June 22, 2009

Human Resource Management

Human Resource Management Lesson 2 Exercise

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 (it must not be IBM)?

American Express is a global financial services company, known primarily for its credit/charge card and traveller cheque businesses. I observed American Express at one of its major offices, Brighton in the UK, over a period of 3 years from 2003 to 2005, when the company was experiencing a relatively stable period, in terms of growth and general business health.

To understand the role that HR plays within American Express in the UK let us firstly consider the external factors affecting the company at the Brighton office:-

Economic

American Express operates under an outsider system where the shareholders power ensures a strong focus on monitoring and measuring the company’s performance. Normally this results in cost reduction activities. Although American Express were reducing their operating costs during this period, the 2005 Annual Report stated that there was an 8% increase in ‘HR and other expenses’ partly due to higher technology costs, but also including ongoing high levels of commitment to training and development of employees. 

Although American Express operates under an outsider system, the HR strategy was more aligned to an insider system, ie employees appeared to be treated as the organisations source of competitive advantage and were treated very individually in order to ‘keep them happy’

Political

American Express has worked diligently and consistently at a global level since the 1970’s to resist unions. The company has done this by implementing a strong HR strategy to partner with their employees. In terms of context, the number of unions in the UK has steadily declined, and the role of the TUC, the main union confederate, had progressed from collective bargaining to influencing and lobbying. In addition TUC supports the idea of employee and management partnership.

Legal

Although American Express is a US based company, the function in Brighton operates under UK regulations. There were widespread consultations with employees about changes to the legal context the company was working in, and particularly as European legislation was being introduced to the UK for items such as emission from Company Vehicles, and Food Hygiene and Safety Standards which impacted the offering of canteen facilities to staff.

Labour Markets

The Brighton office sourced many of its staff from Brighton itself which has a total population of 480,000 people. Brighton has a young, well-educated and diverse cultural demographic. Brighton is known as the ‘Gay capital of Britain’, the three MP’s elected in 2005 were Labour, and 22% of the vote in Brighton went to the Green Party in 2005 (compared to the national total vote of 1%.) 

A progressive partnership HR strategy appears to have been received well and proved fruitful in the context of the labour market available.

Business Sector

American Express are in the business of offering premium services, and are operating an HR strategy which could be described as corporate isomorphism, as defined by Ferner and Quintanilla (1998). This is the HR strategy and practices of a multinational corporation (MNC), so important to its culture that it is distributed intact to the countries the business is operating in with scant regard for the countries normal practices or for competitors standard approaches.      

Location

The US and UK broadly share similarities in national cultural characteristics and when looking at the definitions put forward by Trompenaars (1993) it is clear that the UK shares practices that embrace universalism, individualism and achievement with some adjustment to be made for emotional expression where the US are more open than the UK. The location of Brighton itself, recruiting from a progressive, open-minded sub-culture means that the HR Strategy has been well received and embedded in the business.    

If we now turn to the management style of American Express we should consider the model set out by Purcell below:

High

Individualism

Individualism

Collectivism

Collectivism

High

Low

Low

Sophisticated human relations

Traditional

Consultative

Constitutional

Fig 2.1 Management style in handling employee relations

Source: Purcell, J. (1986) ‘Employee Relations Autonomy Within a Corporate Culture’ Personnel Management, February

The management style adopted by American Express would be described as sophisticated human relations as it is high on individualism.  Employees have a clear understanding of the promotions structure and the procedures of the company for reward, promotion, appraisal, and grievances.

Management are rated by employees themselves, and are therefore incentivised to consider and treat the individual employees working for them with the utmost respect and clarity. A downside to this is that salary levels of employees are sometimes above the market level which creates a cost issue for the business.

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

American Express has committed to a long term HR strategy to create a culture of commitment to service from their employees. This is important to the company as they were offering a premium service and brand.

The strategy comprises of such elements as investment in training and development of employees, managers being appraised almost totally on feedback from their own first line staff which has a direct impact on the managers’ remuneration, employee consultations, profit share schemes, and above market salaries (as demonstrated when staff transferred via TUPE from American Express to IBM, and have had no salary pay increase to position an individual to market pay for 5 years)  The result of this is

a)     a strongly committed and loyal workforce to the company

b)     employees who feel that they have a ‘voice’ in the organisation

c)     investment in training and development of employees (managers want a good appraisal and will fight for these budgets)

d)     excellent service providers (as a result of both training and strong loyalty to the company) for a premium service

e)     low attrition rates

What are the strengths and weaknesses of this role in the context of the organisation

The HR role implemented in American Express means that the company has high commitment and loyalty from its employees. This commitment to the brand is inherent in the high end services offered in the card banking industry which is a marketing tool in itself. The loyalty engendered also lowers the attrition rate, which means the company sees long term payback on their investment in training and development of employees.

Over time, the emphasis on individualism has shown some weakness due to the higher expectations of the employees. The concept of a mutual psychological contract has had to be introduced into the HR strategy, in the past 5 years to help employees to understand that employees and managers need to agree on issues that are attractive to both parties  

Additionally American Express has outsourced some of its departments, and its employees have found it difficult to enter another company that has different management styles, and where the salaries are not at market level.

