Yo u r road to success

Your road to success

LEVEL 4
PRINCIPLES OF
HUMAN RESOURCES

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 © ABE 2017

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ii © ABE
 Contents
Using your study guide iv

Chapter 1 The Contribution of the HR Function to the Achievement of

Business Objectives 2

1.1 The contribution of human resource objectives to the achievement of business objectives 3
1.2 How human resource objectives are evolving in response to changes within the
contemporary business environment 13
1.3 Human resource objectives for business organisation 15

Chapter 2 The Impact of Different Perspectives of Human Resource

Management on the Organisation and Workforce 18

2.1 The difference between human resource management and personnel 19

2.2 “Hard” and “soft” approaches to human resource management 22
2.3 The role of key stakeholders in delivering a strategic approach to HR 26

Chapter 3 The Role and Function of Human Resources Within the Key
Areas of Resourcing, Reward and Performance 30

3.1 Different methods of recruitment and selection 31

3.2 The most effective techniques for retaining talent within the organisation 38
3.3 Key performance management activities and initiatives 41
3.4 Creative and effective policies for reward management 45
3.5 The relationship between resourcing, performance management and rewarding talent 51

Chapter 4 Different Employment Models and the Essential Features

of the Contract of Employment 54

4.1 The strengths and limitations of different employment models 55

4.2 The best use of the organisation’s people to meet budget and business
delivery challenges 62

Glossary 66

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 Using your study guide
Welcome to the study guide, Level 4 Principles of Human Resources. Below is an
overview of the elements of learning and related key capabilities (taken from the
published syllabus), designed to support those completing the Level 4 Diploma.

Element of learning Key capabilities

Element 1: The HR function Ability to identify the contribution of
the HR function to the achievement of
business objectives.

Business awareness; scanning of the

external and internal organisational
environment; HR objective setting
Element 2: Approaches to HR Awareness of how different approaches
management to HR management are used in business
organisations

Analysing, interpreting and assessing

different HR perspectives and ideas;
stakeholder involvement
Element 3: Resourcing, reward and Ability to recommend techniques for
performance retaining talent

Ability to recommend creative and

effective policies of reward management

Analysing core HR specialisms and

operational essentials; comparing different
HR approaches; problem solving; making
recommendations
Element 4: Employment models and Ability to recommend the best use of
contracts employees to meet budget and business
delivery challenges

Constructing a contract of employment,

analysing different employment models,
making recommendations

This study guide follows the order of the syllabus, which is the basis for your studies.
Each chapter starts by listing the learning outcomes of the course and the assessment
criteria. This course is a Level 4 course. This means you will have the following level of
knowledge and skills when you complete your learning.

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 Level Knowledge descriptor Skills descriptor (the holder can…)
(the holder…)
• Has practical, theoretical or • Identify, adapt and use
technical knowledge and appropriate cognitive and
understanding of a subject or practical skills to inform actions,
field of work to address problems and address problems that are
that are well defined but complex complex and non-routine while
and non-routine. normally fairly well-defined.
• Can analyse, interpret and • Review the effectiveness and
evaluate relevant information appropriateness of methods,
Level 4 and ideas. actions and results.
• Is aware of the nature of
approximate scope in the area of
study or work.
• Has an informed awareness
of different perspectives or
approaches within the area of
study or work.

In this study guide there are a number of features which we hope will enhance your
studies:

’Over to you’: activities for you to complete – just print out the page and use the
space provided. You can write out longer answers on an extra piece of paper.
Case studies: realistic business scenarios to reinforce and test your
understanding of what you have read.
REVISION
on the go
’Revision on the go’: use your phone camera to capture these key pieces of
learning, then save them on your phone to use as revision notes.
’Need to know’: key pieces of information that are highlighted in the text.
Examples illustrating points made in the text to show how it works in practice.
Tables, graphs and charts to bring data to life.
Reading lists: identifying resources for further study, including Emerald articles
(which will be available in your online student resources).
Source/quotation information to cast further light on the subject from industry
sources.
Highlighted words throughout and glossary terms at the end of the book.

Note
Website addresses current as at June 2017.

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Chapter 1
The Contribution of the HR
Function to the Achievement
of Business Objectives

Introduction
Ask people what Human Resource (HR) function is and what it does, and you’ll get a variety of
answers. Certainly, the HR function varies from one organisation to another. Many things influence
this including the size of the organisation; the nature of the workforce and the employment sector;
and the national context. Nonetheless, the overall purpose of any HR function is to ensure that the
organisation achieves success through its people. In this chapter we’ll explore how the HR function
contributes to the achievement of business objectives.

Learning outcomes
On completing the chapter, you will be able to:
1 Explain how the Human Resource function contributes to the achievement of business
objectives in contemporary organisations

Assessment criteria
1 Explain how the Human Resource function contributes to the achievement of business
objectives in contemporary organisations
1.1 Summarise the contribution of human resource objectives to the achievement of business
objectives
1.2 Explain how human resource objectives are evolving in response to changes within the
contemporary business environment, including the demand for flexibility within workplace
1.3 Summarise human resource objectives for a business organisation

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 Level 4 Principles
of Human Resources

1.1 The contribution of human resource

objectives to the achievement of business
objectives
What are the different types of business organisations?
Not every organisation is the same – in terms of size, operating sector, geographical locations,
business objectives, etc. It is important how these variables impact on the organisation’s HR
function and how it contributes to the achievement of business objectives.

Firstly, let’s consider the different types of business organisations.

Almost all organisations fall into one of three sectors: the private sector, the public sector and the
voluntary sector (Taylor and Woodhams, 2015).

NEED TO KNOW

There are three “types” of organisations – forming the private, public and
voluntary sectors. Revision
on the go

Private sector
Organisations in the private sector are owned by individuals – who are often sole traders running
their own businesses – or by shareholders – who have invested money into an existing business. The
purpose of most private sector organisations is to make profit for their owners.

Private sector organisations can be divided into the following sub-categories.

• Small and medium enterprises (known as SMEs) – UK legislation, the Companies Act 2006 –
defines SMEs as organisations with:
– an annual turnover of less than £22.8m;
– fewer than 250 employees;
– a balance sheet total of less than £11.4m.

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 Chapter 1  The Contribution of the HR Function to the Achievement of Business Objectives

Over to you
Activity 1: Defining an SME

If you are outside the UK, find out the definition of an SME in your country with the
appropriate measures of size as per the UK definition, if available.

Write your answer below.

• Multi-national corporations (often known as MNCs) are companies that are involved in the
manufacture of goods or services in two or more countries (called “host” countries). It will have a
headquarters based in one country that will be called its home country. It will adapt its products
to fit the needs of the host country. An example of a multi-national company is Adidas.
• A global company is one that trades with other countries, selling the same products using
the same brand image. Unlike MNCs, global companies do not have official headquarters,
and they are composed of separate organisations which are part of one global company. Each
organisation operates independently, and the role of the global company is to only deal with
matters that affect the whole company or brand. An example of a global company is McDonald’s
which has stores in most parts of the world.

CASE STUDY
A Global Company Example
According to their corporate website, in 2015 the annual turnover
for Coca Cola was US$44,294 million. In that same year, they sold
29.2 billion cases of their products in more than 200 countries, and
produced those products in more than 900 bottling and manufacturing
facilities across the world, including the United States, Africa, Europe
and Asia.

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The Contribution of the HR Function to the Achievement of Business Objectives Chapter 1

Over to you
Activity 2: Corporate website investigation

As a homework activity, investigate the corporate websites of other high profile

MNCs – American Express, Diageo, McDonald’s and Google. How do they compare to
Coca-Cola, in terms of turnover and operating locations? Make notes in the table below
to share in class with your tutor and fellow students, if applicable.

Company Turnover Operating locations

Coca-Cola US$44,294 million 900

American Express

Diageo

McDonald’s

Google

Public sector
Public sector organisations can be categorised as follows.
• National or local/regional governments – these have responsibility for the country’s economy,
education, welfare and protection.
• Publicly-owned organisations – these are usually accountable to national government
and carry out a business enterprise on their behalf. An example of this, in the UK, is the
British Broadcasting Corporation (BBC). An example in Trinidad and Tobago is the National
Infrastructure Development Company Limited (NIDCO).
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 Chapter 1  The Contribution of the HR Function to the Achievement of Business Objectives

• Public-service providers – these can operate at a national or regional level. An example would
be The Ministry of Education, Science, Vocational Training and Early Education – the centrally
funded education system in Zambia.

Public sector organisations are funded mostly by taxes and are managed (directly or indirectly) by
public officials, such as government ministers.

Voluntary sector
Typically, voluntary sector organisations are either:
• charities – an organisation set up to help those in need, funded mainly by donations from
the public;
• co-operatives – a business that is owned and funded by its members, who share the profits;
• campaigning organisations – a group that is formed to influence government policies, for
example, Greenpeace.

Over to you
Activity 3: Co-operatives

Working with another student, if possible, identify a co-operative operating locally to

you. Summarise below how the co-operative is governed and promoted.

Factors which impact on the organisation’s business objectives

When formulating business objectives, an organisation needs to consider certain factors, which can
be external or internal:

External factors
External factors are outside the organisation’s control, but shape the way it operates. The PESTLE
analysis – Political, Economic, Sociological, Technological, Legal and Environmental – is a popular tool
which can be used to examine the external factors impacting on an organisation’s decision-making and
corporate objectives.

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The Contribution of the HR Function to the Achievement of Business Objectives Chapter 1

Factor Examples

Political What is happening politically in the world, or the country/countries

in which the organisation operates? This includes government
policies on taxes, tariffs on imports of foreign goods, legislation
and – importantly in some countries – political stability.

Economic What is happening within the economy of a country/countries? For

example, is the economy growing or declining? Are interest rates
high or low? Are unemployment levels rising or falling?

Social What is happening socially in the markets in which the organisation

operates? What are the current social trends? For example, what is
the demographic structure of the local or national community
in terms of age and gender distribution, population growth rates,
race or ethnicity, education levels, income and occupations?

Technological How is technology impacting on the products that the organisation

sells, or the services it provides? What is the impact of social
networking sites?

Legal How are laws impacting on employment (for example, working

hours, equal opportunities, national minimum wage), health and
safety, tariffs on imports/exports and taxation?

Environmental What is happening with respect to ecological and environmental

issues, such as pollution, recycling and global warming?

Additional factors
to consider:

Competition What are your competitors doing? How do their products and
prices compare to yours? Are they releasing any new products?

International factors What are the PESTLE and competition factors in another
country in which your organisation operates?

Table 1: PESTLE example plus competition and international factors Revision

on the go

NEED TO KNOW

Key external factors that impact on an organisation are the competition,

government policy and legislation, social trends and demographics. Revision
on the go

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 Chapter 1  The Contribution of the HR Function to the Achievement of Business Objectives

Over to you
Activity 4: PESTLE analysis

Think back to our earlier example of Coca-Cola. Using the PESTLE analysis tool, analyse
the external factors that would impact on their business objectives. You should also
consider the competition. Summarise your findings in the table below.

Name of organisation: Coca-Cola

Political

Economic

Social

Technological

Legal

Environmental

Competition

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The Contribution of the HR Function to the Achievement of Business Objectives Chapter 1

Internal factors
Internal factors are unique to each organisation, and include factors such as the following:
• The money is available to spend – a cash-rich organisation can invest money to improve the
business, for example, by training staff or launching a marketing campaign. An organisation that
is struggling financially may not be able to this.
• The thoughts of senior management – do senior managers have a vision for the future? Senior
managers have to play a major leadership role for an organisation to be successful.
• The role of line managers – there’s a strong link between the role of line managers and
organisational success. Questions to consider include: how much is delegated to line managers
in terms of staff, budget and resource management? Are line managers sufficiently trained to
carry out their role?
• Organisational culture – Armstrong and Taylor (2017) describe organisational culture as the
combination of “values, norms, beliefs, attitudes and assumptions” that shape how people think
and behave in an organisation. If this culture is positive, staff should be motivated to achieve
the business goals. If negative, staff may not want to stay with the organisation, or may be
demoralised about their work and their future.

NEED TO KNOW

Key internal factors that impact on an organisation are the finances, management
and organisational culture. Revision
on the go

Over to you
Activity 5: Internal factors

Working with another student, if possible, consider an organisation with which you are
both familiar. What internal factors do you think most shape the way it operates, and
the decisions it makes? Can you think of any additional internal factors other than those
mentioned above?

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 Chapter 1  The Contribution of the HR Function to the Achievement of Business Objectives

What are the functions of HR?

