Human Capital Management New Possibilities in People Management

Source: Journal of Business Ethics, Vol. 44, No. 2/3, Corporate Sustainability Conference2002: The Impact of CSR on Management Disciplines (May, 2003), pp. 171-184Published by: Springer

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Human New People Capital Management: in Possibilities Management Marcel Joanna vm Marrewijk Timmers In addition to the traditional personnel ABSTRACT. and human resource management (HRM), there is a need for a new approach to 1. Introduction for Business framework, Foundation Excellence introduced for Quality is in which we will call Human Capital Management (HCM). HCM emphasises an alignment between the individual and the organization and in our view offers the challenge and the key to successful management in the future. personnel management, The European Model a popular management 1992 by the European principles approach. (EFQM). The EFQM model of the Rhineland According the corporate to - or stakeholders represents the KEY WORDS: capital resource management, management human asset management, human potential, human human management environment is being approach as a complex field of stakeholders, represented to be reckoned whose interests need with. these Ultimately, an organization stakeholders realizing would its goals accept at their ex not this CPM Classic Personnel - Foundation for EFQM Management; European ? HCM Human Quality Management; Capital - HRM Human Resource Management; - PTDP Personal and Management; Training - Stork Industrial Services Plan; SIS Development ABBREVIATIONS: - In the opposing, Anglo-Saxon penses. approach, the corporate environment consists predominantly of shareholders, and the striving for shareholder value is the ultimate According ture of the so-called management attention areas, the EFQM model has serious implications for the social policy employees. management task for companies. to its basic principles and the struc of organizations and for managing The choice and positioning of the attention area \"people manage ment\" Marcel van Marrewijk is the initiator and project manager of the international EU-financed European Corporate Sustainability Framework (ECSF) research project. The Erasmus project is lead by ERBS BV, an affiliate of the University Rotterdam. Van Marrewijk is also director Work Institute Nederland. of the Great Place to Johanna Timmers is assistant professor with the Department Business and the of Organisation of Faculty of Economics at Erasmus University since October 1988. In her teaching activities, she has specialized in organ isation studies and (quality) management. Over the years, Ms. Timmers has been involved in various con are seen that employees clearly indicates as human potential should not be and, therefore, used as resources and that management needs to reckon with their interests (see area: \"people other results\measuring among things their Human Resource is satisfaction). Management - ? to the EFQM model not appro according in practice while the priate. However, applying model for quality and as a man improvement tool, this norm is often ignored. agement occurs The then: which type of question management stakeholder more aligns with approach, advanced ambitions the EFQM in other words, of corporate people model's matches sulting activities in the area of quality management and employee motivation at a number of organizations. sustainability? ?* r\" Journal of Business Ethics 44: 171-184, 2003. ? 2003 Kluwer Academic Publishers. Printed in the Netherlands. 172 Marcel Aims and structure of this paper van Marrewijk and Johanna Wilber, individual Timmers So, and organizations are entities and at the same both relationship include between 1995). In this paper we will outline the most impor as far as tant trends in corporate social policies, for personnel they have implications policies. This will give a standard for evaluating three actual forms or development levels of people man agement, namely Classic Personnel Management, Human what Resource we Management call Human Capital (HRM) and Management on the features employees time there is a hierarchical and tran them, because organizations some organisations In practice, scend employees. do not function as wholes, integrating people and value. Instead additional providing they are \"heaps\" of people and not able to create synergy. can The development of people management in terms of different of be described qualities teaches that a development History dependence. via has taken place of authoritarian relations, to eventually fraternal supporting, paternalistic, and relations between the individual motivating his organization. different (business) This can also be seen in cultures. The model of Davis (HCM). We will then elaborate a HCM of the HCM-model. Subsequently, instrument that has been tested in practice will in more be outlined detail. The article will conclude with a number of issues for the future. 2. The human development potential and recognition of (1997, p. 33), slightly changed by and completed these with a last column by Timmers, describes developments Reading authoritarian tion, the pithily. See Figure 1. the matrix, the trend is clear: from to individual self-motiva control social dimension of has companies towards a better and the organi can explain this the In analyzing the relationship between employee can two extreme and organization, standpoints be distinguished. that organizations One school of thought (reification): claims there do not exist grown more important, moving balance between the individual are only to (parts) working people together obtain specific goals. The opposite is standpoint cannot the claim that separate human beings a social context, without such as an function a meaning to the life of organization, providing individual However, contemporary employees. the atom say that both extremes, philosophers1 are beside istic and the collectivistic the views, point: exist, in reality only neither whole/parts \"parts\" nor or holons \"wholes\" (Koesler; Custodial Economic Resources Managerial Orientation zation. Two major developments of organizations: shift in the social dimension case. work/life and the business balance, Over and the developments the past decades, society have speed of