Please note that these are not fully-worked model answers, but they are intended as a guide to the

type of answer expected.

The Association of Business Executives QCF

Strategic Human Resource Management

Suggested Answers June 2012

STRUCTURE OF PAPER: Answer ALL THREE sections SECTION A: Answer ALL FIVE questions Q1 Q2 Q3 Q4 Q5 Either Q6 or Q7 Either Q8 or Q9 14 marks 14 marks 14 marks 14 marks 14 marks 15 marks 15 marks 100 marks

SECTION B: Answer ONE question SECTION C: Answer ONE question

TOTAL MARKS AVAILABLE FOR THE PAPER

Please note that these are not fully-worked model answers, but they are intended as a guide to the type of answer expected.

SECTION A Candidates must answer ALL FIVE questions in this section. Each question carries 14 marks. Section A is worth 70% of the total marks available for the paper.

Q1 A company employing 5000 people was recently criticised for not having a formal, written HR strategy. It responded by claiming that an HR strategy would restrict its flexibility to react quickly to changing competitive conditions. Q1 (a) Outline two arguments in support of the companys claim. A strategy can appear rigid and indeed become a tool to resist change on the grounds that the integrity of the strategic intent should take priority over any short-term pressures for innovative action. The strategy may be half-implemented and its success could depend on full implementation, so persisting with the strategic programme and sequence could be a more straightforward option. The organisations business strategy may involve a single-minded set of plans and so the HR strategy, if aligned to the business strategy, would be equally definitive. Q1 (b) Outline two arguments against the companys claim. Because any strategy incorporated assumptions about the future, and these assumptions are always problematic, the strategy must itself allow for change. Periodic reviews of the strategy as it unfolds should enable the interested parties to become aware that the strategy is out of touch with the emergent reality and that, as a result, it must be revisited and revised. Rarely does a requirement for corporate flexibility arise with such urgency that an existing strategy needs to be unravelled at a moments notice, and so flexibility (perhaps involving incremental change, or even transformational change) can be implemented over a period of time without any massive disruption to the business.

4 marks

4 marks

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Q1 (c)

Show how an HR strategy could be designed and implemented whilst still enabling the company to retain its flexibility. The strategy and its associated strategic plan should be subject to frequent reviews (at least every six months), especially if the environment is thought to be particularly volatile in the near future. The strategy and strategic plan may be designed around a number of alternative scenarios the most likely, the least likely so that a switch becomes easier to contemplate. Some of the more operational dimensions of the strategy can be removed or replaced without doing damage to the high-level Big Idea, the vision and the core values of the business if these remain constant, then the organisation may shift direction in ways that are not immediately disruptive. All strategies must make allowances for massively disruptive events, e.g., a technological innovation which renders the companys business obsolescent.

6 marks 14 marks

Q1

Total Maximum Marks for Question

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Q2 Q2 A business making high-quality products now wishes to establish a world-class reputation for its after-sales service. Identify and discuss the potential impact of this strategic change on the companys HR strategies. HR Planning Focus on the labour market for customer-oriented candidates Development of plans to match the predicted supply and demand for suitable employees People Resourcing Recruitment strategies aimed at attracting customer-focused employees Development of new job descriptions (accountability profiles) and person specifications (competency frameworks) Selection strategies: redesigned around assessment for customer-service capabilities, attitudes and skills Induction, Learning, Training and Development Induction reprogrammed to permit the new Big Idea to be promoted and operationalised Training: on customer-facing capabilities, attitudes and behaviours, including the management of customer complaints Development: encouragement for self-directed learning and personal growth through relevant qualifications Performance Management Switch of emphasis towards service-related performance measures Emphasis on collaborative strategies between front office and back office teams so that complementary synergies are achieved Performance Review Creation of performance appraisal processes which now emphasise service performance, service contribution, service innovation and service attitudes Managerial behaviours now to stress service excellence and team-working Need for service innovations in order to stay ahead of customer expectations and competitor initiatives Reward and Recognition Rewards to be structured around service progress and attainment Recognition opportunities for managers and team-leaders/supervisors Employee Relations and Communications

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Mechanisms to promote employee engagement, involvement and commitment Frequent dissemination of success stories, celebratory messages and statistics about service Establishment of cross-functional project teams to solve problems (about service delivery) and institute incremental or transformational improvements/change Job Design Creation of customer-facing roles with maximum opportunities for discretionary action Empowerment, especially when resolving customer complaints Proactive opportunities for service interaction and the building of customer relationships. Q2 Total Maximum Marks for Question 14 marks