HR is concerned with the issues of managing people in the organisation so that the organisation is
able to achieve its business objectives. Here’s a brief overview of some key functions of HR.
• Recruitment and selection – is the process of having the right people, in the right place, at the
right time. It ensures that an organisation has the right people resources to achieve its business
objectives now and in the future.
• Performance management – is a set of processes that ensure employees contribute
positively to the business by improving individual, team and organisational performance. It
integrates various HR activities, such as training and development, and reward management.
• Reward management – ensures that the contribution that employees make to achieving
individual, team and organisational goals is recognised and rewarded. Effective reward
management is essential for attracting, engaging, motivating and retaining employees.
• Training and development – ensures that employees have the appropriate skills and
knowledge to fulfil the organisation’s business objectives. It includes a range of on-the-job and
off-the-job methods. Effective training and development can improve business performance,
productivity and efficiency.

We’ll look at each of these four functions in more detail in Chapter 3.

NEED TO KNOW

HR is concerned with all aspects of how people are employed and managed in
organisations. Revision
on the go

How can HR be delivered in organisations?

HR can be delivered in a variety of ways. In some organisations, all members of the HR team work
in generalist roles, while in other organisations there are both generalist and specialist roles. Much
depends on the size of the organisation, the wider structure and the overall business objectives. In
a small company the HR “team” may be just one person.

NEED TO KNOW

Each organisation is unique and the way that HR is delivered adapts accordingly.
Revision
on the go

Let’s look at the two main ways in which HR is delivered.

The traditional model is made up of a single team with generalists, specialists and administration
that provide key services and handle the needs of line managers, employees and senior staff.
Typically, the HR team has a customer focus and “open door” relationships with employees. This
model is common in small and medium-sized organisations (Taylor and Woodhams, 2015).

The “three-box” model, developed by the influential US academic David Ulrich, is based on
different types of HR professionals working in different ways (Ulrich, 1997).

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The Contribution of the HR Function to the Achievement of Business Objectives Chapter 1

HR business partners HR centres of excellence HR shared services

Senior HR professionals Small teams of HR experts A single (often relatively large)

working closely with business with specialist knowledge, for unit that deals with all the
leaders and line managers example, knowledge in reward routine services across the
influencing the development management. business such as payroll and
and implementation of advice on simpler HR issues.
organisational strategy.

Typically, this model is found in large public and private sector organisations, including multi-
nationals. The model brings several benefits to the organisation, for example, it means that HR is
more driven by the business and the internal voice of the customer, taking a proactive approach
towards its internal and external clients. Also, HR is quicker to respond to the needs of the
management as well as the changed conditions in the organisation. However, the model isn’t
without criticism, for instance, the different parts of the model may struggle to share knowledge
and resources.

Over to you
Activity 6: HR delivery in an organisation

Look at your own organisation or an organisation with which you are familiar. How is
HR delivered? What has influenced the delivery approach? What is the impact of the
delivery approach on the organisation and its workforce?

How does HR contribute to high levels of organisational

performance?
The purpose of HR is help make possible the achievement of the organisation’s business objectives.
This means that any HR objectives need to be consistent with the business objectives and focused
on the key HR functions and activities.

Whilst the precise HR objectives will vary from business to business and industry to industry, the
following are examples of how HR can contribute to high levels of organisational performance:
• hiring the best people available at every level
• maintaining competitive pay practices and reward programs
• properly training and developing employees
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 Chapter 1  The Contribution of the HR Function to the Achievement of Business Objectives

• monitoring and supporting individual and team performance

• introducing programmes to reduce employee absence
• creating a work atmosphere that promotes good working relationships.

The “best practice” approach assumes that there is a set of best HR practices which always result
in high levels of organisational performance (Armstrong and Taylor, 2017). However, this approach
doesn’t take account of the unique context of the organisation. Importantly, there’s a range of good
HR practices – some of which will help an organisation and some of which will not. What’s crucial to
understand is that what works for one organisation won’t necessarily work for another.

The “best fit” approach stresses that HR practices should take account of the unique context of
the organisation (Armstrong and Taylor, 2017). In other words, to be effective, the objectives and
practices of HR must support the goals of the business. This is known as vertical integration or
“vertical fit” (Wei, 2006).

Also, there needs to be horizontal integration or “horizontal fit”. This is achieved if all HR
functions – such as recruitment and selection and performance management – feed into and
support each other, with no conflict between them.

NEED TO KNOW

The greater the degree of vertical and horizontal integration, the more effective
HR is likely to be. Revision
on the go

Over to you
Activity 7: Reply to an email

A fellow student has sent you the following email:

During my studies I’ve come across the phrase “best fit is more important than best
practice”. What does this mean?

Use the space below to draft a reply.

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The Contribution of the HR Function to the Achievement of Business Objectives Chapter 1

1.2 How human resource objectives are evolving

in response to changes within the contemporary
business environment
Factors shaping HR objectives
HR objectives are shaped by both internal business factors and external factors.

Internal business factors

HR objectives must support and be consistent with business objectives. For example, if a business
objective is cost reduction, then an HR objective may be reducing workforce costs through
organisational restructure. Other strategies within the business such as the marketing strategy,
shape HR objectives too. For example, entry into new markets may require employees to develop
new knowledge and skills. The organisational culture shapes HR objectives too. For instance, if
there’s an organisational culture that places value on employees being treated as individuals, then
there is likely to be a strong focus on personal development. An important aspect of running a
successful business and a successful HR function is to align business objectives and HR objectives.
As we explored earlier, there needs to be “vertical fit” between the HR objectives and the
organisation’s business objectives.

External factors
Earlier in this chapter, we looked at the PESTLE analysis tool. The information resulting from this
analysis shapes the organisation’s business objectives and, in turn, its HR objectives.

Factor Examples

Political A new government policy about skills development, requiring a

different approach to the training and development of employees.

Economic A loss of market share to competitors, requiring changes to divisional

structures or cost reduction through job losses.

Social Population changes in the area where the business is located,

requiring new approaches to recruitment to overcome skills shortages.
Changing expectations about work-life balance, requiring more
flexible working options.
Technological Rapid growth in new technologies, requiring new ways of working
such as teleworking.

Legal Changes to employment law, requiring changes in the way employees

are recruited or rewarded.

Environmental Changes to environmental practices within the organisation, requiring

new ways to manage performance.

Table 2: PESTLE – impact of factors on HR objectives Revision

on the go

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 Chapter 1  The Contribution of the HR Function to the Achievement of Business Objectives

Over to you
Activity 8: External factors impacting HR objectives

Go back to the PESTLE table you completed in Activity 4. How do the external factors
that you identified impact on the HR objectives of the company? Summarise your
findings in the table below.

Name of organisation: Coca-Cola

Political

Economic

Social

Technological

Legal

Environmental

The role of HR in business planning

HR plays an important role in business planning, because only through the effective use of its
workforce can an organisation achieve its business objectives. For example, the HR function:
• supports informed decision making by researching and analysing key HR and
environmental information;
• aligns HR with the needs of the business, now and in the future;
• compiles facts and figures of how HR can add value.

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The Contribution of the HR Function to the Achievement of Business Objectives Chapter 1

Measuring HR’s contribution

The HR function must be able to measure and monitor its contribution to the achievement of
business objectives. Practical reasons for doing so include, stopping what isn’t effective, being
accountable to stakeholders, improving HR processes, and so on.

Useful tools to help manage the performance of the organisation and HR include the following:
• Key performance indicator (KPI) – a measurable value that demonstrates how effectively
an organisation is achieving business objectives. Organisations use KPIs to evaluate their success
in reaching targets. A KPI in relation to HR might be employee turnover. Defining the KPI
numerically gives better definition, for example, reduce employee turnover by 5% every year.
• Service level agreement (SLA) – a formal agreement between two parties that details the
type of service one party (the HR function) will provide to the other (management or other
business functions such as marketing and finance). Typical elements of an SLA include:
– roles and responsibilities of the HR function;
– services provided;
– performance targets and KPIs;
– monitoring and evaluation of the SLA.
• The balance scorecard – measures organisational performance across four perspectives:
financial, customers, internal business processes, and learning and growth. It can be used to link
human resource management (HRM) activities with the organisation’s strategy and evaluate the
extent to which it adds value to business strategies and objectives. You will find out more about
human resource management in Chapter 2.

HR objective Measure

Operate effective recruitment and Recruitment survey data

selection processes Time to fill vacancies and costs involved
Percentage of jobs filled by internal
promotions

Achieve high productivity levels in all Employment cost per unit of production
activities Proportion of support function costs

Table 3: Examples of HR objectives and associated measures Revision

on the go

1.3 Human resource objectives for business

organisation
Setting HR objectives
There are many potential HR objectives. Armstrong and Taylor (2017) suggest that the objectives of
HR should be to:
• support the organisation in achieving its objectives by developing and implementing HR
strategies that are integrated within business strategy;
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 Chapter 1  The Contribution of the HR Function to the Achievement of Business Objectives

• contribute to the development of a high-performance culture;

• ensure that the organisation has the talented, skilled and engaged people it needs;
• create a positive employment relationship between management and employers;
• encourage the application of an ethical approach to people management.

NEED TO KNOW

The precise HR objectives vary from business to business, depending on each

organisation’s unique circumstances. Revision
on the go

When setting objectives, the HR function must interpret trends, patterns and performance data in
the organisation, as well as trends and developments in the external environment. For example,
performance appraisal data might show that a significant number of employees in a department are
underperforming or workforce data might show that an increasing number of employees are taking
up flexible working options.

As we’ve explored, using analysis tools (such as PESTLE) can help to identify trends in the external
environment. Nevertheless, external change can be hard to predict. Also, the HR function might use
benchmarking activities – reviewing own processes and practices, and then assessing how they
are addressed in another organisation – to inform its approach.

Long and short-term objectives

HR objectives can be split into two broad categories.
• Strategic objectives – comprehensive in scope and focusing on the long-term future. They are
stated in broad terms and are measurable by such indicators as the value added. For example,
“effectively market the organisation as a good employer”.
• Operational objectives – narrower in scope and focus on the intermediate and short-term
future. They are usually stated in specific terms, such as “10% reduction in turnover in one
year”. Operational objectives provide criteria for decision making, the standard against which to
evaluate performance and act as a communication tool.

CASE STUDY
Setting objectives
Dee-Livered is medium-sized distribution company
with 350 employees, including 130 drivers. The staff
turnover rate of drivers is very high – 35% last year –
and there’s an unacceptable level of road accidents.
No formal procedures for employee communications
or consultation are in place and morale across
the workforce is low. Despite this, the company is
doing reasonably well – although it is felt by senior
management team that it should do better – and
there are plans to open a new distribution centre in
another part of the country.

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The Contribution of the HR Function to the Achievement of Business Objectives Chapter 1

Over to you
Activity 9: Case study analysis: Setting objectives

Formulate your top three objectives for the HR function for Dee-Livered.

Summary
In this chapter we looked at different types of organisations and how internal and external factors
impact on business and HR objectives. We introduced the functions of HR and considered different
ways in which HR can be delivered. This chapter highlighted the importance of aligning HR
objectives with business objectives.

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Chapter 2
The Impact of Different Perspectives
of Human Resource Management
on the Organisation and Workforce

Introduction
HR is an important strategic function. However, as with all business disciplines there are many,
and often competing viewpoints about the approaches to take. In this chapter we look at some
of the key perspectives of human resource management (HRM) and consider their impact on the
organisation and workforce.

Learning outcomes
On completing the chapter, you will be able to:
2 Explain how different perspectives of human resource management impact on the
organisation and workforce

Assessment criteria
2 Explain how different perspectives of human resource management impact on the
organisation and workforce
2.1 Differentiate between definitions of human resource management and personnel
2.2 Explain “hard” and “soft” approaches to human resource management
2.3 Summarise the role of key stakeholders in delivering a strategic approach to HR

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 Level 4 Principles
of Human Resources

2.1 The difference between human resource

management and personnel
What is human resource management (HRM)?
Armstrong and Taylor (2017:4) define human resource management (HRM) as:

a strategic, integrated and coherent approach to the employment,

development and well-being of the people working in organizations.

The concept of HRM arrived from the USA in the mid 1980s. Previously, the term “personnel
management” had been used to describe activities such as staffing, payroll, contractual
obligations and other administrative tasks.

HRM goes beyond the administrative tasks of personnel management. It’s a much broader vision
of how management would like employees to contribute to the success of the organisation which
has developed in response to changing business environments as well as new theories about the
management of people.

Deakin (2001) sums up the transition from personnel management to HRM:

Like an improved soap powder with a biological ingredient, HRM, equipped with
something called strategy, promised a new set of tools and measures to reward,
motivate and organise employees in the re-engineered workplace.

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Personnel management HRM

Operates in relatively stable market Operates within competitive markets and a
conditions change agenda
Is a traditional approach to managing Is a distinctive approach to managing
people, with a strong administrative purpose people, with a strong strategic purpose
Fragmented and ad-hoc policies and Integrated and co-ordinated policies and
practices practices
Rigidity Flexibility
Focus on performance measurement Focus on adding value

Table 1: From personnel management to HRM – a summary Revision

on the go

What is strategic HRM?

