Chapter 15: Strategy and people

Chapter learning objectives

Upon completion of this chapter you will be able to:

  • explain, for organisations in general, how the effective recruitment, management and motivation of people is necessary for enabling strategic and operational success
  • describe classical and modern leadership theories and explain, for a given scenario, how appropriate leadership can facilitate strategy formulation and implementation
  • describe the contribution of four different approaches to job design (scientific management, job enrichment, Japanese management and re-engineering)
  • discuss the tensions and potential ethical issues related to job design in organisations in general
  • advise, for organisations in general, on the relationship of job design to quality initiatives, process re-design, project management and the harnessing of e-business opportunities
  • explain, for organisations in general, the human resource implications of knowledge work and post-industrial job design
  • describe, for organisations in general, the emergence and scope of human resource development, succession planning and their relationship to the strategy of the organisation
  • describe, for organisations in general, different methods of establishing human resource development
  • explain, for organisations in general, the contribution of competency frameworks to human resource development
  • explain, for organisations in general, the meaning and contribution of workplace learning, the learning organisation, organisation learning and knowledge management.

1 Human resources and organisational strategy

The strategic role of human resources

People are of central importance in most organisations and theirrecruitment, management and motivation forms part of the human resourcemanagement function.

Human resource management (HRM) has been defined as 'a strategic andcoherent approach to the management of an organisation's most valuedassets: the people working there who individually and collectivelycontribute to the achievement of its objectives for sustainablecompetitiveadvantage’ (Michael Armstrong).

The definition mentions competitive advantage and this reinforces the link between HRM and strategy.

Illustration 1 – HRM and competitive advantage

Some examples of the link between HRM and strategy are as follows:

If a competitive advantage is sought through differentiation thenHRM needs to ensure that high quality, skilled staff are recruited, thatthese staff are given freedom to be creative and innovative, that aculture of service and quality is prevalent, and that rewards are gearedtowards long-term success and beyond short-term financial measures.

On the other hand, if a strategy of cost leadership was pursued,then HRM needs to focus on recruiting low skilled workers, providingrepetitive, simple tasks, minimising staff numbers, providing strictcontrols, and focusing appraisals and rewards on short-term costmeasures.

These are examples of how HRM can link to a company's competitivestrategy. However, HRM can link to all strategic choices that wereexplored in chapters 5 to 7.

Test your understanding 1

If an organisation planned to grow through acquisition, how might HRM contribute to the achievement of this strategy?

The goals of HRM

From the above analysis it can be seen that for strategies to besuccessful HRM must be effective in a number of areas. These can besummarised into 4 areas (4C's):

  • commitment (requires good motivation and leadership)
  • competence (requires good recruitment, assessment, training and staff development)
  • congruence (requires good job design)
  • cost-effectiveness (this normally comes from the achievement of the others).

The goals of HRM

  • Commitment. This means motivating staff and removing dissatisfaction. This should result in better attendance, better time-keeping and reduce staff turnover. Motivated staff are more likely to achieve targets and the organisations goals.
    Part of the role of HRM will be the leadership of staff. This will not only play a role in motivation.
  • Competence. This involves having the right level of staff with the correct skills base. It includes identifying, in precise terms, the kinds of talent the organisation will need in order to achieve its strategic goals in the short, medium and long term. So careful recruitment will be important to achieve this goal.

    It also includes searching for ways of improving the performance and productivity of the most talented staff. Training and staff development will therefore play an important role.

  • Congruence. This means that HRM need to ensure that the organisation's goals are understood and that these goals are communicated to staff.

    HRM should be represented at a senior, strategic level in order to clearly understand the organisation's goals. For example, if the goal of the company is to achieve cost leadership then the HRM function need to understand this as it will influence recruitment, training, rewards etc.

    These goals then need to be communicated to staff. This will be achieved in a number of ways. Job design will be important. As will be seen later, if cost leadership is the goal, for example, then a scientific approach to job design is most likely to be used.

    Reward systems and appraisals will also play a role. For example, cost leadership is likely to require strict controls and financial targets with assessments and rewards based on conformance to these controls.

  • Cost effectiveness. It is often found that if the other goals of HRM are achieved then a natural cost effectiveness will be derived. Recruitment costs will be reduced, performance will improve, wastage will be reduced and goals will be achieved. In this way, good HRM 'pays for itself' in returns to the business.

