Human Resources Management













Fundamentals of


Human Resources


































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This HR book is concerned with managing people at work, individually and collectively. In recent times, the function of human resources management (HRM) has assumed new prominence as concerns persist about globalization, the internationalization of commerce, trade, and technology, and the on-going quest for increased productivity of labor. It is argued that these developments require managers to change the way in which they manage the employment relationship to allow for the most effective utilization of human resources (HR).


This HR book is a collection of pertinent readings and presents the fundamentals of HRM. At its core, the content is principle-based, comprehensive, yet fundamentally focused. The readings assume and embrace a truly international perspective with many international examples at hand. The text is structured into 16 major topical themes. Each chapter follows a similar structure in order to help the reader navigate easily through the text. At the beginning of each chapter, the author offers quotes from academics or practitioners to show the direct relevance of the chapter topic. The main text introduces the reader to the major concepts and issues before offering critical comments, discussing alternatives perspectives, and presenting global solutions.


It is my hope that this practical, hands-on approach to learning enables the reader to make maximum use of the textbook as a useful, user-friendly, and leading-edge HR tool.




















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Chapter 1:


The concept of Human Resources Management (HRM)




You can get capital and erect buildings, but it takes people to build a business” (Thomas J. Watson, Founder of IBM)





The concept of human resource management (HRM) has attracted a lot of attention since it first emerged as a field of study in the mid-1980s (Armstrong, 2000). The term human resources implies that individuals have capabilities that drive organizational performance alongside other resources, including financial, material, and information resources. The basic idea is that people (or human resources) can make a difference in how an organization performs. Research has shown that successful organizations are particularly adept at bringing together a diversity of people to achieve a common purpose. This is seen as the essence of HRM (Bohlander, Snell, & Sherman, 2001). Likewise, the concept of strategic human resource management (SHRM) is based on the philosophy that the strategic nature of HRM needs to be integrated with the prevailing business or corporate strategy (Armstrong, 2000).


How is HRM defined? Unsurprisingly, a large variety of definitions have appeared in literature. For the purpose of this human resource (HR) course, the following definition has been adopted:


“Human Resource Management is the utilization of individuals to achieve organizational objectives” (Mondy, Noe, & Premeaux, 2002: 2)


As a consequence, all managerial employees throughout the organization and at every level must concern themselves with the function of HRM. In other words, in order to get things done through others, managers must effectively utilize human resource.


The field of HRM has become increasingly complex and dynamic. Indeed, individuals dealing with the management of HR matters face a multitude of opportunities and challenges, such as profound technological, societal, and structural changes as well as on-going pressures to keep costs low and to increase the firm’s levels of productivity and effectiveness in the face of globalization.




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Managers that are engaged in the process of managing HR need to be cognizant of the main concepts and constructs of HRM. The purpose of this first chapter is to introduce the student of HRM to the fundamentals of HR concepts, constructs, and functions.


Purpose of HRM


The underlying purpose of HRM is to increase the productive contribution of employees to the organization and the fulfillment of its mission and objectives. This needs to take place in a manner that is strategically legitimate and ethically and socially responsible (Werther & Davis, 1996). This purpose drives the study and practice of HRM which has emerged out of the function of personnel management. The history of HRM and its predecessor, personnel management, will be discussed in more detail in this chapter.


Perspectives on HRM theories


HRM approaches are grounded is essentially three perspectives or theories that contrast in their approach to the nature of workplace relations – unitary, pluralistic, and the Marxist (or conflict) perspective (Geare, Edgar, McAndrew, 2006).


Unitary: The organization is seen as an integrated and harmonious entity where management and non-management share a common vision and purpose. The ideal of a “happy family” prevails. Conflicts are seen as disruptive and trade unions are superfluous. The focus is on mutual cooperation and full loyalty is presupposed.


Pluralistic: The organization is viewed as being made up of powerful and divergent sub-groups. There is recognition that the interests of management and employees are conflicting. The key players in a pluralistic environment are management and trade unions.


Marxist: This perspective looks at the nature of capitalism and the fundamental division of interest between capital and labor. Inequalities of power and economic wealth are seen as a capitalistic problem. Marxists believe that conflicts are inevitable and trade unions emerge as a natural response to the exploitation of workers by capital.


Hard versus Soft HRM


HRM approaches are also built on two divergent perspectives of the individual’s role in the organization. The hard version of HRM emphasizes the quantitative business-strategic aspects of HR in a purely calculative, rational way. This philosophy stresses the


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importance of adding value in order to achieve competitive advantage. It sees individuals as human capital (Armstrong, 2000) from which a return can be obtained by investing judicially in their development (Storey, 1989). Guest (1999) points out that hard HRM embraces a viewpoint that sees the worker as a commodity.


The soft version, on the other hand, can be traced back to the human relations school with its emphases upon leadership, motivation, and communication. It treats employees as assets and a source of competitive advantage through their high skills, adaptability, and commitment (Armstrong, 2000). There is a strong focus on the development of a high-commitment, high-trust organization as well as the fostering of positive organizational culture (Guest, 1999). Finally, the focus is on “mutuality” (Armstrong, 2000: 7), which is a belief that the interests of management and employees should coincide.


Both scholars and practitioners have pointed out that the reality of modern-day organization is that the rhetoric of HRM is generally ‘soft’, whereas the reality is often ‘hard’. In other words, there is a perception that the interests of the organization generally prevail over those of the employees. Some writers also discuss the hard version of HR in relation to McGregor’s theory X and associate the soft version with theory Z, respectively (Truss, 1999).


The development of the HRM concept


The history of HRM largely corresponds with the development and origins of the general management discipline. HRM has emerged from five interrelated sources; the scientific management movement (or Taylorism), the industrial welfare movement, the early industrial psychology, the human relations movement (including the Hawthorne Studies), and the labor movement (French, 1986). HRM-related themes can be found in literature as early as the 1970s. At that time, personnel management was the prevailing discipline and HR practitioners mainly drew upon the emerging knowledge from the behavioral sciences and systems theory. Note that there is a distinction between personnel management and HRM: the two are often used interchangeably. While the personnel management movement was prominent from the 1920’s to the 1970’s, the modern view of HRM first gained prominence in the early 1980s when the Harvard Business School launched its prestigious MBA course.


In order to fully appreciate the modern-day concept of HRM, it is of importance to study two initial concepts that emerged out of North




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America – the matching model and the Harvard Framework. These were later further developed by scholars in the United Kingdom.


The matching model of HRM, also called the Michigan model, holds that HR systems and the organization structure should be managed in a way that is congruent with organizational strategy. The matching model further assumes that there are four generic HR processes (or HR functions) in an organization; selection, appraisal, rewards, and development (Formbrun, Tichy, & Devanna, 1984).


The Harvard framework is seen as the other founding father of HRM. This framework asks for a more comprehensive and strategic role with regard to the management of human resources. Harvard scholars Beer, Eisenstat, and Spector (1990) argue that there is an urgent need for a longer-term perspective in managing people. In this sense, employees should be seen as assets rather than as an expense or a variable cost. The framework is also in direct response to problems that had occurred under the historical personnel management in which the function was largely reactive, administrative, and bureaucratic. As a consequence, there ought to be a central philosophy about how employees should be involved in and developed by the firm. This can only be provided by general managers (Boxall, 1992). Failure to recognize this will inevitably lead to a HR system that remains a set of independent variables and a function that is largely inconsequential in importance and status within the firm.


Characteristics of HRM


There are a number of distinct features that characterize the unique nature of HRM. The following list constitutes the characteristics of HRM collected from the writings of Guest, Legge, Hendry, Pettgrew, Purcell, Sisson, and Storey:


●HRM stresses the need for strategic fit – the integration of business and HR strategies,


●HRM emphasizes the importance of gaining commitment to the organization and its vision, mission, and values,


●HRM is a top management-driven activity,


●The performance and delivery of HRM is a line management responsibility,


●HRM creates and maintains a firm’s competitive advantage,




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●HRM focuses upon adding value to the firm,


●HRM adopts a comprehensive and coherent approach to the provision of mutually supporting employment policies and practices,


●HRM is performance-oriented,


●HRM is committed to the delivery of high quality service to customers and the achievement of high levels of customer satisfaction.