The idea of strategic HRM emerged in the early 1990s. Of course, a key feature of HRM is its
strategic purpose, so how does strategic HRM differ?

Definitions vary, but a key feature of strategic HRM is the focus on longer-term issues. Strategic
HRM focuses on long-term objectives, not just on current HR issues. It seeks to address and solve
problems that affect people management programs in the long run.

CIPD (2016) define strategic HRM as:

an approach to managing human resources that supports long-term

business goals and outcomes with a strategic framework.

Over to you
Activity 1: Researching global job sites

As a homework activity, research global job sites for HR-related job titles.

Compare the different job titles and use the information in the job description and
person specification to compare the scope and nature of the jobs. Summarise any
common themes below.

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The Impact of Different Perspectives of Human Resource Management on the Organisation and Workforce  Chapter 2

The impact of organisation type on HRM

In Chapter 1 we explored the “best fit” and “best practice” approaches to HR, concluding that
each organisation must develop an approach that supports the achievement of its unique business
objectives. Organisation type influences HRM in several ways. Let’s look at some examples.
• SMEs – relationships between employees and management tend to be less formal and trade
union representation less likely. Therefore, the organisation may find it easier to adopt some of
the principles of “soft” HRM. However, there may be no dedicated HR function, meaning that
little, if any, attention is given HRM beyond dealing with administrative and payroll tasks. Very
small, privately-owned start-up businesses may not prioritise in-house HR, instead using external
HR consultants until the businesses’ growth warrants a permanent HR resource.
• Public sector – the HR function is concerned with ensuring that the workforce has the necessary
skills and attributes to deliver efficient and effective services to the public. As a result, the
HR function is likely to place a strong focus on performance management and “hard” HRM
approaches. However, the economic downtown has meant that many public-sector organisations
are experiencing high levels of change and, as a result, the HR function may be looking at ways
to enhance the satisfaction and motivation of employees. Legislation may mean that there are
constraints on how HR can be delivered.
• Voluntary sector – the HR function must ensure that the organisation operates in a cost-
effective way. For HR recruitment is likely to be a fundamental activity, with activities focused on
attracting individuals with values that match those of the organisation. However, recruitment is
often more complex because potential employees often need to go through appropriate vetting
to work with children and vulnerable adults.
• MNCs and global organisations – the HR function must ensure smooth running and effective
operation of the organisation across national borders. MNCs must decide whether they will
adapt their HR policies and practices to the various national circumstances or standardise them.
MNCs must consider carefully whether the benefits of a standardised approach are greater than
the costs of not adapting to environmental circumstances.

Contemporary themes in HRM

NEED TO KNOW

Over the last decade HRM thinking and practice have evolved in significant new
directions as HR agendas have shifted to take account of development in the
business environment. Revision
on the go

As the world of work evolves and becomes more diverse, traditional models of working
are giving way to more flexible forms of organisation and employment. Over the last decade
organisations have increasingly become “flexible” by adapting the size, cost and composition of
their workforce (Atkinson 1984). We’ll consider this development in more detail in Chapter 4 by
looking at flexible methods of working and flexible employment models.

Also, organisations must ensure that employees have the skills and capabilities to respond
positively to advances in technology and shifts in customer preferences. The leading academic
Peter Senge (2010:8) comments that:

As the world becomes more interconnected, and business becomes

more complex and dynamic … organizations that will truly excel in the future
will be the organizations that discover how to tap people’s commitment and
capacity to learn at all levels in an organization.
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This means not only providing training and development opportunities but also ensuring that key
stakeholders, such as line managers, create the necessary conditions for effective learning to happen.

Taylor (2011) highlights that much more interest is now being taken in issues and approaches that
were previously regarded by many organisations as secondary, such as work-life balance issues and
HR ethics.

2.2 “Hard” and “soft” approaches to human

resource management
“Hard” and “soft” HRM
Storey (1989) describes two broad approaches to HRM.

“Hard” model – treats employees simply as a resource of the business, like machinery and
buildings. The focus is on resources – identifying the workforce needs of the business, then recruit
and manage accordingly.

“Soft” model – employees are the most important resource in the business and a source of
competitive advantage. The focus is on human aspects – the needs of employees in relation to
roles, rewards, motivation and so on.

Let’s compare the approaches:

Hard HRM Soft HRM

Short term changes in employee numbers Focus on workforce planning
Minimal communication from the top down Strong and regular communication
Pay – enough to recruit and retain enough Pay – competitive with performance related
staff rewards, for example, bonus
Little empowerment or delegation Employees are empowered and seek
responsibility
Appraisal systems focus on making Appraisal systems focus on identifying and
judgements (good or bad) addressing training and other needs

Table 2: Hard and soft HRM – a comparison Revision

on the go

So which approach is better? The answer is that it depends! The type of organisation
is a strong influence on the approach taken. However, to achieve its business objectives, an
organisation is likely to need to adopt HR policies and practices that engage with both the
“hard” and “soft” elements of HRM.

NEED TO KNOW

The focus of “hard” HRM is on resources. The focus of “soft” HRM is on

human aspects. Revision
on the go

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The Impact of Different Perspectives of Human Resource Management on the Organisation and Workforce  Chapter 2

CASE STUDY
A “hard” or “soft” approach?
The Bolt Company is a small manufacturing
firm with 50 employees. The HR manager has
recently produced a booklet that outlines all
the company’s HR policies and procedures. A
copy has been given to all employees, together
with an invitation to the launch of a new
employee forum. The purpose of the forum is
to give employees an opportunity to discuss
the future of the business with senior managers.
The forum will be held every four months and
the HR manager would like at least five employees
to attend regularly.

Over to you
Activity 2: Case study analysis: ‘Hard or soft’ approach

Do you think that the HR manager of the Bolt Company in the case study above is
taking a “hard” or “soft” approach to HRM? Use the space below to summarise your
answer, including your reasons why.

HR delivery methods
In Chapter 1 we looked at two methods of HR delivery – the traditional model of HR delivery and
the “three-box” model. In practice there are many ways in which HR can be delivered and the HR
function may look very different from one organisation to another. Let’s now look at some other
delivery models.
• Shared-service centres – these are a single, often relatively large, units that deal with all
the routine “transactional” services across the business. This usually includes recruitment
administration, payroll, absence monitoring and advice on simpler employee relations issues.
The job of shared services is to provide low-cost, effective administration.

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• Outsourcing – this is the purchasing of HR services from a third-party supplier in order to

access skills, knowledge, quality and cost reduction. Potential benefits of outsourcing include
access to HR expertise that is not available internally and increased flexibility and speed of
response to HR problems.
• HR consultancy – some organisations may decide to hire specialist HR consultants to provide
advice on certain issues or develop specific strategies or policies, but not typically implement
them. Because consultants work with many different clients, they can bring deeper levels of
expertise than an organisation would hope to have in-house. Additionally, each organisation only
has to purchase as much of the consultant’s service as they require.

The resource-based view of strategic HR

The resource-based view (RBV) states that it is the range of resources – including human
resources – within a business organisation that produces its unique character and creates
competitive advantage (Armstrong and Taylor, 2017). Here, human resources include all the skills,
knowledge and attributes of the employees.

The RBV emphasises that investment in employees – through activities such as training and
development – increases their value to the organisation. Thus, the RBV tends to reflect the
developmental principle of the soft model of HRM.

Importantly, the RBV also suggests that some HR objectives – such as those in relation to reward –
should be strongly influenced by the need to attract and retain talented people.

NEED TO KNOW

The resource-based view has had significant influence on thinking about HRM. Revision
on the go

“Best practice” and “best fit” approaches to HR

In Chapter 1 we looked at the “best practice” and “best fit” approaches to HR. Let’s remind
ourselves of the approaches.
• Best practice – there’s a set of best HR practices which always result in high levels of
organisational performance.
• Best fit – HR practices should take account of the unique context of the organisation.

Both models offer organisations powerful tools for shaping HRM processes and there will not be
any absolute judgments on which approach works best. However, it is generally accepted that ‘best
fit’ is more important than best practice.

Ethical and responsible approaches to HR

According to Armstrong and Taylor (2017), the corporate goals of an organisation should
encompass the rights and needs of employees, as well as those of the business. Within this, the HR
function has a special responsibility for protecting and promoting core values on how employees
should be managed and treated.

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NEED TO KNOW

HR has a primary responsibility for championing approaches that concern the

dignity and rights of employees. Revision
on the go

Of course, HR policies and practices must comply with the law. However, as Taylor and
Woodhams (2014) remind us, legal compliance is a minimum standard. Ethical and responsible
HR is a proactive approach that works towards fairness for all. Key aspects include:
• equality of opportunity;
• dignity at work;
• work-life balance;
• health and well-being.

Employees should be treated in ways that recognise their natural rights to be treated justly,
equitably and with respect (Armstrong and Taylor, 2017).

CASE STUDY
An ethical dilemma
Elliot is a HR officer in a large technology company. A
departmental manager asks him to raise the performance
appraisal score of an employee from another department.
Elliot is told by the departmental manager to simply
change the score and “ask no questions”.

Over to you
Activity 3: Case study: An ethical dilemma

What should Elliot do and why? Summarise your answer below.

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2.3 The role of key stakeholders in delivering a

strategic approach to HR
Key stakeholders
All successful HR work is built on a foundation of good working relationships that foster trust and
open communication. Let’s look at some of the most important stakeholders.

Line managers
Line managers play a very important role, not only in the day-to-day management of people and
operations, but also in the implementation of HR policies.

The role of the line manager, as well as delivering the department’s objectives, is to:
• enable HR policies and practices;
• act upon advice or guidance from HR;
• control the work flow by directing and guiding the work of others.

The extent to which responsibility for core HR activities, such as recruitment and selection, is
devolved to line managers largely depends on the model of HR delivery. Nevertheless, line
managers make a significant difference to people management practices.

Importantly, research tells us that employees who feel positive about their relationship with their
line manager are more likely to have higher levels of job satisfaction, commitment and loyalty –
which in turn are linked to higher levels of organisational performance and achievement of business
objectives (Hutchinson and Purcell, 2003).

NEED TO KNOW

The role of the line manager is “to bring HR policies and practices to life”.
Revision
on the go

Senior managers
Senior managers set the direction of the organisation. They are concerned with areas such as
costs and efficiency, reputation, leadership development and supporting business objectives with
appropriate HR objectives.

Employees
Organisations achieve their business objectives through the effective management of its people.
Well-run organisations take account of employee opinions, concerns and values. Even if an
organisation is only concerned with outcomes such as “profitability”, getting employee views is still
important – in the long-term employee dissatisfaction is likely to impact on profitability.

Other business functions

Other business functions play an important role in delivering a strategic approach to HR. Let’s use
the finance function as an example.
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Not only does the HR function need to ensure that there are enough employees available to do a
company’s work, but it also needs to ensure that the employees have the right skills, are placed in
the right jobs, are paid competitively and receive the proper motivation and rewards. The finance
function helps HR to do this. How? The most obvious way is by providing data. HR needs to know,
for example, what the company can afford to pay its employees now and in the future. By working
together, the functions can utilise the data they each hold to gain a better understanding of the
current situation as well as determine the best way forward to meet business objectives.

Shareholders
Although the responsibility for running a private company is devolved to its board and directors,
shareholders have an interest in how the company’s workforce is managed. For example, a
challenge for the HR function is ensuring that decisions about how employees are rewarded are
consistent with shareholder interests. Shareholders might consider that a proposed pay increase
is too high because it negatively impacts on their dividends. On the other hand, shareholders may
consider that the proposed pay increase is too low because it impacts negatively on the company’s
reputation.

Trade unions
Trade unions with members employed by an organisation have a direct stake in its HR policies and
practices. Unions will often be called upon to represent their members in the development of new
or changed employee agreements, with the aim of getting the best possible deal for their members.
The levels of trade union membership differ across organisations and industries. While trade union
membership has declined in Europe and North America, it has been relatively stable or grown in
other regions such as South Africa and China (The Federation of International Employers, 2017).

Other forms of collective representation, such as employee forums and work councils, are common
in some industries.

Over to you
Activity 4: Trade union membership

Research trade union membership levels in your country. Are the numbers rising or falling?
Are there differences across sectors and industries? Summarise your findings below.

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Governments
Governments play several roles. They:
• pass laws that form the legal framework for HR practice;
• implement laws by publishing guidelines and providing advice;
• act as economic managers and are concerned that wage costs don’t result in inflationary
pressures in the economy;
• are employers themselves.

The importance of managing relationships with stakeholders

Most stakeholders have a degree of power or influence which they can exert over HR and the
organisation. For example, a senior manager may have the power of veto (the final authority
to say no) over a proposed HR approach or initiative. Two different types of stakeholders may
come together to exert their influence. For example, employees who are unhappy about working
practices may join forces with the relevant trade union.

