Introduction
Variations in human resource management (HRM) policy and practices are discussed in the context of understanding why such differences exist within different organisations, and what the driving influences are behind any differences.
Definitions
Human resource management (HRM) policies are continuing guidelines on the approach an organisation intends to adopt in managing its employees. They define the philosophies and values of the organisation on how people should be treated. From these flow the principles upon which managers are expected to act when approaching HR matters. HR policies serve as reference points when employment practices are being developed, and when decisions are made about people. HR policies are distinguished from procedures or practices, in that a policy provides generalised guidance on the approach adopted by the organisation, and therefore its employees, concerning various aspects of employment. Procedures spell out exactly what action should be taken to ensure alignment with the policy. There are many policy areas and the values of organisations will vary with the type of business area and with the culture of the organisation. The value concepts behind HR policies include:
- Equity – Treating employees fairly and justly.
- Consideration – Taking account of individual circumstances.
- Learning – A belief in the need to promote development.
- Performance – The management of performance by agreeing mutual expectations and giving feedback in their attainment.
Balance – Enabling a between work and life.
- Quality – Increasing satisfaction by making the working environment conducive to happy employees.
- Working conditions – Providing a healthy and safe environment
These values are proclaimed by many organisations in one form or another, but the extent to which they are practiced depends on the nature of the organisation (Armstrong 2006).
Performance
How job performance and its relation to underlying HR policies vary is described by Torrington et al (2008) Job satisfaction has been seen as key to the link to performance. The motivational theories which underpin this aspect of HR policy and practice are often based on the work of Maslow (1943), Vroom (1964), Herzberg (1968) and McGregor (1960). The importance of work itself is identified by Hertzberg as how opportunities for achievement, recognition, responsibility, autonomy, challenging tasks and development opportunities may all be motivational and this would affect HMR policies and practices of job design, empowerment, training and career development. Maslow has described how social needs may be met by affiliation and this is likely to be facilitated by HR policies which incorporate teamwork.
Vroom’s expectancy theory of motivation recognises that in the process of motivation the extent to which an individual feels he or she can achieve targets set will influence whether they feel they can try, so policies which enable individuals to agree targets are more likely result in employees attempting them. Policies that promote responsibility and self-motivation are more likely to succeed and this is in accordance with McGregor’s theory of motivation. Policies which ensure that pay and benefits are comparable with, or greater than, competitors are likely to have a motivating influence according to Herzberg’s theory.
Harrison (2005) argues that there is much evidence of links between HR practices and organisational performance; particularly where there is ‘bundling’ of sets practices. Findings suggested that where people are performing beyond minimal requirements, three conditions are necessary (CIPD 2001b). This is described as the AMO model and the requirements are:
-
- (A) They have the ability to do so because they have the necessary knowledge and skills, including team working.
- (M) They are motivated to do so.
- (O)They are given the opportunity to use their skills both in their jobs and in contributing to organisational success.
To turn AMO into action requires policies and practices to support the model, and key findings were that HR policies and practices that build commitment are crucial in turning skills into action. High levels of commitment and discretionary behaviour are needed to achieve above-average organisational performance. As an example Selfridges expresses it’s ‘Big Idea’ in three goals: to be the place where people want to shop, invest and work. Selfridges regularly reports on performance related to each and this scorecard approach enables an explicit link to be made between individuals’ goals and those of the organisation.
Best Practice
Businesses undergoing change or those in unpredictable markets have different HRM strategies and from them flow differing policies and procedures. Swart et al (2005) describe how the best-practice approach to HRM strategy, which holds that particular sets of best practices, will lead to performance improvements. A dominant theme is the best-practice approaches are that of horizontal alignment – i.e. establishing a fit between the various practices within the HR strategies, otherwise known as HR bundles. This model has been criticised as practitioners may find that what works best in one environment may not work as well in another. Relatively predictable environments which accommodate the strategy are more likely to succeed. Evolving strategy with relatively unpredictable environmental factors is more difficult as there is little knowledge of change or what triggers it in these circumstances. Best practice bundles can include employment security, selective hiring and sophisticated selection, extensive training and development, employee involvement, self-managed teams, reduction of status differences and high compensation tied to organisational performance.
