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The Association of Business Executives

QCF

Strategic Human ResourceManagement

Suggested Answers

Unit Title: Strategic Human Resource Management

Unit Code: 6SHRM

QCF Level: 6

Session: December 2012

STRUCTURE OF PAPER: Answer ALL THREE sections

SECTION A: Answer ALL FIVE questions Q1Q2Q3Q4Q5

14 marks14 marks14 marks14 marks14 marks

SECTION B: Answer ONE question EitherQ6 orQ7 15 marks

SECTION C: Answer ONE question EitherQ8 orQ9 15 marks

TOTAL MARKS AVAILABLE FOR THE PAPER 100 marks

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SECTION A

Candidates must answer ALL FIVE questions in this section.

Each question is worth 14 marks.

Section A is worth 70% of the total marks available for the paper.

Question 1

Q1

(a)

Outline the principal benefits of High Performance Working (HPW) strategies andpractices for an organisation, its managers and its workforce.

Benefits for the organisation

Reputational advantages with customers

Ease of recruitment for talented people

Benefits for managers

Superior productivity

Ease of facilitating continuous improvement and change

Benefits for the workforce

Heightened job security

Greater levels of job satisfaction

Maximum Marks for (a) 8 marks

Q1

(b)

Explain how you would get active support for a HPW initiative from the organisationsmanagers and workforce.

The promise of highly-valued rewards in the future initially for the organisation, but

these then to be shared throughout the management team and the workforce. Theserewards will consist not principally of financial benefits, but also of job security, asustainable competitive advantage, the reputational asset of the business as a HPWenterprise, and so forth.

References to other well-known examples of organisations, preferably in the samesector, geographical region, etc., which have become HPW businesses and whichhave then enjoyed superior levels of profitability, customer retention, and employeeengagement.

For the workforce: some specific benefits linked to an employee engagementculture, e.g., bonus payments, involvement in continuous-improvement projects, andother employee voice opportunities.

For the managers: becoming a HPW business will produce benefits in terms ofcustomer attraction, customer retention, customer loyalty, and will in turn, therefore,yield other consequential advantages in terms of workforce planning, productionplanning, product/serviced quality and profitability.

Citation of suitable research evidence, preferably from organisations in the samesector and/or geographical region.

Maximum Marks for (b) 6 marks

Total Maximum Marks for Q114

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Question 2

According to Torrington et al (2009), the contingency approach to the design of HR strategy isbased on external fit (sometimes referred to as vertical integration) and internal fit (sometimesreferred to as horizontal integration).

Q2(a)

Explain what is meant by external fit (vertical integration) and outline one of theproblems of developing and implementing an HR strategy which is vertically integrated.

External fit vertical integration

This describes a scenario in which the HR strategically is sequentially derived fromthe overarching corporate strategy, including the organisations Big Idea (assumingthere is one), its vision, mission and core values.

When undertaken efficiently the resultant HR strategy and its constituent functionalstrategies (for reward, recruitment, etc) are all aligned to the corporate goals.

Example: if an organisations central strategy is founded on service excellence, thenall the HR strategies should be focused on their contribution to this goal, i.e.,recruiting/selecting individuals who are predisposed to perform generous acts ofcustomer service, rewarding and recognising achievements and progress withindividuals or teams who go the extra mile, and so forth.

Problems

Such logical tidiness is not normally a feature of organisational life, because in thedesign of both corporate and HR strategies compromises have to be agreed partlyto accommodate legacy systems (what has gone before doesnt all need to berejected) and partly to accommodate the powerful interests of individual stakeholders.

The overall strategic direction may change (for reasons for commercial expediency)so there is inevitably a time-lag between it doing so and the subsequent directional

switch for the HR strategy.

Some senior HR professionals may pursue agendas of their own which aresubversively aimed at promoting some HR values irrespective of their relevance tothe corporate purposes.


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Q2

(b)

Explain what is meant by internal fit (horizontal integration) and outline one of theproblems of developing and implementing an HR strategy which is horizontallyintegrated.

