Human Resource Management

in the Service Sector

Review of the course
 Overview
Course examines the HRM challenges in the knowledge-
intensive service sector

1. Introduction: characteristics of the service sector and

identifying the knowledge-intensive section of this
sector (1 week)
2. Develop theoretical frameworks and perspectives for
analysing the HR challenges (2 weeks)
3. Investigation of HR challenges in four types of
organisations in this sector: call centres, management
consulting, law and creative (8 weeks)

Summary and review (second half of final week)

2
 Course design
HRM Call Management Law Creative
Characteristics of the service sector

challenges centres consultancies Firms: Firms:

theory Theory Theory theory Theory and
and case case

Summary and revision

Managing Call Management Law Creative
knowledge centres consultancies Firms: Firms:
workers Case Case theory Theory and
and case case

3
Literature focus for the course

HRM & knowledge-

intensive services

Services sector Professional

Services

4
Week 1: Introduction to the service
sector: objectives
• Outline the importance of the service sector in
modern economies
• Identify the key characteristics of service work
and the areas of the sector for detailed study:
knowledge intensive work
• Outline the research in the area
• Introduce the HRM challenges posed by
knowledge based service sector working

5
 Converting Human Capital into
Intellectual Capital

Human
HumanCapital
Capital Conversion Intellectual Capital
Process
Employee
Knowledge Products
Skills and
Experience services
which have
market value

Role of HR
practices in this
conversion process
6
 Implications for HRM
Nature of Work Managerial problem HRM issue

Performance
Intangible Measurement management/reward

Knowledge Training and

Renewal
based Development

Customised Standardisation Staff

allocation

Professional Organisational Recruit and retain

commitment
7
(Drawn from Suddaby and Greenwood (2006) Maister (2003) and Batt (2006))
Week 2: HR practices in knowledge
intensive firms: objectives
• To understand the distinctive characteristics of
knowledge intensive service firms
• To identify the key resources (forms of capital)
that knowledge intensive firms draw on for their
success
• To identify the challenges for managing people
and managing knowledge faced by knowledge
intensive firms
• To explore the ways in which HR strategy,
structure, delivery and practices can be used to
create valuable products and services

8
Pressures on knowledge intensive firms
Product market -
Customers and clients

KIF

Financial success – Employment market –

short and long term needs of employees

(Maister, 2003) 9
 Knowledge skills
Forms of Capital and experience of
staff
Human
Knowledge of
and capital Knowledge
relationships embedded in
with network Network Social values, culture
members Capital capital and
relationships
Intellectual
Capital
Knowledge of
and Client Structural
relationships
Capital capital
with clients Ways of
Organizational structuring
Capital work

Procedures, policies
and processes 10
The HR Resourcing
Wheel

Human
capital
Network Social
Capital capital
Intellectual
Capital
Client Structural
Capital capital
Organizational
Capital

Pay and Reward

Kinnie et al 2006 11
Delivery
 Week 3: Managing knowledge
workers: objectives
• Define a knowledge worker
• Identify the characteristics of knowledge workers and
understand the human resource management
challenges presented by them
• Explain how knowledge workers are managed
• Identify and discuss the dilemmas associate with the
management of knowledge workers
• Understand how social identity can resolve some of the
tensions involved in the management of knowledge
workers

12
 Managerial challenges
• How can organisations retain and develop their
professionals?
• Presents three dilemmas that sit between the
employee and the organisation
Retention Employability

Multiple Identity perspective

Organisation specific Transferable

Value capture Ownership of value

13
Multiple sources of identity

Organisation Professional

EE

Team Client

14
 Weeks 4 and 5: Call Centres:
objectives
• Define call centres and understand the reasons for their
growth
• Identify the key characteristics of the nature and
management of call centres
• Analyse their forms of human capital and consider the
implications for HR especially recruitment, selection and
retention
• Examine recent changes in call centres especially the
moves towards outsourcing and off-shoring
• Apply the 4 ID model to gain insights into the nature of
work in call centres – with reference to the Norwich
Union case
(Refs: Deery and Kinnie, 2004; Korczynski, 2002, Frenkel et al, 1999, Homan, 2004)

