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iARMSTRONG’SESSENTIALHUMAN RESOURCEMANAGEMENT PRACTICE
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iiiARMSTRONG’SESSENTIALHUMAN RESOURCEMANAGEMENT PRACTICEA GUIDE TO PEOPLEMANAGEMENTMichael Armstrong
ivPublisher’s noteEvery possible effort has been made to ensure that the information contained in this book is accurate at thetime of going to press, and the publishers and author cannot accept responsibility for any errors or omissions,however caused. No responsibility for loss or damage occasioned to any person acting, or refraining fromaction, as a result of the material in this publication can be accepted by the editor, the publisher or the author.First published in Great Britain and the United States in 2010 by Kogan Page LimitedApart from any fair dealing for the purposes of research or private study, or criticism or review, as permittedunder the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case ofreprographic reproduction in accordance with the terms and licences issued by the CLA. Enquiries concerningreproduction outside these terms should be sent to the publishers at the undermentioned addresses:120 Pentonville RoadLondon N1 9JNUnited Kingdomwww.koganpage.com525 South 4th Street, #241Philadelphia PA 19147USA4737/23 Ansari RoadDaryaganjNew Delhi 110002India Michael Armstrong, 2010The right of Michael Armstrong to be identified as the author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988.ISBN978 0 7494 5989 5E-ISBN 978 0 7494 5990 1British Library Cataloguing-in-Publication DataA CIP record for this book is available from the British Library.Library of Congress Cataloging-in-Publication DataArmstrong, Michael, 1928–Armstrong’s essential human resource management practice : a guide to people management / MichaelArmstrong.p. cm.ISBN 978-0-7494-5989-5 — ISBN 978-0-7494-5990-1 (ebook) 1. Personnel management—Handbooks,manuals, etc. I. Title. II. Title: Essential human resource management practice.HF5549.17.A758 2010658.3—dc222010000341Typeset by Graphicraft Limited, Hong KongPrinted and bound in India by Replika Press Pvt Ltd
vContentsIntroduction1Part IHuman Resource Management5The Practice of Human Resource Management71.Introduction 8; The philosophy of HRM 8; The purpose of HRM 9;The diversity of HRM 10; HRM as a system 11; The context of HRM 12;The ethical dimension 14; The impact of HRM on performance 15;The HRM role of line managers 15; The role of the HR function 19;The role of HR practitioners 21; Critical evaluation of the concept ofHRM 28; Key learning points 30; Questions 31; References 312.Strategic Human Resource Management34Introduction 35; The conceptual basis of strategic HRM 35; StrategicHRM defined 37; The resource-based view of strategic HRM 39;Strategic fit 41; Perspectives on strategic HRM 41; HR strategies 47;Critical evaluation of the concept of strategic HRM 50; Key learningpoints 52; Questions 54; References 543.HR Policies and Procedures57Introduction 57; HR policies 57; HR procedures 66; Key learning points 69;Questions 70; References 704.Human Capital Management71Introduction 72; Human capital management defined 72; The conceptof human capital 72; Human capital measurement 74; Human capitalreporting 80; Key learning points 81; Questions 82; References 835.Knowledge ManagementIntroduction 84; Knowledge management defined 85; The concept ofknowledge 86; The purpose and significance of knowledge management 87;Knowledge management strategies 87; Knowledge management systems 88;Knowledge management issues 90; Key learning points 91; Questions 93;References 9384
Contentsvi6.Corporate Social Responsibility95Introduction 95; Strategic CSR defined 96; CSR activities 96; The rationalefor CSR 98; Developing a CSR strategy 99; Key learning points 100;Questions 100; References 1017.International HRM103Introduction 103; International HRM defined 104; Issues in internationalHRM 104; Global HR policies and practices 109; Managing expatriates 109;Key learning points 114; Questions 116; References 116Part IIOrganizations and People1198.Organizational Behaviour121Introduction 122; Organizational behaviour defined 122; The sources andapplications of organizational behaviour theory 122; How organizationsfunction 123; Organizational processes 126; Organizational culture 128;Organization design 129; Characteristics of people 130; Motivation 136;The psychological contract 144; Organization development 146; Keylearning points 147; Questions 149; References 1509.Employee Engagement153Introduction 