Having listed some of these characteristics, the most important characteristic of HRM is the increasing recognition of HR as a legitimate strategic business partner within the firm. This will be more thoroughly explored and discussed in a chapter on HR strategy.


The functions of HRM


Most HR practitioners, managers, and scholars describe the practice, functions, or functional activities of HRM in terms of a process-systems terminology. This is a most useful approach in that it takes into account the interdependence of all HR aspects and recognizes the inherent relationship between HR activities and organizational goals. The term process refers to a combination of events that lead to an end result, whereas the term system identifies specific procedures and devices that control those events. According to the process-systems view, the term HRM is defined as:


“The systematic control of a network of interrelated processes affecting and involving all members of an organization” (French, 1986: 9)


This definition is important since it provides the foundation for the second aspect in that the generic processes (also called functions) are the major HR functions that are performed in all organizations. They were presented in the Michigan-school framework of the model matching of HRM as selection, appraisal, rewards, and development.



What are the HR functions? Mondy et al. (2002) discuss five functional HR areas, namely staffing, human resource development (HRD), compensation and benefits, safety and health, and employee and labor relations. Similarly, Dessler (2004) categorizes the HR activities into recruiting, selecting, training, compensating, appraising, and developing individuals.


Noe, Hollenbeck, Gerhart, and Wright (2007) present nine principal functions of HRM. These are the functions we will be using


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throughout this course. These are frequently linked with the actual responsibilities of HR departments. They are the following:


p))))<>{color:#000;}. ANALYSIS AND DESIGN OF WORK (Work analysis, job design, job descriptions)


p))<>{color:#000;}. RECRUITMENT AND SELECTION (Recruiting, job postings, interviewing, testing, coordinating use of temporary labor)


p))))<>{color:#000;}. TRAINING AND DEVELOPMENT (Orientation, skills training, career development programs)


p))<>{color:#000;}. PERFORMANCE MANAGEMENT (Performance measures, preparation and administration of performance appraisals, discipline)


p<>{color:#000;}. COMPENSATION AND BENEFITS (Wage and salary administration, incentive pay, insurance, vacation leave administration, retirement plans, profit sharing, stock plans)


p))))<>{color:#000;}. EMPLOYEE RELATIONS (Attitude surveys, labor relations, employee handbooks, company publications, labor law compliance, relocation and outplacement services)


p)))<>{color:#000;}. PERSONNEL POLICIES (Policy creation, policy communication, record keeping, HR information systems [HRIS])


p))<>{color:#000;}. COMPLIANCE WITH LAWS (Policies to ensure lawful behavior, reporting, posting information, safety inspections, accessibility accommodations)


p)))<>{color:#000;}. SUPPORT FOR STRATEGY (Human resource planning and forecasting, change management)


Unfortunately, there is a (wrong) perception on the part of line management that the key activities of HRM are carried out by HR professionals only. It must be understood that the HR function is most potent when both line managers and HR professionals carry out the HR activities. The reality is that all managers carry out HR activities on a daily basis and are thus considered quasi HR managers!


The traditional HR functions and responsibilities will be explored and discussed in greater detail in the subsequent chapters.


Line and Staff authority within HRM


Authority has been defined as the right to make decisions, to direct others, and to give work orders (Dessler, 2004). In management theory, there is a distinction between line managers and staff managers. The former are authorized to give orders and are responsible for achieving organizational goals. On the other hand, staff managers assist and advise line managers in accomplishing these goals. Traditionally, HR managers (and formerly personnel


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managers) have been staff managers. However, more recently changes to the HR function, including the devolution of the HR function, has seen line managers embrace an increasing number of HR-type activities. In this sense, both HR and line managers mutually share the responsibility for HR activities.


The role of HR – why is it important to all managers?


Most HR writings point out the importance of HR and what effective and successful HR practices can achieve ‘in a perfect world’. However, all organizations make personnel mistakes – some may be minor, but others may have the propensity to seriously hurt the organization. For instance, the most successful and well-managed firms have shown:


●to hire the wrong person for the job and/or the organization; ●to experience high levels of absenteeism among individuals; ●to experience high levels of employee turnover;


●to find employees perform at substandard levels; ●to be implicated in discriminatory actions;


●to be accused of unsafe workplaces by the federal occupational safety laws;


●to commit unfair labor practices; and


●to allow a lack of training to undermine individuals’ competency.


Competitive advantage and HRM


Regardless of the mistakes made, effective HRM is critical to organizational success. Individual employees have always played a central role in organizations. Today there is even a greater recognition that people are able to build an organization’s competitive advantage. This is particularly important in so-called knowledge-based industries, such as information services and software development. Success increasingly depends upon “people-embodied know-how” (Bohlander et al., 2001: 4). There is also a growing number of professionals that argue that the key to a firm’s success is based upon the building and development of a set of core competencies. These integrated knowledge sets within an organization enables it to distinguish itself from its competitors by delivering value to customers. Examples abound: British Petroleum (BP) has core competencies in oil exploration; BHP Billiton has core competencies in mining, and Credit Suisse has core competencies in providing financial services. Core competencies provide a long-term basis for technology innovation, product development, and service delivery.





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It is important to recognize that core competencies tend to be limited in number, yet they are vitally important to the success and survival of any organization in any industry and anywhere in the world. Core competencies provide a competitive advantage, or competitive edge. Sustained competitive advantage through employees can be achieved if the following five criteria are met:


p<>{color:#000;}. Human resources must be of value. People are a source of competitive advantage when they improve a firm’s levels of efficiency, effectiveness, and competitiveness.


p<>{color:#000;}. Human resources must be rare. People are a source of competitive advantage when their KSAO’s (knowledge, skills, abilities, and others) are not equally available to competitors.


p<>{color:#000;}. Human resources are difficult to imitate. People are a source of competitive advantage when people’s capabilities and contributions cannot be copied by others.


p<>{color:#000;}. Human resources can be organized. People are a source of competitive advantage when they can be deployed to work at various assignments at a moment’s notice


p<>{color:#000;}. Human resources have no substitutes. People are a source of competitive advantage when they are highly motivated, well trained, embrace continuous learning, and care about customers. It is difficult to imagine how another source can replace committed, talented employees (Bohlander et al., 2001, Noe et al., 2007).


Admittedly, these five qualities imply that human resources have enormous potential. How can a firm unleash and realize this vast potential? The answer is simple: a firm realizes the potential of its human resources through its human resource management system!


The effective management of human resources has the capacity to develop a high-performance work system. This is an organization in which technology, organizational structure, human resources, and processes operate to give an organization a competitive advantage in a dynamic environment (Noe et al., 2007).


Objectives of HRM


How does an organization know if their HR management system is performing well? Like any performance system, identifying the appropriate evaluative standard is critical: Objectives are benchmarks against which actions are evaluated. It is importance to


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recognize that HR objectives do not exist in isolation. Indeed, HR objectives typically reflect the intention of senior management and balance challenges from the organization and the external environment, including the wider society. Failure to consider the internal and external environments can jeopardize the firm’s reputation, image, profitability, and survival. These challenges spotlight four objectives that form a framework and that are common to HR management (Werther & Davis, 1996).


Societal objectives

Organizations are expected to be ethically and socially responsive to the needs of the society. The failure of a firm to utilize its resources for society’s benefits is likely to result in restrictions. A society usually limits an organization’s HR decisions by instituting laws that address discrimination, safety, and other areas of societal concern.


Organizational objectives


The HR function (or HR department) does not constitute an end in itself. Rather, the HR department exists in order to serve the entire organization and to contribute to organizational effectiveness and success.


