Hisham El Sherbini MPP Assignment v2.0 (For Pub)

MPP (Managing People & Performance) Individual Assignment

The Low Performing Team at CompanyX

Name: Hisham El Sherbini

Elective Pathway: High Performing Team

Course: Executive MBA – EM12

Date: 4th of November 2012

Table of Contents

1. Executive Summary ....................................................................................................................... 1

2. Introduction .................................................................................................................................. 1

2.1. Overview of the organisation and department ..................................................................... 1

2.2. Overview of the Relevant Context ........................................................................................ 1

3. Part 1: Analysis of Critical Issue ..................................................................................................... 2

3.1. Context .................................................................................................................................. 2

3.1.1. External Realities ........................................................................................................... 2

3.1.2. External and Internal Stakeholders ............................................................................... 3

3.1.3. Size & Growth ............................................................................................................... 4

3.2. Culture .................................................................................................................................. 4

3.2.1. National Culture ............................................................................................................ 4

3.2.2. Organisational Culture .................................................................................................. 5

3.3. CompanyX’s HR ..................................................................................................................... 6

3.4. The Psychological Contract ................................................................................................... 7

3.5. The Issue of Low Performance and Conclusion of Analysis ................................................... 8

4. Part 2: Proposed Course of Action .............................................................................................. 10

4.1. Recommendations .............................................................................................................. 10

4.2. Outline Plan......................................................................................................................... 11

4.3. Actions ................................................................................................................................ 12

4.4. Justification ......................................................................................................................... 13

5. Part 3: Implementation and Impact ............................................................................................ 13

5.1. Benefits & Measurement .................................................................................................... 13

5.1.1. Quantitative ................................................................................................................ 13

5.1.2. Qualitative ................................................................................................................... 14

5.2. Risks .................................................................................................................................... 14

5.2.1. Buy-in .......................................................................................................................... 14

5.2.2. Misinterpretation of Reward ....................................................................................... 14

5.2.3. Issues with PRP ............................................................................................................ 15

5.2.4. Issues with Performance Appraisals ............................................................................ 15

5.3. Contingencies to Realise Business Benefits ......................................................................... 15

6. Reflection .................................................................................................................................... 15

7. References .................................................................................................................................. 17

8. Appendices ................................................................................................................................. 18

8.1. Appendix A – Glossary ......................................................................................................... 18

8.2. Appendix B – The HRM Model (Storey, 2007) ..................................................................... 19

8.3. Appendix C – The Balanced Scorecard (Kaplan & Norton, 1992) ........................................ 20

Hisham El Sherbini MPP Assignment

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1. EXECUTIVE SUMMARY

This report will attempt to analyse one of the critical issues that the Consultancy Services (CS)

Business Unit (BU) at CompanyX is struggling with. CS is made of some of the most experienced,

skilled and knowledgeable individuals in the IT industry. This claim is validated by both vendors that

have relationships with CompanyX as well as rival IT companies. However, the issue of “low

performance of the Consultants team” is becoming more and more critical as will be explored in

section 3.5. The report will seek to illustrate the impact of HR practices on that issue.

Data was collected through Informal interviews with Mark, the Head of CS, as well as several

Consultants in CS, financial records provided by the Finance Director reflecting the position of the

organisation as a whole over the last 3 years as well as mostly qualitative but also quantitative HR

data especially regarding Employee Retention.

During the analysis, the impact of the external and internal contexts will be explored. Following that,

recommendations will be presented along with their benefits and risks as well as means of

measuring them.

2. INTRODUCTION

2.1. OVERVIEW OF THE ORGANISATION AND DEPARTMENT

CompanyX is one of the UK’s leading IT infrastructure partners. It was founded in 1990 in Reading by

Steve McNeill who is still the Chairman and Chief Executive of the organisation. Today, CompanyX

has over 280 employees and achieved a turnover of £67m to March 31, 2012.

2.2. OVERVIEW OF THE RELEVANT CONTEXT

Steve worked in IT Sales since 1983. The HR department is two people. Steve’s sister, Jane, is the HR

Manager. She works part-time (4 days a week, two of which are from home). She does not seem to

have any HR qualifications or training. Her assistant works 2 days a week and claims that she does

most of the work, which is actually just “Administrative”. Steve’s brother-in-law, James (Jane’s

husband), is the Services Delivery Director. There is a perception among the Consultants that they

are not really sure what he does especially when there is a similar role called Services Director who is

totally overwhelmed with work.