153; The meaning of employee engagement 154; Discretionarybehaviour 157; Why engagement is important 158; Drivers of engagement 158;Enhancing engagement 159; Enhancing organizational engagement 163; Keylearning points 165; Questions 165; References 165Part III10.HRM Practice167Competency-based HRM169Introduction 170; Types of competencies 170; Competency frameworks 171;Applications of competency-based HRM 171; Behavioural competencymodelling 174; Keys to success in using competencies 175; Key learningpoints 175; Questions 176; References 17711.Job and Role Analysis and Design178Introduction 179; Job and role analysis 179; Job design 181; Roledevelopment 183; Key learning points 183; Questions 184; References 18512.People ResourcingIntroduction 187; People resourcing strategy 187; Human resourceplanning 189; Recruitment and selection 192; Selection methods 195;186
Contents viiRetention planning 198; Talent management 203; Flexibility planning 208;Absence management 210; Key learning points 212; Questions 213;References 21413.Learning and Development216Introduction 217; Learning and development defined 217; Learningand development strategy 219; Learning culture 219; The learningorganization 220; Organizational learning 221; How people learn 223;Approaches to learning and development 226; Development 228;Training 230; Blended learning 232; Planning and delivering learningprogrammes and events 232; Identifying learning needs 235; Evaluationof learning 238; Management and leadership development 239; Keylearning points 242; Questions 244; References 24414.Managing Performance246Introduction 247; The meaning of performance 247; Influences onperformance 248; High-performance cultures 250; High-performancework systems 251; Managing organizational performance 253; Managingteam performance 257; Managing individual performance 259;Key learning points 262; Questions 263; References 26315.Reward Management266Introduction 267; Reward management defined 267; Aims of rewardmanagement 267; The reward management framework 268; The rewardpackage 268; Reward systems 268; Strategic reward 271; Total rewards 273;Financial rewards 275; Non-financial rewards 279; Job evaluation 279;Market pricing 281; Grade and pay structures 282; Pay progression 287;Recognition schemes 289; Employee benefits 289; Key learning points 289;Questions 291; References 29116.Employee Relations293Introduction 294; The employment relationship 294; Underpinningemployment relations philosophies 297; Employee relations policies 298;Managing employee relations 299; Collective bargaining 301; Collectiveagreements 302; Dispute resolution 304; Employee voice 305;Communications 307; Key learning points 308; Questions 310;References 31017.Employee Well-beingIntroduction 313; Managing the work environment 313; Health and safetymanagement 315; Key learning points 320; Questions 322; References 322312
ContentsviiiPart IV18.People Management Skills323Managing Change325Introduction 325; The change process 325; Change models 326; Resistanceto change 327; Implementing change 329; Guidelines for changemanagement 329; References 33019.Leadership Skills331What leadership involves 331; Leaders and followers 333; Ulrich’sleadership brand 333; Leadership styles 334; What makes a goodleader 335; Leadership and emotional intelligence 335; Developingleadership skills 336; References 33820.Selection Interviewing Skills339The nature of a selection interview 339; The content of an interview 340;Preparing for the interview 341; Planning the interview 342; Interviewingtechniques – asking questions 343; Key interviewing skills 349; Comingto a conclusion 35121.Performance Management Skills354Setting objectives 354; Formal review meetings 357; Guidelines onproviding feedback 36122.Learning and Development Skills364Induction training 364; Continuous learning 364; Personal developmentplanning 365; Coaching 366; Mentoring 367; Job instruction 36823.Managing Conflict370Introduction 370; Managing inter-group conflict 370; Managing conflictbetween individuals 371; The role of the third party in managingconflict 373; Conclusion 374; References 37524.Handling People Problems376Absenteeism 376; Disciplinary issues 378; Negative behaviour 380; Poortimekeeping 384; Underperformance 385Appendix: HRM Research Methods386Author indexSubject index410415This book is accompanied by additional online material. To access these resources go towww.koganpage.com/resources and under ‘Academic Resources’ click on either ‘StudentResources’ or ‘Lecturer Resources’ as appropriate.
