DIPAK KUMAR BHATTACHARYYA

Professor (OB/HRM)
Xavier Institute of Management
Bhubaneswar

1
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Table of Contents

PREFACE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v

CHAPTER 1
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Introduction to HRM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Theories of HRM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Perspectives of HRM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.4 HRM and Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.5 The Strategic Aspect of HR Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.6 HR Strategy Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.7 Developing Research Skills
Through Case Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.8 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Case Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

CHAPTER 2
THE PRINCIPLES OF HR RESEARCH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.2 Defining HR Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.3 Different Approaches to HR Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.4 Concept-mapping for HR Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.5 Literature Review on HR Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.6 Model Building in HR Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.7 Significance of HR Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.8 Kinds of HR Research. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.9 HR ResearchSelection of
Areas of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.10 Sampling for HR Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.11 Questionnaire and Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.12 Using Statistical Tests in HR Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
2.13 Computer-aided Research in HR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
2.14 Presentation of HR Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
2.15 HR Research Through Case Study Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
2.16 HR Research as a New Area in Management Research . . . . . . . . . . . . . . . . . . . . . 48
2.17 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

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Case Study 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Case Study 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

CHAPTER 3
TOOLS AND TECHNIQUES OF HR RESEARCH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
3.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
3.2 Ethical Issues in HR Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
3.3 HR Research Tools and Techniques . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
3.4 Types of Quantitative Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
3.5 Ethical Considerations in
Quantitative Research. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
3.6 Quantitative Research Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
3.7 Data Types and Preparation for Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
3.8 Processing and Coding of Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
3.9 Making Use of Collected Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
3.10 Uncommon Data Collection Methods
for HR Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
3.11 Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
3.12 Two Measures of Relationship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
3.13 Four Measures of Relative Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
3.14 Inferential Statistics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
3.15 Framing of Hypotheses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
3.16 Parametric and Non-parametric Tests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
3.17 Application of Multivariate Statistics
in HR Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
3.18 Research Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
3.19 Meta-analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
3.20 Qualitative Research Considerations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
3.21 Evaluation Designs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
3.22 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Case Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105

CHAPTER 4
NONPARAMETRIC STATISTICS FOR HR RESEARCH. . . . . . . . . . . . . . . . . . . . . . . . 107
4.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
4.2 Nonparametric Tests in HR Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
4.3 One Sample Tests in Nonparametric Tests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
4.4 Nonparametric Tests for Two Related Samples . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
4.5 Nonparametric Tests for Two Independent Samples. . . . . . . . . . . . . . . . . . . . . . . 120
4.6 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126

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CHAPTER 5
HUMAN RESOURCE PLANNING RESEARCH. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
5.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
5.2 Concepts of Strategic HRP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
5.3 Activities Required for HRP/Manpower Planning . . . . . . . . . . . . . . . . . . . . . . . . . 130
5.4 Manpower Demand Forecasting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
5.5 HRP at Macro-level . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
5.6 Cause and Effect Model in HRP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
5.7 HRP at Micro-level . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
5.8 Timescale of HRP Forecasts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
5.9 Quantitative Tools for Forecasting
Manpower Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
5.10 Analysis of Manpower Supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
5.11 Manpower Planning Models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
5.12 Predictive Statistics in Micro-level HRP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
5.13 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170
Case Study 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173
Case Study 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176

CHAPTER 6
COMPENSATION RESEARCH. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178
6.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178
6.2 Compensation Research. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179
6.3 Theoretical Discussions on Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181
6.4 Compensation Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
6.5 Types of Executive Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193
6.6 Variable Pay Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196
6.7 Quantitative Application in Compensation
Management Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217
6.8 Mistakes in Compensation Designing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222
6.9 Compensation and Behavioural Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222
6.10 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223
Case Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226

CHAPTER 7
RESEARCH ON EMPLOYEE MOTIVATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229
7.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229
7.2 Motivational Theories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230

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7.3 Other Miscellaneous Theories

in Employee Motivation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 234
7.4 Indian Perspective. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235
7.5 Motivational Research in Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238
7.6 Employee Motivation Research Techniques . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240
7.7 Developing Questionnaires for Employee Motivation . . . . . . . . . . . . . . . . . . . . . . 240
7.8 Employee Motivation Survey Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247
7.9 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249
Case Study 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251
Case Study 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254

CHAPTER 8
TRAINING AND DEVELOPMENT RESEARCH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 257
8.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 257
8.2 Training and Development Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259
8.3 Training Evaluation Models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 264
8.4 Training Needs Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271
8.5 Designing Training Programmes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 278
8.6 Training Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 288
8.7 Training and Development and Strategic HRM. . . . . . . . . . . . . . . . . . . . . . . . . . . 291
8.8 Research on Training Methods Selection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293
8.9 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294
Case Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 304

CHAPTER 9
PERFORMANCE MANAGEMENT RESEARCH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309
9.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309
9.2 Selection of Performance Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 310
9.3 Developing Performance Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 311
9.4 Performance Metrics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 313
9.5 Effective Performance Modelling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317
9.6 The Human side of Performance Metrics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 318
9.7 Building a Performance Management System . . . . . . . . . . . . . . . . . . . . . . . . . . . . 320
9.8 Performance Management System (PMS) and Organizational Strategy . . . . . . . 322
9.9 Dimensions of Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 323
9.10 Types and Methods of Performance Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . 324
9.11 Potential Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 330
9.12 Balanced Scorecard and Performance Management. . . . . . . . . . . . . . . . . . . . . . . 331
9.13 The HR Scorecard Approach. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 334
9.14 Competency-mapping and Performance Management . . . . . . . . . . . . . . . . . . . . . 335

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9.15 Research on Performance Counselling. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 340

