The Key Concepts Routledge Key Guides by Chris Rowley and Keith Jackson_1 potx

Whatever method is used to decide on how many and what type of jobs are needed by the organisation, it is important to introduce a system of feedbacks to compare the expected and needed

precise in setting requirements The job analysis may involve inter­viewing existing jobholders and their supervisors, observing work being carried out, or seeking information from consultants or other specialists The job analysis will outline the expected responsibilities and accountabilities of a job, likely deliverables, and the qualifica­tions and experience required of jobholders As an example, after job analysis the local resourcing requirement will stipulate that a factory manager will be responsible for factory operation involving the per­formance of 50 machine operators producing 10,000 widgets a day This manager will be a university graduate with five years of relevant industrial experience.

As mentioned already in this discussion, the available technology and the training and expertise of the employees will have a crucial impact on the numbers and types of jobs deemed to be required by the organisation Unskilled workers with few resources will be much less productive than skilled workers supported by machines or other

resources Hence, within the human resource planning process

it is necessary to be aware of these factors Sometimes business plans will suggest the hiring of many unskilled workers, e.g in fast food retail outlets working in standardised ways Other business plans will prefer skilled workers with significant supporting technology (equipment) together with maintenance staff working to ensure that the logistics systems ordering ingredients for the same retail fast food outlets works effectively

Jobplanningandradicalchange

Attempts to improve an organisation’s ways of working radically lead to radical changes in the numbers and types of jobs required Such changes occur in processes of ‘re­ engineering’, where human labour becomes substituted by machines or information and com­munications technology (ICT) is used to replace human thought (cf

Hammer & Champy, 1993) In general, trade unions and work­

ers prefer to keep to the current levels of staffing and so commonly attempt to prevent employers from gaining the advantages implied

by introducing new ways of working

LinkstootherHRMprocesses

It should be noted that the more expensive the labour costs then the more effort that HRM specialists will tend to invest in making accurate predictions of the jobs that their organisation requires In

JOB PLANNINGreality, however, the more expensive jobs are those requiring flexibil­ity in delivery and are thus less easily measured Consequently, most

organisations rely on benchmarking or best practice comparisons to

decide on the job types and numbers In these contexts, the job type

is fed into information systems that then describe the basis of a job

description and a candidate specification, which outlines the quali­ties a jobholder should bring to the job These job­ planning processes

then feed into processes for HR recruitment and selection.

Whatever method is used to decide on how many and what type

of jobs are needed by the organisation, it is important to introduce

a system of feedbacks to compare the expected and needed jobs at different stages in the business planning and development processes

Thus, the job­ planning process feeds into processes of ance and rewards management in that it advises business managers

perform-about the extent to which their assumptions concerning being able

to attract and retain needed employees at assumed rates of pay (and so on) are or have been accurate, and can be achieved in the future

To summarise, job planning represents a systematic approach towards establishing the number and type of jobs and employees that

an organisation needs to operate competitively As such, job plan­

ning is a core aspect of human resource planning and informs training and development activities together with succession and career development planning It also supports recruitment and performance management systems as well as the foundation of

the employment relationship between employees and employers

WH

See also: development; human resource planning; information

sys-tems; international HRM; labour markets; organisational ing; outsourcing; performance management; resourcing; strategic HRM

learn-Suggested further reading

Becker et al (2001): Develops a performance­ oriented approach to the job­ planning process

Boxall & Purcell (2003): Develops a strategic HRM perspective on job planning

Lam & Schaubroeck (1998): Develops a detailed perspective on how to inte­grate job­ planning processes with business strategy

Rowley & Harry (2010): Connects job­ planning issues to the ‘global/local’ HRM debate

Turner (2002): A practical ‘how to’ guide linking processes of job planning with human resource planning (HRP)

K NOW L EDGE M A NAGEM ENT

Knowledge­ based business has become a major strategy for an organ­isation to sustain its growth Application of knowledge management (KM) facilitates organisations to maintain their competitive advan­tage through leveraging intellectual capital or knowledge residing in the mind of organisational workforce