At a general level, different stakeholders have the same common purpose – the overall success of
the organisation. However, at a more detailed level, they are likely to have different priorities about
how to meet that goal as well as different views about the HR function itself. Understanding how to
relate to diverse expectations helps the HR function to better manage relationships – to see where
the tensions and conflicts may arise, and to adopt strategies to address, if not, resolve them.

Research by Hirsch and others (2008) suggests that by proactively managing relationships, the HR
function is better able to work across the business to achieve more consistency of people management
and to develop and deploy people more effectively for the benefit of the whole organisation.

Summary
In this chapter we defined and considered the evolution of HRM. We explored a variety of approaches
that looked at the role of stakeholders in delivering a strategic approach to HR. This chapter
highlighted the complexity of HRM and the significance of effectively managing relationships.

28 © ABE
© ABE
Over to you
Activity 5: Activity sheet for an organisation

Working with another student, if possible, consider an organisation with which you are both familiar.
Using the activity sheet below:
1 Make a list of the organisation’s internal and external 4L
 ist what each stakeholder could potentially contribute to
stakeholders. delivering a strategic approach to HR.
2 List each stakeholder’s interest in the HR function. 5R
 ank the stakeholders in order of their importance in delivering a
3 List each stakeholder’s expectations of the HR function. strategic approach to HR.

Stakeholder Interests: Expectations: Potential: Ranking:

What is their interest in the What do they expect from What contribution could they Rank the stakeholders in
HR function? their relationship with the HR make to delivering a strategic order of importance
function? approach to HR?
The Impact of Different Perspectives of Human Resource Management on the Organisation and Workforce 
Chapter 2

29
Chapter 3
The Role and Function of Human
Resources within the Key Areas of
Resourcing, Reward and Performance

Introduction
You have studied the important strategic role that HR has to play. But HR isn’t just about strategy.
It is about how to take these initiatives and corporate goals, and apply them in a practical way to
ensure all staff operate to the very best of their ability, and are motivated to do so. In this chapter
we look at the key roles that HR perform to ensure maximum performance from its staff, from
making sure the right staff are recruited in the first place, to managing high performance and
under-performance.

Learning outcomes
On completing the chapter, you will be able to:
3 Summarise the role and function of human resources within the key areas of resourcing,
reward and performance

Assessment criteria
3 Summarise the role and function of human resources within the key areas of resourcing,
reward and performance

3.1 Outline different methods of recruitment and selection

3.2 Recommend the most effective techniques for retaining talent within the organisation

3.3 Outline key performance management activities and initiatives (including High Performance
Working)

3.4 Recommend creative and effective policies for reward management

3.5 Analyse the relationship between resourcing, performance management and rewarding
talent, and how this contributes to the achievement of business objectives

© ABE
 Level 4 Principles
of Human Resources

3.1 Different methods of recruitment

and selection
What is recruitment and selection?
Recruitment is the process of finding and appointing the people the organisation needs.
Selection is part of that process and consists of a number of different methods to identify the best
people for the job.

This part of HR’s role is important for the organisation itself and for line managers. Selecting the
wrong person for a post could impact on productivity, if they do not have the right knowledge,
skills or experience to do the job. If they do not fit within the team this could cause problems
for team morale and possibly, in extreme cases, lead to existing members of staff leaving the
organisation as a result.

The recruitment and selection process

The recruitment and selection process has nine stages.
1 Decide on the duties of the vacant post (This document is called a job description).
2 Decide on the knowledge, skills and experience required for a person to do this role (This
document is called a person specification).
3 Advertise the post.
4 Sift applications to produce a shortlist (a number of potential people who have the required
skills, knowledge and experience).
5 Notify those people not shortlisted.
6 Interviews and selection tests (such as a skills test).
7 Obtain references.
8 Offer employment to the successful candidate and issue contract.
9 Notify unsuccessful candidates.

Where to advertise?
Once the vacancy is agreed – and a job description and person specification agreed for the role –
the next decision is where to advertise the post. There are a number of different options that an

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organisation could utilise, depending on the money available to spend on the advertisement, the
sort of vacancy being advertised, and so on.

Advertising method: Description:

National newspapers Useful for more senior posts, such as managers. Can be expensive.

Local newspapers Better for lower-paid roles, where applicants are likely to live nearby.

Local shops Again, effective for lower-paid roles.

Word of mouth This is where an employee tells a friend of family-member about a

vacancy.

Company websites Here the company can advertise all vacancies in their own
organisation.

Social media For example: Facebook, Twitter. Can reach millions of

people.

Table 1: Advertising methods Revision

on the go

Great expectations: Recruiting and retaining the Millennial generation

Human Resource Management International Digest, Vol. 24 Issue 2 pp. 32 – 35
This document will be available from within your online student resources.

Over to you
Activity 1: Advertising a vacancy
If you were asked to advertise an office administrator vacancy, where would you advertise it?

What factors did you take into account to decide on the place(s) you would
advertise the vacancy?

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The Role and Function of Human Resources within the Key Areas of Resourcing, Reward and Performance Chapter 3

Types of recruitment
Recruitment and selection can be either internal or external. Internal recruitment means that
the post is only advertised within the company, so only current employees can apply for the post.
External recruitment means that a vacancy is advertised inside and outside the company,
so anyone can apply for the post. We also talk about formal and informal recruitment. Formal
recruitment means that a company follows all normal procedures (for example, advertises in
newspapers or online). Informal recruitment is less structured and will very often rely on word-
of-mouth recruitment.

Type Advantages Disadvantages

Internal You know the employee’s skills and Someone from outside the
recruitment abilities, so this reduces the risk when organisation may bring new ideas
you recruit someone you don’t know. to improve its performance.

No advertising costs. It may automatically create

another vacancy somewhere else
The employee knows the organisation in the organisation that will need
and will probably be very motivated to to be filled.
be successful in achieving a new role,
and therefore their performance levels
should be high.

External Advertising outside the organisation It can be very expensive and time
recruitment may lead to a bigger choice of consuming, especially if you have
possible candidates. advertised in newspapers.

New employees may bring new ideas New employees will need to go
on products or ways of working. through an initial training period
to settle into the job, which may
result in a temporary reduction in
performance or productivity.

Formal You are following proper procedures It can take a long time to fill a
recruitment which are designed to select the best vacancy, which means that the rest
person for the job. of the team are having to cover that
work too. This puts added stress on
You can ensure you comply with legal the other team members and can
procedures around recruitment. also lead to reduced productivity.

Informal Very often this means recruiting a The employee may be biased in
recruitment friend or family member of an existing their opinion and may recommend
employee. They may therefore know a friend or family member who is
a lot about the company before they not right for the role.
start.

You will have the recommendation of

the current employee that the new
person will be suitable.

Can be a way to recruit someone very

quickly.

Table 2: Recruitment methods – advantages and disadvantages Revision

on the go
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Research by Greenidge and others (2012) indicates that many business organisation in small
developing countries, like Barbados, use informal recruitment methods regardless of the size of
the company based on their low-cost business strategy. Also, the adoption of informal techniques
show the flexibility needed to secure the appropriate job fit for their organisations as they strive to
achieve competitiveness.

Recruitment avenues
An employment agency is a business that finds jobs for people seeking work, or finds potential
employees for employers with vacancies to fill. Employers notify their vacancies to the agency, and
they select the names of people who have registered with them and are looking to find a job. The
agency will be able to check to make sure that each person they send through to the employer has
the required skills and experience. The employer can then shortlist from this list of names and go
through their normal selection processes. While this makes recruitment much easier for employers,
it should be remembered that the agency will charge for this service, so it can work out to be quite
expensive.

Graduate recruitment is a specialised form of recruitment that focuses on the recruitment

of people who are about to leave university or other higher education establishments, having
completed their degrees. These graduates will certainly have the knowledge required for a role,
through their degree, although might not have business experience, unless they have been working
alongside their studies.

Graduate programmes are often used to select and develop people to become that organisation’s
senior managers later in their careers.

Of course, an employer does not just want to target graduates in the higher education
environment. Educational liaison is when an employer builds links with any education
establishment – from schools for the under 10s all the way up to higher education. This can involve
the school or college hosting talks by employers, or the students going to an employer to learn
about a particular industry. This acts as good publicity for the employer as they are working with
their local community, as well as forming links with prospective employees of the future.

Finally, there is role of a headhunter. This person is not employed by an organisation but is
contracted for a period of time to work on behalf of an organisation to find an excellent person for
a vacancy. It can be very expensive to use a headhunter so they tend to only be utilised for very
senior management or highly specialist vacancies.

NEED TO KNOW

There are nine stages to the recruitment and selection process. There are also different
forms of recruitment such as external and internal, formal and informal, graduate
recruitment, education liaison and headhunters. Revision
on the go

Different selection methods

As you have seen, there are many ways to gather interest for your vacancy, which should hopefully
mean you have a number of applicants for your post. So now the question must be – how can we
find the right person for our job from all these applications? And this is where selection methods
can help.

Selection is concerned with identifying the best people for the job, using a number of different
techniques. These include:
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The Role and Function of Human Resources within the Key Areas of Resourcing, Reward and Performance Chapter 3

Shortlisting
Shortlisting is the first step in the selection process. Here applications are matched to the
requirements outlined in the person specification to reduce the number of applicants to a pool of
people who could all, potentially, do the job role.

Employers will often use a grading system – such as a score of 1–10, where 10 means that a person
fully meets and exceeds the requirements for knowledge, skills and experience, and 1 means that
there is very little match to the specification.

This process will reduce numbers (for example, to five or six people), and these will be the people
invited to interview and/or selection tests. The employer will then contact those other applicants
who were not shortlisted to inform them of the outcome.

Interviews
Interviews are a very popular selection method – whether just with the HR Manager or line manager
and the candidate/prospective employee, or with a number of different managers.

According to the CIPD (2016), for the employer, the interview is an opportunity to:
• discuss candidates’ experience and previous achievements, and their suitability to fit into the
team;
• discuss details such as start dates and terms and conditions;
• give the candidate a positive impression of the organisation as a good employer.

For the candidate, the interview is an opportunity to:

• understand the job role in more detail;
• ask questions about the organisation;
• decide if they like the organisation.

However, the interview does have its critics. It could be argued that it is great for candidates who
are very articulate (but who might not be very good at the job) and is not so great for people who
may be shy or get nervous, but who can do the job perfectly. It is often a good idea, therefore, to
use selection tests alongside interviews (see below).

Selection testing
Psychometric tests allow employers to assess individual differences in a slightly more scientific
way than selection interviewing. They are sometimes administered online or at an assessment
centre, particularly when assessing high volumes of applicants and, according to Armstrong and
Taylor (2017) could include the following types:
• intelligence – measure general intelligence of a candidate;
• personality – assess the personality of candidates in order to make predictions about their likely
behaviour in a role;
• aptitude/attainment – assess abilities or skills and ability to perform tasks.

A different form of selection test might be a roleplay where candidates are asked to act how they
would respond in a particular situation. For example, for an HR Manager roleplay, the candidate
might have to act out a disciplinary investigation or interview, to show their skills in dealing with
these situations.

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References
A person applying for a job normally has to give the names of two people – one of whom is usually
their current line manager – to provide witness testimony to the new employer about the ability of
the person.

There are two types of employment reference:

• professional reference – usually from the candidate’s current employer, or a previous employer
or manager
• character (or personal) reference – this typically comes from an independent person, often in a
respected position, who knows the candidate well

Any offer of employment is normally subject to satisfactory references.

While some types of selection methods are more popular in some countries, research suggests that
that the differences are not that large because there is a certain level of consistency in people’s
perceptions of the fairness of different selection methods across the globe (Steiner and Gilliland,
2001).

Over to you
Activity 2: Selection methods

In Activity 1, you were asked to consider how you would advertise for the post of office
administrator. Let us now imagine that you have done this, and 40 people have applied
for the position. What selection methods would you use, and why, to reduce that
number down to the one person you want for the role?

36 © ABE
The Role and Function of Human Resources within the Key Areas of Resourcing, Reward and Performance Chapter 3

Over to you
Activity 3: Recruitment and selection legislation

As a homework activity, explore the legislation that applies to the recruitment and
selection process in your country. For instance, this might be around equal opportunities
and no discrimination (e.g. refusing to appoint someone who has a different religion or
ethnic background from the rest of the employees on the team). Make a list of the laws
that you think are relevant to anyone recruiting and bring them to your next lesson.

Selection is concerned with identifying the best people for the job using a number of different
techniques, such as shortlisting, interviews, testing and references.

