Human_Resource_Management

Strategy of a company: a pattern of decisions emerging throughout the firm Seven Best Practices (Pfeffer 1998): high commitment & involvement Employment security: job secured/ the fundamental element of the model Selective hiring: raise skill level of new employees to achieve human capital advantage as source of sustained competitive advantage Teamworking: group of employees be responsible for group task High compensation: motivation for employees to perform better; above-average compensation- attract and retain the core high-quality employees Extensive training: sustained competitive advantage & remain the employees’ skill at forefront of their field Small status differences: (status btw managers and employees) overall equal treatment encourages employees involve in work with higher responsibility Information sharing: convey a message of ‘trust’, encourage bottom-up communication (idea sharing) Arthur (1992, 1994) Quality Enhancement / Innovation Strategy: teamworking ↑ pay ↑ training ↑ employee involvement (discretion) ↑ use of internal labour markets (employment security) ↑ Cost Reduction Strategy training ↓ teamworking ↓ pay ↓ ad hoc recruitment and selection ↑ use of temp workers, subcontractors and migrant workers ↑ +. Huselid (1995) cross-sectional study of 968 US workplaces: best practice workplaces had annual profits per employee $15,000 per annum higher Patterson (1997) studies of 67 UK manufacturing: best practices as a driver to improved performance Pfeffer (1998): best practice HRM has the potential to have positive imparct on all organizational performance regardless of company profile -. Purcell (2003): diverse lists of desirable practices: beyond a certain level of obviously sensible practices, managers start to think about their unique context. Therefore, best practice models engender diversity rather than uniformity in HRM. Payment I. Basic pay: Job based- compare task & responsibility of different job Competency based Time based- e.g. part time v.s full time; overtime is cutting overall cost during hard time II. Benefits: Insurance Pension plans- defined benefits and contributions * Guarantee retiring benefit, depending on the duration and final salary * Individual account for deposit, funded by company and realized to employees until retired; risky- inflation and time-value Pay for time III. Incentive pay: variable depending on performance Piece rate- price each piece of works and levelled pay Commission- for sales, variable to the amount of sales (monthly/ weekly) Bonus- especially to skilled employees (annual/ semi-annual) Merit pay- based on annual performance and affect into basic pay next year Company-performance –related pay Restricted stock plan: employee is given shares or rights to purchase shares under market price (their shares are restricted for holding at least a settled period, meanwhile, they will try to increase price by better performance Stock option plans: mostly call option Profit-related pay Scanlon plan: tie a reward to ratio of [total payroll cost/sales value] Rucker plans: total payroll cost/ production value added [sales value- cost of material, service, supply] Which is recommended' Piece rate for production workers- effective Commission for sales Bonus/ merit- commonly used, but difficult to implement [performance measures], inappropriate way may raise unwanted opposite result Profit-related- less complicated, less problems; mostly for the high level Share/ options- common for top managers; problem of agent-principle conflicts: managers may focus on short-term increase in stock price but at expense of long-term run and owners’ interests Benefits- counts 27% of total compensation package in US Equity theory- estimate how big the package should be * Op/Ip ' Oo/ Io: employee compares the personal earning and contribution to the others [their outputs v.s inputs] <: underreward inequity- negative consequence, people will decrease effort (input) and want to get more (output) like stealing things or leave the firm >: overreward inequity- people become self-conceit that revalue and improve the self performance, then think it’s deserved, but actually is not =: equilibrium should aim to Managers should make sure it is equal by right evaluation Internal evaluation: job evaluation- relevant worth of different job inner-company External evaluation: benchmark average- through industry (job at same level called key jobs) * Conduct regression analysis for non-key jobs Solution Pay the benchmark average to the job same with the industry, use regression for all non-key jobs: max external equity Use job evaluation for all jobs: max internal equity Employee involvement: give employee autonomy, target motivation & opportunity Control: make order and monitor in case of deviation Authority/ Best practice approach: a bundle of HR practise to max ability, motivation & opportunity Three degrees Downward communication: limit autonomy, ruled by managers * Team briefing- little background about the job are informed, not really have autonomy; not told what to do, but why to do that Upward problem solving: employee undertakes jobs under the control system * Suggestion scheme- suggest supervisor about how to improve the work process * Quality circles- group discussion about production process improvement with/ without supervisor * Attitude survey- not has real autonomy Task participation: workers offered discretion and autonomy * Job enrichment- independent individual discretion, certain freedom about job * Team working: with discretion about allocating group members (e.g. biggest change in work design since assembly production system introduced) Team