The changing world of work and organisations HR Management

By the end of the twentieth century, the firmly established nature of work and organizations was changing so dramatically that some observers had foreseen the ‘end of work’ (Rifkin, 1995) and workplaces without jobs (Bridges, 1995). Changes are being brought about through the new information and communications technologies, and through the way in which organisations are responding to the need to achieve and maintain their competitive edge in increasingly global markets.

Castells (1996) argues that a new ‘network society’ is emerging. The new technologies are making economies interdependent, organised around global networks of capital, management and information, and thereby are profoundly transforming capital and labour. While capital and information flow around the globe, unconfined in space and time, labour is local: individuals live and work in time and place. ‘Labor is disaggregated in its performance, fragmented in its organization, diversified in its existence, divided in its collective action’.

For the future, according to Bayliss (1998), many of the traditional boundaries and distinctions – between organisations, between jobs, between employment and selfemployment – will shift or become eroded. The relationship that individuals will have with employing organisations will change: individuals will move more frequently, have projects rather than long-term jobs, work in different locations and at different times, make their own work, no longer have fixed working lives.

Many careers will be ‘boundaryless’, transcending traditional boundaries between organisations (Arthur and Rousseau, 1996). To express these changes in metaphors: whereas during much of the twentieth century jobs were like pigeon-holes, or boxes piled up to form organisations, at the start of the twenty-first century they are more like nets and networks. To be competitive, organisations have had to become more flexible, innovative, qualityconscious, customer-oriented, constantly improving their performance.

During the past 20 years or so they have undertaken what amount to massive experiments with various ways of achieving these ends. During the 1980s the imperatives were excellence, world-class and ‘lean’ manufacturing (a collection of techniques contributing significantly to organizational performance), and total quality management (TQM), resulting in downsizing, delayering, and breaking bureaucracies down into business units.

During the early 1990s the new soft approaches were multi-skilling and the learning organisation, while the hard approach was business process re-engineering (BPR). In the later 1990s, attention turned to knowledge management and innovation, with a further emphasis on teamworking. As the twenty-first century opened, the management and measurement of human capital, ‘the contribution of human skills and knowledge to the production of goods and services’ (Scarborough, 2003: 32), became recognised as key issues.

Thus wave after wave of new approaches have brought about new tasks, new ways of working, new roles, relationships and skills, so that lifelong learning and human resource development have now become central to the effectiveness of organisations. For example, TQM (see also Chapter) holds that quality is achieved through continuous improvement in the processes, products and services of the organisation: Deming’s ‘journey of never-ending improvement’ (Hodgson, 1987: 41).

It requires new relationships between organisations and their suppliers and customers, and calls for the transformation of the management of people ‘so that employees become involved in quality as the central part of their job’ (Sheard, 1992: 33). Business process re-engineering, which radically restructured bureaucratic organisations by focusing on their lateral processes rather than their vertical functions, not only ‘downsized’ organisations, but also redesigned the nature of jobs within them:

Whereas work had previously been packaged into jobs, Martin (1995: 20) argues, it now had to be reconstructed into the ‘competences’ needed to achieve customer satisfaction. ‘The future will see a world based more on skills than on organisations’ (Tyson and Fell, 1995: 45). If TQM and BPR can be seen as natural heirs – in spirit if not in practice – of scientific management and Taylorism , then knowledge management could be recognised as an echo of Trist and the Tavistock school (Pugh et al., 1983).

They saw the working group as a socio-technical system: to be effective, the introduction of new technology had to take that into account. Fifty years later, it is once more being recognised (Malhotra, 1998) that it is people who make the difference. The wealth of information generated by information technology becomes meaningful and of competitive advantage to the organisation only when knowledge workers share, interpret and elaborate it.

This enables them to anticipate challenges to the organisation’s goals and practices, and thus to adapt the organisation in appropriate and timely fashion. However, knowledge is now no longer regarded as ‘abstract, objective’ truth but a cultural construction within ‘communities of practice’, and hence ‘essentially pragmatic, partial, tentative and always open to revision’ (Blackler, 2000: 61).

