Employee Resourcing

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Employee Resourcing1 The Context of Employee Resourcing

Objectives

When you have finished reading this module you will be able to:

appreciate the scope of employee resourcing (ER) and its contributions to strategic management; assess the context in which ER is conducted, and the changing world of work and organisations; understand the changing business environment and its impact on ER, with particular reference to

globalisation, ICT, and workforce diversity;

analyse the case of ER change in China as an example of ER in its context;

analyse ER in Mauritius as a way of understanding ER in its cross-cultural context; appreciate the distinctiveness of ER in international organisations; analyse the role of ER in developing international capabilities and diversity; appreciate the importance of managing diversity and equal opportunity, and their implications for

ER;

devise a strategy for increasing employee diversity and managing diversity effectively.

1.1 Introduction: The Scope of ER

1.2 Our Focus on ER

1.3 ER in Context: The Changing World of Work and Organisations

1.4 The Business Environment

1.5 Globalisation and Changing ER Practices1.6 The Implications of Globalisation for Employee Resourcing in Multinational Companies

1.7 Managing Diversity and Its Implications for ER

Summary

In this module we began by discussing the scope of ER and the particular focus taken here. Though ER is

defined in various ways, and different writers draw different boundaries around it, the core areas concern

getting the right people (with appropriate experience, skills, knowledge and other attributes) in the right

place at the right time. The core activities of ER involve HR planning, recruitment and selection, and

performance management. These activities, whether conducted by large multinational companies, by small

companies or by public service organisations, are conducted in a rapidly changing context: one to which

Module ES08 returns. Of particular importance is the impact of informatisation and globalisation, and thecase of China illustrates how these processes have impacted on ER. The case of Mauritius also shows how

ER varies according to cultural context.

We next discussed ER in multinational companies, with particular reference to the way globalisation has

affected mindsets at IBC and BA. BA is particularly instructive in demonstrating the importance of

international diversity to ER, especially in terms of the growth of multicultural teams. The case also shows

how important it is to manage such diversity effectively, and that significant business benefits may accrue to

organisations that manage to do this successfully. These include such ER benefits as more effective

recruitment and retention of specific groups, and other more general benefits such as enhanced creativity.

The module concludes with a discussion of diversity in a domestic context, with a particular focus on its role

in equal opportunity and the business case.

2008 Edinburgh Business School 1


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2 The Strategic Significance of Employee Resourcing

Objectives


analyse the role of ER in improving productivity and performance; critically evaluate the significance of labour markets and employment relationships for ER; explore the significance of internal and external labour markets for ER; analyse the concept of employment flexibility, especially functional, numerical and financial

flexibility, and its implications for ER;

critically analyse the role of outsourcing and shared service centres in strategic ER; assess the benefits of outsourcing ER (especially recruitment), identify potential problems, and

manage ER outsourcing successfully.

2.1 Introduction: ER, Productivity and Performance

2.2 Human Capital Management

2.3 The Strategic Significance of HRM, and ER in Particular

2.4 HRM, ER and Organisational Performance

2.5 Flexibility and Labour Markets

2.6 HR Outsourcing and Shared Service Centres

Summary

In this module we explored the strategic significance of employee resourcing. We began by analysing the

role of ER in enhancing productivity and performance in the UK and elsewhere, especially when linked withhuman capital management. HR information systems and toolkits have enabled much more efficient tracking

of talent flows and human capital, and better evaluation of the contribution of human capital to

organisational performance. The case study of BP illustrates this, as does the way ER has been employed to

define, assess and develop behavioural competences defined as necessary to organisational success. The

module also noted some possible downsides of this strategic approach to ER, such as the decline in the role

of employee champion, before noting how ER can be used strategically through an exploration of its role in

implementing corporate strategies in the low-cost airline business, with particular reference to Southwest

Airlines in the USA. Recent attempts to measure the impact of HR, and ER in particular, have led to a search

for what bundles of HR practices, including ER practices of assessment, selection and recruitment, can

enhance performance, and how intended ER practices can link to actual ER practices. This has led to studies

of how employees experience such practices and react to them, leading hopefully to positive employees

outcomes such as enhanced commitment and motivation and enhanced performance. The strategic role of ERis not limited to large companies; it can also assist small and medium-sized enterprises, as the case of

Cranbrook Engineering illustrated.