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3. PART 1: ANALYSIS OF CRITICAL ISSUE

A good place to start is the Henley’s adaptation of the HR Value Proposition framework (Ulrich &

Brockbank, 2005 cited in Henley Business School, 2012). It focuses on “People & Performance”

which is core to the issue being analysed here.

3.1. CONTEXT

The framework suggests that knowing external business realities as well as serving external and

internal stakeholders would be critical to supporting line management to deliver.

3.1.1. EXTERNAL REALITIES

PESTEL can be used to analyse the External Realities CompanyX is facing:

Political: The Cabinet Office (2011) stresses that ‘ICT is critical for the effective operation of

government and the delivery of the services it provides to citizens and businesses’. This

highlights the opportunities that CompanyX might have leveraged in the past as well as those

emerging in the future and how the government would be supporting growth in the ICT industry

which could be seen to have a positive impact on CompanyX.

Economic: CompanyX ‘went through the dot-com boom’, rode the wave and was least affected

by the latest recession, as per its financial figures. According to the ITU (2009:7), ‘the ICT

industry is in better shape today than after the dot.com crisis of 2001/2002’. This is not

surprising since ICT is considered a core service rather than a “luxury” and it did see an

opportunity in restructuring business processes and introducing more and more automation that

can lead to more efficiency and reduction in operational costs. Based on the personal experience

of the writer, at the beginning of the recession, recruiters admitted that the pay for Consultants

suffered an average reduction of %25, taking it to £45K. However, by 2012, it recovered and an

(Henley Business School 2012a adapted from Ulrich &

Brockbank, 2005)

Figure 1 – The HR Value Proposition


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average salary of a Consultant with more than 10 years’ experience is circa £60K. Hence, “pay” is

currently satisfactory for Consultants.

Social: CompanyX is an example of a “KIBS”. Hence, Consultants are expected to be highly

educated and accredited. They can easily move between companies because of the skills they

possess. The average retention period at CompanyX for Consultants is 3 years. However, it is a

lot higher for Sales people. Some of them have been there for over 10 years.

Technological: ITU (2009: 9) suggests that ICT ‘is founded on innovation and, while the economic

turmoil may challenge some, it can also overturn the established order and stimulate the

emergence of new entrants with new technologies’. This introduces business opportunities that

have been and will be helping CompanyX grow both in size and turnover. It should also

introduce new challenges which are perceived to keep the Consultants engaged.

Environmental: The Green IT Magazine (2012) suggests that the ‘IT sector can become a leader

in showing how industry at large can benefit from a low carbon economy and maximise new

commercial opportunities as they arise’. This introduces even more opportunities for CompanyX

and its workforce.

Legal: CompanyX operates only within the UK. Hence, UK laws govern the formal relationship

between CompanyX and its employees. There is, however, little influence of the legal aspect on

the CS team or the issue under consideration.

3.1.2. EXTERNAL AND INTERNAL STAKEHOLDERS

CompanyX has no external shareholders to please. It is a private company with two shareholders,

one of them is Steve. He is solely running the company and overseeing its day to day activities.

Decision making lies with him hence can be seen as micromanaging the company. An interview with

Mark clearly showed how his decisions can be easily overturned by Steve.

Managers try to please Steve and go with his flow rather than give objective feedback. In

CompanyX’s mission statement, CompanyX claims to ‘foster a corporate culture that continues to

attract and retain experienced, creative, practical and energetic employees’. Although that can be

seen in some business units and departments, it is not across the board. The perception of the

Consultants is that Steve, being a Sales guy and seeing Sales as the driving force, favours the Sales

team over the rest of the company.

Customers are looked after by Sales Account Managers whose main job is to retain them. It was

reported that CompanyX claimed ‘that of its 50 biggest clients in FY11 32 remain from the preceding

year. Another 13 of the top 50 for FY10 retain an “active trading account”’.


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3.1.3. SIZE & GROWTH

Size can be seen as an external factor but also an internal reality. According to the European

Commission (2005), CompanyX has now exceeded the threshold of “medium-sized” enterprises of

250 employees and can now be considered a “large” enterprise. The annual turnover of £60m also

asserts that. The uncertainty that Hill & Stewart (2000) suggested and the instability, highlighted by

Wilkinson et al (2007) in Table 1, can be seen less and less evident. However, CompanyX can still be

seen as “Authoritarian”. Mark clearly stated that he feels that CompanyX is turning into a large

business that still has a “small business mentality”.

