Guest editorial

Citation

Lucas, R. and Atkinson, C. (2011), "Guest editorial", Employee Relations, Vol. 33 No. 2. https://doi.org/10.1108/er.2011.01933baa.001

Guest editorial

Article Type: Guest editorial From: Employee Relations, Volume 33, Issue 2

About the Guest Editors

Carol AtkinsonSenior Lecturer in HRM and Director of Studies for the MSc HRM in the Human Resource Management and Organisational Behaviour Group. Her principal research interests include the small firm employment relationship, HRM and performance, rewards and incentives in adult social care and flexible working.

Rosemary LucasProfessor of Employment Relations and Research Co-ordinator in the Human Resource Management and Organisational Behaviour Division. Her principal research interests centre upon employment relations and migrant workers in the hospitality and tourism industries, rewards and incentives in adult social care and comparative HRM in Central and Eastern Europe.

Issues of performance and reward are central to the discipline of HRM given that they underpin the effort-reward exchange in the employment relationship. Their operation at the individual, group and organisational levels, however, renders them complex and often contradictory. All major stakeholders – managers, workers, trade unions, shareholders and customers – have an interest in performance and reward but each also has their own agenda which may conflict with that of other stakeholders. Added layers of complexity exist in the form of contextual influences emanating from society, the economy and government. Organisations seeking to deal with performance and reward at a strategic level must grapple with the tensions arising from these multiple goals and influences. This makes the area ripe for investigation and in this special issue we present five papers dealing with performance and reward which demonstrate the diversity of interest and issues within this subject area.

As one of our keynote speakers outlined, the HRM/performance debate, i.e. the extent to which and how HRM contributes to organisational performance, continues to rage. Employee attitudes and behaviours are seen as a critical mediating variables in this, there being much debate on how HR practices affect these attitudes and, indeed, which attitudes they should seek to influence. Commitment and involvement have been identified as key to enhancing performance but recent research has suggested a need for consideration of a wider range of attitudes. There is also lack of understanding over how individual HR practices influence attitudes and papers in this issue explore the impact of two such practices, flexible working and reward, in detail. Further, there has been a substantial focus on the gap between policy intentions and the reality of their enactment. This has led to calls for the examination of HR practices from an employee perspective, the investigation of their lived experiences of these practices. A number of our papers respond to this call reporting both line manager implementation of HR policies and employee perspectives on these.

Clearly performance cannot be divorced from reward and organisational strategies must deal with the adoption of total reward strategies comprising monetary and non-monetary rewards that will motivate and enhance performance. The reward mix within a total reward package is vital within this and is under-researched. Current debates on pay have centred on the extent to which individualised pay systems have superseded collectively bargained pay and the effects of this, linking payment systems to skills development, how to make performance-related pay systems work and how far they are used as control mechanisms, rather than to motivate employees and provide them with genuine enhanced earnings opportunities. There is often an over-reliance on performance related pay (PRP) to motivate, despite 20 years worth of debate and very mixed evidence on its capacity to achieve this end. This special issue addresses both reward mix and PRP in attempt to move these debates on. Finally, who gets what raises questions of fairness and social legitimacy. Nowhere is this more evident than in equal pay debates. Research evidence continues to demonstrate a gender pay gap and the search goes on for mechanisms through which to address this. Job evaluation is often held up as such a mechanism although many question its capacity to support gender pay parity. An exploration of this forms the final paper in this special issue.

This special edition of Employee Relations draws primarily from papers given at the 5th Performance and Reward Conference (PARC) in April 2009, which was organised by Rosemary Lucas and Gill Homan of the Manchester Metropolitan University Business School and Carol Atkinson of the University of Bradford School of Management. PARC is designed explicitly to link performance and reward; it is a niche event that takes place every two years and attracts international academics from a number of continents, as well as more locally based practitioners. The two keynote speakers are always a leading practitioner and a leading academic, one of whom addresses performance, while the other focuses on reward. All papers have gone through the normal review process and reflect upon a number of issues in contemporary debates that have been highlighted earlier.

Our keynote practitioner speaker at PARC 2009 was Sally Knill, Group Reward Director at PZC who spoke about the challenges of managing reward in an international context. New to her role having recently moved from running reward at Kelloggs, Sally reflected on the need to understand organisational culture in designing reward strategy and ensure clear links to both overall HR and business strategy. She argued against a “one size fits all” approach to reward strategy, especially in an international context where both head office and local operational needs must be met. She adopts a partnership approach to those in the organisation responsible for talent and above all ensures that reward strategy underpins organisational values and is “felt fair” by employees. Communication is vital to this, coupled with an employment brand which brings together performance and reward in an holistic total package. She spoke of the pressures of dealing with currently severe financial constraints and uncertainties while developing long-term effective reward strategies – without a crystal ball!