BIBLIOGRAPHY

Marchington, M. and Wilkinson, A. (2008) Human Resource Management at Work – People Management and Development 4th ed, London: Chartered Institute of Personnel and Development

Purcell, J. (1986) ‘Employee Relations Autonomy Within a Corporate Culture’ Personnel Management, February

Quintanilla, J. & Ferner, A. (2003) ‘Multinationals and human resource management: between global convergence and national identity’, International Journal of Human Resource Management, Vol.14, No.3, 363-8

Trompenaars, F. (1993) Riding the Waves of Culture: Understanding Cultural Diversity in Business London: Nicholas Brearly Publishing

www.212.americanexpress.com [Online] (URL: http://www212.americanexpress.com/dsmlive/dsm/int/campus/campusrecruitmenthome/workingwithus/ourculture.do?vgnextoid=e34e0681b88ec110VgnVCM100000cef4ad94RCRD) (Accessed 2 June 2009)

www.thisbrighton.co.uk ‘Trade Unions – A National Perspective’ [Online] (URL: http://www.thisbrighton.co.uk/city-politics/trade-unions.htm) (Accessed 2 June 2009)

WBS (2009) Human Resource Management, Warwick Business School

Human Resource Management Lesson 3 Exercise

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

In my experience as both an employee and a manager there is not a straightforward answer to whether pay motivates or demotivates employees because it is dependent on a number of factors.

For example a pay rise which is expected as part of a fixed incremental process is not as motivational as an unexpected exceptionally high increase in pay awarded due to an outstanding performance.  Equally if an employee has worked hard, and performed well, and been awarded a pay increase which falls below the employees expectations pay can become a demotivating factor.  

There are two areas that stand out as contextually important in the argument on whether pay is a motivating or demotivating factor:-

Equity Theory

The first is the entry point of the employee into the interaction (ie whether the employee begins by feeling underpaid, overpaid or somewhere in between the two.) This is known as equity theory (WBS, 2007/8) and is a process theory in the field of organisational behaviour.

According to Maslow’s content theory (1943) basic physiological needs such as pay have to be satisfied before an employee can move up the hierarchy to ‘higher’ social needs in order to increase motivation.   Herzberg (1966) analysed needs as motivators or hygiene factors, pay being a hygiene factor, which broadly related to Maslow’s lower-order needs. Herzbergs theory of ensuring that negative hygiene factors (eg low pay) do not detract from the work requiring to be done supports the theory that pay can become a demotivator if the employee feels underpaid.

I have experienced employees who have left IBM due to entering IBM on a low market rate on the pay scale, and managers not having the flexibility or power to address the gap. I have also experienced employees who are paid well above the market rate in IBM, and who demonstrate sustained motivation and commitment to the company as they know they are placed in a good position. These are examples of felt negative inequity (feeling underpaid) and felt positive inquity (feeling overpaid.)

Expectancy Theory

The second factor that stands out to me, in terms of pay as a motivating factor, is that different career and life cycle stages affect employee motivation and related choices and options.  Generational diversity also plays a significant part in whether pay is a motivational factor or not as different values drives employees in different ways, and at different stages of their lives or career. Vroom (1964) argues that his path-goal concept or expectancy theory covers this complex area, and individuals have the capacity to evaluate factors pertinent to themselves in order to decide whether they will be motivated or not.  

Knowing in advance how each generation can be triggered, either positively or

negatively, can help organizations develop balanced policies and can help

individual managers and employees structure their work interactions, including pay, in ways that benefit all types of people

Some employees may have different needs as they approach retirement (eg one employee may want work/life balance rather than more pay whilst another may want pay increases to top up their pension.) whilst employees in their 20’s may want a work/life balance if they feel they have an equitable market based pay, or may be ambitious and motivated by pay in terms of achieving higher levels than their peers.) 

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

I have experienced 2 types of pay system in my working life.

The first system was an hourly rate. I was paid on a weekly basis for the hours I worked at a restaurant the previous week. The system was easy to understand and administer for both myself and the company, so if there were any disputes over the amount they were quickly able to be clarified. The incentive, as an employee, was that any tips I received during the evening were solely mine to keep which was a motivating factor to provide the best possible service.

The second system is a Performance Related pay (PRP) system. I am paid a fixed annual salary on a monthly basis with a discretionary incremental scale each year, plus a one-off payment during one tax year related to performance. The performance related element is awarded within capped levels defined by both seniority and the company’s profit performance for the previous year.

This system is theoretically good, but actually mediocre in execution because

(1)  managers are not trained adequately to appraise lower performers. This means that normalisation spread of salary increases are high-ended and the better performers get a diluted pay increase rather than a high increase as they perhaps deserve

(2)  managers are also, conversely, providing very high appraisals to most employees. The system is measured as 1(exceptional), 2(high performer), 3(average performer) and 4(low performer.) Most managers were awarding 1’s and 2’s only.  The result was that employees expectations were raised and most employees expected at least 2.  HR had to introduce a 2+ between 1 and 2 to assist managers in normalising the spread for more 2’s (and by default, more 3) performers, but there have been many disgruntled employees, mainly because the 2 performers do not now receive an annual performance-related payment.