Recruitment difficulties
Finally, let us take a pessimistic view for a moment. What can HR do if there are no applicants for a
post? Here are a number of suggestions.
• Job description – Are people not applying because the job sounds unattractive? HR could
discuss with the line manager to see if the job duties contained in the job description could be
reshaped or rewritten to make the job more appealing.
• Person specification – Are the requirements contained within the person specification realistic
to the role? Are there likely to be sufficient people in the local area with those skills, knowledge
and experience?
• Advertisement – Have you used every possible option in terms of where you have advertised
your post? Could you do anything to make the website entry, social media notice or
advertisement more attractive or noticeable?
• Terms and conditions – Are the salary, benefits and other terms and conditions fair for the post
you are advertising? Are your competitors offering something better for similar roles?

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3.2 The most effective techniques for retaining

talent within the organisation
Measurement and costs of staff turnover
Staff turnover is the rate at which people leave an organisation. It is calculated as:

Number of leavers in a specified period (usually a year)

x 100
Average number of employees employed during that same period of time

The higher the answer to this calculation, the more staff are leaving the organisation.

Over to you
Activity 4: Calculating turnover
A local factory employs 250 people. In 2014, 25 people leave the company; in 2015, 40
people leave the company. The turnover rates for those two years, therefore, are:

2015: (25 ÷ 250) x 100 = 10% 2016: (40 ÷ 250) x 100 = 16%

Question: What will the turnover rate be, in 2016, if 55 people left? Show your
workings.

According to Armstrong (2017) it can be very expensive for organisations when staff leave an
organisation in a number of different ways, such as:
• cost of having to recruit for the vacancy that the person who leaves creates (such as
advertising and administration costs)
• cost of having to train the new people appointed when they first start the job
• loss of output for the company – a person leaving an organisation is likely to be less motivated
while working their notice, and so their productivity is likely to reduce
• loss of output after the person leaves, while a new person is being recruited
• loss of output while the new person gets started in their role – it will always take someone,
whatever their role, some time to get used to the new job and to speed up in terms of their
productivity.

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Labour turnover is calculated as:

Number of leavers in a specified period (usually a year)

x 100
Average number of employees employed during that same period of time

Reasons why employees might leave an organisation

There can be many reasons why an employee leaves an organisation. These include:
• a higher salary;
• better career opportunities;
• more chance for training in the new company;
• more job security;
• better working conditions (or health and safety conditions);
• poor working relationship with manager or team colleagues;
• more chance for training in the new company.

So what can an employer do to improve retention in their organisation? While some labour turnover
or workforce mobility can be considered a good thing – to bring new people into the company,
with new skills and ideas – no employer wants to see many people leaving, especially if they are
leaving to join a competitor. Many employers use employee surveys or exit interviews to
ascertain why employees leave their organisation. This helps an employer to recognise any trends
or problems that could be overcome.

Employers can take many steps to improve staff retention. The Chartered Institute of Personnel
and Development (CIPD) produce an annual resourcing and talent planning survey. In the 2015
Survey, they suggest that the following are the top six ways that employers utilise to reduce labour
turnover:

Method Likely impact

Improve pay Obviously, this has the advantage of giving the employee more money
so they do not leave, but could have consequences. But, what might his
or her colleagues think about that? Would they too demand more money
from the company so that they do not leave? This could become quite
costly for the company.

Increase Increasing people’s skills may increase their motivation and their desire
training and to stay with your organisation. They could then feel that the organisation
development cares about their career development, or become less bored with the job
opportunities they are currently doing. They may also feel that they could now apply for
promotion posts within the company.

Improve the Sometimes line managers can become too focused on the task and forget
people skills of communicating positively with their staff. Increased training for managers
line managers could improve their communication and interpersonal skills, which could
improve their people management skills and make working lives better for
their staff.

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Method Likely impact

Improve Recruiting the right person for a job is very important. Imagine the
selection selection methods used have not been carried out properly and the
techniques organisation has ended up appointing someone to a job that they are not
capable of carrying out. This could mean the organisation perhaps having
to spend money to train that person, or that the person realises that they
cannot do the job and resigns.

Improve Induction is the process of making new employees feel welcome, and
induction giving them the basic information needed to help them settle down and
processes feel happy working for this new employer. If there is no induction, or a
poor induction, the new employee will feel unwelcome and regret joining,
and may quickly leave.

Improve Employee involvement means that employees are given the opportunity to
employee state their views on something, or put forward their own ideas.
involvement It can make employees feel valued if they think that
management are listening to them and their ideas.

Table 3: Ways to reduce turnover Revision

on the go

Over to you
Activity 5: Reducing labour turnover

Working with another student, if possible, identify any additional approaches that
employers could use to reduce labour turnover – for example, more flexible working.

Think of an organisation with which you are both familiar and make a list of things that
could be done to keep labour turnover low.

Labour turnover can be very costly to an organisation. There are a number of strategies an
employer can take to reduce it.

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3.3 Key performance management activities and

initiatives
What is performance management?
Performance management can be defined in different ways. Armstrong (2017:391) defines it as:

The continuous process of improving performance by setting

individual and team goals, which are aligned to the strategic goals of
an organisation.

Performance management involves planning performance and tasks to allow an employee or a

team to achieve goals, and then reviewing progress against these goals. It is supportive, making
sure that employees have the right skills and knowledge to be able to achieve their goals, but also
involves policies to address under-performance through disciplinary or capability procedures.

Armstrong and Taylor (2017) suggest five key questions to consider when managing performance in
an organisation.
1 What do we mean by performance? How would we measure it?
2 Can we identify good or poor performance? In other words, can we tell who is a good performer
and who is not?
3 Can we establish the cause of good or poor performance?
4 How can we motivate people to perform well?
5 Can we do all this fairly and consistently?

It will not be a surprise given all this, that organisations use performance appraisal, training and
disciplinary processes to assist with performance management.

Performance appraisal (also known as performance review) is a process for individual

employees and their line managers to discuss the employee’s performance, training and
development needs, and also any support the employee needs in their role from the line manager.
It is usually used to assess recent performance, via feedback and to set objectives for the future.

The disciplinary process is a mechanism for organisations to deal with misconduct or wilful
under-performance (for example, when an employee avoids work whenever possible). Where
under-performance is due to a lack of skills, organisations would not discipline someone, but would
introduce training and development measures to support the employee and help give them the
required skills.

What are the main stages of the performance management cycle?

The performance management process is often referred to as a “cycle” because, as we have seen,
it is continuous, and breaks down into a number of stages. There are many versions of the cycle, all
saying similar things in different ways. This is a good example:

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Planning

Rewarding Monitoring

Rating Developing

Figure 1: The performance management cycle

Source: [Link]/policy-data-oversight/performance-management/performance-
management-cycle/ Revision
on the go

Step 1: Planning (including managing expectations)

This is where work can be planned in advance and objectives can be set. This planning would
require consideration of organisational and team objectives, the specific job role of the employee
and their current skills and competencies to do the job role. It is important to make sure that the
employee’s objectives are realistic and achievable.

It is at this stage that expectations can be set and managed. This might mean the manager
explaining an employee’s job role and how their responsibilities link to organisation and team or
department objectives. This would include specific targets to be completed by the employee, as
well as the expectations about behaviour (such as working well with team colleagues, or acting with
courtesy at all times).

Step 2: Monitoring

This is where the employee’s progress is reviewed at regular intervals to ensure they are on
target to achieve those targets agreed at Step 1. The employee is given feedback to assist this
achievement on their progress thus far.

Step 3: Developing

This is enhancing the employee’s ability to perform through training or coaching or other forms of
learning.

Step 4: Rating

This provides a way to assess or grade performance, again to give feedback on performance.

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Step 5: Rewarding

In some organisations this rating is linked to an employee’s pay, through performance-related pay
or bonuses (see later sections on reward).

There is an additional aspect to consider in the performance management cycle: managing

expectations.

Performance management is a cyclical process and is all about planning performance and tasks
to allow an employee or a team to achieve goals, and then reviewing progress against these
targets.

It’s time to bring performance appraisal into the twenty-first century. The
lessons from companies like Cisco, Google and Infosys
Human Resource Management International Digest, Vol. 23 Issue 7 pp. 23–26
This document will be available from within your online student resources.

Over to you
Activity 6: Measuring performance of staff

Think of an organisation with which you are familiar. How do they measure performance
among its staff? What could they do to improve performance?

High performance working (HPW)

High performance working (HPW) was defined by Coombs and others (2006) as the sum of
the processes, practices and policies put in place by employers to enable employees to perform to
their full potential. In other words, the idea is that a combination of certain HR practices will lead to
employees who are very motivated and committed, and therefore perform to their maximum ability.
The benefits of this for the organisation could be improved customer service, higher profits and a
growth in business.

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Sung and Ashton (2005) suggest that the following processes and practices will lead to a HPW
organisation:

Work practice Description

High- This includes any methods an organisation has to involve employees in

involvement decision-making. This might be through formal staff committees or more
work practices informal staff forums.

It could also include role autonomy where managers reduce the

amount of supervision they carry out over their employees and give them
the chance to “self-manage”. This can also be applied to teams where the
team operates itself without the need for close management supervision.

HR practices This could be well-developed and effective recruitment processes that are
able to identify employees with high potential. It could also be through
effective use of the performance appraisal system to develop employees
to their full potential. It could be by re-designing a job to take away
some duties that are wasting an employee’s time, so he or she can then
focus on more productive work. A final example could be learning and
development programmes that train employees not just for the job they
are doing now, but develop them for their future careers.

Reward and One example here is financial reward that relates high performance such
commitment as performance-related pay (see below for more on reward management).
practices Another could be non-financial benefits and rewards such as: generous sick
pay, health insurance or flexible working hours – all these could
make the employees feel valued, and therefore more
committed to the organisation and keen to perform well.

Table 4: High performance working practices Revision

on the go

As you can see from the table above, the role of the manager is crucial in HPW. From setting
challenging individual objectives that link closely to organisational strategic objectives, to
organising the relevant training and development. Managers are critical to its success and need to
trust the abilities and experience of their employees.

CASE STUDY

High performance working

Cherise works for a manufacturing company that
aims to be creative and continually developing new
products for the market. The company regards itself
as being an HPW organisation and so stresses the
importance of developing high levels of trust amongst
its employees and between management and staff.
This encourages people to share their good ideas
for new products, to help the company expand. It
also strongly encourages team working amongst its employees and provides a wide variety of
training and development to continuously develop people’s knowledge and skills. As a result, it
is very successful in its sector.

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High performance working (HPW) is the combination of high quality HR processes and practices
to enable employees to perform to their full potential.

3.4 Creative and effective policies for reward

management
What is reward management?
Reward is the process of deciding how employees should be paid, or rewarded by other means,
including financial or non-financial benefits or rewards. It is a key part of the strategy to help attract
and then retain employees. According to Armstrong and Taylor (2017) reward management is the
term used to describe the strategies, policies and procedures required to recognise the value and
contribution of staff to the achievement of organisational objectives.

What are the aims of reward management?

The aims of reward management include the following.
• to help the organisation achieve its objectives by encouraging high performance
• to reward the skills and behaviours that the organisation wants to encourage
• to recognise valuable employees
• to attract and retain high-quality applicants
• to help to motivate employees

Key reward perspectives

A number of key perspectives help to shape the reward approach adopted by an organisation.

Stakeholder What are they looking for in reward?

Employer The employer aims, in its reward management, to keep salary costs as low as
possible, but not so low that they are demotivating to current staff and stop
new employees joining the organisation. The employer also needs to keep
an eye on the competition. The more they pay in terms of salaries, the less
overall profit they will make. This is why pay is sometimes linked to increased
performance, through performance-related pay or bonuses (see later notes).

Employees Employees want to be paid well, especially if the organisation is making

high profits. But there is another element to this – they want to be paid
fairly (see section on fairness below).

Employee The role of representative groups, such as trade unions, is to look after
representative their members (for example, employees). They will want to negotiate with
groups employers to ensure the best possible pay rises for their members – making
(including trade sure it is fair compared to other employers in the same industry or sector.
unions) They will also support individual members of staff, who think they are not
being paid fairly, to take their case to their line manager or HR manager.

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Stakeholder What are they looking for in reward?

Managers Line managers are often involved (along with the HR team) in setting the
salary for a newly-appointed member of staff. If the organisation operates
a performance-related pay (PRP) scheme, they will also be responsible for
assessing the employee’s achievement of the targets set, which will decide
how much extra PRP the employee receives. This can be quite stressful for
both the line manager and the employee – especially if they disagree over
the level of performance, and therefore the extra pay to be awarded.

Shareholders Shareholders have bought shares in a private sector organisation and

want to see a return on their investment – in other words, earn money on
that investment by receiving a percentage of the company’s profits each
year. They have the same dilemma as the employer – on one side, they
want salary costs to be as low as possible so that the profits are as high as
possible. But on the other, they don’t want salaries to be so low that they
demotivate employees, reducing performance and therefore profit.

