WIXLIB

11TH EDITIONARMSTRONG’SHANDBOOKOF HUMAN RESOURCEMANAGEMENT PRACTICEMichael Armstrong

iARMSTRONG’SHANDBOOKOF HUMAN RESOURCEMANAGEMENT PRACTICE

ii

iiiARMSTRONG’SHANDBOOKOF HUMAN RESOURCEMANAGEMENT PRACTICE11TH EDITIONMichael ArmstrongLondon and Philadelphia

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 publisher and authors 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 any of theauthors.First edition published in 1977 as A Handbook of Personnel Management Practice by Kogan Page LimitedSeventh edition published in 1999 as A Handbook of Human Resource Management PracticeEleventh edition published in 2009 as Armstrong’s Handbook of Human Resource Management PracticeApart 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 19147USA Michael Armstrong, 1977, 1984, 1988, 1991, 1995, 1996, 1999, 2001, 2003, 2006, 2009The 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.ISBN 978 0 7494 5242 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 handbook of human resource management practice / Michael Armstrong. -- Eleventh ed.p. cm.Rev. ed. of: A handbook of human resource management practice. 10th ed. 2006.Includes bibliographical references and index.ISBN 978-0-7494-5242-11. Personnel management --Handbooks, manuals, etc. I. Armstrong, Michael, 1928– Handbook of humanresource management practice. II. Title. III. Title: Handbook of human resource management practice.HF5549.17.A76 2009658.3--dc222008053904Typeset by Saxon Graphics Ltd, DerbyPrinted and bound in India by Replika Press Pvt Ltd

vContents in BriefPrefacexxvPart I1.2.3.4.5.6.7.8.9.10.Human Resource ManagementThe Practice of Human Resource ManagementStrategic Human Resource ManagementHR StrategiesHuman Capital ManagementThe Role and Organization of the HR FunctionThe Role of the HR PractitionerThe Impact of HRM on PerformanceInternational HRMCorporate Social ResponsibilityHuman Resource Management Research Methods1325476581104135150165174Part II11.12.13.Human Resource Management ProcessesCompetency-based HRMKnowledge ManagementHigh-performance Work Systems199201218230Part III14.15.16.Work and EmploymentWorkThe Employment RelationshipThe Psychological Contract249251260276Part IV17.18.Organizational BehaviourThe Essence of Organizational BehaviourCharacteristics of People289291299

viBrief Contents19.20.21.22.MotivationEngagement and CommitmentHow Organizations FunctionOrganizational Culture316335357383Part V23.24.25.26.27.Organization Design and DevelopmentOrganization DesignOrganization DevelopmentChange ManagementJob, Role, Competency and Skills AnalysisJob and Role Design and Development401403415423443466Part VI28.29.30.31.32.33.34.35.36.37.People ResourcingPeople Resourcing StrategyHuman Resource PlanningPeople Resourcing PracticeRecruitment and SelectionSelection InterviewingSelection TestsTalent ManagementCareer ManagementIntroduction to the OrganizationRelease from the Organization477479485495514540567579590602609Part VII Performance Management38.The Process of Performance Management39.360-degree Feedback615617643Part g and DevelopmentLearning and Development StrategyThe Process of Learning and DevelopmentLearning and Development Programmes and EventsHow People LearnOrganizational LearningManagement Development

Brief ContentsPart IX46.47.48.49.50.51.52.53.Rewarding PeopleReward ManagementJob EvaluationMarket Rate AnalysisGrade and Pay StructuresContingent PayRewarding Special GroupsEmployee Benefits, Pensions and AllowancesManaging Reward Systems733735755783795815839849859Part X54.55.56.57.Employee RelationsThe Employee Relations FrameworkEmployee Relations ProcessesEmployee VoiceEmployee Communications875877905935949Part XI58.59.Health, Safety and Employee Well-beingHealth and SafetyEmployee Well-being957959975Part XII60.61.62.HR Policies, Procedures and SystemsHR PoliciesHR ProceduresHR Information Systems98598710001010AppendicesA.Example of Employee Engagement and Commitment SurveyB.Example of Performance Management SurveyC.Example of Reward SurveyD.Learning and Development Activities and Methods10171019102010211022Useful Website AddressesSubject IndexAuthor Index103110341057vii

