational performance. It encompasses processes like talent acquisition, training, performance management, and employee engagement, aimed at fostering skills, motivation, and retention. HCM focuses on aligning workforce capabilities with business objectives, leveraging technology and data analytics to make informed decisions. Unlike traditional HR, HCM emphasizes a holistic view of employees’ value, addressing their career growth, well-being, and potential contributions. This approach ensures organizations maintain a competitive edge by cultivating a skilled, satisfied, and productive workforce while achieving long-term goals.

Goals of Human Capital Management:

1. Attracting and Retaining Talent

A core goal of HCM is to attract skilled professionals and ensure their retention. This involves creating competitive compensation packages, offering career growth opportunities, and maintaining a positive workplace culture. By aligning recruitment strategies with organizational goals, HCM ensures a steady influx of capable individuals.

2. Enhancing Employee Engagement

Engaged employees are more motivated, productive, and committed to organizational goals. HCM aims to foster engagement by promoting open communication, recognizing achievements, and providing opportunities for personal and professional development. This not only boosts morale but also reduces turnover.

3. Aligning Workforce with Organizational Goals

HCM ensures that the workforce is aligned with the organization’s mission and strategic objectives. By conducting workforce planning, skills mapping, and performance evaluations, HCM ensures that employees are working on tasks that drive business outcomes.

4. Developing Employee Skills and Competencies

Investing in employee development is crucial for staying competitive. HCM focuses on identifying skill gaps and offering targeted training programs, mentoring, and upskilling opportunities. This enables employees to adapt to changing business environments and technological advancements.

5. Promoting Diversity, Equity, and Inclusion (DEI)

HCM strives to create an inclusive workplace that values diverse perspectives. By fostering equity and inclusion, organizations can harness the full potential of their workforce, drive innovation, and improve decision-making.

6. Leveraging Technology and Analytics

HCM integrates technology to automate processes, enhance decision-making, and track employee performance. Analytics tools are used to predict workforce trends, optimize talent management, and measure the impact of HR initiatives.

Categories of Human Capital Management:

1. Leadership Practices

• Communication: Employees must be treated well for them to develop a feeling of attachment and loyalty towards the organization. Managers must understand that their role is not just to sit in closed cabins and impose ideas on others. They ought to communicate well with their subordinates. Employees must have an easy access to the senior management. Communication from management to employees also known as Top down communication is essential for the employees to be aware of their goals and objectives and for them to know what is expected out of them.
• Inclusiveness: Management ought to sit with employees on a common platform to invite suggestions and feedbacks from them.
• Supervision: Senior executives and management must reduce the various levels of hierarchy between them and employees’. Management must interact and motivate the employees from time to time for them to give their level best.
• Leadership: Senior executives should support, lead and influence the workforce so that they contribute effectively towards the organization.

2. Employee Engagement

• Key Responsibility Areas: Key responsibility areas of an individual should be designed in line with his education, skills, expertise, experience and also area of interest. This way, work never becomes a burden for him.
• Commitment: Outstanding efforts of employees must be acknowledged for them to feel motivated and work harder even next time. Employees performing well ought to be suitably rewarded and appreciated in front of others.
• Time: Time management ensures that no employee is overburdened. Responsibilities must be equally shared among employees.
• Evaluation: Employee engagement must be evaluated from time to time by the top management.

3. Knowledge Accessibility

• Information Availability: Employees must have an easy access to all relevant information required to perform their duties. Organizations must organize various training programs (In house Trainings or Out sourced trainings) to constantly upgrade the existing skills of employees and acquaint them with new learnings.
• Team Work: Employees must be motivated to work in teams rather than working alone.
• Information Sharing: Encourage employees to share information with each other.

4. Workforce Optimization

• Work processes: Senior management must define work processes of employees well for maximum productivity.
• Working Conditions: An organization needs to provide excellent working conditions to the employees to expect the best out of them.
• Accountability: Individuals must be held accountable for their work. Get a commitment from employees and nothing like it, if everything is in writing.
• Hiring: Individuals responsible for talent acquisition must ensure that they hire the right candidate for the right role. Design a strong induction program for all the newly joined employees.
• Performance Management: Employee’s performance needs to be strongly monitored and managed.