change in our industrialized been tremendous, with subsequent consequences for \"the human side of business\". If an employer he always hires a uwhole man\" that are 1952, ch. 20). The demands (Drucker, as a \"whole man\" may not put on the worker hires a worker, Supportive Leadership Autocratie Basis of Model Power Coll?gial Partnership Teamwork Motivational Alignment Authority Obedience Money Security and Benefits on Dependence Organisation on Support Job Performance Mentoring and Employee Orientation Responsible Behaviour Competence Accomplishment Flow Employee Psychological Result Dependence Participation Self-discipline Employee Met Performance Results Needs Subsistence Security Passive Cooperation Respect Awakened drives Esteem Self-actualisation Minimum Moderate Enthusiasm Dedication Figure 1. Different dependencies in the relationship between the individual and the organisation. Human have has Capital Management time, human full potential The 173 beings are allowed to bring in their more and more. into organizations for but the question that much, changed as to how to combine those demands individuals become more able difficult to combine days. the different these Are roles arises: do institutional question develop ments in people management support sufficiently employees they have to fulfil: as children, parents, partners, employees and members of society? And do employers have a responsibility to support individuals in the pursuit of combining these different roles? The human side of business also refers to meeting the needs of potential new employees who are choosing to work in organi zational cultures that align with their personal values and support them in their personal and professional growth. In order to retain the best people, organizational values need to meet the needs of existing employees so that they feel fully aligned with the organization's vision, mission and values and feel they are able to bring their selves to work (Barrett, 2000). These corporate challenges caused the com panies to focus on the human side of business, but do companies gain by doing so? Is there a business case? According to Collins and Porras (1994), authenticity and commitment to corpo rate norms and values lead to enduring great companies. According to Barrett (2000) \"finan cial success is correlated with employee fulfilment - strongly 39% of the variability in corporate performance is attributable to the employee fulfilment.2 Employee fulfilment is also strongly correlated with leadership - 69% of the vari ability in employee fulfilment is attributable to qualities of leadership of the manager or super visor.\" Furthermore, studies show that motivated personnel has a phenomenally higher produc tivity than employees who have taken \"mental dismissal\but are nevertheless present from 9 a.m. until 5 p.m. Barrett (1998) names a factor 12 higher productivity! Furthermore, the \"soft\" social dimension (company culture, work climate) of organizations contributes to its competitiveness. A price cut can be followed overnight, while copying a supportive corporate culture is much more difficult, if not impossible. Moreover, it yields a surplus value that can be capitalized. A better balance between the individual and the collective has been created: from authori tarian control to individual self-motivation. Over this trend? Are employees still considered as resources, with companies exhausting and debiting the human potential, or are employees considered as capital, worthwhile subjects to invest in. 3. Classic Personnel Management and Human Resource Management This paragraph starts with a historical draft of Classical Personnel Management and Human Management. Furthermore, we elab orate on the often-heard complaint that the traditional HRM approach is not in tune with changing circumstances in business and society and that it has insufficient potential for growth and improvement. A short historical outline Classic Personnel Management is a product of Taylorism and occurred (and is still occurring) in large organizations with specialized divisions and bureaucratic settings. In the beginning, the accounting department took care of administra tive transactions concerning personnel, but when recruitment and selection, industrial relations and terms of employment demanded more time, special departments were set up, usually under the name Personnel Department. The factor labour had hardly been differentiated. The decreasing influence of industrialization and the increasing complexity, combined with the growth of knowledge-intensive service, stimu lated the need for knowledge-workers, for flexibility and innovative capacity. Companies no longer wanted \"workers\" but qualified employees. Within personnel management, these new circumstances caused a new trend called human resource management (HRM). HRM ascribed itself an important role in realising the strategic goals of the organization, in which the factor labour was indeed of growing importance. whole Resource Marcel 174 van Marrewijk and Johanna Timmers The rise of HRM has had important implica tions for the recognition of the individual within the organization. The competences of employees are being distinguished, in recruitment and selection as well as in training and development. HRM and Classical Personnel Management both start from the conviction that control can be exerted over the individual employee by means of authority, contract or temptation. In both approaches, employees are optimally allo cated in the organisation, as if they were resources. Obviously criticism occurred towards Classic Personnel Management and Human Resource Management. We experience two major problems with these traditional approaches in people management. The first one relates to its paradigm and the second to the role HRM has within organizations. Contemporary paradigm is no longer feasible The underlying paradigm of HRM is that human resources can be managed, co-ordinated and controlled {people can be managed). The HRM approach has developed a variety of instruments to exert influence over employees. Classic Personnel Management and HRM consider employees as a liability, instead of an asset, and as a flexible and mouldable resource. However, the distinguishing feature of people is that they will only be flexible and mouldable if they themselves choose to do so. A striking charac terisation of this new paradigm is the saying: \"You can lead a horse to the water, but you can not make it drink\". 