viiiThis page has been left intentionally blank

ixContentsSupporting resources for instructors and studentsList of figuresList of tablesPrefacePart I1.2.3.4.Human Resource ManagementThe Practice of Human Resource ManagementIntroduction 4; Human resource management defined 4; Theobjectives of HRM 5; Theories of HRM 6; Characteristics of HRM 7;The development of the concept of HRM 13; Reservations aboutHRM 14; The context of HRM 17; The ethical dimension 19Strategic Human Resource ManagementIntroduction 26; The conceptual basis of strategic HRM 26;Strategic HRM defined 29; The resource-based view of strategicHRM 30; Strategic fit 32; Perspectives on strategic HRM 32; Thebest practice approach 33; The best fit approach 35; Bundling 37;The reality of strategic HRM 39; Practical implications ofstrategic HRM theory 40HR StrategiesIntroduction 48; What are HR strategies? 48; General HRstrategies 49; Specific HR strategies 52; Criteria for an effective HRstrategy 53; How should HR strategies be formulated? 54; Issues indeveloping HR strategies 55; Implementing HR strategies 59Human Capital ManagementIntroduction 66; Human capital management defined 66; Theconcept of human capital 66; The constituents of human capital 68;Human capital measurement 69; Human capital internalreporting 75; Human capital external reporting 76; IntroducingHCM 77xixxxixxiiixxv13254865

xFull Contents5.6.7.8.9.10.Part II11.The Role and Organization of the HR FunctionIntroduction 82; The role of the HR function 82; The organizationof the HR function 84; Evaluating the HR function 87; HR sharedservice centres 92; Outsourcing HR work 93; Offshoring 94;Using management consultants 94; Marketing the HR function 95;HR budgeting 96; The HR role of front line managers 97The Role of the HR PractitionerIntroduction 105; The basic role 105; The business partner role 106;The strategic role of HR specialists 108; The change agent role 111;The internal consultancy role 112; The service delivery role 112; Theguardian of values role 113; Models of HR roles 113; Gaining supportand commitment 117; Ethical considerations 120; Professionalism inhuman resource management 121; Ambiguities in the role of HRpractitioners 122; Conflict in the HR contribution 124; The qualitiesrequired by HR professionals 125; Continuous professionaldevelopment 129The Impact of HRM on PerformanceIntroduction 136; The impact made by HRM 136; How HRMstrategies make an impact 141; How HRM practices make animpact 144International HRMIntroduction 151; International HRM defined 151; Issues ininternational HRM 151; Global HR policies and practices 156;Managing expatriates 156Corporate Social ResponsibilityIntroduction 166; Strategic CSR defined 166; CSR activities 167; Therationale for CSR 168; Developing a CSR strategy 170Human Resource Management Research MethodsIntroduction 175; The nature of research 175; Researchphilosophy 176; Planning and conducting research programmes 178;Literature reviews 180; Quantitative and qualitative methods ofresearch 181; Methods of collecting data 182; Processes involved inresearch 187; Statistical analysis 191Human Resource Management ProcessesCompetency-based HRMIntroduction 202; Types of competencies 202; Competencyframeworks 204; Coverage of competencies 209; Applications ofcompetency-based HRM 210; Developing a competencyframework 212; Competencies and emotional intelligence 21481104135150165174199201

Full Contents12.13.Part III14.15.16.Part IV17.Knowledge Management218Introduction 219; Knowledge management defined 219; The conceptof knowledge 220; The purpose and significance of knowledgemanagement 221; Knowledge management strategies 222; Knowledgemanagement systems 223; Knowledge management issues 223; Thecontribution of HR to knowledge management 225High-performance Work Systems230Introduction 231; High-performance culture 231; High-performancework system defined 232; Characteristics of a high-performancework system 234; Components of an HPWS 235; Impact of highperformance work systems 238; Reservations about the impact ofan HPWS 240; Developing a high-performance work system 241Work and EmploymentWorkIntroduction 252; The nature of work 252; Organizational factorsaffecting work 255; Changes in the pattern of employment 256; Thefuture of work 257The Employment RelationshipIntroduction 261; The employment relationship defined 261; Thebasis of the employment relationship 262; Employment relationshipcontracts 263; What is happening to the employment relationship 265;Managing the employment relationship 266; Developing a hightrust organization 267; Theories explaining the employmentrelationship 270The Psychological ContractIntroduction 277; The psychological contract defined 277; Thepsychological contract and the employment relationship 279; Thesignificance of the psychological contract 280; Changes to thepsychological contract 282; State of the psychological contract2004 283; How psychological contracts develop 284; Developing andmaintaining a positive psychological contract 285249251260276Organizational Behaviour289The Essence of Organizational Behaviour291Introduction 292; Organizational behaviour defined 292;Characteristics of organizational behaviour 292; Organizationalbehaviour and the social and behavioural sciences 293; Explainingorganizational behaviour 294; Factors affecting organizationalbehaviour 294; The sources and applications of organization behaviourtheory 295; The significance of organizational behaviour theory 296xi