5. Learning Capacity

• Innovation: New ideas should be welcome. Employees must be encouraged to come out with new and innovative ideas which might benefit the organization.
• Training: Trainings must be practical/relevant and designed to sharpen the skills of employees. Do not design training programs just for the sake of it. They must benefit the employees.
• Career Development: Employees must be aware of their growth plan in the organization.
• Learnings: New learnings should be valued by all in the organization.

Benefits of Human Capital Management:

1. Enhanced Productivity

HCM ensures employees are well-trained, motivated, and equipped with the right tools, leading to increased efficiency and productivity. By aligning tasks with employees’ skills and strengths, organizations can achieve higher output and quality.

2. Improved Talent Acquisition and Retention

Effective HCM strategies attract top talent and reduce turnover by fostering a supportive and engaging work environment. Competitive compensation, clear career paths, and personal development opportunities make employees more likely to stay with the organization.

3. Better Decision-Making through Analytics

HCM leverages data and analytics to provide insights into workforce trends, performance metrics, and future talent needs. This data-driven approach helps organizations make informed decisions about hiring, training, and succession planning.

4. Strengthened Employee Engagement and Satisfaction

HCM focuses on employee well-being, open communication, and recognition, creating a workplace where employees feel valued and motivated. Higher engagement levels lead to improved performance and loyalty.

5. Agility and Adaptability

By identifying skill gaps and providing upskilling opportunities, HCM enables employees to adapt to changing market demands and technological advancements. This agility helps organizations stay competitive in a dynamic business environment.

6. Promotes Diversity and Inclusion

HCM emphasizes building a diverse and inclusive workforce, which drives creativity, innovation, and a positive organizational reputation. Inclusive workplaces also enhance collaboration and decision-making.

A policy is somewhat a permanent feature of an organization. It being a standing plan, provides guidelines to managerial decisions. Therefore, policies should be developed on a sound basis. If this is not done, managers have to make decisions again and again. However, what features constitute a sound policy cannot be prescribed universally because situations vary so greatly and an organization may differ in respect of policy formulation and implementation from others.

A sound policy must Have

(i) specify more precisely how the decision will come what is to be done, who is to do it, how it is to be done, and when it is to be finished

(ii) establish a follow-up mechanism to make sure that the decision intended will take place

(iii) lead to new strengths which can be used for decisions in future.

Characteristics of Sound HR Policy

1. Relationship to Organizational Objectives:

A policy is formulated in the context of organizational objectives. It tries to contribute towards the achievement of these objectives. Therefore, in formulation of a policy, those functions or activities which do not contribute to the achievement of objectives should be eliminated.

For example, if a policy of filling higher positions from within produces hindrance in attracting talents at higher level but the organization needs them, the policy can be changed because in the absence of suitable manpower, the organization may not be able to achieve its objectives.

2. Planned Formulation:

A policy must be the result of careful and planned formulation process rather than the result of opportunistic decisions made on the spur of the moment. Since policies are relatively permanent features of the organization, ad hocism should be avoided because it is likely to create more confusion.

It is true that it is not possible to solve every problem in the organization on the basis of policies because new situations may arise, however, for matters of recurring nature, there should be well-established policies.

3. Fair Amount of Clarity:

As far as possible, policy should be clear and must not leave any scope for ambiguity. If there is a problem of misinterpretation, the organization should provide the method for overcoming the ambiguity. Further, policy provides some discretion for managerial decisions but it should minimize the number of cases where decisions are based on personal judgement. If this happens frequently, there should be close scrutiny of the policy and suitable amendments should be made.

4. Consistency:

The policy should provide consistency in the operation of organizational functions. Often the organization formulates policies in various functional areas and each function is related to other functions of the organization. If the policy in one area is inconsistent with another area, there may be conflict resulting in inefficiency.