Definitionofknowledge

In general, KM is concerned with the identification, acquisition and maintenance of organisational knowledge Definitions of know­ledge range from the practical to the conceptual to the philosophical

views, and from narrow to broad in scope Woolf (1990) in Webster’s Dictionary defines knowledge as organised information applicable to

problem­ solving Van der Spek and Spijkervet (1997) believe know­ledge is a whole set of insights, experiences, and procedures that are considered correct and true Similarly, Nonaka and his colleagues (1996) describe knowledge as a meaningful set of information that constitutes a justified true belief and an embodied technical skill.There are also definitions of organisational knowledge centring

on intellectual capital Meyers (1996) refers to organisational know­ledge as ‘processed knowledge’ embedded in routines and processes that enable action Brooking (1996) defines it as the collective sum

of human­ centred assets, intellectual property assets, infrastructure assets and market assets Organisational knowledge can be spilt into two dimensions, so­ called explicit knowledge and tacit knowledge

Explicit knowledge is knowledge that can be documented or codified

It can be easily classified, categorised, combined, and distributed to others (Mládková, 2007) This assumes that much of the knowledge

of individuals that is useful to an organisation can be articulated

and thereby made explicit and available to others Tacit knowledge is

knowledge held by human beings It is based upon personal expe­rience that is accumulated over an extended period of time, per­haps even over a lifetime This type of knowledge is influenced by intangible factors such as personal beliefs, perspectives, and values

An organisation’s tacit knowledge takes the form of rules of thumb, intuition, tips and techniques, internalised skills, best practices, etc Tacit knowledge is relatively difficult to communicate or share (Mládková, 2007) Any attempt to communicate tacit knowledge is complicated further by the fact that even those people who hold a great deal of personal knowledge have a hard time expressing exactly

KNOWLEDGE MANAGEMENThow they do what makes them experts in their fields Yet, the sharing

of tacit knowledge can be significantly important to an organisation’s ability in highly challenging and competitive markets or in the man­agement of highly complex processes

TheKMprocess

Why is KM important? Global competition has been increasing at a greater pace; what is useful today may become obsolete tomorrow Under such rapidly changing environments, only the learning organ­isation can survive, it is asserted Organisations have to update them­selves constantly in changing environments The formalisation and access of experience, knowledge, and expertise in the KM process can create new capabilities, enable superior performance, encourage innovation and enhance customer value KM is often treated as the systematic, explicit and deliberate building, renewal and application

of knowledge to maximise an enterprise’s knowledge­ related effec­tiveness and returns on its knowledge assets

KM consists of three components: knowledge creation, sharing,

and transfer Knowledge creation can be through four different modes

(Nonaka & Takeuchi, 1995):

1 socialisation which involves conversion from tacit knowledge to tacit knowledge

2 externalisation which involves conversion from tacit knowledge

The second component, knowledge sharing or learning, can occur in

both formal (e.g classroom events) and informal (e.g mentoring, coaching) situations, involving either structured, explicit knowledge (‘know­ what’) or non­ structured, implicit knowledge (‘know­ how’,

‘know­ who’, ‘know­ where’) Knowledge sharing that occurs during formal learning in the corporate setting tends to focus on some struc­tured courses led by a trainer or facilitator In contrast, knowledge sharing that occurs during informal learning in a corporation usually involves interactions during coaching and mentoring or communi­cation that take place within communities of practice Many scholars (e.g Collins, 2001) believe that tacit knowledge is embedded in the

‘mental models’, ways of solving problems, and routines of an organ­isation, which involve continuous social interaction It is clear that knowledge sharing is not simply a matter of managing information;

it is essentially a deeply social process, which must take into account human and social factors, as well as cultural issues (Clarke & Rollo, 2001)

Additionally, knowledge transfer involves the distribution and dis­

semination of knowledge from one (or more) person to another one (or more) Although knowledge can be acquired at the individual level, to be useful it must be transferred to a group or a community, often described as a ‘community of practice’ An ideal climate for such transfer is:

1 maintaining ‘learning loops’ in all organisational processes

2 systematically disseminating new and existing knowledge throughout an organisation

3 applying knowledge wherever it can be used in an organisation

A ‘learning loop’ is any learning process that tries to improve another process, whether incrementally or radically A Quality Circle is

an example of an incremental learning loop designed to transfer knowledge steadily to raise the quality of a production process In the international business situation, knowledge transfer generally involves downloading technical information from headquarters to local partners in international joint ventures, or some international managers sending or teaching knowledge while local managers receive and learn knowledge (Clark & Geppert, 2002) Some forces and trends (for example globalisation, internationalisation, techno­logical advancement) may also trigger transfer of HRM knowledge from Western developed countries to other countries, such as the Asian economies (Rowley & Poon, 2008)

