Francisco Montoya Giménez

1. EVIDENCE-BASED HRM

Human Resource Management developed from Personnel Management and treats

employees as a resource instead of a cost. Strategic Human Resource Management is
about aligning HR policies and practices with the organizational strategy.

High-Performance Work System (HPWS) are the HR policies and practices that are
integrated and mutually reinforcing in order to produce an effective outcome at an
organizational level.
1.1 Evidence-based HRM

What is HRM? The overall process of managing people in organizations.

→From Personnel Management. Specialization in functions (e.g., recruitment, training,

payroll). Employees mostly seen as a cost to the organization.

→To Human Resource Management. Resource-based view: Employees are considered

a resource that is crucial for the competitive advantage of the organization.
(D)Evolution of HRM
-Human Resource Management. Resource-based view: Employees are
considered a resource that is crucial for the competitive advantage of the
organization.
-Strategic HRM. Aligning HR-practices with one-another and with the
organization’s strategy.
-Evidence-based HRM. Using scientific evidence as well as business
information in making people- management decisions. It emerged from the need
to improve HR policies and practices and demonstrate their added value.

Devolution → Transfer of responsibilities from HR specialists working in, and identified

with, a centralized HR unit to line managers in other units.

1.2 Strategic Human Resource Management

What is the goal of the organization? What an organization hopes to achieve in the
medium-to long-term.
-Vision: What the organization expects to become at a particular time in the future.
-Mission: Expectations to do to become the organization it has envisioned.

What is the strategy? How the organization wants to accomplish his goals are the
strategic choice or options the organization makes. The strategy is a plan of action
designed to achieve a set of objectives.

The strategic choices are divided into two groups, depending on which is his objective:

→Cost leadership. Reduce costs.

-Narrow job roles. Maximize efficiency, it permits lower wages and doesn’t need
people with so much preparation.
-Hire and train specific skill sets.

1
Francisco Montoya Giménez

-Performance-based compensation (e.g. pay per attached iPad screen).

→Differentiation. Perceptions of difference.

-Broad job roles. Maximize cross fertilization.
-Hire people that cooperate, are creative, reflective.
-Pay for market value of employee.

Determining the right strategy: SWOT (DAFO)

Role of HRM:
-Internal analysis: strengths and weaknesses of workforce.
-External analysis: opportunities and threats (labour shortages, competitors…).

Good SHRM = Good Alignment

→Vertical Alignment. The matching of HRM policies and practices with business
strategy.

→Horizontal Alignment. Strong consistency and interconnections between HRM

policies and practices.

In strategic human resource management, HRM practices and policies are

aligned with the strategy of the organization and HRM practices and
policies are mutually aligned. It comes from the vision, mission, and the SWOT analysis.

1.3 The LESS Model of EBHRM

Evidence-based HRM (EBHRM) concerns the effective use of scientific evidence as

well as business information in making people-management decisions. By following it,
you consider and integrate the key sources of evidence in your approach to people
management issues.
The LESS model is based on four types of evidence:
-Local content. Facts and data from the local organizational context that can help
identify and address people management issues.
-Experience. Professional expertise with similar people management issues in
other contexts, or organizations adopting particular HR practices.
-Stakeholders. Conscious consideration of the impact of your decisions on your
employees and other stakeholders, such as bosses, clients, and suppliers.
-Scientific-evidence. Insights from scientific research that are relevant to the
problem or issue at hand.

Facts and data form the Local context

One distinction:

→Primary data. Collected specifically to address our issue. Includes satisfaction

surveys, focus groups on specific questions or interviews with specific groups.

2
Francisco Montoya Giménez

→Secondary data. Data collected with a different or no primary purpose in mind. It

comes from HR Information Systems (HRIS), customer DBs… and includes absence
levels, time to recruit each job, customer satisfaction by team, information on policies
and practices…

Scientific evidence

It is evidence of research conducted and reported using scientific quality standards, such
as empirical articles, review articles or theoretical articles. They are published in a peer-
reviewed journals. The quality of scientific evidence can be determined by evaluating the
evidence directly (e.g., sample, biases, methods) and indirectly (e.g., journal, citations).

1.5 The 5 As of EBHRM

It comes from medicine:

-Ask. Identify the issues and formulate a problem statement.
-Acquire. Search for evidence, using the LESS Model.
-Appraise. Critically evaluate the quality and relevance of the evidence.
-Apply. Combine the evidence with your expertise and understanding of the
organizational context and stakeholders’ interests to design the most effective
strategy and create an action plan.
-Assess. Monitor and review the outcomes to ensure the desired impact and make
improvements as needed.

1.6 Job Analysis

What is a job analysis? The process used to gather detailed information about the various
task and responsibilities involved in a position. Though this process, the knowledge,
skills, abilities… associated with successful performance in the role are also identified.
It is commonly used in recruitment and selection, but is also useful for other areas in HR.
When and why do a job analysis? Building block of many HR processes:
-Recruitment and selection (e.g. job description, people specification)
-Performance management (e.g. performance appraisal criteria)
-Reward management (e.g. compensation plans)
-Learning and development (e.g. training needs assessment)

Job analysis: Methods

-Background information (e.g. online courses, organization charts, HR systems)
-Observation. Watching what people do.
-Questionnaires, interviews, work diary or log, wearables…

Outcomes of job analysis

Job analysis is composed of job description, outlines the typical job duties, tasks and
responsibilities; and the person specification, which outlines the essential and desirable
criteria of the person doing the job.