Functional objectives


The person in charge of the HR function (e.g., Vice President HR or Director HR) is responsible for maintaining the department’s contribution at a level appropriate to the organization’s needs. In other words, precious resources are wasted when the HR function is more or less sophisticated than the organization’s demands.


Personal objectives


The HR function attempts to assist individuals in achieving their personal goals assuming that they will enhance the person’s contribution to the organization. In this sense, HR practices and policies will act as tools to attract, maintain, motivate, and retain employees.


Clearly, not every HR decision and action can meet all societal, organizational, functional, and personal objectives every single time simultaneously. Nonetheless, the more these objectives can be met by the organization’s actions, the larger the contribution to the overall society’s, organization’s, and employees’ needs.


Having previously outlined the traditional HR functions and discussed the four levels of management objectives, the following depicts how the various HR activities contribute to the realization of management objectives.




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Societal objectives: 1. Legal compliance


p<>{color:#000;}. Union-management relations


p<>{color:#000;}. Benefits


Organizational objectives: 1. Human Resource Planning


p<>{color:#000;}. Recruitment


p<>{color:#000;}. Selection


p<>{color:#000;}. Placement


p<>{color:#000;}. Training and Development


p<>{color:#000;}. Performance Appraisal


Functional objectives: 1. Appraisal


p<>{color:#000;}. Placement


p<>{color:#000;}. Assessment


Personal objectives: 1. Training and Development


p<>{color:#000;}. Appraisal


p<>{color:#000;}. Placement


p<>{color:#000;}. Compensation


p<>{color:#000;}. Assessment


It must be understood that HR activities ought to contribute to at least one or, ideally, all objectives. If an activity does not contribute to any objective, the resources would need to be judiciously redirected.


Proactive and reactive HRM


The practice of reactive HRM occurs when HR individuals with decision-making authority primarily respond to HR problems within the organization. Undoubtedly, an attitude of waiting for an issue to arise and then responding or reacting is likely to be inappropriate, slow, and costly. Such an approach would also provide the HR function with a primarily operational, day-to-day status. On the other hand, proactive HRM takes place when the HR function is bestowed with a strategic role within the organization. As such, future HR trends, issues, and problems are anticipated and built into the overall organizational planning, thinking, and strategic intent.


Conclusive remarks


Human Resources Management (HRM) is a broad concept and refers to the philosophy, policies, procedures, and practices used in managing individuals throughout the organization. People – human resources – create organizations and make them survive, grow, and succeed. If human resources are neglected or mismanaged, the organization is unlikely to do well over the long haul. The central challenge facing society today is the continued improvement of our private and public organizations. The purpose of HRM is to improve the contribution made by people to these organizations.



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Armstrong, M. (2000) Strategic Human Resource Management: A guide to action, 2nd edition, Kogan Page, London.


Beer, M., Eisenstat, R., & Spector, B. (1990) Whey change programs don’t produce change, Harvard Business Review, November-December, 158-166.


Bohlander, G., Snell, S., & Sherman, A. (2001) Managing Human Resources, South-Western College Publishing, Cincinnati, OH.


Boxall, P.F. (1992) Strategic HRM: a beginning, a new theoretical direction, Human Resource Management Journal, 2 (3), 61-79.


DeCenzo, D., & Robbins, S. (2007) Fundamentals of Human Resource Management, 9th edition, John Wiley & Sons, Inc, Hoboken, NJ.


Dessler, G. (2004) A Framework for Human Resource Management, 3rd edition, Pearson Prentice Hall, Upper Saddle River, NJ.


Formbrun, C.J., Tichy, N.M., & Devanna, M.A. (1984) Strategic Human Resource Management, Wiley, NY.


French, W. (1986) Human Resources Management, Houghton Mifflin


Boston, MA.


Geare, A., Edgar, F., & McAndrew, I. (2007) Employment Relationships: ideology and HRM practice, The International Journal of Human Resource Management, 17, 7, 1190-1208.


Guest, D.E. (1999) Human resource management: the workers’ verdict, Human Resource Management Journal, 9 (2), 2-25.


Mondy, R., Noe, R., & Premeaux (2002) Human Resource Management, 8th edition, Prentice Hall, NJ.


Noe, R., Hollenbeck, J., Gerhart, B., & Wright, P. (2007)


Fundamentals of Human Resource Management, 2nd edition, McGraw-Hill, New York, NY.


Storey, J. (1989) From personnel management to human resource management, in J. Storey (ed), New Perspectives on Human Resource Management, Routledge, London.





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Truss, C. (1999) Soft and hard models of HRM, in L. Gratton, V.H. Hailey, P. Stiles and C. Truss (eds), Strategic Human Resource Management, Oxford University Press, Oxford.


Werther, W., & Davis, K. (1996) Human Resources and Personnel Management, 5th edition, McGraw-Hill, New York, NY.

























































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Chapter 2:


Human Resources Management (HRM) and


Organizational Strategy




However beautiful the strategy, you should occasionally look at the results” (Sir Winston Churchill)


What business strategy is all about – what distinguishes it from all other kinds of business planning – is, in a word, competitive advantage. Without competitors there would be no need for a strategy… Corporate strategy thus implies an attempt to alter a company’s strength relative to that of its competitors in the most efficient way” (Kenichi Ohmae, The Mid of the Strategist)





Strategy, or the Greek term strategos, was originally a military term and associated with the role of a military general (Boxall & Purcell, 2003). It was management guru Peter Drucker in his seminal book The Practice of Management in 1955 who stressed the importance of strategic decisions within organizations. Since then, the term strategy has been defined in various ways by many writers: For instance:


“Strategy is the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals” (Chandler, 1962)


“Strategy is concerned with the long-term direction and scope of an organization. It is crucially concerned with how the organization positions itself with regarding to the environment and in particular to its competitors” (Faulkner & Johnson, 1992)



Broadly speaking, strategy may be defined as a statement of what the organization wants to become, where it wants to go, and how it means to get there (Armstrong, 2000). Strategy determines the direction in which the firm is going in relations to its environment in order to achieve sustainable competitive advantage. Thus, it is a declaration of intent and concerned with the long-term allocation of company resources (Purcell, 1999).


This second chapter is concerned with the relationship between strategy and HRM. The overall purpose of the chapter is to determine the basic concepts of strategy and strategic HRM and to


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explore practices in which HRM can be strategic to business success. Finally, the chapter explores practical ways in HR’s pursuit of becoming a legitimate Strategic Partner.


Key concepts of strategy


There are at least three key concepts of strategy that are regularly discussed in association with strategy – competitive advantage, distinctive capabilities, and strategic fit:


Competitive advantage


The father of modern strategy, Michael Porter (1985), formulated the concept of competitive advantage which arises out of a firm creating value for its stakeholders. Porter emphasized the importance of differentiation and focus. The former refers to a product or service that is unique, whereas the latter serves a buyer group or product market more efficiently or effectively than its competitors. Porter then developed a framework of three strategies to gain competitive advantage – innovation (being the unique provider), quality, and cost leadership.


Distinctive capabilities


Quinn (1980) describes distinctive capabilities as features that confer superiority on the organization. Kay (1999) distinguishes between distinctive and reproducible capabilities. The former are characteristics that can only be imitated with great difficulty, while the latter can be purchased, imitated, or created. Armstrong (2000) points out that most technical capabilities are reproducible. Distinctive capabilities or ‘core competencies’ (Prahalad & Hamel, 1990) also provide the rationale for the concept of knowledge management.


Strategic fit


The concept of strategic fit states that a firm ought to match its capabilities and resources to the opportunities available in the external environment in order to maximize competitive advantage. Hofer and Schendel (1986) aptly conclude:


“A critical aspect of top management’s work today involves matching organizational competencies (internal resources and skills) with the opportunities and risks created by environmental change in ways that will be both effective and efficient over the time such resources will be deployed”


So, what is this seemingly elusive concept of strategy all about? Strategy is about the expression of the intentions of the organization. This may be a broad vision statement, a mission statement, or it could be a statement of goals and objectives it wishes to attain over the long run. However, a firm needs the


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strategic capability to effectively develop and implement strategy and develop and implement strategic plans through the process of strategic management.