This is useful criteria not only for improving and developing HRM,but also for assessing an organisation's existing HRM. The remainder ofthe chapter explores how these criteria can be met.

Human resource planning is a way of overseeing the entire process.

Human Resource Planning

Human resource (HR) planning is 'a strategy for the acquisition,utilisation, improvement and preservation of an enterprise's humanresources'. It is through planning that a company can determine itsrecruitment and selection needs, and can assist in the planning of itstraining needs.

Its purpose is to reduce uncertainty in the environment and assist in shaping a company's personnel policies.

The four main phases involved in HR planning are:

  • an analysis of existing staffing resources – its strengths and weaknesses, age spreads, experience and training levels, etc.
  • an estimation of likely changes in resources – flows into, within, and out of, the organisation – and the ability of relevant labour markets to supply existing or future demands
  • an estimation of the organisation's future HR needs in terms of numbers, type, quality and skill composition
  • the identification of gaps between supply and demand and the development of policies and plans to close these.

The first step of the plan is to determine the company's long-termobjectives so that the human resources can be optimally used. Corporatestrategy is a reconciliation process between what an organisation mightdo (opportunities) and what it can do (resources). This is an impossibleprocess without consideration of HR requirements.

The planning process serves two functions.

  • It fulfils a problem-solving role by identifying HR requirements, controlling the flow of labour, developing skills and increasing adaptability.
  • It also has a strategic role in contributing towards the shape of the organisation as required by external and internal changes.

In both cases, HR planning represents an important flow of information to aid decision making and the formulation of policies.

2 Leadership

Theories of leadership

Classical theories of leadership

Classical theories of leadership, which you should be familiar withfrom your previous studies, can be considered as falling into four maincategories.

  • Trait or personal characteristics, which see the individual as more important than the situation.
  • Style theories, which are based on the assumption that the leadership style of a manager will affect the motivation of employees.
  • Contingency (or contextual) approaches that take into account other variables such as the nature of the group in which the leader operates and the position of the leader within the group.
  • Situational theories that look at situations where leaders are shown to be effective and considered the actions of leaders and the context in which they led in order to suggest the appropriate style to match the requirements of the task, the group and the individuals.

Likert's classical theory

Likert's book New Patterns Of Management distinguished between four key styles or 'systems' of leadership.

System 1 Exploitative autocratic

Here the leader has no confidence or trust in subordinates, imposesdecisions, never delegates, motivates by threat, has littlecommunication with subordinates and does not encourage teamwork.

System 2 Benevolent authoritative

Under this system the leader has only superficial and condescendingtrust in subordinates, imposes decisions, never delegates, motivates byreward and, though he sometimes will involve others in solvingproblems, is basically paternalistic.

System 3 Consultative

The leader has some incomplete confidence in subordinates, listensto them but controls decision making, motivates by reward and a level ofinvolvement and will use the ideas and suggestions of subordinatesconstructively.

System 4 Participative

The democratic leader has complete confidence in subordinates whoare allowed to make decisions for themselves. Motivation is by rewardfor achieving goals set by participation and there is a substantialamount of sharing of ideas and opinions and co-operation.

Likert's research shows that effective managers are those who adopteither a System 3 or a System 4 leadership style. Both are seen asbeing based on trust and paying attention to the needs of both theorganisation and employees.

Recent approaches to leadership

More recent approaches to leadership have characterised leaders in one of two ways:

  • transformational or charismatic leaders who provide a vision, inspire people to achieve it by instilling pride and gaining respect and trust. These leaders appear to be particularly effective in times of change and uncertainty
  • transactional leaders who focus on managing through systems and processes. These leaders are likely to be more effective in securing improvement in stable situations.

The differences between transactional and transformational leadership are shown below:

3 Job design

Job design and motivation

There are two major reasons for attention to job design:

(1)To enhance the personal satisfaction that people derive from their work and,

(2)To make the best use of people as avaluable resource of the organisation and to help overcome obstacles toeffective performance.