3
Francisco Montoya Giménez

2. RECRUITMENT AND SELECTION

Human Resource forecasting is a key stage of strategic recruitment and selection.

-Recruitment. Attracting the ideal candidate, who shows a high fit with the
position and organisation.
-Selection. Using selection instruments that adhere to the five quality criteria and
have high predictive validity.
Workforce provides a unique competitive advantage since people can add considerable
value, be unique (or at least rate) and be difficult to replicate.

2.1 Forecasting

HR planning process is a process of identifying the estimated supply and demand for
different types of human resources in the organization over some future period, based on
analysis of the past and present.
-Forecast of labour.
-Goal setting and strategic planning.
-Implementation.
-Evaluation.

Forecasting is the process of determining the supply and demand of various types of
human resources:
→Quantitative forecasting.
-Trend analysis. Historical data.
-Ratio analysis. Calculating proportions.
-Regression analysis. Statistical relationship between variables.
→Quantitative forecasting. Expert knowledge.

Goal setting and strategic planning

There are two factors to consider in order to select a strategic plan: speed and impact.
The two strategic plans that we can consider are:

→Labor surplus. Reduce the number of employees.

-Hiring freeze.
-Early retirements.
-Downsizing.

→Labor shortage. Increase the number of employees.

-Overtime. It can work but might cause stress in workers.
-Outsourcing.
-Hiring new workers.

forecast of labor → goal setting & strategi planning → implementation → evaluation

2.2 Recruitment strategy

Successful recruitment provides signals about the attractiveness of job and the
organisation and fit between person and them.

4
Francisco Montoya Giménez

Effective employer branding

→Perception of brand:
-Shaped by degree of familiarity with the organization and external ratings of
reputation.
-Shaped more by diffuse than by explicit cues, so explicit communication has a
limited effect.

→Implication for employer branding. Spending money on making big explicit

statements is pointless if the diffuse cues about the brand say something else.

→Congruency required between employer branding and:

-Corporate & organizational identity (internal).
-Current brand image (external).

How do you recruit? We have two alternatives of strategies:

-Low involvement. Known company with positive image.
-High involvement. Proactively discuss reputation, values and work culture.
The recruitment can be done by an administrative person who barely knows about the job
or somebody who knows the nature of the position. The most specialize and technical
the position is the most important is the more important that the applicant interacts with
someone who knows the job, as he will be asked about specific questions.

2.3 Recruitment practices

When we think about where to recruit, we have several methods. To evaluate them, there
are some criteria:
-Cost per hire. Total recruiting costs divided by the number of new hires.
-Time to fill rate. The length of time it takes from the time a job opening is
announced until someone starts the job.
-Diversity. The extent to which your applicants are similar or different from your
current workforce.
-Yield ratio. The number of realistically viable applicants divided by the number
of total applicants.

→External recruitment. Attract applicants from the outside of the organisation.

-Newspaper ads.
-Online postings.
-Campus recruiting.
-Search firms.
-Employment agencies.

→Internal recruitment. Attract applicants with extensive familiarity with the

organization.
-Email listserv/intranet.
-Employee referral program. Own employees recommend people who know.
-Hiring former employees.

5
Francisco Montoya Giménez

While external recruiting has generally a higher cost and a poor yield ratio, it is faster
and offers a wider diversity than the internal recruiting, that it is true that is so much
cheaper and offer a higher yield ratio, although its slowness and low diversity. Not been
selected in an internal process also affects to self-esteem, so internal employees only will
apply for the job if they have some security that it will be for them.

The effectivity of the recruitment method depends also on the importance of the job that
is being offered. For seniors, managers or concrete specialists you need wide nets,
because of the concrete looked for. On the other hand, for lower prepared jobs wide
trawls are used, not needing a profile so concrete.

Companies also need to provide a realistic job preview, which will help to create realistic
job expectations and reducing turn over. According to a study, employees that in the job
interview are told also about the disadvantages of the job will be less likely to quit.

2.4 Selection quality

According to research, 75% of employers said they have hired the wrong person for a
position. For this reason, we need an objective approach to selection to limit the
influence of unconscious biases and ‘gut feeling’ on selection decisions.

To find the best approach, we have three criteria:

→Legality. The selection process has to evite to have an adverse impact, that happen
when employment practices that appear neutral disproportionally impact members of a
protected group, without business necessity (e.g. immigrants, pregnants, old people…).

→Reliability. The extent to which the measure consistently measures what it sets out to
measure.

→Validity. The extent to which a selection method measures what it purports to measure
and how well it does this. To be a selection method valid, it has to be reliable, although
the reliability doesn’t need validity to exist, so a method can be reliable, and repeat a
similar result every time, but not valid, not getting its purpose.