Strategic Management


The concept of strategy and its main elements are operationalized by strategic management. In theory, strategic management is a sequence of activities – strategy definition (formulation), strategy implementation (execution), and strategy evaluation (review). Strategic management is visionary as well as empirical in that managers ought to decide upon where the firm should be going and how it is going to get there. It is important to recognize that strategy focuses upon the firm’s vision, mission, and strategies, but attention also needs to be given to the actual resources. More importantly, strategy is the means to create value. In other words, the most sophisticated and well-articulated strategy is ultimately futile unless the strategy can build and sustain value for the firm and its many stakeholders.


Levels of Strategic Planning


Managers generally engage in three levels of strategic planning – corporate (companywide), business, and functional levels (Dessler, 2004).


First, a firm’s top-level, corporate-level, or executive -level strategy identifies the business or portfolio of businesses that constitute the company. It also determines the ways these businesses are interrelated. Within this primary strategy there are a variety of secondary strategies, including diversification, vertical integration, consolidation, and geographic expansion. Practical examples of these strategies include Virgin, UK (diversification), General Motors, USA (vertical integration), Von Roll, Switzerland (consolidation), and AMP, Australia (geographic expansion).


Second, each business unit (also called strategic business unit or SBU) requires a business-level (competitive) strategy. This strategy identifies how to build and strengthen the business’s long-term standing in the marketplace. Within this level of strategy there are also a variety of sub-strategies, namely cost leadership, differentiation, and focus. Practical examples of these strategies include Dell, USA (cost leadership), Volvo, Sweden (differentiation), and Ferrari, Italy (focus).


Third, each individual business consists of functional departments. Functional strategies represent the courses of action that each


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department will pursue in order to help the business (or division) achieve its competitive goals.


Strategic Human Resource Management


Nowadays, there is a high level of recognition that employees are central to achieving competitive advantage (Kearns, 2003). This understanding has led firms to focus more on strategic human resource management (SHRM). SHRM is defined as:


“The linking of HRM with strategic goals and objectives in order to improve business performance and develop organizational cultures that foster innovation and flexibility” (Truss & Gratton, 1994: 663)


“The pattern of planned human resource deployments and activities intended to enable an organization to achieve its goals” (Wright & McMahan, 1992: 292)


The term HR strategy refers to the specific HR courses of action the firm embraces and pursues to achieve its goals and objectives. For instance, Switzerland’s Novartis AG aims to achieve superior levels of product innovation, product quality, and profitability by means of a highly skilled, dedicated, and committed workforce. The overarching objective of its overall HR strategy is to build a first-class workforce. Therefore, all specific HR strategies and activities are derived from the overall HR objective, which, in turn, is linked to overall organizational objectives.


HR as a Strategic Partner


Views on the role, importance, and depth of integration of the HR function into the overall business strategy vary (Dessler, 2004). For instance, there is little doubt that HR’s primary role ought to be to help execute the firm’s overall strategy. In such a situation, the executive management devises a corporate strategy. In response, HR’s role would then be to create the HR plans and programs required to successfully implement that corporate strategy. In this sense, the HR system must be tailored to the demands of the business strategy (Truss & Graton, 1994). Thus, the underlying idea then would be that there is a matching HR strategy for any organizational strategy (Dessler, 2004).


An even more strategic view of HR is that it should rise to the status of an equal partner in the firm’s strategic planning process. As such, HR’s role would not just be to tailor its activities to the demands of the corporate strategy or to be pre-occupied with operational, day-to-day function activities. The role of contemporary HR should be to forge the firm’s workforce into a competitive advantage for the entire organization. However, the question arises as how this can be


~ 19 ~

achieved in more pragmatic terms? The answer, at least partly, lies in HR’s role of formulating and executing strategy:


Formulating Strategy

Formulating a firm’s strategic plan requires the rigorous execution of a SWOT analysis in that the internal strengths and weaknesses need to be balanced with the external opportunities and strengths. A resulting outcome would, ideally, capitalize on the firm’s strengths and opportunities and neutralize its weaknesses and threats. HR is in a unique position to provide competitive intelligence about its competitors (external data) and about its internal human strengths and weaknesses (internal data) to the strategic planning process. The former may include data about its competitor’s incentive plans, opinion survey data from employees, and information about labor laws and mandatory health insurance, whereas the latter may comprise information about the firm’s existing turnover levels, retention efforts, and human resource development (HRD) initiatives.


Executing Strategy


HR’s role in the strategic planning process needs to transcend the formulation (definition) stage and to include the execution stage. HR must ensure that it provides the necessary support towards the firm’s endeavor to successfully implement and execute corporate-level strategies. For instance, when Switzerland’s Sandoz AG and Ciba-Geigy AG merged in 1996, it was HR’s main task to merge two very different corporate cultures and to provide leadership in dealing with initial shock and uncertainty displayed by employees following the announcement of the merger. The HR function is increasingly heavily involved in major corporate change management programs, such as restructurings, downsizings, and reengineering efforts. Following such announcements, HR is routinely charged with devising social plans and programs, providing outplacement services, instituting pay-for-performance plans, reducing benefit-related costs, and re-deploying and retraining employees.


Strategy and the HR Department


Without a doubt, if a HR department focuses mainly upon the old personnel management-type activities of administration and maintenance, then there is a strong chance that the HR department will become an endangered species (Dessler, 2004). Many outsourcing firms that specialize on HR functions have shown to be able to perform HR-related activities more efficiently. Today’s HR function, irrespective of its actual name and position within the firm, needs to demonstrate that it is a fully-fledged business partner. As


~ 20 ~

such, it is required to be able to add value to the bottom line of the organization. Thus, the following activities will need to be the foci of strategic, proactive HRM:


●Strategic Planning


●Change Management


●Corporate Culture Transition


●Development of Human Capital


According to prolific scholars Hamel and Prahalad (1989), this viewpoint is based upon the assertion that competitive advantage is obtained if a firm can attract and develop human resources that enable it to learn faster and apply its learning more effectively than its competitive rivals. In academic circles, this has come to be known as the resource-based HR strategy (Hamel & Prahalad, 1989). As mentioned earlier, HR must develop the “distinctive capabilities” in staffing and development that competitors cannot imitate.


Strategy and HR: The ‘best practice’ approach


A vast variety of approaches to the development of concrete HR strategies have emerged. The best known set of ‘best practices’ is Pfeffer’s (1994) list of seven HR practices of successful firms. The list is prescriptive, yet anecdotal evidence does suggest that these practices have received global attention and been actively implemented in a variety of industries:


1. Employment security


Employees should not be made redundant or laid off for temporary economic downturns or senior management’s strategic mistakes over which employees have no direct control. Firms are unlikely to invest in resources if the organization is unable to recoup its investment over the long run.


2. Selective hiring


The firm needs to be clear about the critical skills and attributes it needs to succeed in the future. As such, the organization looks for people with the right KSAO’s (knowledge, skills, abilities, and others), attitudes, values, and cultural fit.


3. Self-managed teams


The adoption of self-managed teams allows the firm the removal of layers of hierarchy and permits employees to pool their ideas. This


~ 21 ~

enables individuals to become more productive and to provide more creative solutions to work problems.


4. Compensation contingent upon performance

Compensation should be contingent upon performance. This may include the measurement of organizational, team, or individual performance.


5. Training


Training provides employees with the necessary knowledge and capability to perform the requisite tasks. As a result, this should lead to a highly skilled, dedicated, and motivated workforce.


6. Reduction of status differentials

Status differentials in organizations often send individuals the message that they are not valued or valuable.


7. Sharing information


The dissemination of information, including the sharing of information regarding the firm’s financial performance and business strategies, conveys the impression that employees can be trusted. Also, employees need timely, accurate, and relevant information in order to enhance organizational, team, and individual performance.