1 - Figure - the Davis and Timmers scheme clearly indicates a trend towards emancipation of the employee. Although traditional jobs and paternalistic management styles continue to occur, the number of professionals is growing as well as the trend towards high quality jobs. With an increasing number of highly educated and independent employees, a co-operative attitude is not to be taken for granted. As a reaction to this development, HRM has made adjustments in its operating procedures: the sharp edges in the traditional HRM instruments have long been removed. However, the old paradigm has not been abandoned ? the basic assumption remains that people (with a carrot, instead of a stick) can be influenced and even tually controlled. In our view, this is why HRM is losing the connection with developments in current Western society. The strategic dilemma of HR-managers The HRM function assigns itself a strategically important position as a sounding board for top and facilitator and change agent in the restructuring and transformation processes. Equally it manifests itself as a strategically important partner for employees, by advocating instruments such as employability and empowerment, which confirms a new view on industrial relations. Thus, the HRM function positions itself in two ways: as the architect of new organizational structures and work systems, and as coach in management development processes and companion of employees in turn around processes. In doing so, HRM has manoeuvred itself into a difficult splits-attitude. As the strategic com partner to management, HRM sometimes has to operate against the interests of the employees. For instance, in a corporate governance structure dominated by shareholders, each profit warning will coincide with public announce ments of massive lay-offs. The HRM function, as a strategic partner of top management, awaits the unpleasant task of helping develop and carry out these measures. In trying to serve two masters at the same time, the HRM function has moved itself into a very difficult position. As a mouth piece for management in unpopular measures, HRM will not be able to gain the confidence of the employees and, therefore, it will not be able to create a culture of trust, involvement, commitment and motivation, in spite of its intentions. If employees are treated like numbers, appeals for attitude, emotion and enthusiasm will fail. With CSR and corporate sustainability as major trends, companies recognize the impor management, modern munication Human tance of the social dimension tion, but HRM has not Capital Management 175 of their organiza the yet developed the under identity of of the alignment between the (or interdependence) individual and the collective employee organiza tion. to support identity or the instruments culture and lying values, workplace the organization. Indicative of the instrumental approach the relationship between the employee Usually, in and the organization is made by contracts, to use his which the employee commits himself HRM is the following development: recently a new movement has emerged within HRM: Human Resource Development (HRD). This movement wants to emphasize HRM's strategic position. HRD stresses the development function of HRM (training and education, Management Development, the role of HRM as a change agent). However, the Pricewaterhouse-Coopers' HR Benchmarking Survey 2000, shows that management development and career planning score only less than 4% of the time spent by HR managers. We have formulated important arguments as to why current HRM does not sufficiently connect with today's challenges. The question of course is: what does? We think that an essen tially different approach offers possibilities: the Human Capital approach. 4. Human Capital Management: An Alignment Model for Human Capital Organizations ? as any entity ? manifest the prin ciples of agency and communion (van Marrewijk, 2000a): the right to be and the capacity to create added value equals the duties to be responsible for your impact and to adjust yourself to changes in the environment. The two principles combined allow each entity, individual or group, to act according to its awareness, capabilities and best understanding of its situation, provided it does not conflict with current regulations or interfere with the freedom of others to act in obtaining a similar objective. At the same time organizations hold a hierar chical and interdependent relationship with their employees: organizations benefit from employee performances but they also have a supporting obligation and responsibility towards them. Each of the individual employees also expresses self preservation and acts of communion. This is the reason why our model (see Figure 2) focuses on knowledge, learning and skills for the benefit of the company In return, the organization provides a reasonable compensation. The context of a contract relationship is dynamic: market devel opments, social changes and personal growth can disrupt the fragile status quo. In this turbulent environment employer and employee continually have to reposition themselves. They both have to find a balance between the principles of agency and communion and together create a win-win position in being employee and employer (van 2003a). A lasting and productive relationship between the organisation and the employee can no longer be organized via the performing of tasks and linked compensation. The complex work-situa tion demands that employees and organizations find a certain alignment in goals and responsi bilities. Not the technical-legal contract, but a social cultural network binds the employees, them being hindered in their activities. has to be found between the values and goals of individuals and the collective, between employees and organizations. The alignment with the employees (human Figure 2. An Alignment Model for Human Capital. Marrewijk, without Alignment 176 Marcel van Marrewijk and Johanna Timmers capital) takes place in three domains: \"Corporate Identity and Values\\"Human Operations\" and \"Human Development\". Per domain, the objectives are named, acquiring