Theories
Harris et al (2003) contrast the Universalist and contextual HRM approaches. The Universalist paradigm assumes that the pattern of planned HR deployments and activities are intended to enable a firm to achieve its goals. The characteristics of ‘good’ HR practices in the Universalist context include careful selection systems for recruitment and training, information sharing, clear job design, local participation, monitoring, performance appraisals, good grievance procedures, and promotion and compensation schemes that reward high-performance. This theory is widely accepted in the US, but in other countries such as list is contrary to their experience or even what would be considered as good practice. In contrast, the contextual paradigm looks for an overall understanding of what in contextually unique and why. It’s focussed on understanding what is different between and within HRM in various contexts, and what the causes of those differences are. The policies and practices of ‘leading-edge’ companies are of less interest to contextualists than identifying the way labour markets work and what more typical organisations are doing. The case of the Channel Tunnel was the subject of international comparative organisational and cultural research to explore the behaviour of British and French managers working to a common purpose. Of the measurements taken across some 200 managers, the French managers had significantly more work and decision-making autonomy and were less procedurally oriented than the British, but provided less feedback and opportunity for adjustment. The French had more control of their work and power emanated more from the personal responsibility of the senior managers that from control systems. The French were more action-oriented and the British more procedural. The British were more motivated through the use of feedback involving praise and encouragement but this was important to French managers. The British were more directly job-motivated, in that they expressed unhappiness when performing badly. The boundary between work and home life was more porous of the British and reported stress was lower. By contrast the French managers were more distant from colleagues and shouldered more responsibility, and therefore more stressed. The implication for HR is that not all HR management methods are transferable in the same enterprise, even when employee values have converged, and the effectiveness of any universal or in this case pan European concept of HRM is constrained by the different institutional contexts across Europe.
Environment
Zanko and Ngui (2003) argue that there is a growing recognition that HRM is shaped and shapes, influences and is influenced by the environments in which it is embedded. A survey of some 21 countries in Asia-Pacific comparing the main HRM issues and trends in HR policies and programmes, concluded that there is enormous diversity among APEC member economies HRM policies and practices, trends and issues, and this diversity is shaped by the contextual factors residing in various societies both within and out with national boundaries, and there various geographic, historical, socio-cultural, political and economic conditions. There is also no ‘one best way’ of HRM being followed by the economies in the Asia-Pacific Economic Cooperation Forum (APEC). It follows with such diversity that there will be even more differences in individual companies policy and practice.
State influence
The role of the state has influence on HR policy and practice, particularly in factors such as job security. In Europe it is typical for governments to be major employers in their own right, since the public sector forms a substantial proportion of the total economy, for example in Sweden., and many governments subsidise these jobs extensively. Likewise, on becoming unemployed, workers in the US initially receive a level of benefit of about two-thirds their income, but those levels fall sharply after six to none months. In European countries, in contrast, benefits are either not time-limited or actually increase the longer people are out of work. The major difference between HRM in the USA and in Western Europe is the degree to which HRM is influenced and determined by state regulations. Companies have a narrower scope of choice in regard to personnel management than in the USA. There are differences in the degree of employment protection, legislative requirements on pay and hours of work, and the legislation on forms of employment contract. There are differences in the length of notice period to be given to workers, the amount of severance pay to be paid according to the nature of the separation, and the nature and complexity of the legal process involved in redundancies. Union recognition and its role in collective bargaining which sets the terms and conditions of many employees is another differentiating factor as in most European countries there is a legal requirement of employers over a certain size to recognise unions for consultative purposes (Harris et al 2003).
Professional HR organisations
Harris et all (2003) relates that HRM institutes and associations are different in the national context. The CIPD in the UK has over 100, 000 members, all of whom have gone through a qualification process. On the other hand the ANDCP in France is an elitist organisation of heads of major organisations. Most members of the DGFP in Germany are corporate. Spain has a strong regional association with a relatively weak centre, whereas Sweden has a well-resourced central organisation. There are over 70 different national associations world-wide with different levels of entry qualifications, restrictions on membership, levels of education and training, so it is unsurprising that their policies and practices, even at national level, differ widely and therefore translate to even more differences at individual organisational level.
