A Short Guide to People Management

For HR and line managers

Antonios Panagiotakopoulos

• Publisher: Routledge
• Year: 2016
• Print ISBN: 9781472478528
• eBook ISBN: 9781315526393
• Topic: Business
• Subtopic: Business General
• Index: Business

There is a plethora of information available for busy HR practitioners but what they really need is a clear, concise and comprehensive analysis of the theory and practice of people management within contemporary organizations. Indeed, much has been written about Human Resource Management and Organizational Behavior, which rigorously explores each scientific field, yet there is a lack of an integrated examination of both fields.

The author begins by describing the new world of business and management, which is characterized by continuous change and precarious employment. He examines the individual at work, group behavior, people resourcing, performance and development and the employment relationship and he concludes with a look at organizational change; i.e. the nature of the sorts of changes that take place in companies of all sizes and how the process of organizational development can be managed effectively through people management.

This guide provides a thorough examination of the key areas of organizational psychology and people management and offers an easy to digest theory on each topic coupled with the latest empirical evidence. All the core theories of HRM and OB are presented in a methodical and critical manner, appealing to time-starved professionals who wish to acquire a detailed overview of people management rapidly. Throughout the book, several suggestions will be made to managers for ways of applying various HR theories to the workplace. The reader will uncover how to manage people but won't be offered prescriptions because the best way of managing people depends on the context.

1
Organizations in the changing economy

The purpose of this chapter is to outline the main areas of interest of people management and describe the ‘new world’ of business and management, which is characterized by continuous change and precarious employment. The role of people management in such a turbulent business environment is also highlighted at the end of this chapter.

People management and organizations

Nowadays, the management of human talents is becoming a prominent component of corporate agendas. It is frequently argued by several commentators from the academia and the business world that intangible people-related assets such as worker skills, relationships with customers and employee involvement in decision-making are becoming more central than ever to organizational success. In this context, it would be surprising – given the degree of organizational restructuring, alterations in the legal context and the attempt to engage the workforce more fully – if people management was not on the organizational agenda to a much greater extent than a decade ago.

However, many employees’ experience of employment is shaped by immediate work pressures reflected in concerns about job satisfaction, work intensity and limited discretion. It seems that managers are not addressing effectively the needs and concerns of their workforce in too many work-places across the world. Although line managers appear to be more sensitive to the significance of HRM than in the past, still this is targeted at providing improved communication rather than translated into tangible improvements in the quality of working life, indicating that people management issues are not sufficiently embedded within mainstream management practice in a large number of workplaces. Therefore, understanding the behaviour of people in organizations is becoming increasingly important as managers’ concerns such as staff productivity, quality of work life and job stress start featuring high in their agendas.

There is still little universal agreement on what precisely constitutes HRM, and debates around the meaning of the term still continue. For the purposes of this publication, we will use predominantly the term ‘people management’ (or PM) instead of ‘human resource management’ (or HRM), which reflects a humanitarian approach towards managing employees that emphasizes staff commitment, job satisfaction and motivation (as opposed to an instrumental approach that places much emphasis on the quantitative aspects of managing human resources). The working definition of PM that we will use in this book views people management as the productive management of talents within an organization with the purpose of achieving the firm’s strategic objectives and the satisfaction of individual employee needs.

Two broad models have become particularly influential in the interpretation of people management. On the one hand, contingency-based approaches have developed into strategic HRM to suggest that people management should match with the chosen corporate-level strategy. In particular, the contingency model introduced the concept of strategic PM in which personnel policies are closely linked to the formulation and implementation of strategic corporate objectives. The model emphasizes the necessity of a tight fit between PM strategy and corporate strategy and the use of a set of PM policies and practices that are integrated with each other and with the goals of the organization. On the other hand, what might be termed an absolute position – more is better – has developed around ideas of mutuality and stake-holding at the organizational level. The second influential model, the ‘best practice’ school of HRM, highlights that there is a universal set of practices (e.g. sophisticated selection, extensive formal training, performance-related pay) aimed at high commitment and high performance that benefit any organization regardless of context. Although both models have some limitations, they have both underpinned the practice of people management so far, with the contingency-based model gaining more support from the available research studies.

