PEOPLE RESOURCING

PEOPLE RESOURCING

Third Edition

Contemporary HRM in practice

Stephen Pilbeam

Marjorie Corbridge

Third

Edition Contemporary HRM in practice PEOPLE RESOURCING Corbridge Pilbeam

An imprint of

PEOPLE RESOURCING

Third Edition

Contemporary HRM in practice

Stephen Pilbeam and Marjorie Corbridge

This book focuses on the resourcing of organisations with people and fully meets the CIPD performance indicators

for the People Resourcing and People Management and Development Professional Standards. However, it also

goes beyond this remit by integrating contemporary issues in HRM, avoiding prescriptive solutions and

encouraging critical evaluation. The balance between academic rigour and practitioner relevance, together with

the breadth and versatility of the content, enables the book to be used effectively not only for modules based on

the CIPD Professional Standards but also for HRM modules on upper Undergraduate and Masters programmes.

This third edition promises to make the subject even more involving and understandable than ever before.

Readable text, exhibits and case studies promote the application of HR theory and concepts to HR practice.

Updated Assignments and Discussion Topics, Further Reading, web links and on-line resources further enhance

the teaching and learning experience.

This multi-purpose text offers an engaging and thoroughly contemporary look at current practice and recent

developments in People Resourcing and HRM.

Stephen Pilbeam is a Principal Lecturer in HRM and the Course Leader for the Masters in HRM at the University

of Portsmouth Business School. Stephen is a Chartered Fellow of the CIPD and serves on the CIPD Quality

Assurance Panel. Prior to working at the University Stephen held senior HR positions in the private sector.

Marjorie Corbridge is a Principal Lecturer in HRM at the University of

PortsmouthBusiness School. She is a Chartered Member of the CIPD, has

undertaken many consultancy projects and is Vice-Chair of the Portsmouth

CIPD Group Prior to working at the University Marjorie held senior HR positions

in the public sector.

ISBN 0-273-70379-X

9 780273 703792

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Front Cover Image:

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Additional student support at

www.pearsoned.co.uk/pilbeam

Additional student support at

www.pearsoned.co.uk/pilbeam

Current Issues in People Resourcing and HRM

covered in People Resourcing 3rd edition:

Emphasis on HR practitioners as business partners

Added-value HR

Strategic Management of wellness at work

Changes in employment and related law

Employer branding

e-HR

Current CIPD Professional Standards

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People Resourcing

Vist the People Resourcing, third edition Companion Website

at www.pearsoned.co.uk/pilbeam to find valuable student

learning material including:

• All Internet resources listed in the book as live web links

• Annual updates reflecting changes in the HRM territory and

in HR practice

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We work with leading authors to develop the

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Under a range of well-known imprints, including

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People Resourcing

Contemporary HRM in Practice

THIRD EDITION

STEPHEN PILBEAM

AND

MARJORIE CORBRIDGE

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Pearson Education Limited

Edinburgh Gate

Harlow

Essex CM20 2JE

England

and Associated Companies throughout the world

Visit us on the World Wide Web at:

www.pearsoned.co.uk

First published 1998

Second edition 2002

Third edition published 2006

© Stephen Pilbeam and Marjorie Corbridge 2006

The rights of Stephen Pilbeam and Marjorie Corbridge to be identified

as authors of this work have been asserted by them in accordance with

the Copyright, Designs and Patents Act 1988.

All rights reserved. No part of this publication may be reproduced, stored in a

retrieval system, or transmitted in any form or by any means, electronic, mechanical,

photocopying, recording or otherwise, without either the prior written permission of the

publisher or a licence permitting restricted copying in the United Kingdom issued by the

Copyright Licensing Agency Ltd, 90 Tottenham Court Road, London W1T 4LP.

ISBN-13: 978-0-273-70379-2

ISBN-10: 0-273-70379-X

British Library Cataloguing-in-Publication Data

A catalogue record for this book is available from the British Library

Library of Congress Cataloging-in-Publication Data

A catalogue record for this book is available from the Library of Congress

10 9 8 7 6 5 4 3 2 1

11 10 09 08 07 06

Typeset in 9.5/12pt Sabon by 35

Printed and bound by Ashford Colour Press Ltd., Gosport

The publisher’s policy is to use paper manufactured from sustainable forests.