Knowledge is a key component of all forms of innovation How­ever, the deliberate effort of KM to support innovation has still not found its way into all companies Some commentators would argue that this is because organisations try to use too many struc­tured approaches and tools to capture and diffuse knowledge, and hence stifle the development of innovation More recent approaches

to innovation management have shifted to focus more on manag­ing the supporting structures and climate that allow individuals to engage in interaction and communication This approach eventu­ally results in new knowledge and innovation (Murray & Blackman, 2006)

KNOWLEDGE MANAGEMENTInnovation management is critical for both practitioners and aca­demics, yet the literature is characterised by a diversity of approaches, prescriptions and practices that can be confusing and contradictory Innovation can be thought of as a process involving little change, fine­ tuning, incremental adjustment, modular transformation, system transformation (Dunphy & Stace, 1993) and continuous improvement methodologies (Murray & Blackman, 2006) Con­ceptualised as a process, innovation evaluation emphasises a series of stages and phases Conceptualised as a product, companies empha­sise the impacts and results derived from innovation activities and the performance of these innovations can be measured according to the product This activity view of innovation focuses on the technologi­cal implications and the managerial implications (Liu & Tsai, 2007) After all, innovation comes from the acknowledgement of vicious circles and dead ends and the investment of positive and action­ led approaches Innovation management approaches taken by companies should consider the need for balance between what has to be stable, structured and systematised and what has to be creative, dynamic and open.

InnovationmanagementandKM

Adams et al (2007) propose that the three KM areas important for innovation management are idea generation, knowledge repository, and information flow The early stage of the innovation process is

a somewhat fuzzy period, including idea generation, opportunity identification, data analysis, idea selection and concept development Then, if knowledge is fundamental to innovation, it should be pos­sible to measure the accumulated knowledge of the firm, in other words its knowledge repository One aspect of innovation relates

to the combinations of new and existing knowledge (including explicit and tacit knowledge) Central to this perspective is the idea

of ‘absorptive capacity’, the firm’s ability to absorb and put to use new knowledge, recognise the value of new, external knowledge, assimi­late it, and apply it to commercial ends (Cohen & Levinthal, 1990: 128) Firms with strong absorptive capabilities are more likely to acquire knowledge and learn effectively from outside Higher levels

of absorptive capacity appear to be positively related to innovation and performance (Chen, 2004) Finally, innovation management involves information flow into and within the firm, as well as infor­mation gathering and networking in KM

IP & CR

See also: assessment; development; cultural and emotional

intelli-gence; employee involvement and participation; information tems; models of HRM; organisational learning; teams; training and development

sys-Suggested further reading

McInerney & Day (2007): Explains the fundamentals of KM in organisa­tions and societies as well as knowledge processes

Pauleen (2007): Presents the views of a diverse range of academic research­ers, industry leaders, and public policy experts on how knowledge and

KM perspectives vary across different cultures, in different contexts, using different processes for different purposes

Renzl et al (2006): Presents perspectives on knowledge and learning, including modes of knowing in practice, transactive knowledge systems, organisational narrations, and challenges conventional wisdom It deals with emerging issues in knowledge and innovation embracing models of distributed innovation and forms of co­ operation

LA BOU R M A R K ETS

One of the major shifts in HRM research and practice in recent years has been the increased attention given to strategic factors generated outside the organisation such as the influence of market fluctua­tions and of stakeholder (e.g customer and shareholder) interests and

expectations on human resource planning and decision­ making One of the major shifts in performance and rewards manage­

ment research and practice over the last decade or so has been the move to benchmark as many jobs as possible in the labour market In the 1970s and 1980s most organisations still relied on internal value hierarchies to create a salary structure and then priced that structure using a few ‘key’ jobs in each grade Now many organisations bench­mark as many jobs as possible This has resulted in a new emphasis

on market surveys covering wages and other parts of the rewards and compensation mix

Demographic, technological and organisational changes have impacted work value during this time The increased participation

of women in labour markets, for example, has increased the supply

of many professional skills Automation has deskilled (and less­ened the demand for) many jobs while at the same time creating a demand for new highly skilled jobs The move of many organisations

towards outsourcing jobs to lower­ cost labour markets has lessened

demand for jobs in some geographical areas while increasing demand

LA BOUR MARK ETSfor the same jobs in other areas All this roiling and turbulence of labour markets has changed perceptions of the value of labour in local, regional, national and global labour markets At the same time, changes in work have made jobs less static and more ambiguous, resulting in greater difficulty in finding matches for many jobs This has left compensation professionals less certain about benchmarks and seeking guidelines for evaluating surveys and other sources of market rate information.

