Human Resource Management Practices

In order to get management to listen and to gain credibility, HR managers would do well to document the added value of HR investments and their impact on firm performance. Highlighting the contribution of HR practices requires us to answer two core questions: What is the added value of investing in HR functions and practices? How can the added value created by HR functions and practices be assessed?

In order to address these central questions, a broad overview of a four-step-approach (ORMM-approach) is given that structures the process of determining the added value of HRM: Based on a definition of outcome variables (O), research/theory-based cause-and-effect-relationships (R) between antecedents and outcome variables need to be modeled. Finally, the added value needs to be assessed by using adequate measures (M) and to be managed (M). Moreover, in view of the broadly discussed theory-practice-gap, it is shown how this edited volume supports both researchers and practitioners in their work by giving an overview of the contributions in this edited book.

We argue that although HR has a lot of tools and practices, it still lacks an overarching decision science that defines how organizations can obtain strategic success through their human resources. In order to support companies’ informed HRM decision-making, we recommend establishing a tradition of evidence-based HR practices. Evidence-based HR is a family of practices, combining research evidence with contextual information and individual judgment of HR professionals as essential sources of information. After having reviewed implications for HR practice from scholarly work, economic and societal trends as well as business tools from other managerial domains, we discuss the potential of Talentship as an evidence-based decision science and as a first step towards a general way of thinking to support HR decisions. As such, we believe the present chapter provides a significant contribution to the insights of practitioners and scholars into the further development towards evidence-based HR.

In this chapter, we present research-based insights into where and how, and under what circumstances, Talent Management (TM) adds value for an organization. Since 2008, we have been performing a regular large-scale TM study to investigate the value of TM where we combine academic concepts and extensive practice-oriented analytical procedures. A total of 2,660 respondents within 21 large internationally oriented organizations in Europe participated. The outcomes show that organizations experience difficulties in effectively designing TM. In this chapter, we provide avenues for resolving this. We provide clarity on the components of an effective talent definition and strategy, and explain why an exclusive talent-differentiation strategy is preferable. We explain why it is extremely important that all relevant stakeholders have the right perceptions of this definition and the differentiation strategy. More than ever, it is today important to show the financial value of investments in what are often specific and expensive TM practices. We show the advantage of using analytics to enhance the effect that both current and future TM investments have on the attitudes and behaviors, such as intention to leave and commitment, of relevant employees. These are variables that can easily be transformed into a financial business case. TM does not necessarily involve investing in standard TM practices; there are many alternatives that are worth considering, such as investing in individualized arrangements (i-deals) and improving employees’ opportunities to perform. Also it is recommended to clearly differentiate the organization’s employment deal compared to competitors on talent. Based on our research, we provide insights that could enable organizations to maximize the value of their TM approaches and be well prepared for the future.

The attraction and retention of superior talents is increasingly becoming a key challenge for many organizations. To cope with the ongoing shortage of talented people, academics and practitioners agree on the pivotal role of an attractive employer brand to succeed in the persistent war for talent. The evaluation of employer brands is therefore of critical importance for human resource managers to assess their potential to attract talents and to benchmark the effectiveness of their employer branding activities. However, appropriate key figures to evaluate employer brands are scarce. In light of this shortcoming, the chapter presents a monetary approach to evaluate employer brands. Moreover, this study investigates the impact of relevant employer branding factors on the monetary evaluation of employer brands. The presented employer brand value score model provides a monetary key figure that allows a detailed and monetary evaluation of employer brands in comparison to relevant competitors and with respect to different target groups. Results of the empirical study support the validity of the model to capture the evaluation of employer brands in a monetary key figure and highlight the importance of a segmented approach to employer branding.

Current studies attest that companies are increasingly investing in the in-company further education of their staff. A substantial reason for this trend is the positive economic effect regarding the company’s success which these investments in further education are intended to accomplish. Education controlling is the specific part of HRM which deals with the checking of training measures as well as its success, utility and effectiveness via the sub-function that is the evaluation. Against this background the article concerns itself with outcome evaluation, which assesses the success of further education measures from an economic perspective. Until now there have been very few theoretical approaches, concepts and models with which one can determine the cost effectiveness of training investments. Business controlling uses economic key performance indicators (KPI) to verify the utility of investments made by the business. One of the most significant KPIs is return on investment (ROI). As the discussion of utility verification of in-company further education measures, especially in regard to the calculation of the ROI on educational investments and the need to establish what deficits exist in the theoretical and empirical foundations of education controlling, in the relevant subject literature has been controversial, this article will address the question how the economic effects of in-company training measures can be determined from a theoretical perspective. To this end, an overview of the current state of research regarding education controlling and especially the return on investment of in-company training measures will be given.