15
 Weeks 6 and 7: Management
Consulting: objectives
• To understand the characteristics of the management
consulting industry
– History
– Types of organisations
– Types of consultancy activities
• Typology of human capital
– According to the client interface process
– Career structures within management consultancy
– The role of consultants as knowledge brokers
• Typology of client capital Human
capital
– The consulting firm – client relationships Network Social
Capital capital
• The HRM practice focus:
– Recruiting human capital Client Structural
Capital capital
– Managing across boundaries Organizational
Capital

16
Using external facilitators poses a challenge to many
forms of intellectual capital flows

Clients Facilitators 17
Facilitator network: HC viewpoint

HC External pool of
facilitators
boundary External
Externalskill
skillexperts
experts

Facilitators
Clients within Clients
clients
Focal Regions
Practice
Group Other
Practice
Groups

Clients

External skill experts

Clients

18
 Weeks 8 and 9: Law Firms:
objectives
• Understand the basic characteristics of the
sector
• Identify the traditional model of organising
and management of HR
• Consider some of the key changes in the
sector and the responses of law firms
• Identify the challenges this presents for HRM
and for knowledge management
• Focus on the key issue of remuneration and
reward, especially variable reward
• Analyse a practical case drawing on our
knowledge of theory 19
 Traditional HR practices
‘Up or Out’
High reward for
equity partners

Partner in 6 years
– or leave the firm

Apprenticeship
model
Elite
recruitment 20
 ‘High Trust’

• Local law firm - medium sized and growing fast

• Strong emphasis on culture and values inclusive
and mutual respect – building social capital –
sharing work and knowledge
• Issue of how to reward their staff who contribute
to the success of the firm while reinforcing their
values

21
 Weeks 10 and 11: Creative
Firms: objectives
• Understand the basic characteristics of the
sector and establish our focus on
advertising/marketing agencies
• Identify the key forms of capital present in
these firms
• Identify the challenges this presents for HRM
especially the development and retention of
staff
• Draw contrasts between two practical cases
on the way they manage these HR
challenges
22
 Building network capital
Client

Agency
Marketing
manager

23
 Key challenges and tensions facing
HRM in marketing agencies
• External Resourcing
– Attraction and retention of staff valuable to the firm and to existing and potential clients
– Recruiting for internal development – recruiting experienced staff
• Internal Resourcing
– Promotion and career building – efficient allocation of staff
– Rotation of staff - building and maintaining client and network relationships
• Training and Development
– Developing human capital - developing client capital
– Importance of coaching, feedback and development – importance of serving client needs
• Reward
– Intrinsic rewards linked to development – extrinsic rewards linked to client success
– Longer term rewards through promotion – shorter term linked to targets

• Our focus: the interaction between the need to develop employees, serve the
needs of clients and achieve financial success

24
 Revision
• Essential to understand the basic
theoretical frameworks underlying the
course (weeks 2 and 3 especially)
• Need to be able to apply these to the four
sectors studied (eg how does the reactor
model apply to creative firms)
• Facility to move between theory and
practice (to understand the theory in
practice and the practice in theory)
25
 Revision continued
• Cases studied in class are important along
with other cases and your own experience
• Key is to build up your understanding of
the issues – at a sector level and at a
macro/cross sector level
• Use the frameworks and models to guide
your analysis – to help you understand the
issues/problems/cases

26
 Examination structure and rubric
• Unseen paper in 2 hours no additional
materials
• 6 questions – one from each sector
studied plus two others
• Answer three questions

27
 Sample questions
• What are the most important external pressures
on the managers of knowledge intensive firms?
How might HR strategy and practice help to
manage these pressures?
• How might the concept of multiple identities help
managers of HR contribute to the creation of
organisational value in professional service
firms?
• With reference to the ‘High Trust’ case study
discuss the problems associated with designing
a variable reward system in law firms. How
might these problems be resolved?
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 Expectations
• Demonstrate your learning and your understanding of
the theory and the practice
• Answers which directly focus on the question (basic
descriptive answers will get a low pass)
• Explicit references to previous research (you will get
credit for this)
• Good use of practical examples to illustrate points
(credited)
• Highlight conflicts and tensions where they exist
• Develop an argument which is supported by theory and
evidence (illustrates higher level understanding)

29
 Advice
• All the basics apply: plan your answer/focus on
the question/refer to relevant theory and
examples/pull it together
• Thorough revision – understanding not rote
learning – test yourself out – use the models to
analyse cases; use the cases to ask: what is this
an example of?
• See links between the models and sectors
• Use contemporary examples if you can – shows
engagement with the material

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