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Q3 You have just been appointed as the first HR Director for a pharmaceutical company which develops and manufactures medical drugs. Its head office is in the UK but its research and manufacturing operations are in Asia. One of your first jobs is to develop an HR strategy for the firm. Q3 (a) Outline two important questions you need to ask before you can create a meaningful HR strategy for the company. What is the organisations vision or Big Idea? What are the organisations key strategic goals for the foreseeable future? What is the view held by the organisations CEO and senior management about the role of the HR function? Is it a genuine business partner or is it nothing more than a legalistic/administrative unit? The purpose of this question is not merely to enable the HR manager/director passively to accept the role of the HR function as perceived by senior executives, but to permit her to know whether any special efforts have to be made to generate a business partner ethos. Should there be one HR strategy for the whole company, or separate, localised strategies appropriate to each of the regions where the company operates? To what extent does the company want to encourage staff to move internationally between its locations? Q3 (b) 4 marks

Identify three reasons why the companys HR strategy should contain an ethical code of conduct and appropriate methods of enforcement. The business will benefit from securing and enhancing a reputation for ethical treatment of employees everywhere. If no action is taken, there is always the danger that critics will label the company as exploitative, even though that is unlikely, especially so far as the research division in Asia is concerned. The company is already engaged in ethical pharmaceuticals, and there may be those who could see a connection between the ethicality of its products and the ethicality of its actions. Customers are increasingly anxious about the ethical treatment of employees, especially when trans-national locations are concerned. 6 marks

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Q3 (c)

Suggest one method by which the effectiveness of the companys HR strategy could be measured. The problems of deciphering cause and effect relationships need not be explored in the answer, but candidates should cover any one of the following: When employee surveys are regularly used, there are increasing scores for measures of employee engagement and commitment. Statistics about employee involvement, e.g., participation in crossfunctional continuous-improvement projects or remedial action groups. Statistical trends covering labour turnover, absence, industrial disputes, number of cases referred to employment tribunals, etc. Figures for employee productivity based on multi-skilling. Use of the Norton/Kaplan balanced scorecard. 4 marks 14 marks

Q3

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Q4 You have been recruited as the first Learning and Development Manager for a computer software company whose training has so far consisted solely of sending people on courses on such topics as health and safety. You want to introduce a much more co-ordinated and strategic approach. Q4 (a) Outline three arguments you will use when seeking to persuade your managerial colleagues that a strategic approach to learning and development is worthwhile. A focus on learning and development improves recruitment, motivation and retention. Learning and development enhances employees skills, knowledge and attitudes appropriate for the job they are doing so they can do it better. Learning and development prepares individuals to take on different and sometimes higher-level roles in the organisation, making it much less necessary to fill such positions from outside. Learning and development is an investment in improving business performance because in a climate of constant change there is a permanent need for new skills to be developed in order for the organisation to remain competitive. Continuous development is a key part of increasing the value of the employee capital in any organisation.

6 marks

Q4 (b)

Discuss the potential benefits to be gained from a change from training to learning and especially towards self-managed learning. Training implies an activity that one person delivers to another, whereas learning is an activity which the individual performs personally. With training, the motivation of the trainee can sometimes be problematic trainees may even be actively hostile, if they think that the training is irrelevant to their needs. With learning, on the other hand, the motivation of the learner can be taken for granted, and the likelihood of beneficial outcomes in terms of knowledge, attitudes and behaviour is much increased. Self-managed learning in particular encourages the individual to progress at his/her own pace. There is already a widespread acceptance of self-managed learning in the economy, through such organisations as the Open University and the popularity of similar programmes. If the organisation can create a culture of learning, and self-directed learning, then it will be prepared for change and for circumstances in which learning becomes essential. In a training regime, there is sometimes active resistance to being trained. Self-directed learning and other similar methods are often more costeffective than training. When learning is facilitated through managerial coaching and mentoring, it creates closer bonds within the organisation between managers and their teams. Learning can be structured around each learners preferred learning styles, whereas training and its methodologies are more haphazard. Total Maximum Marks for Question

