Strategic Human Resource Management – Current Developments and the HE Context David Guest Professor of Organizational Psychology & Human Resource Management King’s College, London

The Starting Point  Is your university able to attract and retain the kind of talent that will ensure a high RAE rating in 2008?  Does your university provide attractive development opportunities for young up-and- coming staff?  Are there effective mechanisms for dealing with the kind of poor quality teaching that can lead students to complain to governors?

The Starting Point  Does the institution have in place the kind of performance indicators that permit you to make sound judgements about the management of human capital?  Can you judge whether you have ethical human resource policies and practices in place?  For what do you hold the human resource department accountable?

Reasons for Interest in HRM  Basis for competitive advantage and better performance  To attract and retain a high quality workforce  To manage change and innovation  Growth of evidence-based case for adoption of human resource policy and practice  Interest in human capital and ethical reporting  To manage universities effectively and efficiently  Response to financial incentives

Approaches to HRM 1.HRM as strategy –Integration of HR strategy with university strategy 2.HRM as management –Line management accept responsibility for managing their staff within HR strategy 3.HRM as utilisation of talent (human capital) –An integrated culture, philosophy and HR policy and practice to gain high commitment and performance 4. HRM as guardian/promoter of fair treatment 5. HRM as performance management 6. HRM as administration

The Main Elements of Performance Management PERFORMANCE MANAGEMENT PERFORMANCE APPRAISAL PERFORMANCE- RELATED PAY PERSONAL DEVELOPMENT PLANS OBJECTIVE SETTING AND REVIEW COACHING MENTORING FEEDBACK

High Commitment HRM Recruitment & selection Training & Development Opportunity to participate Employee motivation Employee competence Job design Involvement systems Communication Performance appraisal Financial rewards Feedback Employee commitment Internal promotion Security Fair treatment Met psych. contract Enhanced employee performance

High Performance HRM Practices  Selection based on quality/approach to work/capacity to learn  Use of realistic job previews in selecting all staff  Extensive provision of training  Deliberate development of a learning organization  Design of jobs to make full use of skills and abilities  Staff/teams responsible for their own quality  Formal appraisal of all staff at least annually  Partnership system of employment relations  Systematic goal setting and feedback  Internal promotion if at all possible  High basic pay and organization-based contingent pay  Harmonised terms and conditions for all staff  Employment security emphasised  Formal system of communicating values to staff  Staff informed about company performance and prospects  Regular use of attitude surveys

HEFCE Strategic Priorities  Recruitment and retention  Development and training  Equal opportunities  Staffing planning  Performance review and reward  Poor performance +  Strategic integration  Performance indicators

Choosing HRM Outcomes and Measures of Performance  Standard performance indicators  Goal-based perspectives  Balanced score-card  Resource acquisition models  Bench-marking and ratios  Process models; process effectiveness  Stakeholder perspectives

The Outcome Measurement Challenge: Evidence from 110 UK Health Service Trusts Labour turnover - 2Absence Staff Costs-07 –19 - 4Productivity-01 – Unit Labour Costs –89 - 6Appointments on time –07 – Complaints – Return on capital-03 –21 –05 – –11 - Correlation above.18 p<.05

HRM and Performance  Low adoption of HR practices in the UK Number of HR practices in the public (N=546) and private sectors (N=1277) WERS data

Effectiveness of Human Resource Departments (CEO responses)

HR and profit per employee

HRM – Performance Links: UK NHS Trusts % deviation from average

Managing People Through the Psychological Contract: Why the Interest?  Breakdown of the traditional ‘deal’ –A career in return for loyalty –A fair day’s work for a fair day’s pay –Low pay but high autonomy  Individualisation of the employment relationship  Organizational change and violation

Defining the Psychological Contract “The perceptions of both parties to the employment relationship, organization and individual, of the reciprocal promises and obligations implied in that relationship” The state of the psychological contract is concerned with whether the promises and obligations have been met, whether they are fair and their implications for trust.

The Deal Employer Delivers on Promises Employees Deliver on Promises Fairness Trust Commitment Well-Being Performance

Promises made and kept by the organization %Central Local Health Industry Govt. Govt. Fair pay: promise made promise fully kept A career: promise made promise fully kept

Do you feel fairly rewarded for the amount of effort you put into your job? %Central Local Health Industry Govt. Govt. Yes No

Extent to which you trust senior management to look after your best interests %Central Local Health Industry Govt. Govt. A lot Somewhat Only a little Not at all

The Psychological Contract Framework The Good Employer The High Quality Workplace The Deal Satisfied And Productive Workers

The Good Employer Employee Partnership Flexible Employment Practices Climate of Positive Organisational Support Progressive Human Resource Practices The Good Employer High Quality Workplace

The High Quality Workplace % positive response  Reasonable demands/manageable workload 74  Some personal control over work 67  Support from supervisors and colleagues 82  Positive relationships at work 93  A reasonably clear role 76  Involvement in changes affecting you 83

Effective supervisory leadership Rarely/ Most of Never the time  Motivates you to work effectively  Provide feedback on how you are doing  Help you improve your performance  Make you feel you want to quit this job 72 9  Provide praise and recognition  Get on your nerves  Support you when necessary 11 63

Exploring the Links High quality workplace Effective supervisory leadership Number of promises State of the psychological contract Human Resource Management Flexible Practices

Exploring the Links cont… State of the psychological contract Job satisfaction Loyalty to supervisor Organisational Citizenship Excitement Intention to quit Organisational commitment Work-life balance Life satisfaction

High Quality Workplaces and Stress High Quality Workplaces Organisational Commitment Motivation Stress Intention to quit Positive state of Psychological contract Work Satisfaction Satisfaction with Work-Life Balance Human Resource Management Flexible Practices Long Hours

Issues Arising  What sort of HR strategy?  How well integrated an HR strategy?  Strategic or reactive HR?  What role for middle managers?  What role for the HR function?  What psychological contract is offered?  Does your university deliver on its promises?  Modes of cultural leadership – what do you pay attention to?