This happens very frequently in functions having close relations such as production and marketing or finance and other functions. Therefore, the formulation of policies should be taken in an integrated way so that policies in each area contribute to other areas also.

5. Balanced:

A sound policy maintains balance between stability and flexibility. On the one hand, a policy is a long-term proposition and it must provide stability so that members are well aware about what they are required to do in certain matters. On the other hand, the policy should not be so inflexible that it cannot be changed when the need arises.

In a changed situation, the old policy becomes obsolete. Therefore, there should be a periodic review of policies and suitable changes should be incorporated from time to time. The changes may be in the form of addition, deletion, or substitution of the existing policy.

6. Written:

A policy may be in the form of a statement or it may be interpreted by the behaviour of the people at the top level. However, clearly-specified policy works better than the one which has to be interpreted by the organization’s members. When the policy is in writing, it becomes more specific and clearer. It creates an atmosphere in which individuals can take actions with confidence knowing fully the impact of a particular action.

A written policy is easier to communicate through the organizational manuals. However, written policy has certain disadvantages in the form of being inflexible, too much emphasis on written words and their interpretation, and leakage of confidential policy. However, if the policy has been formulated carefully, many of the dangers will be overcome. Of course, confidential policies cannot be made part of organizational manuals.

7. Communication:

It is not just sufficient to formulate policies. Unless these are communicated properly to the persons concerned, no meaningful purpose will be served. Therefore, a system should be developed to communicate the policies to those who are to make decisions in the light of those policies.

While written policies can be communicated easily, problems exist for communicating unwritten ones. In such cases, there should be more interaction between policy framers and policy implementers.

HR Policies

1. Recruitment and selection policy: To procure suitably educated and efficient personnel by offering those tempting wages, good working conditions, safety and security, and better future prospects.
2. Training and development policy: To make available all possible facilities for the training and development of employees to enable them to do their job efficiently and to prepare them­selves for future promotions; to take effective steps including training and development pro­grammes to equip the employees in the latest techniques of production, management and so on; to get the performance appraisal done; and to provide adequate opportunities and facilities for the development of employees.
3. Job evaluation, wage and incentive policies: To determine reasonably good wage rates and dearness allowance, and to work out incentive plans for workers after undertaking job evalu­ation and other necessary steps and also keeping in view the prevalent wage rates for similar jobs in other industries.
4. Labour welfare policy: To improve industrial relations by evolving a suitable machinery for the settlement of disputes; to encourage mutual negotiations; to prepare and execute labour welfare programmes; and to arrange all possible facilities for the health, education and other welfare programmes.
5. Retrenchment: All progressive companies keep good exit policies, so that feedback can be obtained and improvement can be brought about.

High-commitment management emphasizes personal responsibility, independence, and empowerment of employees across all levels instead of focusing on one higher power; it always intended to keep commitment at high level “calling all the shots”.

A high commitment system is unusual in its job design and cultural structure. These practices emphasize getting the tasks complete, but do it in a way that their employees enjoy doing it. According to Harvard Business School Professor Michael Beer, “leaders develop an organizational design, business processes, goals and measures, and capabilities that are aligned with a focused, winning strategy.” This kind of environment allows employees to approach tasks at ease, wearing jeans instead of suits and staying home to watch their children get on the bus for school before coming to work. Technology also plays a role in this system. Recently, technology has slaughtered barriers of communication, which makes this high-commitment model fit that much better. That father waiting for the bus can still answer phone calls and check emails for work, so is he working or is he spending time with his daughter? He can be doing both. As long as the job gets done, this system is casual on how it gets done, relieving employees of constant stress.

A flat organizational structure is one of the biggest success factors. Individuals are responsible for their own decision-making and these decisions, their skill, and their performance is how they get paid. Instead of putting too much weight on the individual, “people are likely to see the locus of the control coming from ‘within’ through the adoption of self-created demands and pressures as opposed to external and making them feel subordinate.” While these companies allow each employee to be a manager in their own way and try not to distinguish its structure by higher levels of employment, it doesn’t mean that they lack these higher powers entirely. It’s that under this system people aren’t relying on the general managers, CEOs, or other employees to do their work for them. This personal discipline is what drives the employees to help the company be successful. and eliminates the chance at a thought like, “Why would I want to help my company become better if I know I’m just going to get yelled at?”