Research suggests that it is primarily in the realm of job designthat opportunity for constructive improvement of worker satisfactionappears to be high. The level of job satisfaction experienced isaffected by a wide range of variables;

  • Individual factors – personality, education, intelligence and abilities, age, marital status, and orientation to work.
  • Social factors – relationships with co-workers, group working and norms, opportunities for interaction, informal organisation.
  • Cultural factors – attitudes, beliefs and values.
  • Organisational factors – nature and size, formal structure, personnel policies and procedures, employee relations, nature of the work, technology and work organisation, supervision and style of leadership, management systems, and working conditions.
  • Environmental factors – economic, social, technical and governmental influences.

The application of motivational theories, and a greaterunderstanding of dimensions of job satisfaction and work performance,have led to increasing interest in job design. The nature of the workorganisation and the design of jobs can have a significant effect on thejob satisfaction of staff and on the level of organisationalperformance.

Job design is concerned with the relationship between workers andthe nature and content of jobs, and their task functions. It attempts tomeet people's personal and social needs at work through re-organisationor restructuring of work.

Different approaches to job design

There have been a number of different approaches to job design,which have been based on different theories of behaviour of individualsin the workplace. These include:

  • scientific management
  • job enrichment
  • Japanese management
  • business process re-engineering.


Scientific management

Frederick W Taylor is generally credited with the introduction ofscientific management. He believed that workers would be motivated byobtaining the highest possible remuneration and that this could beachieved by organising work in the most efficient way, based on a truescience of work whereby what constitutes a fair day's work and a fairday's pay could be determined. This had a huge impact on manufacturingjobs and resulted in:

  • job fragmentation where individual workers focused on one single task
  • the separation of planning from doing the work, and direct work from indirect
  • the minimisation of requirements for skill and training time
  • the minimisation of material handling
  • the use of highly-specialised machinery and flow lines
  • deskilling of work, with jobs becoming repetitive and boring
  • low commitment from employees
  • an adversarial industrial relations climate.

Job enrichment

Job enrichment developed to address some of the drawbacks ofscientific management and is the process of adding tasks to a job inorder to increase the amount of employee control or responsibility. Themain driver behind the development of job enrichment was the belief thatit could improve job satisfaction and hence performance by meeting theneed for the factors identified by Herzberg as motivators (achievement,recognition, attraction of the job itself, responsibility andadvancement). Job enrichment is often part of business process redesignand/or quality initiatives and:

  • combines tasks vertically as employees undertake some supervisory tasks
  • leads to greater responsibility for individuals, with some control delegated downwards.


The enrichment of the job of a barman whose current duties onlyinclude serving drinks from a bar could involve adding furtherresponsibilities such as:

  • ordering supplies of drinks
  • dealing with customer complaints
  • cashing up at the end of a shift
  • drawing up menus for cocktails.

Japanese management

In the 1980s, businesses around the world began to introducemanagement techniques based on the production methods used by largeJapanese corporations. Particular characteristics of the model are:

  • total quality management, with every employee taking responsibility for quality, taking part in quality improvement activities and carrying out quality control of their own work
  • cellular manufacturing to improve flexibility, with assembly of complete components carried out by a team of flexible, multi-skilled workers
  • just-in-time manufacture to minimise inventory and waste by having the right materials, at the right time, at the right place, and in the exact amount required
  • interdependence of employees on each other, with a high degree of socialisation at work and the organisation becoming a community
  • a high reliance on a skilled, flexible workforce.

Business process re-engineering (BPR)

BPR was discussed in detail in the chapter on business process change. The key implications for HRM are that BPR:

  • views employees as an asset rather than a cost
  • involves the establishment of a more horizontal structure with work carried out by self-managed teams with a degree of autonomy
  • makes extensive use of IT to enable new forms of working and collaborating with an organisation and across organisational boundaries.

Self-managed work groups have a number of key features.

  • Specific goals are set for the group but members decide the best means by which these goals are to be achieved.
  • Group members have greater freedom and choice, and wider discretion over the planning, execution and control of their own work.
  • Collectively, members of the group have the necessary variety of expertise and skills to undertake successfully the tasks of the group.
  • The level of external supervision is reduced and the role of supervisor becomes more one of giving advice and support to the group.
  • Feedback and evaluation are related to the performance of the group as a whole.


Match the following characteristics to the relevant approach to job design.

(1)Total quality management.

(2)Deskilling of work, with jobs becoming repetitive and boring.

(3)The establishment of a more horizontal structure with work carried out by self-managed teams with a degree of autonomy.

(4)Greater responsibility for individuals, with some control delegated downwards.


(1)Japanese management.