2.5 Selection toolkit

Before starting the selection process, there are three things to consider:
-Can this applicant do the job? Cognitive ability tests; job knowledge tests…
-Will this applicant do the job? Personality test; interests tests…
-Has this applicant experience doing the job? CV; interviews…

Thinking which selection instruments are the best, it depends on the specialisation of
the job and how general the employers want to do it. They are order from the best to the
least job performance:
→Job specific. Normally they are better and more reliable, but also more expensive.
-Employment interviews-structures.
-Job knowledge tests.
-Biographical data.

6
Francisco Montoya Giménez

-Work sample tests.

-Assessment centres.

→General. They can be use in a wider range of settings.

-Cognitive ability tests.
-Integrity tests.
-Personality-based emotional intelligence.
-Conscientiousness-contextualized.
-Interests.

However, we have to proceed carefully with some of the selection tools, such as the
cognitive ability tests, which you have to use with caution for the possibility for an
adverse impact in race, being checked that they tend to favour white applicants. If you
decide to use them, you have to take some precautions, removing items than can show
differences, eliminating time limits…

You must also avoid personality assessment because its openness to experience,
agreeableness and neuroticism. If you finally decide to use them, you must have clear
which dimension of personality is relevant for the job. Unstructured interviews are
neither recommended.
To do effective interviews, there is a basic structure that is important to follow:
-Base interview guideline on insights from job analysis.
-Use a mixture of situational, behavioural, and job-related questions.
-Evaluate candidate answers on anchored-rating scales.
-Document your decisions and conversations.

7
Francisco Montoya Giménez

3. LEARNING AND DEVELOPMENT

Learning can be understood from the perspective of cognitivism, behaviourism, and

experiential learning. Effective onboarding practices give access to both information
and relationships and are critical for the retention of employees.

The ADDIE model is a standardized instructional design approach that consists of five
stages: Analysis, Design, Development, Implementation, and Evaluation.

The most robust form of training evaluation relies on measuring behavioural changes
and organizational outcomes. Learning and development is becoming more mobile,
social, and adaptive.

3.1 Key Theories in Learning

→Cognitivism. Focus on the mind and how it receives, organizes, stores and retrieves
information. According to it we make association between information which are stored
as change in mental schemas. and his key figure is Jean Piaget (1886-1980), who
planted the Theory of Cognitive Development.
Examples of cognitivism at work include the use of quizzes, chunking information or
graphic organizers.

→Behaviourism. Focus on observable behaviour and threats internal learning process as

a black box. The process of learning and behavioural change is done though punishments
and rewards, getting a change in behaviour. It was created by Ivan Pavlov, with his
theory of Operant conditioning, based on dogs’ behaviour.
An example of behaviourism could be a bonus for a job well done or a poor performance
review if the job’s being done poorly

→Experiential Learning. Learning comes from experience, having a process with four
steps: experiencing, reflecting, thinking and acting, experimenting with the new
principles obtained from the crisis situation lived. Its key figure is David Kolb.
We can find it in every experiential situation, such as cycling or after an event review.

Depend on the topic, it drives the choice of a learning theory, developing some activities
and skills of others:
-Cognitivism. Stimulate previous knowledge, sequence learning to optimize
information processing, use activities (demonstrations, concept mapping); …
-Behaviourism. Apply positive feedback, encouragement, and reinforcement;
link practice to feedback; design training room to promote positive behaviour…
-Experiential learning. Encourage creating experiences, reflecting on experience
and thinking about lessons learned; encourage active experimentation/planning…

Learning styles. They follow two dimensions: the processing continuum, which
describes how we approach a task, and the feeling continue, which describes how we
respond emotionally. The theory appeals the design learning experience, following a
certain learning style, they would resonate more with those people that have the same
learning style: activist, pragmatist, theorist or reflector.

8
Francisco Montoya Giménez

This is actually a bad idea. The group of people that you will be developing likely have
different learning styles, so if you develop a learning activity focused only in one learning
style you would only appeal to a subset of the people you were training. There is very
little scientific evidence that support the learning style which matches the learning activity
leads to better results.
Instead of this, you should ensure that each training and learning opportunity you organize
meets the following criteria:
-Information. Provides the concepts, facts, and information trainees need.
-Demonstration. Shows examples of the knowledge, attitudes, and behaviours
targeted by the training.
-Practice. Creates opportunities to practice using the trained knowledge, attitudes,
and behavioural skills.
-Feedback. Provides timely, meaningful, and diagnostic feedback with
opportunities to make corrections.

3.2 Onboarding

Onboarding. Those formal and informal practices, programs, and policies enacted or
engaged in by an organization or its agents to facilitate newcomer adjustment.

Socialization. The psychological process by which employees come to think of

themselves as organizational insiders; learn about processes and how to get work done;
and identify with work and organization.

Goals of onboarding. Resources show that providing information and social activities
improve workers lives, increasing role clarity, self-efficacy and social acceptance by
colleagues. Theses aspects are associated with higher performance and job satisfaction,
and also increase the organisational commitment and lower turnover or remain intentions.