dedication, commitment and motiva tion. Per domain, the corporate interests, objec tives and options, have to be aligned with the efforts, motivations and competences of the employees. A, B and C have to be matched A', B' and C'. HCM primarily aims at establishing and supporting this alignment between the individual and the collective. A suc cessful organization-employee alignment results in commitment, dedication and loyalty. These values directly relate to productivity, while (employee)-satisfaction, which is often measured as an indicator for the EFQM's management area \"employee results\does not have a significant contribution to corporate performance (Timmers et al., 1998a, 74 pp. and 1998b, pp.). Next, the HCM-activities will be arranged per domain. Corporate identity and values In the first place, HCM aims at the proactive development and stimulation of the organization's identity and corporate culture. Collins and Porras (1994) have shown that a strong company culture is of great importance for survival and corporate success. The company's mission and supporting values greatly influence the corporate identity, policies, institutional structures and thus corpo rate behaviour, also with respect to its employees. Successful companies - Collins and Porras of visionary companies - speak pay much attention to the communication of the company's vision and the organizational values. This way the corporate identity can inspire employees to perform to their best abilities. According to Drucker (1952) management also needs a corporate identity as reference: \"the new tasks demand that the manager of tomorrow roots every action and decision in the bedrock of principles, that he lead not only through knowl edge, competence and skill but through vision, courage and integrity\". Creating a company culture is a two way street: only top down would never work (van Marrewijk et al., 2001). Alignment between personal and company-values characterizes suc cessful organizations. The increasing number of \"values-driven-organizations\" (Barrett, 2000) shows the importance of this dimension3 of organizations. Human operations The next domain, \"human operations\repre sents all tasks and execution of planned activities. operational and supporting processes take place in a context of dialogue and alignment, employees show dedication and high produc tivity. In his classic The practice of management (1952) Peter Drucker refers to the Hawthorne experiments described by Elton Mayo (1928) taking place at Western Electric Company in Illinois. They were conducting a scientific man agement research to find out what level of electric light intensity lead to the highest pro ductivity. The female workers showed higher productivity levels at any light intensity, simply because, instead of being a replaceable resource, they suddenly received attention for any movement they made. In a process of alignment between individuals and the organization, the mission, vision and company goals are formulated and eventually translated into individual tasks and responsibili ties (policy deployment). The situation in which the ? organization finds itself is the organization strategically oriented towards flexibility, creativity, effectiveness or efficiency4 - and the individual capabilities determine what role managers and employees opt for in order to carry out the appropriate tasks. Also, the degree of empower ment and individual performance indicators are determined in mutual agreement. Aligning the personal characteristics, attitudes and competences of the available human capital with the collective needs of the organisation, essentially differs from the top down approach of resource planners. This field of HCM links perfectly to features of the EFQM model, the Business Balanced Scorecard and the Four Phase Model.5 with When Human Capital Management ill Human development Organizations innovate and technologies and markets change. To be able to keep up with these developments, employees - the human capital - need to develop as well. New knowledge and skills have to be learned and competencies trained. At the organizational level, \"learning\" is established when organizations: structurally determine the need for knowl edge and a collective competence profile, and use this as a basis for human develop ment, and building learning \"loops\" within the company processes, through which they can continually improve themselves. this domain, an alignment needs to be established, between the tempo of the develop ment inside and outside the organization, and the direction and extent of competence development with respect to individual employees. The goals and approach of \"Investors in People\"6 are very well connected to this crucial aspect of HCM. The individual needs of professionals (knowl edge workers) in particular, are largely aimed at the possibilities for development that a job and an employer offers. A personal approach, directed at facilitating this need attuned to the possibili ties and needs of the organization, supports the motivation of the individual. Empirically tested monitoring tools7 are available to measure and evaluate individual motivation. Aligning individual and collective interests per domain is a discipline by it self. Human Capital can also be regarded as the umbrella term of three separate management disciplines: In which Human Asset Management pre Figure 3. HCM. dominantly covers \"operations\" and Human Potential Management corresponds with Human Development.8 To conclude: collective - individual alignment on issues related to \"corporate identity and values\\"human operations\" and \"human development\" will improve productivity, support workplace climate, and stimulate human devel opment. The HCM-activities strengthen the commitment, dedication and motivation of individual employees, while companies show an increase of their basic assets: material (financial performance), commercial, socialization and creative asset (or intellectual capital) (Hardjono, 1995). 