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1 People Resourcing: the changing world of work and contemporary

human resource management 1

2 Human Resources Strategy – perspectives and theories 40

3 Competencies in People Resourcing 61

4 Human Resource Planning, Employee Retention and Worker Flexibility 89

5 HR Information Systems and e-enabled HR 121

6 Recruitment: attracting the right people 141

7 Selection: choosing the right people 169

8 Managing Diversity 208

9 Pay, Reward and Resourcing 230

10 Reward, Financial Benefits and Pensions 264

11 Managing and Appraising Performance 288

12 Human Resource Development and Organisation Development 317

13 Managing Health and Safety at Work 348

14 The Strategic Management of Wellness at Work 373

15 Employment Relations in Context 409

16 Employment Relations Processes 435

17 Conflict Resolution: discipline and grievance 462

18 Termination of Employment 487

19 Managing Redundancy 523

Brief Contents

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List of Figures and Tables xi

List of Exhibits xiii

Preface to the Third Edition xv

CIPD Professional Standards xvii

General Internet References xxvi

Acknowledgements xxxiii

1 People Resourcing: the changing world

of work and contemporary human resource

management 1

Introduction 2

A contingent approach 2

Changes in the world of work 5

Human resource management (HRM) 9

The changing role of the HR professional 13

Case Study: Call centres in the financial services

sector – just putting you on hold . . . 23

Ethics and professionalism 26

Brave new world or more of the same? 30

2 Human Resources Strategy: perspectives

and theories 40

Introduction 41

Strategy: misconceptions, concepts and typologies 41

Strategy, business performance and human

resources 43

Best-practice models 44

Best-fit models 49

The resource-based model 52

Case Study: Polygon University – the challenges

of developing Human Resources Strategy 55

Developing an emergent human resource strategy 56

3 Competencies in People Resourcing 61

Introduction 62

Definitions and concepts 62

The competency movement 64

Who uses competency frameworks? 68

Why do employers use competency frameworks? 68

How to construct a competency framework 70

Techniques for constructing competency

frameworks 72

Assessing competencies 73

Using competencies 78

The pros and cons of competency management 82

Case Study: Competency frameworks and

performance management in the British

civil service 83

4 Human Resource Planning, Employee

Retention and Worker Flexibility 89

Introduction 90

Human resource planning 90

The process of human resource planning 91

Developments in human resource planning 98

Employee retention 100

Flexibility at work 103

Patterns of work 110

Case Study: Introducing flexible working at

Safelife Insurance Limited 115

5 HR Information Systems and

e-enabled HR 121

Introduction 122

Information needs 122

HR information and business partnering 124

e-HR and the transformation of HR services 124

Managerial decision-making and the HRIS 126

The benefits of an HRIS 129

Case Study: Young People’s Fashion PLC and HRIS 133

Security of personal data 134

Data protection – rights, access and security 135

6 Recruitment: attracting the right people 141

Introduction 142

Contingency in recruitment and selection methods 142

Contents

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viii CONTENTS

Recruitment, selection and the systems approach 143

Recruitment and selection sub-systems 144

Pre-recruitment 146

Recruitment methods – attracting applications 151

Case Study: A-B-Zee: Human resource planning

and recruitment for new superstores 160

Recruitment methods – analysis and trends 164

Responding to enquiries and the candidate’s view 164

Criminal certificates – Police Act 1997 165

Asylum and Immigration Act 1996 166

7 Selection: choosing the right people 169

Introduction 170

Subjectivity, discrimination, professionalism

and ethics 170

Elimination and reduction 170

Validity, reliability and popularity of selection

methods 172

Selection methods 175

Case Study: Recruitment and selection of

graduate trainees 189

Selection trends 193

Successful transition through pre-engagement

and induction 195

The contract of employment and the written

particulars of employment 197

Exit interviews – the initial stage of the

recruitment and selection process? 198

8 Managing Diversity 208

Introduction 209

Defining diversity 209

The nature of discrimination 209

An overview of UK discrimination legislation 211

Case Study: Implementation of age discrimination

legislation at Family Fitness Plc 215

The Commission for Equality and Human Rights

(CEHR) 217

The business case for managing diversity 218

Work–life balance 220

Equal pay 221

Case Study: Equal pay review at the Greenacres

College of Further Education 224

9 Pay, Reward and Resourcing 230

Introduction 231

Reward 231

New pay and old pay 231

Reward strategy 233

Total reward philosophy 235

Pay strategies 237

Graded pay and job evaluation 237

Market-driven pay 244

Performance-related pay 247

Competence-based pay 256

Profit sharing 256

Case Study: Reward systems at City in the Woods

City Council 257

10 Reward, Financial Benefits and Pensions 264