The strategic significance of ER cannot be fully appreciated without consideration of its role in shaping and

responding to labour markets. Organisations can seek to hire from the external or internal labour market, but

these are structured in particular ways, as the discussion of occupational labour markets shows. The module

discussed when internalising labour markets might make sense for employers, and what the drawbacks might

be. Many organisations have sought to enhance labour market flexibility, such as functional, financial,

temporal, and numerical flexibility, though the UK has often gone further in this direction than many other

European countries. Associated with this have been recent moves towards the outsourcing of HR, and of ER

in particular, as well as the use of shared service centres and offshoring. HR outsourcing was discussed

extensively, with questions raised over its effectiveness and over its cost and quality. Recruitment and

selection are often among the first HR functions to be outsourced. Steps that organisations can take to

improve the quality of their ER outsourcing were outlined, as well as other options, such as keeping the ER

service internal through shared service centres. A case study of ER outsourcing in English local government



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was used to explore some of these issues, as well as some of the problems that ER outsourcing raises.

3 Approaches to Employee Resourcing

Objectives


discuss three perspectives on ER: the traditional paradigm, the contingency-based paradigm, and thenew paradigms/alternative approaches to ER;

analyse the power/knowledge paradigm in ER discuss the relationships between ER and knowledge management, including the significance of

knowledge to organisations, the nature of knowledge management, the move from strategic

management to knowledge management, the role of knowledge management in employee

resourcing, the impact of knowledge management on the future of ER, and the management ofknowledge workers;

explore the customer service approach to ER, including the role of customer relationshipmanagement and quality management in ER.

3.1 Introduction: Approaches to ER

3.2 ER, Knowledge and Power Perspectives

3.3 Knowledge Management and ER

3.4 ER and Managing Knowledge Workers

3.5 A Customer Service Approach to ER

Summary

The module pointed out that there are several different perspectives on ER: the traditional paradigm,

contingency paradigms, and alternative paradigms. These alternative paradigms include the resource-based

view, social process views, power/ knowledge views, knowledge management perspectives, and customer-

service models of ER. Though the textbook model of ER tends to take a managerialist approach, there are

competing perspectives on ER. From a power and knowledge perspective, ER might be seen as part of the

government of organisations, being concerned with the regulation of individuals and how they are assessed,

appraised, graded, tracked, sifted and sorted. Power is exercised within a purportedly detached and scientific

process of competence-based assessment.

Knowledge is an important organisational asset, is a critical source of competitive advantage, and creates

intellectual capital. There has been increasing interest in knowledge management owing to the growth of IT,

the rise of knowledge workers, the growth of the service economy, and the growth in importance ofintellectual capital. Knowledge management from a strategic perspective discusses questions of ownership,

control and value, with an emphasis on planning. A key distinction is between tacit and explicit knowledge,

and knowledge is created by converting explicit to tacit knowledge, and tacit to explicit knowledge, through

such processes as socialisation, externalisation, internalisation, and combination.

ER plays a key role in knowledge management. Careers, in particular play an important role in integrating

and sharing knowledge, and different organisations will pursue different strategies (e.g. defenders, analysers,

prospectors, reactors) linked to different career strategies (e.g. make, buy, mix).

A customer service approach to ER demands: adopting a customer service strategy; promoting a CS culture;

getting top management support; analysing who the customers of ER are; understanding their needs; and

adopting customer relationship management, quality management and continuous improvement perspectives.



