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Essentials of Human Resource Management, Fifth Edition

Essentials of Human Resource Management, Fifth Edition

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Essentials of Human
Resource Management

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AMSTERDAM • BOSTON • HEIDELBERG • LONDON • NEW YORK • OXFORD

PARIS • SAN DIEGO • SAN FRANCISCO • SINGAPORE • SYDNEY • TOKYO

Butterworth-Heinemann is an imprint of Elsevier

Essentials of
Human Resource
Management

Fifth edition

Shaun Tyson

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Butterworth-Heinemann is an imprint of Elsevier
Linacre House, Jordan Hill, Oxford OX2 8DP
30 Corporate Drive, Suite 400, Burlington, MA 01803, USA

First published as Personnel Management 1982
Second edition 1989
Third edition 1996
Fourth edition 2000
Fifth edition 2006

Copyright © 1982, 1989, 1996, 2000, Shaun Tyson and Alfred York. All rights reserved
Copyright © 2006, Shaun Tyson. Published by Elsevier Ltd. All rights reserved

The right of Shaun Tyson to be identified as the author of this work has been
asserted in accordance with the Copyright, Designs and Patents Act 1988

No part of this publication may be reproduced, stored in a retrieval system or
transmitted in any form or by any means electronic, mechanical, photocopying,
recording or otherwise without the prior written permission of the publisher

Permissions may be sought directly from Elsevier’s Science & Technology Rights
Department in Oxford, UK: phone ( 44) (0) 1865 843830; fax ( 44) (0) 1865
853333; email: permissions@elsevier.com. Alternatively you can submit your request
online by visiting the Elsevier web site at http://elsevier.com/locate/permissions, and
selecting Obtaining permission to use Elsevier material

Notice
No responsibility is assumed by the publisher for any injury and/or damage to
persons or property as a matter of products liability, negligence or otherwise, or from
any use or operation of any methods, products, instructions or ideas contained in the
material herein. Because of rapid advances in the medical sciences, in particular,
independent verification of diagnoses and drug dosages should be made

British Library Cataloguing in Publication Data

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

Library of Congress Cataloguing in Publication Data Control Number: 2006923608

ISBN-13: 978-0-7506-6795-1
ISBN-10: 0-7506-6795-8

Typeset by Charon Tec Ltd, Chennai, India
www.charontec.com
Printed and bound in The Netherlands

06 07 08 09 10 10 9 8 7 6 5 4 3 2 1

For information on all Elsevier Butterworth-Heinemann publications
visit our web site at http://books.elsevier.com

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Contents

Preface

vii

Acknowledgements

xi

Part One

The behavioural bases of human
resource management

1

1

Individual differences

3

2

Groups

21

3

Organizations

42

Part Two

The developing strategic role of
human resource management

59

4

From personnel management to HRM:how did this
field of work develop?

61

5

Human resource strategy

84

6

Human resource planning

107

Part ThreeRecruitment and selection

125

7

Job analysis:defining effective performance

127

8

Recruitment

143

9

Selecting employees

161

Part FourAssessing performance and
developing people

181

10Induction

183

11Assessing performance potential

192

12Training and development

214

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Part Five

Rewards

243

13Job evaluation

245

14Pay and benefits

263

15Conditions of service

298

Part Six

Industrial relations

325

16The history and development of trade unions

329

17Collective bargaining

341

18Negotiation techniques

357

19Disputes and ways of resolving conflict

367

20Consultation and participation

381

21Employment law:institutions and contracts of employment

391

22Employment law:managing employment relationships

421

Part SevenEpilogue

445

23The contribution of HRM to organizational performance

447

Appendix 1

451

Appendix 2

453

Index

457

vi

Contents

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Preface

Human Resource management has grown in its range and depth to the
point where it has become an industry rather than just an occupation.
This Fifth Edition of a book aimed at explaining the main areas of the
field has grown in each edition, expanding with the scope of the topic
to the point where even a summary of the topic is a large tome. In each
succeeding edition we find new ideas, new techniques and new legisla-
tion to describe. There is however, no diminution in the volume of
existing material because all is still relevant. It is necessary to know how
we have come to our present situation in order to understand where
we are going, and the trends which are continuing. HRM is highly sit-
uation specific, the context is infinitely variable and there are endless
applications.