8 marks 14 marks

Q4

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Question 5 Q5 A recent article has claimed that there is genuine benefit in building a collaborative enterprise based on the collective interests of all employees working together. Critically evaluate the concept of the collaborative enterprise. Advantages A collaborative culture encourages people to apply themselves for the overall benefit of the organisation rather than simply acting selfishly the psychological principle is enlightened self-interest. A shared purpose is valuable (like Purcells Big Idea) because it moves the business potentially into new arenas. Thus IBM used shared purpose to steer employees away from selling hardware to selling solutions. A collaborative system helps to break down silo divisions in organisations and soften bureaucratic constraints. Collaboration ultimately enables the organisation to cope more creatively with changing customer aspirations and emergent competitive threats. Disadvantages The need for a collaborative culture can slow down decision-making which can be dangerous at times when the company must act quickly, e.g., if a sudden downturn in business leads to the requirement to close down a manufacturing plant or some lossmaking shops. A collaborative enterprise may also present a diluted front to the world because of the need to accommodate so many disparate stakeholders. Assessment of the model The model of the collaborative enterprise is especially appropriate for knowledgeintensive work but it can also be relevant for any business which depends for its success on the presence of mutual trust and team-working. There are some sectors where the background of endemic industrial conflict and mistrust would make it particularly difficult to switch to a collaborative culture though this is not to say that the transition cannot be achieved, given sufficient impetus, consistency and focus from a few key leaders. Collaboration is particularly hard to accomplish in organisations which are multicultural (because of ethnic conflicts) or global (because of the difficulties of undertaking all the consultations involved). Again, however, the problems are not insuperable, e.g., through the development of international teams managed at a distance through e-leadership. Examples of a collaborative enterprise in action include the John Lewis Partnership. Here, too, there are limits to collaboration and ultimately it is a management-run business. Collaboration becomes particularly hard to sustain during periods of business adversity just as the unwritten psychological contract is threatened whenever organisations find themselves in difficult circumstances. Q5 Total marks for question 14 marks

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SECTION B Candidates must answer ONE question in this section. Each question carries 15 marks. Section B is worth 15% of the total marks available for the paper.

EITHER: Q6 Q6 (a) Outline and explain three reasons why the search for talent has become a major issue for many organisations. Talent management is a portmanteau term embracing people planning, people recruitment, selection and people retention so suggests a more strategic approach to these issues, linked to the organisations overall strategic purposes and vision. In some economies there is a shortage of talent which means that organisations seeking to acquire talent must work harder to do so. Talent management is also based on the supposition that, in a context of continuous competitor innovation, globalisation and technological change, organisations must find, motivate and keep people with above-average levels of talent. Developing talent from within is often thought to be more cost-effective than recruiting it externally, especially at more senior levels. Talent management as a philosophy is attractive to employees because it suggests career possibilities to them. Q6 (b)

9 marks

Explain why the search for talent is not an important issue for some organisations. Some organisations dont believe that developing talent from within is more cost-effective, especially as some of the activities embraced within talent management may be wastefully allocated to individuals who do not fulfil their early promise. Some organisations (e.g., Ryanair) deliberately pursue strategies based on the absence of career and talent management, arguing that they need new blood to enter the hierarchy in order to keep it dynamic. There isnt a universal shortage of talent instead, it is concentrated in certain economic sectors and certain occupations. For others, therefore, talent management is unnecessary. If the business is one which undergoes very slow change and has customers who are relatively undemanding, then talent management is not so essential because the system can be administered and led from the top by a small group of senior executives. Some organisations mistakenly believe that talent management is a very expensive exercise, and therefore claim that their resources are insufficient to justify the costs especially when the achievement of the

6 marks

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desired outcomes is also problematic. In a few cases, organisations may have suffered bad experiences (e.g., through the surprising defection of a highly-talented employee) and this has alienated them so far as future talent management is concerned. Examples Possibilities include: Singapore Airlines, Tesco, John Lewis Partnership, Procter & Gamble, Unilever. Q6 Total Maximum Marks for Question 15 marks

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OR: Q7 Some organisations are described as talent magnets because of their ability to attract, motivate and retain talented people. Q7 Describe and evaluate the strategies typically pursued by these organisations. Support your answer with relevant examples from named organisations. HR planning Strategic choices about the types of people being sought qualifications, experience, attitudes. Strategic choices, based on the evidence and experience of the past, about the sorts of people who ultimate succeed in the organisation. Strategic choices based on the types of people the organisation will need in the future if it is to remain competitive. Strategic choices about the desirability or otherwise of identifying a talent elite, given its potential damage to the morale of other members of the workforce. People resourcing Strategic choices about recruitment sources and methods, e.g., the use of a corporate website. Strategic choices about selection techniques, e.g., assessment centres, psychometric tests, work-related trial periods, etc. Training, learning and development Strategic choices about rotational assignments and accelerated experiences to encourage rapid development for the talent elite. Strategic choices about the identification of the talent elite and the development of those excluded from this favoured group. Strategic choices about the use of external resources, e.g., MBA programmes or inhouse high-level development initiatives. Reward and recognition Strategic choices about salaries for talented people. Strategic choices about the use of special incentives, especially if talent management includes periods of overseas assignments. Strategic choices about methods to prevent talented employees from being poached by competitors. Performance management Strategic choices about the construction of performance management and appraisal systems to encourage and stimulate talent. Strategic choices about the specification of challenging objectives and growth goals. Employee relations and communications Strategic choices about methods for enhancing engagement and commitment within the talent elite. Strategic choices about the use of collaborative methods to motivate talented people. Q7 Total Maximum Marks for Question 15 marks

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SECTION C Candidates must answer ONE question in this section. . Each question carries 15 marks. Section C is worth 15% of the total marks available for the paper.