5. Comparing Classic Personnel Management, HRM and HCM A mutual framework A lot of research exists on the different (strategic) roles that the HRM function can fulfil within an organization (among others McWilliams (2001), Ulrich (1997)). In ences discussing the differ in the three stages of development of people management, we will specifically deal with the operational activities that the HRM function performs in bridging policy and practice. It is customary to divide the activities of the HRM function into a number of main categories (Kleiman (1997), Mensink (1991) and Paauwe et al. (1997)). If we consider these approaches next to each other, we come to the following classification of HRM activities: Personnel planning; Recruitment and selection; Socialization; Work and task systems; Training and development; Assessment; Rewarding; Participation. We will discuss these briefly. In the term per sonnel planning, we understand all activities that are related to the influx, throughput and outflow Within Management 178 Marcel van Marrewijk and Johanna Timmers of personnel. In the light of the tasks that need to be performed and the desired competency levels, from time to time a \"tableau de la troupe\" is put together, from which measures with regard to the necessary amount of personnel result. The recruitment and selection activities are self evident. Socialisation is the process in which the employee is familiarized with the organization and with its values and norms. Socialization takes place in an informal way, but is also sup ported by formal systems. In work and task systems, we include those activities that aim for developing such task-descriptions and work systems, which contribute to improved efficiency and effectiveness, while leaving employees sufficient degrees of freedom. This feature also includes supporting the quality of the workplace. and development are activities that are being used to maintain and promote the com petencies and talents of the employees, in relation to the developments inside and outside the orga nization. On the basis of positive assessments results, line managers can propose periodical salary increases. Rewarding holds elements such as job evaluation, reward systems and the system of primary and secondary terms of employment (perks). Participation is connected to all systems that are being developed and implemented, that aim at promoting the involvement of the employees (such as councils, consultation and participation). Shortly summarized: the HRM function is oriented towards the 3 Rs: to recruit, to retain and to rouse the workforce; all systems (activi ties) have in common that they try to control the factor labour in the organization. Changes in Goal M?M e HflCftMnttcnr '.' met opt?cno^ e? ' ' trfatoaodi vatosaoa Recruit Rewarding . ' Work ?id taak systems + Ti^ Retain Jm*t*n & * Figure 4. Human Resource Management. society and organisations will bring companies to adopt HCM as a new, more adequate approach to challenge these new circumstances. Analysis of the differences between HRM and HCM HRM has a number of functional tasks - the 3 Rs ? and deploys a number of traditional instruments in order to realize these tasks. A major problem ? as we have shown above ? is that the HR function is manoeuvred into a splits and that it operates out of an obsolete paradigm. In the current approach to HRM, the three goals are usually striven for separately. Per formance on these goals is being assessed on the basis of, for instance, the average vacancy time, the structure of job descriptions in comparison to other companies, the educational facilities that are being offered and the extent to which these are used, the number of executed performance assessments, absentee figures, etcetera. The tactical goals (the 3 Rs) can produce conflicts or unworkable situations at operational levels, for example when training and education becomes an issue. An illustration: in the case of a Personal Training and Development Plan (PTDP), personal shortcomings come to light very sharply. The chance that this information is discussed at an assessment meeting, and that this might have negative impacts for the person at hand, creates an atmosphere of mistrust, which can ruin an effective policy for human develop ment. HCM is values-driven, striving to bring about dedication, motivation and commitment of employees. It is not oriented at achieving functional goals, but at the policy effect on the chosen values. Of course, the 3 R's remain important and, as far as they are still suitable for the purpose, the traditional instruments will be used, but now dosed and aligned to the realiza tion of the three values. In Figure 5, HRM, and her instruments, are differentiated into three domains. For example, what can the policy of recruitment and selec tion add to operations, to the company culture and to the development and competence profile, etcetera? Training Human Capital Management 179 Human Capital Management Recruit Rwsuitmentand Selection; function profile of vacancies Pasoond punning : and amount pcofic of cmdiaBties cBCBcted at sttinnacoB and values Assessment Reward Reaxotment and Selection: educational pcofle of ^ Pexsonnd pttfmmoc natuse Retain ai Work and task systems oflflfffHWinffiiit 9 andamount_ A fflyftSlllCIlt Rewaid Rewatd Rouse FIDP Participation Serialization Tiak]ing& development Participation Participation Goal * Dedication * Figure 5. Human 4 Motivation Capital Management. We ment have summarized between the most important The cleared elements traditional of instruments will and have have to be \"manipulative\" and therefore, will founded \"controlling\" to be aligned differences of the personnel principles (the new paradigm). A number of instru policy are still missing. ments HRM has not yet been to the creation with of a proactive regard company culture and corporate identity; it there instruments fore has no appropriate for this. on \"alignment\" in focusing between Moreover, the employee and the collective, HCM aims at a between the individual (permanent) dialogue is and the organization. The dialogue employee an outstanding instrument by which is alignment to bring about align reached. Starting a dialogue ment non-dominant After implicates positions. is not \"telling\" from all, the basis of the dialogue a hierarchical but patronizing position, from a basis of equivalence between \"involvinghe negotiation partners. By doing so, the current call for respecting the integrity of the individual and space for creating (agency) of the individual self-preservation come out well. the to the newly of people chart:9 see