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• • • i • • • I ' f • I Human Resource Management • • •• • • • • • • I ·.I •' Human Resource Management Peter Blunt Graduate School of Management University of Adelaide Longinan Cheshire :5: _. Longman Cheshire Pty Limited Longman House Kings Gardens 95 Coventry Street Melbourne 3205 Austra...

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Human Resource Management

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Human Resource Management Peter Blunt Graduate School of Management University of Adelaide

Longinan Cheshire :5: _.

Longman Cheshire Pty Limited Longman House Kings Gardens 95 Coventry Street Melbourne 3205 Australia Offices in Sydney, Brisbane, Adelaide and Perth. Associated companies, branches and representatives throughout the world. Copyright © Peter Blunt 1986 First Published 1986 All rights reserved. Except under the conditions described in the Copyright Act 1968 of Australia and subsequent amendments, no part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without the prior permission of the copyright owner. Set in 10/12 pt Plantin (Linotron 202) Printed in Malaysia by Art Printing Works Sdn. Bhd., Kuala Lumpur Produced by Longman Cheshire Pty Limited National Library of Australia Cataloguing-in-Publication data Blunt, Peter, 1948Human resource management. Bibliography. Includes index. ISBN 0 582 71161 4. I. Personnel management. 2. Corporate culture. I. Title. •

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\X'hile every effort has been made to trace and acknowledge copyright, in some cases copyright proved untraceable. Should any infringement have occurred, the publishers tender their apologies.

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Contents

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Preface

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Part I

Introduction

Chapter 1 Chapter 2

Reorienting modern human resource management Paradigms of analysis and methods of investigation

Part II

Managing the organisational setting

Chapter 3 Chapter 4

Organisational structure and environment Configurations of organisational structure

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ChapterS Chapter 6

Processes of organisational design Organisational culture and job redesign

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Part Ill

Managing people

Chapter 7 Chapter 8 Chapter 9 Chapter 10

Human resource planning and recruitment Principles and techniques of personnel selection Job analysis and performance appraisal Job evaluation and salary administration

Part IV

Managing development and change

Chapter 11

Learning, development, and change

Index

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69 115

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162 201 228

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To Paul and Jude

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Preface

This book aims to provide an introduction to three domains of personnel or human resource management (these terms are used interchangeably throughout): the analysis and management of the organisational setting; the analysis and management of the behaviour of people within that setting; and the analysis and management of development and change. In doing so, it examines some theories and research findings which are more usually found in texts on organisational behaviour and organisational theory. Although, in order to minimise overlaps between this book and others in the series (for example, Lansbury and Spillane 1) , and because of space limitations, certain material which might otherwise have been included has been left out. Nevertheless, an underlying theme of this book is that the boundaries sometimes drawn between organisational behaviour, organisational theory, and human resource management are pedagogical conveniences which have not always been in the best interests of students or practitioners. In part, this may explain why it is that the field of human resource management in Australia, as elsewhere, has been undergoing a prolonged identity crisis. Widespread concern has been expressed about the field's lack of influence within organisations, skill deficiencies among practitioners, and the shortcomings of specialist training programmes. Some of the blame for this state of affairs must be borne by the vehicles of learning: books like this one. An English writer, Karen Legge, was probably the first to point out what is arguably the most profound weakness of many texts in this field. The basis of her argument was that most writing on the subject did not take sufficient account of the circumstances in which methods and techniques were to be

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applied. This book attempts to make some amends by adopting an approach which is more self-consciously situational that is, one which accepts the idea that under certain circumstances some things will work or be accepted while others will not. It is an approach founded on the premise that there is no 'one best way', and it is known as contingency theory. The basic principles of contingency theory, which are introduced in Chapter 1, should therefore be kept firmly in mind by the reader as he or she proceeds through this book. In some places, the connections between contingency theory and the material covered are explicitly drawn; in others they are implicit. The chapters most clearly related to contingency theory are those on 'Organisational structure and environment' (Chapter 3), 'Configurations of organisational structure' (Chapter 4) and 'Processes of organisational design' (Chapter 5). These are topics which are little understood and often problematic in organisations. Such considerations can be crucial to organisational perfonnance, and they should therefore be integral parts of strategic decision making. Yet, almost without exception, personnel specialists have been silent on them. It is essential, therefore, that specialist human resource managers become informed and credible in this domain if their voices are to be heard at the highest levels of planning. The inclusion in this book of non-traditional personnel topics such as those just mentioned and others like 'Paradigms of analysis and methods of investigation' (Chapter 2), and 'Organisational culture and job redesign' (Chapter 6) has meant that some, more conventional, fare has had to be sacrificed. For instance, the omission of a chapter on health and safety is partly explained in this way, although this is an area of such burgeoning interest in Australia at present, and it is of such complexity, that it probably merits separate, specialist attention in any case. It is likely that a book on this topic will appear in this series in the future. A final point that should be mentioned concerns my use of the pronouns he, she, his and her. For ease of expression, I have chosen to use he and his in most places. However, where reference is made to only one sex, no injury is meant to the other. Among my colleagues at the University of Adelaide wl).o, in different ways, have been supportive of this endeavour I would like t9 give special thanks to Scott Henderson and Bob Newman. Reliable and thorough research assistance, and the occasional game of squash, were provided by Mark HenneseySmith, and the onerous amount of typing and ~;~-typing was cheerfully shouldered by Trisha Lyndon and Jackie Dearing. My thanks to them too. On the home front, I am grateful to the 'gang of fou~' Marla, 'The Dude', 'Biggles', and Samburu who conspired to. ,keep .QUuQf my way on the bad days and to provide affection and amusement on~he goad ones.