Government The national government are interested in pay levels as this will directly
relate to the economy of a country. If pay is consistently too high, it
can cause high levels of inflation in the economy, which no
government likes to see.

Table 5: Key reward perspectives Revision

on the go

Rewards policy and practice: key elements to know

When setting pay levels, there are many factors that an organisation has to take into account.
• What is the current financial situation of the employer?
• Are there lots of people in the labour market who could be appointed to a position (where
the salary could be lower) or are the skills you need quite rare (where the salary would have to
be higher)?
• What level of skills, knowledge, experience and qualifications are required for the post (the
more that is needed, the higher the salary is likely to be)?
• Are the national and local economy in a good state? Is inflation high or low (if it is high then
people will want higher salaries)?
• What are your competitors paying for a similar role in their organisation?

Key reward techniques

Let’s now consider some of the key techniques used within reward.

Grade and pay structures

Not everyone will be paid the same, and the salary they receive will be related to their job role and
their position in the organisation’s structure. Grade and pay structures provide the framework
for this to happen, from a reward perspective. They enable the organisation to determine where
jobs should be placed in a hierarchy, define pay levels and the scope for progression. Roles at each
level of the hierarchy will be allocated a salary range (for example, four salary points). Each year a

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person moves from one point to the next and when they reach the top of the range they stay at
that point, unless they are promoted to a higher post.

Job evaluation
In simple terms, job evaluation is a process for measuring what a job is worth to an organisation,
which then helps set the pay for that job. It takes into account the duties and responsibilities of
the job as well as the skills/knowledge/qualifications/level of experience that a person needs to do
this job. Each aspect is given a score against set criteria, which is then added up and equated to a
salary point.

Job evaluation also helps to compare different jobs against each other. For instance, in a factory,
how would you decide the salary of a factory worker compared to an HR officer in that factory?
Who should be paid more?

Market rates
Market rate analysis is a method of calculating the salary of a post, not by using a “scientific”
method such as job evaluation, but by looking at what other organisations in your sector (or your
competitors if the employer is operating in the private sector) are paying for similar posts. That
information could come from the job advertisements of your competitors, published salary surveys,
or information from employment agencies.

Market rate analysis isn’t a particularly reliable method to calculate a salary, but can be useful if the
employer cannot find people to fill vacancies.

Performance-related pay
A way of paying people related to the achievement of set targets or results. For example a factory
worker receives a basic salary each month, however, he or she might also have the chance to work
an extra 10% of their salary if they achieve a target agreed with the manager. The idea is that it
motivates the employee to work hard (to earn extra money) and the employer gains by getting
higher productivity from its staff that will hopefully lead to higher profits.

CASE STUDY
The best way to pay?
Robert works for a garage selling cars.
He receives a set salary each month but it isn’t
very generous and is barely enough for him
and his family to survive. However, if he sells
more than 12 cars per month he receives a
bonus of 15% of his month salary as a lump
sum additional payment. If he sells more than
20 cars, that bonus rises to 25%.

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Over to you
Activity 7: Case study analysis: The best way to pay?

Thinking about this case study, what are the advantages and disadvantages of this
reward system for Robert, and for his employer? Do you think that there is a better
way to pay him? Explain your answer.

Reward is the process of deciding how employees should be paid, or rewarded by other means,
such as financial or non-financial benefits or rewards. It is a key part of the strategy to help
attract and then retain employees.

Types of reward

Benefits
Many employers offer extra benefits to their employees in addition to the salary paid, or on top of
what they are legally required to offer. For example, if the law says that an employee is allowed six
months’ absence once her baby is born as maternity leave, an employer might offer, as part of its
benefits, that a woman can be entitled to nine months’ maternity leave.

Common examples of the benefits offered by employers include:

• pension schemes
• profit sharing
• employee share options
• commission or bonus
• company loans
• staff discounts
• healthcare
• flexible working
• extended parental leave

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• career breaks
• relocation fees.

There are several reasons why the employer might want to introduce these extra benefits which are,
after all, an extra cost for them. Reasons might be:
• to contribute to the overall total reward package (see below) to make the company more
attractive to potential employees;
• to provide an employee with financial assistance if they become ill, or when they retire;
• to meet the organisation’s goal of being seen to be a caring employer;
• to increase commitment and motivation amongst employees.

Over to you
Activity 8: Compare and contrast benefits

As a homework activity, identify three employers in your local area. Carry out research
to investigate the benefits each organisation offers, using the list above to guide you.
Compare and contrast to see which, in your opinion, has the best reward package.
Explain your answer.

Extrinsic and intrinsic reward

Extrinsic rewards are specific things the employer can offer to motivate and/or reward staff.
These are usually directly related to job performance of employees:

Pay A company can designate a generous payment for employees as a reward

for the hard work and commitment to achieving their organisational goals.
A fair salary is often considered to be motivational and is a major factor
that affects job satisfaction. However, the idea behind extrinsic and
intrinsic reward is that people are not just motivated by money.

Performance This is a way to pay people according to their performance.

related pay Performance related pay links salary progression to an assessment of
individual performance, measured against pre-agreed targets.

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Bonus or This is a method of sharing company profit and recognising the contribution
commission of an employee. This might be a bonus for meeting high targets in a
manufacturing organisation, or commission through selling a car (for
example, with the sales person receiving 10% of the value of the car sold).

Benefits (as discussed above)

Workplace Employees and employers make contributions to a pension fund whilst the
pensions person is working for that employer, which gains interest over the years. The
employee then receives a regular payment from this fund once they retire.

Improved An employee spends a lot of time at the workplace and the employer
working should try to ensure that they work in pleasant environment. This might
conditions be good quality furniture, modern computers, comfortable temperatures,
protective clothing for employees who work outside, and so on.

Promotion Employees who are very hard-working and achieve a great deal are
very valuable to an organisation. It might be able to offer some of these
employees the chance for promotion to higher level posts, with higher
level duties and an increase in pay and status.

Profit sharing Some organisations choose to share the profits they make with their
employees – after all it could be argued that the performance and
contribution of the employees will have played a very large part in
achieving those profits in the first place.

Praise from This makes you feel valued and appreciated by your manager.
your manager

Table 6: Examples of extrinsic rewards Revision

on the go

Intrinsic rewards do not come from the employer, they come from the feelings and
self-motivation of the employee. We are all different as human beings so our intrinsic motivation
and reward will also be different. Some examples of intrinsic rewards might be as follows.
• Sense of achievement – The pride you feel when you have achieved a difficult task, or worked
very hard on a particular project.
• Feeling proud of the job you do because you know it makes a difference – Not many nurses,
for example, would expect performance-related bonuses for caring for sick people and helping
them to recover. They feel proud of the difference they can make to people’s lives and this plays
an important role in motivating them in the future.

Different countries vary in the methods and approaches used for rewarding employees as no
one system fits all. According to Lawler (2000), rewards capable of attracting and retaining top
talent and motivating for performance starts with the understanding of the reward preferences
of individuals and how they are likely to vary across borders.

Total rewards
Total rewards are the combination of financial and non-financial rewards made available to
employees.

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Financial Non-financial TOTAL

rewards rewards REWARD

Figure 2: Total rewards Revision

on the go

In this diagram:
• financial rewards = salary + any performance-related pay + financial benefits;
• non-financial rewards = recognition + opportunities to develop skills + quality of working life.

Some organisations (who have a strategy around total reward) give their employees an annual
total reward statement. This is specific to the employee and illustrates to them all of the pay and
benefits that they receive from the employer.

Significance of fairness, consistency and transparency in reward

There are three important concepts that an organisation must consider when designing and
implementing its reward approach.
• Fairness – we often talk about employees wanting “A fair day’s pay for a fair day’s work”.
Fairness is very important in reward – employees want to feel that what they are paid is fair for
the work they have done and also want to make sure the pay is fair compared to their colleagues
doing similar or equivalent work. If pay does not feel fair to an employee it is very demotivating
and there is a strong possibility that they will leave, thus increasing the organisation’s labour
turnover.
• Consistency in a reward context means that behaviour and assessment do not change greatly
between employees, or over time. For example, if one employee receives a bonus for achieving
an accountancy qualification, another employee completing the same qualification would also
expect a bonus. Also, if there is always a pay rise on 1 April each year, employees will expect the
same every year. If this is not possible then communication has to be very clear as to why that
is, so employees understand. It will link to fairness also – if no-one has a pay rise at all that year,
employees will feel fairly treated. If some do and some don’t, it will not feel fair.
• Transparency links to the point made above about explaining and communicating how reward
is calculated, or why certain decisions about reward have been made. This is where the word
“transparency” comes in – if employees feel you are being open with them in your reward
communications, they are more likely to think they have been treated fairly.

3.5 The relationship between resourcing,

performance management and rewarding talent
The value of effective recruitment and induction
Pilbeam and Corbridge (2015) sum up the importance of this key HR function noting that:

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The recruitment and selection of employees is fundamental to the

functioning of an organisation, and there are compelling reasons for
getting it right. Inappropriate selection decisions reduce organisational
effectiveness, invalidate reward and development strategies, are frequently
unfair on the individual recruit and can be distressing for managers who
have to deal with unsuitable employees.

If the wrong person is appointed – and by “wrong” we mean someone who doesn’t have the
required skills or doesn’t fit within the team – it can have a serious impact on employee and line
manager morale, organisational performance (which then, in turn, impacts on reward strategies)
and potentially the reputation the organisation has with its customers. However, if the right person
is appointed, it can help develop the skills and behaviours within your employees and lead to
enhanced levels of performance. This is why recruitment is a key part of high performance working,
as we discussed earlier in this chapter.

The same applies to induction, which Armstrong and Taylor (2017) describe as the process of
introducing an employee to an organisation, giving them the basic information required to help
them feel welcome and happy, and be able to do the job they were employed to do. Induction
helps to show the new employee the right way to behave, to fit with the culture of the organisation,
and sets performance expectations (such as, the duties and responsibilities for the new job). If the
“right” person has been appointed, but is not made to feel welcome in the organisation (or not
supported in their work while they get settled in their job role), they will very quickly resign and the
recruitment process has to start all over again.

The relationship between reward, employee performance and

positive organisational outcomes
How can reward and employee performance link together for the good of the organisation? Some
suggestions are in the table below:

Organisational outcome How do employee How do reward strategies

desired performance strategies help? help?

To be better than its To recruit and retain high To have a scheme that gives
competitors (to achieve quality employees with creative people reward for coming
competitive advantage) by skills and experience. up with new product ideas.
continuously coming up with
new products (innovation).

To achieve competitive Use sophisticated selection Link rewards to quality

advantage through having procedures to recruit people performance and the
high quality products. who will deliver quality and achievement of high levels
high levels of customer service. of customer service.

Achieve competitive Training employees in Introduce a performance-

advantage through production techniques related pay scheme that is
producing the cheapest will generate measurable directly linked to output
products. improvements. targets.

Table 7: Examples of the link between reward, employee performance and

positive organisational outcomes Revision
on the go

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The links between HPW, sustainable organisational performance and

competitive advantage
Earlier, we considered the method of performance management called high performance working
(HPW). As we reach the end of this chapter, let’s take some time to look at a key research report
around organisational high performance and how that can give an organisation an advantage over
its competitors.

Sung and Ashton carried out their extensive research on the subject of HPW, the results of which
were published in 2005. Some of their key conclusions were as follows.
• HPW is linked to organisational performance. They identified 35 possible HR practices that could
lead to HP and said that the more of these an organisation adopts, the more they are likely to
have greater employee involvement, be more effective in delivering good training provision,
motivate staff and provide career opportunities.
• In order to achieve better support for staff and enhance organisational competitiveness, the use of
the reward and commitment practices appear to be better than employee involvement practices.
• In an HPW organisation it is more important to focus on training that is linked to performance
requirements rather than just producing quantity (which may not meet quality standards and
would therefore end up been rejected and wasted). So in a HPW organisation, training strategy
is about creating a work environment in which employees can learn all the time as part of their
normal work to develop performance and innovation.
• Organisations committed to HPW practices tend to be the leading organisations in their sector
who come up with the best ways of working that their competitors try to follow.

Over to you
Activity 9: Analysis: Sung and Ashton
What do you think about Sung and Ashton’s conclusions in the previous section? Do you
agree with what they say?

Is there an organisation in your country that you think is a high performance working
organisation? If so, what makes you think this?

Summary
In this chapter we have considered how HR operates in practice, and how that links to HR
strategies. We have looked at key functions such as recruitment and selection, performance
management and reward. The chapter illustrated the complexity of the work that HR carries out for
the organisation and how much of a difference it can make to its success.

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Chapter 4
Different Employment Models
and the Essential Features of
the Contract of Employment

Introduction
The technological, economic and social conditions that shape workplaces and workforces are
changing rapidly and profoundly. For a business organisation to survive and grow, work must be
organised more flexibly and effectively than before. In this chapter we look at different employment
models and explore their impact on the management of people and the HR function.

