Discovering Management: Human Resource Management
Prof. Dr. Gudela Grote D-MTEC ETH Zürich
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 2
Human Resource Management (HRM)
§ Definition: HRM concerns the policies, practices, and systems that influence employees' behavior, attitudes, and performance.
§ Goal: HRM aims at applying human resources within organizations such that people succeed and organizational performance improves.
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 3
A tragic example of effects of work on personal well-being
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 4
Effects of Human Resource Management
§ HRM-practices (especially job design and selection/ appraisal/training) better predict company performance than R&D, QM, strategy and technology (West, 2001)
§ Empowerment better predicts company performance than technology-based management practices in the short- and long-term (Patterson et al., 2004; Birdi et al., 2008)
§ HRM-practices as cause and effect of company performance (Guest et al., 2003)
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 5
Characteristics of HRM in successful companies (Pfeffer & Veiga, 1999) § Selective hiring § Extensive training § Self-managed teams and decentralization § Reduction of status differences § High compensation contingent on organizational
performance § Sharing information § Employment security
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 6
Characteristics of HRM in successful companies (Pfeffer & Veiga, 1999) § Selective hiring § Extensive training § Self-managed teams and decentralization § Reduction of status differences § High compensation contingent on organizational
performance § Sharing information § Employment security
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 7
e.g. work samples/tests; selection of predictors
Job analysis
Job requirements
Plan
ning
Selection of success criteria
Assessment and combination of success criteria
Eval
uatio
n
Validity testing
Cost-benefit analysis
Prototypical procedure in personnel selection
Assessment and combination of predictors
Decision about selection/placement Im
plem
enta
tion
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 8
Validity of different selection methods § Personality dispositions
§ Cognitive ability tests ~ .5 § General personality tests ~ .3 § Graphology ~ .0
§ Behavioral simulation § Work samples ~ .5 § Assessment center ~ .55
§ Biographical focus § CV/references ~ .2 § Biographical questionnaire ~ .35 § Structured interview ~ .45 § Unstructured interview ~ .3
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 9
Characteristics of HRM in successful companies (Pfeffer & Veiga, 1999) § Selective hiring § Extensive training § Self-managed teams and decentralization § Reduction of status differences § High compensation contingent on organizational
performance § Sharing information § Employment security
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 10
Personnel development
§ Systematic furthering of personal aptitude in relation to individual expectations and organizational requirements § education/training § counselling/coaching § management by objectives § team development § job design
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 11
Basic assumptions in personnel development § Dynamic relationship between person and work:
person and work change continuously, requiring also continuous adaptation
§ Adaptation can happen from the perspective of „fit human to task“ and/or „fit task to human“ § Define possible career paths: e.g., management
versus technical career § Identify individual career needs: e.g., different types of
career orientations
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 12
Career orientations in Switzerland (Swiss HR-Barometer, Grote & Staffelbach, 2012)
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 13
Career orientations in Switzerland (Swiss HR-Barometer, Grote & Staffelbach, 2012)
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 14
Characteristics of HRM in successful companies (Pfeffer & Veiga, 1999) § Selective hiring § Extensive training § Self-managed teams and decentralization § Reduction of status differences § High compensation contingent on organizational
performance § Sharing information § Employment security
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 15
Core concept of job design: Self-regulating teams § Teams: several people who work together over a
period of time to reach common goals and who share a sense of belonging together
§ Self-regulation: individual and collective autonomy in order to coordinate work processes and to cope with process variances and uncertainties locally
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 16
Prerequisites for good team work § Adequate common task
§ Complexity higher than individual competencies § Clear performance criteria § Collective decision competence
§ Shared goal orientation § Positive goal coupling § Goal transparency and feedback
§ Adequate group composition § Different perspectives on the task § Shared language
§ Development of group rules § Adequate group size § Support for team development (form, storm, norm, perform) § Handling conflicts between individual and collective autonomy
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 17
Characteristics of HRM in successful companies (Pfeffer & Veiga, 1999) § Selective hiring § Extensive training § Self-managed teams and decentralization § Reduction of status differences § High compensation contingent on organizational
performance § Sharing information § Employment security
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 18
In the past the question was: "How do I lead a company?"
Today it is: "How do we lead a company?"
For the future it will be: "How does a company lead itself?"
