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CHAPTER 2

THE STRATEGIC CONTEXT FOR NEW OE


Any discourse about people management lacks context without consideration of
the changing nature of organisational context, employment models and the
employment relationship.
HR is increasingly required to play an active part in organisational change
initiatives to help their organisations successfully navigate todays choppy
waters. Senior HR professionals are increasingly expected to take a lead in
organisation design, culture change, change management and improving the
quality of leadership all of which are key aspects of organisation development.
The goal of OD is to build healthy and effective organisations.

ANGLO-AMERICAN CAPITALISM
This aggressive free-market fundamentalism is based on the efficient market
hypothesis of which the aim is to maximise individual freedoms through the
deregulation of market thus enabling corporate capitalism to expand free from
interference from the state. Britain was becoming largely a service and
knowledge-intensive economy, with high technology, financial services and
travel and tourism as major growth areas.. The role of business was conceived as
almost exclusively about making wealth for shareholders and investors. Within
organisations the combined effect of changes in technology, globalisation,
competitive pressures , unpredictable socio-political and economic factors was
evident in the ruthless pursuit of flexibility and efficiency, in the form off
business re-engineering in the 1980s, rationalisation and de-layering in the 90s
and aggressive outsourcing in the 2000s

INDUSTRIAL RELATIONS
In the UK, part of Mrs Thatchers solution to increase UK competitiveness was to
increase labour flexibility. Since then, analysts have argued that the mainly
collective industrial relations of the 80s have been largely replaced by
individualised HRM approaches to employee relations, including direct staff
communications. Alongside this, the practices of management was pushed
further to the forefront since efficient management was seen as a panacea for a
number of economic ills, and the byword efficient management was seen as a
panacea for a number of economics ills, and the byword of the 90s was that
managers have the right to manage. This led to the development of business
schools and the installation of managerialism which refers to the application of
private sector management techniques and ideologies within the sphere of the
public services and more broadly.

THE PURSUIT OF FLEXIBILITY


Market disciplines place pressure on organisations to react quickly and flexibly to
market changes, and to find more cost-efficient ways of producing and selling
goods and services. Since labour is usually considered the main production cost,
employers will chase cheap labour wherever it is to be found and is not bounded
by geography.
Alongside this managerial drive for flexibility and competitive advantage, new
instrumental methodologies such as total quality, continuous process
improvement, and high-performance work practices such as team working were
introduced during the 80s and 90s to increase productivity gains.
As the knowledge economy, with its new types of post-industrial firms, products
and markets, began to take root in the UK during the 90s, structural forms
increasingly reflected aspirations to move beyond the modernist era of large
bureaucratic production to smaller, leaner post-modern organisations with
responsive and de-layered management structures. These flatter structures were
promoted to workers as more democratic, enabling greater initiative, being freer,
more flexible and participative, although the primary reason for de-layering as
many employees perceived it, was to achieve cost savings. The result of such
changes, was that employees found their workloads expanding and managers
struggled with ever wider spans of control.
The first decade of the twenty-first century has been described as the era of
nimble as organisations pursue ever greater flexibility and global reach. And
also expect the use of technology to replace expensive HR, the nature of work
and the workplace continue to be transformed. To service the 24/7 trading
environment and the more personalised nature of customer provision, new and
more fluid forms of organisation are emerging, with more diverse workforces and
ways of working. The terms ambidextrous organisation, high performance and
the boundary less company all refer to the same kind of new organisation,
which is seen as being flexible and constantly changing.
Decisions are based on dialogue and consensus rather than authority and
command; organisation is a network rather than a hierarchy, open at the
boundaries. Such features imply that employees will be able to exercise agency
since they will have access to the information and other resources required to
enable them to exercise their judgement proactively on behalf of the
organisation. The nature of management and leadership, is more dispersed and
democratic than in conventional hierarchies. However, such idealised templates
tend to ignore the power politics, these idealised templates also tend to ignore
contextual factors such as the widening gap in pay ratios.

DESTABILISING THE EMPLOYMENT RELATIONSHIP


The white collar employment deal or psychological contract that was typical of
bureaucratic organisations consisted of perceptions between employers and
employees, such as good work in return for continued employment, and
promotion based on seniority. Ongoing restructurings and the pursuit of labour
flexibility over the last 30 years have largely undermined these expectations and
resulted in a reshaping of the employment relationship. The resulting contract
breaches, have destabilised the employment relationship since they have shaken
the basis of trust and belief in the mutuality of interests between employers and
employees.
For employees, flexibility can be a double-edged sword. Whereas many
employers have actively sought to work flexibly, others have had flexibility
imposed on them. With respect to careers, individuals are expected to adapt to
changes in work conditions, career structures, pension arrangements, job
specifications and job locations. No longer able to rely on a full-time permanent
job, workers are increasingly expected to take control of their own training to
make themselves employable and place themselves in the best position in the
job market.