Generational influence
Holbeche (2009) discuss the differences caused by HR policies which encourage greater control of personal time, offer rewards for hard work and involve people in exciting projects are more likely to attract younger people. The generation born after 1982 have a different perception of work than their parents. Young people want money, greater control of their time and a chance to use some of their intellectual potential. Organisations which are future-oriented and developing and using new technologies are more attractive. These types of organisations include consultancies as opposed t organisations where people’s intelligence and individual contribution are perceived to be of only limited value, such as primary manufacturing. This affects work-life policies, and the HR practice of allowing home working on a regular basis is a response in some consultancy companies such as Cap Gemini.
Diversity
Many policies within organisations originally were designed to fit the stereotypical male employee. Now leading companies are changing structures and policies to facilitate and support a diverse workforce. A survey of Fortune 1,000 companies found that 85 percent of companies surveyed had formal policies against racism and sexism, and 76 percent have structured grievance procedures and complaint review processes. Companies are also developing policies to support the recruitment and career advancement of diverse employees. Increasingly, organisations such a Proctor & gamble, Ernst &Young, and Allstate Insurance are tying managers’ bonuses and promotions to how well they diversify the workforce (Daft 2006). In Western countries, issues relating to the diversity of the workforce may include gender, race, ethnicity, religion, age, disability, immigration status, social class, political association, marital status and sexual orientation. Many of these differences are accepted by Western society and protected by law and company HR policy. By contrast, the concept of managing diversity is relatively new to China, many employing organisations may never have heard of the phrase. Inequality at the workplace and in society generally is often accepted and unchallenged (Storey 2008).
International
Stahl and Bjorkman (2006) argue that at one level, HRM clearly is universal. Every organisation has to utilise and, hence, in some way, to manage, human resources. However, HRM practices vary across the world.
Dowling et al (2008) argues that to operate in an international environment an HR department must engage in a number of activities and apply policy and practice which is different from organisations which do not have a multinational presence. These include international taxation, international relocation and orientation, administrative services for expatriates, host-government relations, and language translation services. Tax equalisation policies are required to ensure that there is no tax incentive or disincentive associated with any particular international assignment. International relocation involves arranging for pre-departure training, providing immigration and travel details, providing housing, shopping, medical care, recreation and schooling information, and finalising compensation details such as delivery of overseas salary, determination of overseas allowances and taxation. There also has to be a policy covering re-entry to the home country and for administrative services for expatriates in the host countries, and where local conditions conflict with policies. There are ethical considerations when practices that are legal and accepted in the host country may be unethical and potentially illegal in the home country. For example a host country in which an AIDS test for a work permit for an employee whose parent company is headquartered in the USA, where employment-related AIDS testing is a controversial issue. Multinationals with European presence may face the complexity of designing and administering policies for more than one national group of employees who may work together in one building.
Communication
Mathis and Jackson (2007) describe that there are various methods of communication policy and practice among organisations. Internal publications, company magazines, newsletters videotapes, Internet postings and e-mail announcements are some of the common means of reaching employees with HR information, aimed at timely and widespread dissemination. In practice, this efficiency can be misused as in the case of General Dynamics Government Systems Corporation when they sent out an e-mail to all employees advising that arbitration would be the exclusive means of resolving workplace disputes. One employee was later fired for persistent absenteeism and lateness. He sued and the court refused to require him to arbitrate the claim because the e-mail notification lacked several important components of proper notice.
Interpretation
Martocchio (2006) illustrates that while an HR policy might reflect a commitment to pay-for-performance there can be a number of different interpretations of this by different companies. Some may have HR practices which involve profit sharing, others piece-rate systems, other commission, any of which might be implemented to attain the policy. For instance a sales oriented organisation may rely heavily on commission, while a manufacturing company may rely on measured output as a means of implementation of the policy.