Peter Blunt March 1986

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1 R. D. Lansbury and R. Spillane, Organisational behq.'9iour: the Australian context, Longman Cheshire, Melbourne, 1983.

Part/

Introduction

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Chapter 1 Reorienting modern human resource management •

In these times of rapid economic, technological and social change, it is a truism to say that the competent and sensitive management of an organis1 ation's human resources is more important than ever before. If, as Revans suggests, the concept of social velocity means anything, it is now showing plenty of signs of speed-up. To take just one topical example, uncertainties and widespread feelings of insecurity stemming from the unclear effects of the introduction of new technologies on employment opportunities, job tenure, income, and quality of working life pose difficult problems for the manage2 ment of human resources. But in South-east Asia and Oceania there are even stronger reasons for according importance to human resource management (HRM). For instance, several of the nations in this part of the world notably, Australia, Hong Kong, Japan, and Singapore are among the most urbanised countries on earth. The vast majority of the people in these regions, unlike others in parts of Africa and Latin America, come into direct contact with a wide variety of formal organisations 3 constantly. In a sense, their social existence is defined in terms of organisational boundaries: by the organisations they work in, the clubs they belong to, the councils they live in, the schools they send their children to, and so on. Moreover, Australia is notable because it is a multicultural society whose cultural diversity may well increase in the future. These developments \Vill pose new challenges to those concerned with the effectiveness of formal organisations and the well-being of people who work in them. The way in which managers in general, but specialist human resource or personnel managers in particular, respond to these challenges will have a major

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Human Resource Management

bearing on the ability of organisations to adapt to this turbulent environment. As I shall attempt to show in greater detail below, it appears, however, that the field of HRM has not always managed to keep pace with these rapid changes. In many instances, it has been seen not to be able to deliver the goods. Some would say that it has lost direction and needs reorienting: to have its scope broadened, its influence on strategic decision making increased, and hence its status in the organisation enhanced. This book addresses, and attempts to redress , some of these problems. It does so initially by examining the conventional approach to HRM, and suggesting an alternative (the subject of this chapter), and by including material which is not commonly found in standard personnel texts. But more of this in a moment. The problem of what is meant and what should be meant by the term HRM is also something which this chapter as a whole considers, and develops. The definition of HRM adopted in this book therefore does not appear until the end of this chapter.

Whither human resource management? The state of uncertainty surrounding the functions and goals of HRM, its needs, and future directions were crystallised for me in a lunch meeting I had not too long ago with half-a-dozen or so senior personnel executives drawn from some of Adelaide's major private and public enterprises. I had invited the group to lunch in order to discuss the forthcoming visit to Adelaide of Professor Tom Lupton of the Manchester Business School. This distinguished scholar, teacher, and consultant had offered to conduct several workshops for local practitioners on any topics which were of particular concern to them. The specific purposes of our lunch-time meeting were to determine which topics should be addressed by Tom Lupton, and how. What struck me most about the conversation that day was the complete absence of even a single burning issue. There appeared to be no aspect of HRM that any member of the group could identify as being of immediate significance to their organisation; nothing which they needed, or wanted, to know more about. Eventually we did reach agreement, but the topics chosen were those that I had had in mind before the • meeung. The moral of this story is that the lack of direction, and the inability to isolate pressing needs, so evident in that meeting seem to be characteristic of the general domain of HRM. Collins' prophetic remark about the Australian scene reinforces this view: 'If a national seminar on the Education and Training of the Personnel Occupational Group were held this year, in all probability it would be cancelled because of lack of interest. ' 4 While there has been some attempt made in recent years to confront these, and related, difficulties in HRM, 5 the analyses have been limited in depth and scope. 6 Fundamental problems, such as those first addressed by Legge/ have not attracted the sustained, detailed, attention they deserve. Accordingly, clear

Reorienting modern human resource management

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responses to the following basic questions still need to be enunciated. 1 What is wrong with conventional HRM? 2 What should be the objectives of a new approach to HRi\1? and 3 How might these objectives best be achieved? The major aim of this chapter, therefore, is to confront some of the issues thrown up by these questions. It also assesses the present state of HRM in Australia in relation to the major points of criticism which emerge. Finally, it proposes several strategies for overcoming the problems identified, and outlines the contents of this book in relation to those strategies.