Another focus of high commitment practices is their employee relationships. They only hire people who are flexible, determined, and are willing to handle challenges. Because this system relies on individual performance, there is a big emphasis on hiring the right people for the job. The detailed recruitment process can consist of many interviews with different members of the company, an induction course, and in some cases, team-building exercises. Once found, the right employees help create a strong bond and high trust throughout the entire company.

High commitment workplaces are successful through their importance on an individual’s responsibility in order to help the team prosper. By creating a culture that motivates individuals to want to succeed while sustaining high commitment, “these firms stand out by having achieved long periods of excellence.”

These models of best practice can take many forms; while some have advocated a universal set of HR practices that would enhance the performance of all organisations to which they were applied (Pfeffer, 1994, 1998), others have focused on high-commitment models (Walton, 1985; Guest 2001) and high-involvement practices (Wood, 1999) which reflect an underlying assumption that a strong commitment to the organisational goals and values will provide competitive advantage.

Others have focused on ‘high-performance work systems/ practices (Berg, 1999; Applebaum et al., 2000). This work has been accompanied by a growing body of research exploring the relationship between these ‘sets of HR practices’ and organisational performance (Pfeffer, 1994; Huselid, 1995; Huselid and Becker, 1996; Patterson et al., 1997; Guest, 2001). Although there is a wealth of literature advocating the best-practice approach, with supporting empirical evidence, it is still difficult to reach generalised conclusions from these studies.

This is mainly as a result of conflicting views about what constitutes an ideal set of HR best practices, whether or not they should be horizontally integrated into ‘bundles’ that fit the organisational context and the contribution that these sets of HR practices can make to organizational performance.

• Universalism and high commitment

One of the models most commonly cited is Pfeffer’s (1994) 16 HR practices for ‘competitive advantage through people’ which he revised to seven practices for ‘building profits by putting people first’ in 1998. These have been adapted for the UK audience by Marchington and Wilkinson (2002).

Pfeffer (1994) explains how changes in the external environment have reduced the impact of traditional sources of competitive advantage, and increased the significance of new sources of competitive advantage, namely human resources that enable an organization to adapt and innovate. Pfeffer’s relevance in a European context has been questioned owing to his lack of commitment to independent worker representation and joint regulation (Boxall and Purcell, 2003), hence Marchington and Wilkinson’s adaptation, highlighted in Table.

HR practices for ‘competitive advantage through people’

With the universalist approach or ‘ideal set of practices’ (Guest, 1997), the concern is with how close organisations can get to the ideal set of practices, the hypothesis being that the closer an organisation gets, the better the organization will perform, in terms of higher productivity, service levels and profitability. The role of Human Resources, therefore, becomes one of identifying and gaining senior management commitment to a set of HR best practices, and ensuring that they are implemented and that reward is distributed accordingly.

The first difficulty with the best-practice approach is the variation in what constitutes best practice. Agreement on the underlying principles of the best-practice approach is reflected in Youndt et al.’s (1996: 839) summary below: Lists of best practices, however, vary intensely in their constitution and in their relationship to organisational performance. A sample of these variations is provided in Table. This results in confusion about which particular HR practices constitute high commitment, and a lack of empirical evidence and ‘theoretical rigour’ (Guest 1987: 267) to support their universal application. Capelli and Crocker-Hefter (1996: 7) note:

• Integrated bundles of HRM: horizontal integration

A key theme that emerges in relation to best-practice HRM is that individual practices cannot be implemented effectively in isolation (Storey, 1992) but rather combining them into integrated and complementary bundles is crucial (MacDuffie, 1995). Thus the notion of achieving horizontal integration within and between HR practices gains significance in the best-practice debate.

