Human Resource Management Practices: Assessing Added Value

235 Pages·2015·3.32 MB·English

by  Maike Andresen

Management for Professionals
Maike Andresen
Christian Nowak
Editors
Human
Resource
Management
Practices
Assessing Added Value
Management for Professionals
Moreinformationaboutthisseriesat
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ThiSisaFMBlankPage
Maike Andresen (cid:129) Christian Nowak
Editors
Human Resource
Management Practices
Assessing Added Value
Editors
MaikeAndresen ChristianNowak
DepartmentofHumanResource LeoniAG
Management Nuremberg
UniversityofBamberg Germany
Bamberg
Germany
ISSN2192-8096 ISSN2192-810X(electronic)
ISBN978-3-319-08185-4 ISBN978-3-319-08186-1(eBook)
DOI10.1007/978-3-319-08186-1
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Contents
AssessingtheAddedValueofHumanResourceManagement
Practices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
MaikeAndresen
AddingValueandHRMPractice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
DirkBuyensandJasmijnVerbrigghe
RealizingtheHighestValueofInvestmentsinTalentManagement. . . . 31
Marie¨lleSonnenbergandVeravanZijderveld
HowtoEvaluateEmployerBrands:AMonetaryApproach. . . . . . . . . 53
PascalGu¨ntu¨rku¨n,TillHaumann,andAlfredLukasczyk
AssessingtheReturnonInvestmentsinHumanResource
Development. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
CorneliaTonha¨userandSusanSeeber
TheAddedValueofExpatriation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
YvonneMcNulty
ALookIntotheFuture:IsWorkingTimeFreedomApttoAdd
ValueforDifferentStakeholders?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
MaikeAndresen
CreatingValueThroughOccupationalHealthManagement. . . . . . . . . 125
KarlheinzSonntagandRalfStegmaier
InvestmentsinWork-Life-BalancePayOff. . . . . . . . . . . . . . . . . . . . . . 147
ManfredBu¨hrmann
InvestingintheSubjectiveWell-BeingofTemporaryWorkers. . . . . . . 163
SusanneImhof
AddedValueofEmployeeFinancialParticipation. . . . . . . . . . . . . . . . . 181
ErikPoutsmaandEricKaarsemaker
v
vi Contents
DoesEmployeeDownsizingReallyWork?. . . . . . . . . . . . . . . . . . . . . . . 197
DeepakK.DattaandDynahA.Basuil
DeterminingOutcomesofHRMPractices. . . . . . . . . . . . . . . . . . . . . . . 223
WolfgangBecker,BiancaBrandt,andHaraldEggeling
Assessing the Added Value of Human
Resource Management Practices
An Introduction
Maike Andresen
Abstract
Inordertogetmanagementtolistenandtogaincredibility,HRmanagerswould
dowelltodocumenttheaddedvalueofHRinvestmentsandtheirimpactonfirm
performance. Highlighting the contribution of HR practices requires us to
answertwocorequestions:WhatistheaddedvalueofinvestinginHRfunctions
andpractices?HowcantheaddedvaluecreatedbyHRfunctionsandpractices
beassessed?
Inorder toaddressthese central questions,a broad overviewofa four-step-
approach(ORMM-approach)isgiventhatstructurestheprocessofdetermining
the added value of HRM: Based on a definition of outcome variables (O),
research/theory-based cause-and-effect-relationships (R) between antecedents
and outcome variables need to be modeled. Finally, the added value needs to
beassessedbyusingadequatemeasures(M)andtobemanaged(M).Moreover,
inviewofthebroadlydiscussedtheory-practice-gap,itisshownhowthisedited
volume supports both researchers and practitioners in their work by giving an
overviewofthecontributionsinthiseditedbook.
1 HumanResourceManagementPracticesandAddedValue
Thepotentialaddedvalueofhumanresourcemanagement(HRM)toorganizations
andemployeeshasalreadybeendiscussedsincethemid-1990s(seeLegge1995).
Ever since, numerous studies have shown the positive impact of effective HR
practices on the financial performance of a company (Paauwe 2009). Yet, in
ordertoaddvaluetotheorganization’sdistinctivecompetenciesHRpractitioners
muststrivetodomuchmorethanattracting,managinganddevelopingpeopleand
M.Andresen(*)
DepartmentofHumanResourceManagement,UniversityofBamberg,Bamberg,Germany
e-mail:[e-mail]
#SpringerInternationalPublishingSwitzerland2015 1
M.Andresen,C.Nowak(eds.),HumanResourceManagementPractices,
ManagementforProfessionals,DOI10.1007/978-3-319-08186-1_1
2 M.Andresen
buildcompetitiveadvantagethroughHRM.Inordertogetmanagementtolistento
theiradviceandtogaincredibility,HRmanagersneedtoquantifytheaddedvalue
ofHRinvestmentsonfirmperformance.
Several publications have since then conceptualized which metrics HR
professionals can use in order to empirically demonstrate the link between their
practices and firm performance and to quantify the impact (e.g. Cascio and
Boudreau 2011). However, the focus so far has been on the financial impact of
HR investments, neglecting alternative outcome variables. Moreover, a broader
empirical understanding of cause and effect between HR inputs, outcomes and
performance, of the resulting consequences for the measurement of these
relationships as well as of implications for the assessment of the added value of
HRM is still lacking. With the present edited volume Human Resource Manage-