Figure It has the three stages of develop in the following management 6. that in some the aspects the to be noted qualifications HCM replace preceding position (paradigm, in other whereas extensions munication). of employee, orientation), concerns it mostly aspects intervention, com (such as selection, 6. Making HCM operational HCM return Classic HRM includes and transcends HRM, a offers surplus value with Personnel As Management. keep context, which in instruments regard to said, many their applicability within the HCM from manipulative In this paragraph practical that they are free provided and controlling elements. we will introduce two of Human applications Capital ? Asset The first one Human Management. - is presently Management being implemented at Stork Business Services. The second example consists of recent between dialogue is a vital zation, which experiments10 the employee in improving the and the organi in realizing HCM We includes and transcends HRM consider HCM as a more advanced stage of HCM addi instrument development incorporates in turn, includes tional values. HRM, scends Classic Personnel Management. in personnel management. HRM's features and provides the HCM goals and tran 180 Personnel Human Marcel van Marrewijk and Johanna Timmers Management can be managed, aimed Human at and controlled: Resource people can be managed. Human Management resources command communication Capital Management make it drink! You can lead a horse to water, but you cannot Authoritarian, Top-down Controlled Standardized Temptation Communication directions in all sorts of Alignment Dialogue: interactive communication information tasks and job descriptions Open communicatJon Dialogue Individualized of description of roles, indication tasks and responsibilities aimed at Individualised tasks and job descriptions, global responsibilities_ aimed Training Training aimed at function at multi-availability Training development Employees cost money still cost money, Employees output needs to be generated Selection professional) on the basis of problems_ orientation Interventions problems_ Functional optimal Employees professional and output (esp. Selection personal and fulfilment of PTDP a are partners, with whom discussion about costs can be Selection on the basis of the job on the basis of personal description_ Interventions operational Instrumental competencies_ on the basis of tactical held_ on the basis of personal and competencies values_ on the basis of Interventions strategic orientation problems_ orientation Strategic Figure 6. differences between Classical Personnel Management, HRM en HCM. Human Stork Asset Management Industry Services (SIS) employs 3000 tech and experience skills, behaviour Just as with any other business total of personnel managed of all personnel. this sum process has to be nicians. Doing temporary assignments they work in various such as related industries technically food processing, refineries, engineering, etc. SIS operates tenance in a volatile with a structural shortage of well-qualified nical professionals. SIS management, main market tech such as ensure the effectively success, now and in the future. company's Since there is a shortage of technicians, Stork as a must be perceived and offer good employer new attract which will talented challenges employees Competence and retain the ones they want to keep. therefore improves development as individual meeting objectives, competencies to in order and Van der Hammen have, concluded Heintjes factors are critical for success. that the following Job Proficiency and retaining talented technicians Attracting The right man in the right place culture and competence Supporting development The value scheme Industrial Services is pri to which their to their employability, as it improves Stork's profile in the market. much a wide of customers and their With variety Stork demands, specific operational increasingly care to match needed supply and demand very as a whole for SIS' business fully. Furthermore, as much as for their individual employees, they want to create a successful in a dynamic can do well existence, professional based on what environment, they in the future instead of what they including the of Stork determined by the level marily collective adds value job proficiency customers' business dynamic best Industrial tial degree proficiency described in an increasingly processes, In order to become environment. the Full Service Provider a substan job is of qualitative is required. and quantitative have done well competence training schemes. manage in the past. a database SIS has developed profiles of all and programmes This way SIS has been human potential their employees, their assignment better able to and Job proficiency, sum total of as SIS the by knowledge, development Human arrange the best fit for their individual with respect to available assignments. Capital Management The dialogue 181 employees Specific jobs are evaluated with respect to the demands of the client as much as the competence individual the achieved by development employee. Jobs or assignments revenues but also offer business tunities. Database The Human Asset are not learning only oppor of \"corporate identity and values\" to examine, in hiring a person but it is important the also whether (potential) continually, can agree with of the the identity employee of company. This can be a task for an employee The the HRM function. result of a well between and alignment monitoring performing and the organizational the individual- standards the organization and values will be, that within commitment will occur towards the \"corporate identity and values\". With regard to maintaining the dialogue within the work situation, the direct manager has a role to play. He or she is in a to build a relationship of trust with his position or her subordinates. In the scope of the dialogue two HRM within instru the work situation, and job assessment We would like to add, management. performance Gordon (1997, 1981), a third assess following and exceeds both evalua encloses ment, which known: tions: assessment the motivational assessment.11 and performance management domain part of the \"human operations\" mainly assessment of the HCM model. The motivation is mainly Job are ments are already In the domain to provides