HR practices for ‘competitive advantage through people’

The need for horizontal integration in the application of SHRM principles is one element that is found in the configurational school of thought, the resource-based view approach and in certain best-practice models. It emphasises the coordination and congruence between HR practices, through ‘a pattern of planned action’ (Wright and McMahan, 1999). In the configurational school, cohesion is thought likely to create synergistic benefits, which in turn enable the organisation’s strategic goals to be met.

Roche (1999: 669), in his study on Irish organisations, noted that ‘organisations with a relatively high degree of integration of human resource strategy into business strategy are much more likely to adopt commitment-oriented bundles of HRM practices’. Where some of the best-practice models differ is in those that advocate the ‘universal’ application of SHRM, notably Pfeffer (1994, 1998). Pfeffer’s argument is that best practice may be used in any organisation, irrespective of product life cycle, market situation or workforce characteristics, and improved performance will ensue.

This approach ignores potentially significant differences between organisations, industries, sectors and countries however. The work of Delery and Doty (1996) has highlighted the complex relationship between the management of human resources and organisational performance, and their research supports the contingency approach (Schuler and Jackson, 1987) in indicating that there are some key HR practices, specifically internal career opportunities, results-oriented appraisals and participation/ voice, that must be aligned with the business strategy or, in other words, be context-specific.

The ‘bundles’ approach, however, is additive, and accepts that as long as there is a core of integrated high-commitment practices, other practices can be added or ignored, and still produce enhanced performance. Guest et al.’s analysis of the WERS data (2000a: 15), however, found that the ‘only combination of practices that made any sense was a straightforward count of all the practices’. As with many high-commitment-based models, there is an underlying assumption of unitarism, which ignores the inherent pluralist values and tensions present in many organisations. Coupled with further criticisms of context avoidance and assumed rationality between implementation and performance, the best-practice advocates, particularly the universalists, are not without their critics.

Self-directed work teams

In a study of illumination in the workplace of Hawthorne and the Western Electric Company, a sociologist from Harvard Business School, Elton Mayo, concluded that when the organization established experimental work groups, “the individuals became a team and the team gave itself wholeheartedly and spontaneously to cooperation.” Through a natural system of collaboration, the teams are not only responsible for the work but also the management of their group. Mayo’s research uncovered that teams under their own direction established a capacity for self-motivated learning and change. This concept of designing the work system with the full participation of the people proved to be a breakthrough for organizations during the 1990s. During that time, employees closest to the product and customer began to have increasing decision making capacities and capabilities.

Interview programs

The Hawthorne Experiments sought to determine a correlation between light levels and productivity. Researchers had divided the employees into teams of six and interviewed the individuals to determine the effect of the lighting. Mayo discovered that the interview program set up by the study inherently gave the employees a sense of higher purpose.[9] Exposure of employee thoughts and concerns to managers appeared to be a fundamental aspect of the relation between managers and employees. Evidently, by having the ability to speak to their managers, the employees at Western Electric exhibited a dramatic improvement in their attitudes towards work. Essential to a highly committed work force, the interview program formally developed and sustained cooperation with management.

Problem-solving teams

The Hawthorne experiment further highlighted that teams working without coercion from above or limitation from below could astonish even their own expectations of themselves. Sociologist Fritz Roethlisberger argued that this informal organization left the team responsible for addressing the myriad of problems that continuously arose. Roethlisberger noted by studying the chemistry of informal groups that human interactions and collaboration have the potential to set when teams have to face problems on their own. Together the individuals of the team strive to improve the processes of the team by adapting to different demands and learning from each other.

Cross training

Cross training began to be heavily examined through the scope of modern Japanese management in the automobile industry in the 1970s. Sociologists examined the way in which the Japanese automobile firms cross-trained its employees through a company wide orientation and training program. As Japanese firms trained their employees in a multitude of aspects in the production process, sociologists discovered that the training brought the employees together and formed a connection in which all the employees were dedicated to the company’s mission. These established connections appeared to solicit cooperation among the work force. The Japanese auto plants revealed that flexibility within the production teams allowed employees to work on their own tasks while keeping others efficient.