ABE DIPLOMA IN HRM

HUMAN RESOURCE MANAGEMENT

UNIT 1: HRM & ITS CONTEXT

REVISION QUESTIONS & ANSWERS

SYLLABUS POINTS

1. Describe the principal theories of HRM.

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1. Explain the importance of people as a key resource and examine the potential for tension between the objectives and needs of
2 individuals and the organisation.
1. Discuss the impact on the organisation and employees of the unpredictable global environment.
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1. Explain the significance of the psychological contract between organisation and employee.
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1. What is HRM?
- Human Resource Management (HRM) is the strategic and coherent approach to the management of an organization's
most valued assets - the people working there who individually and collectively contribute to the achievement of the
objectives of the business – (Michael Armstrong, 2006)
- Overall purpose of HRM is to ensure that the organisation is able to achieve success through people.

2. What is Strategic HRM?

- Strategic HRM is the systematic attempt to integrate the use of human resources with the wider long-term business
strategy of an organization.

3. What does HRM include?

HRM comprises of HR Processes and HR Outputs.
HR Processes are:
- HR strategy – how the best return can be obtained from HR available now and in the future.
- People resourcing – getting the right number of people with right skills at the right job.
- Learning and development – focusing on developing employees’ skills, knowledge, etc.
- Organisation development – Managing the structure/systems/culture/values of the organisation.
- Performance management/reward/recognition – maximise recruitment, retention and motivation.
- Employee relations – making staff supportive, involved and engaged with the business.
HR Outputs are:
- People resourcing – getting the right number of people with right skills at the right job.
- Performance – Engaging and supporting the workforce for better contribution.
- Change management – Aligning culture/structure/learning to enhance business.
- Administration – legal compliance, payments to staff and developing policies and practices.
HR Lifecycle model:
- Recruitment – attracting people for the jobs.
- Selection – choosing the best candidate for the job.
- Induction – briefing about the organisation to the new employees.
- Performance management – setting objectives and goals for employees.
- Performance monitoring and appraisal – overseeing how the objectives are being achieved.
- Personal and professional development – developing skills, talents, etc in employees.
- Engagement – commitment, communication and involvement of staffs with the organisation.
- Career development – planning staffs progress.
- Termination – ending the job contract by means of resignation, retirement, redundancy, dismissal, etc.

4. Is important for HR professionals to get evidence that connects success with good treatment of staffs?
- Yes, because people say that the staffs are the most valuable asset for organisations and this saying requires
academic backing for managers and owners to consider it seriously.
- If the evidence is not found, the managers and owners may completely ignore staffs’ expectations about their
development, welfare, motivation, fair treatment, etc.

5. Why is HRM important?

Because,
- Staffs are considered to be a prime source of competitive advantage (all other assets are more easily purchased,
imitated etc.).
- More attention is being paid to human intellectual and social capital – measurement and reporting.
- People management and development have been less well developed than financial or material resourcing.
- It is relatively easy to add value to employees by performance management and training.
- UK Blackbox research showing the link between best practice HRM and organizational success.
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Human Resource Management, ABE Diploma in HRM, Unit 1, Revision Questions & Answers
© Ali Hashim, Clique College, Male, Maldives
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6. What is Horizontal and Vertical Integration?
- Horizontal Integration a term given for the integration of one HR function with the other. For example, recruitment is
affected by an organisation’s pay policy and the way it treats employees; reward will be based on the staff
performance.
- Vertical Integration is how HR activities integrate with the activities of line managers and also outside bodies such as
government/regulator. For example setting of minimum wage by the government, reduction of cost as per the
organisation’s business plan.

7. Briefly explain the “Blackbox Research”.

- It was a study done in 2003 by the UK Chartered Institute of Personnel and Development (CIPD) in 11 large UK
organisations, including Jaguar Cars, the Nationwide Building Society, Selfridges, Tesco, etc.
- It confirmed the powerful relationships between HR practices, employee commitment and operating performance.
- One of its conclusions was that there was no universal 'best HR practice'.