(2)Scientific management.

(3)Business process re-engineering.

(4)Job enrichment.

Factors to consider when choosing a job design

These include:

  • the organisation's goals
  • the need for staff motivation
  • the need for control over staff actions
  • ethical issues
  • legal issues.

It can be seen that some of these factors may lead to conflicts and tensions.

Explanation of job design issues

Job design – tensions and issues

Job design raises a number of issues for managers.

  • There is a tension between the need to control cost and quality of work by the division of activities and the need to co-ordinate and integrate activities.
  • Job design for a particular purpose may have unforeseen or undesired consequences that need to be addressed, as seen for example in the impact of scientific management where the sub-division of work for economic reasons led to a lack of job satisfaction and poor motivation.
  • There is a conflict between the need to motivate and encourage employees by allowing them initiative and to be creative, and maintain management control.
  • Whenever jobs are redesigned it is important to consider the impact on individual employees in terms of their personal satisfaction and development.
  • In addition, any job design needs to be carried out in a way that is seen to be fair, consistent and complies with any legal requirements.

Test your understanding 2

Discuss any potential areas for ethical concerns in job design.

Job design and strategic change

In implementing any strategic change such as quality initiatives orthe implementation of e-business there are implications for the contentand nature of jobs that will need to be considered as part of theimplementation plan.

  • The core issues of job design such as control, skill and knowledge remain the same, but need to be considered in a changing environment.
  • Such initiatives should have an impact on all parts of the organisational structure. Traditional job design has focused on manual or less-skilled work, but needs to have a broader focus.
  • The increasing use of information technology and e-business has a tendency to lead to more streamlined, flatter structures, which will have implications for the nature of jobs.
  • Organisations and work are becoming more knowledge-intensive (this will be discussed further, later in this chapter).
  • Changes to and increased complexity of relationships within the organisation and with suppliers and customers mean that staff need a broader understanding of business.
  • If projects to implement change are to be successful, changes to job design need to be considered as part of the project planning phase, to ensure that the response and behaviour of individual staff supports the strategic objectives.

Cross-functional teams often drive initiatives such as qualityimprovement, process re-engineering and the development of e-businessdevelopment. This is often through the formation of self-managed workgroups who assume greater autonomy and responsibility for the effectiveperformance of the work.

Test your understanding 3

Identify three reasons why job design needs to be considered as part of the implementation planning of e-business developments.

4 Human resource development

The emergence of human resource development

Human resource development encompasses the activities that areconcerned with developing the skills and abilities of the people withinan organisation in order to ensure its success. Today, human resourcedevelopment is seen as more than just a training activity, and its scopehas been extended so that:

  • people are seen as a major source of competitive advantage, and their training and development is seen as an investment, not a cost
  • learning is seen as essential and embedded in the organisation as a means of coping with change and ensuring that strategic objectives are met
  • employees have the expectation that they will learn and change and retrain as necessary as strategy demands
  • the development and training of their staff is seen as a key part of a manager's role
  • changes outside the organisation are reflected in changes to training and development needs
  • human resource implications are considered as part of strategic planning.

Succession planning

One of the most important aspects of human resource development isensuring the management succession. Bringing in top managers fromoutside the company can improve the breadth of experience of the topmanagement team, but people at the top who have come from within thebusiness bring specialist knowledge of different aspects of the firmitself and provide an inspiration for more junior managers who canaspire to the same position. Effective succession planning:

  • identifies people with management potential early in their careers
  • provides training integrated with planned career patterns including a number of development moves to widen experience. However, care must be taken that grooming the chosen few does not take precedence over everyone else's career to avoid resentment being caused and the company missing out on spotting late developers
  • long-term plans based on identifying:
    • for each post, a list of perhaps three potential successors
    • for each person (at least from a certain level upwards), a list of possible development moves
  • provides contingency plans for a successor for any post that becomes suddenly and unexpectedly vacant (e.g. through death).

Illustration 2 – Human resource development

Many organisations have a 'fast track' whereby potential futuresenior managers are identified early in their careers and given work andtraining opportunities in an attempt to help them achieve theirpotential.

Establishing human resource development

Most organisations establish human resource development in one of two ways.

  • Systematically, according to the traditional model of training.
  • Using a more integrated approach more closely linked to strategy development.