Organisations are beginning to understand that different kinds of knowledge have to be managed in different ways: some knowledge is explicit, and can easily be documented, whereas other knowledge is tacit. ‘The knowledge needed to develop a new product is largely in people’s heads . . . [it] cannot be written down, because an individual may not even know it is there until the situation demands a creative response’ (Dixon, 2000: 37).

Importantly, argues Scarborough (1999), HR managers need to have a direct involvement in this area. It is now also recognised that, although the UK has shone in invention, it has lagged in innovation: ‘“the creation, successful exploitation and impact of new ideas at all levels – the economy, sector, enterprise, workplace and individual”’ (Guest et al., 1997: 1, quoting from the Economic and Social Research Council’s Innovation Programme material).

However, innovation is ‘the source of sustained competitiveness in organisations’: Research suggests that financial results account for only 50 to 70 per cent of a firm’s market value, the remainder being attributed to ‘intangibles’ (Ulrich and Smallwood, 2002), such as intellectual property and human capital. Scarborough (2003: 32–34) suggests that the human capital approach is ‘more than a recycling of cliches about the importance of our employees.

It also reflects a shift in thinking about ways to make the best use of the whole range of abilities that people bring to the workplace.’ He cites the television programme Jamie’s Kitchen, in which cook Jamie Oliver turned a team of For multi-dimensional and changing jobs, companies don’t need people to fill a slot, because the slot will be only roughly defined. Companies need people who can figure out what the job takes and people to do it, people who can create the slot that fits them.

Moreover, the slot will keep changing. (Hammer and Champy, 1994: 72) Creating, disseminating and embodying knowledge – tacit and explicit – becomes a key strategic resource to be leveraged. It holds the key to unlocking the organisation’s ability to learn faster than its environment is changing. In summary, learning and development lie at the heart of innovation in organisations. (Guest et al., 1997: 3) inexperienced and unemployed young people into top-class chefs. ‘This blending of new skills and attitudes into high-level performance sums up exactly what human capital can be and why it is so important to business’ (Scarborough, 2003: 32).

Ulrich and Smallwood (2002: 43) include learning or knowledge management among the seven ‘critical organisation capabilities that [create] intangible shareholder value’: ‘Learning capacity is an intangible value when organisations have the ability to move ideas across vertical, horizontal, external and global boundaries.’ However, accountants have traditionally not found satisfactory ways of measuring human capital, and so have treated employees as costs to an organisation rather than assets.

In the increasing effort to achieve competitive advantage this approach is now changing, and the Accounting Standards Board now recommends that human capital policies and practices should be included in company annual reports (Hammond, 2002). It is also becoming clear that employees are beginning to recognise the need to invest in their own learning and development – their human capital – and so employers have to take steps to retain talent, nurture it, and manage it effectively, which in turn calls for effective means of measuring human capital, which Mayo (2002) discusses.

All these changes are of considerable significance for individuals and organisations, as we shall shortly see.

  • The strategic importance of learning and development

‘Change matters more than ever before’, said the president of the Chartered Institute of Personnel and Development (CIPD, formerly IPD) in his message in the Annual Report for 2000 (Beattie, 2002: 2–3). ‘People are our only source of differentiation and sustainable competitive advantage. Essential to that is learning.’ Hence the director-general of the IPD claims that ‘staff management and development will become the primary weapon available to managers to generate success’ (Rana, 2000).

The continuous learning and development of individuals are, therefore, of crucial and strategic importance to organisations, and thus also to the overall economy. This national significance is now fully recognised by the government which, for example, in 2001 set up the Learning and Skills Council (see Chapter ), and human resource developers and trainers now have to address the new responsibilities of their increasingly strategic role (Chartered Institute of Personnel and Development, 2002a).