Against this background, this discussion looks first at current approaches towards determining market values for work, and then focuses on the questions raised by the resulting survey data Unfor­tunately there are not, at this time, many convincing answers to such questions

Wageandbenefitsurveys

The traditional approach towards developing benchmark informa­tion on job worth or work value uses a fairly straightforward meth­odology A survey form is developed that has short job definitions (typically no more than five or six sentences) and requests informa­tion on several reward forms for each current holder or incumbent

of a particular job At one point surveys asked only for base wages for most jobs but most surveys now ask about a variety of reward types, including base wage, any incentive payments, and other job rewards Some job family surveys (e.g IT, sales, executive jobs) ask questions about pay policy and practice and seek other reward­ related informa­tion particular to members of the job family

Survey questionnaires or forms are sent out to clients of the survey­ing company and to mailing lists from professional associations and other sources likely to include a high percentage of compensation pro­fessionals The use of a convenience sample requires survey providers

to do extensive data editing Survey data are increasingly collected over the internet and are also made available to survey subscribers online.The wage or salary differential literature – in conjunction with practical experience – has led most survey users to look for those aspects of the data that most closely resemble their own organisation

At the very least, someone pricing a job needs to do so on a total reward basis rather than a simple base wage Some of the major classi­fying variables are geographic location, industry, size (e.g in terms of

number of employees or level of revenues), trade union status, and

organisational reward policies While arguments can be made for rewards convergence – and especially in terms of HRM policies and

practices – wage differentials remain significantly great Thus, taking

a single global benchmark for a job would result in over­ or under­ paying most employees The practical implication is, of course, that market data are no more adequate to specify ‘true’ work value than are procedures designed to generate an internal value hierarchy At most, market data can reveal only what competitive pay levels are, and what the organisation may need to offer in terms of rewards to attract and retain employees for specific jobs – more discussion on

this issue appears under the concept heading retention.

With the rise of the internet has come a proliferation of websites claiming to offer good market data about wage levels for many jobs These sites usually work with volunteered data, and the results are questionable at best Nonetheless, employees access these sites and

HR professionals have to contend with these data and be prepared to counter the information offered by web data sources with their own market data

Problemswithmarketsurveyprocedures

While rewards professionals have significant problems with the pop­ular websites that employees use for comparing wage or salary data, they also have problems with the wage surveys they use routinely to set actual wages within the organisation This is a recent develop­ment, at least in terms of stated concerns among HR and rewards professionals However, some of the concerns they raise were dis­cussed in detail by academic researchers more than 20 years ago For example, Rynes & Milkovich (1986) noted four areas of research needed on market wage surveys:

• Employer and consultant surveying practices

• The impact of variation in measurement procedures on survey outcomes

• The basis of policies on the usage of wage data

• The impact of wages on attraction, retention and labour quality.More than 20 years on there has been little research focusing on any

of these areas

The problems raised by many professionals include the reliability, quality and breadth of data available generated by surveys In many cases, the surveys available for some jobs include data from only a few organisations, and in some cases one employer provides most of the incumbent data Data rarely come from a large­ enough cross­ section

LA BOUR MARK ETS

of organisations that cuts or relevant outtakes from specific industry data can be made with confidence

Job planning descriptions are sometimes so brief that profession­

als wonder whether it is possible for survey respondents to make good job matches Few surveys capture all parts of the rewards package,

so it is difficult to know whether higher levels of one part make up for low levels of another part of the reward package Data on incen­tive payouts are particularly hard to interpret without detailed know­ledge of the specific incentive generating the payout See the concept

entry motivation and rewards for a more detailed discussion link­

ing incentives and job performance

Surveys eliciting data about benefits and other non- monetary rewards present additional problems An employer trying to cost

labour will want to know what organisations actually pay for the ben­efits package received by a job incumbent Since organisations have different workforce demographics, are of different sizes, and have dif­ferent qualities of negotiating skills within the organisation, non­ cash benefits costs can differ considerably for very similar packages An organisation worried about attracting and retaining employees might

be more interested in the level of service provided to the incumbent, and what the incumbent would have to obtain it externally Finally,

a researcher might well want to know the actuarial value of a specific benefits package for a hypothetical incumbent All three measures of value are valid, but are rarely provided in surveys Level of service tends to be the main set of data provided