"Boundaryless, flattened, flexible, project-based and team-based organizations that employ temporary, externalized and remote workers, whose tasks are more intellectual amd less routine and cannot be controlled and coordinated by structure or direct supervision, need mechanisms of coordination through shared meaning systems and a shared sense of purpose" (Shamir, 1999)
Changing context for leadership
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 19
Management of uncertainty as strategic and operational leadership function Ø Balance between
minimizing uncertainty, which creates stability, and coping with uncertainty, which creates flexibility
Stability Flexibility
Central planning
High standardization
High level of automation
Little operative freedom
Feedforward control
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 20
New issues in leadership
§ Leadership portfolios § In order to match different situational demands with
adequate leadership behaviors, leaders must develop portfolios of styles and behaviors and understand when to use which behavior.
§ Shared leadership § Leadership involves different tasks that can be taken
on by different team members and may shift between team members.
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 21
Sharing different leadership functions in medical teams (Künzle et al., 2010)
High performing teams (n=6) Low performing teams (n=6)
p<.05
(n.s)
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
Nurses Residents
Content-oriented Structuring
(n.s)
(n.s)
Lead
ersh
ip (M
ean
rate
per
Min
ute)
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
Nurses Residents
Content-oriented Structuring
Lead
ersh
ip (M
ean
rate
per
Min
ute)
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 22
Characteristics of HRM in successful companies (Pfeffer & Veiga, 1999) § Selective hiring § Extensive training § Self-managed teams and decentralization § Reduction of status differences § High compensation contingent on organizational
performance § Sharing information § Employment security
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 23
Pay is ...
… money … compensation … reward … incentive … recognition Ø Procedural and distributive justice of pay
systems at least as important as absolute amount of own pay
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 24
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 25
Performance-related pay
§ A part of the overall pay is determined on the basis of individual/group/company performance.
§ Increasing use § in the US more than in Europe § for managers more than for non-managerial employees § in larger companies more than in smaller companies
§ Critical voices become louder: § Is the rewarded behavior the desired behavior? § Danger of reducing intrinsic motivation § Conflict between individual and team performance
§ Pay schemes related to organizational performance tend to avoid these problems
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 26
Characteristics of HRM in successful companies (Pfeffer & Veiga, 1999) § Selective hiring § Extensive training § Self-managed teams and decentralization § Reduction of status differences § High compensation contingent on organizational
performance § Sharing information § Employment security
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 27
Characteristics of HRM in successful companies (Pfeffer & Veiga, 1999) § Selective hiring § Extensive training § Self-managed teams and decentralization § Reduction of status differences § High compensation contingent on organizational
performance § Sharing information § Employment security
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 28
Employment relationship: Social exchange defined by legal and psychological contracts
Employment relationship
Empl
oyee
t + Goal achievement
Firm
$ + Goals
e.g. goal-orientation, loyalty
e.g. employability, job security
Empl
oyee
Firm
Legal contract
Psychological contract
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 29
Flexible working: Any time, any place, contract work, pay for performance
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 30
Flexible working: Change from a traditional to a new contract? (Raeder & Grote, 2001)
Traditional contract New contract
Job security / Life-long employment
Flexibility / Accepting insecurity
Internal promotion Internal development
Specialization Goal / Performance orientation
Loyalty/ Identification
Employability / Focus on own competencies
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 31
Psychological contracts in Switzerland (Swiss HR-Barometer, Grote & Staffelbach, 2012)
Mix of old and new contract
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 32
Using the psychological contract to handle employment uncertainties § Communicate and match reciprocal expectations
and offers § Support employability through training, job
design, and systematic career management § Distribute risks between organization and
employee according to individual coping capabilities
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 33
Characteristics of HRM in successful companies (Pfeffer & Veiga, 1999) § Selective hiring § Extensive training § Self-managed teams and decentralization § Reduction of status differences § High compensation contingent on organizational
performance § Sharing information § Employment security
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 34
Beyond "rational choice": HRM-practices as expression of organizational culture § Organizational culture implies
§ Assumptions about human nature (e.g., motivation, trust versus control)
§ Images of organizations (e.g., brain, machine, family) § Assumptions about how organizations work best
(e.g., centralization versus decentralization) § These assumptions strongly influence choices of
HRM practices beyond and possibly even against empirical evidence.
Fall Semester 2013 Prof. Dr. Gudela Grote, D-MTEC, ETH Züirch 35
Characteristics of HRM in successful companies (Pfeffer & Veiga, 1999) § Selective hiring § Extensive training § Self-managed teams and decentralization § Reduction of status differences § High compensation contingent on organizational
performance § Sharing information § Employment security