(3)  managers are not always strong communicators about the company’s profit performance and the resulting capped levels. Employees are often confused by the capped levels, as the definitions seem to change, eg one year profit was calculated at a worldwide level and the following year at regional level, which happened to be the lower of the two that year. Employees trust in the fairness of the system was damaged by this lack of clarity and felt that the company was not being forthright

BIBLIOGRAPHY

Herzberg, F. (1966) Work and the Nature of Man, Cleveland: World Publishing

Maslow, A.H. (1943) ‘A theory of human motivation’, Pyschological Review, 50 (4), 370-96

Rosenfeld, R.H. & Wilson, D.C. (1999) Managing Organisations, London:McGraw-Hill

Stackpole, B., “Meet your Future Employee”, [Online] (URL: http://www.pcworld.ca/news/column/58b861b90a010408008b33e8277dba29/pg0.htm), 20 November 2007, (Accessed 1 July 2009)

Vroom, V.H. (1964) Work and Motivation, Wiley, New York

WBS (2007/8) Organisational Behaviour, Warwick Business School

Human Resource Management Lesson 4 Exercise

Thinking about an organisation or organisations you are familiar with, if comparing two organisations, one may be IBM, what mechanisms and procedures have different organisations used for employee involvement and to give employees voice?

Let us compare and contrast how employees are involved and given influence over their organisations by comparing IBM’s procedures and mechanisms for employee involvement and voice, with Liaise Marketing, an Australian based company providing sales solutions and marketing product promotions for major supermarket chains, hardware retail stores and independents. 

Using Purcells (1986) model to define the management style employed for IBM and Liaise Marketing I would propose that IBM employs a sophisticated human relations style, whilst Liaise Marketing trys to employ a consultative style but falls frequently into a more traditional style.

IBM

IBM utilises technology to a significant degree to involve employees in a wide range of activities and for employees to be given a ‘voice’ in the Corporation.

From basic tools such as Lotus Notes Team Rooms (where documentation, processes, comments and ideas can be stored and shared with as large a team as you wish across the globe) through to Sametime, an instant messaging system within IBM, which truly allows an open door policy to anyone in the company if you wish to informally approach them, IBM has the capacity to invest in a good HR strategy to support a company the size and reach of IBM.

In addition consultation is taken very seriously in IBM, with a very clearly understood process which provides for IBM employees to nominate and vote their own representatives onto steering boards that act as a representative cross-section of employees who are entrusted with a exploring the detail of the strategy being proposed for potential implementation. Once the steering board have conducted due diligence they report the facts and recommended course of action back to employees, often hosting a teleconference to take any questions from employees attending.  The actions are then voted upon by the employees for support or not, as the case may be.

Quarterly employee satisfaction surveys are run and results published to the organisation, with management investing in projects to make improvements. These projects are communicated to the organisation, and are measured after implementation to assess their effectiveness.

Finally IBM’s senior management periodically host what are known as jams, an intranet based discussion involving 50,000 to 100,000 employees over a set period, often 1 to 3 days depending on the size of the registration list. The purpose of the jams are to provide a forum for all global IBM employees to discuss and provide ideas on the topic selected. The latest jam held in 2008 was called InnovationJam and included IBM clients, business partners and academics as well as 100,000 IBM’ers, a third of the total global workforce. Software is used to sort through the discussions and threads to identify the key ideas and common issues so that management can consider it as they take decisions on the future direction and actions of IBM.

LIAISE MARKETING

Liaise Marketing is a small privately owned business with offices in Melbourne, Sydney, Perth, Brisbane, and Adelaide, and a sales force of approximately 100 in total. The sales teams are divided up by region and managed by a Regional Manager.

The regional team meets once a week face to face to be updated by the operations manager and Regional Sales Manager. The employees are asked to contribute and input their issues and own ideas for improvements at these meetings.

A quarterly magazine is published in-house to communicate about what teams in the business across Australia are achieving, and updates on clients. Employees and managers are asked to provide stories to the magazine and small token awards are made on a regular basis for good sales achievements and longevity of service. 

Both of these activities are consultative in style and are designed for employees to feel they have a ‘voice’ in the organisation.

Although a small company like Liaise Marketing does not have the capacity to invest as heavily as IBM in technology, there are advantages to a smaller sized entity as employees can access management on a one to one basis more easily in theory.

How effective were each of these voice mechanisms in a) giving employees an effective voice at work and b) adding value to the organisation?

IBM

The greatest thing about any of the mechanisms described above is how the Corporation has managed to harness a large, complex organisation and provide employees with opportunities to have their say in a way that employees feel included, even though they are one of 300,000 employees. The output from the jams, employee satisfaction surveys and consultations are shared with employees, and the actions and investments arising from the input to these mechanisms are communicated widely.

Employees have reported a steady rise in morale and commitment to the business as a result of these mechanisms which allows them to feel that they have a ‘voice’ in the organisation and that their ‘voice’ is actively listened to and considered in the overall strategic direction of the company.  The latest satisfaction survey for the UK region showed a 2% increase in employees feeling they were ‘Involved in Decisions’ from the last quarter at Worldwide level (IBM Employee Satisfaction Survey, 1Q09)

To achieve this, IBM have invested heavily in developing their line managers in the past 2 years to ensure that direct communication with employees supports these processes to encourage employees to explore and navigate IBM, and to provide input at any level they wish.  