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4 Human Resource Planning

Objectives


understand and evaluate the rationale for HRP, the environment in which it takes place, and the linksbetween HRP and business planning;

analyse the HRP process, and compare it with traditional models of manpower planning; assess the limitations of the HR planning process; evaluate the advantages/disadvantages and benefits/limitations of HRP; determine the information requirements for HRP, and the role of HR information systems; evaluate the use of IT to store, collate and analyse data relevant to HRP; evaluate the outcomes of the HR planning process;

assess the contribution of HRP to strategic management and policy-making; apply a model of HRP to the problems faced by your organisation, or one with which you are

familiar.

4.1 Introduction

4.2 The HRP Process and Its Limitations

4.3 HRP at the Sectoral Level

4.4 Advantages, Disadvantages and Limitations of HRP

Summary

In this module we began by looking at the HRP process and its limitations: its key role in HRM, and itsorigins in manpower planning. We reviewed the way in which the earlier, quantitative, statistical phase

associated with large, stable organisations in the 1970s gave way to softer, less quantitative but more useful

approaches in the 1980s. As flexibility became of strategic interest in the more dynamic business

environment of the 1980s and 1990s, manpower planning came to be seen as bureaucratic and outmoded.

However, the analysis of workforce needs, of the demand for labour, and forecasts of internal and external

supply remain important for organisations seeking to assess their HR requirements and make ER plans and

decisions. Indeed, renewed skills and shortages, scenario planning approaches, and the increased importance

of knowledge and talent management have led to renewed interest in contemporary HRP. Such analyses can

also be carried out at the sectoral level (e.g. the creative and cultural industries sector) as well as at the

organisational level, where they may play a key role in regional economic strategies and in regional

economic development.

Turnover, though potentially beneficial to organisations in some contexts, can be costly to organisations, withmany direct and indirect costs associated with it. High levels of turnover can point to a range of motivational

and other problems, and suggest changes to recruitment and selection, career management, training,

participation and involvement and pay policies. However, the popular exit interview with leavers may not

give a full picture of the reasons for turnover, as employees may downplay push factors while focusing on

pull reasons.

A whole variety of subjective techniques (e.g. managerial judgements and estimates) and objective

techniques (econometric, work study, ratio analyses) are available to carry out HRP, and the recent growth in

the use and availability of human resource information systems (HRIS) can be of great help here. However,

HRP, like all business planning, is not in practice a rational, objective process, but takes place in a social,

cultural, political and interpersonal context. Often, the possibility of knowledge at lower levels of the

organisation is ignored, and it is often difficult to gather accurate data. Implementation of agreed policies is

often not easy, or achievable.

We closed the module by looking more closely at the role of information systems in HRP, which convey

many potential benefits for HRP if they are seen as enablers, rather than drivers, of HRP. Too often, however,



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well as skills and knowledge are increasingly important selection criteria (though the module discussed some

issues here, such as lack of diversity, and cloning).The module also discussed the evaluative standards by which we can judge the value of any selection

procedure or system. These include the importance of reliability: does the instrument or test give consistent

measurements? Another important criterion is validity, of which there are several different kinds: face

validity (does it feel valid to candidates?), construct validity (does it assess what it claims to assess?), content

validity (does the selection instrument accurately sample job content?). However, the most important

standard is criterion-related validity: does performance on the test or procedure predict performance against

some criterion? The most common measure of this is predictive validity: does the instrument predict job

performance (recognising that this is multifaceted, and that it may not be possible to obtain one objective

criterion of performance)? Against this criterion, certain procedures perform relatively well, with high

validity coefficients, such as work samples, assessment centres, psychometric tests and structured interviews.

Biodata and personality tests may also have useful validity, but unstructured interviews, graphology,

astrology and reference checks perform poorly. In terms of structured interviews, both those focused on pastperformance and those focused on future intentions, such as situational interviews, perform well. Tests of

general cognitive ability may be useful, but it is often more useful to assess more specific mental abilities,

such as numerical or verbal ability. In addition, personality tests may be useful if targeted at specific job-

relevant competencies such as agreeableness or conscientiousness, and ipsative tests are particularly useful

for feedback and development, if not for selection.

