Understanding The People and Performance Link: Unlocking the Black Box is published by the Chartered Institute of Personnel and Development, price £50, www.cipdpublishing.co.uk tel 0870 800 3366 .. firstname.lastname@example.org
Companies pay management consultants big bucks in the belief that the fees will soon be recovered as a result of the strategies, cost savings and efficiencies that the consultants have identified.
Business understands this relationship. If you need external expertise, you pay for it. The saying `The best things in life are free’ is counter-intuitive to the principles of capitalism.
Perhaps this explains why Bath University’s school of management had the devil of a job persuading companies to let them take an in-depth look at their human resources systems. John Purcell, the school’s professor of human resource management, believes the reluctance in some cases came down to control of the findings.
`A management consultant’s report would be to the company and the company alone. Our objective is to publish our findings. We gave the co-operating employers absolute control over factual information but we reserved the right to interpret the findings,’ he says.
Good for him—and good for the 12 companies and public sector employers who buried their anxieties and let in the academics. Three years later, these employers have the benefit of some first-rate analysis that cost them no more than the time expended by staff in co-operating with the researchers.
The result of this co-operation, according to findings published at a London-based seminar last week, is a much sharper focus on the human resources policies that make a difference to their businesses.
The three-year research project by the management school, funded by the Chartered
Institute of Personnel and Development, worked as a health check on HR policies: the researchers were able to identify those policies that worked best, allowing companies to install or improve the ones that made a big difference.
In fact the number of policies, the researchers found, was less critical than the way they were executed. A well administered appraisal system, for example, achieves positive results. But poorly run appraisals can prove more harmful to staff morale than the absence of any system, says Prof Purcell.
Tesco, the supermarket chain, tested the methodology by asking the researchers to assess four stores in very similar towns. One was a high-performing store, two were average and one was performing comparatively poorly; but the researchers were not told where the stores stood in terms of their profitability.
Using interviews covering a series of HR policies, the team was able to identify one store that was out of line with the others. It was rated comparatively poorly for its training provision, pay and knowledge-sharing. It also scored badly on areas connected with job satisfaction. Its ratings for allowing staff to influence their jobs and for responding to staff suggestions were markedly lower than the other stores in the survey.
These areas of job influence, what the report describes as `controlling dimensions of discretion’, tend to be directly connected with the quality of management. This was particularly discernible at Tesco, which operates its stores under highly standardised and centralised policies and procedures.
In theory, therefore, each store should operate much like another. In practice, however, the role of the store manager and the senior management team and the way they relate to the section managers (whose work rate scored the highest among all the case studies) is crucial.
The manager of the poorly performing store was exposed as over-controlling in his methods. It was clear that he did not give his section managers enough latitude and did not respond effectively to comments from staff. It should surprise no one to learn that he no longer works for Tesco.
The problem of bad managers may be more widespread in the UK than this one example suggests. In a survey of 700 senior HR professionals featured in the magazine Personnel Today last week, three-quarters of those questioned were concerned at the capabilities of line managers, highlighting leadership and people management among the skills found wanting.
In the past, such comments have been dismissed as a product of HR antipathy to the hierarchy. But the Bath research has demonstrated that HR not only is in a position to point out problems but can also provide the remedies. The research has created a model of employee performance that relies on a combination of ability, motivation and opportunity.
Motivation, organisational commitment and the chance to shine, says Prof Purcell, are all important if employees are to exercise the kind of discretionary behaviour that makes the difference between excellent and ordinary performance. This is particularly significant among line managers, he believes. `Line managers’ behaviour bringing policies to life does make a very big difference,’ he says. Yet the tacit knowledge that this has always been the case was ignored in the re-engineering of the 1990s that swept through business like a revolutionary class war.
At Selfridges, the department store that was another of the featured companies, the HR team had succeeded in securing a more central role under former chief executive Vittorio Radice, who led the store’s transformation from dull Oxford Street retailer to the innovative and expanding `house of brands’ it is today.
The way the store runs its branded departments means that a high proportion of sales staff are not employed by Selfridges but by the various brand-owners. These so-called ‘concessionary staff’ undergo the same training as their Selfridges counterparts, with opportunities to gain job qualifications and in-store promotion. Staff training has a long
history at Selfridges, which was talking about its valued `human resources’ as long ago as 1920.
Selfridges must be doing something right. A few weeks ago, when 600 people took off their clothes in the Oxford Street store to be photographed on the escalators by Spencer Tunick, an installation artist, a third of them were staff. Now that’s what I call commitment.
Q1 Why might managers be suspicious of consulting projects offered for free?
Q2 Select three different types of project from those listed in this chapter and detail a selling strategy for thorn offered on a no-fee basis,
Q3 How would your selling strategy change it you were offering them on a full-fee basis?
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