The value to IBM is that they have a much more motivated workforce and culturally this shows in a high level of responsiveness from colleagues to Sametimes (IBM’s instant messaging system), emails, actions and meetings internally, which means that productivity is optimised for the business and that employees can navigate across a flat organisation if they need or want to.

LIAISE MARKETING

Although Liaise Marketing are attempting to pursue a consultative style with their weekly meetings and quarterly magazine, the reality and feedback from employees is that they do not have an effective ‘voice’ in the organisation.

For example, the weekly meetings are minuted for management at Head Office, but are not visible to the employees so employees do not have minutes to refer back to, and are unsure of what is actually reported up to management by the Regional Sales Manager and his team.

Additionally, there are no clear disciplinary or grievance procedures documented for employees or managers, which causes confusion for both the employees and the managers when issues arise, and the course of action that should be followed. The lack of a clear HR strategy in this area is particularly sensitive as it not only creates morale issues, but can potentially lead to legislative issues.     

Finally many decisions are imposed on the workforce without consultation such as the white uniform that was introduced as compulsory for all staff to brand employees as they met with clients. Most sales managers complain that white is impractical for the nature of the job as they often carry various products into their clients stores, and may kneel on shopfloors of stores to stack product promotions. The imposing of the uniform without consultation with the employees means that changes are not always readily accepted, and impacts motivation and morale. To make matters worse the employees had to pay for the new uniforms.

By operating in this way Liaise Marketing management are losing good intellectual capital from employees who are out with their clients, and also downgrading motivation and commitment to the company.

Account for any variation in effectiveness of different mechanisms.

Dundon et al (2004) argue that effective mechanisms to allow employees ‘voice’ in the organisation provides:

           Improved employee attitudes, loyalty and commitment

           Improved productivity and performance, and

           Improved managerial systems

IBM are experiencing improvement in all these areas according the latest Employee Satisfaction Survey with increases in six of the seven climate areas surveyed, and with the largest increases in employee satisfaction in clarity and leadership, an area that has experienced steady significant gain for two and half years (since 3Q06).

Liaise Marketing do not conduct formal surveys to measure these areas, but in interview with a NSW Sales Manager it was estimated there was a loss of 10% of productivity in day to day business out in the field with clients. This was due to Head Office not addressing the loading of call data correctly into the sales teams PDA’s which resulted in calling members of the same sales team to get correct data. This issue had been raised at the weekly team meetings but the NSW Sales Manager was not clear if this had been raised through to higher management. When challenged on whether the individual could approach Head Office themselves there was a reluctance to ‘go over’ the manager’s head and be seen to be ‘causing issues.’

The interview raises questions over the effectiveness of Liaise Marketing’s mechanisms to provide their employees with a ‘voice’ in the business but does not tell us where the process breaks down.

I have concluded that the management team in Liaise Marketing does not appear to have targeted employee ‘voice’ hard enough. Even with IBM it has taken low employee satisfaction ratings in the past to point out that these areas are important in todays workforce to attract and retain the best skills.

BIBLIOGRAPHY

Dundon, T., Wilkinson, A., Marchington, M. and Ackers, P. (2004) ‘The meaning and purpose of employee voice’, International Journal of Human Resource Management, Vol.15, No.6, 1149-70

IBM Employee Satisfaction Surveys from 3Q06 to 1Q09

Interview with NSW Regional Sales Manager & NSW Sales Manager

Marchington, M. and Wilkinson, A. (2008) Human Resource Management at Work – People Management and Development 4th ed, London: Chartered Institute of Personnel and Development

Purcell, J. (1986) ‘Employee Relations Autonomy Within a Corporate Culture’ Personnel Management, February

WBS (2009) Human Resource Management, Warwick Business School

Human Resource Management Lesson 5 Exercise

To what extent do you think that the employment relationship is necessarily based on conflict between employers and employees who have competing interests?

The competing interests of employers and employees create a symbiotic relationship which introduces tension, but not necessarily conflict to the employment relationship in the modern business world.

Employees seek good pay and good working conditions in exchange for producing goods and services for a company.

In the past conflict has arisen over hygiene factors (Maslow, 1943) in the workplace such as equality of pay, health and safety, and discrimination (eg race, disability, part-time workers.) These needs have been fought for at government level and with the support of unions in the past. Companies now have to work to stronger legislation and are subject to more monitoring controls which protects the employers rights more than at any other time in history.

It can be proposed, then, that if these lower level factors are largely addressed and mechanisms are in place to protect both the employee and employer from inequity in these areas, that the focus in a modern employment relationship is centred on higher level needs as defined by Herzberg (1966) in his dual factor theory of work motivation. These include such elements as opportunity for advancement,

recognition for achievement, and responsibility.

Companies today are recognising that conflict arises today in an employment relationship if an employee is stopped from fulfilling these higher level needs. This forces companies to think about how to provide employees with these needs in the workplace in order to retain and motivate skilled employees. Companies are driven by needing to remain competitive in increasingly demanding markets full of rapidly changing technologies and more innovative competitors.   

This is supported by the findings of the International Labour Conference in 2006 where it was stated:

“Employers are constantly faced with the challenge of survival in a competitive global environment and legitimately seek viable solutions among the range of options offered by different forms of employment. However, it is difficult for enterprises to improve their productivity with a poorly trained, demotivated and rapidly changing workforce.”

