As part of the preparation for its 2015 conference, Great Place to Work took a close look at the key trends and challenges facing Irish HR professionals in the coming years.
It commissioned a team from the Link Research Institute at DCU Business School to conduct a survey of HR professionals around the country. The team was led by Patrick Flood, professor of organisational behaviour at DCU Business School, and Dr Na Fu, a lecturer in human resources management at NUI Maynooth.
The research was carried out among more than 150 HR professionals during January 2015 and focused on a number of specific topics and themes. These included organisational effectiveness, HR networks, evidence-based management, the role of line managers in HRM, middle managers’ role in change management, employee engagement, and future challenges and priorities for HR.
The research threw up a number of interesting findings, according to Prof Flood. “One of the things we found interesting was the extent to which the HR community relies on its own advice,” he said. “It is not outward-facing enough. We also found quite a low usage of scientific research. Even though many of the HR managers have masters degrees, the extent to which they made use of scientific data for evidence-based management was very low. This could lead to the repetition of approaches which haven’t worked in the past but just appear instinctively right.”
He believes this may have something to do with the workload of the individual HR managers. “They are extremely busy and their perception is that they need short, snappy insights to guide them,” he says. “This can lead to short-termism and a firefighting approach to the job.”
A skills deficit at line and middle manager levels was also identified. “Line managers are very willing to manage their teams but they don’t have the required skills,” says Dr Fu. “This is because they are hired for their technical skills and then promoted for those skills rather than their leadership skills.”
Middle managers are very much the meat in the sandwich between frontline employees and the senior leaders of the company, says Prof Flood. “They are under an awful lot of pressure to deliver change but they haven’t been given the support to develop their leadership skills and aren’t capable of leading change in their organisations. As organisations become less hierarchical and flatter in future years, there will be a much greater need to invest in middle managers and line managers in order to give them the skills to lead changes.”
The other interesting finding was an expectation gap between employers and employees. Organisations now expect their employees to be very highly engaged emotionally, physically and intellectually. “The difficulty is that employees expect similar engagement from employers in terms of their training and development,” Prof Flood points out.
However, many companies focus mainly on high-achieving staff to the detriment of the majority and indeed overall performance. “In a rowing analogy, research from Cambridge points to the need to focus on your best eight rather than your eight best. There’s an awful lot of talk about focusing on A players, but all of the evidence shows that 80 per cent of the productivity and innovation comes from the middle and lower levels of organisations, so they should very much be focusing more on their B players.”
Evidence-based management
Other members of the team analysing the results of the survey were Steven Kilroy, Claire Gubbins and Yseult Freeney, all of DCU, Edel Conway, director of the Link Institute, and Johan Coetsee of the Centre for Creative Change.
“Respondents to the survey possessed a strong internal network from whom to seek knowledge to do their work,” says Gubbins. Respondents’ external networks, however, were less strong. “International research repeatedly highlights the benefits of a network rich in senior and external contacts for accessing valuable knowledge and ultimately enhancing performance,” she says.
In today’s environment of rapid change there are many examples of successful high-performing organisations which failed or struggled because they didn’t focus on or couldn’t master the changes required to adapt to the external environment.
One approach to this problem is a data-driven and systems-thinking approach to decision-making. “Increasing international discussion centres on how data analytics and evidence-based decision-making provides for an enhanced, systematic, evidence-informed practice of management,” says Gubbins. “Evidence-based management and the number of practicing evidence-based managers is still in its infancy, however. Greater education and training about how to be an evidence-based manager, how to use data analytics and how to question internal and external data to find answers to problems is required.”
According to Gubbins, a particular challenge for a manager is accessing and understanding data from diverse organisational functions and perspectives. “This ability can, in part, be enhanced where a manager possesses a network of contacts across functions who can help make sense of the data.”
Effective employee engagement
Another finding of the survey is that there is a need to balance investment in high-potential employees with other activities to enhance engagement levels across all categories of employee. “There is growing international research evidence to show that levels of employee engagement have a significant impact on organisational performance,” says Edel Conway, a member of the HR panel. “However, the factors that influence engagement will differ depending on the type of sector, organisation and employee, as well other strategic constraints.”