Assessment centres are where multiple groups of candidates are assessed by multiple trained assessors as

they undertake multiple exercises, some of which will be simulations or facsimiles of the job. These are both

valid and well-regarded assessment procedures (as are the related development centres). This reminds us that

other important evaluative standards are practicality, impact, and adverse impact on specific groups such as

ethnic minorities or women (usually seen in terms of diversity, equality, fairness or discrimination). Another

is utility, seen in terms of the costbenefit ratios and financial returns that allow the benefits of different ER

procedures to be assessed in the same ways as other management functions.

The discussion of impact also reminds us that recruitment and selection procedures are not neutral measuring

instruments, but part of a social exchange process between applicants/candidates and organisations: both

sides engage in impression management, and both are involved in exchanges of communication of signals

and mutual decision making. This social process perspective is likely to grow in importance alongside the

growing importance of technological developments such as the use of the Internet and social networking in

recruitment and selection.

6 Performance Management

Objectives

When you have finished reading this module you will be able to: appreciate changing perspectives on the importance and role of organisational performance to

contemporary organisations;

understand the nature and purpose of performance management and performance appraisal; outline the stages of a performance management system; evaluate the implementation of performance management systems; evaluate the contribution of 360-degree/multi-rater, multi-source feedback; introduce an effective performance management system in an organisation with which you are

familiar.

6.1 Introduction

6.2 Performance Appraisal Defined

6.3 The Importance of Performance Management in ER

6.4 Trends in Performance Management



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6.5 An Appropriate Model of Performance Management

6.6 Case Study: Performance Management in Rogers Cargo Services, Mauritius6.7 Alternative Approaches to Performance Management

Summary

In this module we began by discussing the cornerstone of performance management, performance appraisal

(now often not known by that term in many organisations, which prefer a term such as performance review,

perhaps to reduce the assessor/judge connotations of the word appraisal).

Appraisal as the review and assessment of performance plays a crucial role in ER, by linking individual

objectives and work behaviours to organisational, strategic aims and objectives, and by establishing a basis

for identifying training and development needs and for establishing a framework for reward management.

However, there are many issues that need to be resolved in performance management, such as what should

be appraised, and who should do the appraising?In terms of the what, there has been a move away from trying to assess personality traits (honesty,

dedication etc.) to assessing either objectives/targets and their attainment (usually as set the previous year) or

behaviours, usually in the form of competences/competencies. Both are useful, but complementary: whereas

objectives may give feedback on what has been achieved (though there are issues as to comparability over

different sets of objectives, and the contribution of an individual, rather than a team, to their achievement),

competencies allow feedback on how these objectives have been achieved.

For this reason many organisations will use both frameworks in their performance management system. In

terms of who, the trend has been to move away from the boss as sole rater of performance to including

other stakeholders: the individual appraisee, through self-assessment; and peers, customers, subordinates and

others such as superior levels, in the name of 360-degree feedback. However, 360-degree appraisal carries its

own problems, and in the UK, as distinct from the USA, tends to be used for developmental purposes rather

than reward purposes.

This raises the issue of the purposes of appraisal, and of possible tensions between these purposes. In

addition to direction, control and focus, appraisal is usually intended to assist with other ER decisions such

as exit or promotion, and with other HR decisions such as identifying training and development needs, and

acting as the basis for reward decisions, especially in terms of performance-related pay or bonuses.

In the first place, appraisal may be doing too much and confusing employees, especially if its purposes are

not transparent. Second, there is a tension between the role of the appraiser as judge (awarding recognition,

money, promotion etc. for good work) and as counsellor (helping give accurate feedback and assisting the

employees development). Employees are unlikely to open up and admit weaknesses, for example, if they

feel this may penalise them in financial or career terms. As a result, some organisations not only give through

training to both appraisers and appraises (to clarify roles, responsibilities and purposes, and enhance skills)

but also separate out judgements of potential (as clearly the best performer in a current job will notnecessarily make the best in a promoted job involving significant changes in skill sets) and of reward,

allowing appraisal to focus on enhancing performance in the current role and in identifying current training

needs.