This ‘best practice’, or universalist, view has earned some criticism from a number of commentators. For instance, Legge (1995) points out that what succeeds in one firm may not necessarily work out in another organization since it may not fit its overall business strategy, corporate culture, management style, technology, or working practices (Armstrong, 2000). Thus, Becker, Huselid, Pickus, and Spratt (1997) comment:


“Organizational high-performance work systems are highly idiosyncratic and must be tailored carefully to each firm’s individual situation to achieve optimum results”.



Moveover, even when best practices can be adopted by other organizations, the results may not be desirable, as competitive advantage – as we noted earlier – arises from differentiation. This differentiation, however, is not limited to product and service offerings, but it is also critical in strategy execution. Borrowing an HR “best practice” from another company does little to differentiate strategic execution and develop a competitive advantage.


Enabling HR as a Strategic Partner


A rigorous study into the contemporary role and status of the HR function as strategic partners involving some of the world’s most


~ 22 ~

influential Multinational Corporations (MNCs) was conducted under the leadership of recognized HR scholars in North America. This first-of-its-kind, multi-year, multi-organization, and high-level benchmarking study sought to identify and examine ‘best practice’ in HR strategy. The study also sought to project and identify the emerging HR function of the future. Eleven key findings categorized into five main sections emerged. These were determined to be the key HR capabilities of the present age. The study also confirmed that for the HR function to have ‘a seat at the table’ (i.e., become a critical strategic partner within the organization) it will need to demonstrate that it is capable of adding measurable value to the bottom-line of the companies (APQC, 2000):


1. Strategy development and execution

p<>{color:#000;}. HR needs to move away from being a ‘policy police’ and ‘paper pusher’ to being a fully integrated contributor of strategy development and execution.


p<>{color:#000;}. HR needs to develop effective two-way communication with line management to develop strong partnerships. This will enable HR to develop its agenda from the business goals and communicate this agenda back to the workforce.


p<>{color:#000;}. HR needs to develop strong competencies, including business acumen and systems thinking, in order to effectively partner with the business units.


p<>{color:#000;}. HR needs to structure its department to improve the chance for successful partnerships within the firm. Such a (re)structure itself will not guarantee success, but it will constitute the first step toward enhanced recognition within the organization.


p<>{color:#000;}. HR needs to move into the roles of strategy developer, strategy executor, and change agent. This is likely to require a major paradigm shift for both HR employees and line managers.


2. Change agency


● HR needs to provide the necessary tools and processes to support change. Practically speaking, this may include adjustments to the functions of selection, performance management, and compensation management to align with the new vision of the organization. To be successful, change needs to be owned and embraced by the entire organization. HR needs to play a pivotal role in providing expertise on building line ownership of change.


3. Administrative expertise


● HR needs to execute its administrative, transactional work quickly, efficiently, and accurately. This will free up valuable resources. The savings need to be directed toward strategic activities. This may include the implementation of world-class




~ 23 ~

human resource information systems, and the outsourcing of some or all administrative functions to third-parties (e.g., ADP).


4. Employee advocacy

● HR needs to make the HR function self-sufficient by placing the onus on line managers and making it their responsibility to manage human resources. HR needs to focus upon its people and build value. It is critical that HR learns to leverage the strategic resources that impact the business. For instance, staffing, career development, coaching, and mentoring build an environment of continuous learning and improvement which reward strong contributors and eliminate unproductive employees.


5. Measurement

p<>{color:#000;}. HR needs to measure how it can add value to the organization.


p<>{color:#000;}. HR needs to build comprehensive evaluation and measurement systems to prove its worth to the organization.


p<>{color:#000;}. HR needs to build a solid infrastructure to demonstrate its value and to be disciplined about measurement as an on-going process.


The study concluded that more and more organizations recognize the true value of the HR function as a key driver of ‘intangibles’, including but not confined to change management, in-house leadership development, and organizational culture. To demonstrate value, HR needs to evolve and measure the value it provides to organizational growth and performance. As such, successful organizations of the future need to strategically leverage their HR and focus on the business drivers and bottom-line issues.


Concluding remarks


This chapter explored the relationship between strategy and Human Resources Management (HRM). The chapter determined the basic concepts of strategy and strategic HRM and explored practices in a firm’s quest of becoming a recognized, legitimate Strategic Partner. Both empirical and anecdotal evidence suggest strongly that there is still a lack of understanding of the role and true value of HRM on the part of many executives, managers, and professionals all across the globe. In spite of that, there are several insights that have emerged. According to Kearns (2003), the key lessons for HR strategy are:


p<>{color:#000;}. The business and the HR strategies must be totally integrated;


p<>{color:#000;}. The two have to run side-by-side, ideally for many years;

p)<>{color:#000;}. Top management must not only understand the holistic, systemic nature of the HR strategy, but to give their complete commitment to it;


p<>{color:#000;}. 24 ~

p<>{color:#000;}. The HR strategy should be founded on simple, durable principles. This ensures that the strategy will last in the face of most foreseeable circumstances,


p<>{color:#000;}. Simple principles can be explained to any employee at any level. Once they understand the principles, they are likely to follow them with their daily actions. This can be regarded as directly contributing to business strategy;


p<>{color:#000;}. This way, the ‘grand’ strategy becomes a strategy for individuals in the organization.





















































~ 25 ~



APQC (2000) Enabling Human Resources as a Strategic Partner, American Productivity and Quality Center, Houston, Texas.


Armstrong, M. (2000) Strategic Human Resource Management: A guide to action, 2nd edition, Kogan Page Limited, London.


Becker, B.E., Huselid, M.A., Pickus, P.S., & Spratt, M.F. (1997) HR as a source of shareholder value: research and recommendations,


Human Resource Management, 36 (1), 39-47.


Boxall, P., & Purcell, J. (2003) Strategy and Human Resource Management, Palgrave Macillan, New York.


Hamel, G., & Prahalad, C.K. (1989) Strategic intent, The Harvard Business Review, May-June, 63-76.


Henn, W. (1985) What the strategist asks from human resources,


Human Resource Planning, 8 (4), 195.


Hofer, C.W., & Schendel, D. (1986) Strategy Formulation: Analytical concepts, West Publishing, New York.


Kay, J. (1999) Strategy and the illusions of grand designs, Financial Times, October 15, 2-4.


Legge, K. (1995) Human Resource Management: rhetorics and realities, Macmillan, London, UK.


Pfeffer, J. (1994) Competitive Advantage Through People, Harvard Business School Press, Boston, MA.


Porter, M.E. (1985) Competitive Advantage: Creating and sustaining superior performance, The Free Press, New York.


Prahalad, C.K., & Hamel (1990) The core competences of the organization, The Harvard Business Review, May-June, 79-93.


Purcell, J. (1999) Best practice or best fit: chimera or cul-de-sac,


Human Resource Management Journal, 9 (3), 26-41.


Truss, C. and Gratton, L. (1994) Strategic Human Resource Management: A conceptual approach, International Journal of Human Resource Management, 5 (3), 663-686.





~ 26 ~

Wright, P.M., & McMahan, G.C. (1992) Theoretical perspectives for SHRM, Journal of Management, 18 (2), 295-320.































































~ 27 ~

Chapter 3:


Job Analysis and Job Design




Accurate job descriptions enhance organizational effectiveness

(Robert J. Sahl, Fall 1992)





This chapter discusses the first two HR functions of job analysis and job design. Traditionally, job analysis has emphasized the study of existing jobs in order to make intelligent, well informed decisions regarding HR planning, employee selection, training, performance management, and compensation. In contrast, job design has focused on making jobs more efficient, attractive, and more simulating (or motivating). At the same time, the two activities are closely connected and interrelated.