9.16 Research on Performance Measurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 344
9.17 Statistical Methods of Performance Measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 348
9.18 Performance Measurement using Ranking and Rating Systems. . . . . . . . . . . . . . 351
9.19 Scales for Evaluation of Performance
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 353
9.20 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 354
Case Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 357

CHAPTER 10
RESEARCH ON ORGANIZATIONAL CULTURE AND DEVELOPMENT. . . . . . . . . . 368
10.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 368
10.2 Organizational Culture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 368
10.3 Merger and Impact on Corporate Culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373
10.4 Hofstedes Cultural Orientation Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374
10.5 Applications for the Culture in the Workplace . . . . . . . . . . . . . . . . . . . . . . . . . . 375
10.6 Organization Structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376
10.7 Organizational Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376
10.8 Organizational Commitment Questionnaires . . . . . . . . . . . . . . . . . . . . . . . . . . . 376
10.9 Organizational Diagnostics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378
10.10 Organizational Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 380
10.11 Understanding Personality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 384
10.12 Individual Behaviour and Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385
10.13 Thinking and Decision-making Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 386
10.14 Measurement of Personality Traits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 386
10.15 Organization Health Survey. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 388
10.16 Attitude and its Measurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393
10.17 Other Measures of Attitudes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 394
10.18 Attitude Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395
10.19 HRD and Attitudinal Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396
10.20 Some of the Common Tools for OD Research. . . . . . . . . . . . . . . . . . . . . . . . . . . 397
10.21 Validity and Reliability of Test Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 425
10.22 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 428
Case Study 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 432
Case Study 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 434

CHAPTER 11
HUMAN RESOURCE ACCOUNTING AND AUDIT RESEARCH . . . . . . . . . . . . . . . . 437
11.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 437
11.2 HR Valuation Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 438

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11.3 HR Scorecard and Metrics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 440

11.4 Human Resource Information Systems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 447
11.5 HR Audit Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 451
11.6 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 459
Case Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 461

CHAPTER 12
USING FACTOR ANALYSIS IN HR RESEARCH. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 465
12.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 465
12.2 Definition and Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 465
12.3 Framing the Problem for Factor Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 468
12.4 Common Factor Analysis Versus Principal Component Analysis . . . . . . . . . . . . 469
12.5 Principal Factors Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 473
12.6 Factor Analysis as a Classification Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 474
12.7 Factor Analysis Decision Diagram . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 481
12.8 Mathematical Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 481
12.9 Limitations of Factor Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 482
12.10 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 483

CHAPTER 13
SIX-SIGMA PRACTICES IN HR RESEARCH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 486
13.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 486
13.2 Six-sigma and Total Quality Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 487
13.3 How to Calculate Sigma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 489
13.4 Relating Six-sigma to HR Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 490
13.5 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 493
Case Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 495

APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 501
INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 515

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1 Introduction
OB JECTIVES

to appreciate the 1.1 INTRODUCTION TO HRM

changing concepts
of HR For the human resource (HR) researcher, it is not important to
to understand the reiterate the concept of HRM. However, since many new
different dimensions developments are taking place almost everyday, it is pertinent
of HR research
to recapitulate the ideas about the concept. It is a common per-
to understand the
strategic relevance ception that human resource management (HRM) is about the
of HR management of an organizations human resources. This is
to use the case-study more of a normative approach. Although various scholars have
approach in HR dealt with this normative aspect of HRM, we will review only
research some definitions here. According to Boselie (2002), Human
resource management involves management decisions related
to policies and practices which together shape the employment
relationship and are aimed at achieving individual, organiza-
tional, and societal goals. Schermerhorn (2001) has defined
HRM as the process of attracting, developing, and maintain-
ing a talented and energetic workforce to support organiza-
tional mission, objectives, and strategies.
Both the definitions espouse the normative aspects of HRM;
the only difference is that the former also focuses on the impor-
tance of achieving societal goals through HRM, even to the
extent of emphasizing the importance of other stakeholders,
whereas the latter focuses on achieving organizational goals. Due
to such contextual differences under the normative approach,
HRM research areas extend from recruitment and selection,
compensation management, training and development, and per-
formance management to motivation. Even other management
research areas extend to areas such as organizational change and
development, team development, and worklife balance.
Whatever may be the HR research issues, certain common
aspects need to be considered for any such research.
At which organizational leveloperational, business, tacti-
cal, or strategicdoes research need to be conducted?
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The research dimensions and measurement criteria change according to the

levels.
To what extent do we need to relate the research issue with the HRM policies
to understand the impact of HR research outcome at the aggregate level?
What should be the source of the informationthe organizations employees
only or from HR professionals as well?