Learning outcomes
On completing the chapter, you will be able to:
4 Define different employment models and the essential features of the contract of
employment

Assessment criteria
4 Define different employment models and the essential features of the contract of
employment

4.1 Discuss the strengths and limitations of different employment models

4.2 Recommend the best use of the organisation’s people to meet budget and business
delivery challenges

© ABE
 Level 4 Principles
of Human Resources

4.1 The strengths and limitations of different

employment models
The traditional employment model
Burgess and Connell (2004) describe the main features of the traditional or standard employment
model as:
• full-time work sufficient to generate a minimum income;
• employee status attaching rights and obligations through an explicit or implied employment
contract;
• expectation of ongoing and predictable employment;
• assigned and regulated workplace;
• formal agreements covering work, working conditions and pay;
• single engagement with one employer.

Globally, fewer than one in four workers are now employed in conditions corresponding to the
traditional employment model (ILO, 2015a).

Flexible working methods

Flexible working methods are a type of working arrangement that are non-traditional and give a
degree of flexibility on how long, where, when and at what times employees work. Methods include
the following.
• Temporary working – can be for a defined period (days, weeks or months) or for the completion
of a specific project or task. It includes many other forms of flexible working, such as seasonal
and casual work. In Europe and Latin America, temporary working is dominated by formal fixed-
term contracts, while casual working – without any formal guarantees – dominates in many parts
of Africa and Asia (ILO, 2015b). Temporary working is more common in some industries, such as
agriculture and construction.
• Part-time working – is if the normal hours of work are less than the scheduled full-time hours
in an organisation. Many countries have specific legal thresholds that define part-time work in
relation to full-time work. Part-time working is prominent in northern Europe, reflecting explicit
government policy to promote work-life balance. Significantly, in nearly every country in the
world, women are more likely to be found in part-time work than men (ILO, 2015b).
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 Chapter 4  Different Employment Models and the Essential Features of the Contract of Employment

• Agency working – is where a temporary work agency supplies workers to work temporarily for
a company. The agency worker works under the supervision and direction of the company but
only has a contract with the temporary work agency. In some countries temporary agency work is
referred to “labour despatch” (such as China and Japan), “labour brokerage” (South Africa) and
“labour hire” (Namibia). Temporary agency work has grown rapidly over the last two decades
but still represents only a small fraction of the labour force. However, this differs across countries
and industries, for example, in Zambia 48% of the labour force in the mining industry was
employed by contractor and labour broker companies in 2009, mostly on short-term contracts
(ILO, 2015b).

Pitfalls and prospects among “temp” workers: Changing conditions create

challenges for workers and management
Human Resource Management International Digest, Vol. 25 Issue 1 pp. 7–9
This document will be available from within your online student resources.

• Job-sharing – is a form of part-time working where two (or sometimes more) people share the
responsibility for a full-time job. They share the pay and benefits in proportion to the hours each
works. Job sharers may work split days, split weeks or alternate weeks.
• Annualised hours – mean that the employee works a certain number of hours over the year but
has some flexibility about when they work. Sometimes the employee must work “core hours”
each week with the remaining hours worked flexibly, or there may be periods of intense working
followed by periods of rest (such as the two weeks on, two weeks off pattern found in the oil
industry).
• Compressed hours – allow an employee to work longer hours on some days so that they
achieve their required weekly hours sooner. Common compressed working schedules include
full-time hours worked in four and a half days in a week, or nine days out of ten in a fortnight.
• Zero-hours contracts – gives an individual no guarantee of a minimum number of working
hours, so they are called upon as and when required and paid just for the hours worked. In some
zero-hours contracts the individual must accept work if offered.

CASE STUDY
Zero-hours contracts
The Luxury Hotel has 25 staff on zero-hours working
arrangements out of a workforce of 96. The hotel is
especially busy during the summer months, but also
runs large events such as conferences and weddings
throughout the year. The hotel has just advertised a
number of zero-hours contracts.
Amelia is a student who lives near to the Luxury
Hotel. She has experience of working in the service
industry. During term-time Amelia attends college
most weekdays.

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Different Employment Models and the Essential Features of the Contract of Employment Chapter 4

Over to you
Activity 1: Case study analysis: Zero-hours contracts

What are the advantages and disadvantages of giving Amelia a zero-hours contract,
both for Amelia and the Luxury Hotel? Make two lists in the table below.
Advantages

Disadvantages

• Homeworking – is a long-established feature of certain parts of the manufacturing industry

although now it is usual for many different types of organisations. Estimates suggest that as
many as 100 million people – mostly women – work in their own homes (GLI, 2012).
• Teleworking (or telecommuting) – is using technology to allow employees to work all, or part
of, their working week at a location remote from the employer’s workplace. This might include
some time working from home or “on the road”.

The International Labour Organization (2015a) estimates that 75% of workers are “employed
on temporary or short-term contracts, in informal jobs often without any contract, under own-
account arrangements or in unpaid family jobs”.

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 Chapter 4  Different Employment Models and the Essential Features of the Contract of Employment

Over to you
Activity 2: Work–life balance

Working with your fellow students, if possible, consider your own circumstances and those of
others in the group.

How much would your own home commitments affect the patterns of work you feel
able to do?

What differences emerge within your student group?

What kind of work wouldn’t be suitable for some people’s home commitments, and
what might organisations be able to do to make it more suitable?

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Different Employment Models and the Essential Features of the Contract of Employment Chapter 4

The driving forces for non-traditional and flexible employment

models
As the world of work evolves and becomes more diverse, traditional models of working are shifting
to more flexible forms of organisation and employment. Technology, globalisation, changing
workforce demographics and new expectations about work are all driving new ways of working.
Let’s consider some of these factors in more detail:
• the need to be competitive – by the better use of resources, including people
• the need to be adaptive or agile – through being able to respond quickly to the need for
change in highly turbulent business conditions
• the impacts of new technologies – which have changed the products demanded, the nature of
competitors and the ways of working
• the development of new organisational structures – by turning to more organic organisational
structures that are tailored to specific situations
• the demand for better work-life balance – meeting employee expectations about having a
measure of control over when, where and how they work (this has grown in importance in recent
years).

Flexible employment models

Different types of flexibility can be used by organisations to enable them to meet business
objectives. Blyton (1996) identifies four basic types of flexibility.

Type Description

Numerical The ability to make rapid adjustments to the number and the composition of
the workforce. Typically, this type of flexibility is used in seasonal industries
(such as agriculture) where additional temporary workers are needed at specific
points in the year.

Temporal The ability to adjust the working hours or schedules of people working for the
organisation by using, for example, annualised hours or part-time working to
meet business demands.

Functional The ability to transfer employees to different tasks within the organisation to
where they are most needed on a day-to-day basis.

Financial Wage levels are not decided collectively so that employment costs
reflect the supply and demand of labour.

Table 1: Types of organisational flexibility Revision

on the go

Over 30 years ago, John Atkinson and Charles Handy anticipated the way in which work would
develop and how certain forms of organisation would become dominant. The models each
developed continue to hold relevance for today’s business organisations.

Atkinson’s (1984) “flexible firm” model divides the workforce into two elements.
• A “core” workforce of functionally flexible employees who are essential to the success of the
company and are needed year-round.
• A “periphery” workforce, which contains various sub-groups, including:
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 Chapter 4  Different Employment Models and the Essential Features of the Contract of Employment

– employees who possess skills needed by the company but that are not company-specific (for
example, general ICT skills). The company offers limited scope for movement to the core and
few career prospects. This group provides both functional and numerical flexibility.
– workers employed under “non-standard” contractual arrangements, such as temporary and
zero-hours contracts. This group provides both temporal and numerical flexibility.
– individuals not directly employed by the company, such as agency workers and freelancers.

The model has not been without criticism. For instance, the concept of core and peripheral workers has
been interpreted by organisations in different ways. Attempts to equate the core with skilled, flexible
workers and the periphery with unskilled, inflexible workers have been criticised as too simplistic.

Over to you
Activity 3: Flexible working

Working with another student, if possible, consider an organisation with which you are
both familiar.

Which of the different forms of flexibility are used by the organisation?

What are the advantages and disadvantages of the different forms of flexibility for the
organisation and the employees?

Summarise your findings below.

Handy’s “shamrock organisation” describes a type of organisational structure with three parts,or
leaves.
1 the professional core workers, usually full-time salaried staff
2 the flexible labour force who are deployed when required, including part-time and temporary
workers who are often low skilled
3 the contractual fringe providing specialist services more economically, for example, contractors
and freelancers.
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Different Employment Models and the Essential Features of the Contract of Employment Chapter 4

More recently, a fourth leaf has been added to the model, which is consumers who do some
of the work of the organisation. For example, consumers ordering products online from retail
organisations.

There are four basic types of flexibility: numerical, temporal, functional and financial.
In practice, organisations are likely to use a combination of these approaches.

The impact of flexibility for the management of people and the HR

function
Flexibility has wide-reaching impact on both the management of people and the HR function.
Organisations need to pay special attention to the following.
• Staffing levels – there should be sufficient flexibility to enable the organisation to make the best
use of people and adapt swiftly to changing circumstances. For example, operational flexibility
can be improved by extending the range of skills held by employees (multiskilling) through
training and development. The HR function must take a structured and strategic approach to
creating a flexible workforce.
• Supervision – the goal in designing flexible work arrangements is to ensure that work gets done
in the most effective way, from the most effective location. Line managers need to ensure that
“out of sight” doesn’t mean “out of mind”. Processes need to be in place to make sure that
all employees are effectively supervised by, for example, ensuring that all staff are included in
briefings and team activities. Informal processes may need to become more formal, for example,
comments and ideas made over lunch break may need to be emailed to off-site employees. Care
should be taken that all employees get access to training and promotion opportunities.
• Contract of employment – various types of contract may be used to provide greater
flexibility. The requirement for a written contract is found in many national laws and may
be coupled with the obligation to include certain specific information. However, holding a
written contract may not necessarily mean that the employment relationship is more stable.
Flexible working arrangements can be formal or informal. Some organisations may amend the
employment contract when new working arrangements are put in place with some form of
flexible working (such as working from home), which may be offered informally, for example in
agreement with an employee’s line manager.

The implementation of flexible working methods may need to be accompanied by a review of

HR policies which have usually been designed around full-time employees.

6.2 The best use of the organisation’s people to

meet budget and business delivery challenges
The contribution of workforce and talent planning activities to
organisational success
According to the CIPD (2016), workforce planning is defined as:

a process to ensure the right number of people with the right skills are
employed in the right place at the right time to deliver an organisation’s
short- and long-term objectives

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 Chapter 4  Different Employment Models and the Essential Features of the Contract of Employment

To achieve that goal, a number of different HR-related activities need to happen in a co-ordinated
way, such as:
• succession planning;
• flexible working;
• recruitment and retention planning;
• labour demand and skills forecasting;
• job design;
• learning and development strategies – to include multi-skilling and career planning.

There are four stages to the workforce planning process.

Organisational
objectives

Plans to meet Workforce

the skills gap required?

Current
workforce?

Figure 1: The workforce planning process

In practice, this means the following.

• Organisational objectives – what is the organisation wanting to achieve in the next year and
several years in advance as specified in its objectives?
• Workforce required – how many staff will be needed to meet those objectives? What
knowledge and/or skills and/or experience will those staff need to have?
• Current workforce – look at your current staff. Do they have the knowledge and/or skills and/
or experience the organisation needs those staff to have? Are there any gaps between what you
want in your workforce and what you currently have?
• Plans to meet the skills gap – what action does HR need to do to fill these gaps? These could
be:
– redundancies – if you no longer need all the staff you have;
– recruitment – if you need more;
– training – if your staff need additional skills to meet the new organisational objectives in the
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Different Employment Models and the Essential Features of the Contract of Employment Chapter 4

CASE STUDY
Looking after the community
As part of its corporate objectives to improve its
service to the community, a hospital has recently
built a new ward to treat patients with heart
disease. Dora is the HR Manager for this hospital
and it is her job to make sure the hospital has
the 40 nurses it needs for this new ward. From
the workforce plan she anticipates that 15 of
these nurses will come from nurses employed in
other wards of the hospital. She therefore needs
to implement a training and development plan
to ensure any internally recruited nurses have the
right skills to work with patients with heart disease.
For the other 25 nurses, Dora had to recruit externally. She advertised the vacancies on the
radio, online on her hospital website, and on a national jobs website for healthcare staff.
The hospital received over 50 applications and were able to appoint the 25 nurses they needed.

Ensuring the supply skills for now and the future

Succession planning
Succession planning is the process used in organisations to identify staff who have the potential
to be developed into future leaders or senior managers. It can also identify staff who could be
trained to do specialist or technical roles in the organisation. This development would include
training activities as well as gaining experience of working in a number of different roles.