1IntroductionThis book describes the essential features of human resource management (HRM). The aim isto provide practitioners and students with a succinct picture of the key processes and activitiesinvolved in managing people. The practical approaches to HRM described in the book arebacked up with evidence from research. Critical evaluations are included for the following keyHRM theories and concepts:zz HRM itself;zz the role of HR business partner;zz strategy;zz strategic HRM;zz the resource-based view;zz the choice between best practice and best fit;zz bundling;zz human capital measurement;zz motivation theory;zz emotional intelligence;zz the flexible firm;zz the learning organization;zz financial rewards.Underpinning philosophyThe philosophy underpinning this book was well-expressed by Schneider (1987). He wrote that:‘Organizations are the people in them people make the place.’ His point was that:
2IntroductionAttraction to an organization, selection by it, and attrition from it yield particular kindsof persons in an organization. These people determine organizational behaviour Positive job attitudes for workers in an organization can be expected when the naturalinclinations of the persons there are allowed to be reflected in their behaviours by thekinds of processes and structures that have evolved there.HRM has to serve the interests of the business but it must also be concerned with the interestsof the people in the business. A stakeholder approach is adopted throughout the book. Inaccordance with the views of Freeman (1984), management, and this includes HR specialists,must satisfy a variety of constituents comprising employees, customers and the community atlarge as well as shareholders or, in the public or voluntary sectors, those who have the ultimateresponsibility for what the organization does.There is an important ethical dimension to HRM. As Boxall et al (2007) point out: ‘WhileHRM does need to support commercial outcomes (often called “the business case”), it alsoexists to serve organizational needs for social legitimacy.’ This means exercising social responsibility, or in other words being concerned for the interests (well-being) of employees andacting ethically with regard to the needs of people in the organization and the community.Plan of the bookThe book is dived into four Parts and an Appendix.Part IHuman Resource ManagementPart I deals with the fundamentals of HRM. It starts with a general review of the practice ofHRM. It continues with a description of the processes that provide guidelines on the direction,scope and application of HRM, namely strategic HRM and HR policies and procedures. Theneed to base HRM decisions on data and information relating to the use and development of theorganization’s human capital is dealt with in Chapter 4, and the associated topic of knowledgemanagement – increasing organizational capability by sharing the wisdom, understanding andexpertise accumulated in a business about its processes, techniques and operations – is coveredin Chapter 5. The requirement for organizations to conduct their business in an ethical way,taking account of the social, environmental and economic impact of how they operate, andgoing beyond compliance, is emphasized in Chapter 6. The final chapter of Part 1 recognizesthat organizations operate in a global context, and explores the particular factors that affectinternational HRM.
IntroductionPart II3Organizations and peoplePart II recognizes that HRM takes place within the context of organizations, in which the waypeople behave and how the organizations of which they are members function will governHRM policy and practice. It also deals with the concept of employee engagement, which isbecoming increasingly prominent in people management, but which is often presented asa mantra without being properly understood. Chapter 9 examines the concept in detail byreference to recent research.Part IIIHRM practiceThis is the heart of the book. It deals with:zz the basic HRM activities of competency-based HRM, job / role analysis and design;zz people resourcing;zz learning and development;zz managing performance;zz reward management;zz employee relations;zz providing for the well-being of employees.Part IV People management skillsThe activities described in Part IV all require people management skills from line managers aswell as HR specialists. The following skills are covered in this part:zz managing change;zz leadership;zz selection interviewing;zz performance management;zz learning and development;zz managing conflict;zz handling people problems.AppendixHRM research methodsThis appendix describes the approaches and techniques used in conducting
Armstrong’s essential human resource management practice : a guide to people management / Michael Armstrong. p. cm. ISBN 978-0-7494-5989-5 — ISBN 978-0-7494-5990-1 (ebook) 1. Personnel management—Handbooks, manuals, etc. I. Title. II. Title: Essential human resource management practice. HF5549.17.A758 2010 658.3—dc22 2010000341