“Balancing equity and adaptability is at the very heart of the ILO.s Decent Work

Agenda, which offers a framework for reconciling the different interests and reaching a consensus through social dialogue. Countries have found different institutional and

policy responses to reconcile these diverging interests. For instance, a number of

European countries have moved away from a situation where flexibility creates

insecurity to one in which security promotes flexibility.”

The modern approach to address this is for companies to work in partnership with employees. Although the workplace will always experience either conflict or harmony at different times businesses who partner with employees have more flexibility and access to a variety of techniques to manage this to the benefit of all parties.

It is more difficult to ascertain how many employers actually use the partnership approach successfully although more rigorous legislative and financial reporting of companies existing today helps to illustrate at a high level the health of a company, and often helps the company themselves think through best practices to support the business.

What factors influence the extent to which the employment relationship is harmonious or conflictual?

If we assume that a partnership approach helps to address the level of conflict in an employment relationship we can turn to Brown (2000) who suggests the following factors should be included in a partnership arrangement:

  • “ a shared commitment to the business goals of the organisation
  • a clear recognition that there might be some legitimate differences of interest and priorities between the parties. These differences need to be listened to, respected and represented
  • measures to ensure flexibility of employment must not be at the expense of employees’ security, which should be protected by taking such steps as ensuring the transferability of skills and qualifications
  • partnership arrangements must improve opportunities for personal development of employees
  • open and well informed consultation, involving genuine dialogue
  • effective partnerships should seek to ‘add value’ by raising the level of employee motivation”

(WBS HRM, 2009)

All of these items help to set the expectation of what a partnership involves, and allows a wide enough definition to establish an employment relationship which if referenced back to these definitions would keep the relationship harmonious, eg if both parties are committed to a common set of objectives. Good communication, leadership, clarity and equity are also factors that are requirements for a harmonious employment relationship.

Conversely, breaking any of these ‘rules’ would lead to conflict, eg if employees didn’t have a ‘voice’ in the organisation. Job insecurity is another area that has been researched widely as being an area for potential conflict in the employment relationship. Burchell et al (1999) found that employees were not only worried about losing their job, but of losing job features of value to them, so there are many variations on this factor. 

BIBLIOGRAPHY

Burchell, B., Day D., Hudson M., Ladipo D., Mankelow R., Nolan J., Reed H., Wichert I. and Wilkinson F. (1999) Job Insecurity and Work Intensification: Flexibility and the changing boundaries of work. York, Joseph Rowntree Foundation

Herzberg, F. (1966) Work and the Nature of Man, Cleveland: World Publishing

International Labour Conference, 95th Session, 2006 The Employment Relationship [Online] (URL: www.ilo.org/publns) Accessed 10 June 2009

Maslow, A.H. (1943) ‘A theory of human motivation’, Pyschological Review, 50 (4), 370-96

Marchington, M. and Wilkinson, A. (2008) Human Resource Management at Work – People Management and Development 4th ed, London: Chartered Institute of Personnel and Development

WBS (2009) Human Resource Management, Warwick Business School

Human Resource Management Lesson 6 Exercise

Thinking about an organisation that you know well, evaluate the extent to which it conforms with the LO model.

In analysing the GTS business in NorthEast IOT I would argue that this department in IBM conforms to the LO model as described by Simons et al (2003) as “an organisation that aims to extend and to relate the learning and learning abilities of individuals, groups and the organisation as a whole in order to change continuously at all three levels in the direction of existing and possible wishes and needs of customers.”

IBM’s GTS formal learning strategy takes many different forms:

  • Formal in-house and external training courses
  • E-Learning
  • Conferences, workshops and events
  • Update and cascade teleconferences or presentations (usually through management chain layers)
  • Job rotation
  • On the job learning
  • Social learning (ie networking ‘teaches’ expected IBM behaviours such as levels of responsiveness, acceptable behaviours, business etiquette) (Wenger 2000)
  • Formal mentoring programmes
  • Coaching, both internally and externally at a number of levels
  • Lessons Learned culture (analysis documented and actions taken following the conclusion of a piece of work such as a project)
  • Surveys

The strategy works well in this particular part of the IBM organisation because the GTS Leaders have recognised that affective commitment, where employees share the organisations values and business objectives, is required in order to improve the ‘psychological contract’ between employees and employer. This is important to IBM as employees who will ‘go the extra mile’ will ensure the survival of the organisation as internal and external factors change, eg competitors, markets, technologies, individuals themselves (Herriott and Pemberton, 1997)

The ‘psychological contract’ means that employees expect something valuable such as pay, training, job security or opportunities in return for their effort and contribution to the organisation.

Although the formal and e-learning training courses have been available for years in IBM, the key change to note in the past 2 years is that GTS Leaders have focussed on coaching line managers. This has been implemented as an element of the 10x10 Programme and is executed in several ways.

Weekly executive calls early on Monday morning are followed by executives updating their managers later on a Monday morning. Managers then cascade the summary position to their teams. This links the organisations objectives directly to employees day to day jobs.

This communication is further supported by quarterly packs which are prepared by the executive and provided to managers with update conference calls per business unit. Managers utilise the messages in the pack, and are provided with blank bullet points to add the specific elements for their own teams and employees prior to cascade to their teams.