Explanation of the HRD approaches

The systematic approach

The systematic approach has been followed by large numbers of organisations since the 1960s. This approach:

  • is one in which training and development activities are planned based on needs analysis, implemented and then evaluated at the end
  • includes varied training activities that are often off-the-job, and may use a variety of techniques and technologies such as e-learning and distance learning
  • has contributed to the development of training as a profession
  • may be less effective for organisations in a changing environment where objectives are less clear.

The integrated approach

More recently, organisations facing rapid change have begun todevelop an approach that is more directly integrated with strategy, toensure that the organisation's staff are equipped to meet the challengesrequired by the strategy. It is an approach in which:

  • a culture of learning is created within the organisation that is reflected in its systems and processes
  • close links are made between HRM and key activities within the organisation such as strategy development
  • the development of staff is seen as a management responsibility
  • development activities such as coaching and mentoring are established as part of HRM
  • use is made of competency frameworks that are developed to identify key skills and behaviour needed to meet strategic objectives.

Test your understanding 4

The training department of a large public sector organisation usesthe following model to establish its human resource development:

Discuss the advantages of the model used in the example above, and explain when might it not be sufficient?

Competency Frameworks

Competences are the critical skills, knowledge and attitude that ajob-holder must have to perform effectively. A competent individual canperform a work role in a wide range of settings over an extended periodof time. Competences:

  • are expressed in visible, behavioural terms and reflect the main components of the job (skills, knowledge and attitude)
  • must be demonstrated to an agreed standard and must contribute to the overall aims of the organisation.

Most competency frameworks cover the following categories:

  • communication skills
  • people management
  • team skills
  • customer service skills
  • results-orientation
  • problem-solving.

Illustration 3 – Competency frameworks

A research analyst working for the government might have the following factors within their competency framework:

Delivery skills

  • Focus
  • Delivery skills
  • Learning and improving

Intellectual capacity

  • Critical analysis and decision making
  • Constructive thinking
  • Professional expertise

Interpersonal skills

  • Developing constructive relationships
  • Communicating with impact

Leadership and management

  • Leading and directing

Each of these competences will then be supported by a high level description.

For example, "Learning and improving" could be described as follows:

  • Acknowledges own development needs and seeks new skills, knowledge and opportunities for learning;
  • Learns from others; adapts quickly and effectively to new people, situations and task demands;
  • Operates effectively in a range of roles and contexts including times and situations of uncertainty.

Test your understanding 5

List some (of the many) competences an accountant may have.

The use of competency frameworks

Organisations are increasingly making use of competency frameworksas a way to link HRM processes to the skills and behaviour required tomeet strategic objectives. Systems using competency frameworks mayinclude many components each linking to a different aspect of humanresource activity within an organisation:

  • to provide an analysis of the behaviour needed to achieve a given strategy
  • recruitment – as a basis for person specifications and as a basis for comparison of applicants during selection
  • identifying training and development needs to develop people to a level of performance expected at work
  • managing performance, focusing on what people do at work and how well they do it, often as a basis for appraisal systems such as behaviourally anchored rating scales
  • benchmarking.

A key point here is that the same competency framework can be usedfor job design, recruitment, ongoing performance appraisal and thedesign of reward systems.

The process for assessing competencies

For any competence-based system the process is the same:

5 Workplace learning, the learning organisation, organisation learning and knowledge management

Workplace learning

As has been discussed earlier, in human resource developmentlearning is seen as key in ensuring competitive advantage. The conceptof workplace learning sees the organisation as a unit of learning inwhich:

  • learning is of strategic importance and is seen in a wider context by managers and staff
  • links are made between learning and other parts of the organisation, such as training and information systems, and training and organisational development.

The learning organisation

The idea of the 'learning organisation' emerged towards the end ofthe twentieth century. Pedler, Burgoyne and Boydell are the mainproponents in the UK of the 'learning company', which they define as 'anorganisation that facilitates the learning of all its members andcontinuously transforms itself'.

  • In learning organisations, testing and experimentation are encouraged, because the organisation wants to find new answers, and recognises that failed answers are as important as successful ones.
  • Actions have two purposes – to resolve the immediate problem and to learn from the process.
  • Learning organisations are capable of adapting, changing, developing and transforming themselves in response to the needs, wishes and aspirations of people, inside and outside.
  • Self-development and action-learning are also foundations of the learning organisation: as the organisation learns from the actions that it carries out, so does the individual.