8. What do we understand by Pluralist and Unitarist Approach?

- Pluralist or leftwing approach is where the workers seek high rewards for as little effort as they can get away with and
also where the employers seek high productivity for little labor cost.
- The Unitarist or rightwing approach is where the employees work hard because they know when the organisation is
successful, and owners happy, the employees get benefited.

9. Give the meaning of “employers”, “manager” and “employee”?

- Employers are the ones that offers job, and is also called the owner.
- Managers are the ones that run the organisation.
- Employees are the ones that work for the organisation.

10. What is meant by the term “psychological contract”? And what are its models?
- The perceptions of the two parties, employee and employer, of what their mutual obligations are towards each other -
(Guest and Conway, 2002).
- The psychological contract is the un-stated contract between the employee and employer about what the former is
expected to contribute to their employer via their work and what they can expect in return. It consists of mutual
obligations – e.g. ‘work hard and you will have job security and promotion’; or ‘we do not expect you to stay once your
training is complete’.
- There are 2 models of the psychological contract, they are:
 The traditional deal (a relationship): long-term commitment, trust, mutual respect, a career, interesting work, fair
treatment and employee involvement – a career.
 The ‘new deal’ (transactional): short-term engagement of short-term mutual benefit, flexible and finance based,
adversarial – a job.

11. Is the psychological contract, the same as a legal contract of employment?

- No, it is because, the psychological contract offers a limited and uncertain representation of the reality, and, unlike a
written employment contract, the psychological contract is not often easy to prove in a court of law.

12. What are the terms, as per a psychological contract for both employees and employers?
- For Employees: they are expected to work hard, uphold company’s reputation, attend work and be punctual, be loyal
and honest, be courteous to clients/colleagues, etc.
- For Employers: they are expected to pay the employees regularly, provide training and development, recognize and
reward innovation, give feedback, provide reasonable job security, etc.

13. What happens if the psychological contract is breached?

- If an employee believes that the management has broken promises or failed to deliver on commitments, this has a
negative effect on job satisfaction, commitment and on the psychological contract. The employees may start to become
careless, show lack of commitment, and have reduced level of motivation.

14. What are the areas covered in the psychological contract?

- Tenor of the relationship between the employer and employee (old deal or new deal)
- The image of the model employee (biodata, etc.)
- Employees’ sense of personal identity.
- Provision of outplacement for displaced staff.
- Importance given to job satisfaction.
- Expectation of honesty and loyalty by both parties.
- Provision of job security and career development.
- A fair day’s pay for a fair day’s work and contingent reward.
- Employees’ willingness to be flexible.
- Provision of a safe and healthy work environment.
- Equality of opportunity.
- Self-management (eg: employee will take responsibility for CPD); provision of resources for learning & development.
- Levels of employee engagement, empowerment and communication,
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Human Resource Management, ABE Diploma in HRM, Unit 1, Revision Questions & Answers
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 - Power afforded to employee representatives, eg: trade unions.

15. How are organisations empowering line managers to do HRM work?

- Clerk of works - Transactional HR (dealing with individual casework; predominantly administrative) - the ‘old’ model of
HR specialist who takes difficult casework from line managers.
- Contracts manager - Managerial HR (where HR is heavily formalised and rule-bound and emphasis is on
troubleshooting or staying on the right side of employment law (often strong in a public sector or unionised
environment).
- HR Architect - Strategic HR (creative and innovative HR, with emphasis on vertical integration and making best use of
the available human resource – added value HR)
(Tyson and Fell, 1986)

16. How do employees get involved with HR works?

- Through intranet, the employees can manage their leave, change their hours of work, get a pay slip, apply for
promotion, find out about conditions of service etc.