This ties together IBM’s overall strategic direction, and issues, directly to the employees own role, and helps coach employees in order to influence their decisions in their day to day job. This has been extremely successful as all teams receive a common message, specific team factors are tailored to the overall IBM strategy, employees feel they are contributing knowledgeably to the overall direction of IBM and management productivity is not impacted as the packs are provided from a central group.

This is supported by the Q109 Employee Satisfaction Survey which shows a 6% increase in the GTS business for both ‘Job Satisfaction’ and ‘Personal Accomplishment’ from the last quarter.

What changes would need to take place within the organisation to make it into a learning organisation?

There is real energy around GTS IBM as a LO.

To sustain this energy it would be useful to monitor and coach managers in the appropriate management style more formally, where required. Employees can politically decide whether to be motivated enough to learn, and to use the outcome of what they learn in the organisation. It is therefore important that managers continue to motivate employees in the appropriate way. 

Team learning is also an area that is weak at present and would benefit from some focus to optimise and broaden the LO.

To what extent do you think these changes are a) feasible and b) desirable?

As a senior GTS Manager I know that GTS implemented the 10x10 strategy 2 years ago, which provides some insight into how long organisational and behavioural change can take to impact. 

The monitoring of managers is both feasible and desirable but will require further investment to identify those managers who require this coaching. In the meantime the change to the environment itself will assist some of the weaker management styles to improve.

Team learning is the next big step that GTS needs to take, but although this is extremely desirable I believe that there is more work to be undertaken before this can be rolled out successfully as it is a lot more complex in an already complex environment.   

BIBLIOGRAPHY

Herriott, P. and Pemberton, C. (1997) ‘Facilitating New Deals’, Human Resource Management Journal , 7,1

IBM Employee Satisfaction Surveys from 3Q06 to 1Q09

Marchington, M. and Wilkinson, A. (2008) Human Resource Management at Work – People Management and Development 4th ed, London: Chartered Institute of Personnel and Development

Simons P., Germans, J., and Ruijters, M. (2003) ‘Forum for organisational learning:combining learning at work, organisational learning and training in new ways.’ Journal of European Industrial Learning, Vol.27, No.1, 41-49

WBS (2009) Human Resource Management, Warwick Business School

Wenger, E. (2000) ‘Communities of Practice and Social Learning Systems’ Organisation, 7,2,pp. 225-46

Human Resource Management Lesson 7 Exercise

What implicit expectations do you and the employees you manage/work with have of your employer?

IBM employees and managers have an implicit expectation that IBM will exhaust every idea before the Corporation implements an involuntary redundancy programme.

To understand this we should look at the history of IBM and understand that in the UK IBM have run only 2 programmes of involuntary redundancies, one in 1993, and one in 2002, both of which destabilised IBM internally in terms of trust in the employment relationship that employees had with the Corporation. IBM recognises that this has taken huge investment (not only financial, but in rebuilding the employment relationship psychologically) to repair.

As a manager I am involved in many different HR strategies which supports this implicit expectation which includes:

           Cutting cost in expenses,

           Headcount freezes,

           Headcount moves between businesses within IBM,

           Frozen promotion cases,

           Forecast appraisals and rankings reviewed monthly to identify low performers               and put them onto Performance Improvement Plans,

           Reviewing individuals monthly for performance, motivation and work/life                       position to optimise any opportunity that may be raised to offer early

                       retirement, a sabbatical, compressed or part-time hours to reduce costs

Another implicit expectation of IBM employees is flexibility in the workplace, so there is no monitoring of how an employee organises their work hours as long as productivity is maintained, eg taking time during the workday to attend a personal appointment (eg doctors, bank manager) may be made up for later that evening, or at the weekend. Employees are not expected to ‘explain’ this, but are expected to manage it appropriately.

The final implicit expectation that most IBM employees have is that they will receive training and development to enhance their career progression.

Analyse how and why these expectations might be different from the implicit expectations in another organisation with which you are familiar.

Having observed RSA Insurance between 2001 and 2005 the implicit expectations of their employees at that time was that redundancy was not expected, but that if there was a chance of early retirement, an excellent package would be offered.

This implicit expectation was based on precedent, and the employees of RSA, unlike IBM employees, did not take accountability for cost reduction within their day to day business like the IBM employees to help reduce the risk that redundancies might have to be made.

For example, all RSA employees would take the entitlement of a British Airways business class seat between London Gatwick and Manchester airports on frequent occasions, a flight of less than one hour. The RSA management team did not execute an HR strategy with their employees to alter employees mindset that they could contribute to RSA’s financial position whereas IBM employees were asked to reduce expenses as much as practicable before incurring them to assist the overall cost reduction programme in expenses.

Flexibility in the workplace was not understood in RSA. The traditional approach of expecting to see employees present at their desk during business hours, and asking permission from a manager to take time off for a personal appointment was still in place. IBM employees, on the other hand, were asked not to travel unnecessarily, and to conduct business by phone if this contributed to reducing unnecessary expense to the business. RSA employees were distrustful of this flexible way of working, when their business was outsourced to IBM, and education had to be given to help the tuped employees change that mindset.

Finally education for RSA employees was very limited, and consisted only of formal external training courses. In contrast IBM has a variety of training and development courses and behaviours which are available to each employee, and are agreed in Development plans annually to underpin an employees progress.