Benchmarkingfromsurveydata

Aside from the reliability and quality of the data, rewards profession­als have difficulties in analysing the survey data in order to come up with a benchmark, even assuming that the survey data represent a valid and reliable sample of the market The most fundamental prob­lem arises from the fact that any survey returns a picture of a distri­bution of wages Which survey statistic should rewards professionals match against? Typical choices are median, average, 60th percentile

or 65th percentile, and others All these choices are a means to repre­sent job value in the market

Another problem facing rewards professionals is how to price hybrid jobs, team jobs, and other jobs for which job surveys do not provide an exact match A typical hybrid job is a maintenance mechanic/electrician The market rates for maintenance mechan­ics and electricians are readily available Is the hybrid job worth an

average of the two, or is it worth more than either? Similarly, the market value of a work­ alone production expediter is accessible, but the rate for one who is part of a large customer service team may well be worth more; or, indeed, less The most common problem occurs when the survey job differs slightly from the organisation’s job How much more is the job of an HR VP position worth when the incumbent is also responsible for the organisation’s fleet of cor­porate jets?

The unresolved problems of rewards surveys make them a poor (but the only available) source of determining and, by extension, benchmarking job value Most organisations rely on rewards surveys

to construct the rewards package relevant to their own employees As long as organisations recognise that surveys provide flawed answers

to questions of job value and processes of valuing work, their use

is appropriate A benchmark, though flawed, is better than no data

at all, especially when the professional using it recognises that it is a guideline and not an absolute truth

CF

Editors’ note: Each year the UK­ based Chartered Institute for Personnel and

Development (CIPD, at www.cipd.co.uk) offers downloadable results from

an annual survey of UK practice in rewards/compensation management The survey is designed to provide benchmarking data in respect of current and emerging practice

See also: compensation strategies; diversity management; executive

rewards; expatriate pay; information systems; international HRM; performance and rewards; resourcing; strategic HRM; valuing work

Suggested further reading

Armstrong & Mitchell (2008): Offers a British perspective on HRM that takes into account labour market impacts on staffing, rewards and other processes

Bjorndal McAdams & Ison (2006): Outlines the leading rewards associa­tion’s take on analysis of market data for rewards purposes

Bovbjerg & Dicken (2007): A paper prepared for the US Government Accountability Office giving practical advice on how to control employer costs such as health and retirement benefits

Fay & Tare (2007): A study outlining market pricing concerns for the influ­ential WorldatWork journal

McMahon & Hand (2006): Guidance on how to design and conduct a salary survey

LEADERSHIP DEVELOPMENTParus (2002): Marks a direct application of labour market data to job pricing and building salary structures.

Perkins (2006): Offers a British perspective on rewards that considers labour market influences on wages

Rynes & Milkovich (1986): A scholarly study aiming to ‘dispel some myths about the market wage’ concept

WorldatWork (2006): Provides data from surveys focused on North Amer­ica; also includes major surveys from other countries Provides instruc­tions on how survey data can be applied to build salary structures

L EA DERSHIP DEV ELOPM ENT

Leaders in today’s organisations face a number of significant chal­lenges as their jobs and the world around them become increasingly complex Trends such as rapid technological advance, proliferation of team­ based organisations and cross­ cultural operations require that leaders adapt their leadership styles to meet these new challenges

In the face of all these changes, researchers and HRD specialists are working to find methods to develop more effective leaders

Definitions

There are several schools of thoughts concerning leadership ‘Lead­ers are born, not made’ is perhaps one of the most common assump­tions about leadership Those who hold this ‘qualities’ approach maintain that there are certain inborn qualities or traits, such as ini­tiative, courage, intelligence and humour, which together predes­tine a person to be a leader However, there is no agreement upon what these qualities may be and this approach hardly favours the idea of training at all On the other hand, leadership can be viewed

as a system embedded within a larger social organisational system Leadership systems include the quality of dyadic interactions and rel­ationships, collective leadership characterising group interactions, and ultimately leadership culture characterising an organisation system The functional approach, however, stresses that leadership is essentially an interaction between a leader, the group members and the situation Another school of thought is that leadership involves relationships that exist between persons in a social situation People who act as leaders in one situation may not necessarily act as lead­ers in other situations (Stogdill, 1948) A more contemporary view

is that leadership is a process that induces others to pursue a common goal (Locke & Associates, 1999) Leaders (as opposed to dictators)