Effective onboarding

→Information.
-The basics. Needed for all employees (Wi-Fi access, laptop, organization
credentials, general company policies…).
-Job specific. Needed for the employee to be successful in their specific job
(online training, in-person training…).
-Orientation. Creating an insider identity (values of the organization, history and
important people in the organization…).

→Relationships. Two purposes: provide informal avenues for information and ensure
people belong (day 1 meeting, connect to newcomers or mentors…).

In onboarding, managers play a crucial role. As a manager, you have to think carefully
what the employee has to know and who he has to meet, where and when he has to
attend… You also have to make time for your new employee and to encourage proactivity.

9
Francisco Montoya Giménez

3.3 Training effectiveness

The ADDIE model consists of five stages:

→Analysis. Needs analysis describes the process of gathering and analysing data to
determine the learning and development needs within an organisation.
It is a long-term process composed of a present state (where are we at the moment?), a
gap analysis (how do we do this?) and a desired state (what do we want to achieve this?).

→Design. Building a programme that meets the learners’ needs by defining an overall
approach to the learning and development content. It involves four key steps:
-Formulation of learning objectives.
-Planning of assessment strategy.
-Determining levels, types, and difficulty.
-Selection of delivery method.

→Develop. Constructing content and materials. It involves the drafting, producing, and
testing of learning materials. Instructional designers need to select methods that are
suitable for the proposed learning and development program.

→Implement. The programme goes life and learning and development programme are
delivered. Managers can add value if the employees are motivated to learn, making they
see the training as a learning opportunity to face new challenges and get new skills, and
also as a chance to demonstrate behaviour.
Managers can help the effectiveness of the process with the transfer of training, making
the employees know they are able to use the knowledge, skills, and attitudes developed
in training on the job. It can be maximized by supporting employees, giving them
opportunities to practice; performance feedback; or following up.

→Evaluate. The training programme is evaluated for its intended and unintended
consequences.

3.4 Kirkpatrick

Companies have to determine what training worths, evaluating its impact and
effectiveness with the Kirkpatrick’s model, which has four levels:
-Level 1. Trainee reactions about the training, curriculum, training environment,
and the instructor.
-Level 2. How learning affects the trainees’ attitudes, knowledge or skills at job.
-Level 3. Trainees’ behaviour and if they use what was learned on the job.
-Level 4. Results and if the training affect outcomes relevant to the organization,
(profit, customer satisfaction, absenteeism, accident rates…).

10
Francisco Montoya Giménez

3.5 Trends

Digital transformation enables learning and development activities to become more

learner-centred, by being:

→Mobile learning. By means of portable devices, such as smartphones. About 47% of

organisations are leveraging mobile learning. More organizations are looking to provide
accessible, engaging, bite-sized learning that is available anywhere and anytime.

→Social learning. Through (digital) interactions with others (blogs, wikis, video chat…).
59% of organizations use social learning, but only 24% say it is effective. Organizations
are looking to adopt effective social learning strategies to foster collaboration, knowledge
sharing, and a strong learning culture.

→Adaptative learning. Through personalized programs, using data mining to put

individualized learning content. Organizations are looking to provide personalized
learning that is responsive to a specific employee’s skill gaps, learning needs and interests.

11
Francisco Montoya Giménez

4. PERFORMANCE MANAGEMENT AND INCLUSION

4.1 Performance management

Performance management. Establishing shared understanding about what is to be

achieved, and an approach to managing and developing people, increasing the probability
to be achieved in the short and long term.

Performance appraisal. Formal infrequent process, by which employees are evaluated

by a supervisor, who assesses the employee’s performance along a set of dimensions,
assigns a score, and usually informs the employee of his formal rating.

Traditional performance management cycle.

-Performance plan. Translate organizational goals into individual goals.
-Feedback. Provided to employee about performance.
-Midyear evaluation. Discuss incremental goal attainment and redefine goals.
-Yearend performance appraisal. Formal performance rating, discussion goal
attainment and areas for improvement.
Goal-setting theory explains why traditional performance management cycle builds on
goal-setting processes, in which organization goals are translated into individual ones,
increasing motivation and performance in workers. It was created by Locke and Latham
in 1990. Goals regulate performance as they direct the direction, intensity, and duration
of motivated action. Self-efficacy and feedback can strengthen the link between goal
setting and performance. This theory stands on 5 principles: clarity, challenge,
commitment, feedback and task complexity.

4.2 Inclusion

Diversity. Differences among employees in an organization or groups. As underlying

characteristics, there are knowledge-related differences (job, education, experience);
values; beliefs… or demographic differences (sex, ethnicity, religion, disability status…).

Inclusion. All employees, both those who have historically been powerful and
underrepresented in cultural context are treated fairly, valued for who they are and
included in core decision making. It generates emotions as belongingness and uniqueness.
As motivations of inclusion, we can see:
-Doing what is right and just.
-Showing viable career paths.
-Ensuring business success.

Some studies show that inclusion is seen as a climate, existing the shared perception by
employees of the employer’s policies, procedures, and activities focused on creating a
sense of belongingness, while valuing the uniqueness of each individual employee. As
benefits of an inclusive ambient, the research shows that in stores with a climate for
inclusion, sales were higher by black employees, improving their performance. This
effect was even bigger in Latino or other minorities employees.

