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Strategic Human Resource

Management Current
Developments and the HE
Context
David Guest
Professor of Organizational
Psychology & Human Resource
Management
Kings College, London

The Starting Point


Is your university able to attract and retain
the kind of talent that will ensure a high
RAE rating in 2008?

Does your university provide attractive

development opportunities for young upand-coming staff?

Are there effective mechanisms for dealing

with the kind of poor quality teaching that


can lead students to complain to governors?

The Starting Point


Does the institution have in place the kind
of performance indicators that permit you
to make sound judgements about the
management of human capital?

Can you judge whether you have ethical

human resource policies and practices in


place?

For what do you hold the human resource


department accountable?

Reasons for Interest in HRM


Basis for competitive advantage and better

performance
To attract and retain a high quality workforce
To manage change and innovation
Growth of evidence-based case for adoption
of human resource policy and practice
Interest in human capital and ethical
reporting
To manage universities effectively and
efficiently
Response to financial incentives

Approaches to HRM
1. HRM as strategy
Integration of HR strategy with university strategy
2. HRM as management
Line management accept responsibility for
managing their staff within HR strategy
3. HRM as utilisation of talent (human capital)
An integrated culture, philosophy and HR policy
and practice to gain high commitment and
performance

4. HRM as guardian/promoter of fair treatment


5. HRM as performance management
6. HRM as administration

The Main Elements of


Performance Management
PERFORMANCE
APPRAISAL
OBJECTIVE
SETTING AND
REVIEW

PERFORMANCERELATED PAY
PERFORMANCE
MANAGEMENT

COACHING
MENTORING
FEEDBACK

PERSONAL
DEVELOPMENT
PLANS

High Commitment HRM


Recruitment & selection
Training & Development

Employee
competence

Performance appraisal
Financial rewards
Feedback

Employee
motivation

Job design
Involvement systems
Communication

Opportunity to
participate

Internal promotion
Security
Fair treatment
Met psych. contract

Employee
commitment

Enhanced
employee
performance

High Performance HRM Practices

Selection based on quality/approach to work/capacity to learn


Use of realistic job previews in selecting all staff
Extensive provision of training
Deliberate development of a learning organization

Design of jobs to make full use of skills and abilities


Staff/teams responsible for their own quality
Formal appraisal of all staff at least annually
Partnership system of employment relations

Systematic goal setting and feedback


Internal promotion if at all possible
High basic pay and organization-based contingent pay
Harmonised terms and conditions for all staff
Employment security emphasised

Formal system of communicating values to staff


Staff informed about company performance and prospects
Regular use of attitude surveys

HEFCE Strategic Priorities


Recruitment and retention
Development and training
Equal opportunities
Staffing planning
Performance review and reward
Poor performance
+
Strategic integration
Performance indicators

Choosing HRM Outcomes and


Measures of Performance

Standard performance indicators


Goal-based perspectives
Balanced score-card
Resource acquisition models
Bench-marking and ratios
Process models; process effectiveness
Stakeholder perspectives

The Outcome Measurement


Challenge: Evidence from 110 UK Health
Service Trusts
1
2
3
4
5
6
7
8

1 2
3
4
5
6
7 8
Labour turnover
Absence 16 Staff Costs
-07 19 Productivity
-01 13 26
Unit Labour Costs
07 05 11 89
Appointments on time
-16 10 07 54 53 Complaints
02 -05 09 25 20 27 Return on capital
-03 21 05 08 05 21 11 -

Correlation above .18 p<.05

HRM and Performance


Low adoption of HR practices in the UK
Number of
HR practices
in the public
(N=546) and
private sectors
(N=1277)

Per cent of workplaces

30

20

10

WERS data

Public sector
0

Private sector

Effectiveness of Human
Resource Departments (CEO
responses)
Not effective
0%

10%

20%

60%

70%

45
48

43

Response time of HR administration to management's requests


34
30

57
66
70

40

80%

59

52

Implementing HR aspects of the business plan

Matching staff to the job

50%

55

Progressing HR projects and initiatives

Maintaining up-to-date workforce info/data

40%

41

Contributing to the firm's performance

Explaining personnel policies and procedures

30%

Effective

60

90%

100%

HR and profit per employee

Profit per employee ()