working Job rotation: traditional work specialized in one task; TW makes different tasks flexible to members Multi- skilling: TW are more skilled than traditional works; more tasks which should be interrelated Process improvement: responsible for making process improvement; make adjustment to improve quality of products Supplies and maintenance: ensure the supply materials always available in time; responsible for arrange maintenance repair Mutual monitoring * Group goals / rewards: less supervise of individual work * Monitor is controlled within the group; members are committed to some group goals, can base on financial reward at group level * Social identification: high status of the team (↑skills, pay, employment security), makes members feel sense of pride to join the group * Values, norms, rules: if value of team goal is commonly shared, which is conducive to achieve tram goal, norm is preferred than rules * Concertive-coercive control Tram facilitator: not control over the workers, but help understand group goals, foster a sense of pride, support rules framing, mutual monitoring Job characteristics model-TW is introduced to improve profitability; 5 characteristics of job that stimulate the intrinsic motivation of job itself to employees a) Task variety: job consist of various task experienced b) Identity: employee identity with job meaningfulness c) Significance: someone care how you perform of work d) Autonomy: feel needed as an expert, be responsible for sth. e) Feedback High intrinsic motivation; High quality work performance; High satisfaction with the work; Low absenteeism and turnover The Effectiveness of EI Downward communication: no significant effect (Patterson et al., 1997) * Employee may feel better of more concern, but no improve in performance Upward problem solving: modest and inconsistent effects on attitudes, behaviors and performance (Batt, 2004, Cohen & Bailey, 1997) Task-participation: performance improvements (Patterson et al., 1997) * Self-managed teams; Productivity effects of self-managed teams (reviews and meta-analyses by Pearce & Ravlin, 1987, Cotton, 1993, Cohen & Bailey, 1997, Guzzo & Dickson, 1996, Macy & Izumi, 1993) * Saving supervising cost to increase productivity and profitability- field technicians: US$60,780 salary of supervisors per team (Batt, 2001) * But: this new system takes years to full applied by workers Type of workforce flexibility Numerical: amount change- demand ↑, hire more; demand↓, lay some off Functional: workplace change- shift within firm for diff tasks in terms of their performance, e.g. self-managed teams- high degree of flexibility Temporal: time change- demand ↑, more overtime; demand↓, working short or instead of training program (Kurzarbeit) Financial: payment change- recession, less pay, other conditions remains (workplace, performance, task); pay-related-pay Contingent work: temporary employees- hire for big shift in demand (numerical flexibility) * Staff engagements in the absence of an implicit or explicit contract for ongoing employment (Polivka & Nardone, 1989) Different variations 1. Fixed-term contractors: no expectation for further employment after contract 2. Temporary agency workers: facilitate the functions temporarily needed 3. Leased workers: a type of 2., who contract with client org., which does training and development of employees * E.g. 30% of the US workforce (Gallagher & McLeanParks, 2001; Belous, 1989), especially agency grows * * Workers in the pool for agency are not regular employees of agency, they’re independent contractors Reasons for prevalent CW Demand is expanding Temporary absent of regular employees Incapable tasks (not regular) Reduce costs (lower wages- less pay, less fringe benefit) Atkinson’s model: workforce segmented into core and periphery Core: permanent employees: executives, skilled, team workers Periphery: internal groups- substitutable, not much skilled; external groups- temporary workers, freelances, sub-contractors * Numerical flexibility provide better job security to core workers than peripheral groups * Prerequisite the use of best practice system of HRM * Different treatment: core- best practice; periphery- control Mixed empirical evidence: + Pfeffer (2009) in Germany, employment security of core workers protected by use of CW as numerical flexible purpose - Cappelli and Neumark (2004) less employment security, CW may substitute regular workers, in terms of better performance US cases Matusik & Hill (1998) 43% of CW used in professional/ technical functions- not for numerical flexiblility purpose; substitute some existing workers/ suffice needs in specific skilled workers CW still at more voluntary status (Krausz et al., 1995; Marler et al., 2002; Arthur & Rouseau, 1996) Work-life balance Flexible reductions in working hours- when face particular demand * Part-time- shift from full-time e.g. working mother * Sick leave- stay at home with payment during therapy * Vacation- to recover from stressed work * Leave for childbearing and family care- maturity leave Employee control over scheduling and location of work * Flexible time- e.g. start any time btw 6-9, finish at 4-7 * Job sharing- e.g. two employees share one job * Working at home- soho, writer, skype, video conference Financial support- company welfare * Childcare * Eldercare * Day care centres Evidence: Family protection laws in the UK Maternity leave- protected leave with payment for mum, and secured to return former job Paternity leave- father of new born baby can also have protected leave Parental leave- position is secured when leave for ill child, but unpaid Part-time employment- right to apply reduction of working hours