Our keynote academic speaker, Professor Stephen Wood, addressed the question: where is the HRM-performance debate going? In reviewing research to date, Stephen argued that there appeared to be consensus around the importance of both human capital and the drive to demonstrate HRM/performance relationships, but that a number of heterogeneous studies had failed to coherently demonstrate these relationships. He outlined weaknesses of current research in this field, including the use of cross-sectional designs and small samples. Against this backdrop, he outlined the case for considering the relationship between employee involvement and performance, drawing on both an analysis of WERS and his own studies. He argued that relatively little used HR involvement practices such as empowerment and teamwork have significant impacts on performance and that this is a field that is rich in potential for understanding the HRM/performance relationship. He suggested that his own work makes a strong case for the need to use large datasets and robust, fit-for-purpose measures of performance. He further outlined the need for fuller examination of the intervening variables which mediate the relationship between these practices and performance.

Employee attitudes as a mediating variable in the HRM/performance relationship was the topic of the paper presented by Carol Atkinson and Laura Hall. Included in this special issue and drawing on the high performance work system (HPWS) literature, it explores relationships between an HR practice, employee attitudes and performance outcomes. Atkinson and Hall’s research investigates the impact of flexible working and presents employee perspectives, reflecting the importance of this as outlined above. Situated in an NHS context and adopting a qualitative inductive approach, Atkinson and Hall argue that the employee attitude of happiness emerged unexpectedly as the mediating variable between flexible working and certain performance outcomes. Flexible working made employees happy, both because they felt cared for and valued and because it served to reduce work/life tensions. This led to discretionary behaviour which employees in turn linked to improved performance and retention and reduced sickness absence. While a small, exploratory study, the authors argue that happiness is an overlooked attitude, most current research focusing on commitment and involvement. They conclude that further research into and consideration of happiness could substantially develop understanding of HPWS.

Continuing the theme of the influence of HR practices on employee attitudes, Michael Armstrong, Duncan Brown and Peter Reilly explore reward/attitude relationships. Their argument is that, despite the considerable cost of many reward systems, most organisations do not effectively evaluate their impact on attitudes such as commitment and motivation and ultimately employee engagement and performance. This lack of measurement means that it is difficult to identify the cost/benefit of reward practices and determine how to improve the reward mix. This paper has a strong practitioner focus, presenting empirical data on organisational practice on reward evaluation. This facilitates the development of a conceptual model of evidence-based approaches to evaluating reward effectiveness. While requiring further testing and research, the authors argue that their model may be an important early step on the path to evidence-based reward management.

Our remaining three papers concern themselves in the detail of reward policy and practice. The first discusses the influences on reward mix determination from a consultant’s perspective. Jonathan Chapman and Clare Kelliher explore reward mix decisions, that is, the relative contribution that a given element makes to the overall reward package, and consider the determinants of this. They draw their data from reward consultants who are closely involved in reward mix decision making. Their findings suggest that a number of reward mix norms, emerging from the specific market forces organisations face, have developed and that organisations are pressurised to conform to these norms. They draw on resource dependence and institutional theory perspectives to develop a model which allows reward managers to consider how the moderating variables could be manipulated for their firm to allow greater differentiation of the reward mix. While intended to support the practice of those involved in reward, the paper also aims to provide greater theoretical robustness to the subject. Policy makers may use this stronger theoretical base for understanding the determinants of reward mix choices and the extent to which organisational free choice and institutionally determined choice influence final choices in reward policy decision making.

Werner Schmidt, Nele Trittel and Andrea Müller’s paper investigates performance-related pay, presenting a case study of its recent introduction in a German public service organisation, the Local Administration in North Rhine-Westphalia. The research considers how the functionality of PRP schemes is influenced by their different designs and how the circumstances under which they are implemented impact upon acceptance by employees. Their findings suggest that highly selective, individualistic schemes in the public sector context have tended to fail, having little positive effect upon motivation and performance. They argue, however, that more participative schemes will allow for employee inclusion and in which employees can influence performance objectives are more likely to have positive outcomes. A more participative approach to PRP could, therefore, be central to improving its effective operation and acceptance by employees.

The final paper by Angela Wright presents a retrospective analysis of pay equality initiatives developed through the recent Labour Government’s public sector modernisation agenda. Pay and reward systems formed a major element of this modernisation process with a particular focus on gender pay inequality. Across many parts of the public sector, job evaluation has formed the basis of attempts to achieve gender equality, accepted as an appropriate mechanism by both employers and unions alike. Wright focuses on one initiative, the implementation of the single status agreement in the local government sector. She outlines the common arguments as to why this implementation has been slow, typically lack of funding and resources. However she then suggests that a significant contributory factor to the limited progression in achieving gender pay equality derives from the largely unquestioned assumptions inherent in the systematic view on of job evaluation. This view holds that job evaluation is a rational process which can indeed support in the achievement of gender pay equality. Wright argues for the fuller incorporation of feminist and social perspectives which recognise the job evaluation can be biased in its design and thus fail to achieve rational outcomes such as gender pay equality. She concludes that a more informed debate around job evaluation may serve to address some of the difficulties experienced with it in reaching its aims.

We are confident that the papers in this special issue will make thought provoking reading and hope that they serve to inform future research which will develop understanding in these vital areas.

Rosemary Lucas, Carol Atkinson