Internal fit or horizontal integration

This phrase embraces a situation in which the component parts of the HR function

are all linked together laterally so that, as it were, they all pull in the same direction.

It also encompasses situations in which the HR function/department pursuesstrategies that are perfectly aligned with the strategies of all other organisationalunits, such as the production department, the R&D department, and so forth.

Problems

The issues here are not dissimilar from those that prevent vertical alignment frombeing attained over a long period of time, namely, that political interests sometimestake precedence over the abstract concerns of organisational logic.

Moreover, with the best will in the world, individual strategies often have unforeseenand unintended consequences, so that what appears initially to be alignmentsubsequently emerges as anarchic chaos.

Individual departments, functions or units may be led by individuals who wish to adoptand implement their own strategic variations, perhaps because they believepassionately in the supremacy of their own contribution to the corporate whole.



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Question 3

You have been recruited as the HR adviser for a start-up company which is expected to grow from10 to about 500 employees over the next 12 months. Management will be free to decide its ownemployee relations strategy and style.

Q3 Compare and contrast the principal features of the pluralist and unitary approaches to

employee relations and explain, with reasons, which of these approaches should beadopted by the business you have just joined.

Principal features of the unitary and pluralistic perspectives for employeerelations

The unitary model assumes that the organisation consists of people who all pursuethe same goals, in the same ways and with the same degree of enthusiasm.

If there is conflict, such conflict is muted and is easily controlled or managed so thatultimately there is a good deal of unanimity in the system.

Examples: small family businesses; new and small enterprises; a few largerorganisations such as the John Lewis Partnership (though reality reveals that there is

a lot of individual and group conflict in the company).

The pluralistic framework assumes that industrial conflict is endemic andunavoidable, so the task is to manage that conflict so that it becomes a factorcontributing to the organisations success rather than an element which holds it back.

Pluralism is much more commonplace, especially in larger organisations, where onefinds individuals and groups with opposing values and priorities, not just hierarchicallybut also laterally.

Examples: conflicts of goals between the priorities of senior executives and those oflow-level employees; conflicts between business functions, none wishing to cedeauthority to another; conflicts between personalities; conflicts between differentgroups of employees whenever technological innovation replaces one process byanother.

The perspective which the new business should pursue

A majority of students may well seek to claim that the new business should pursue aunitary philosophy which will be acceptable so long as some form of underpinningrationale can be provided.

On the other hand, it may be as well to acknowledge from the start that there will bedifferences of opinion (even if such differences are informal rather than codified), andset up conflict-resolution processes accordingly.

Reasons

The nature of the rationale will depend on the position taken up by each individual

examination candidate.


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positions, e.g., as leaders of problem-solving or creative-thinking groups aimed atremedial action or competitive innovation.

Performance appraisal and personal development planning

Performance appraisal must incorporate criteria (competencies) which are central to athinking performer model, and appraisers should look for instances where members

of their teams have exemplified the thinking performer paradigm.

Personal development planning must be strongly geared towards the thinkingperformer framework.


marks

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Question 5

You are the HR advisor for a new manufacturing business which will start production in mid-2013.The workforce of 500 employees will be involved in production and distribution (400 people), salesand marketing (20 people) and management and administration (80 people).

Q5(a)

Outline and justify appropriate objectives forthe new companys reward andperformance management strategy.

To attract talented people who can, as it were, hit the ground running, i.e., becomefully effective very quickly.

To retain talented people.

To motivate talented people to deliver value-added results consistently, over time.

To encourage the organisations employees to co-operate with each other and workcollaboratively both in small teams and with the goals of the overall organisation asone of their key priorities.

To stimulate world-class levels of service excellence, both internally and for theorganisations external (paying) customers.


Q5

(b)

Summarise and justify the reward and performance management methods which shouldbe implemented in order to maximise the contribution from each of the followingcategories:

Administration and management

Sales/marketing staff

Production and distribution staff

Administrative and managerial staff

Stock ownership plans

Performance bonuses based on the accomplishment of previously-agreed targets thatare clearly linked to the organisations overall, higher-order and overarching Big Idea.