The role of management in learning organisations

The role of management in a learning organisation is to encouragecontinuous learning and acquisition of new knowledge and skills and totransform these into actual behaviour, products and processes within theorganisation.

To enable learning to take place within the organisation, the following approach should be adopted by management.

  • The process of strategy formulation should be designed with learning in mind, and should incorporate experimentation and feedback.
  • All members of the organisation should be encouraged, and given the opportunity, to contribute to policy making as part of the learning process.
  • Information should be seen as a resource to be exploited by all members of the organisation, not as a 'power tool' reserved for a chosen few.
  • Accounting systems should be designed in such a way that members of the organisation can learn how the cash resource is used.
  • Employees should be encouraged to see internal users of their outputs as 'customers'.
  • Employees should be encouraged to see the diversity of rewards they enjoy (not just cash), and there should be openness about why some people are paid more than others.
  • The structures of the organisation – everything from office layout to managerial hierarchy – should be regarded as temporary arrangements, which can be altered in response to changing conditions.
  • Employees who have contacts outside the organisation, such as salesmen, customer service staff and purchasing staff, should impart the knowledge they determine from such contacts to improve the organisation's knowledge base.
  • Management must foster a climate in which workers understand that part of their task is to improve their own knowledge, and to share knowledge with other members of the organisation.
  • A priority for management should be the provision of opportunities for structured learning such as courses and seminars.

Illustration 4 – The learning organisation

Woods Ltd provides all staff with 'works-time' to update thecompany's database on customers, competitors and other industryinformation and to allow them to keep abreast of any additions theircolleagues may have made.

Organisation learning

The idea of organisation learning is a further development of theconcept of workplace learning. It is concerned not with the learning ofindividuals but about how learning takes place at the organisationallevel – that is how the organisation as an entity itself learns newways of doing things.

  • The organisation needs to be seen as organic, and learning in the same way individuals do.
  • The organisation develops through collective learning from interactions within the organisation.
  • Organisation learning is mainly informal and about the organisation's response to given events and circumstances. This depends on the culture of the organisation and the groups within it.

Knowledge management

Organisations are becoming more knowledge-based. As a result,success becomes more dependent on how effectively information is turnedinto useful knowledge that is then applied to products and processes.

  • Knowledge management is concerned with how to acquire, share, retain and use information, knowledge and experience, and how to build on and develop it.
  • The knowledge may be 'explicit' and formal such as the content of reports, spreadsheets or manuals, or 'tacit', which is informal, not written down, and includes knowledge, the understanding of good practice and management skills. Both types of knowledge need to be managed.

Implementing knowledge management within an organisation

Effective knowledge management involves both formal and informalprocesses and has implications for the organisational structure ifsharing of knowledge is to be achieved, with:

  • commitment from senior management to establishing a culture where the sharing of knowledge is encouraged and supported
  • appointment of staff to manage the process
  • movement of individuals between functions and divisions to enable knowledge to be shared and to encourage the development of informal networks
  • a flatter, decentralised structure so that decisions can be taken close to where key knowledge is located
  • the use of technology to support knowledge management such as
    • email to facilitate the exchange of information between individuals
    • intranets to enable access to and exchange of information
  • data-warehousing to store and make available large amounts of information
  • decision-support systems that make use of existing knowledge.

Test your understanding 6

What is the common factor underpinning concepts such as workplacelearning, the learning organisation, organisation learning and knowledgemanagement?

6 Knowledge workers

Arrangements of knowledge workers

Recent years have seen the emergence of 'knowledge work' where workis no longer about the manufacture of products but about thedevelopment of intangible assets, and where knowledge is the main assetof organisations.

Knowledge workers are not involved in routine production oradministrative functions but provide expertise in a defined area. Thisexpertise is critical to solving complex problems and through thisdelivering competitive advantage.

Examples of knowledge workers

Examples of knowledge workers include:

  • doctors
  • engineers
  • academics
  • lawyers
  • scientists
  • technologists.

The role of knowledge workers

Collaboration on defined projects is a key aspect to the knowledge worker's role. Other elements to the role are:

  • ability to access corporate data through web-based services and corporate databases
  • a roving role across departmental boundaries
  • a temporary project-based role
  • high levels of limited scope, massive depth expertise.