12
Francisco Montoya Giménez

Microaggression. Intentional or unintentional behaviours that communicate racial slights

or insults.

Role incredulity. A form of gender bias where women are mistakenly assumed to be in a
support or stereotypically female role rather than a leadership or stereotypically male role.

4.3 Inclusive strategies

Climate of inclusion. Shared perception by employees of the employer’s policies,

procedures, and activities focused on creating a sense of belongingness, while valuing the
uniqueness of each individual employee.

Formal inclusion policies and practices. Need to be aligned with managerial actions.

For increasing diversity:

→Recruitment and selection of targeted demographic categories.
-Selection is controversial and has potential to delegitimize the individual.
-Recruitment is better option.
→Targeted leadership and development programs for demographic categories.
-Risk of delegitimization.
-What message is being sent: “fix the minority” or focusing on structural barriers?
-How are candidates identified: self-identification vs structured process?
For enhancing inclusion:
→Diversity and anti-bias training.
-Context-dependent.
-Risk of backfiring.
→Making minority employees feel like they belong.
-Proactive mentorship programs.
-Actively creating connections between employees.
-Highlight the value of each employee.

In order of creating accountability:

-Measure the demographic make-up of the organization
-Make performance evaluation contingent on inclusion statistics.

Informal inclusion practices

-Informal mentorship.
-Support flexible work arrangements (proactively building relationships)
-Develop a team charter.
-Outwardly demonstrate support for inclusion (using inclusive language).

4.4 Performance measurement

Formal process, which occurs infrequently, by which employees are evaluated by some
judge (typically supervisor) who assesses the employee’s performance along some
dimensions, assigns a score to that assessment, and usually informs him of his rating.ç
There are some common errors in performance measurement:

13
Francisco Montoya Giménez

-Leniency/severity error. Rating employees at the high/low end of the scale.

-Central tendency error. Rating employees at the scale midpoint.
-Halo error. Creating an overall positive or negative impression that drives
ratings on other dimensions.
-Primacy/recency error. Influenced by the employee’s first/recent performance.
-Contrast error. Boosted after a poor employee or lowered after an excellent one.
-Similar-to-me error. Inflated for feeling a personal connection for sharing
demographics, values or experiences.

Reducing error and biases

-Training. To recognize and distinguish different levels of performance (frame of
reference training or calibration).
-Memory aids. Recording information throughout the review cycle (let rater keep
a journal).
-Accountability. Raters should expect to have to justify their evaluations to others
(other manager reviews evaluations or company rewards good evaluations).

There are two classic approaches:

→Ranking. Comparative rating methods (forced distribution).
-Easy to use.
-Useful for eliminating poor performance and distributing bonuses.
-Unpopular with employees, being seen as capricious and political.
-No support for employee development.
-Promotes internal competition, leading to a higher likelihood of aggressive
culture and unethical practices.
→Rating. Absolute rating methods.
-Explicit behavioural standards that anchor rater’s scores in behaviours, which
employees perceive as fair.
-Rating level descriptions provide some feedback.
-Need unique scales for each job.
-Still comparatively little support for personal development (descriptions mainly
focus on level of achievement, providing little input on how to improve.

Improving performance measurement

→Critical incident technique.
-Can be time-consuming (and thus costly) for supervisors.
-Requires excellent observational skills.
-Ratings based on concrete behavioural examples.
-Memory aid and performance measurement in one.
-Meaningful information for personal development.
→360-degree feedback. Multi-source review.
-Bureaucratic process, given the different sources used.
-Provides relevant information for personal development.
-Promotes a climate of continuous improvement.

14
Francisco Montoya Giménez

-Especially helpful when employees work with many different parties and
supervisors have limited insight into performance.

To reduce subjectivity, organisations may opt to only measure ‘results’ (% sales

increase, number complaints…). However, results are not always under employee control
and actions not contributing to results may be disregarded. Organisations are thus advised
to also measure ‘competencies’ (knowledge, skills and attitudes). It is important to
measure ‘what’ (results) employees deliver and ‘how’ they do it (competencies).
4.5 Trends in performance management

Employee performance reviews are now seen as outdated, according to several research,
and employees feel that they are not worth the time invested and they not receive feedback
on what to improve.

As traditional and annual problems with performance reviews, we can highlight:

→Performance reviews focus on identifying past mistakes rather than developing
strengths. It can be solved to:
- Strength-based feedback.
-Focus on future behaviour and personal development.
→Infrequent and poor alignment with employees’ progress. We can solve it with
continuous and personalized feedback.

Why strengths-based feedback? Although we label weaknesses “areas of opportunity,”

brain science reveals that we do not learn and grow the most in our areas of weakness. In
fact, the opposite is true: we grow the newest synapses in those areas of our brain where
we have the most pre-existing synapses. Our strengths, therefore, are our true areas of
opportunity for growth.