Conventional HRM: problems of power and direction Standard definitions of HRM straight away encounter the difficulty that, from the traditional standpoint of HRM as an activity (usually taken as that of making the best use of human resources in the pursuit of organisational goals), it (HRM) finds widespread expression outside the personnel department. HRM is an activity that most, if not all, managers would see themselves as being engaged in to varying degrees. This problem is reflected still in some of the most recent descriptions of the HRM function. For example: Personnel and human resource management is a set of functions and activities to be used in the management of human resources in a nondiscriminatory, affirmative, and effective manner for the benefit of the organization, the individual, and society in a given organizational and environmental context. 8 Personnel management may be defined as the process of developing, applying, and evaluating policies, procedures, methods and programmes relating to the individual in the organization . . . Essentially, the personnel function is concerned with the management of the human resources of an organization, in contrast to the material or financial resources. 9

There is nothing in either of the above definitions \vhich might not reasonably be regarded as being part of any manager's job. A direct consequence of this problem of disentangling what the personnel manager does from \vhat other managers do is that it becomes extremely difficult to demonstrate a direct relationship between the activities of human resource managers per se and desired organisational outcomes. When an organisation responds favourably to an HRM activity, everyone involved is likely to claim some responsibility. On the other hand, when the reverse occurs (the organisation responds unfavourably, and the cause is attributed to poor HRM), the personnel department is more likely to be seen as the culprit. This has serious negative effects on the status and power of the personnel function within organisations. 10 A second general problem that complicates any attempt to define HRM is that there is a tendency to state its goals in terms of both organisational effectiveness and quality of working life (QWL) considerations. 11 Setting aside for the moment questions pertaining to whether or not improved QWL leads to improved organisational effectiveness, the dilemma of the personnel function in nearly everything it does is immediately obvious. If we accept Schuler's 12

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Human Resource Management

definition, every time a personnel manager intervenes, he or she does so at the risk of dishonouring his or her allegiance either to management or workers. Faced with this continual conflict of interests and loyalties, it is not surprising to find that the personnel function, and its institutionalised presence in organisations, frequently lacks a sense of direction and purpose. In Australia, this view is endorsed by Trevor-Roberts who advocated, on the basis of a survey of personnel activities in eighty-seven Queensland organisations, that 'a concerted effort [should be made] by top management, personnel executives and other line executives to discuss what the role and objectives of personnel 13 management should be for a particular organisation' . The result of all this is that a vicious circle sets in. The personnel function typically starts from a low-power position which is made worse by the difficulties it encounters in establishing clear cause-effect connections between its own activities and organisational effectiveness, and by its sometimes ambiguous position vis-a-vis different interest groups within the organisation.

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Other problems with the conventional approach to HRM

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As the major vehicles of conventional wisdom in the field, personnel and HRM text books exert considerable influence on popular notions of its aims, functions, and responsibilities. But in the past the contribution of such texts to the development of the discipline and to the solution of some of the problems outlined in this chapter has not been clearly discernible. Much of the credit for drawing attention to the deficiencies of standard personnel texts must go to Legge. 14 Among other things, her analysis shows that meta-theoretical advances which have taken place in closely related disciplines like organisational theory 15 have not left their mark on HRM. She points to three aspects of the conventional view of HRM which illustrate these omissions, two of which are of particular importance to the present discussion. First, text book and other pronouncements on the subject tend to be 'prescriptive in general terms rather than analytical about actual situations'. 16 Mistakes are likely to be made more frequently when this approach is adopted which further depresses the standing of HRM in the eyes of strategic decision makers • • • 1n organisations. Second, the conventional view seems to regard the content of the function of HRM divorced from its context. That is to say, it fails to recognise that, in more cases than not, it is context which should play a major part in determining the content of the function. To put this second point more simply, the conventional view makes no allowance for the powerful effects of an organisation's internal and external environments on the nature of its HRM. Both these features of the conventional view imply a 'one best way' approach to HRM, an approach which cuts across organisational cultures and national boundaries. Yet one of the most widely received models for understanding organisational life contingency theory proposes the opposite point of view: that organisational structures, methods of coordination and

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Reorienting modern human resource management

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control, techniques of HRM, and so on should all be adapted to the particular 17 circumstances or contingencies they face. Legge has made this point in relation to the prac...