1.2 THEORIES OF HRM

Human resource management can be descriptive, conceptual, or normative. The
descriptive aspect is concerned with getting facts right; the conceptual aspect
deals with how these facts relate to each other; and the normative aspect is con-
cerned with what we should do to obtain a specified goal. Descriptive HR
research can be done without any theoretical base, while conceptual and norma-
tive studies require a sound theoretical foundation (Storey 1992; Guest 1997).
Two of the main theoretical approaches to HRM research emerged from the
Stephen M. Ross School of Business at the University of Michigan and from the
Harvard Business School.
The Michigan approach was developed by Fombrun et al. (1984). It stems from the
strategic orientation of traditional personnel management functions such as recruit-
ment and selection; performance appraisals; rewards and compensation; and
development. This approach argues that an organizations policies in these areas
will affect the individual performance of its employees. Human resource research
following the Michigan Approach emphasizes organizing and performing all these
functions in a way that improves organizational performance. This can be achieved
by developing HR practices in line with the organizational strategy.
The Michigan approach is based on principles that stem from strategic manage-
ment. This approach focuses on the basic functions of personnel management
selection, appraisal, rewards, and development. It also discusses how instruments
and policies, along with these basic functions can affect the performance of the
organization and the individual employees. The ultimate objective of HRM is to
organize and utilize the functions to maximize organizational performance, by
achieving horizontal and vertical fit, keeping in view the organizations strategy
(De Nijs 1999). Horizontal fit integrates HR practices, while vertical fit matches
HR policy with the organizational strategy.
The Harvard approach was developed and presented by Beer et al. (1984). It
assumes that the interests of employees and other stakeholders, together with situ-
ational factors, affect HRM policy choices directly (Boselie 2002). This model rec-
ognizes that employees are not resources for the production process only, but are
also individuals in themselves. The Harvard model, therefore, stresses the human
factor in human resource management and emphasizes that the central objective of
HRM should be to align employees with the organization and the management.
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This requires a strategic vision of HR functions. The degree to which the

employees of an organization nurture a strategic vision can be assessed by under-
standing the extent of integration of HRM practices with the organizational
policy. De Nijs identified four fields of HRM policyemployees influence, work
systems, human resource flow, and reward systems. Organizations have to make
choices on this policy aspect. The best choices will obviously lead to positive
human resource outcomes, which not only have an impact on increasing organi-
zational effectiveness but in the long run will also have a cascading effect on social
well-being (Boselie 2002).
The main distinction between the two approaches is that while the Michigan
approach limits focus to the shareholders, the Harvard approach includes social
stakeholders too. According to Legge (1995), the distinction between these two
approaches is, mostly, a symbolic one. Another possible distinction is while the
Harvard approach stresses the importance of the motivation of employees, the
Michigan approach focuses on the ability of employees. Boxall and Purcell (2003),
however, have argued that both motivation and ability are important determi-
nants of organizational performance. In an organization, employees must have the
requisite ability, i.e., knowledge, skills, experience, and adequate motivation, to
do their jobs.

1.3 PERSPECTIVES OF HRM

The basic influencers of organizational performance are the abilities and motiva-
tion of employees and the opportunities given to them if they are reinforced by
adopting suitable HRM policies and practices. To understand how the process
works, we can adopt either the resource-based view or a behavioural perspective.

1.3.1 Resource-based View

The resource-based view assumes that the differences in the physical, organiza-
tional, and human resources of companies lead to differences in their potential of
productivity. Such differences in resources ultimately provide the long-term com-
petitiveness to an organization and differentiate one organization from another.
The ultimate competitive advantages of an organization depend upon not only
the differentiating resources but also on resources that are sustainable and difficult
to imitate (Prahalad and Hamel 1990; Rangone 1999). From this perspective, an
organizations human resources constitute the only factor of its sustainable compet-
itive advantage. Every organization, therefore, tries to stay competitive by develop-
ing the competencies of its human resources, and renewing them, continuously. Due
to, therefore, the increasing importance of human resources, organizations have to
adopt strategies suited to their human resources, and, simultaneously, suited to their
objectives.
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1.3.2 Behavioural Perspective

The behavioural perspective on HRM focuses on the use of those HR practices
as tools, which best shape the employees behaviour to achieve desired goals
and objectives of an organization (Naylor et al. 1980). The underlying assump-
tions of this perspective are that different goals and objectives require different
strategies and behaviours, and therefore, different HRM practices (Snell 1992).
This obviously requires focusing on the external fit, i.e., the contingency vari-
ables such as size, technology, ownership, location, etc. (Huselid 1995; Legge
1995; Delery and Doty 1996). Based on this perspective, Schuler and Jackson
(1987) tested the alignment of different HRM practices with Porters (1985) three
generic strategies. Their study suggested that if an organization selects HR
policy and practices appropriate to particular generic strategies, it could experi-
ence higher work performance. Thus this approach recommends a strategic fit
with HRM practices.

1.4 HRM AND PERFORMANCE

According to Koch and McGrath (1996), certain HRM strategies may universally
exert positive influence on performance. It is true that universally, certain HRM
strategies are associated with improved employee performance.

1.4.1 Best Practice

The resource-based view emphasizes the importance of internally consistent
HRM strategy, so that the organizations can adopt the HRM practices which
achieve the best internal fit. Internal fit is associated with the best HRM practices
view (Huselid 1995; Legge 1995). However, only some set of best practices can be
identified by emulating the examples from high performing organizations. The
important features of high performing organizations, which have the best prac-
tices, are listed here (Huselid 1995; Delery and Doty 1996; Pfeffer 1998):
distributed responsibility of employees within flatter organizations;
increased emphasis on line managers as human resource managers;
instilling learning as a priority in all organizational systems;
decentralized decision making to autonomous units and employees;
linking financial performance indicators for all employees as performance
measures at the organizational level; and
increasing emphasis on the customer-focused nature of employees work.
These features of high performance work systems emphasize on teamwork,
training and development, flexibility of employees, and a trusting management.