1. Job Analysis


Today’s work environment is characterized by rapid, unprecedented change. As a consequence, the need for an efficient, coherent job analysis system is crucial. New jobs are being created and old jobs are being phased out, eliminated, or redesigned. A job analysis conducted only a few years ago is likely to be outdated and may include inaccurate and misleading data. Some writers have even suggested that changes in the modern workplace are occurring too fast to maintain an effective job analysis system.


Job analysis is considered the cornerstone of modern-day HRM since the information it collects serve most other HR functions (Bohlander, Snell, & Sherman, 2001). In this sense, it is an essential and pervasive HR technique that needs to be extremely well understood by managers and professionals. So what is job analysis? How can it be defined?


Job analysis is:


“The systematic process of determining the skills, duties, and knowledge required for performing jobs in an organization” (Mondy, Noe, & Premeaux, 2002: 87).


In order to further examine the concept of job analysis, it is important to understand the terms job and position. By definition, a job generally consists of tasks that are to be performed for an organization to achieve its goals (Mondy, Noe, & Premeaux, 2002).


~ 28 ~

A position, on the other hand, is the collection of tasks and responsibilities performed by a single person. Thus, there is a position for every individual working in an organization (Mondy et al., 2002). To further outline the difference between job and position consider the following example:


In an office work setting at a small accounting firm, there are two supervising managers, three senior accountants, and five operative employees. In terms of jobs and positions, there are three jobs and ten positions.


Each job is different and requires different knowledge, skills, and ability levels. These aspects are generally considered the KSAOs – knowledge, skills, a bilities, and other characteristics. The purpose of job analysis is to learn about jobs and to obtain answers to six important questions:


p<>{color:#000;}. What physical and mental tasks does the worker accomplish?


p<>{color:#000;}. When is the job to be completed?


p<>{color:#000;}. Where is the job to be accomplished?


p<>{color:#000;}. How does the worker do the job?


p<>{color:#000;}. Why is the job done?


p<>{color:#000;}. What qualifications are needed to perform the job?


A well-conducted job analysis provides a summary of a job’s duties and responsibilities, its relationship to other jobs, the knowledge and skills required to be successful, and the working conditions under which the job is performed (French, 1986).


When do we conduct a job analysis? A job analysis is performed on at least three occasions. First, a job analysis is conducted when the organization is first founded and a job analysis program initiated for the first time. Second, a job analysis is performed when new jobs are created. Third, and probably most importantly, a job analysis is initiated when jobs have changed significantly. This may be due to major changes in technologies, methods, procedures, or systems (Mondy et al., 2002).


Job Analysis is so important to HR professionals that is has been fittingly called “the building block of everything that personnel does” (Cascio, 1991). Analyzing jobs and understanding what is required to carry out a job successfully provides invaluable information for all other HR functions, including staffing, training, and performance appraisal. To illustrate this, consider a supervisor’s need to evaluate an employee and his or her work. Assuming that the evaluation is based upon work performance, the evaluating person needs to




~ 29 ~

ensure that the assessment of work performance is relative to job requirements (Noe, Hollenbeck, Gerhart, & Wright, 2007).


Who performs the function of job analysis? Noe et al. (2007) point out that large firms generally have specialists, such as personnel analysts, whereas in smaller firms the function may be carried out by internal HR professionals or line managers. There is also an increased tendency to involve external specialists and outsourcing firms.


Collection of Job Analysis information


The job analyst needs to be adequately equipped with the necessary information prior to conducting the analysis. This may include a familiarization with the external environment as well as the organization itself: its purpose, strategies, design, inputs, and outputs. It is also important to inform the employees about the nature and rationale of the job analysis. Werther and Davis (1996) recommend that the firm should provide an explanation of the need for the process and assurances that the outcome will not have an adverse affect on employees. However, in this day and age, fewer and fewer organizations are prepared to make such assurances to employees.


Outcomes of Job Analyses


The process of job analysis generally generates three major outcomes – job descriptions, job specifications, and job evaluation. The former two are particularly important since job analysis is seen as the starting point of HRM. The latter is less frequently discussed and, if at all, in relations to compensation management only.


1. Job descriptions


Job descriptions represent the first tangible outcome of a job analysis. At its most basic, a job description is a list of tasks, duties, and responsibilities (TDRs) that a job entails (Noe et al., 2007). DeCenzo & Robbins (2007) add that a job description is a written statement that should accurately portray job content, job environment, and conditions of employment. Detailed information about TDRs are observable actions. Job descriptions enable organizations to evaluate an individuals’ job performance. It is only through detailed information about the work performed on the job that managers are able to realistically determine how well an individual is meeting each job requirement (Noe et al., 2007).


A common format for a job description includes the job title, a job summary, the work duties to be performed, the distinguishing


~ 30 ~

characteristics of the job, environmental conditions, the authority of the jobholder, and the responsibilities of the job incumbent (DeCenzo & Robbins, 2007). Job descriptions within an organization should follow the same format. This enables the organization to make consistent decisions about matters such as pay and promotions. Furthermore, it helps the organization show that it makes HR decisions fairly (Noe et al., 2007). Job descriptions need to be reviewed periodically and updated whenever necessary. For instance, performance appraisals (discussed in a separate chapter) provide good opportunities for updating job descriptions as both employee and supervisor compare performance with the details of the job description (Noe et al., 2007).


2. Job specifications

Job specifications constitute the second tangible outcome of a job analysis. The job specification document states the minimum acceptable qualifications that the incumbent must possess to perform the job successfully (DeCenzo & Robbins, 2007). The job specification list identifies pertinent knowledge, skills, education, experience, certification, and abilities. It can therefore be assumed that individuals that possess the personal characteristics identified in the job specification should be more likely to be successful in performing the job than those lacking these personal characteristics (Joinson, 2001).


Job specifications focus heavily on the actual qualities of an individual performing the job (French, 1986). It is a list of the KSAOs that an individual must possess to perform the job. Knowledge is referred to as factual or procedural information that is necessary for successfully performing a task. A skill is an individual’s level of proficiency at performing a particular task. An ability refers to a more general enduring capability an individual possesses. Other characteristics refer to personality traits, such as persistence or motivation to achieve (Noe et al., 2007). In contrast to tasks, duties, and responsibilities (TDS) outlined in job descriptions, the KSAOs are characteristics of people and that are not directly observable. At last, the latter are the key factors in interviews and selection decisions. This will be discussed in a separate chapter.



3. Job evaluations


Job evaluations specify the relative value of each job in the organization (French, 1986). Job evaluations provide valuable information for making such job comparisons. Organizations that wish to have compensation programs that are perceived as equitable and fair are likely to place jobs that have similar demands (in terms of KSAOs) in common compensation groups. This is


~ 31 ~

important. If employees do not believe that pay structures are fair, they will become quickly dissatisfied and may be more inclined to look for external opportunities.


Job Analysis Methods – Sources of Job Information


The function of job analysis has traditionally been conducted in a number of different ways. This is due to the fact that organizational needs and resources for conducting job analyses differ widely. It is clear that the selection of a particular method should be based upon the approach that is most feasible for a particular organization and the purposes for which the information is to be used. The most common job analysis methods are the following:


Observation Method


The job analyst watches employees directly or reviews video of workers on the job. This method provides firsthand information. However, workers rarely function most efficiently when they are being watched. Thus, the outcome could be misleading. This method also requires that the entire range of activities is observable. This may be possible for jobs emphasizing manual skills, but not necessarily for managerial jobs (DeCenzo & Robbins, 2007).





An understanding of the job may be gained by means of interviewing both the employee and the supervisor. Most likely, the analyst interviews the employee first, thus enabling the worker to describe the duties performed. The analyst then proceeds interviewing the supervisor to obtain additional information, clarify certain points, and check the accuracy of the data (Mondy et al., 2002).



This method provides employees with a questionnaire on which they check or rate items they perform in their job from a long list of possible task items. It is an excellent technique for primarily gathering information about jobs. However, there is a lack of follow-up opportunities and the possibility for clarifying the information received (DeCenzo & Robbins, 2007).