Part of the joy of working in HRM is the significance of the work that
we do in this field, to help people and organizations to adjust to the
massive social, economic, political and technological changes that
influence the way people are managed.
The pace of change is such that we must acknowledge wider forces
affecting people management. Environmental change, increased secu-
rity risks, demographic changes, the rise of new economies such as
China, India and Brazil, and the expansion of the EU are some of the
obvious global pressures. The social changes we can all list include
shifts to values and lifestyles, families, education and health. What at
one time might have seemed remote from HRM is now central to our
work. Global, social and political changes affect all economic activities,
through marketing opportunities and threats, affecting employment,
costs, productivity and the social climate of relationships.
New ways of working and organizing, such as flatter, more devolved
organization structures, the burgeoning range of networks, whether

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technological, inter-organizational, intra-organizational, or personal,
and global ownership with international activities as a norm have
affected HRM. The HR functions in organizations are smaller and
more often linked to a wide range of service providers and sometimes
with the transactional activities outsourced. The HR role is diffused
throughout organizations, with new job titles reflecting the signifi-
cance of change management and talent management.
Not in spite of, but because of, these trends, there is every sign that
HRM as an activity is itself becoming widely distributed. There is conver-
gence in practices for example, between the public and private sectors,
and across national boundaries. Information flows are so fast the stan-
dard for communications is now instant, via electronic means, that the
latest ideas on the HR field are transmitted within seconds. There is trans-
parency in areas such as pay and benefits, labour market data, recruit-
ment opportunities and working trends. The world of the business of
HRM is mature, expanding and mainstream to all managerial activity.
These trends and changes would be sufficient justification for the
Fifth Edition of this text alone. The need for this kind of text continues
because whatever the discontinuities arising from the new challenges,
people management in all its aspects builds and develops from tradi-
tion and techniques. New cases and legislation in the field amend and
marginally reconfigure regulations, with our understanding of the
human condition comes a slow accretion of knowledge which is repre-
sented in the continuing traditions in techniques and approaches,
such as in selection, job evaluation, reward, training, development and
in industrial relations. The people working in this field are developing
knowledge and techniques as they face new problems, as communities
of practitioners.

The latest edition of this text seeks to bring together the main funda-
mental knowledge of areas of human resources, from organizational
behaviour to people management, industrial relations and employment
law. These are explored from the perspective of the current and emerg-
ing context of HRM and the latest techniques in managing people.
The themes of continuity and change are supported by the genesis
of this book, when Alfred York, the original co-author and I sat down
together to blend our joint knowledge and interests as a foundation
for the book, with John Milton’s words in mind:
‘Where there is much desire to learn, there of necessity will be much
arguing, much writing, many opinions; for opinion in good men is but
knowledge in the making.’
Our desire to write the book was born as much out of a desire to learn
as the intention to communicate ideas and understanding.

viii

Preface

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That desire continues, because with each new edition, come revi-
sions and new ideas. The field of HRM is one where there are new tech-
niques and fresh concepts by the bucketful, and where no book can
completely do justice to the topic.
This book is intended for anyone who wishes to find a comprehen-
sive guide to the subject, grounded in the principal theories and con-
cepts, with the authority of a long term perspective and a focus on the
latest techniques and practical ideas.
Later in these introductory pages I acknowledge my debt to Alfred
and to Jayne Ashley who over many years and editions have worked on
this book with me. In the ideas and perspectives found here, we hope
our readers will find ‘knowledge in the making’.