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Introduction 5

1.4.2 Best Fit

It is difficult to identify a universal set of best practices (Becker and Gerhart 1996).
It is true that the best practice approach ignores the relevance of external and
internal fit of HRM practices. Although external fit suggests that the effect of
HRM practices are contingent upon organizations size, technology, ownership,
sector and location; internal fit suggests that synergy effects may exist between
individual HRM practices. Thus combinations of HRM practices, i.e., HRM
bundles or HRM systems, have much stronger effect on performance than the
combined effect of individual HRM practices (MacDuffie 1995; Armstrong 2001).
This synergetic effect is due to the overlapping and mutually reinforcing effect of
multiple practices (Armstrong 2001).
Many studies on the impact of HRM on organizational performance assume
that such synergies and contingencies exist. These studies often represent HRM
by a limited number of HRM bundles, which are operationalized as scales or
indices that represent different aspects of HRM (Delery 1998). These scales of
indices are then used in (regression) analysis to determine their impact on organi-
zational performance. The presence of contingencies can be established by exam-
ining whether the impact of HRM bundles on performance is contingent on
organizational characteristics and/or other HRM bundles (Huselid 1995;
MacDuffie 1995; Koch and McGrath 1996; Delery and Doty 1996). Within this
bundles approach, an organizations HRM is still represented by several indica-
tors. While this approach accounts for synergies between HRM practices that are
part of the same HRM bundle, synergies between HRM bundles are not auto-
matically incorporated. Furthermore, for each separate bundle it is assumed that
more is better with respect to the impact on performance (Armstrong 2001).
Some researchers view these characteristics as disadvantages of the bundles
approach. Instead of identifying a limited set of HRM bundles that are applied
(to some extent) by all enterprises, they identify a limited number of HRM con-
figurations. Each organization can be assigned to a single configuration (Kalleberg
and Moody 1994; MacDuffie 1995; Ichniowski et al. 1997; Delery and Doty 1996).
These configurational theories are concerned with how the pattern of multiple
independent variables is related to the dependent variable rather than with how
individual independent variables are related to the dependent variable (Delery
and Doty 1996).
The best practice view posits the existence of clusters or bundles of high per-
forming work practices, which can enhance the performance of all firms, which
adopt them (Arthur 1994; Pfeffer 1994; Huselid 1995; MacDuffie 1995). Pfeffer
recommends fourteen best HR practices for adoption by all firms, including selec-
tivity in recruitment, high wages, incentive pay, employee ownership and promo-
tion from within. The best fit or configuration theory approach proposes that
firm strategy is the critical factor which should be considered in deciding which

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6 Human Resource Research Management

system of HR practices a firm should adopt (Miles and Snow 1978; Mintzberg
1978). Miles and Snow (1984) identified three unique clusters of HR practices,
which they proposed fit best with the prospector, defender, or analyser strategies
respectively. Finally, contingency theorists argue that a variety of internal and
external environmental influences combine to determine the optimal mix of HR
practices for any particular firm. Huselid and Rau (1997) reviewed a large num-
ber of the contingencies which have attracted research attention, including strategy,
size of the firm, age of the firm, and local labour markets. An organizations inter-
nal aspects such as union coverage and its external aspects such as industry com-
plexity and munificence have also been researched upon.
The universalistic model (the best practices approach) is considered to be more
effective than the best fit model. We can, however, view this from different per-
spectives, as evident from numerous studies. The best practices view is for general
HR issues, i.e., generic HR processes, while best fit model is more contingent as
organizations adopt this approach to derive the benefit of synergy. To illustrate,
continuous competency development is a best practice approach, while process of
achieving it may differ from organization to organization, depending on the
nature of best fit. This is due to the difference in the approaches of organizations.
While some organizations may consider training and development initiatives
others may consider on-the-job learning.

1.4.3 Psychological Contract as a Mediating

Variable in HRM
How can HRM have a positive effect on organizational performance? It is a com-
mon perception that the effect of HRM on performance is mediated by other
variables. Such variables may be in the form of opportunities and motivation for
employees. For example, the most widely accepted model suggests that HRM
policies and practices influence the abilities, motivation, and opportunities of
employees. In turn, these mediating variables affect employee performance (such
as sick leave, willingness to cooperate with others, workforce turnover, and pro-
ductivity) and organizational performance measures (such as the firms produc-
tivity, value-added products and services, and profits). Various empirical studies
on HRM and employee performance have examined the relationship between
HRM and indicators of employee behaviour and organizational performance.
However, according to Guest (1999) the first part of this causal HRM chain has
been ignored in empirical studies. This may often be due to a lack of proper data
regarding the abilities, motivation, and/or opportunities of individual employees
in HRM studies.
An exception is provided by Guest, who used a data-set that contained infor-
mation about the psychological contract of employees. A psychological contract is

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Introduction 7

closely related to the motivation and (perceived) opportunities of employees. The

psychological contract can be defined as an individuals belief regarding the
terms and conditions of a reciprocal exchange agreement between the focal per-
son and another party (Rousseau 1989).
The psychological contracts differ from the more general concept of expecta-
tions since contracts are promissory and reciprocal. It offers a commitment to a
particular behaviour on the part of the employee in return for some action on the
part of the employer. The psychological contract is often measured by a scale that
included various items regarding perceived employer and employee obligations.
A higher level of the psychological contract implies that employees expect more
from their employer with regard to issues such as training, opportunities for pro-
motion, a good working climate, and competitive salaries. At the same time,
employees may feel more obliged to deliver good performance for their employer
by providing good service, by performing non-obliged tasks voluntarily, working
extra hours, and delivering good work in terms of quality and quantity
(Sonnenberg 2004).
The results of Guests research confirm that the psychological contract mediates
in the relationship between HRM and performance. Human resource manage-
ment is positively related to the psychological contract, and a higher level of the
psychological contract is associated with improved employee performance. The
main hypothesis that Guest examines is whether the adoption of more different
HRM practices increases employee performance. This hypothesis is accepted,
because the number of applied HRM practices is positively related to the level of
the psychological contract. In addition, he also identified other determinants of
the psychological contract. A positive psychological contract is likely to be asso-
ciated with the following eight factors:
1. A high involvement organizational climate
2. Adoption of a great number of HR practices
3. Lower expectations of being made redundant in the next couple of years
4. Working shorter rather than long hours
5. Working in smaller organizations
6. Having a high salary
7. Not being a member of a trade union
8. Working in a sector other than traditional industry/manufacturing