Employee Recording


This method requires job incumbents to record their daily activities in a diary or log. It is the most time consuming of the job analysis methods (Mondy et al., 2002). This method presents the problem of employees exaggerating about what they do and how valuable they are to the firm. This needs to be overcome. Information from job


~ 32 ~

incumbents should therefore be supplemented with information from supervisors. Research suggests that incumbents provide accurate estimates of the actual time spend performing job tasks, whereas supervisors are more precise in reporting information about the importance of job duties (O’Reilly, 1973).


Technical Conference Method


This method uses subject matter experts to elicit specific job characteristics. However, it frequently overlooks the incumbents’ perceptions about what they do on their job (DeCenzo & Robbins, 2007).


It must be understood that all presented job analysis methods are legitimate and have their distinct advantages and drawbacks. No one method is universally superior. However, these methods are not mutually exclusive. As a result, the best outcomes are likely to be achieved with a combination of methods.


Job Analysis methods


After the data collection, the job analyst is required to analyze the primary data. There are a number of sophisticated software packages that help in the process of job analysis. A detailed discussion of the various types is beyond the purpose of this chapter. However, it may be of interest that the most frequently used techniques are the Position Analysis Questionnaire (PAQ), the Task Analysis Inventory (TAI), and the Fleishman Job Analysis System. For instance, researchers at Purdue University developed the scientific approach of Position Analysis Questionnaire (PAQ). The PAQ generates job requirement information applicable to all types of jobs. The procedure involves 194 elements that are grouped within six major divisions and 28 sections. Research has shown that PAQ is one of the most useful job analysis methods even though it is applicable to mainly higher-level, professional jobs (Nelson, 1997).


Future trends in Job Analysis


Organizations have begun to appreciate the need to analyze jobs in the context of a firm’s structure and strategy. Firms are also beginning to recognize that today’s workplace is subject to great change. Thus, even though the term ‘job’ is still thought of as something stable, it is far from it! There are many sources of error in job analysis. However, most inaccuracy is likely to result from job descriptions being outdated. Some writers have even suggested that the concept of a job per se is obsolete. A recent trend that has received attention from both researchers and businesspeople is the new concept of ‘dejobbing’. This new concept views firms as a field


~ 33 ~

of work needing to be done rather than a series of jobs held by individuals. A practical example is Amazon.com which puts more emphasis on broader worker specifications, such as being entrepreneurial or customer-focused rather than on detailed KSAOs (Caudron, 2000).


Changes in the nature of work and the increasing use of project-based organizational structures require a broader understanding. Since work can change quickly and suddenly it is impossible to modify the existing job descriptions monthly or even weekly. This requires for job descriptions to remain flexible. At the same time, certain legal requirements may prevent firms from issuing flexible job descriptions. As a result, firms must balance the need for flexibility with the need for legal documentation (Noe et al., 2007).


2. Job Design


It must be understood that a job is more than a collection of tasks recorded on a job analysis schedule and summarized in documents such as job descriptions. Indeed, jobs are the foundation of organizational and individual productivity and employee satisfaction. The way jobs are designed will play a significant role in the success, survival, and competitiveness of most organizations. The design of a job reflects the environmental, organizational, and behavioral demands placed upon it. Job designers take these elements into consideration and create jobs that are productive while at the same time satisfying for the individual incumbents. Feedback on how well jobs are designed is generally fairly easily obtained through productivity reports and employee satisfaction surveys. It is clear that a poorly designed job will yield lower productivity as well as higher levels of employee turnover, absenteeism, complaints, sabotage, unionization, and other job-related problems (Werther & Davis, 1996).


So, what is job design? By definition, job design is:


“The process of defining how work will be performed and what tasks will be required in a given job (Noe et al., 2007: 120)


Unequivocally, effective job design necessitates good job analysis. In other words, the input/information obtained through the process of job analysis will be critical in the success of job design and job redesign. The latter function is required when existing jobs need to be re-designed or restructured.


The job designer has a number of approaches available – each emphasizes different aspects of the job. For the purpose of this chapter, we will discuss four major approaches:


~ 34 ~

p<>{color:#000;}. Design for Efficiency

p<>{color:#000;}. Design for Motivation


p<>{color:#000;}. Design for Mental Capacity

p<>{color:#000;}. Design for Safety and Health


Each approach emphasizes different aspects of the jobs.


Designing for Efficiency


This approach borrows many of its concepts from industrial engineering which focuses on job efficiency, job specialization, repetitiveness, and work simplification. The organization usually benefits from lower costs and greater output per worker. However, the ‘scientific management’ approach frequently leads to low levels of employee satisfaction and perceived boredom on the part of the job incumbent. As a result, most modern-day firms combine industrial engineering with other job design approaches (Noe et al., 2007). Also, this approach is more effective for jobs that involve repetitive tasks, such as those found in manufacturing environments. Some service-based jobs and those that require the application of knowledge (e.g., management) are not as conducive to this approach.


Designing for Motivation


Research has shown clearly that a pure focus on efficiency will not achieve HR objectives. In today’s fiercely competitive environment, firms need a workforce that is highly -skilled and motivated and that cares about customer satisfaction. A model that has shown to make jobs more motivating is the Job Characteristics Model developed by Hackman and Oldham in 1980. The model describes jobs in terms of five characteristics:


p<>{color:#000;}. Skill variety (the extent to which a job requires a variety of skills to carry out the task)


p<>{color:#000;}. Task identity (the degree to which a job requires completing ‘whole’ pieces of work)


p<>{color:#000;}. Task significance (the extent to which the jobs has an impact on other individuals)


p<>{color:#000;}. Autonomy (the degree to which the job allows the incumbent to make decisions about the way the work is carried out)


p<>{color:#000;}. Feedback (the extent to which a person receives clear information about performance effectiveness derived from the work itself)





p<>{color:#000;}. 35 ~

Various studies have shown that the more each of these job characteristics a job has, the more motivating the job will be. The model then predicts that job incumbents who are motivated will be more satisfied with their work, they will be more productive, and they will produce better quality outcomes (Noe et al., 2007).


The Job Characteristics Model has shown to be very successful. Its approach to designing jobs includes various techniques, including but not limited to job enlargement, job enrichment, self-managing work teams, flexible work schedules, and telework. We will introduce and discuss each technique briefly:


Job Enlargement


This technique broadens the types of tasks performed. The objective of job enlargement (also called horizontal loading) is to make jobs more interesting and less repetitive. Common forms of job enlargement include job extension and job rotation. The former, job extension, enlarges jobs by combining several relatively simple jobs to form a job with a wider range of tasks. This approach is simple. However, if all tasks are mundane it is questionable whether the redesigned jobs will be more motivating. The latter, job rotation, enlarges jobs by moving individuals among several different jobs. The jobs themselves are not changed; the workers are rotated. This approach is found mainly in production teams (Noe et al., 2007). The organization benefits from job rotation since employees become competent in several jobs, while the employees benefit from an increased level of self-image and personal growth (Werther & Davis, 1996).


Job Enrichment


This technique adds new sources of satisfaction to jobs. It increases responsibility, autonomy, and control. Adding these elements to jobs is also called vertical loading (Werther & Davis, 1996). Job enrichment adds more planning and control responsibilities and is likely to increase motivation and other improvements. This technique is derived from Herzberg’s two-factor theory and aims to empower employees by adding more decision-making authority to jobs. Accordingly, individuals are motivated more by the intrinsic aspects of work (i.e., meaningfulness of a job) than by purely extrinsic rewards, such as pay and financial benefits. Herzberg identified five factors that generate motivation in jobs: achievement, recognition, growth, responsibility, and performance of the entire job (Noe et al., 2007).


