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

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

Work and Employment Research Centre HR and profit per employee Source: FoW (N=297) Number of HR practices 11+8 to 105 to 70 to 4 Profit per employee (£) Source: Guest

Work and Employment Research Centre 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 Death rates (mortality) in hospitals and HRM HR Director on the Board associated with lower mortality Source: Michael West People Management 21 February 2002 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.

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

Work and Employment Research Centre 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 Detailed case studies

Work and Employment Research Centre 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 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 Empowerment Enhancing HR Practices: Function to facilitate employee contributions of knowledge, skills and abilities to work-group and organizational success. Motivation Enhancing HR Practices: Function to affect the motivational forces that energise, sustain and direct work behaviour. A little theory …

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

Work and Employment Research Centre What makes a difference Commitment and Satisfaction in a large accountancy/consulting partnership Commitment Job 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 What makes a difference Commitment and Satisfaction in leading retail store: Selfridges, Manchester – sales staff Commitment Job 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 N=43 Employee Discretion in Omega Generally, how much influence do you have over how you do your job? A lot Some A little None 9 How satisfied are you with the amount of influence you have over your job? Satisfied Neither satisfied nor dissatisfied Dissatisfied 9 18 Location A B C D % % % %

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

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

Work and Employment Research Centre OMEGA PERFORMANCE DATA (2000/01) 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 Turnover £m 42.6 B C D (Based on averages for 12 month period Feb 2000 – Feb 2001) Percentage variation from regional average (20 sites) NB Data has been corrected to ensure that positive figures reflect better than average performance and negative figures show worse than average performance

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

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