Feedforward interview protocol

→Step 1: Helping the employee to identify a personal success story.
-Focus on positive experiences only.
-Let employee describe nature of positive emotions in that moment.
→Step 2: Helping the employee to discover their personal success code.
-Personal characteristics and actions.
-Supporting actions of others (supervisor, peers).
-Supporting conditions created by organisation (access to information).
→Step 3: Helping the employee to align their future with their personal success code.
-Asking the feedforward question.

Continuous feedback conversations provide real-time feedback that take employees

progress into account. ADOBE introduced a system called “Check-In” to provide more
meaningful and timely feedback to their employees. It was based on three steps:
expectations, feedback and development.

15
Francisco Montoya Giménez

5. REWARD MANAGEMENT

5.1 Key concepts

What are rewards? Financial and nonfinancial elements used to compensate employees
for their time, effort and commitment. It is composed of:
-Base pay.
-Incentives. They can be short-term (individual or group bonusses or
nonmonetary rewards) and long-term (profit-sharing plans, stock-options and
employee stock ownership plans).
-Benefits. They can be statutory or organizational.

Why should we care about reward management?

-Attraction. To attract individuals to the organisation.
-Retention. To maintain employees in a job and not be likely to leave.
-Motivation. Employees want to put effort in their job.
They serve organizations to fill their legal and ethical responsibilities and also help to
achieve the organizational goals.

There are some key decisions in reward management:

-How do we determine how much to pay our employees?
-Should we use financial incentives to motivate people to work harder?
-What benefits should we offer in addition to those we are legally obliged to?
-Should we encourage people to be open and transparent about their pay levels?
The answer to these questions depends on multiple factors, such as organization’s
philosophy, legal responsibilities, strategy, ability to pay (budgetary constraints) or
competition and market forces.

5.2 Pay structure

Pay structure. Hierarchical organization of jobs in terms of pay. Depends on two factors:
-Job structure. Hierarchy of the jobs in the organization.
-Pay level. Average pay range for a specific job in the organization.

There are three methods to determine it and maintain it the fairest:

→Whole job ranking. You have to ask you what the organization does, and which jobs
are the most important for this. As a pro, it is quick and easy, although highly subjective,
so can be perceived as unfair.

→Point-factor method. Creating a pay structure based on job evaluation of positions in

the organization. They use compensable factors to evaluate jobs and choose the pay for.
-Allocate points to each compensable factor for each job.
-Allocate weight to each compensable factor.
-Outcome: point value for each job.

→Factor-comparison method. It is only possible with jobs that are not unique of your
organization and is based on pay comparisons of the same position in the market.

16
Francisco Montoya Giménez

-Pay survey of benchmarking or key, jobs.

-Comparable position depend on industry, type, geographic location…
You have also to decide if you pay at market value (less costs) or above market rate (attract
and retain more employees).

Generally, using whole job ranking is a bad idea. About the other two, one method is not
definitively better than another, but they are often used together, determining context
witch one is emphasized more (firm-specificity, industry, employee mobility…).
5.3 Performance pay

Performance-related pay can have multiples forms:

→Consolidated. Added to base pay (increasing base salary based on performance) with
merit pay increase.
→Non-consolidated. One-off payments in addition to base pay:
-Individual performance. Strategic goal is to increase individual performance.
>Piecework.
>Commission.
>Bonuses.
-Group performance. Strategic goal is to increase group performance and
encourage co-operation.
>Team-based pay.
>Profit-sharing.
>Share ownership.
>Gainsharing.

PRP has as organisational goals attraction, retention and motivation, that are achieved
with two effects:
→Sorting effect. People who want their pay differentiated by performance will be more
attracted to organisations offering PRP (attraction) and low performers receive lower
pay, so are more likely to leave the organisation, as higher performers to stay (retention).
→Incentive effect. Signals to individuals that their effort is valued and appreciated and
provides direction in what they should focus effort on (motivation). Motivation is
characterized by intensity, direction and persistence of effort.

About the incentive effect, research was made manipulating bonuses over a 5-weeks
period. Bonuses were from cash bonus, written thank you, free pizza… Right after the
bonus, the productivity was so much higher. It was proved that all incentives implied an
increased productivity. However, two days later, productivity dropped when incentive
was removed, but more so for cash-based incentives. In conclusion, short-term
incentives increase intensity but not encourage persistence.

Motivation can be intrinsic (comes directly from people) or extrinsic (motivated with an
external reward). Short-term incentives can undermine intrinsic motivation from the task,
so when they are gone, people are less motivated that before receiving them.

17
Francisco Montoya Giménez

5.4 Benefits

Benefits have financial value but are rewarded in forms other than cash. This includes:
-Statutory benefits. Set out by law (at national level).
-Organizational benefits. Specific to each organization and a source of
competitive advantage.

Goals of benefits are:

-Attraction. Benefits are critical for attracting and retaining employees.
-Retention. Employees are more committed and attached to organizations even if
they don’t use them.
-Organizational goals. Benefits typically comprise 1/3 of organization’s total
labour costs so are a key strategic concern.

Organizational benefits can be influenced by strategic goals and benefits; national

characteristics; workforce demographics; and external influences.