mentPractices–AssessingAddedValuewewanttoaddresstwocorequestions:
• WhatistheaddedvalueofinvestinginHRfunctionsandpractices?
• HowcantheaddedvaluecreatedbyHRfunctionsandpracticesbeassessed?
In the following we give a broad overview of a four-step-approach (ORMM-
approach)tostructuretheprocessofdeterminingtheaddedvalueofHRM:Based
on a definition of outcome variables (O), cause-and-effect-relationships
(R) between antecedents and outcome variables need to be modeled. Finally, the
added value needs to be assessed by using adequate measures (M) and to be
managed (M). Moreover, in view of the broadly discussed theory-practice-gap, it
isshownhowthiseditedvolumesupportsbothresearchersandpractitionersintheir
workbygivinganoverviewofthecontributionsoftheauthors.
2 Indicators of the Added Value of HRM: An Extended View
on Outcomes
In order to determine the added value of HRM, the first question to answer –
according to the ORMM-approach – is to which outcome variables (O) HR
practices should add. Traditionally, financial performance is seen as being the
mostimportantoutcomevariable(CascioandBoudreau2011).
ThisfocusonfinancialoutcomesisinaccordancewithGuest’smodelofHRM
(Guest 1997), where the financial result in terms of profits and ROI is the target
figureforevaluatingHRpractices.Financialoutcomesagaindependonemployee
performance in terms of e.g., productivity, innovation, quality, or turnover.
Employee performance outcomes in turn are the result of employee behaviors,
i.e. motivation, co-operation or organizational citizenship. Behavioral outcomes
againaretheresultofHRoutcomes,includingemployeecommitment,qualityand
flexibility,whichinturnareimpactedbyHRpractices,especiallyhiring,training,
appraisal, compensation and relations. HR practices need to be in tune with HR
strategies which are invariably aligned with organizational strategies. Hence, the
strengthofGuest’stheoryofHRMistheindicationofinputsandoutcomes.
AssessingtheAddedValueofHumanResourceManagementPractices 3
ThecomparablyolderHarvardapproachofHRM(Beeretal.1984),bycontrast,
notonlyhighlightstheimprovementoforganizationaleffectivenessastheultimate
aim of HRM, but also identifies individual as well as societal well-being as
universally desirable outcomes. Thus, the Harvard approach not only focuses on
financialoutcomesbutenlargestherelevantoutcomevariablestobeconsideredby
social objectives. HRM policy choices are impacted by various stakeholder
interests and environmental factors. Albeit determinants and consequences of HR
politics are extensively listed, the Harvard approach lacks a coherent theoretical
basis for measuring the relationship between HR inputs, outcomes and perfor-
mance. Particularly the relationship between different outcome variables,
i.e. organizational effectiveness and individual and societal well-being, is not
specified.
In the present book, value is understood to be added if HR practices produce
positive outcomes for at least one of the most important stakeholders (e.g.,
employees,linemanagers,customers,investors)and,hence,helptheorganization
toreachitsgoalsandtogainfromtheseactions.Thismeansthatnotonlyeconomic
efficiency, (organizational performance such as productivity or financial perfor-
mance),butalsosocialefficiencyontheindividualandsocietallevel(forexample,
satisfaction indicating performance motivation or well-being indicating perfor-
manceability),arebothultimateformalobjectivesofHRMand,hence,indicators
of the added value of HRM. When determining outcome variables, influencing
factors need to be taken into account. For example, in order to avoid an
oversimplified view of training effectiveness, individual or contextual influences
needtobeconsideredintheevaluationoftraining.Anoverrelianceonfinancialand
accounting measures can be misleading, particularly because not all human
resource development programs require justification in monetary terms, but
could, for example, be required by law (e.g. trainings in relation to the General
Equal Treatment Act in Germany). In sum, this volume is intended to take an
interdisciplinary stance and is aimed at examining the link between HR practices
andoperational/financialaswellasattitudinal/behavioraloutcomes.
3 Assessing the Added Value of HRM: Not Only
the Outcomes, But Also the Processes
and Cause-and-Effect-Relationships Are Pivotal
ThemeasurementoftheaddedvalueofHRMisnotlimitedtothequantificationof
outcomes but requires – following the logic of the ORMM-approach – profound
theory-andevidence-basedknowledgeofthecause-and-effect-relationships(R)in
ordertoderivemanagementimplications.Thisisallthemoreimportantbecausefor
most nontrivial HR management problems, especially complex HR problems, no
onebestwayexists(cf.Ford1994).DifferentHRpracticescanyieldsimilarresults
in terms of workforce performance, productivity, satisfaction, or happiness – in
accordancewiththeprincipleofequifinality(cf.GresovandDrazin1997).