Table 1 - HRM and employee involvement in SMEs

Small is beautiful Bleak House

Harmonious Hidden conflict

Good HR practices Black hole

Informality with little bureaucracy Instability

Familiar style and culture Authoritarian

(Wilkinson et al, 2007)

Catlin & Matthews (cited in Price, 2007) rightly point that ‘the behaviours and habits that lead to

success at early stages of growth can contribute to failure at later stages’.

3.2. CULTURE

3.2.1. NATIONAL CULTURE

CompanyX is owned by two Englishmen and it operates predominantly in the South East of England.

More than 90% of the workforce is English. And, hence, The Hofstede Centre’s (2001) dimensions of

culture for the UK, featured in Figure 3, can be applied on CompanyX.

35

89

66

35

25

0

10

20

30

40

50

60

70

80

90

100

PDI IDV MAS UAI LTO

Figure 2 – Dimensions of Culture for UK

(Hofstede Centre, 2001)


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A high feeling of “Individualism (IDV)” has been experienced at CompanyX especially by the non-

British minority. Wilton (2011) suggests that ‘in cultures rated low in power distance, a closer

relationship exists between superiors and subordinates, with greater worker involvement in

decision-making’. In the case of CompanyX, this is seen as relatively far from the truth, especially in

CS. A lot of the Consultants interviewed have not ever met or talked to the founder, Steve. But, what

is even more interesting is that they rarely talk with their direct line manager. They claim that they

hear from him only when he wants something. Besides that, he seldom responds to emails and

almost never asks for feedback or involves Consultants in any decision making. The figure above also

hints at how Masculinity is quite high in the UK and that can be seen as Sales Achievements are

ambitiously sought after and more recognised by the organisation. However, the lack of PRP and

other forms of Reward for Consultants does not give them a chance to exercise their “Masculinity”.

The above factors are perceived to contribute to the Consultants being disengaged and

demotivated.

3.2.2. ORGANISATIONAL CULTURE

The Robbins & Judge’s (2007) model can be used to establish the Organisational Culture at

CompanyX. The culture is dominant and maintained by the philosophy of the founder, Steve.The

selection criteria for Top Management ensure the persistence of his ideas and values, being

ambitious, willing to take risks, and Sales-oriented. Similar lifestyle and interests are important

factors. Horse Racing, for example, is his passion and those who share it with him are able to get

close. In fact, the only annual meeting of the company is at a Horse Racing fixture in March. There is

not a Christmas party.

Top Management is seen as a “club”. Handy (1993) suggested that this “Power” culture can be

‘depicted as a web with strong, charismatic leadership from the centre’ but he also warned that the

organisation ‘may have difficulty operating above a certain size’ which is what is being experienced

Figure 3 – How Organisational Cultures Form

(Robbins and Judge, 2007)


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(Handy, 1993)

Figure 4 – Power/Web/Club Culture

at the moment. Top Management are perceived to be disconnected with communication being

limited to non-existent. It seems to the Consultants that there is “them” and there is “us” and that

“we”, the Consultants, have little insight into the strategic direction of the organisation and how

their activities contribute to its success.

In an interview with The Business Magazine, Steve sees CompanyX as a ‘people-driven business, we

look after them, we motivate them, we give them a career path’.

He claims that CompanyX ‘have been able to offer top-notch

consultants and sales people a stable and supportive environment in

which to progress and develop’. The Sales people might agree but

the Consultants do not.

CompanyX tends to hire experienced and expensive Consultants but does not give enough space and

support for them to actually evolve within and blend into the fabric of the organisation. All the

Consultants interviewed seemed to agree on that. They feel disconnected socially, mainly because of

their disinterest in Horse Racing and the lack of any other team-building activities or social

gatherings but also because of the lack of communication from Steve, any of the Directors or even

their Line Manager.

3.3. COMPANYX’S HR

Stanton & Coovert (2004, cited in Wilton, 2011: 15-16) suggest that the ‘HR function can be divided

into three broad, interlocking functional areas’, those being Administrative, Financial and

Performance. The Consultants agree that their experience with HR is merely Administrative and they

can only see it focusing on enforcing organisational policy and employment law. It is seen as akin to

traditional personnel management practices (Wilton, 2011).