  • The need for individuals to learn and develop

The new ways of working are demanding not just extensive training in new task skills, but completely new ways of thinking about work, doing work, and relating with one another. Individuals at all levels need to be able to challenge traditional ways of thinking and working; think and work ‘outside the box’ of traditional job descriptions; and work without prior experience, clear guidelines or close supervision; be flexible, prepared to change, undertake new tasks or move to a different organisation.

In the struggle to ‘think global and act local’, organisations need people who have ‘a “matrix of the mind’’’; sharing learning and creating new knowledge are among the key capabilities that organisations must have (Ulrich and Stewart Black, 1999). Overall, this amounts to the need for using high levels of cognitive skills, which will be discussed below.For much of the industrial age, such abilities, when sought, were expected mainly in the upper echelons of organisations.

In the twenty-first century, competitive organizations need to find these abilities much more widely in their workforce, in what Castells (1998: 341) calls the ‘self-programmable’ labour in the global economy. This has ‘the capability constantly to redefine the necessary skills for a given task, and to access the sources for learning these skills’. Nevertheless, there will still be work that does not require those particular abilities – for example, serving in fast food outlets – jobs that will be undertaken by what Castells calls ‘generic’ labour, which, lacking self-programmable skills, would be:

(It should not be assumed, however, that all jobs giving personal service demand lowlevel skills: they may require high levels of social, emotional and other non-cognitive intelligences (Gardner, 1985, 1999; Pickard, 1999b).) Although many employers are now recognising the need to invest in their employees’ learning, it is also held that individuals must take some responsibility for it; that they must invest in their own learning and development to ensure their own ‘employability’ (Arnold, 1997).

This personal investment changes the balance of the ‘psychological contract’, and raises the question of who owns the individual’s learning (see Controversial Issues at the end of the chapter).

  • The need for higher-order skills

According to Wisher (1994: 37), among the ‘competencies that occur frequently in the most successful clusters of different organisations’ are conceptual, ‘helicopter’ and analytical thinking. Organisations are thus demanding more of their employees than new or enhanced task skills. They are requiring higher-order thinking skills that are not easily picked up within the constraints of many existing jobs.

However, there is a long way to go for many organisations. According to Myers and Davids (1992): Cooley (1987) reports how the Lucas Aerospace Shop Stewards’ Combine Committee, as long ago as 1975, recognised the value of human capital. It challenged the organization not to lay its highly skilled workforce off when its market was failing, but to retain it by moving into new markets for ‘socially useful’ products:

As this chapter will show, ‘ordinary people’ have the capacity to learn and develop. ‘human terminals’ [which could] be replaced by machines, or by any other body around the city, the country, or the world, depending on business decisions. While they are collectively indispensable to the production process, they are individually expendable . . . (Castells, 1998: 341) workers are a resource which has not been well understood by management in the past.

Bluecollar workers in particular have been regarded as a static commodity incapable of innovation and self-development. Consequently reservoirs of skill and ability remain untapped. What the Lucas workers did was to embark on an exemplary project which would inflame the imagination of others. To do so, they realised that it was necessary to demonstrate in a very practical and direct way the creative power of ‘ordinary people’.

Further, their manner of doing it had to confirm for ‘ordinary people’ that they too had the capacity to change their situation, that they are not the objects of history but rather the subjects, capable of building their own futures.

  • The need for organisations to invest in their employees’ learning and development

As well as training and developing new employees, organisations have to invest in their human capital and, importantly, not just in their knowledge workers but in their lowerskilled employees as well (Chartered Institute of Personnel and Development, 2002a).

This means that they have to train and develop their existing workforce, facilitate their learning within a learning culture, and with appropriate resources. Hence, human resource managers need to understand the processes and nature of the learning of the higher-order and other task skills in order to be able to facilitate that learning and development. It is the purpose of this chapter to explain these.

  • The need for a learning society

The need for learning and development is not just an issue for individuals and their employers. It is now widely recognised that we need to become a learning society, in which there is a culture of, and opportunities for, lifelong learning. To this end, the government has introduced a number of initiatives.


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