HRM recruit, retain and select employees proactively can match the flow], while operations [managing to new assignments much available employees Also Human effectively. is part of the deal: they and facilitate competence develop training efforts in the market. Management a tool department more and efficiently Potential Management can monitor ment with and compare programmes the results and evaluations Competence a has truly become development SIS is better able strategic activity. Furthermore, to respond quickly to changes in the market. HAM offers Stork a better picture Developing as to where knowledge is available. Clients would is present at SIS also like to know what expertise and if hired hands have tions or not. Developing and will be wider introduced manifests the trends above. We will example. the necessary qualifica HAM is still brand new shortly. Indeed, it this article has described with a second practical stated continue of \"human part of the domain but is not limited to this: it also development\fans out to the domains of \"human operations\" and \"corporate identity and values\". clear that job assessment Figure 7 makes centralize management mainly performance interests assessment, of the and the we In the preceding paragraph, that the dialogue between employee isation goals. is the best In practice, instrument have and organ to realise HCM place.10 Next, instrument within Human on this have taken experiments we will introduce this HCM the outlines of our model of In the motivation employer. is the central the employee however, for the discussion the identity, are the the which Capital Management. person. Starting point individual goals and Manager Job assessment Perfor Management Motivation assessment Employee Figure 7. Three types of dialogue. 182 Marcel van Marrewijk and Johanna Timmers is striving for. From this central issue employee out to what is aimed at working the discussion experiences alignment with degree the employee and its identity, and the goals of the organisation room to what extent the employee experiences for individual tion within between ation? development the organization. and optimal motiva How big is the gap situ and the \"ideal\" work It appeared had been that mistakes \"easy wins\". in the in the past, delicacies made had occurred the mutual which bothered relationship, employee delicacies but had not yet been mentioned. could easily be solved. Next These to that, the current In what way can, in a mutual process, this is taken the employee gap be levelled out? When room for in this way, and experiences seriously in his or her individuality, the result will bringing for the activities that have to be be motivation done. domain activities into The the be, that within where of \"human daily operations\can be turned take place and motivation result of this will dedication occurs towards the in the atmosphere asked for measures employees It appeared that, for example, of daily work. they on a not move in could they had project, because or because the to wait for 1 management approval mandate they could act towards other asked parties was not clear. Finally, the employees in the context of their for things that were with which personal requests shorter or different If we somewhat resemblance model. The scrutinize further with development for education It concerned and growth. and training, requests for hours et cetera. working these the three three types of requests that there is a clear domains in our to the corpo occur usually in what the identity and action, it is striking organization. Practical example rate identity because there company easy wins are linked and values. Delicacies is a discrepancy stands for (\"corporate It is possible we that the thought now settles in, that as are making a plea for as much tolerance and that possible from the side of the employer, we to allow in fact invite the employer the employees all, when to have you where After their way in everything. with the have such discussions in and what the employee values\") experiences or not the treatment of the company (whether of the direct manager). the behaviour through are in the field of daily work The measures of \"human opera clearly linked to the domain in the context tions\". And finally the requests of are and growth the personal development of \"human devel clearly linked to the domain an indication In this, we can recognize opment\". a good is indeed the proposed dialogue to create alignment and to opera instrument of Human tionalize the model Capital that Management. employee, of attention, important too much? unit this The he or she is put at the centre in which his or her goals have an not tend to ask place, do employees conducted multinational in a business shows that motivation in 1999/2000. the in A project, of a large Dutch is not results the was of case. assessments Conducting there introduced the discussions asked from employees the motivation assessments) in three place, categories, employees (the things their direct managers could A remark has to be made the motivation assessment. about the nature of In practise, be classified see Figure 7. In the first called asked what managers do not automatically that managers Following right note in these discussions. (in: Dowling and Sayles, 1978, 1971) it appears strike the Rogers the moti \"Personal Development\" \"Daily Work': \"Easy Wins\" (Human (Human Operations) Figure 8. Results of the motivation (Corporate Identity and Values) assessment Development) (and the relation to the HCM model). Human vation assessment Because Capital Management dedication 183 needs to have are a non-directive in a private chosen character, atmosphere. and it has to be conducted managers will be strengthened. of employees This dedication has a direct and very strong effect on the development of productivity. The mutual effect of the three goals supports the emergence of the desired development of the organization. A challenge for the future will be developing usually to for their qualities, patience and the tendency cut the knot for employees, this attitude can be a pitfall for them when motivation conducting assessments. A dominant attitude of the manager is harmful for the motivation assessment. It appears that employees experience this help as disrespectful, however well meant it may be. If this situation occurs, employees are no longer to expose their deepest feelings with regard to their own values, standards, goals and The same reaction occurs should the have a judgmental attitude towards the issues that the employee brings forward in the assessment. Non-judgmentalness and non-con trolling qualities are necessary conditions for a assessment. Luckily, these qualities can be learned by managers through training. Finally, experience from practice shows that if the motivation assessment is conducted in a sphere of complete openness and good commu nication, job assessment and performance man agement eventually can be lapsed. 