Concerning Rewards, a possible financial functional area for HR, Wilton (2011) makes a distinction

between three different categories: Financial, Non-financial and Benefits. The Consultants at

CompanyX can only recognise the Basic pay and, sometimes, Overtime but not any of the other

financial rewards such as Bonus, Commission or variable pay. From the non-financial rewards, they

can hardly acknowledge experiencing any of them whether its feeling valued, job satisfaction, job

interest, recognition of achievement or challenge and variety. As for benefits, none of them exist.

Regarding Performance, Mark and the Consultants agree that HR has not matured yet to be involved

in developing, deploying or maintaining any Performance or Talent Management processes at

CompanyX and that it seems to everyone as an unchartered area.


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In addition, the HR involvement in the Recruitment and Selection also seems to be non-existent.

None of the Consultants seem to recall seeing a Job Description before getting hired which can

sensibly mean that the Job Analysis exercise might not have been performed. They all revealed that

they were head-hunted. During the Interview process, only Dave, the Services Director, was involved

and he seemed to make the decision unilaterally.

The above can be further illustrated using the Three-Dimensional Model of People Strategy by

Gratton & Truss (2003). It would be reasonable to suggest that the HR at CompanyX is still at the

“Mere Tactics Speak” where there is ‘weak vertical alignment, weak horizontal alignment and weak

action’.

3.4. THE PSYCHOLOGICAL CONTRACT

In one of the definitions, the psychological contract is seen as ‘a set of unwritten reciprocal

expectations between an individual employee and the organisation’ (Schein, 1978: 48 cited in

Wilton, 2011: 36).

Wilton (2011:36) suggests that the psychological contract ‘begins to take shape even before the

explicit employment contract is established… [whether] in job advertising or in the recruitment

process’. That is what the Consultants experienced during their interviews with Dave. He drew a

picture of the organisation being a family company and one that is family-oriented in understanding

and supporting employees with families. He tried to transfer a feeling of excitement about the

company’s goals and ambitions and how that the Consultant being interviewed will be part that.

However, most of the Consultants interviewed claimed that, two weeks into the job, they found it

Figure 5 – 3D Model of People Strategy

(Gratton and Truss, 2003)


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difficult to link between reality and the rosy picture that Dave tried to draw. Price (2001: 251)

suggested that that can lead to ‘rapid disillusionment rather than sustained commitment’.

At CompanyX, the Consultants expect flexibility and support; they do not generally expect a “9 to 5,

Mon to Fri” work pattern. They are usually goal-oriented and they work extra hours in the evenings

or weekends without asking for overtime. In return, they expect the company to support them when

they are in need.

The Consultants expect to be heard and to be involved. Guest and Conway (2002, cited in Wilton,

2011: 37) highlight how ‘employee voice in organisational decision-making is viewed as having a

positive impact on employee trust’. At CompanyX, the Sales guys have a stronger voice than

Consultants who are rarely consulted before decisions are made. It is an issue that Consultants

continuously complain about especially when the uninformed Sales decisions put the Consultants in

a difficult position before the customer.

Referring back to CompanyX’s mission statement, they say that ‘Our priority is, quite simply, meeting

our customers' needs’ rather than, perhaps, exceeding their expectations or going the extra mile. It

is interesting how that truly reflects the general feeling among Consultants – the feeling of “just

doing our job” rather than trying to “do a better job”. As Wilton (2011: 38) states

‘…with the development of a positive psychological contract…organisations

can elicit greater discretionary effort to ‘go that extra mile’ for a colleague or

customer, increase employee engagement and unlock hidden potential’.

(Wilton, 2011: 38)

3.5. THE ISSUE OF LOW PERFORMANCE AND CONCLUSION OF ANALYSIS

According to financial records, more than 30% of CompanyX’s revenue can be contributed to CS

being a high revenue and, potentially, high profit BU. The records also show some interesting facts:

1. The contribution of CS remained stagnant over the last 3 years both in actual monetary value

and in percentage of total revenue.

2. There was an increase in the number of Consultants by 25% which should have resulted in more

revenue but it did not.

3. The operational cost of running CS is increasing which means that less profit is realised.


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This can be contributed to different factors but one cannot ignore the points above as signs of “Low

Performance”. In addition, the following indicators were also identified (PayScale, 2012):

Goals are not being met

Employee relies too heavily on others to meet goals

The quality of work is poor

Employee has difficulty working with co-workers

Employee violates company policy

The “5 Whys” (Jones & Womack, 1996) method can be used to bring all the pieces of the puzzle

together and help identify the root cause of the low performance issue.