Self-managed Work Teams


This technique empowers employees by designing work to be done by self-managed work teams. Self-managed work teams (also


~ 36 ~

called autonomous or leaderless work teams) are seen by some as the best ways to achieve high levels of productivity and quality, while improving the quality of work life for employees (Werther & Davis, 1996). Self-managed teams have authority for an entire work process. The team members have authority to schedule work, hire members, resolve problems, and perform managerial tasks. Teamwork provides motivating characteristics, such as autonomy, skill variety, and task identity. An organizational challenge lies in the provision of adequate training for all team members. Research shows that self-managing teams are most likely to accomplish their goals if they involve 6-18 employees who share the same technology, location, and work hours (Noe et al., 2007). On a practical note, job design in the form of autonomous work teams has proved particularly important to the competitive position among European firms.


Flexible Work Schedules


Flexible work schedules have greatly risen in popularity as they represent alternatives to the traditional 8-to-5 job, 40-hour workweeks. Flexible work schedules include flextime, job sharing, and compressed workweeks. Flextime is a scheduling arrangement in which employees may choose starting and ending times within certain guidelines specified by the firm. Research show that work schedules that allow individuals time for community and family interests can be extremely motivating. Job sharing is a work option in which two part-time employees carry out the tasks associated with a single job. Such arrangements enable firms to retain and attract individuals that have substantial commitments outside the firm. A compressed workweek is a schedule in which full-time individuals complete their weekly hours in fewer than the traditional five working days. The most common form in Australia, for example, is four 10-hour days, although some firms, particularly in the United Kingdom and Europe, have introduced scheduling 80 hours over nine days (thereby reducing the workweek from 40 to 38 or 36 hours).




Telework or telecommuting refers to flexibility in work locations and work schedules. It is a broad term that covers work arrangements with individuals away from a centrally located office. Studies have shown that employees who work outside a traditional office tend to be as least as productive (Conlin, 2005). Some studies also reveal that significant cost savings from telework programs can be attained. Noe et al. (2007) cite a comprehensive study revealing that telecommuting can generate cost savings of up to $8,000 per employee annually. It is unsurprising that given the flexibility of




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telework, this work arrangement represents a growing trend (Greengar, 2004).


Designing for Mental Capacity


Organizations are increasingly expected to design jobs that can be accurately and safely performed given the way the brain processes information. This generally means a reduction in the information-processing requirements of a job. While employees who hold ‘simpler’ jobs are less likely to make mistakes and have accidents, they may perceive more boredom. Research shows that challenging jobs dissatisfy employees if they have little control over their situation, lack social support, and are driven to avoid errors. On the other hand, individuals tend to enjoy challenges of a difficult job where they perceive they have some control and social support (Van Yperen & Hagerdoorn, 2003).


At last, a relatively recent source of complexity in many jobs is the need to process a daily flood of e-mail messages. Some studies estimate that office workers spend an hour a day handling e-mail messages, while senior managers easily spend four to five hours handling their e-messages (Weinstein, 2002). Organizations take various steps to manage this challenge, including the establishment of policies, such as limiting personal use of company e-mail and restricting or banning the subscription of internet discussion groups via company e-mail (Weinstein, 2002).


Designing for Safety and Health


The way job incumbents use their physical bodies when they work affects their physical well-being. It may also affect how well and how long they can work. Ergonomics is the study of how human beings physically interface with their equipment (Werther & Davis, 1996). Its goal is to minimize physical strain on the worker by structuring the physical work environment around the way the human body works. As such, ergonomics focuses on safety and health and attempts to reduce fatigue, aches, pains, and general health complaints. Ergonomic job design is not confined to jobs that are physically demanding but include white-collar jobs. Research has shown that redesigning work in order to make it more worker-friendly, safe, and healthy leads to increased levels of efficiencies and worker productivity (Brown, 2001).


Other techniques of Job Design/Redesign


A central question that managers and job designers face is whether a particular job should have more or less specialization. For


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instance, when jobs are not specified enough, job designers may engage in work simplification. This technique is likely to produce more jobs with fewer tasks. However, this bears a significant risk as specialized jobs may become mundane and boring which may lead to employee resignations. This is particularly the case in advanced countries with a highly educated workforce. In less industrialized economies, highly specialized jobs may be appealing since they provide jobs for workers with limited education and skills.


A variant of a job design technique is Total Quality Management (TQM) which is a commitment to excellence achieved by teamwork and a process of continuous improvement (Werther & Davis, 1996). If implemented rigorously, TQM brings forth a fundamental change to the culture of a firm. It requires a new way of thinking and strong leadership. Research shows that job design should precede or accompany the introduction of TQM. The implementation of TQM will yield cultural and organizational change which in itself will result in a need to reevaluate how tasks are performed, the methods used in performing these tasks, and how jobs relate to other work. While quality is essential for organizational success and competitive advantage, TQM is only one of many means to attain high quality. This is also reflected in Harari’s (1997) assertion that “quality is sacred, TQM is not”.


Another variant of a job design technique is reengineering. Unlike TQM which promotes incremental change, reengineering essentially involves the rethinking and redesigning of its entire business system to become more competitive. As such, reengineering emphasizes radical change and the radical redesign of work. It focuses on management systems and organizational structures. It also stresses that work should be organized around outcomes rather than tasks and functions (Werther & Davis, 1996).


Both TQM and reengineering have received a lot of media attention. Some writers consider these modern approaches to be ‘fads’, while others have experienced success in their implementation. On a practical level, IBM (USA) and Nestle (Switzerland) are high-profile examples of success in their implementation of reengineering, while Levi Strauss (USA) and Deutsche Telekom (Germany) endured costly and disappointing results.


Conclusive remarks


This chapter has shown that the function of job analysis provides the foundation for all other HR activities. Thus, it is considered the cornerstone of HRM. The information derived from job analysis is vital to an organization’s understanding of the various duties and


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responsibilities associated with jobs and performed within the firm. Job analysis information is utilized when HR specialists undertake HR management activities, including job design, staffing, and training. At its core, a job is the link between the organization and the employee. The combined attainment of all jobs allows the firm to meet its objectives. At the same time, jobs represent not only a source of income to employees but also a means of fulfilling their needs. Increasingly, there is a need for jobs to provide a high quality of work life. This requires jobs to be well designed. What does this mean? Effective job design requires a trade -off between efficiency and behavioral elements. Efficiency stresses productivity, while behavioral elements focus on employee needs and wants. The role of the manager is to achieve a sound balance.


The challenge for managers today and in the future is also to analyze and create jobs in an ever-changing environment. Elements of traditional methods of job analysis struggle to adapt to this new environment. Here are some concluding thoughts:


p<>{color:#000;}. Future job analysis considers job characteristics and requirements for future positions; answers question like, What will the organization require in jobs next year or five years from now? What skills, knowledge, or competencies will be needed? This is counter to traditional job analysis which is concerned about what is done now and is applicable to slower moving, bureaucratic organizations.


p<>{color:#000;}. Job analysis still has its place (e.g., for well-defined jobs), but as organizations change job descriptions can become outdated.


p<>{color:#000;}. Job analysis is necessary because employees want structure and guidance and they want to know what they are supposed to do. Job analysis is also important for legal reasons


p<>{color:#000;}. Job analysis must find the delicate balance between structure and creativity in a world of change.
















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Harari, O. (1997) Ten reasons TQM doesn’t work, Management Review, 86, 38-41.


Joinson, C. (2001) Refocusing job description, HR Magazine, January 2001, 65-70.


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Human Resources Management

This HR book is a collection of pertinent readings and presents the fundamentals of HRM. At its core, the content is principle-based, comprehensive, yet fundamentally focused. The readings assume and embrace a truly international perspective with many international examples at hand. The text is structured into 16 major topical themes. Each chapter follows a similar structure in order to help the reader navigate easily through the text. At the beginning of each chapter, the author offers quotes from academics or practitioners to show the direct relevance of the chapter topic. The main text introduces the reader to the major concepts and issues before offering critical comments, discussing alternatives perspectives, and presenting global solutions.

  • ISBN: 9781370232383
  • Author: Anton Pelevin
  • Published: 2017-02-01 21:35:29
  • Words: 67572
Human Resources Management Human Resources Management