Handbook of Human Resource Management Practice

The process of performance management PERFORMANCE MANAGEMENT AS A PROCESS Performance management should be regarded as a flexible process, not as a ‘system’. The use of the term ‘system’ implies a rigid, standardized and bureaucratic approach that is inconsistent with the concept of performance management as a flexible and evolutionary, albeit coherent, process that is applied by managers working with their teams in accordance with the circumstances in which they operate. As such, it involves managers and those whom they manage acting as partners, but within a framework that sets out how they can best work together. PERFORMANCE MANAGEMENT AS A CYCLE Performance management can be described as a continuous self-renewing cycle, as illustrated in Figure 33.1. 33

This chapter deals with each of these parts of the cycle as follows: ● Planning: concluding a performance and development agreement. ● Acting: managing performance throughout the year. ● Reviewing: assessing progress and achievements so that action plans can be prepared and agreed and, in many schemes, performance can be rated. Consideration is also given to managing under-performers, and approaches to introducing performance management are considered at the end of the chapter. PERFORMANCE AGREEMENTS Performance agreements form the basis for development, assessment and feedback in the performance management process. They define expectations in the form of a role profile that sets out role requirements in terms of key result areas and the competencies required for effective performance. The role profile provides the basis for agreeing objectives and methods of measuring performance and assessing the level of competency reached. The performance agreement incorporates any performance improvement plans that may be necessary, and a personal development plan. It describes what individuals are expected to do but also indicates what support they will receive from their manager. Performance agreements emerge from the analysis of role requirements and the performance review. An assessment of past performance leads to an analysis of future requirements. The two processes can take place at the same meeting. 504 ❚ Performance management Performance and development agreement Performance review Managing performance throughout the year Figure 33.1 The performance management cycle

Defining role requirements The foundation for performance management is a role profile that defines the role in terms of the key results expected, what role holders need to know and be able to do (competencies), and how they are expected to behave in terms of behavioural competencies and upholding the organization’s core values. Role profiles need to be updated every time a formal performance agreement is developed. Guidelines on preparing role profiles and an example are given in Chapter 13. Objectives Objectives describe something that has to be accomplished. Objective setting that results in an agreement on what the role holder has to achieve is an important part of the performance management processes of defining and managing expectations, and forms the point of reference for performance reviews. Types of objectives The different types of objectives are: ● On-going role or work objectives – all roles have built-in objectives that may be expressed as key result areas in a role profile. ● Targets – these define the quantifiable results to be attained as measured in such terms as output, throughput, income, sales, levels of service delivery, cost reduction, reduction of reject rates. ● Tasks/projects – objectives can be set for the completion of tasks or projects by a specified date or to achieve an interim result. ● Behaviour – behavioural expectations are often set out generally in competency frameworks but they may also be defined individually under the framework headings. Competency frameworks may deal with areas of behaviour associated with core values, for example teamwork, but they often convert the aspirations contained in value statements into more specific examples of desirable and undesirable behaviour, which can help in planning and reviewing performance. Criteria for objectives Many organizations use the following ‘SMART’ mnemonic to summarize the criteria for objectives: The process of performance management ❚ 505

S = Specific/stretching – clear, unambiguous, straightforward, understandable and challenging. M = Measurable – quantity, quality, time, money. A = Achievable – challenging but within the reach of a competent and committed person. R = Relevant – relevant to the objectives of the organization so that the goal of the individual is aligned to corporate goals. T = Time framed – to be completed within an agreed time scale. Measuring performance in achieving objectives Measurement is an important concept in performance management. It is the basis for providing and generating feedback, it identifies where things are going well to provide the foundations for building further success, and it indicates where things are not going so well, so that corrective action can be taken. Measuring performance is relatively easy for those who are responsible for achieving quantified targets, for example sales. It is more difficult in the case of knowledge workers, for example scientists. But this difficulty is alleviated if a distinction is made between the two forms of results – outputs and outcomes. An output is a result that can be measured quantifiably, while an outcome is a visible effect that is the result of effort but cannot necessarily be measured in quantified terms. There are components in all jobs that are difficult to measure quantifiably as outputs. But all jobs produce outcomes even if they are not quantified. It is therefore often necessary to measure performance by reference to what outcomes have been attained in comparison with what outcomes were expected, and the outcomes may be expressed in qualitative terms as a standard or level of competency to be attained. That is why it is important when agreeing objectives to answer the question: ‘How will we know that this objective has been achieved?’ The answer needs to be expressed in the form: ‘Because such and such will have happened.’ The ‘such and such’ will be defined either as outputs in such forms as meeting or exceeding a quantified target, completing a project or task satisfactorily (’satisfactory’ having been defined), or as outcomes in such forms as reaching an agreed standard of performance, or delivering an agreed level of service. However, when assessing performance it is also necessary to consider inputs in the shape of the degree of knowledge and skill attained and behaviour that is demonstrably in line with the standards set out in competency frameworks and statements of core values. Behaviour cannot be measured quantitatively but it can be assessed against definitions of what constitutes good and not so good behaviour, and the evidence that can be used to make that assessment can be identified. 506 ❚ Performance management