The first “Why” is: “Why is the performance low?” The answer is: “Because of low motivation”. The

performance equation by Boxall and Purcell (2003, cited in Wilton, 2011: 48) was used to appreciate

that answer because it illustrates the different contributing factors:

Performance = f (Ability x Motivation x Opportunity)

Few would disagree that the Consultants are very able individuals – most of them with over 10 years

proven experience. They are known by their outgoing, energetic, and passionate attitude and

behaviour. They were all brought in because of their reputation as “top notch” and because of their

certifications and accreditations which leave little space for doubt.

The conclusion from the PESTEL analysis is that most of the external factors support the growth of

CompanyX and should not hinder the momentum it experienced since the beginning. There are a lot

of opportunities that the Consultants can be part of such as the new innovative technologies as well

as Green IT. Having said that, more work needs to be done regarding “the working environment” to

‘provide the necessary support for employees to achieve their potential’ (Wilton, 2011: 51). This can

be seen in, both, enhanced operational processes as well as the better use of technology internally.

The third factor, Motivation, seems to be the main contributor to the low performance of the

Consultants team.

The second “Why” then is: “Why is the Motivation low?” The answer is: “Because there is not

a suitable Reward System (which is attributed to content theories)”. In section 3.3, we highlighted

the fact that, out of the three types of rewards – Financial, Non-financial, and Benefits, CompanyX

only provides Basic Pay and, in some cases, Overtime. It is worth mentioning that, at CompanyX,

expectancy theories do not seem to be considered and their influence on motivation does not seem

to be realised (Henley Business School, 2012a)


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The third “Why” then is: “Why is not there a suitable Reward System?” The answer is: “Because HR

is merely an Administrative function”. This was also highlighted in section 3.3.

The fourth “Why” then is: “Why is HR merely an Administrative function?” The answer is: “Because

HRM remains marginalised” (Wilton, 2011)

The fifth “Why” then is: “Why is it still marginalised?” The answer is: “Because of the organisational

culture and the small company mentality”. This was highlighted in sections 3.1.3 and 3.2.2

This conclusion then leads to the realisation that the Organisational Culture and the lack of suitable

HR Strategies are the key root causes for the low performance of the Consultants team. The

perception is that they contribute to other issues as well but discussing that is beyond the scope of

this assignment.

4. PART 2: PROPOSED COURSE OF ACTION

4.1. RECOMMENDATIONS

There is the perception that a lot needs to be done both in the long term and in the short term

whether on the strategic or the tactical levels to improve the performance of people at CompanyX.

Storey’s model of HRM (Wilton, 2011) is a good start to emphasise ‘potential for ‘people’ to be a key

strategic asset’ and ‘how they should be managed to maximise their performance’ (Wilton, 2011: 7).

The full model is in Appendix B but the highlights and the recommendations are:

Realise that ‘HR decisions are of strategic importance’

Understand the commitment of ‘Top management’

Implement a High-commitment HR Strategy

Manage the culture

The Bath People and Performance Model (Purcell et al., 2003 cited in Wilton, 2011) can help explain

the link between the required HR Strategy and the perceived enhancement of organisational

performance.


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Figure 6 – The Bath People & Performance Model

(Purcell et al., 2003 cited in Wilton, 2011)

At the heart of the model is the Performance formula by Boxall and Purcell (2003, cited in Wilton,

2011: 48). The model suggests that HR practices can ‘only create the building blocks of good

performance’ and that the ‘degree to which these building blocks develop into improved individual

performance is mediated by a number of factors…[the most important of which are] the activities

and behaviours of line managers’ (Wilton, 2011: 51).

An HR Strategy that would be suitable for CompanyX needs to be “commitment-based”. Wilton

(2011) suggests that this type of strategy is grounded in the view of human resources as an asset

which should apply to CompanyX being a KIBS. The three perspectives on strategic HRM suggested

by Wilton (2011) are Best Fit, Best Practice, and Resource-based View. The latter seems the most

fitting for CompanyX. The resources of CompanyX and the CS BU specifically are the “people”.

Hence, it can be fairly perceived that ‘a significant source of sustainable competitive advantage’ is

CompanyX’s workforce and their organisation (Wilton, 2011: 73).