Torrington et al (2008) states that policy and practice may also vary by being subject to interpretation by line managers, especially if the HR policies are not well defined, or the HR practice of insuring line management has been coached in them is inadequate. They provide an example supplied by Purcell et al (2003) of two Tesco stores each operating the same Tesco HRM policies but with very different performance levels. In this case the line manager’s role was identified as key in the way policies were delivered and the consequent impact on employees and their performance Torrington et al (2008)
Soft and Hard HRM
Beardwell and Claydon (2004) in discussing HRM policies aimed at maximising employee commitment and improving the overall effectiveness of human resources state that the individual practices which are used can vary depending on whether the dominant interpretation of HRM is soft or hard. Soft variants of HRM are likely to emphasise employee commitment through extensive employee development, internal labour markets and job security, whereas hard variants are more likely to emphasis effective utilisation through flexibility, multi-skilling and performance-related pay.
Conclusions
HRM policies and procedures can vary widely with different organisations, and even in some cases within one organisation. In particular, environmental factors such as national differences and the acceptability, or otherwise of certain practices is a determinant factor in ensuring differences. Culture has a major role to play, as does the influence of the state, and the strength or otherwise of labour unions. Additionally, reward or motivational policies may of necessity be aligned to differing reward mechanisms such as commission, piece work etc. All these differences are compounded by the fact that internationally the HR profession itself varies widely in their structure, qualifications and influence of policy and practice.
References
Armstrong, M. (2006), A Handbook of Human Resource Management Practice, 10th Edition, Kogan Page Limited, London, p 147.
Beardwell, I. Holden, L. Claydon, T. (2004), Human Resource Management: A Contemporary Approach, Fourth Edition, FT Prentice Hall, London, p 15.
Bratton J. Gold, J. (2001), Human Resource Management: Theory and Practice, Edition 2, Macmillan Press Ltd., p 166
Bohlander, G.W. Snell, S. (2007) Managing Human Resources, Edition 14, Thomson South- Western, USA, p xxx.
Daft, R.L. (2006), The New Era of Management, Thomson South-Western, USA, p 480.
Dowling, P.J. Festing, M. Engle, A.D. (2008) International Human Resource Management, Edition 5, Thomson Learning, London, p 7, 250.
Multinationals GOOD
Harris, H. Brewster, C. Sparrow, P. (2003) International Human Resource Management, Institute of Personnel and Development, London, p 57-69.
Harrison, R. (2005), Learning and Development. 4th Edition, Chartered Institute of Personnel and Development, London, p 99.
Hertzberg, F. (1968) One More Time: How do you Motivate Employees? Harvard Business Review, Vol. 46, pp 53-62.
Holbeche, L. (2009) Aligning Human Resources and Business Strategy, Edition 2, Butterworth-Heinemann, Oxford, p 344.
Martocchio, J. J. (2006) Research in Personnel and Human Resources Management, Elsevier, Oxford, p 221.
Maslow, A. (1943) A Theory of Human Motivation, Psychological Review, Vol. 50, pp 370-96.
Mathis, R.L. Jackson, J.H. (2007) Human Resource Management, Edition 12, Thomson South-Western, USA, p 510.
McGregor, D. (1960 The Human Side of Enterprise, McGraw-Hill, USA.
Purcell, J. Kinnie, N. Hutchinson, S. Rayton, B. Swart, J. (2003) Understanding the People Performance Link, Research report, CIPD, London.
Stahl, G.K. Bjorkman, I. (2006) Handbook of Research in International Human Resource Management, Edward Elgar Publishing Limited, UK, p 68.
Comparing P and P GOOD
Storey, J. (2008) The Routledge Companion to Strategic Human Resource Management, Routledge, Oxon, p459.
Swart, J. Mann, C. Brown, S. Price, A.(2005) Human Resource Development, Elsevier Butterworth-Heinemann, Oxford, p 79.
Torrington, D. Hall, L. Taylor, S. (2008), Human Resource Management, Seventh Edition, FT Prentice Hall, London, p 259.
Vroom, V. (1964) Work and Motivation, John Wiley & Sons, Chichester.
Zanko, M. Ngui. M. (2003) The Handbook of Human Resource Management Policies and Practices in Asia-Pacific Economies, Edward Elgar Publishing Limited, UK, p 596.