As we shall see in more depth in Module ES08, in some more collectivistic cultures (e.g. Japan, China, the

Middle East) individual appraisal, especially if linked to differential pay and to direct feedback and criticism,

may be less culturally acceptable than team appraisal and reward, or whole-unit appraisal and reward.

These issues are especially pertinent in knowledge-based organisations, such as consultancies, universities

and research institutes, where top-down, hierarchical models may be less appropriate than more collegial,

developmental models of appraisal and performance management. As Module ES03 showed, knowledge

management is increasingly important in contemporary organisations and economies, so models of appraisal

will continue to evolve.



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7 Career and Talent Management

Objectives


distinguish between the terms career planning, career management and career development; critically analyse some of the major changes in career patterns and career development issues over

the last few years;

define career resilience and its implications for individuals and organisations; be able to engage in personal career planning activities, such as setting career goals, benchmarking

skills, and implementing career action plans;

define the term talent management, and identify why talent management has become important toorganisations in recent years;

critically analyse the concept of talent management, and evaluate the success of talent managementprogrammes in different organisational contexts;

develop a talent management programme for an organisation with which you are familiar.

7.1 Introduction: Careers and Career Management

7.2 Career Management and Career Planning Practices

7.3 Career and Management Development Practices in the UK

7.4 Talent Management in ER

7.5 Case Study: The Emergence of TM in China

SummaryThe module began with a discussion of career development and career management, showing how careers

had changed in the latter part of the 20th century away from employment security (exchanging loyalty and

commitment for slow but sure promotion and job security) to frameworks increasingly based on career

resilience (maintaining focus and connections in an era of rapid change in career paths) and employability

security (looking for continued marketability, either within the company or outside through continuous

professional development: i.e. exchanging flexibility and commitment to learning in return for growth and

development opportunities). However, in most organisations, individuals have not been given complete

responsibility for their own career development: in many cases a partnership model has emerged, with shared

roles and responsibilities. While individuals engage in individual career planning, organisations engage in

career management,, implementing a series of initiatives such as coaching, mentoring, and other career-

enhancing programmes.

For most people careers therefore no longer resemble the former ideal of employment security, with slow,steady vertical progression contingent on loyalty and commitment, and with the company taking full

responsibility for career development. In some companies career resilience has been stressed: career

development is the responsibility of the individual, as the company can no longer offer job security or

upward movement. All it can offer is employability: if the individual is flexible, and continues to offer high

performance, the company will offer training, development and growth opportunities that enhance the

marketability of the individual, who thus maximises his or her chances of continued employment, either

within the company or in another position. This may involve crossing national, functional or company

boundaries, such as retraining, emigration, self-employment, retirement or consultancy following a corporate

career. However, in other companies a partnership model may be on offer, where the company assumes

mutual responsibility with the employee for career development.

The module went on to show some examples of career planning and invited readers to set and evaluate career

goals and action steps, for example, before reviewing the current state of play in career management in

British organisations. The current fashion is to engage in talent management; indeed, this topic, and its links

with succession planning, is one reason for the renewed interest by organisations in career management, as



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organisations have increasingly realised the importance of identifying, assessing and developing talent,

especially managerial and leadership talent. Most of these talent management initiatives have focused eitheron high potentials or on top leaders, but in some organisations a less exclusive focus has been taken on

technical, creative and professional talent. Issues remain over how talent is defined and assessed, the

objectives of talent management, its components and its future direction.

The module next looked in detail at two areas where talent management has become important: the financial

sector, and in multinational companies in China. However, a key issue in talent management has been the

over-focus on human capital and individual talent; the module makes the point that talent is embedded in

teams, networks and structures, and that development in these areas needs to occur as well The emerging

concept of talent management appears to suggest that such a partnership model is emerging, at least for

certain groups defined as in the talent pool.