The role of HR manager and line managers

The role of HR managers is to undertake certain key activities, including job analysis, labour planning, staff recruitment and selection, workforce skills development, career planning, performance appraisal, compensation and employee relations. As Ulrich stated several years ago, as HRM becomes more business oriented and strategically focused, HR professionals need to become strategic partners, administrative experts, employee champions and change agents. At the end of the day, their core aim should be to make a real contribution to shareholder value.

Line manager action or inaction is often responsible for the difference between espoused HR policies and their enactment. Many HR policies can only be converted to practice by line managers. In so doing, they often reflect the ‘informal’ culture of the firm rather than the values articulated by top management. Thus, at times, line managers help to keep a sinking ship afloat. At other times, they may be letting a policy die that they think is unworkable or against their interests. Research on managers and their subordinates shows that more effectively developed relationships are beneficial for the individual and work-unit functioning.

One of the essential things that every manager should know when it comes to people management is that great managers try to discover and develop what is different about each person who works for them. Many ‘average’ managers simply view employees as workers who fill roles; by contrast, exceptional managers view employees as individuals to build roles around. Effective managers are those who try to uncover what is unique in each employee and then capitalize on it. They should value the unique abilities and even eccentricities of individuals and try to integrate them into an HR plan. A manager’s time is a very important resource, and great managers should know that the most effective way to invest their time is to figure out how best to incorporate employee idiosyncrasies into the overall corporate plan.

2
People strategy and corporate culture

This chapter aims to explain why modern HRM should be strategic, that is aligned with the organization’s general strategy. Also, its purpose is to present the main elements of corporate culture and explain how cultural values and beliefs are created within organizations. The process followed for cultural adaptation will also be explored at the end of the chapter.

Nature of strategy and strategic choices

The meaning of ‘strategy’ has changed over the last 20 years and become more complex as the literature has moved from emphasizing a long-term planning perspective to a more organic evolutionary process occupying a shorter time frame. Hence, strategic management is seen now to be as much about vision and direction as about planning, mechanisms and structure. Four distinctive approaches to strategy-making have been identified in the literature: the rational-planning approach; the evolutionary approach; the processual approach; and the systemic approach.

The rational-planning approach emphasizes a comprehensive analysis of the external and internal environment that then enables the organization to evaluate and from a range of strategic choices that in turn allows for plans to be made to implement the strategy. The evolutionary approach suggests that strategy is made through an informal evolutionary process in which managers rely less on top managers to plan and act rationally and more on the markets to secure profit maximization. The processual approach recognizes that in practice, strategy formation tends to be fragmented, evolutionary and largely intuitive. While this approach acknowledges the value of the rational-analytical approach, it also identifies the need to take into consideration the psychological, political and behavioural relationships which influence and contribute to strategy. Finally, the system approach suggests that strategy is shaped by the social system it operates within. Strategic choices, therefore, are shaped by the cultural and institutional interests of a broader society.

Understanding that strategy formulation does not always occur in a rational, planned manner due to complexities in both the external (e.g. political, economic, social, technological, environmental, legal) and internal environment (e.g. culture, structure) is significant for a manager’s understanding of strategic PM.

People and strategy

The early HRM literature appeared to emphasize a strategic theme. However, there was much critical evaluation that demonstrated its lack of strategic integration. The notion of a link between business strategy and the performance of every individual in the organization is central to vertical integration. Vertical integration can be explicitly demonstrated through the linking of a business goal to individual objective setting and to the measurement and rewarding of attainment of that business goal. Vertical integration between business strategy and individual performance is at the core of many strategic HR models. This vertical integration or ‘fit’ where leverage is gained through procedures, policies and processes is widely acknowledged to be a crucial part of any strategic approach to the management of people and can ensure that competences are created which have a potential to be a key source of competitive advantage. Both vertical integration and horizontal integration (i.e. integration between HR policies themselves) are considered as the essential ingredients that enable the HR paradigm to become strategic.