Employees in the sales/marketing function

Profit-sharing schemes

Performance bonuses based on the accomplishment of departmental/functional goalsthat are quantitative and time-bounded

Production and distribution staff

Traditionally, such employees may be paid wages and also receive additionalpayments for, say, overtime and for working unusual (antisocial) hours, etc.

However, it would be more innovative to pay salaries based on annualised hours andflexible working, with incentives for personal flexibility (multiskilling) and discretionarycontributions linked to individual or team efforts.

Another possibility would be to pay these employees according to the level ofproduction uptime (i.e., no downtime), and also take account of absence levels, bothindividually and collectively.

The above are only suggestions: other responses and proposals could be acceptable,provided they are (or can be) justified commercially and cost-effectively.


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14marks

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SECTION B

Candidates must answer ONE (AND ONLY ONE) question from this section

Each question carries 15 marks.

Section B is worth 15% of the total marks available for the paper.

EITHER Question 6

Q6

(a)

Outline two reasons why there might be an increasing expectation that staff incompanies should behave ethically.

Customers are increasingly expecting organisations to conduct themselves inaccordance with some (admittedly only vaguely defined) ethical principles, e.g., aboutfair treatment for ethnic minorities and women, child labour, and so forth.

The awarding of commercial contracts can take account of the degree to which theorganisation has conducted itself and continues to conduct itself ethically.

The organisations workforce may well include some individuals who are concernedabout ethical matters, and who will blow the whistle if they believe there is anyevidence of inappropriate behaviour so companies must guard themselves againstthis possibility by ensuring that they do indeed act ethically.

Many companies now come under the supervision of external regulators either forspecific sectors like the FSA or for whole countries, like the EU.


Q6

(b)

Explain two benefits which an organisation may enjoy as a result of creating a Code ofEthics.

The Code gives guidance to employees about how they are required to behave(though its exact influence will depend on the zeal with which the Code isimplemented and enforced).

The Code sends out signals to external stakeholders (like customers and suppliers)about the seriousness with which the firm views ethical conduct.

The Code should indicate the behaviours that are not acceptable as well as thosewhich are encouraged.

The reputation of the business is enhanced.


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Q6

(c)

Describe the key factors which have to be in place before a Code of Ethics can be saidto be worthwhile.

The Code has to be strongly and visibly endorsed by the organisations CEO and allits top executives.

Adherence to the Code has to become an important element in the organisations

performance management and performance appraisal systems.

There must be strong and multiple mechanisms for enforcement, reflecting acombination of reward (celebration of individual/team successes in the companymagazine/newsletter) and punishment (sanctions including dismissal for anyindividual breach of the Code, after warnings and publicity).

The Codes contents should be made apparent to all job applicants, all short-listedcandidates and all new recruits.

Responsibility for monitoring should be allocated to a single individual probablysomeone senior from the HR function, but also, conceivably, from the CompanySecretarys unit with powers for unannounced inspections, etc.

Coverage of the Code should be extended to the organisations suppliers and otherstakeholders subject to their agreement, of course, but if such agreement iswithheld for reasons considered unacceptable, other suppliers will be sought.

A Code for Whistleblowers should be established so that individuals with evidence ofwrongdoing may communicate their concerns without fear of suffering harmfulconsequences.

Maximum Marks for (c) 7 marks


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OR Question 7

Q7 Discuss the internal and external factors that will be relevant to the construction of anorganisations HR strategy and identify one internal and one external factor which youthink will have the greatest impact, giving reasons for your views.

Internal factors relevant to the construction of an organisations HR strategy The personal preferences and values of the organisations CEO

The distribution of power among the organisations senior executives

The degree to which the HR function is seen as a strategic partner or merely as anadministrative and costly necessity/overhead

The nature of the organisations business and the sector(s) within which it operates

The history of the organisation and its changing ownership patterns

The external factors relevant to the construction of an organisations HR strategy

The extent of any current competition

The impact of the competition in the foreseeable future Predicted developments in the supply of labour

Predicted developments in the demand for labour within the organisations normalcatchment area

Likely developments in customer expectations, including any growing concerns aboutethicality and environmental issues

The impact of technological innovation which may suddenly cause significant growthin demand for the organisations products/services, or which may, equally suddenly,cause existing demand to evaporate

Political and legal changes

Specific examples

For internal factors, students may wish to show how the appointment of a new CEOcan change the strategic thrust for the business away from a legalistic, task-focusedculture to a culture characterised by employee engagement and customer-centricity.