8 The Changing Context of Employee Resourcing: Beyond Boundaries

Objectives


discuss the ER implications of acquisitions and mergers, and ERs role in implementing effectivemergers and acquisitions;

analyse the application of cultural and institutional perspectives in understanding how ER ispractised in different countries, with particular respect to Russia, the Middle East and China;

consider how the recruitment and selection of global staff differs from that of local/domestic staff,and consider the impact of country of origin and country of operation on global ER;

define the terms expatriation, repatriation, inpatriation, culture shock; describe the process of recruitment and selection of global staff, and the criteria used to select

international assignees outline the factors that influence the recruitment and selection of global staff, including the issue of

failure in international assignments and the reasons for it;

describe the attributes of successful recruitment and selection programmes for international staff; critically analyse the role of ER in transferring knowledge in multinational enterprises and

international joint ventures, and the factors affecting the transfer of ER knowledge across borders,

with particular reference to China;

critically analyse the role of ethics in ER and in global ER, and the rules and standards developed inthis area, both in English local government and in doing business in other countries.

8.1 Introduction

8.2 International and Comparative ER8.3 Ethics, Integrity and ER

8.4 Case Study: Ethical Frameworks in English Local Government and the Role and Support Needs of

Monitoring Officers

Summary

This module discussed employee resourcing in changing contexts, involving ER across boundaries of various

kinds: organisational (in terms of mergers and acquisitions); national (in terms of comparative ER,

international ER, the transfer of ER knowledge across borders, and the role of ER in transferring knowledge

in international joint ventures); and functional (the role of ER in ethical issues and integrity, with reference to

international ethics and ethical issues in local government).

It began with a discussion of the role of ER in making mergers and acquisitions successful (people and ER

issues often being neglected in mergers), and in dynamic organisations, conceived of as networks of

alliances.



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It then moved on to discuss international and comparative ER, beginning with a discussion of comparative

ER: how ER differs across national borders. One group of researchers (institutionalists) seeks explanations inthe form of differing national business systems principally the role of government, law, unions and

business associations. Another (culturalists) look to the role of national culture, especially values. We used

the leading exponent of this approach, Hofstede, and later commentators such as Fan and Schwartz, to

explore the specific instance of Chinese culture and its influence on ER. We examined how such values as

collectivism, power distance, long-term orientation, face, humility and relationships (guanxi) affect ER,

especially in the areas of HR planning, recruitment and selection, and performance management, as well as

career development and talent management.

We also noted how cultures change, and how the emergence of more individualistic values in China and the

Middle East has affected the way ER is performed, especially in multinational enterprises (MNEs). However,

as in China, the role of collectivism, power distance and relationships (wasta or piston) remains strong, as we

saw in the case study of Libya. To an extent, this is also true of Russia, which we explored more briefly.

Culture, and its impact on national ER systems, is an area that MNEs need to take into account in conductingoperations across borders, especially in their choice of staff (expatriates or PCNs, locals or HCNs, and third-

country nationals, or TCNs). Many PCNs are not selected systematically, resulting often in costly failures

due to culture shock and failures in adjustment or adaptation. There are ER policies and practices that

companies can adopt to reduce their risks here, as well as the sometimes even greater problems that emerge

with repatriation.

Companies also seek to transfer knowledge, including ER knowledge, across borders, and seek to use ER

processes such as staffing and career and performance management to help them do this effectively. The

module explored this area with specific reference again to China, and also to the issue of transferring ER

knowledge to joint ventures and to using ER to help transfer knowledge from the parents to the venture.

The module ended with a discussion of ER in relation to ethics and integrity, first with an exploration of

ethical issues in the Middle East, especially in government and public service, and how ER can be used to

strengthen integrity regimes. Finally, it examined the role of ethical frameworks in English local government,

and what knowledge, skills and competencies were needed by monitoring officers as ethical leaders or

guardians of probity and integrity in local government.

The context in which ER now operates is indeed changing, embracing a wider range of issues, and crossing

many boundaries as it does so.

Documents

Employee Resourcing