Human Resource Management Practices: Assessing Added Value PDF
Preview Human Resource Management Practices: Assessing Added Value
Management for Professionals Maike Andresen Christian Nowak Editors Human Resource Management Practices Assessing Added Value Management for Professionals Moreinformationaboutthisseriesat http://www.springer.com/series/10101 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 SpringerChamHeidelbergNewYorkDordrechtLondon LibraryofCongressControlNumber:2014951436 #SpringerInternationalPublishingSwitzerland2015 Thisworkissubjecttocopyright.AllrightsarereservedbythePublisher,whetherthewholeorpart of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation,broadcasting,reproductiononmicrofilmsorinanyotherphysicalway,andtransmissionor informationstorageandretrieval,electronicadaptation,computersoftware,orbysimilarordissimilar methodologynowknownorhereafterdeveloped.Exemptedfromthislegalreservationarebriefexcerpts inconnectionwithreviewsorscholarlyanalysisormaterialsuppliedspecificallyforthepurposeofbeing enteredandexecutedonacomputersystem,forexclusiveusebythepurchaserofthework.Duplication ofthispublicationorpartsthereofispermittedonlyundertheprovisionsoftheCopyrightLawofthe Publisher’s location, in its current version, and permission for use must always be obtained from Springer.PermissionsforusemaybeobtainedthroughRightsLinkattheCopyrightClearanceCenter. 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Printedonacid-freepaper SpringerispartofSpringerScience+BusinessMedia(www.springer.com) 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:[email protected] #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).
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