How convincing do you find the idea of the psychological contract as a theoretical framework for understanding the employment relationship?

The idea of a psychological contract as a theoretical framework for understanding the employment relationship lends itself well when supported by the argument that if all lower level needs are fulfilled employees will focus on fulfilling the higher level needs as argued by Herzberg (1966.)

Although Herriot and Pemberton (1997) argue that reciprocal and unwritten psychological contracts have disappeared during the late 1980’s my experience is that this is not the case with IBM. My colleagues have occasionally discussed the fact that they are proud to call themselves ‘IBM’ers’ with the implicit status it confers. However I would point out that IBM have spent the last 10 years investing in constant change, consulting with their employees and executing a clear communication plan to achieve a unique employment relationship with its employees.

BIBLIOGRAPHY

Herriot P. and Pemberton C. (1997) ‘Facilitating new deals’, Human Resource Management Journal, Vol.7, No.1, 45-56

Herzberg, F. (1966) Work and the Nature of Man, Cleveland: World Publishing

WBS (2007/8) Organisational Behaviour, Warwick Business School

WBS (2009) Human Resource Management, Warwick Business School

Human Resource Management Lesson 8 Exercise

With reference to your own experience, critically evaluate the idea that there is a business case for family friendly working practices.

Family friendly working practices were initially adhered to either for ethical reasons, or coercive reasons (laws existed that company’s had to follow.) However currently company’s favour these working practices because if company’s do not utilise all parts of the workforce potentially available to them they may be giving competitive advantage to their competitors, eg highly skilled resource or a wider demographic who may bring in different experiences or viewpoints that are valuable to the company.

The environment that businesses face today is ever changing and businesses have to change to reflect and take advantage of those changes. For example, the nature of the workforce available to company’s is changing, eg there are many more single parents with dependents than there were 50 years ago when the workforce was dominated by men.

Technology has a part in changing the nature of the workforce as it provides more flexibility in the ways that employees can work, which provides opportunities for employees who may not have been able to work prior to that, eg mobility reasons, or childcare arrangements.

It is difficult to find financial evidence to support a business case for family friendly working practices. Some might argue that to invest in any organisational change required to accommodate family friendly policies is simply not worth doing.

However if we were to consider the cost of not employing a more diverse workforce, we would have to include the financial impact of long term sick leave due to stress and burnout, or the impact of divorce on employees who may not have a good work/life balance. We would also have to consider losing the investment of the initial recruitment and training of the employee if they left due to family commitments that the company cannot accommodate.

My experience recently with a single mother working for me as a team leader is that we utilise the flexibility offered by IBM, and partner to ensure that both she and I achieve what is needed. On my part I need ongoing challenging targets met at certain times in the quarter. On her part she needs to collect her young son from nursery at midday each day, and be able to manage days when her son is ill, or the nursery is closed.

By openly acknowledging and discussing the requirements for each party we have agreed the mode of operation for both parties which has resulted in a very successful partnership. In addition the employee is highly committed and motivated due to the fact that her needs are recognised in the ‘deal’. This is in contrast to when the employees previous manager handed over the employee with a low banded level and with the advice that the team leader had trouble committing due to child care issues.   

By altering work practices to manage diversity in the workplace we are investing in a sustainable future, as it is unlikely that the workforce will revert back to what the demographic was 20, 30 or 40 years ago. Businesses need to recognise this more widely and move mindsets forward to ‘people’s issues’ rather than ‘women’s, disabled or black issues’ (Kandola and Fullerton, 1998) to ensure they are positioned to compete for the best resource available.

BIBLIOGRAPHY

Kandola, R. and Fullerton, J. (1998) Diversity in Action: Managing the mosaic. London, CIPD

Marchington, M. and Wilkinson, A. (2008) Human Resource Management at Work – People Management and Development 4th ed, London: Chartered Institute of Personnel and Development

WBS (2009) Human Resource Management, Warwick Business School


October 02, 2008

Operations Management Lesson 2

Writing about web page http://blogs.warwick.ac.uk/louiseholding/

Take two processes with different volume and variety characteristics. Profile these processes and establish the process choice and layout decisions they have taken. Critically appraise the design decisions taken.

ATM Banking and Interior Design Consulting differ in performance objectives and therefore have different process designs.

Performance Objectives:

ATM Banking

Quality

High - each transaction has to be 100% accurate

Speed

High – each transaction should be rapid with no processing delays between prompted questions to the customer

Flexibility

Low – customers will generally accept that only very simple  transactions are offered

Dependability

Medium - the service (technology) has to be dependable, ie is always available, otherwise customers will choose an alternative ATM with another bank or building society

Cost

High – Cost to the bank is lowered, and customer not impacted by cost reduction as they have availability 24/7

Interior Design Consulting

Quality

High - quality is extremely important to this process as the end product has to be a perfect fit for the customer

Speed

Medium - This is not required as a priority unless the customer has explicitly requested a deadline

Flexibility

High - large amount required as the process is creative and requires a bespoke and variable service to match each customer requirement

Dependability

Medium - required in terms of working to any agreed deadlines within the process which are agreed depending between the customer and consultant at each stage

Cost

Low - the process is highly variable and therefore not extremely cost effective

The ATM process in the financial sector requires an efficient, cost-effective, accurate and non-flexible approach. The Interior Design consultancy service process is much more flexible, offering variety to customers. Therefore the Interior Design process key objectives are quality and flexibility rather than cost effectiveness and speed. However if you define quality in the interior design process as being able to match customer requirements rapidly, in order to compete with other interior design consultants, and with suitably creative solutions, then lower cost, speed and dependability increases.