1.5 THE STRATEGIC ASPECT OF HR RESEARCH

Human resource strategy is the pattern of decisions concerning policies and
practices associated with the HR system. Each organizational system encompasses
all functional area of an organization and thereby helps in the formulation of

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8 Human Resource Research Management

organization-wide strategies. Strategic human resource management (SHRM) is a

competency-based approach for management of HR. It focuses on developing
HR for sustainable competitive advantage.
There is a considerable debate about what SHRM actually means. There are
many definitions, including:
A human resource system that is tailored to the demands of the business
strategy (Miles and Snow 1984).
The pattern of planned human resource activities intended to enable an
organisation to achieve its goals (Wright and McMahan 1992).
Such definitions range from a portrayal of SHRM as a reactive management
field where human resource management is a tool with which to implement strat-
egy, to a more proactive function in which HR activities can actually create and
shape the business strategy (Sanz-Valle et al. 1998).
The range of activities and themes encompassed by SHRM can be seen, in the
work of Mabey et al. (1998), which looks at the subject from four perspectives:
1. The social and economic context of SHRM including the internal (corporate)
and external environments that influence the development and implementa-
tion of HR strategies
2. The relationship between SHRM and business performance, emphasizing the
measurement of performance
3. The management style and the development of new forms of organization
4. The relationship between SHRM and the development of organizational
capability, including knowledge management
Strategic HRM has been studied from three perspectives: universalistic, con-
tingency, and configurational (Delery and Doty 1996). The universalistic (or best
practices) studies look for particular policies or practices that are more effective
than others and result in gains for all firms. Empirical studies from the universal
perspective (Arthur 1994; Huselid 1995) have focused on sets of high perform-
ance work practices that result in high levels of organizational outcomes but not
necessarily outcomes directed at any particular strategy.
Both the contingency and configurational perspectives hold the idea that given
a corporate strategy, certain HRM practices will support that strategy by shaping
behaviours and outcomes. The contingency perspective links choices of practices
within HRM systems to firm-level strategic positions (Schuler and Jackson 1987).
The empirical studies in this group have focused on linking particular systems
(e.g., compensation systems) to the strategic model (Gomez-Mejia and Balkin
1992; Begin 1993).
Configuration theorists take a more holistic approach by looking for ideal types
and explicitly adopting a system assumption of equifinality (Doty, Glick, and
Huber 1993). They examine how a pattern of several independent variables relate

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Introduction 9

to a dependent variable. Wright and McMahan argued that to be effective, a firms

HRM systems must be aligned with the firms strategy and with each other. Becker
and Gerhart (1996) suggested that the architecture might be more important than
specific practices. As an empirical example, Schuler and Harris (1991) demon-
strated a specific configuration of HRM practices as highly aligned with an organ-
ization pursuing Deming-style quality as a corporate strategy.
There are a number of theories which define the role of HR Strategy.
Behavioural role theory, pioneered by Katz and Khan (1978) considers employee
behaviours as key to successful strategy implementation. By aligning HR policies
and practices with organization-wide strategy, employees can fulfil their role
expectations within the organization. The resource-based theory of Barney (1991), and
Prahalad and Hamel (1990) suggests that HR is the sustainable competitive advan-
tage for the organization. This is because HR is a characteristically rare, inim-
itable, and non-substitutable source for achieving competitive advantage. Other
resources do not have such characteristic features. The human capital theory of
Becker (1964) suggests strategic importance to HR like other economic assets such
as knowledge, and employee skills and abilities. This concept later developed the
human resource accounting by Flamholtz (1981) and others. The transaction cost
theory of Williamson (1981) suggests that strategic HR approach can ensure cost
minimization as this will enhance periodic monitoring and governance. The agency
theory of Eisenhardt (1989) suggests that a strategic approach to HR aligns the
interests of agents (employees) and principals (employers) and thereby ensures
streamlining of employment relations and systems within the organization. All the
above theories justify alignment of HR with organization-wide strategy and there-
fore, they are grouped under rational choice theories of HR.
The institutional theories (Meyer and Rowen 1977; Powell and DiMaggio 1991)
and dependency theories (Pfeffer and Salancik 1977) on HR strategy, however, focus
on constituency-based interest. This is because strategic approach to HR is not
empirically proved, as contributor to organizational performance while institu-
tional theory argues strategic and acceptance from stakeholders; dependency
theory argues, this will unduly enhance the level of influence over the organiza-
tions (from HR) and thereby will defeat the purpose.
Prima facie, environmental, organizational, institutional, and technological fac-
tors are potential influencers in strategy. Relative importance of each such factor
will depend on organizational characteristics. However, for HR, we need to give
cognizance to each such factor, or else this will not be a strategic decision for sus-
taining organizational growth and profitability. Any redundancy decision without
considering the possible reaction of unions may transpire as defeating. Similarly in
an FMCG organization, with product life-cycle being short, employees with multi-
ple skill-sets would always be better than those who have specialized skill-sets.
Strategic human resource management, therefore, requires formulation of HR
objectives, strategies, and policies. These enable the provision of the skills and

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10 Human Resource Research Management

abilities needed to meet the requirements of an organizations overall objectives.

In other words, they provide the framework, which ensures that an organizations
HR needs are met. In modern organizations, HR strategy is supported by infor-
mation technology in the form of human resource information systems and work-
force management systems.