Implications for human resources management

Implications for HRM of the move towards knowledge-based organisations are:

  • employee selection is on the basis of skill and competences rather than application to a distinct task
  • employees require input to their own development, skills and careers
  • the development of separate and relevant incentive schemes based on a variety of individual factors
  • temporary, contractor-based roles
  • increasing numbers of employees based in remote locations, and the emergence of flexible working schemes.

Illustration 5 – Knowledge workers

Railway technology makes great use of knowledge workers whom theydescribe as 'associates'. Associates are selected based on theirqualifications, skills and experience and are matched to a variety ofroles and tasks at any one time. Associates are employed on a freelancebasis and often work remotely.

Post-industrial job design

Post-industrial job design and High Performance Work Systems (HPWS)

As the nature of work has changed, new organisational structureshave been proposed with a view to improving the productivity andcommitment of staff. Knowledge workers are an important element in thesenew flexible organisations.

Other features that it is suggested are important in post-industrial organisations are:

  • procedures that attempt to recruit and retain the best people
  • stability in employment relationships (job security with flexibility)
  • pay for performance schemes
  • a minimum hierarchy
  • flexible working and flexible work design
  • multi-skilled employees
  • empowered, involved, listened-to employees
  • a commitment to training
  • open, honest communication
  • fair and consistent treatment of employees.

Test your understanding 7

Discuss some of the problems that might arise for traditional managers in dealing with knowledge workers.

7 Chapter summary

Test your understanding answers

Test your understanding 1

HRM will have to:

  • plan potential redundancies when staff are measured,
  • to facilitate and manage the changes in culture and performance that are necessary,
  • to ensure that corporate goals and missions are understood and communicated,
  • to unify reward systems,
  • jobs might need to be redesigned, and
  • new training might be necessary.

This is just one further example of the link between HRM andstrategy, but it should illustrate how HRM plays a role in contributingto theachievement of an organisation's objectives.

Test your understanding 2


Areas that need to be considered from an ethical viewpoint in job design include the following.

  • Cost versus quality of working life.
  • Cost versus quality of output.
  • What may be economically in the organisation's best interests may be to the detriment of the employee's job satisfaction, health or motivation.
  • Motivating employees and controlling employees may conflict.
  • Personal development may be at the expense of the most economical way of designing a job.
  • Legal considerations.

Test your understanding 3

  • These initiatives have an impact on all parts of the organisational structure.
  • E-business has a tendency to lead to more streamlined, flatter structures, which will have implications for the nature of jobs.
  • Organisations and work become more knowledge-intensive.
  • The nature of the relationships within the organisation and with suppliers and customers changes.

Test your understanding 4

The model would allow a manager to:

  • assess job performance
  • measure performance before and after the training
  • check the effectiveness of the quality
  • check the quality of the training
  • maintain records of job performance and training
  • note areas of outstanding achievement and those of problems
  • feed back to staff on their performance.

The above might not be sufficient when there is rapid change –for example in a public sector organisation a change of political powermay mean that the perceived needs and required outputs of theorganisation have changed.

Test your understanding 5

The competences an accountant may have include the following.

  • Skills
    • Numeracy
    • Literacy
    • IT literacy
    • Bookkeeping, etc.
  • Knowledge
    • FRS, IAS, etc.
    • Group accounts, partnership accounts
    • Hedges, Black-Scholes model, etc.
  • Attitude
    • Contentious
    • Dynamic, etc.

Test your understanding 6

The concept underlying these techniques is that learning is ofstrategic importance to an organisation and needs to be seen in itswidest context by staff and management. It also needs to be linked toall parts of the organisation.

Test your understanding 7

Potential problems for traditional managers in dealing with knowledge workers include:

  • difficulty in measuring output and quality
  • staff will require a degree of autonomy
  • need for individual methods of assessment and reward
  • uncertainty and change in make-up and numbers of staff
  • feelings of lack of control.

Created at 5/24/2012 12:59 PM  by System Account  (GMT) Greenwich Mean Time : Dublin, Edinburgh, Lisbon, London
Last modified at 5/25/2012 12:55 PM  by System Account  (GMT) Greenwich Mean Time : Dublin, Edinburgh, Lisbon, London

Rating :

Ratings & Comments  (Click the stars to rate the page)


Recent Discussions

There are no items to show in this view.