For external factors, one example could revolve round the expected labour shortagesin the organisations current labour market region as a result this could propel thebusiness into such strategies as flexible working, the encouragement for olderworkers to remain in the organisation, outsourcing, or even a geographical relocationinto another region or another country.

Total Maximum Marks for Q7 15 marks

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SECTION C

Candidates must answer ONE (AND ONLY ONE) question from this section

Each question carries 15 marks.

Section C is worth 15% of the total marks available for the paper.

EITHER Question 8

Q8 Critically assess the advantages and disadvantages of contemporary information andcommunication technologies (such as the Internet and social media) for the recruitmentand selection of staff. Show how the disadvantages may be overcome or minimised.

The benefits of the Internet so far as people resourcing (recruitment and selection) isconcerned

Low cost

Access to a much larger field of potential applicants

Speed

Flexibility (e.g., advertisements may be withdrawn or amended very quickly)

Creates a positive impression of growth and expansion with customers

Can help to generate an employer of choice reputation

The disadvantages of the Internet so far as people resourcing is concerned

Internet advertising may attract a large number of unsuitable candidates

Not all potential applicants have Internet access.

Shortlisting can be an enormous task

How the disadvantages may be overcome or minimised

Job advertisements on the Internet should be very tightly worded

Warnings should be included about the treatment of unsuitable applications

Online candidate elimination tests can reduce the number of candidates to a moremanageable figure

The whole exercise may be outsourced to a recruitment agency (though this creates

a separate category of problems)


marks

OR Question 9

Dreamwell is a company that owns and operates ten large holiday centres, offering holidayaccommodation, leisure activities and entertainment during the summer and for several nationalholidays each year. It maintains only a small number of permanent staff and takes on otheremployees to meet seasonal demands.

Q9 Devise and justify a people resourcing strategy which would be appropriate forDreamwell. Make sure that your strategy encompasses all aspects of people resourcing,

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namely:

HR planning

Recruitment and selection

Training, learning and development

Reward and recognition

Employment relations

HR planning

The predicted demand for employees must continue to show seasonal fluctuationsand should not be drawn as a straight line.

The architect for the people resourcing strategy must know the intentions of thesenior management of the business, so far as its future products and sales/marketingstrategies are concerned. What about Internet and online sales?

Recruitment and Selection

Seasonal fluctuations imply Annualised Hours contracts for the permanent staff and

the development of a large network of temporary employees.

Costly measures for coping with unusual levels of labour demand should be avoided,i.e., overtime and the use of outsourcing agencies.

Existing staff may be incentivised to introduce new recruits, e.g., other familymembers.

Training, Learning and Development

If a reliable network of short-term employees can be created, then they can beretained through annualised hours contracts and given short bursts of trainingthroughout each year, partly to ensure that they can hit the ground running whenthey finally start work but also to make it more likely that they will indeed do so whenthe time comes.

Experienced staff should become qualified trainers to help with the workload whenshort-term staff return after the normal holiday season has finished.

Reward and Recognition

Small retainers may be paid to short-term staff who demonstrate strong and relevantskills and aptitudes.

Tasks undertaken in the factory should he heavily incentivised so that productivityremains high (whilst quality is sustained).

Bonuses for continuous attendance and team skills should be considered.

Employment Relations

When employees are recruited, their propensity for becoming engaged should beascertained.

It is likely that the short-term staff will be instrumentally motivated (i.e., they havejoined because of the monetary rewards, and will not conspicuously welcome anyattempts for involvement, participation and consultation); if this is so, they will respondto financial incentives, especially to end-of-task bonuses.


marks

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