17. Discuss the HR Strategic Business Partner Model developed by Ulrich (1997)? And also what is the use of it?
- Shared Services: it is a single and sometimes large unit that handles all the routine transactional HR activities for the
organisation. Typically: resourcing, payroll, absence monitoring, advice on the simpler employee relations issues.
- Centres of Excellence: they are small teams of HR experts with specialist knowledge of key areas of HR. Typically
reward, learning and development, employee engagement, talent management, diversity and compliance.
- Strategic Partners: it is a small number of HR professionals working closely with local business managers, influencing
strategy and steering its implementation. The task of strategic partners is to ensure the business makes the best use of
its people. Strategic Partners hightlight to general managers the HR issues and possibilities the managers may not
see. It also aims to inform and shape HR strategy, so that HR meets organisational needs.
- If HR is divided between specialists and line managers using the Ulrich model there is a significant role for line
managers. If (in an ideal world) the HR specialist were to impart all necessary knowledge and skills to line managers,
the specialist would be unnecessary in handling casework, however, there would continue to be a strategic and HR
development role for specialists.

18. How did the role of HR Professionals emerge?

- Welfare: the concept of welfare workers developed during the 2 World Wars to make the best use of the welfare
provisions available to workers/families. They were called ‘People professionals’ and represented the staffs.
- Industrial relations: during the 1960s improved communication saw the increased number of trade unions. To
counterbalance to the powerful employers. So, ‘Personnel Managers’ were like the independent arbitrators between the
two.
- Human resource management: during the 1980s, competition increased, low productivity meant low job security and
management seized back the power. ‘Personnel Managers’ became HR Managers, and sided with the employer. Their
work: enhancing performance, change management, legal compliance.

19. What is Culture? What is Organisational Culture? What is Organisational Climate?

- It is the sum total of the beliefs, knowledge, attitudes of mind and customs to which people are exposed in their social
conditioning. Through contact with a particular culture, individuals learn a language, acquire values and learn habits of
behaviour and thought.
- Organisational culture refers to the deep-seated values of an organisation as they are manifested in the ways in which
people are expected to behave.
- Organisational climate refers to the ways in which people involved with the organisation) perceive that organisation. Eg:
How customer friendly is it? How concerned is it with the welfare of its employees?
20. Give some ways in which we can deduce the culture of the organisation?
- Through its structure, eg: formal or informal structure.
- Centralised or decentralised decision-making and whether decisions are taken by committees or individuals.
- The extent to which innovative thinking is promoted and encouraged.
- Layout and appearance of the factory or office.
- Formality of dress.
- Attitudes to training and development.
- Attitudes to change and particularly, technology.

21. Name and discuss the types of Organisational Cultures proposed by Charles Handy?
- Power Culture (Zeus)
In this type of culture, the manager is the source of all power and he takes all decisions and risks. The organisations
have limited amount of rules/procedures/policies and it does not have a rigid structure thus it can adapt quickly to
change. As they grow, the power of key people is likely to diminish since they cannot control everything. This culture
can work for small organisation.
- Role Culture (Apollo)
This is a quasi-bureaucratic culture, and works by logic/reason and they have formal policies/procedures/practices/job
descriptions, etc. which are clearly defined. Their structures are rigid with narrow band of senior managers at the top,
and a highly structured organisation set out below, each constituent part knowing its function. They appoint people
based on their ability to perform that role. These organisations find it hard to adjust to external changes.
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Human Resource Management, ABE Diploma in HRM, Unit 1, Revision Questions & Answers
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 - Task Culture
The task culture is one based on jobs or projects to be carried out and the emphasis will be on completing the job. The
organisations are flexible and changeable to suit the job in hand. Task culture can be ideal when the enterprise has to
adapt quickly to changes in the external environment of its market place. The most difficult issues for managers in the
task culture are: control of work, coordination of resources, achieving economies of scale and budgeting.
- Person Culture (Dionysus)
In this culture, the individual is the main focus and the organisation and its structure exist to serve the individual’s
objectives and aspirations. This culture is found in diverse businesses: eg. Solicitors’ offices, small businesses, etc.