The focus and value of organizational benefits depends a little on

the location of the organization:
-USA. Many benefits not taxed, and poor state provision (healthcare) means
organization-specific benefits are source of competitive advantage.
-Europe. Better state provision of benefits so organizational benefits focus on
other things, depending on the organization’s location.
-Nordic countries & France. Generous childcare means less prized as a benefit.
Prefer to receive cash to use as they wish.
-China, Japan, Korea. Tax levied only on base pay, so bonuses and benefits have
greater financial value.

Strategic goals of benefits. Some examples of benefits famous organizations give:

-Netflix: unlimited parental leave. Signal that family and flexibility are
important and compensates for low US national policy.
-Airbnb: 2k$ a year for travel. Linked to the company’s core business and
strategic goals and signals that employees should love travel.
-PWC: student loan repayment. Encourages retention as repayment is in
instalments. Helps younger workers to get greater value of other parts of
reward package.

The workforce demographics are factors that interfere in benefit selection. Preferences
for benefits are likely to be influenced both by generation and life stage:
-Generational differences (more current older workers may have built historical
expectations about career development).
-Life stages and life choices (parents and those planning to be parents are likely
to prefer work-family and financial benefits).
There are also some external influences:
-Shift in traditional roles and increased rights for same sex couples (in EU
parents can ‘switch’ parental leave, although it is still predominantly women).

18
Francisco Montoya Giménez

-Organizations are likely to mimic companies within the same industry or

geographic region so external trends influence.
-During times of financial crisis or recession individuals may prefer more stable
financial support benefits (pension, life insurance).

Employees may also choose among flexible benefits, a variety of benefits or levels.
Research suggest that it increase satisfaction and awareness of benefits.

5.5 Pay secrecy

Pay secrecy. A pay communication policy that limits employees’ access to
pay-related information and discourages discussion among employees about
pay issues. In many countries, it is illegal to forbid employees from sharing pay
information, but this type of pay secrecy is still prevalent in the private sector, and there
are other types of pay secrecy that are legal.

Transparency vs secrecy. Benefits of transparency:

-Removes uncertainty/asymmetrical information as a basis for perceptions of
unfairness/discrimination.
-Promotes trust and fairness in the organization.
-Promotes motivation and performance.
Benefits of secrecy:
-Organizational control, avoid conflicts (while being able to use pay dispersion).
-Protection of privacy.
-Decreased labour mobility (of productive workers).

It also depends on multiple factors:

→Type of pay secrecy.
-Distributive pay nondisclosure. Restricting the amount of information the
organization shares about employee pay levels.
-Pay communication restriction. Stop employees from talking about their pay.
-Procedural pay nondisclosure. Restricting the amount of information the
organization shares about employee pay decisions.

→Type of pay secrecy. Restricting pay communication and information on pay

procedures is generally seen as more malevolent (with negative intentions).
On the other hand, when companies are more open about procedures for making pay
decisions, this is seen as more benevolent (with positive intentions).

→Preference for disclosure. Highest levels of job satisfaction when preferences

matched policy (high/high or low/low).

→Hoe pay is determined. Pay secrecy is generally negatively related to performance but
particularly when pay is determined relative to others (forced ranking) and when
performance is objectively measured (based on sales or outputs).

19
Francisco Montoya Giménez

6. EMPLOYMENT RELATIONSHIP

6.1 Key concepts

The employment relationship is a basic exchange between the employees and the
employer. The employee work for the employer and, in exchange, he gey paid. It is limited
by legislation, expectations, power, behaviours, and emotions and attitudes.

Employees get influenced by trade unions or representants; their community; and their
friends and family. On the other side, employers are directed by what expect their
managers (if they have); customers; and shareholders or trusters.

Perspectives on the ER
-Unitarist view. Employer and employees share the same goals, so keeping
employees’ happy benefits all. Conflict is not due to real issues but just personality
clashes and communication issues.
-Pluralist view. Conflict is inevitable as parties have differing interests.
Management’s role is to balance conflicting interests. Trade unions are seen as
necessary and valuable.
-Marxist view. Conflict is necessary for workers to further their interests.
Methods of reducing conflict are only out to benefit management. Little influence.
The first two ones are important because it shapes how we view the nature of the
employment relationship, the role of trade unions, and of managers and HR practices.

Shift from pluralism to unitarism. It can be seen in:

-Overall trend of decline in TU membership.
-Shift towards favouring employer in legislation protecting against dismissal.
-Trend towards organizations investing in policies that aim for a “happy
productive worker”.
6.2 Employee wellbeing

Generally, adults dedicate most of the hours of the day for working, demanding for more
time to interact with other people or to have free time.

Mutual gains vs conflicting outcomes

→Unitarist view. Employer and employees share the same goals, so keeping employees’
happy benefits all. Mutual gains: A happy worker is a productive worker. HR practices
benefit employees in terms of wellbeing who then work harder which benefits the
organisation.

→Pluralist view. Conflict is inevitable as parties have differing interests. Management’s

role is to balance conflicting interests. Conflicting outcomes: HR practices are for
management benefit, and these practices don’t benefit employees and may harm them.

Some authors defend the unitarist view, as Wright, who says that job satisfaction is
positively related to job performance; and vice versa, high levels of emotional exhaustion
are negatively related to organisational performance (Taris and Schreus).