4.2. OUTLINE PLAN

Developing the optimal HR Strategy at CompanyX can be seen as a long-term objective. It is

unrealistic to expect CompanyX to embrace and adopt the recommended HR Strategy as well as the

perceived associated change in the Organisational Culture overnight.

Hence, a more practical short-term plan is suggested. The plan is inspired by the Bath model above.

The key idea is to devolve some of the HR practices to Line Managers and involve them in the

development and implementation of the relevant blocks in the Bath model namely:


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Communication, Involvement and Engagement giving the Consultants a Voice.

Trust, Respect and Encouragement

Job Challenge

Performance Appraisal through PM and Reward systems

4.3. ACTIONS

First, Mark should be trained and developed to appreciate his role and responsibilities especially in

the non-financial aspect of the reward. Mark needs to create an atmosphere to regain trust,

commitment and engagement by communicating openly, involving the Consultants in decision-

making especially when it affects them directly, empowering them and encouraging positive

discretionary behaviour, providing challenging work, valuing their contribution and supporting

opportunities for development (Henley Business School, 2012a).

As the psychological contract is getting mended, HR needs to work on developing a PM system and a

Total Reward package (Wilton, 2011) whereas Line Management needs to work on the delegated

employee relations including managing and amending the psychological contract.

HR can use the PM cycle suggested by Wilton (2011: 192) to implement a PMS:

1) Observe: Assessing current performance and 12identifying potential for improvement.

2) Plan: Agreeing on goals and objectives for a practical pre-defined period and establishing

‘measures’ of performance (more on that in section 5.2).

3) Act, monitor and support: Line Management, coaching and mentoring.

4) Review, rate and reward: Evaluating the outcomes in relation to criteria as well as

performance appraisal (possibly 360-degree appraisal) and rewarding.

Being an IT company, the use of e-HR can possibly be very much appreciated. Wilton (2011:443)

suggests that an ‘e-enabled HR function has the potential to develop its strategic role and become a

more effective business partner’.

Total Reward, as suggested by Wilton (2011), should be developed and implemented by HR in

coordination with Line Management to streamline:

1) Financial Reward: Basic pay, Bonuses, PRP, Commission, and Overtime.

2) Non-financial Reward: Feeling valued, Recognition of achievement, Job satisfaction, Job

interest, and Challenge and variety.

3) Benefits: Pensions, Healthcare, Subsidised meals and Enhanced maternity, Paternity or

sickness leave (since CompanyX claims to be a family-oriented company).


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4.4. JUSTIFICATION

The justification for the above can be summarised as follows:

1) It is too early for the ideal HR Strategy to be developed and implemented especially that HR

at CompanyX is not mature enough or big enough in size to perform all of the practices or

activities of the HR function detailed by Henley Business School (2012a).

2) A partnership is required between HR and Line Management to deliver the recommended

plan (Henley Business School, 2012a).

3) As mentioned above, the activities and behaviours of line managers are the most important

factors in improving individual performance (Wilton, 2011)

4) Henley Business School (2012a: 99) stresses that ‘Line managers are the interface between

individual employees and their organisations, and it is often said that employees leave

managers not organisations’.

5) The use of 360-degree appraisal ‘seeks to provide a more rounded assessment of individual

performance’ (Wilton, 2011: 200). This can be perceived as particularly suitable for the

Consultants being at that senior level.

5. PART 3: IMPLEMENTATION AND IMPACT

5.1. BENEFITS & MEASUREMENT

Recalling the issue at the heart of this report – low performance of the CS team, the ultimate benefit

to realise would be “an increase in the performance of that team”. Wilton (2011: 195) stresses that

‘key to the success of PM is setting objectives and measures’ and that, to be effective, ‘performance

objectives should be SMART – Specific, Measureable, Attainable, Realistic and Time-bounded’.

A Balanced Scorecard (Kaplan and Norton, 1992 cited in Wilton, 2001:76) adapted to CompanyX

would be an ideal tool to use in providing a ‘range of potential measures of organisational

performance’ (Wilton, 2001:76) as well as a line of sight between people and performance (Henley

Business School, 2012a). Appendix C includes a template that can be used by CompanyX.

5.1.1. QUANTITATIVE

Quantitative benefits and their measurement include:

Increase in the Consultants’ utilisation: It is already being measured using a Web application that

is based on a database populated by the Resourcing team. At the moment, the average

utilisation is 12 days/month which is lower than the desired figure of 14. Reaching and

exceeding 14 days/ month would be perceived as a sign of the benefit being realised.