Process Analysis & Design:

Further analysis of both processes can be done via the 4V model (Slack et al, 2006) and illustrated below:

4 V’s

ATM Banking

Interior Design Consulting

Volume

High volumes require high repetition

Low volume so low repetition and high unit costs

Variety

Low variety so requires well defined routine standard consistent process

High variety which brings flexibility, complexity in the process and a high unit cost

Variation in Demand

Low, so high utilisation, stable and predictable requirements

High, so flexibility required and ability to cope with change. Low capital equipment investment by the process owner would be attractive as the process is so variable.

Visibility

Low in terms of producing a standard binary process

Process design is automated and repeatable

High as customer contact and relationship is very important, including meeting deadlines

Variation and volume within a process is a large determinant of the design of the process.

Thus considering Process Types:-

ATM Banking is a Mass Service as it provides high volumes of transactions to the customer but restricts the customer to only certain offerings within the banking industry (cash dispensing, providing a current bank balance and changing a PIN no on a banking card.) If customers require a more complex banking service they must attend a bank during bank opening hours.  The service is based on technology, with no skilled staff visible within the process.

Interior Design Consulting is a Professional Service offering skilled services which are unique to the customer. Therefore the service is more intermittent and costs more.

In considering Layout Types:-

ATM Banking, with its high volumes and low variety within the process is a product layout, where the process flows along a very well defined and narrow sequence of events to optimise efficiency in service and cost.

Interior Design consulting, however, is a fixed-position layout because the consultancy service moves to the customer in order that the consultant may experience the customers home to solution the design.

BIBLIOGRAPHY

Slack, N.; Chambers, S.; Johnston, R. and Betts, A. (2006)

Operations and Process Management

London: FT Prentice Hall

ATM Banking

(1) Performance Objectives:

Quality:          High - each transaction has to be 100% accurate

Speed:           High - this matters in terms of the transaction going through smoothly without long waits for processing

Flexibility:       Low - this does not matter as the customer will accept that only very simpletransactions are offered

Dependability: Medium - the service (technology) has to be dependable, ie is always available, otherwise customer                          will cease to use it, however customers can use an alternative ATM

Cost:             High – Cost to the bank is lowered, and customer not impacted by cost  reduction as they have

                      availability 24/7

Interior Design Consulting

Performance Objectives:

Quality:         High - quality is extremely important to this process as the end product has to be a perfect fit for the                       customer

Speed:           Medium - This is not required as a priority unless the customer has explicitly requested a deadline

Flexibility:      High - large amount required as the process is creative and requires a bespoke and variable service to  

                    match each customer requirement

Dependability: Medium - required in terms of working to any agreed deadlines within the process which are agreed

                    depending between the customer and consultant at each stage

Cost:               Low - the process is highly variable and therefore not extremely cost effective

These 2 processes differ in performance objectives and are in two completely different industries. The ATM process in the financial sector requires a much more efficient, cost-effective, accurate and non-flexible approach. The Interior Design consultancy service is a much more flexible service offering variety to customers. Therefore the Interior Design process key objectives are quality and flexibility rather than cost effectiveness and speed. However if you define quality in the interior design process as being able to match customer requirements rapidly, in order to compete with other interior design consultants, and with suitably creative solutions, then lower cost, speed and dependability increases.

ATM Banking

4 V’s:

Volume:                      High volumes require high repetition

Variety:                       Low variety so requires very well defined routine standard consistent processes

Variation in Demand:    Low, so high utilisation, stable and predictable requirements

Visibility:                     Low visibility in terms of producing a standard binary process.  Process design is automated and

                                repeatable

Interior Design Consulting

4 V’s:

Volume:                    Low volume so low repetition and high unit costs

Variety:                     High variety which brings flexibility, complexity in the process and a high unit cost

Variation in Demand:  High, so flexibility required and ability to cope with change. Low capital equipment investment by

                               the process owner would  be attractive as the process is so variable.

Visibility:                    High, customer contact and relationship very important, including meeting deadlines

Variation within a process is a large determinant of the design of the process.

Process Types

ATM Banking is a Mass Service as it provides high volumes of transactions to the customer but constricts the customer to only certain offerings within the banking industry (cash dispensing, providing a current bank balance and changing a PIN no on a banking card.) If customers require more complex banking service they must attend a bank during bank opening hours.  The service is based on technology, with no skilled staff visible within the process.

Interior Design Consulting is a Professional Service offering skilled services which are unique to the customer. Therefore the service is more intermittent and costs more.

Layout Types

Layout types reflect the volume and variety of the process. It is important to choose the correct layout type to optimise efficiencies in both the service and the cost. ATM Banking, with its high volumes and low variety within the process is a product layout, where the process flows along a very well defined and narrow sequence of events.

Interior Design consultancy, however, is a fixed-position layout because the consultancy service moves to the customer in order that the consultant may experience the customers home in order to solution the design.


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  • Hi Louise I assume that you have submitted these by now? If you want me to give you some feedbck (an… by on this entry
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