THE POWER OF TALENT


On the other hand, in organisations where the link between talent and business
success is very visible and direct, some employees are able to exercise
considerable influence over their employment relationship or deal with their
employer. In industries as diverse as construction, pharmaceuticals, defence and
high technology there are serious shortfalls of available global talent, with even
greater shortages predicted thanks to demographic trends. Talent management
is a high priority in companies such as Google who source talent globally, using
intelligence sources to obtain knowledge of where the best talent is to be found.
HR functions usually devise the employment deal or the employee value
proposition and in common with other forms of branding, if the lived reality of
the brand is different from the promise, the customer-employee goes elsewhere.
There is growing evidence that the criteria used by younger workers in particular
to select their future employer include the chance for learning and growth,
respect for them as individuals and company ethics and values even more than
the pay on offer.

HRM AND MANAGERIALISM


In recent decades HRM has come to be the preferred international discourse to
frame employment management issues. The nature of HRM is contested
although there is some consensus that HRM is a business concept reflecting a
mainly managerial view of the employment relationship, with theory, policies and
practices geared to enabling organisations to achieve competitive advantage
and high performance.
In American models of HRM the predominant view is unitarist, it assumes that
giving primacy to business interests benefits both businesses and their
employees. Critical scholars contend that HRM approaches are a managerial tool
for controlling and managing the workforce in ways which entirely meet business
needs but which appear less directive than the low-trust command-and-control
structures of previous decades.
Alan Ramdhony offers a more critical perspective on HRD and presents the
possibility of more employee-centred learning and development approaches.
Team working is one of a combination of HRM practices that broadly corresponds
to so-called high-performance work systems. Critics argue that team working is
the work ethic pf a flexible political economy and a device for achieving
compliance since it tends to suppress conflict.
A critical perspective therefore involves raising ethical concerns about the role
played by HRM and HRD in the shaping of a new work culture characterised by
flexibility, performativity and potential work intensification, in support of neo-
liberal forms of capitalism.

SHIFTING HR DISCOURSE
In conventional terms HRs policies, processes and systems must ensure that
people are employed in line with legal and business requirements. And of course
HRs mechanisms for achieving this are intended to ensure that organisations
can attract, motivate and retain the talent needed to achieve competitive
advantage through people.
HR practitioners must therefore deal with paradox and complexity on a daily
basis and be guided by a philosophy and perspective, which helps them deal
with potential trade-offs in contemporary organisations between organisational
performance and employee well-being.

PERFORMATIVITY
Literature under performance management appear to have a strong shaping
effect on employee behaviours and from a critical perspective form part of an
array of managerial domination over work. Critical scholars argue that such
approaches encourage the discursive shaping of the individual project, i.e.
employees self-regulate their attitudes. In performance appraisal discussions, for
example, as employees recount and evaluate their work experiences and
ambitions, they do so in a situation where they are observed and judged by
others in social relations. As a result, the employees conception of the
employment relationship shifts away from former collectivist ideas, toward a
more individualised version, where the primary responsibility for performance
lies with the employee and the primary risk in the employment relationship is
theirs. As Ball points out, there is a paradox in that the apparent move away
from low-trust methods of managerial control via high-commitment HRM, in
which management responsibilities are delegated and initiative valued, has been
simultaneously matched by the installation of very immediate surveillance and
self-monitoring in the form of appraisals, making employees subject to greater
assessment and control.
Not only employees are expected to comply with increasing performance
demands they are expected to feel happy to do so. They raise questions about
the use in practitioner circles of them in term employee engagement to describe
all those HR initiatives aimed at retaining key employees, targeting key
resources at talent and raising performance by encouraging employees to
engage with the organisation and release their discretionary effort.
Many HR professionals are attracted to HR by the thought of working with people
and helping them to have satisfying work lives. The HR function is the pivot point
between managerial and employees interests. However in its current state of
evolution HR is more obviously an instrument of managerialism and must
prioritise business interests.
THE NEED FOR NEW SKILLS
These new forms of contribution require HR practitioners to expand their
repertoire of skills, behaviours and experience to develop and apply new
capabilities with impact and agility to the emerging roles of:
Organisational prospector, able to scan and interpret this changing business
landscape.
Organisational Architect, designing and enabling organisational agility, future-
proofing their organisations by developing flexible structures, supporting
behavioural shifts, developing ethical leadership and creating healthy, self-
renewing organisation cultures.
Developer of individual and organisational capability, growing peoples skills,
creating working conditions which stimulate people to release their discretionary
effort, designing and implementing processes by which their efforts are
translated into knowledge capital.
Change agent, able to initiate and bring about the shifts their organisations need
to make.

CONCLUSION
New OE aspires towards sustainable outcomes. And although there may be no
universal ideal organisational culture, my own research suggests that
sustainable outcomes are more likely in organisations with change-able,
knowledge-rich cultures which are conducive to innovation and performance and
employees who are highly committed and engaged.
As HRs role becomes increasingly transformational, the adoption of an OD
perspective to HR work should assist the development of new forms of
organisational effectiveness, characterised by more mutual employment
relationships, longer-term perspectives and an HR system not only based on
added value, but also on moral values. This will involve reconciling a range of
dilemmas and paradoxes such as fulfilling short-term requirements and also
meeting longer-term organisational needs, focusing on local activities and also
on corporate integration.