Expatriation is undoubtedly an expensive undertaking. Companies spend billions of dollars annually to send their employees on international assignments, and yet, based on recent reports (e.g. Brookfield Global Relocation Services, Global relocation trends survey report, Woodridge, IL, 2012) the return on investment (ROI) from expatriates has been altogether ‘unsatisfactory’. And so, year-on-year, organizations still struggle to define what international assignment success really means, and have made little to no progress on expatriate ROI in practice. More alarmingly, few have a clear strategy for how to measure expatriate ROI in a meaningful way (Cartus & Primacy, Global mobility policy and practices survey, Wilmington, NC, 2010). In addition, these same companies often have a short-term profit-driven focus, ignoring such forces as international careers and the “global war for talent.” Many also fail to run their mobility programs like they often do other areas of their business: with rational strategic practices, and a clear strategy and focus to ensure an acceptable level of “success” (McNulty and Inkson, Managing expatriates: A return on investment approach, Business Expert Press, New York, 2013). The question then is: if expatriates are among an organization’s most expensive employees, surely we ought to be able to justify the money spent and manage them more effectively?

A potential future scenario in the field of working time flexibilization is that input control (recording working hours) will be replaced by output control (recording goal achievement). The underlying work time model is referred to as ‘working time freedom’ or ‘results-only work environment’ (ROWE). The implementation of working time freedom presupposes a collective effort to change the organizational culture so that employee control over the time, timing, and location of their work becomes the norm for all or a large group of employees at all levels of the occupational hierarchy. Traditional attempts to flexibilize working hours (such as part-time work, telecommuting, compressed work weeks), by contrast, rely on individual agreements with select employees and require a supervisors’ permission as a basic principle. ROWE has so far been implemented in few companies in the US, but rarely in Europe due to legal restrictions. This chapter discusses functional and dysfunctional effects of a ROWE for different stakeholders based on first empirical evidence, theoretical models and expert interviews. While the added value of working time freedom is deemed to be positive, several management practices are outlined as prerequisites for its success.

In this paper we want to review and discuss research on the effects of occupational health management activities and services on different outcomes like employee health and well-being or absenteeism and other economic outcomes. In part I we outline goals and functions of occupational health management (OHM), then characterize typical occupational health promotion interventions and describe principles for implementing and organizing OHM. Part II focuses on different OHM activities and services such as creating healthy and safe workplace, reducing work-family conflicts, providing counselling via employee assistance programs and implementing health circles or stress management interventions. We will also discuss intervention design and sample studies as well as meta-analytic data relating to the effectiveness of these interventions. Finally, part III is about the economic impact of OHM. Findings from a management evaluation approach for OHM will be discussed. Then we will concentrate especially on data linking health promotion interventions to absenteeism and financial outcomes expressed as cost savings or cost-benefit ratios. The concluding part summarizes key findings of this paper.

When Commerzbank started taking a closer look at the concerns of women working in the bank in the late eighties, it soon became obvious that the dual role women faced as bank employees and mothers presented a great obstacle to their careers. To help solve this problem the concept of the “corporate childcare center” was developed. Then, in 1998, the first childcare facility was ready to be opened in cooperation with pme Familienservice. Being the first corporation in Germany to offer such an innovative service aimed at supporting the work-life-balance, Commerzbank was not able to draw on the experiences of other companies. For this reason it was decided that the activities would be supervised and scientifically evaluated from the start and over an extended period.

Based on theoretical approaches and empirical results from the research fields of temporary work and subjective well-being, the added value of investments in the temporary workers’ subjective well-being is discussed by taking the temporary work’s specific triangular employment relationship into account. Positive effects of an increased temporary worker’s subjective well-being on productivity, organizational citizenship behavior, health and commitment as well as a negative relation to turnover intention and the risk of counterproductive work behavior are presented in a summarizing cause and effect model. With regard to the return on investment, also limiting factors of well-being enhancing measures like genetic determination, adaptation processes, chosen reference persons as well as investment costs, misleading signals towards the workforce and the well-being promoting activities’ unknown effectiveness are included in the model.

This chapter broadens our understanding of the added value of employee financial participation. Financial participation is a generic term for the participation of employees in profit and enterprise results including equity of their employing firm. In general, there are two forms of employee financial participation: profit-sharing and employee share ownership (including options). While profit sharing is considered as an incentive for employees with positive individual and organizational level outcomes, employee share ownership adds to that a share holding element where employees may consider themselves as co-owners of the firm, including the possibility of voice and control. In this chapter we review the current literature on the impact of financial participation and show that in most cases the literature shows positive effects on outcomes. However, the literature also shows that financial participation is not a HR instrument that produces the results mainly in a generic way, but that the best results can be achieved when embedded in a configuration of HR policies and practices, which we call ‘high performance ownership system’.

Over the past couple of decades, employee downsizing has become a fact of organizational life, not just in the U.S. but, increasingly so, in other countries, with unprecedented levels of downsizing occurring in several countries during the last recession. Seen as being inevitable in an increasingly competitive global marketplace, the high levels of downsizing activity attest to the deep-seated belief among managers that downsizing enhances organizational efficiency and leads to improved financial performance. Critics, on the other hand, argue that benefits are illusory and point out that attendant costs, both visible and invisible, can make downsizing a relatively ineffective tool for creating firm value.

After a brief discussion of the factors that motivate and propel firms to engage in downsizing, we, in this article, examine the findings of extant research to assess whether downsizing does indeed improve organization performance. What we find based on our examination of 55 studies is that the findings are equivocal with very little agreement among researchers on the efficacy of employee downsizing to create organizational value. We explore possible reasons for the same and conclude by providing directions for future research that, we believe, will provide the insights that scholars and managers need to better understand the complex relationship between employee downsizing and firm value.