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Increase in revenue of the CS BU: The revenue of CS is a factor of the Sales activities, market

conditions but also the performance of the Consultants in delivering high quality work as well as

their Pre-sales and Up-selling activities. So far, Sales activities and market conditions have

contributed positively to the revenues and it was the performance of the Consultants that

contributed negatively to the figures. A noticeable increase in revenues under similar conditions

would be perceived as a realised benefit from the increased performance.

Increased retention of Consultants: As mentioned in section 3.1.1, Consultants are likely to leave

CompanyX a lot sooner than Sales people. The interviews with the Consultants showed their lack

of loyalty and they attributed that to dissatisfaction and lack of motivation. Although the HR

figures might not be accurate when it comes to Employee Retention but using a more developed

system to monitor and track the Attrition Rate should yield clearer results and can be a measure

of the success of the plan to increase the motivation of the Consultants.

5.1.2. QUALITATIVE

Job satisfaction: The Bath model clearly links it to the aspired Discretionary Behaviour which

links it to the desired performance outcomes. Satisfaction surveys can be used to measure it. A

baseline should be generated initially before the application of the plan starts and another 6

months down the line to measure the change in satisfaction.

Increased motivation: Questionnaires also can be used in measuring motivation in addition to

changes in the Consultants’ behaviour, increased quality of work (through Customer Satisfaction

surveys) as well as increased communication and participation.

Employee Well-being: This can be measured using perceived happiness, health and lower

number of sick days compared with the current average figure of 15 days/year at CompanyX.

5.2. RISKS

5.2.1. BUY-IN

Mark, the Head of CS, is seen to be supportive of the initiative and the plan. However, the key

perceived risk is “buy-in” from the Chairman and Top Management including the HR Manager.

5.2.2. MISINTERPRETATION OF REWARD

Due to the inherent issues with the psychological contract, the implementation of reward might be

misinterpreted by the Consultants leading to more tension in the employment relationship (Wilton,

2011).


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5.2.3. ISSUES WITH PRP

Kohn (1993 cited in Wilton, 2011: 234) suggested that incentives can ‘only achieve temporary

compliance and short-term changes in behaviour’. Decktop et al. (1999 cited in Wilton, 2011: 234)

advised that PRP can act as a positive stimulus only when ‘high levels of commitment are pre-

existing’. And since that is not the case at CompanyX right now, this can introduce a risk.

5.2.4. ISSUES WITH PERFORMANCE APPRAISALS

Wilton (2011) warns that, inevitably, line managers can lack impartiality or be subject to allegations

of bias or inconsistency which can result in negative outcomes.

5.3. CONTINGENCIES TO REALISE BUSINESS BENEFITS

With the support of Mark, the plan needs to be “sold” to Steve in a way to make him the owner and

the champion of this transformation across the company. This is critical for the plan to succeed and

for the company to realise the benefits sought.

The Consultants and the rest of the employees who will be experiencing the PM system and the

Total Reward package should be involved from the beginning to help develop the frameworks to be

used and set clear objectives that everyone agrees on. This should be seen as an iterative process as

Marchington & Wilkinson (2005 cited in Wilton, 2011: 241) suggest: ‘Continuous evaluation of pay

systems is necessary to ensure that they meet business requirements’.

To get the best out of Performance Appraisals, Mark needs to ‘have the required inter-personnel

skills’ and ‘guard against dysfunctional behaviour through appraisals’ (Wilton, 2011: 198).

An alternative to PRP that can encourage and sustain effective team performance can be team-

based pay (Wilton, 2011).

6. REFLECTION

I found the assignment to be quite fulfilling and, at the same time, quite relevant to my role at

CompanyX. During our projects, I was often part of a team that had been quickly assembled of highly

specialised individuals, whether Project Managers or Consultants. The expectation was for that team

to deliver high performance. However, it rarely did – conflicts arose, deadlines were missed and the

customers complained about poor quality of work. We were puzzled at why that was happening

especially that the Consultants have an excellent relationship between them.

Because of the above, I believe that my choice of the HPT pathway was very appropriate. I wanted to

seek ways of understanding the ‘conditions, prerequisites, enablers and principles for the


Page | 16

management of [such highly performing] teams’ (Daniel & Davis, 2009 cited in Henley Business

School, 2012c) and our performance was, surprisingly, low. The teams were heterogeneous.