1.6 HR STRATEGY FACTORS

HR strategy factors encompass those areas, which are instrumental for success of
an organization. We can classify such factors as under recruitment and selection,
career development, performance appraisal, training and development, compen-
sation designing, and human resource planning (HRP).
Recruitment and selection Some of the issues considered at this level relate
to outsourcing or direct recruitment, contractual or on permanent payroll, multi-
skill attributes or specialization. We have already discussed these issues in detail
in Chapter 11 on HR audit.

Career development Career mapping, succession planning and management

development, integrating career development with organizational development
(OD) initiatives are the factors considered in this area of human resource strategy.

Performance appraisal Designing appropriate tools and aligning appraisals

with training needs, promotion, and transfer and relocation are the issues which
deserve attention at this stage.

Training and development Developing in-house training, return on invest-

ment (ROI) models for evaluating training, training budgets, etc. are the issues
considered at this level.

Designing compensation Designing compensation and incentive schemes,

suitable to attract talent and retain them, NWLC aspects, etc. are the crucial factors.

Human resource planning (HRP) Developing a human resource information

system, aligning HRP with corporate strategies, skill and competence mapping
are important aspects of strategic HRP.
The discussions in this section thus refurbish our HR knowledge and consoli-
date focus on HR research primarily on three different theoretical perspectives:
the best practice view, the best fit or configuration-based view, and contingency
approaches. Without further building the arguments for HR research areas, it is
now important for us to list the areas from organizational perspectives, keeping
focus on cluster or bundles of HR practices.

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1.7 DEVELOPING RESEARCH SKILLS THROUGH

CASE ANALYSIS
Human resource management research also requires analysing and interpreting
the case to emulate the best practice of organizations worldwide. Periodic case
analysis prepares managers to face similar eventualities in future and successfully
tackle those issues. Students of human resource management can also learn
through case analysis, as it helps in developing their analytic decision-making
powers. Keeping in view this requirement, we have included one or more case
studies at the end of each chapter, to develop the HR research acumen of students
and professionals. To start with, in this chapter we have very briefly discussed
some theoretical issues on case study and then presented a case with its tentative
solution. In subsequent chapters, however, case studies need to be practised by
the students for better comprehension of HR decision-making mechanism.

1.7.1 Definition of a Case

A case is a short description, in words and numbers of an actual management
situation. A typical case consists of number of pages of prose description with
some quantitative data (figures), exhibits, organization charts, and graphs or
tables. The use of cases for advanced management education started at the
Harvard Business School at the start of the twentieth century.

1.7.2 Definition of a Case Study

Case study is a systematic way of helping students to learn from experiences. Such
studies are intended to serve as the basis for class discussion and not as illustra-
tions of either good or bad management practices. They are not intended to be a
comprehensive collection of teaching material. Case studies provide a useful back-
bone to a programme of study. Using the case study approach, HR professionals
can develop their analytic skill-sets and learn through practice.

1.7.3 Steps of a Case Study

1. Read the case carefully and note down all the material facts and identify the
problem(s).
2. Mention the area of management to which the main problem relates. It is pos-
sible that the problem may overlap the other areas as well, which may
demand simultaneous solution. Total view of the situation should not be lost.
3. Place yourself in the position of the management and view the problem men-
tioned in the case.
4. The analysis should be from managerial angleunbiased and objective.

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12 Human Resource Research Management

5. List out various possible alternatives and then prioritize on the basis of com-
parative superiority and feasibility.
6. Select the best alternatives and state the same as your decision.
7. Indicate an estimate of outcome including the possible side effects, if any.

1.7.4 Case Study Techniques

Case study method is basically a qualitative analysis pertaining to an organization.
In some cases, however, where the quantitative details about the organization are
available, case study may also provide certain scientific insights to operational
details of case problems. Usually the case study method focuses on an organization
or at best two or three homogeneous or competing organizations for the purpose
of benchmarking. In some instances, a case study may be a cross-organizational
study to authenticate any management practices. A case study may be used to
approve or disapprove any assumptions in order to establish certain theories.
A case study requires in-depth analysis of some situations and examines their inter-
relationship in an organization. The important characteristics of the case study
method are explained in this section.
In the case study method, an individual can choose to study a single organization
or social unit. A researcher may confine his/her focus only on certain areas or situ-
ations of the sample organization. To illustrate, if the purpose is to review an orga-
nizations strategy, a researcher may critically examine, the vision, mission, goals,
objectives, strategies, action plan, and policies. The researcher will document
his/her observations. The researcher analyses questions such as why Reliance can
retain manpower while GE Capital and TCS cannot, despite the fact that both GE
and TCS have pro-active HR policies. The differences in the employee retention
rate of these companies can be explained by analysing their strategies. The reason
why Hindustan Lever Ltd (HLL) is successful in repositioning its Lifebouy brand
and why Colgate cannot reposition its Palmolive brand is again embedded in mar-
keting strategy of these companies.
Case analysis is done very intensively focusing on some limited identified areas.
Such a study may be longitudinal in nature for drawing correct inferences. Even
though perennially the case study method is considered a qualitative analysis, we
can also do quantitative analysis and interpret the organizational issues, as and
when details are available. For example, we can analyse the resource allocation
strategy of an organization in terms of costbenefit analysis. Similarly efficacy of
a compensation strategy can be studied comparing outsourcing vis--vis employ-
ment on permanent payroll.
In case analysis we always attempt to establish a causal relationship between
various factors couching qualitative and quantitative information. To illustrate,
effective customer relationship management (CRM) may be co-related with
increased market share. Employee motivation may be related to productivity.
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Introduction 13

Case analysis is a direct approach and, therefore, requires analytic rigour and
experience. A case study unleashes the best management practices and therefore
significantly contributes in enriching the theories. For example, the strategy of
direct participation became popular because of the practices of Chevron, the
petroleum giant. This strategy uses collective wisdom of the employees to devel-
op a response capability towards some targeted goals of the organization.
Despite its advantages, case study analysis may often suffer from the problem
of generalization. The purpose of learning may get vitiated if the case is not prop-
erly structured.

