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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. CompanyXs 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

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 UKs 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. Steves 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. Steves brother-in-law, James (Janes
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 Henleys 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.

Figure 1 The HR Value Proposition

(Henley Business School 2012a


adapted from Ulrich &
3.1. CONTEXT Brockbank, 2005)

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

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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
CompanyXs 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 Centres (2001) dimensions of
culture for the UK, featured in Figure 3, can be applied on CompanyX.

Figure 2 Dimensions of Culture for UK

100
89
90
80
70 66
60
50
40 35 35
30 25
20
10
0
PDI IDV MAS UAI LTO

(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 & Judges (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
Figure 3 How Organisational Cultures Form

(Robbins and Judge, 2007)

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

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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. Figure 4 Power/Web/Club
Culture
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.

(Handy, 1993)
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. COMPANYXS 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.

Figure 5 3D Model of People Strategy

(Gratton and Truss, 2003)

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
companys 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

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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 CompanyXs 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 contractorganisations


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 CompanyXs 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.
Storeys 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
CompanyXs 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

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Hisham El Sherbini MPP Assignment

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 Tuckmans 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.

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Hisham El Sherbini MPP Assignment

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), 13351
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

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Hisham El Sherbini MPP Assignment

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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Hisham El Sherbini MPP Assignment

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

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Hisham El Sherbini MPP Assignment

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

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