There is also the need for a careful balancing act between job demands and levels of engagement, according to Conway. “The recent economic downturn has led to a significant curtailment in HR activities such as recruitment, training and career progression, which has led to a much more demanding workplace. Yet, further international evidence suggests that increasing job demands without having adequate resources in place such as training, manager support, autonomy and so on will lead to levels of engagement that are excessive. Instead of being positively engaged, employees will become stressed and burned out. In this instance, the quest for higher employee performance and a positive return on investment will be futile.”
Bridging the engagement gap
Human resource managers have a long history of examining employee attitudes, primarily with the purpose of understanding how to make employees happy, trusting that this will also make them more productive. However, research over the years has failed to show strong and consistent relationships between job satisfaction and performance.
“Just over a decade ago, the concept of employee engagement burst onto the scene as the new HR buzzword and was heralded as the answer to this fundamental question,” says Yseult Freeney.
However, there is a gap between the theories of engagement researched by academics and those practiced by HR managers, and the Great Place to Work survey attempted to assess it. Just over 47 per cent of respondents identified work engagement as a “positive, fulfilling work-related state of mind, characterised by energy, dedication and absorption”. Around 26 per cent saw it as a process aimed at driving results, and 24 per cent saw it as a profound connection to the organisation. Only 3 per cent of the sample viewed engagement more cynically, seeing it as just another word for satisfaction.
What is particularly noteworthy about the results is not so much about how engagement is understood, but how HR managers believe it can be most effectively fostered in the organisation. Line manager support, trust in management, and meaningful salary were seen as most important. Interestingly, research has found that monetary rewards have little impact on engagement; indeed, some rigorous studies have found that it actually leads to lower performance.
“These results demonstrate that engagement is a concept that very much resonates with HR managers and is likely to be staying with us for some time to come,” says Freeney.
The line manager’s role
“How line managers implement HR practices has a great impact on how employees perceive and align with HR practices,” says Dr Fu. “We measured three elements of line managers’ implementation of HRM: ability, motivation and opportunity. In other words, are they able to implement HR? Are they willing to do it? Do they have the opportunity to enact it? The results show they are highly willing to implement HRM but lack the required ability and opportunity to do so. In addition, we found that senior leaders’ support is extremely important for enhancing line managers’ ability, motivation and opportunity to implement HRM.”
Survey results at a glance
- HR community too inward-looking which could lead to a repetition of old approaches
- Skills deficit at line and middle management levels
- Expectation gap between employers and employees
- Respondents need stronger external networks
- The majority of respondents saw employee engagement as positive
Managers The new breed
Middle managers are an endangered species in contemporary organisations, and major change is needed if they are to survive, according to Johan Coetsee, a member of the HR panel . “A new breed of middle manager is required,” he says,“one who is more strategic than operational, able to close the gap between potential and realised talent, and energise the people they lead. Their role must shift from transactional managers focused on maintaining the status quo to transformational leaders.”
He says aligning, engaging and empowering employees require effective leadership. “This includes creating a safe environment for learning; being able to explain the strategy clearly; empowering employees to set stretching targets for themselves; and using coaching as a tool to develop employees. Furthermore, middle managers require moral character, a strong concern for self and others; ethical values and the ability to constantly adjust to changing circumstances,” he says.
Sustaining the psychological contract
The psychological contract refers to an individual’s beliefs regarding the terms and conditions of a reciprocal exchange relationship between the employee and employer. The nature of this psychological contract has undergone rapid change in recent years, according to Steven Kilroy.
“The traditional deal largely focused on employers offering job security and employees offering loyalty to the organisation,” he explains. “However, this has shifted to a transactional-based contract that is not expected to endure over the long term. Despite this change, the results from the Great Places to Work survey reveal that managers want to develop and maintain a relational psychological contract with employees – a long-term focus and a desire to meet their socio-emotional needs.”
This has major practical implications as it demonstrates that to retain employees and ensure high commitment levels, sensitivity to employee expectations is a prerequisite. “Constantly monitoring the content of psychological contracts just might be the difference in retaining talent and achieving sustainable competitive advantage,” Kilroy contends.