1.7.5 Important Guidelines

There is no single correct solution even for a specific management problem.
Logical thinking in line with the accepted basic principles and practices (processes)
of management is judged and assessed through the case analysis method.
Questions, given at the end of each case study, suggest the line of enquiry, hence
these questions should be studied carefully. A case with questions at the end is
known as close-ended case study. However, there are also cases which may not
have questions at the end. These are open-ended cases. Such cases require the HR
researcher to identify the problems or issues independently and answer those iden-
tified problems. A mere restating of the facts of a case report without any meaning
should be avoided.

1.8 SUMMARY
To appreciate human resource research, it is important to first understand different
approaches. Even today we emphasize only on normative aspects of HR, despite
the fact that descriptive and conceptual aspects too are important. The descriptive
approach of HR emphasizes on getting facts right, the conceptual aspect show
how these facts relate to each other, while normative aspect is concerned with
what we should do to obtain a specified goal. Descriptive HR research can be con-
ducted without any theoretical foundation, while the conceptual and normative
studies require a sound theoretical foundation. Both the Harvard Business School
and the Michigan Business School model of HR are important for doing HR
research. While the Michigan model focuses on strategy, the Harvard model
emphasizes more on human factor in HRM. A similar demarcation of HR into
resource-based and behavioural perspectives is also important for the HR
researcher. The resource-based view attributes differences in productive poten-
tiality between organizations to differences in physical, organizational, and human
resources. Behavioural view, on the other hand, focuses on the use of HR tools
and practices, which best shape employees behaviour to achieve desired goals.
Another area of interest for the HR researcher is the strategic dimension of HR.
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14 Human Resource Research Management

This concept includes the universalistic, contingency, and configurational per-

spectives on HR strategy. It views HR from the best fit and holistic perspectives
by shaping behaviour and outcomes. The researcher needs to develop a general
understanding of HRM concepts before going for HR research. Finally, this chap-
ter provides some inputs on the use of case analysis for HR research with an
example of a case study and its solution.

KEY TERMS

Normative HR is concerned with what the Michigan model was developed by Fombrun
HR researcher should do to obtain a specified et al. (1984). It stems from the strategic orienta-
goal. tion of traditional personnel management
Conceptual HR deals with how facts relate functions.
to each other. Universalistic approach to HR strategy
Configurational approach opposes the looks at particular policies or practices that are
bundles approach and is concerned with more effective than others and result in gains
how the pattern of multiple independent for all firms.
variables is related to the dependent variable Contingency approach to HR strategy
rather than with how individual indepen- argues that a variety of internal and external
dent variables are related to the dependent environmental influences combine to deter-
variable mine the optimal mix of HR practices for any
Descriptive HR is concerned with getting particular firm.
facts right Resource-based view assumes that physi-
Harvard model assumes that the interests of cal, organizational, and human resource differ-
employees and other stakeholders, together ences between companies lead to differences in
with situational factors, have a direct influence their productive potential.
on HRM policy choices. The model recognizes Behavioural role theory was pioneered by
that employees are not only resources for the Katz and Khan (1978). The theory considers
production process, but also individuals in employee behaviours as key to successful
themselves. strategy implementation.

CONCEPT REVIEW QUESTIONS

1 Briefly explain different approaches to research on success and failure of strate-

HRM. Which approach, do you recom- gic interventions to transform the work
mend for adoption to perform research on culture of a recently acquired manufac-
HR policy? Justify your answer. turing unit in India? Will there be any
2. Which is the right model for an HR difference if this research is carried out in
researcher to consider while doing a the USA?

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Introduction 15

CRITICAL REVIEW QUESTIONS

1. A configurational approach to HR research 2. Doing a research on employee moti-

helps in truly understanding the implications vation, just require a researcher to con-
of HR decisions in organizations. Critically sider behavioural dimensions. Do you
examine the statement and substantiate your agree with this statement? Justify your
answer with practical examples. answer.

CASE STUDY

Leadership and Motivation

Vinod was the Works Manager of Lakshmi companys policy till then was to pay incentives
Engineering. Rahul was with the company as only to direct production workers. Nevertheless,
its Finance Manager and was heading the he took the plan with him and returned to Vinod
Accounts and Finance division. Rahul was a couple of hours later. You cant introduce this
reporting to the works manager directly. plan straightaway, Rahul said to Vinod and
Rahuls general attitude was to be tightfisted in added, we have to give this some more thought.
matters of finance. He was always conscious of the Our maintenance costs are too high mainly due
need to conform to company policies and proce- to lack of adherence to norms on the consump-
dures. He firmly opposed any deviation from tion of spare parts. This incentive plan gives no
policy, but was often willing to explain the reasons weightage to consumption of spare parts.
for his view. He prided himself as a man of prin- Further, it will only add to the maintenance costs
ciples. Vinod was a person who wanted to take without any real benefits to the company.
action regardless of past practice or policy. He Vinods reaction was one of anger. You
considered himself a resulted-oriented manager. understand nothing of incentive plans, he
The differing attitudes of the works manager retorted and added, spare parts consumption
and the finance manager had led to conflicts on is high due to poor quality of spares bought by
past occasions. Vinod had even warned Rahul the materials department. Anyway, I dont
on two occasions that if Rahul could not carry intend to waste time on this with you. I am
out his instructions he was free to search for a notifying this incentive plan today.
job elsewhere. Rahul argued his case with a An altercation followed and the arguments
measure of success stating that his approach of both Rahul and Vinod became so loud that
was proper and that in financial matters the it attracted the attention of others in the hall,
policy guidelines had to be observed. outside Vinods office. I am the boss here,
One afternoon, Vinod approached Rahul and screamed Vinod adding, if you cant work
said, Here is an incentive plan for the main- with me and obey my instructions, you are free
tenance group. I am notifying it today and to leave your job and go elsewhere.
introducing it from tomorrow. Have a look at A few moments later Rahul was back in his
it. Rahul appeared to be surprised. He had office, tired and sullen. He called in his secretary
not known that an incentive plan was being and said, No, I have no option, please write
contemplated for maintenance workers, as the down. He dictated his letter of resignation.
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16 Human Resource Research Management