4000

3000

2000

1000
0 to 4

5 to 7

8 to 10

Number of HR practices
Source: FoW (N=297)

11+

Annual employee turnover > 15%

40

30

20

10
0 to 4

5 to 7

8 to 10

HR practices (UK)

11+

HRM Performance Links:


UK NHS Trusts
10
Staff costs

% deviation from average

Productivity
6

ULC

Complaints

2
0

-2
-4
-6
-8

Me

Managing People Through the


Psychological Contract:
Why the Interest?
Breakdown of the traditional deal

A career in return for loyalty


A fair days work for a fair days pay
Low pay but high autonomy
Individualisation of the employment
relationship
Organizational change and violation

Defining the Psychological


Contract
The perceptions of both parties to the
employment relationship, organization
and individual, of the reciprocal promises
and obligations implied in that
relationship
The state of the psychological contract is
concerned with whether the promises and
obligations have been met, whether they
are fair and their implications for trust.

The Deal

Employer
Delivers on
Promises

Employees
Deliver on
Promises
Fairness
Trust
Commitment
Well-Being
Performance

Promises made and kept by the


organization
% Central Local Health Industry
Govt. Govt.
Fair pay:
promise made
65
71
70
71
promise fully kept 34
54
53

52

A career:
promise made
69
promise fully kept 32

47
48

49
51

54
57

Do you feel fairly rewarded for the


amount of effort you put into your
job?
%
Industry

Central Local Health


Govt.

Govt.

Yes

56

65

65

69

No

44

35

35

31

Extent to which you trust senior


management to look after your best
interests
% Central Local Health Industry
Govt.
Govt.
A lot

14

Somewhat

26
40

Only a little
Not at all

28
38
28

18

13

33
36
23
14

30
21
19

18

The Psychological Contract


Framework
The Good
Employer
The High
Quality
Workplace

The
Deal

Satisfied
And
Productive
Workers

The Good Employer


Progressive Human
Resource
Practices

The
Good
Employer

Climate of Positive
Organisational
Support
Flexible
Employment
Practices
Employee
Partnership

High
Quality
Workplace

The High Quality Workplace


% positive
response

Reasonable demands/manageable

workload
74
Some personal control over work
67
Support from supervisors and colleagues
Positive relationships at work
93
A reasonably clear role
76
Involvement in changes affecting you
83

82

Effective supervisory leadership


Rarely/
Never

Most of
the time

Motivates you to work effectively


Provide feedback on how you

are doing
23
45
Help you improve your
performance
29
37
Make you feel you want to
quit this job
72
9
Provide praise and recognition
Get on your nerves 29
12
Support you when necessary 11

20

47

24

33
63

Exploring the Links


.40
Human
Resource
Management

Flexible
Practices

.12
.08
.12

.44

High
quality
workplace
Effective
supervisory
leadership

.47
Number
of
promises

.35

.37

.16

State of the
psychological
contract

Exploring the Links


cont
Organisational commitment
.32

.28
State of the
psychological
contract

.13

.16

Job satisfaction
Work-life balance

.24

Life satisfaction

.19

Loyalty to supervisor
Excitement

.11
-.09

Organisational Citizenship
Intention to quit

High Quality Workplaces and


Stress

Long Hours

-.12

Human
.40
Resource
Management

High
Quality
Workplaces

.35

Positive state of
Psychological
contract

.09

Organisational
Commitment

.16

Work Satisfaction

.12

Satisfaction with
Work-Life Balance

.08
Flexible
Practices

.12

-.12

Motivation
Intention to quit

-.32

Stress

Issues Arising

What sort of HR strategy?


How well integrated an HR strategy?
Strategic or reactive HR?
What role for middle managers?
What role for the HR function?
What psychological contract is offered?
Does your university deliver on its
promises?
Modes of cultural leadership what do you
pay attention to?