Introduction 265

Employee financial benefits 265

Flexible benefits 267

Pensions 270

Case Study: Pensions change at Woolworths 278

Greenbury and Cadbury 281

Contemporary trends in reward 282

11 Managing and Appraising Performance 288

Introduction 289

Performance management and corporate strategy 289

The performance management process 290

The balanced scorecard and performance

management 298

Managing substandard performance 298

Managing employee absence 299

The management of sick absence 300

Case Study: Managing absence and attendance 308

Case Study: Ellie and the Oasis concert 311

12 Human Resource Development and

Organisation Development 317

Introduction 318

Human resource development 318

The different models of HRD 320

The role of the HRD practitioner and consultant 322

The training cycle – the path to organised learning 323

Continuous development – the path to

organisational learning 327

The macro-HRD environment 327

Organisation development 331

Changing organisational environments and

corporate renewal 333

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CONTENTS ix

OD and links with strategic management 334

OD in practice 334

Planning and managing the change process 336

Case Study: Developing capability in Global

Telecomms (GT) plc 338

The learning organisation 338

Knowledge management 340

The OD consultant and change agent – roles

and skills 341

13 Managing Health and Safety at Work 348

Introduction 349

Health and safety at work and the performance

imperative 349

From prescription to responsibility – statutory

regulation to self-regulation 350

Reconciling the tensions 351

Common law duties of care 352

The Health and Safety at Work Act (HASAWA)

1974 352

A practical guide to the Health and Safety

Regulations 1992 (consolidated in ERA 1996

and Amendment Regulations 1999 and 2003) 357

Protection against dismissal – health and safety

duties and concerns 364

Special groups – young people and pregnant women 364

The Working Time Directive 1993 365

Case Study: Health and safety in Cobras

department store 366

Creating an active health and safety culture 367

Health and safety – principle and reality 369

A framework for analysis 369

14 The Strategic Management of

Wellness at Work 373

Introduction 374

Wellness at work strategy 374

Stress and distress 377

Case Study: Stress management policy at Goodwins

department stores (based on HSE guidance) 385

Bullying and harassment at work 386

Smoking at work 389

Alcohol misuse and drug abuse 391

HIV and AIDS in the workplace 395

Violence at work 398

Case Study: The implementation of a wellness

strategy at Portsmouth City Teaching Primary

Care Trust 402

15 Employment Relations in Context 409

Introduction 410

Employment relations and people resourcing 410

The changing nature of employment 411

The role of the state 412

Case Study: Union recognition at Key Bits Ltd 420

European social policy 424

Management strategies and employment relations 425

Trade unions 428

16 Employment Relations Processes 435

Introduction 436

Employment relations policies and people

resourcing 436

Collective bargaining structure 437

Trends in collective bargaining 439

Conciliation, mediation and arbitration 444

The non-union organisation 446

Personal contracts 448

Employee involvement, commitment and high

performance work 449

The negotiation process 452

Case Study: Preparing for negotiations at Sell-It-All 456

17 Conflict Resolution: discipline

and grievance 462

Introduction 463

Individual conflict-resolving mechanisms 463

The nature of discipline at work 464

Organisational rules 465

Disciplinary procedures 466

Case Study: Discipline at work – Jobs for the

Toys Limited 478

Grievances – employee concern resolution 479

18 Termination of Employment 487

Introduction 488

Introduction to dismissal 488

The origins and aims of unfair dismissal legislation 488

Types of dismissal 489

Dismissal defined 490

Employee qualification for unfair dismissal

protection 491

Inadmissible reasons for dismissal 492

Fair reasons for dismissal 494

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x CONTENTS

Reasonableness 495

Five fair reasons explored 497

Case Study: Christmas spirit and the amorous

kitchen porter 503

Constructive dismissal 510

Case Study: Wacker Payne and the Royal Naval

Reserve training weekend 511

Employment tribunals 514

19 Managing Redundancy 523

Introduction 524

Definition of redundancy 524

Causes of redundancy 525

Redundancy and the law 526

Consultation with employees 526

Redundancy payments 528

Selection for redundancy 528

Other statutory rights 532

The avoidance of redundancy 532

The effective management of redundancy 534

Rebalancing the organisation after redundancy 539

Case Study: Coping with redundancy (if you stay) 541

Index 546

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Supporting resources

Visit www.pearsoned.co.uk/pilbeam to find valuable online resources

Companion Website for students

• All Internet resources listed in the book as live web links

• Annual updates reflecting changes in the HRM territory and in HR practice

For instructors

• Answers and tutor guidance for the end of chapter Assignments and Discussion Topics