Technical expertise, problem-solving and decision-making as well as interpersonal skills were, to a

good extent, covered in the team (Henley Business School, 2012c). More work can definitely be done

on the development of the team, observing models such as Tuckman’s Stages of Team Development

(Tuckman, 1965 cited in Henley Business School, 2012c) or the Integrated Team-Development

Framework by Sheard & Kakabadse (2002). However, this assignment has proved that the main

reason behind the low performance is Motivation and attributed that to the Organisational Culture

and the lack of HR Strategy. At the same time, the use of the material from the SME pathway was

priceless in understanding the context of the organisation.


Page | 17

7. REFERENCES

Cabinet Office (2011) Government ICT Strategy [Accessed 16 Dec 2012]

http://www.cabinetoffice.gov.uk/content/government-ict-strategy

European Commission (2005) The new SME definition: user guide and model declaration.

European and Industry Publications [Accessed 15 Dec 2012]

http://ec.europa.eu/enterprise/policies/sme/files/sme_definition/sme_user_guide_en.pdf

Gratton, L & Truss, C (2003) The Three-Dimensional People Strategy – Putting Human

Resources Policies into Action, Academy of Management Executive, 17(3)

Green IT Magazine, The (2012) About [Accessed 16 Dec 2012]

http://www.greenitmagazine.com/

Henley Business School (2012) Managing People and Performance – Module Core

Henley Business School (2012) Managing People in SMEs and Family Businesses

Henley Business School (2012) The High-Performing Team

Handy, C (1993) Understanding Organizations, London: Pengiun

Hill, R & Stewart, J (2000) Human resource development in small organizations, Journal of

European Industrial Training, 24 (2/4), 105-17

Hofstede Centre, The (2001) National Culture – UK [Accessed 17 Dec 2012] http://geert-

hofstede.com/united-kingdom.html

ITU (2009) Confronting the Crisis – Its Impact on the ICT Industry [Accessed 16 Dec 2012]

http://www.itu.int/osg/csd/emerging_trends/crisis/report-high-res.pdf

Jones, D. and Womack, J. (1996) Lean Thinking: Banish Waste and Create Wealth in Your

Corporation, New York: Simon & Schuster.

PayScale (2011) How to Identify Low Performance – Management Tips [Accessed 19 Dec

2012] http://blogs.payscale.com/compensation/2011/05/performance-management.html

Price, A (2011) Human Resource Management, Cengage Learning EMEA

Robbins, S. and Judge, T. (2007) Organizational Behavior, Prentice Hall

Sheard, A G & Kakabadse, A P (2002) From loose groups to effective teams: the nine key

factors of the team landscape. Journal of Management Development, 21 (2), 133–51

Wilkinson, A, Dundon, T & Grugulis, I (2007) Information but not consultation: exploring

employee involvement in SMEs. International Journal of Human Resource Management,

18(7), 1279-97

Wilton, N (2011) An Introduction to Human Resource Management, Sage

http://www.cabinetoffice.gov.uk/content/government-ict-strategy

http://ec.europa.eu/enterprise/policies/sme/files/sme_definition/sme_user_guide_en.pdf

http://www.greenitmagazine.com/

http://geert-hofstede.com/united-kingdom.html

http://geert-hofstede.com/united-kingdom.html

http://www.itu.int/osg/csd/emerging_trends/crisis/report-high-res.pdf

http://blogs.payscale.com/compensation/2011/05/performance-management.html


Page | 18

8. APPENDICES

8.1. APPENDIX A – GLOSSARY

Acronym Meaning Note

BU Business Unit

CS Consultancy Services The business unit which is the focus of this report

ICT/IT Information & Communications Technology The industry/sector that CompanyX belongs to

ITU International Telecommunication Union A UN specialized agency for information and

communication technologies – ICTs.

KIBS Knowledge Intensive Business Services Are services and business operations heavily

reliant on professional knowledge

PRP Performance-related Pay

HPT High-Performing Team

PM Performance Management

PMS Performance Management System


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8.2. APPENDIX B – THE HRM MODEL (STOREY, 2007)


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8.3. APPENDIX C – THE BALANCED SCORECARD (KAPLAN & NORTON, 1992)

Documents

Hisham El Sherbini MPP Assignment v2.0 (For Pub)