Questions
1. Discuss the leadership style used by Vinod. How effective is his style? What changes would
you advise?
2. To what extent were Rahuls needs being considered? What kind of organizational climate
was created?

TENTATIVE SOLUTION OF THE CASE

Introduction

This is basically a case of restraining leadership 6. There is no effort on the part of Vinod to
but to some extent it also brings out issues answer the doubts raised by Rahul on the
relating to the motivation of subordinates. demerits of the proposed incentive scheme
The facts of the case reveal: clearly and cogently.
7. The conflict leads to a decision by the sub-
1. Difference in the basic approach to leader-
ordinate to quit the organization.
ship between Vinod and Rahul. Rahul is
conservative in outlook, opposed to devia- The Leadership Style Used by Vinod
tions from policy, and a man of principles,
whereas Vinod tends to ignore company Vinods leadership style is autocratic and
policy and practices in an effort to be authoritarian. Authoritarian leaders concen-
result-oriented. trate all authority and decision-making powers
2. Rahul expects a role whereby he can state within themselves. There is no participation by
his differences with his superior. He is also his subordinates in the decision-making
capable of convincing his superior by process; they simply do what they are told
expressing his point of view successfully. to do.
3. Vinod is autocratic in his approach. He As an autocratic leader, Vinod believes that
appears to be a person who does not want his leadership is based on the authority confer-
to share his authority and decision-making red on him by his position and that his subordi-
powers. He views leadership as a matter of nates should follow instructions unquestioningly.
issuing orders and believes that subordi- Autocratic leadership leads to insecurity and
nates must obey them unquestioningly. lack of confidence in the subordinate. Such a
4. The situation as revealed by the facts of leader is capable of stifling the creativity and
the case is one of conflict between the innovate ability of his/her subordinates. The
subordinate and superior mainly due to autocratic leader stifles subordinate develop-
the leadership style adapted by the ment and organizational effectiveness.
superior.
How Effective is Vinods Style?
5. Vinod does not consider it necessary to
involve his subordinate in decision making Vinods style is not effective, keeping in mind
or explain the rationale or the reasons for the kind of leadership that a works manager
the deviation in the company policy with should provide. In fact, it is Vinods style
respect to the incentive scheme. of working that has led to major conflicting

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Introduction 17

situations between him and the finance manager. the matters where he differs from his superior.
This has also attracted the attention of other He seeks the freedom to discuss matters. His
employees in the organization. Such incidents objective is to interact with his superior with-
are bound to lead to a sense of fear among all out fear, bearing in mind the organizational
the employees in the organization and also to goals.
frustration. The lack of communication that underlines
Vinods style of leadership will lead to the leadership style of Vinod and the sense of
resentment and over a period of time, it may insecurity that stems from it had an adverse
also lead to resistance to his orders. Further, impact on Rahuls feelings of pride. Pride is a
the style adopted by Vinod will lead to his sub- powerful and valuable motivator and when this
ordinates showing no active interest in their is stifled, the subordinate feels frustrated.
job, becoming hesitant in taking initiative, and Rahul expects a measure of involvement in
being constantly depending upon the bosss decision making. Involvement in decision mak-
instructions. All these factors can defeat the ing satisfies an employees ego and self-esteem.
purpose for which Vinod is attempting to mod- However, in the present situation, Rahul is
ify the incentive scheme. denied the opportunity for involvement in deci-
sion making.
What Changes Would You Advise?
Rahuls needs for motivation are not satis-
The facts of the case reveal that Rahul was fied to any extent. This is the reason why he
always cognizant of companys policies and decides to leave the organization.
procedures. He had the ability to argue his The leadership style of Vinod will lead to a
viewpoint with a measure of success and when- climate where his subordinates will refuse to
ever he had a difference in opinion, he was will- participate in the decision-making process.
ing to state the reasons about his differences. In Subordinates will in this situation become
this situation Vinod should have adopted a yes men and refuse to confidently accept
participative style of leadership with trust and authority delegated to them. In this environ-
confidence in Rahul. This would have led to ment, group effectiveness will be low. In the
better communication and team building. final analysis, this adverse climate will not
To be an effective leader, Vinod should have provide a conducive atmosphere for Vinod to
a greater measure of confidence and trust in his become an effective leader who can function
subordinates, help them in the development of comfortably and achieve results competently.
methods to achieve organizational objectives, Vinods claim of being a result-oriented
and encourage participation. manager will be self-defeating if he does not
The facts of the case show that Rahul is will- direct the organization to a participative style
ing to explain to his superior his viewpoints on of leadership.

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