7. Issues for the future Capital Management encloses and exceeds HRM. It offers added value by, firstly, from a fundamentally different starting point, in which the integrity of the individual has a central place. This makes it possible for to use the complete potential of the human capital. Secondly, HCM involves the cultural dimension in its competence, and HCM introduces a number of instruments through it can effectively stimulate company culture, as well as bring about the mutual binding of employees and the binding with the organi zation. Thirdly, HCM is able to align individual and collective educational issues on primary operations in a better way. HCM aims at the creation of commitment of employees, a commitment that goes further than contractually exchanging services. Through a permanent dialogue between individual and collective, motivation will be stimulated and the instruments to quantify commitment, motivation and dedication. The administrative function of personnel and HRM continue to remain, even though we think that in many cases it be better to outsource this. The realiza tion of HCM lies with line- management. The role of the HRM professionals becomes that of an internal advisor, in service of the line-man agement, aimed at facilitating and accompanying \"on -the- job\" training and coaching. Alignment will play an even larger role in all sorts of control and co-ordination issues. Other disciplines can also use alignment techniques (marketing, product design, and ergonomics). A challenge for the future lies in further investiga tion of these fields as well as the field of HCM. Recently, the European Commission has committed research money to realize its ambi tious social goals. The Erasmus University has received an assignment to develop a European Sustainability Framework, and an initiative has been taken to make a ranking of the 100 best European employers. and loyalty, dedication and moti vation will be important distinguishing variables. In order to make better use of the human poten tial, academics and companies must co-operate to engage in further research in an energetic way. 1 2 See e.g. Ken Wilber (1996, 2001). Wilson Learning Corporation, Study of Business Performance involving 14 organizations and 25,000 employees. 3 See: D. E. Beck and C. C. Cowan (1996), Spiral 4 See: T. W. Hardjono (1995), Ritmiek en Organisatie 5 [Four Phase Model]. See: M. van Marrewijk and T W Hardjono, \"The European Corporate sustainability Framework form willing motivations. manager management would motivation Corporate moreover Commitment Human working HCM which Notes Dynamics. Dynamiek 184 Marcel van Marrewijk and Johanna Timmers managing complexity and corporate transition\in: Journal 6 of Business Ethics (2003). Investors in People' is an U.K.-initiative Its aims to develop and make better use of the human capital in organisations. It focuses on the education and training of 7 personnel. These measuring methods are developed and tested by the MV|iP Institute. The MV|iP Institute, P.O. Box 428, 8 NL-2300 AK Leiden. Stork Industry Services coined the term Human Asset Management, but they specifically include competence development, which we separated and named Human Potential Management. In paragraph 6 we will elaborate in short on Stork's practices in people 9 management. The model is based on: Kluytmans & v/d Meeren (1992), 10 and Paauwe (1996). The MV|iP Institute has developed the dialogue method. She has a tested instrument to do the motivational talk, and also provides training for management to learn how to do this effectively. The MV|HP Institute: P.O. Box 428, 2300 AK Leiden, the Netherlands. 11 Gordon names this the \"Periodical Planning Conversation\which in our view points too much to the \"normal\" job evaluation. References Barrett, R.: 1998, Liberating the Corporate Soul (Butterworth Heinemann, Woburn). Barrett, R.: 2000, Building a values-driven Organisation (Butterworth Heinemann, Woburn). Beck, D. E. and C. C. Cowan: 1996, Spiral Dynamics (Blackwell, Oxford, U.K.). Collins, J. C. and J. I. Porras: 1994, Built to Last (Harper Business, New York). Dowling, W. E and L. R. Sayles: 1971, 1978, How Managers Motivate - The Imperatives of Supervision (Mc Graw-Hill Kogakusha, Tokyio, Japan). Drucker, P.: 1952, The Practice of Management. 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Wright: 2001, 'Strategic Management of Human Resources for Global Competitive Advantage', Journal of Business Strategies 18(1), Spring. Mensink, J. C. M.: 1991, Dynamiek in Human Resource Management ? Talenten benutten als beleid (Lemma, Utrecht, the Netherlands). Newstrom, J. W and K. Davis: 1997, Organizational Behavior, 10th ed. (McGraw-Hill, New York, U.S.A.). Paauwe, J. et al.: 1997, HRM in China - een onder zoek naar het aantrekken, behouden en aansturen van hoger management personeel in China (Diode, Rotterdam, the Netherlands). Timmers, J. G and M. A. Mennes: 1998, Fundamentals on the Design of Satisfaction Questionnaires (The European Foundation for Quality Management, Br?ssel, Belgium). Timmers, J. G. and M. A. Mennes: 1998, Coverage of Satisfaction Questionnaires: an Analysis of the extent of coverage of 40 Satisfaction Questionnaires in use at Major Western Companies (The European Foundation for Quality Management, Br?ssel, Belgium). Ulrich, D.: 1997, Human Resource Champions: The Next Agenda for Adding Value and Delivering Results (Harvard Business School Press, Boston, MA, U.S.A.). Wilber, K.: 1995, 2000, Sex, Ecology and Spirituality (Shambhala, U.S.A.). Van Linden van den Heuvellsingel 7, 3135 KH Vlaardingen, The Netherlands E-mail: marcel@vanmarrewijk.nl Timmers@few.eur.nl