EITHER: Q8 Q8 (a) Identify and discuss four common difficulties associated with performance appraisal. A given scheme may be trying to fulfil too many objectives at once, e.g., determining individual rewards and also agreeing personal development. Many managers in effect treat appraisal as an exercise in managerial control. The appraisal process can become an adventure in elegant bureaucracy (Marianne Huggett) a tiresome form-filling exercise staff and managers could cheerfully live without. There can be a reluctance to ask hard questions about the process, about the subordinates performance, or about the outcomes from the appraisal system. Appraising managers may be given little guidance or training in the completion of appraisals and still less in the face-to-face part of the process. Despite the lip service paid to the importance of appraisal, managers may find that they themselves are seldom appraised professionally, so draw their own conclusions about how important it really is. Many managers, to avoid conflict, rate their employees performance levels as average or satisfactory when, in reality, such evaluations are inaccurate. A rating of satisfactory is seldom likely to motivate employees. Employees can come to regard performance appraisal as a punitive programme, which means that they do not adopt a co-operative attitude. If rating/evaluation scales are used, the language deployed is seldom precise and unambiguous. Also many managers refuse to use the positions at the ends of the scales, thus compressing individuals into a smaller number of classifying options.

8 marks

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Q8 (b)

Suggest three principles which should govern the design and implementation of a worthwhile performance appraisal process. The scheme should have one set of objectives only, i.e., a reward mechanism, a learning and development experience, or an objectivesetting opportunity for future performance. Ideally, the appraisal process should not be used to determine salary awards and bonus payments. This is best done in other ways and at a separate time. Though formal appraisal needs to take place once a year, managers should not use that as an excuse to delay talking to subordinates about excellent achievement or performance problems. The appraisal interview should be conducted as a meeting between equals, with the manager adopting a problem-solving style (questioning, listening, co-ordinating). The overall philosophy for appraisal should be founded on selfassessment and self-appraisal, since to act otherwise simply promotes a culture of defensiveness and problem avoidance. The appraisal process should begin at the top of the organisation and cascade downwards, so that nobody is excluded. All employees should be subjected to the system. The outcomes of appraisal need to be aligned with the organisations strategic direction, its vision, mission and values, plus its goals. Agreed action plans should be rigorously followed up to ensure that they are taken seriously and implemented. 7 marks 15 marks

Q8

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OR: Q9 A new book, A Guide to Non-cash Reward [Michael Rose, 2011], contains two simple ideas: firstly, that organisations should recognise the great things that people do secondly, that organisations should use more non-cash rewards to help recognise and incentivise staff. Q9 (a) Outline three arguments that support and justify these ideas. Organisations should recognise the great things people do It is difficult to identify any arguments against this suggestion. If recognition takes the form of monetary bonuses or pay increases, however, then the disadvantages should be explored: the fact that bonus payments simply whet the appetite for future, and pay increases reflect an unlimited future commitment for a one-off performance success in the past. If organisations dont recognise the great things people do, then people may well stop doing them and may even go somewhere else where their great things will be properly rewarded. We shouldnt ignore the fact that some organisations do indeed recognise great things, through celebrating progress, achievement, remarkable victories, etc, in a variety of ways. They should use more non-cash rewards to help recognise and incentivise people Non-cash rewards can be conspicuously effective yet cost relatively little. Non-cash rewards avoid some of the endemic difficulties associated with cash rewards. If dispensed in public, non-cash rewards have a sort of multiplier impact servicing to motivate not only the direct recipient but also others. Non-cash rewards have enormous symbolic value. 9 marks

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Q9 (b)

Explain how a strategy for non-cash reward could be made to work. Be genuine if you dont mean it, then dont say it Be timely make the recognition as close to the event as you can. Be personal use the recipients name. Make it specific refer exactly to what the individual did. Be clear explain why it is appreciated. Make it public find a way to let others know about it. Be sure that the non-cash reward strategy is embedded within the organisations overall people strategies, and supports elements like reward, performance and talent management. Be original and innovative find new ways of recognising growth, progress and achievement, in order to keep interest alive. Be employee-focused create recognition initiatives that reflect what employees actually value, if necessary by creating a set of cafeteria choices. Make it fun. 6 marks 15 marks

Q9

Total Maximum Marks for Question

TOTAL MAXIMUM MARKS: 100