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Sustaining the People Management and Performance Link

Sustaining the People Management and Performance Link. Centre for Innovation and Structural Change, Galway – 21 November 2002. John Purcell Professor of Human Resource Management University of Bath. Does ‘Fit’ Make a Difference? $ Change in Market Value per Employee.

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Sustaining the People Management and Performance Link

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  1. Sustaining the People Management and Performance Link Centre for Innovation and Structural Change, Galway – 21 November 2002 John Purcell Professor of Human Resource Management University of Bath Work and Employment Research Centre

  2. Does ‘Fit’ Make a Difference? $ Change in Market Value per Employee Source: Huselid Work and Employment Research Centre

  3. 4000 3000 Profit per employee (£) 2000 1000 0 to 4 5 to 7 8 to 10 11+ Source: FoW (N=297) Number of HR practices HR and profit per employee Source: Guest Work and Employment Research Centre

  4. Sector studies reveal more on HRM and performance Thompson - aerospace Batt - telecommunications Arthur - steel mini mills Bailey - clothing Hunter - Banking West - hospitals Work and Employment Research Centre

  5. Death rates (mortality) in hospitals and HRM Strong relationship between HRM practices and patient mortality: • Appraisal has the strongest relationship with patient mortality • The extent of teamworking in hospitals is also strongly related to patient mortality. • Sophistication of training policies is linked to lower patient mortality. • HR Director on the Board associated with lower mortality Source: Michael West People Management 21 February 2002 Work and Employment Research Centre

  6. How do we explain HRM - Performance How does people management impact on business performance? CIPD ‘flagship’ project 2000-2002 12 case studies of organisations trying to make the link Full report in 2003 - but some initial findings already Work and Employment Research Centre

  7. Detailed case studies One NHS Trust Two major retailers, both highly successful Three knowledge based companies - major consultancy - tele bureau - specialist software designer Two finance companies Three manufacturing companies One after sales service organisation Work and Employment Research Centre

  8. Employee Attitude Survey Total of 900 respondents, 40 + in each company, repeated in the second year Face to face interviews Employee experience and value attached to aspects of people management Direct comparison with a national survey (WERS 98) Unique research – we talk to employees! Work and Employment Research Centre

  9. A little theory … • Dimensions of Human Resource Management Practices • Skill Enhancing HR Practices:Function to improve the knowledge, skills and abilities of the collective work group through pre-hire selection and post-hire training • Motivation Enhancing HR Practices:Function to affect the motivational forces that energise, sustain and direct work behaviour. • Empowerment Enhancing HR Practices:Function to facilitate employee contributions of knowledge, skills and abilities to work-group and organizational success. Work and Employment Research Centre

  10. Training and Development Performance Appraisal Career opportunity Job security Recruitment Pay satisfaction Job challenge/job autonomy Teamworking Involvement Communication The Bath People and Performance Model Ability/skill ---------------------- Motivation/ Incentive ---------------------- Opportunity to participate Line management behaviour, respect, encouragementtrust, leadership Organisation commitment -------------- Motivation -------------- Job satisfaction Discretionary Behaviour Performance outcomes + Work and Employment Research Centre

  11. What makes a differenceCommitment and Satisfaction in a large accountancy/consulting partnership CommitmentJob satisfaction Training √ √ √ √ Performance Appraisal √ √ √ Career Opportunity √ √ √ Job Security Pay Satisfaction √ √ √ Job Challenge Team Work √√ Involvement √ Communication √ Management behaviour √ Respect from manager Climate of employee relations √ Work and Employment Research Centre

  12. What makes a differenceCommitment and Satisfaction in leading retail store: Selfridges, Manchester – sales staff CommitmentJob satisfaction Training Performance Appraisal Career Opportunity √ Job Security √ Pay Satisfaction √ Job Challenge √ Team Work √ Involvement √√√ √ Communication √√ √ Management behaviour √√ Respect from manager √√ Climate of employee relations √ Work and Employment Research Centre

  13. Employee Discretion in Omega Location A B C D % % % % Generally, how much influence do you have over how you do your job? A lot 64 64 27 50 Some 27 36 36 40 A little 9 27 10 None 9 How satisfied are you with the amount of influence you have over your job? Satisfied 82 82 36 100 Neither satisfied nor dissatisfied 9 18 46 Dissatisfied 9 18 Work and Employment Research Centre N=43

  14. Job Satisfaction at Omega A B C D % % % % How satisfied are you with the sense of achievement you get from your work? Satisfied 64 73 64 80 Neither satisfied nor dissatisfied 27 9 18 10 Dissatisfied 9 18 18 10 How motivated do you feel in your present job? Very motivated 55 46 36 40 Fairly motivated 27 46 18 40 Not very motivated 18 9 36 10 Not at all motivated 9 10 Work and Employment Research Centre

  15. Management Behaviour at Omega Location A B C D % % % % How good are mgrs at responding to suggestions from employees? Good 27 82 18 60 Neither good nor poor 46 9 46 40 Poor 27 9 27 To what extent does your line manager provide coaching & guidance to help improve your performance To a great extent 46 55 27 40 To some extent 27 45 36 40 To a limited extent 27 9 20 Not at all 27 How good do you feel the co. is at sharing & exchanging knowledge & experience? Good 64 82 18 70 Neither good nor poor 27 18 64 20 Poor 9 18 10 Work and Employment Research Centre

  16. (Based on averages for 12 month period Feb 2000 – Feb 2001) Percentage variation from regional average (20 sites) Location A Availability -0.1 Waste/known loss -5.5 Shrinkage/unknown loss 5.4 Operating expenses as % of sales 2.4 Waiting to be served 2.4 Payroll costs as % of sales -4.3 Profit Contribution -13.0 Turnover £m 42.6 B 0.6 4.7 63.5 2.4 -6.9 14.8 21.4 71.1 C -0.8 -11.8 -59.5 -28.2 -0.6 4.3 -33.7 48.2 D 0.3 7.1 44.6 -11.7 -3.3 0.1 -0.1 54.8 NB Data has been corrected to ensure that positive figures reflect better thanaverage performance and negative figures show worse than average performance OMEGA PERFORMANCE DATA (2000/01) Work and Employment Research Centre

  17. IMPLICATIONS • Performance Performance measures at the operational level are key – not profit. Performance measures which allow comparisons are particularly valuable. All performance measures are political Work and Employment Research Centre

  18. (B) Strategic HR Strategy is about delivery – implementation as much as the big vision. Good HR policies are vital esp - Job design for challenge and autonomy - Appraisal - Teamworking - Involvement But needs/motivators vary - professionals - non-managerial - front line managers Work and Employment Research Centre

  19. (C) What next? So you have all the key HR policies for AMO? Bringing policies to life: • Vision and Values – partnerships (b) HR integration e.g. balanced score card? (c) HR for front line managers – the behaviour you want is discretionary too Work and Employment Research Centre

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