• Supporting teaching notes on the case studies, associated questions and activities

• PowerPoint slides of the Figures, Exhibit boxes and text extracts

For more information please contact your local Pearson Education sales representative or visit

www.pearsoned.co.uk/pilbeam

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List of Figures

and Tables

FIGURE 1.1 An integrated approach to people resourcing 4

FIGURE 1.2 A continuum of personnel management activity 10

FIGURE 1.3 HR strategy: the integration of HR activities to manage

performance 17

FIGURE 3.1 Using competencies in HRM 78

FIGURE 4.1 The process of human resource planning 91

FIGURE 4.2 Overlapping forms of flexibility 105

FIGURE 4.3 The flexible firm 108

FIGURE 5.1 Data to information and the decision-making levels 127

FIGURE 6.1 The systems approach to recruitment and selection 144

FIGURE 6.2 Pre-recruitment activity 146

FIGURE 7.1 Validating the selection process and decision 174

FIGURE 8.1 A step-by-step guide to equal pay 225

FIGURE 9.1 Reward strategy – vertically integrated, deterministic

and unitarist 234

FIGURE 9.2 Total reward dimensions 235

FIGURE 9.3 Graded pay structure 238

FIGURE 9.4 An example of a paired comparison score chart 242

FIGURE 9.5 Factors contributing to the emergence of PRP 250

FIGURE 10.1 Internal and external shapers of reward trends 283

FIGURE 10.2 Towards a more sophisticated and complex reward

strategy 283

FIGURE 11.1 The performance management process 290

FIGURE 11.2 A systems approach to managing sick absence 303

FIGURE 12.1 HRD models in practice 321

FIGURE 12.2 The systematic training model 323

FIGURE 12.3 The experiential learning model 325

FIGURE 12.4 The continuous development spiral 328

FIGURE 12.5 Congruence and incongruence between organisational

sub-systems 335

FIGURE 13.1 The 1992 Regulations (consolidated in ERA 1996) 357

FIGURE 13.2 Health and safety at work: a framework for analysis 370

FIGURE 14.1 A framework for analysing stress at work 379

FIGURE 14.2 Eustress and distress 379

FIGURE 14.3 Diagnosis precedes targeted SMIs 384

FIGURE 15.1 The management style matrix 427

FIGURE 16.1 Negotiating objectives: conditions for a settlement 454

FIGURE 17.1 Mutual adjustment in the contract facilitated by

disciplinary and grievance procedures 463

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xii LIST OF FIGURES AND TABLES

FIGURE 17.2 Sources of organisational rules 466

FIGURE 17.3 The principal incremental stages of a disciplinary procedure 472

FIGURE 18.1 Reasonableness in the circumstances 495

FIGURE 18.2 Incapability or substandard work: incompetency typology 504

FIGURE 19.1 The redundancy system 535

TABLE 9.1 Believing particular effects of PRP (rounded percentages) 253

TABLE 9.2 Grades, scale points and salaries for City in the Woods

City Council 258

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EXHIBIT 1.1 Changes in the world of work: a summary 9