22. What are the factors that affect the Organisational Culture?
- Origins: the founding principles of the organisation will have a very strong impact on the organizational culture.
- Size: the size of the organisation will influence its culture, eg: big organisations will tend to adopt role culture.
- Technology: the availability and affordability of technology affects the culture, eg: if it is expensive and needs close
controls and supervision, that suits role culture.
- Goals: if one or just a few powerful individuals lay down goals and objectives, the power culture is likely to apply.
- External environment: PESTLE factors affect the organizational culture.
- Human resources: the culture that suits best will depend on personal values, attitudes and beliefs of the staffs.

23. Where can one look to analyse the Organisational Culture?

- Mission Statement
- Behaviour patterns
- The structure of the organisation
- The nature of leadership and the distribution of authority
- The values of the organisation
- Entrepreneurial spirit
- Receptiveness to embrace change
- Cultural climate

24. What are the 2 characteristics necessary for a culture to be successful?

- The culture must be coherent.
- The culture must be flexible

25. How can Organisational Cultures be changed?

- Culture can be changed for the better by re-engineering, usually delayering (stripping out layers of management) and
empowering teams with decision making authority in their work situations.

26. What is Globalisation?

- Globalisation is the process by which national barriers are breaking down in the market within which organisations
operate. Eg: Coca Cola is a truly world brand, readily identifiable by consumers in virtually every county.

27. What are the major facilitators of Globalisation?

- The growing acceptance that barriers to trade are essentially unproductive and serve only to reduce the level of
demand for goods and services overall, as well as inhibit customer choice.
- Initiatives by the World Trade Organisation constantly improve the prospects of free trade.
- The increase in cooperation between different nations and trading organisations is gradually breaking down the
barriers.
- The use of few types of currencies for international trade also facilitates globalisation.

28. What impact does Globalisation has on managers?

- Globalisation impacts the managers in many ways. And they give a special consideration to the following factors if they
operate globally:
 Decision-taking: different countries have entirely different cultures, so the decision-taking processes will vary in
difference countries.
 Leadership Styles: some countries have much more didactic (instructional) approaches to leadership while others
don’t.
 Motivation: people from different countries motivate to different things.
 HR Policies and Practice: this also differs across countries.
 Organisation Structures: if companies are to operate globally, then organisation structures must inevitably
become more complex.
 Technological Transfer: the compatibility of technology is a critical when companies operate globally.
 Legal Environment: each country has its own laws in respect of manufacturing, company statutes, employment
and marketing, etc.

29. Why is Globalisation important to the practice of HRM?

- Increasing cross-border mobility of labour.
- Managing across cultures and languages.
- Downward pressure on wage costs.
- Increasing speed of relocation, mergers and acquisitions.
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Human Resource Management, ABE Diploma in HRM, Unit 1, Revision Questions & Answers
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 - People are a key in a globalised product market.
- Nations are coming together into clusters - e.g. common social policies and.
- Legislation (e.g. expanding European Union, Asia and US global culture).

30. How is the practice of HRM adapting to changes brought about by Globalisation?
- Recruitment becomes international in global labour market.
- Strong downward pressure on wage costs.
- Increased international travel and relocation.
- Cultural awareness raising and learning about acceptable ways of behaviour and leadership.
- Differences in motivation and reward.
- Diversity awareness - stereotypes and frames of reference.
- Develop and communicate new leadership styles.
- Language training.
- Investment to retain corporate culture across barriers.
- Flexible HR policy and practice (e.g. job security and reward).
- New organisational structures.
- New ways to communicate and involve staff at a global level.

31. Planning will be difficult if the company is operating in the global market. Why?
- The risk will be greater if operating globally.
- The knowledge of the local conditions in another country is not easy to obtain.
- Getting market intelligence of another country will be difficult.
- The currency risk (exchange risk) is always there.
- The inflation rates in 2 countries will vary.
- The expectation of the workers in different countries will be different.

END

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Human Resource Management, ABE Diploma in HRM, Unit 1, Revision Questions & Answers
© Ali Hashim, Clique College, Male, Maldives
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