HRM (Fach) / Theoretical Approaches in HRM (Lektion)
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Theoretical Foundations
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- Scientific Management Assumptions and Basic principles Synonymous: Taylorism Assumptions: power struggles between workers an management stresses common interests of both parties Basic principles: distinction between line functions and operating staff strictly horizontal division of labor optimization of work by time and motion studies task oriented personell selection and development uniformity in task assignments
- Scientific management Evaluation and Criticism positive aspects: caused a global rationalization movement preliminary stage of observing work design processes in a scientific way acknowledges importance of working conditions and qualification measures Critical aspects: two-class model: decision maker vs. executing object assumption of the "best way" small degrees of freedom as to the work tasks social character of people neglected limited to designing the production
- Hawthrowne studies 1. Assembly experiments: shortening the day by 30 minutes 5-minutes break with food during this time --> changes result in an increased productivity 2. Measuring the light intensity on work productivity 3. Observing during the work results in increased productivity --> Counterbalance to Taylorism: social aspect of work
- Humans Relations Movement Principles and Criticism Core thesis: Improvement of social relationships and work conditions increase work satisfaction and performance Positive: Humanization of work Negative: one-sided stress on social factors still only orientation towards performance goals connection between workers satisfaction and performance are more complex than suggested In general: social worksatisfaction and social conditions influence the work satisfactian and are therefore important for the work performance
- Theory X Presumption: workers are inherently lazy Workers traits: wants to be guided, extrinsic motivation, pursuit of safety Consequences for Organizations: Supervision, Punishment, Authoritarian leadership Rationale: Taylorism
- Theory Y Presumption: Work can be an important source of satisfaction for people Workers' Traits: is proactive, sense of responsibility, creativity, pusuit of self evaluation Consequences for Organization: create conditions in order to enable people to act in a creative and self-determined way, management by objectives Rationale: Human Relation Movement
- Motavational Approaches In general: extrinsic and intrinsic motivation Content theories of motivation: Hierarchy of needs (Maslow) two-factor theory (Herzberg) Process theories of motivation: Equity theory (Adams) Expactanca theory (Vroom) Model of motivation by Porter an Lawler
- Intrinsic and extrinsic motivation intrinsic: task is performed for the sake of itself flow experience extrinsic: external object motivates the worker, e.g. money
- Hierarchy of needs core assumption: needs on a higher level become only relevant for the person if needs on a lower step are fulfilled Physological needs --> safety needs --> love needs --> self esteem needs --> self actualization needs Problems: no clear delimination in the terminology situational factors are not taken into account depends on social stratum and culture
- Two-factor theory Hygiene and motivation factors (company policy, administration, supervision, work conditions, salary, work itself, growth) different factors for good and bad work experiences Interpretation: Satisfaction and dissatisfaction with work are two independent dimensions Criticism: situational factors and inter-individual differences are not taken into account implicit assumption that satisfied employees are more productive
- Equity theory basic assumption: there must be an equilibrium in organization s between inducement (wage) and contribution (work performance) --> Introduction of social comparison to inducement and contribution Individual outcomes/Individual inputs = relation partners outcome/input --> Perception of justice is relative and subjective
- Equitiy theory Implications and Criticism Perception of injustice: Strategies affecting behavior: increasing input or decreasing output cognitive strategies: re-evaluation of the situation, comparision with another person, reassesment of own performance, Degradation of others' performance Impications: transparent and rule-based compensation differentiated analysis of employees needs
- Expectancy Theory (VIE Theory) Valence: subjectively perceived value of cetrain conditions Instrumentality: Relationship between the result and the consequences Expectancy: Belief about whether or not an action will lead to the result
- Expectancy Theory Implications and Criticism Valence (E) = V(C1) x I (C1) + V(C2) x I (C2) + ... motivational potential = valence (E) x expectancy (E) C1 = consequence 1; valence(E) = total valence of all consequences --> individuals choose those actions for which "valence x expectancy" ist maximal Implications: Measuring V, I and E is crucial to evaluate motivation Alignment of incentive systems towards employees' needs Criticism: rational thinking on terms of cause-and-effect implied, but people are not alway rational on the level of operating actions little degrees of freedom
- Summary and Conclusion of motivational models Content theories: do not explain any process scarce empirical evidence Process theories are difficult to implement Compley relationship between motivation and performance
- Situational Approach (Contingency Approach) Basic assumption: there is no "one best way" concept of fit (person-environment fit) identification of environmental and personal variables as moderators Dominant paradigm in empirical organizational research during the 1970s and 1980s Implication: Alignment of HRM towards company environment and inter-individual employee needs Company does not have a proactive role Input (abilities) -------------------------------------------> Outcome (performance) --> moderators (personality)
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- Personnel Economics In general: Personnel Economics is the study of the employment relationship between firms and workers where firms usually follow a strategic goal Focus: matching of emloyer and employee compensation setting up of incentive schemes development of skills job design --> investigated both: theoretically and empirically with micro- and macroeconomic approaches Two Theories: principal agent theory transaction cost theory
- Principal Agent Theory Relationship between company management (principal) and employee (agent) Adverse selection (before concluding a contract, one party possesses private information about certain things influencing the others party's utility Hidden action (e.g. moral hazard: occurs if a part of the risk of own actions is carried by others Hidden information Different strategies of the company management: direct control by mentoring the work indirect control by checking results
- Transaction Cost Theory Carrying out transactions is not free costs of initiation, formulation, conclusion, supervision, implementation, amendment of contracts e.g. search and information costs, bargaining costs, handling costs... Ammount of transaction costs depend on: specificity (e.g. investment in firm-specific knowledge and skills) uncertainty (e.g. high turn-over rate, lack of job-security...) frequency
- Personell economics Criticism Positive: generates empirically testable propositions recent developments exceed the pure self-interest model Negative: abstraction, simplification and alienation of HR practices terms such as utility ans transaction costs are difficult to operationalize and measure
- Personnel Economic approach in HRM Maximization: firms and workers are rational profit-maximation individuals sometimes also with imperfect information or transaction cost individuals utility depends on different factors Equilibrium: price and equilibrium quantity on labor and good market Efficiency: essential concept of personnel economics inefficiency occurs in case of market failure Economic Modeling: empirical and experimental investigations to identify causal relations
- Labor economics In general: study of functioning and dynamics of the market for labor interaction of workers and employers supply and demand of labor services pattern of wages, employment and income personnel economics is a comprehensive part of labor economics labor economics also contain aspects which are not covered by personnel economics
- Resourced Based View In general: is a theoretical approach udes to determine the strategic resources available in the company Key idea: the basis for a competitive advantage of a firm lies primarily in the application of the bundle of valuable resources identify the firms potential key resources evaluate whether these resources are valuable, rare, in-imatable and non-substitutable care and protect resources