EXHIBIT 1.2 HR behaviours 17

EXHIBIT 1.3 An illustration of a vertically and horizontally integrated

HR strategy 18

EXHIBIT 1.4 Key progressive people management practices 20

EXHIBIT 1.5 HRM in the twenty-first century? 32

EXHIBIT 2.1 Best practice, best fit and RBV – a summary 44

EXHIBIT 3.1 Boyatzis’ competency model 66

EXHIBIT 3.2 Individual competencies 71

EXHIBIT 3.3 Creating a new competency framework for the senior

civil service 74

EXHIBIT 3.4 Employers’ use of competencies 79

EXHIBIT 5.1 Strategic decision-making 127

EXHIBIT 5.2 Functional/tactical decision-making 128

EXHIBIT 5.3 Operational decision-making 128

EXHIBIT 6.1 The recruitment and selection sub-systems 145

EXHIBIT 6.2 A six-factor formula for a person specification (Pilbeam) 148

EXHIBIT 6.3 Recruitment methods 151

EXHIBIT 6.4 Recruitment advertising – professional guidance 152

EXHIBIT 6.5 Percentage of organisations using different recruitment

methods 164

EXHIBIT 6.6 The recruitment pack 165

EXHIBIT 7.1 Employer ethics in recruitment and selection 171

EXHIBIT 7.2 Shortlisting and the six-factor formula 172

EXHIBIT 7.3 Predictive validity of selection methods: a summary of

correlations 173

EXHIBIT 7.4 Extended application form statements for behavioural

competencies 177

EXHIBIT 7.5 Selection interviewing skills 180

EXHIBIT 7.6 Ethics and assessment centres 189

EXHIBIT 7.7 Popularity of selection methods 195

EXHIBIT 7.8 The written particulars of employment required by law 198

EXHIBIT 7.9 Example of an exit interview pro-forma 201

EXHIBIT 9.1 An example of the factors in a points rating system 243

EXHIBIT 9.2 Market rate survey: organisational job profile (internal) 245

EXHIBIT 9.3 Outline survey form for collecting market rate data

(external) 246

EXHIBIT 9.4 Expectancy theory of motivation 248

EXHIBIT 9.5 Conflicts and ambiguities in PRP 254

List of Exhibits

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xiv LIST OF EXHIBITS

EXHIBIT 10.1 Illustration of a flexible benefits menu – which would

you choose? 268

EXHIBIT 10.2 Comparison of final salary and money purchase

pension schemes 275

EXHIBIT 10.3 Emerging and declining reward trends 284

EXHIBIT 11.1 Examples of individual objectives 293

EXHIBIT 11.2 Being unwell, on a scale of 10, versus being unfit for work 302

EXHIBIT 11.3 Bradford Index 306

EXHIBIT 11.4 The sick absence encounter between manager and employee 309

EXHIBIT 12.1 The dualistic dimensions of HRD 320

EXHIBIT 12.2 The role of a change agent 342

EXHIBIT 13.1 The facts on work-related ill health and injury 350

EXHIBIT 13.2 A systematic approach to risk assessment 359

EXHIBIT 13.3 Systematic risk assessment through points rating of each

hazard 360

EXHIBIT 13.4 An illustrative manual handling checklist 362

EXHIBIT 13.5 Successful health and safety management 368

EXHIBIT 14.1 A menu of the potential sources of stress 380

EXHIBIT 14.2 Indicative content of a formal stress policy 383

EXHIBIT 14.3 The contrast between strong management and bullying in

tackling poor team performance 388

EXHIBIT 14.4 Employment National Training Organisation (ENTO)

national standards in managing work-related violence 401

EXHIBIT 15.1 Summary of key changes to collective employment law,

1979–2005 417

EXHIBIT 16.1 Organisational criteria favouring company and plant￾level bargaining 440

EXHIBIT 16.2 Third party dispute resolution 445

EXHIBIT 16.3 Back to the future? 446

EXHIBIT 16.4 Key factors determining the approach to negotiation 453

EXHIBIT 17.1 Principles of natural justice in employment 468

EXHIBIT 17.2 Features of disciplinary procedures (ACAS) 469

EXHIBIT 17.3 Indicative model of a disciplinary procedure (ACAS) 470

EXHIBIT 17.4 Hearing structure for grievance or dispute for larger

organisations 482

EXHIBIT 17.5 Example of a grievance procedure 482

EXHIBIT 17.6 The key professional and ethical characteristics of a

grievance procedure 484

EXHIBIT 18.1 An ethical approach to dismissal within the legal framework 489

EXHIBIT 18.2 An illustrative case of dishonesty dismissal and the burden

of proof 499

EXHIBIT 18.3 Principles for dealing with ill health 506

EXHIBIT 18.4 The employer, the chickens and the chicken catcher and

the balance of disadvantage – some other substantial

reason (SOSR) for dismissal 509

EXHIBIT 18.5 Indicative examples of employer conduct which may be

construed as constructive dismissal 510

EXHIBIT 19.1 Measured factor criteria for redundancy selection 531

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