All entries for Monday 29 September 2008

September 29, 2008

Human Resources Management: Lesson 3 – Exercise

Question 1: Reflecting on your own experience as an employee and as a manager, to what extent do you think pay motivates or demotivates employees? Why?

Several considerations (personal and “perceived” in the team I am/was working with) may be taken about this topic.

Up to decades ago payment (in goods first, in money then) was the only reason to work, to perform any activities.

Nowadays (and in my personal experience) this is not true any more.

Several jobs (especially in this flexible market) that give you the same payment (or even more) may be performed but there’re OTHER reasons that persuade you to invest time & forces in one particular “project”.

My personal working experience started quite early, with several very short term contracts that gave me low pay and no “security” nor career evolution opportunities.

In that period pay was a need (to pay my university) and really it was my only motivator.

In my next working experiences (especially after the degree), in the choice among different opportunities, I started to consider other targets/elements like the possibility of

  • abroad work experiences,
  • changing position in few years,
  • growing in the same sector,
  • having training sessions…

All above obviously taking in account “relativities” and “differentials”[1].

Applying Herzberg’s (1996) two-factor theory to 2 of my personal experiences:

  • in administration sector: medium “hygiene” + low “motivational” factors à employees were not motivated and did many complaints.

  • in operations sector: medium “hygiene” + high “motivational” factors à employees were motivated but did many complaints; it was exciting and competitive working contest but pay and conditions should be improved if company wants to retain highest skills.

Around 10 years working experience make me feel that:

  • I completely agree that a pay above the market average (or a salary increase) is a “motivator” ONLY at the beginning,

  • I’ve also experienced (and seen around me) that underpayment feelings lead to a complete lack of motivation ONLY if no hope of career / growing opportunities (both in salary and position) are given,

  • A great motivator is often the direct award on salary of one employee’s work.

Obviously all the above is based on my personal experience, the working contest I’ve been living in, my desire for professional growth, market conditions and so on.

Those are (some of the) factors that influence the pay view, changing one (or some) of the above may radically change these conclusions.

Question 2: Thinking about different pay systems that you have experienced, which have been the most effective? Why?

I think there’s no most effective pay system.

My answer will be “it depends” and it will be based on my wishes and on my personal experience.

Nowadays what I feel (obviously?) is that the worst is a COMPLETE FIX PAY system. In this contest there’s no motivation at all and employees tend to work as less as they can. By the way when this contest is imposed (for instance in public sector) other “motivators” (like job rotation, job enlargement, working conditions improvement...) may be applied by management

I think that “individual performance-related pay”[2] works effectively.

It’s accused of being too dependent on the judgement of managers but I’ve personally experienced an improvement in its application through the involvement of a 360° employees review. This kind of evaluation revealed itself helpful also in organization where team working is widespread and where a single employee may be simultaneously part of more then one team.

We’ve also to remember the important “message” a company that adopt a PRP method gives to stakeholders.

Several appraisal systems may be used to calculate the PRP.

For sure the “comparison with objectives” is the most objective one but it’s not always applicable. In my opinion when “Narrative report” or “Critical incidents” are used they’ve to be fully supported and motivated. The next employee’s managers understand, only in this way, all the previous evaluations given.

I strongly believe in the “Potential review” especially for employees that shows a desire for professional growth.

In conclusion I believe there’s no perfect system; we’ve to remember that pay is only ONE among performance managing elements.

It has to be flexible and adaptable to changing circumstances.


1) The Warwick MBA for IBM – Human Resource Management (IB811Z)

2) Mick Marchington and Adrian Wilkinson, Human Resources Management at Work. People Management and Development, Third Edition, CIPD, 2007

[1] The Warwick MBA for IBM – Human Resource Management (IB811Z) Lesson 3

[2] Mick Marchington and Adrian Wilkinson, Human Resources Management at Work. People Management and Development, Third Edition, CIPD, 2007

Human Resources Management: Lesson 2 – Exercise

Question 1: Reflecting on your own work experience, and with reference to the theoretical models discussed in Lesson 1, how would you characterise the role of the HR function in an organisation that you are familiar with?