Shaun Tyson

Preface

ix

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Acknowledgements

We wish to acknowledge with thanks the permissions to reproduce the
material from the following works, granted by the publishers and
authors:

The model of strategic change and human resource management,
granted by Chris Hendry and Andrew Pettigrew, and by Routledge and
John Wiley, originally published in the International Journal of Human
Resource Management(1990) 1(1) 17–44, and in the British Journal of
Management(1992) 3(3), 137–56.
The model of HRM from Human Resource Management: A General
Managers Perspectiveby Michael Beer, Bert Spector, Paul R. Lawrence,
D. Quinn Mills and Richard E. Walton. Reprinted with permission
from Professor Michael Beer.
Ashkenas, R, Ulrich, D., Jich, T. and Kerr, S., copyright © 1995. The
Boundaryless Organisation. Jossey Bass. Reprinted with permission of
John Wiley & Sons, Inc.
The cohort analysis from Manpower Planning in the Civil Service(1972),
Table 5.1, Crown Copyright, which is reprinted with the permission of
the Controller of Her Majesty’s Stationery Office.
The table entitled Changes resulting from the impact of technology
from The Future of Workby Ward (1990)in Anderson J. and Ricci, M
(eds)Society and Social Science. Reprinted with the permission of the
Open University Press.
The panel entitled Demographic changes and the workplace:
Implications for HR. Reprinted with the permission of SHRM
2004–2005 Workplace forecast: A Strategic Outlook published by the
Society of Human Resource Management, Alexandria, VA.
Boston Consulting Group Matrix – Boston Consulting Group –
Reprinted with the permission of the Boston Consulting Group.

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Kraft Foods Vision Statement – Reprinted with the permission of

Kraft Foods.

Cadbury Schweppes Mission Statement – Reprinted with the permis-
sion of Cadbury Schweppes.
The dynamics of the stress process (p. 310) – Reprinted with the per-
mission of Resource Systems Limited.
Keith Cameron for permission to quote his chart on commission
schemes and to publish his format of a flexible reward system.
British Aerospace (for a description of their BEST management
development programme objectives) and Standard Life (for a descrip-
tion of their contribution management system).
I wish to express my thanks in particular to Michelle Chamberlain,
Practice Lawyer, of Eversheds LLP for her helpful comments and
advice on the employment law chapter.
This book is a revised text, and much of the original remains. Whilst
completing these revisions I have been conscious throughout that my
old friend Alfred York was my original co-author. Sadly, ill health has pre-
vented him from continuing in this role. Nevertheless, as I brought this
edition up to date, I was conscious that Alfred’s ideas and personality are
imbued in the heart of the book. He is a person whose intellect and life
experience have reached ‘renaissance man’ proportions, having been a
naval officer during the second world war, and RAF officer after the war,
a classics scholar, a linguist, an academic and a management consultant.
I hope this book will be a continuing testament to his genius.
There is a second great debt of gratitude owed. The book would not
have been realised without the professional diligence of Jayne Ashley.
Her good humour, her painstaking and tireless attention to the manu-
script have made the whole project possible.
I am also grateful for the patience of our publisher, Maggie Smith of
Elsevier, who has been a constant source of encouragement.
Any errors or omissions remain my responsibility alone.

Shaun Tyson

Cranfield Bedfordshire

xii

Acknowledgements

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PART ONE

The behavioural bases
of human resource
management

In this part of the book we provide a general background for all the
subsequent chapters on specific aspects of human resource manage-
ment (HRM) policies and practices. Since work and its management
are human activities set in motion, carried out, supervised, monitored
and assessed by people who are constantly interacting with each other,
human factors are crucially important. Nevertheless, managers do not
always act as though they fully understand and acknowledge that suc-
cess in management has to be based on an awareness and at least a
broad knowledge of human behaviour, including, of course, their own.
For the last 100 years there have been studies of the behaviour of
people, and in particular of the special kinds of problems that modern
working life creates. These studies are described collectively as the
social sciences and include contributions from specialists trained in a
variety of disciplines, particularly in the different branches of psychol-
ogy, sociology and economics. In times of increasing academic special-
ization we need to remind ourselves that the situations themselves have
no such specialized distinctions. The value of the various specialisms
lies in the difference of emphasis and perspective that they give in
looking at the same situations, and hence in providing a broader
understanding of their nature.

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In this preliminary phase of the book we are setting out to make a
systematic survey of the important areas covered by research into the
behaviour of people at work, which is, of necessity, no more than an
outline. Apart from providing a necessary background for the main
subjects of the book it will also, hopefully, indicate areas where further
study may usefully be made.

2

Essentials of human resource management

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