Just as strategic HRM objectives must be in harmony with the organization’s general objectives, HRM activity plans must support the achievement of strategic HRM objectives. For example, an organization that has set cost minimization as its primary corporate objective (i.e. aims to become the cost leader in the market) it would require from the HR department to focus on cost reduction via reduced headcount (i.e. minimal hiring), reduced absenteeism, provision of basic rewards and reduced labour turnover. Similarly, if an organization has set as its core business objective to excel in customer service (i.e. to adopt a differentiation strategy that emphasizes innovation in customer service), this would require the HR department to focus on the selection of highly skilled staff (with an emphasis on employees possessing a range of ‘soft’ skills), increased formal training provision and generous rewards for top performers.

Organizational culture

Organizational culture sums up the dominant values, visions, perspectives standards and modes of behaviour that typify any one organization. A mature and effective culture will be capable of serving the interests of a full spectrum of stakeholders, including the employees of an organization. The culture-building activities by which a distinctive culture can be developed include the recruitment of like-minded individuals; the development of group norms; the statement of espoused values; the production of mission statements; the introduction of appropriate communication systems; the installation of organizational procedures and rules; the promotion of organizational symbols; the development of key rituals; and the assisting of learning throughout the organization to interpret the founders’ vision in practice.

It is evident from the preceding discussion that people management has a central role to play in establishing a unique organizational culture through staff selection, training and compensation that will help an organization achieve sustainable competitive advantage in its markets. For example, the recruitment of employees who are willing to accept the founders’ views on how things should be done is vital for developing a distinctive corporate culture. Similarly, training sessions during employee orientation can help a distinctive culture become established. Equally crucial is the role of HR and line managers when it comes to cultural change. As will be discussed more extensively in Chapter 10 of this book, organizational change is not simply a technical matter but a human one. Therefore, when the senior management team decides to introduce a major strategic change, which may involve significant cultural adaptation, the contribution of the HR department is deemed important. For example, the selection of executives and junior staff that espouse the new corporate values along with sufficient in-house training and reward systems are all people-related activities that should be carefully implemented to facilitate the suggested cultural adaptation.

3
The individual at work

This chapter will describe how employees interpret reality and will further investigate the practical implications of perception at work. It will also explore the role that personal values and attitudes play in the way employees perceive various events. Additionally, the concept of personality will be discussed, and its importance for organizational performance will be highlighted.

Values, attitudes, perception

A key feature of every human being is their unique way of looking at things based on their intelligence, their physical abilities and their repertoire of values and attitudes. The concept of ‘perception’ is very important in understanding human behaviour. In the organizational context, it is how employees interpret the events going on around them that is crucial for the managers. The personal values of individuals along with their perception of social events affect their emotions and subsequently their actions. Most managers struggle to address the ‘feelings’ of their employees because they ignore that emotions essentially reflect the perceptions held by an individual on a specific issue and that the concept of perception encapsulates a cognitive activity that differs among individuals. A major challenge for managers, therefore, is to try to understand the beliefs held by employees on various issues at work that significantly affect their behaviour. This will help managers enhance employee loyalty and motivation, and it will assist them in taking better decisions during the selection process of new employees.

The most efficient way for managers to learn about employee beliefs is through communication. Managers should make it a priority to walk across the work site and talk to employees in person. Furthermore, they should let employees know from the start that their door is always open. It is important for managers to encourage workers to come to them by creating a safe environment in which employees feel comfortable honestly and openly voicing their frustrations. Without an understanding of individual differences and their effects, managers at work will be considerably impoverished in their roles.

As mentioned in the introductory chapter, people management can be understood as a set of activities aimed at building individual and workforce performa...

Table of contents

• Cover
• Title
• Copyright
• Contents
• List of tables
• About the author
• Acknowledgements
• Introduction
• 1 Organizations in the changing economy
• 2 People strategy and corporate culture
• 3 The individual at work
• 4 Group behaviour
• 5 People resourcing
• 6 Measuring people performance
• 7 People learning
• 8 People rewards
• 9 The employment relationship
• 10 Organizational change
• 11 Managing employee stress
• 12 Organizational communication
• 13 Measuring the impact of people management on organizational performance
• Concluding comments
• Bibliography
• Index