In order to evaluate the role of the HR function and to discover an application of the HR theoretical models seen up to this moment, I’ll analyze the “GL Informatica” company[1].

It’s a medium size (150 employees) company founded in 1988 that sells:

  • its own SW products
  • services (application and assistance consultancy on system)

G.L. is a young and dynamic company that encourages the spirit of innovation and teamwork, rewarding the commitment and determination in achieving the goals. The strength and success have always been based on professionalism, expertise and know-how.

Let’s analyze the internal context with attention to the external one (since where the organisation operates is fundamental to understand HR role ad evolution).

In last few years GL managers seemed to place an emphasis on individualism[2].

The worldwide political and economic context (especially in IT “business sector”) change and (d)evolution had an effect as well: only few and highly specialized company survived standing alone and without being absorbed by big ones.

GL Management, at a first sight, seems to have chosen a “Sophisticated human relations” style (Purcell, 1986).

Employees are professionals and highly considered within the company: as stated in its home page website: “The value of our human capital is considered one of the most strategic and competitive advantages”.

Their wages are appropriate to their skills and quite above the average.

This approach, up to this moment, has proven successful (at least looking at the growing company’s revenue[3] and thinking about the “particular” situation IT companies are living).

GL is organized in 5 Business Units. I’ve not noticed differences in management styles among each of these groups and within groups themselves.

GL has a single centralized HR department (at corporate level) that

  • maintain attention in developing integrated HR policies across the organisation,
  • develop and maintain long-run human resource policies despite the attention paid to each quarter financial result
  • collaborate with line-managers 

It doesn’t seem a bureaucratic structure and using Storey (1992) matrix I can describe GL HR function as “change makers” or, at least, “adviser” according to the importance of the specific decision that has to be undertaken.

Question 2: Why do you think HR played this role in the organisation?

As mentioned above GL Management tries to develop relations with employees as individuals. In last few years it has not been difficult and may has been due to

  1. the growing Italian “labour market” liberalization/change  
  2. the changing “legal context”  

whose main effect has been a change in employees’ contract type (FROM full time/long term TO flexible time/short term contracts).

Looking at the management style, above I’ve defined it as a “Sophisticated human relations” one. In my opinion and analyzing it deeply, since GL operates in Italy I should more refer to a “consultative” style. In Italy, despite last few years evolution, Unions are highly recognized and play a key role in defining and addressing HR management rules and decision.

Since “the strong influence that the structure of an organisation may have on the way HR is managed is recognized[4] the choice of maintaining a centralized HR department has been undertaken.

GL medium size could make it adopt a complete Mform that would have led to self-contained divisions where resources operate independently.

Each division would have been headed by an executive responsible for investments, developments and performance, profits would have not been automatically returned to the divisions that generated them and corporate would only deal with strategic planning. This kind of organization would have led to the complete loss of HR policies across the organisation.

Employees are seen as the most important resources, competition is high and dealing with high specialized skill GL have to protect against other companies recruitments policy.

GL HR role is central and quite active; it operates at a corporate strategic level, works and continues to invest in order to maintain the relationship and develop skills.

Question 3: What are the strengths and weaknesses of this role in the context of the organisation?

One GL HR role weakness is to remain at a too “strategic” level and to loose sight of the day to day needs and experiences. It could participate more actively in making the profit grow (according to the revenue increase) through the exploitation of new kinds of employees’ contracts (offered by this “new” flexible labour market).

Another weakness is the contrast with line management (especially in overload periods).

One of its strength, up to this moment, has been a good internal fit[5] between its strategy/policy and Italian labour market changing contest.

The good relationship with Unions has to be considered strength as well.

[2] Trompenaars (1993)

[4] Purcell and Alhstrand, 1994

[5] Marchington and Wilkinson, 2005


1) The Warwick MBA for IBM – Human Resource Management (IB811Z)

2) Mick Marchington and Adrian Wilkinson, Human Resources Management at Work. People Management and Development, Third Edition, CIPD, 2007

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