20
Francisco Montoya Giménez

Based on a sample of 1.500 working adults, Ogbonnaya and Messersmith found that
HR practices are positively related to affective commitment and innovative behaviours,
but also to higher demands and therefore higher levels of stress.

So, when is happy also productive? Mutual gains are more likely when:
-HR practices are perceived to create a positive employment relations climate.
-When they are more focused on encouraging employee commitment than
controlling behaviour.
And when are they not? According to the law of diminishing returns, too much
investment in HR systems can have negative relationship with some wellbeing indicators
and costs more money so is also detrimental to organisational performance.

6.3 Disciplining

Employee discipline. Actions imposed by an organization on its employees for failure to

follow the organization’s rules, standards, or policies.

Goals of employee discipline

-Preventative. Deter undesirable behaviour by setting clear consequences for
specific actions.
-Corrective. Guide employees towards acceptable behaviour and performance
standards with fair, consistent, and legal responses to transgressions.
-Legal compliance. Comply with legal and regulatory requirements and reduce
the risk of legal challenges.
-Performance improvement. Improve performance by addressing
counterproductive work behaviours.
-Workplace harmony. Create a positive and respectful work environment by
ensuring fair treatment and addressing disruptive or harmful behaviours.
There are some principles disciplining has to follow, based on the How Stove Rule:
-Provide ample warning.
-Make consequences immediate.
-Enforce consistently and without bias.

A good option is using a progressive disciplinary approach, based on four steps:

-Verbal warning.
-Written warming.
-Suspension.
-Termination.
To do this, you have to be specific; focus on behaviour; create awareness of misconduct;
and create understanding of what needs to change.

Termination or dismissal
-Who. Direct manager should tell the employee (possibly with a third person or
HR-rep present), to make the employee feel respected. For this reason, don’t
delegate to an external consultant.

21
Francisco Montoya Giménez

-When. Pick a day followed by at least one consecutive workday (not Friday).
-Where. In a neutral place that you can exit afterwards (quiet conference room).
-How. Face-to-face and short, max 15 minutes to inform, explain and advise.

6.4 Retention

(Expertly) Addressing Retention/Turnover

1. Identify who is at risk of leaving (and why)
2. Determine whether the turnover is/would be harmful to the organization and
can be addressed
3. Implement preventative and/or reactive measures.

The Unfolding Model of Voluntary Turnover

The model proposes 5 paths of turnover, which captures the 92% of the cases. It serves to
predict who is at risk of leaving.

→Path 1. It comes from a shock that make the person restate his future and he is mentally
prepared, being the turnover expected (the employee’s spouse get a job in Paris).
Measures to take can be proactive (flexible work arrangements) or reactive (relocation).

→Path 2. Comes also from a shock and from an unexpected negative organizational
event (by-passed promotion and sees little opportunity career advancement). Measures:
-Proactive (prevention). Clear career development paths.
-Reactive (intervention). Offer promotions or role changes.

→Path 3. Also a shock and comes from an unexcepted work-related opportunity

elsewhere (job offer form a local competitor and decides to pursue it). Measures:
-Proactive. Competitive pay and benefits.
-Reactive. Provide a counteroffer.
→Path 4a. Comes from a history of dissatisfaction (he realizes that he is unhappy and
quits without looking for a new job). Measures:

-Proactive. Regular stay and exist interviews.

-Reactive. Conflict resolution, mental health support…

→Path 4b. Comes from a history of dissatisfaction by with an alternative job (being
unhappy initiates a job search and quit when finds an alternative). Measures:
-Proactive. Career development opportunities, recognition and reward program…
-Reactive. Enhance compensation, provide a career advancement offer…

Path 1 is the only in where the worker is mentally prepared, and it is expected.

22
Francisco Montoya Giménez

6.5 Voice mechanisms

Employee voice. How employees raise concerns, express their interests, solve problems,
and contribute to and participate in workplace decision-making. Two types:
-Direct voice. Involvement in day-to-day decisions (job design, problem-solving).
Such as the manager or the HR department.
-Indirect voice. Tends to focus on more strategic issues (tech change,
organisation restructuring, corporate strategy). As trade unions.
Decline in trade unions has seen shift towards direct voice.

Pros and cons of voice.

-Pros. Voice can promote self-expression, visibility, and increase transparency of
workplace practices.
-Cons. It can lead to disillusion, frustration and dissatisfaction if not managed
properly.
These are important because they can impact organisational outcomes, including
commitment, performance, and employee turnover.
Voice in the digital age

A survey of a digital voice was done, creating a discussion forum, which permit to share
more specific issues, having more opportunities for employees’ voices. It enables
employees to voice their concerns publicly but anonymously, increasing visibility, which:
-Helps employees to feel heard.
-Enhances collective direct voice.
-Forces management action on issues.
It also enables collaborative problems solving between workers, not only relying on top-
down responses.

As cons, digital platforms can limit voice, they often focus on narrow predefined issues
and restrict two-way dialogue. Besides, voices are easier to silence or ignore in digital
platforms.

23