Not all of the future managers will come from succession planning – it is important to have some
appointed externally, as we saw when looking at types of recruitment (in Chapter 3). External
appointments will bring new ideas to the organisation; internal appointments will bring practical
experience from working in the organisation.

To be able to carry out succession planning effectively, an organisation needs to use talent
management techniques. Talent management looks at the current performance, the future
potential, and future learning and development needs of those staff that you have identified as part
of your succession plan for the future.

The difficult part of succession planning is – how do you identify people who have the potential
to be senior managers or specialists of the future? You can use the judgement of your current
managers and their opinions of who they think will be great managers and leaders of the company
in the future. However, this isn’t a very scientific method and it is likely that managers will not be
able to agree between themselves.

Alternatively, you can use competencies – these are a combination of abilities, knowledge
and skills that enable a person to act effectively in a job or situation. For succession planning, the
organisation needs to decide which competencies would be needed for a senior manager, and then
think how they could use testing (such as online personality or ability tests) to identify who might
have the ability to develop those competencies.

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 Chapter 4  Different Employment Models and the Essential Features of the Contract of Employment

Over to you
Activity 4: Managerial competencies

What competencies do you think a manager would need? Divide your answer into
knowledge competencies and skills competencies.

Once the relevant people are identified, to develop this talent for the future, the following methods
can be used:

Project work Staff are asked to run specific projects in an organisation (such
as developing a new product) to practise their leadership and
organisational skills.

Additional This might be putting relevant staff on courses at local schools or

qualifications colleges to achieve management qualifications.

Secondment This is a temporary transfer to a different role to broaden

experience. A person might be employed in the finance
department, but then work for six months in marketing and then
six months in HR, to give them experience in different parts of
the organisation. Sometimes employees do a secondment with a
different organisation to further broaden their experience.

Mentoring A person appointed a mentor is likely to be a senior manager

in the organisation. This mentor provides informal guidance and
advice to the person to help them grow the competencies and
experience required to be a senior manager.

Job shadowing This is a form of work experience where a person learns about
a job by spending days following a competent worker doing that job.
For instance, if someone has been identified as a future HR director,
they might spend a week alongside the current HR director
to see how they do the job, and experience what the job
is really like.

Table 2: Ways to develop talent Revision

on the go

64 © ABE
Different Employment Models and the Essential Features of the Contract of Employment Chapter 4

Talent pools
Talent pools are another way to make sure you have the skills you need in your organisation,
when you need them. They help ensure you always have a group (or pool) of employees to step in
quickly to fill a job vacancy on a temporary or permanent basis.

So where are the best places to start looking for the people who will be in your talent pool? Some
examples could be:

Previous applicants Previously interviewed candidates – who were not selected due to
minor preferences for another candidate would be a good place
to start. Or, you may have found when you shortlisted during the
recruitment process you had some people who weren’t selected for
interview or were not quite suited to the role they applied for, but it
was a very close decision not to shortlist them. These people might
be interested if a similar vacancy arises in the future.

Work experience Work experience schemes give students their first taste of the
schemes/internships business world and can identify possible people who may help your
company in the future.

Online networking LinkedIn, Facebook and the hundreds of other online social
networking websites make it easy to see what people are
doing, and see if some talent is hiding there that you
could use for your company in the future.

Table 3: Ways to build a talent pool Revision

on the go

Summary
In this chapter we have looked at different employment models within organisations, and the ways
employers can ensure that they have the right people with the right skills and experience – at the
time when they need them – to ensure the success of the organisation in meeting its business
objectives.

You have now completed your study into a range of HR strategies, objectives, policies and
procedures. You have also studied the great number of influences that shape and impact upon
the HR function in any organisation. So how should we sum up the role of HR? Surely, what these
chapters have shown is just how important and valuable the HR function is. If an HR function is
effective, it can make a difference to the lives of employees and their managers – and as a result
lead to the success, growth and increased profits of an organisation.

© ABE 65
 Glossary  

Glossary
Assessment centre A set of selection order to promote goodwill and ascertain why
procedures designed to recruit the best the employee is leaving.
candidate or candidates to fill a job vacancy. It External recruitment A vacancy is
usually takes place over a day or two. advertised inside and outside the company, so
Balance scorecard A performance anyone can apply.
management tool that measures organisational Extrinsic reward A reward expected to
performance across four perspectives: financial, follow the completion of work, such as pay.
customers, internal business processes, and
learning and growth. Flexible working A way of working that
gives employees flexibility on how long, where
Benchmarking The comparison between and when they work.
one organisation and another of an internal
process, system or method in terms of its Formal recruitment The organisation
efficiency, effectiveness and/or cost. follows all normal recruitment procedures.

Best fit An approach to HR which emphasises Global company A company that trades
the importance of ensuring that HR strategies with other countries, selling the same
are appropriate to the circumstances of the products using the same brand image. Unlike
organisation, including its culture, operational MNCs, global companies do not have official
processes and external environment. headquarters and they are composed of
separate organisations which are part of one
Best practice An approach to HR based on global company.
the assumption that there is a set of best HRM
practices and that adopting them will inevitably Grade and pay structure A collection
lead to superior organisational performance. of pay grades, levels or bands linking related
jobs within a hierarchy or series that provides
Competencies The combination of abilities, a framework for the implementation of reward
knowledge and skills that enable a person to strategies and policies within an organisation.
act effectively in a job or situation.
Graduate recruitment A specialised form
Contract of employment A legally binding of recruitment that focuses on the recruitment
agreement made between an employer and of people who are about to leave university or
employee detailing specific facts about a other higher education establishments.
specific job, the written and implied terms of
which are enforceable in the courts. “Hard” model of HRM An approach
to human resource management that treats
Demographic structure Demographics is employees simply as a resource of the business,
the study of a population based on factors recruiting and managing them accordingly.
such as age, race and sex, among others. The
demographic structure of a country is the Headhunter A person contracted by an
percentage of the population fitting each of organisation to find an excellent person for a
these factors. vacancy.

Disciplinary process The process used by High performance working (HPW)

organisations to deal with misconduct or wilful Superior, sustained high performance achieved
under-performance. by employees in an organisation, linked to a
bundle of HR practices.
Employee survey A method of obtaining
candid opinion of employees by giving them Human resource management (HRM)
an opportunity to anonymously answer queries A strategic, integrated and coherent approach
raised in a questionnaire. to the employment, development and well-
being of the people working in organisations.
Employment Agency A business that finds
jobs for people seeking work, or finds potential Induction The process of introducing an
employees for employers with vacancies to fill. employee to an organisation, giving them the
basic information required to help them feel
Exit interview A formal or informal interview welcome and happy, and be able to do the job
conducted with an outgoing staff member in they were employed to do.
66 © ABE
 Glossary

Informal recruitment A less structured contributes to business objectives. It brings

approach to recruitment, often relying on together many of elements of good people
word-of-mouth recruitment. management practice, including learning
and development, and measurement of
Internal recruitment A vacancy is only
performance.
advertised within the organisation, so only
current employees can apply. Performance related pay (PRP) A
common way of managing pay by linking salary
Intrinsic reward Reward that comes from
progression to an assessment of individual
and is inherent in the work itself, such as a
performance, usually measured against pre-
sense of accomplishment.
agreed objectives.
Job description A document that
Performance review Also known as
summarises the duties of a position and states
performance appraisal. The process used to
the essential responsibilities of the job.
assess recent performance, via feedback, and to
Job evaluation A systematic and formal set objectives for the future.
process for defining the relative worth or size of
Personnel management The process
jobs within an organisation in order to establish
of helping the organisation to achieve its
internal relativities.
objectives in the most effective way by ensuring
Key performance indicator (KPI) conditions of employment that attract, retain,
A measurable value that demonstrates how motivate and obtain the commitment of
effectively a company is achieving key business employees.
objectives.
Person specification A document that
Labour market The pool of potential describes the qualifications, skills, experience,
workers available to an organisation – they knowledge and other attributes which a person
might be local, national or global. must have to perform well in a named role.
Market rate analysis A method of PESTLE analysis An audit of an
calculating the salary of a post by looking at organisation’s external influences – Political,
what other organisations are paying for similar Economic, Sociological, Technological, Legal
posts. and Environmental – with the purpose of using
Mentor Someone who teaches or gives help the information to guide strategic decision-
and advice to a less experienced and often making.
younger person. Recruitment Methods by which potentially
suitable employees are sought, located and
Multi-national corporations An
eventually introduced to the organisation.
organisation that operates in several countries
at the same time. Resource-based view (RBV) It is the range
of resources – including human resources –
Organisational culture The values, norms, within a business organisation that produces
beliefs, attitudes and assumptions that its unique character and creates competitive
shape how people think and behave in an advantage.
organisation.
Resourcing The process of identifying
Outsourcing A practice used by different and attracting key people with the capability
companies to reduce costs by transferring to create competitive advantage for an
portions of work to outside suppliers rather organisation.
than completing it internally.
Retaining talent Refers to an organisation
Performance appraisal Also known as keeping the employees it has already hired.
performance review. The process used to assess
recent performance, via feedback, and to set Reward management The operation of
objectives for the future. strategies, policies and processes required to
ensure that the contribution of people to an
Performance management The operation organisation is appropriately recognised by
of strategies, policies and processes required both financial and non-financial means.
to ensure that employees’ performance

© ABE 67
 Glossary  

Role autonomy The ability for employees Talent planning The operation of strategies,
to control their work situation. It might involve policies and processes designed to use an
a choice in the selection of projects, roles or organisation’s existing workforce capabilities
clients. and potential to meet current and future
business needs.
Selection Methods by which the most
suitable individual for a job vacancy is chosen Talent pool A group (or pool) of employees
from the pool of individuals who have applied. to step in quickly to fill a job vacancy, on a
temporary or permanent basis.
Service level agreement (SLA)
A contract between a service provider “Three-box” model A model for organising
(for example, HR) and the end user (for the human resource function that divides the
example, line managers and employees) that function into three segments – HR business
defines the level of service expected from partners, HR centres of excellence and HR
the service provider. shared services.
Skills gap The difference in the skills required Trade union An organisation formed by
on the job and the actual skills possessed by employees in an industry, trade or occupation
the employees. to represent them in efforts to improve wages
and conditions for their members.
Staff retention A company’s ability to
maintain current employees over a substantial Training and development Activities
time period. to improve current or future employee
performance by increasing an employee’s
Staff turnover The proportion of employees
ability to perform through learning, usually by
who leave the organisation over any specified
changing the employee’s attitude or increasing
period of time, expressed as a percentage of
his or her skills and knowledge.
the total number of staff employed.
Stakeholders Individuals, groups or Vertical integration The merging together
of two companies from the same industry who
organisations that are affected by the activity of
are at different stages of production.
the business.
Strategic human resource management Workforce mobility The movement of
the workers of an organisation which maybe
(strategic HRM) A means of aligning the
geographical or occupational.
management of human resources with the
strategy of the business. Workforce planning The operation of
strategies, policies and processes to get the
Succession planning A process to identify
right people, with the right skills, in the right
staff who have the potential to be developed
place, at the right time, with the right contract
into future leaders or senior managers.
and at the right cost.
“Soft” model of HRM An approach to
human resource management that treats
Work-life balance People having a measure of
control over when, where and how they work. It
employees as the most important resource in the
is achieved when an individual’s right to a fulfilled
business and a source of competitive advantage.
life inside and outside paid work is accepted and
The focus is placed on the needs of employees –
respected as the norm, to the mutual benefit of
their roles, rewards, motivation, and so on.
the individual, business and society.
Talent management A process to attract,
identify, develop, engage, retain and deploy
individuals who are considered particularly
valuable to an organisation.

68 © ABE
 Reading list

Reading list

Armstrong, M. and Taylor, S. (2017) Armstrong’s Handbook of Human Resource Management

Practice, 14th edition, London, Kogan Page.

Atkinson, J. (1984) “Manpower Strategies for Flexible Organisations”, Personnel Management,

August, Pp. 28–31.

Blyton, P. (1996) “Workplace Flexibility” in B. Towers (ed). The Handbook of Human Resource
Management, Oxford, Blackwell.

Burgess, J. and Connell, J. (2004) International Perspectives on Temporary Work, London,

Routledge.

CIPD (2016) “Strategic Human Resource Management”, CIPD [Online]. Available at: [Link]
[Link]/knowledge/strategy/hr/strategic-hrm-factsheet (accessed 5 March 2017).

CIPD (2016) “Factsheet: Workforce Planning”, CIPD [Online]. Available at: [Link]
knowledge/strategy/organisational-development/workforce-planning-factsheet#8035 (accessed 5
March 2017).

CIPD (2015) “Resourcing and Talent Planning Survey 2015”, CIPD [Online]. Available at: https://
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70 © ABE