Use of performance measures The CIPD survey of performance management in 2003 (Armstrong and Baron, 2004) revealed that in order of importance, the following performance measures were used by the respondents: 1. Achievement of objectives. 2. Competence. 3. Quality. 4. Contribution to team. 5. Customer care. 6. Working relationships. 7. Productivity. 8. Flexibility. 9. Skills/learning targets. 10. Aligning personal objectives with organizational goals. 11. Business awareness. 12. Financial awareness. Performance planning The performance planning part of the performance management sequence involves agreement between the manager and the individual on what the latter needs to do to achieve objectives, raise standards, improve performance and develop the required competencies. It also establishes priorities – the key aspects of the job to which attention has to be given. The aim is to ensure that the meaning of the objectives, performance standards and competencies as they apply to everyday work is understood. They are the basis for converting aims into action. Agreement is also reached at this stage on how performance will be measured and the evidence that will be used to establish levels of competence. It is important that these measures and evidence requirements should be identified and fully agreed now because they will be used by individuals as well as managers to monitor and demonstrate achievements. Personal development planning A personal development plan provides a learning action plan for which individuals are responsible with the support of their managers and the organization. It may include formal training but, more importantly, it will incorporate a wider set of learning and development activities such as self-managed learning, coaching, The process of performance management ❚ 507

mentoring, project work, job enlargement and job enrichment. If multi-source assessment (360-degree feedback) is practised in the organization this will be used to discuss development needs. The development plan records the actions agreed to improve performance and to develop knowledge, skills and capabilities. It is likely to focus on development in the current job – to improve the ability to perform it well and also, importantly, to enable individuals to take on wider responsibilities, extending their capacity to undertake a broader role. This plan therefore contributes to the achievement of a policy of continuous development that is predicated on the belief that everyone is capable of learning more and doing better in their jobs. But the plan will also contribute to enhancing the potential of individuals to carry out higher-level jobs. MANAGING PERFORMANCE THROUGHOUT THE YEAR Perhaps one of the most important concepts of performance management is that it is a continuous process that reflects normal good management practices of setting direction, monitoring and measuring performance and taking action accordingly. Performance management should not be imposed on managers as something ‘special’ they have to do. It should instead be treated as a natural function that all good managers carry out. This approach contrasts with that used in conventional performance appraisal systems, which were usually built around an annual event, the formal review, which tended to dwell on the past. This was carried out at the behest of the personnel department, often perfunctorily, and then forgotten. Managers proceeded to manage without any further reference to the outcome of the review and the appraisal form was buried in the personnel record system. To ensure that a performance management culture is built and maintained, performance management has to have the active support and encouragement of top management who must make it clear that it is regarded as a vital means of achieving sustained organizational success. They must emphasize that performance management is what managers are expected to do and that their performance as managers will be measured by reference to the extent to which they do it conscientiously and well. Importantly, the rhetoric supporting performance management must be converted into reality by the deeds as well as the words of the people who have the ultimate responsibility for running the business. The sequence of performance management activities as described in this chapter does no more than provide a framework within which managers, individuals and teams work together in whatever ways best suit them to gain better understanding of 508 ❚ Performance management

what is to be done, how it is to be done and what has been achieved. This framework and the philosophy that supports it can form the basis for training newly appointed or would-be managers in this key area of their responsibilities. It can also help in improving the performance of managers who are not up to standard in this respect. A formal, often annual, review is still an important part of a performance management framework but it is not the most important part. Equal, if not more, prominence is given to the performance agreement and the continuous process of performance management. REVIEWING PERFORMANCE Although performance management is a continuous process it is still necessary to have a formal review once or twice yearly. This provides a focal point for the consideration of key performance and development issues. This performance review meeting is the means through which the five primary performance management elements of agreement, measurement, feedback, positive reinforcement and dialogue can be put to good use. The review should be rooted in the reality of the employee’s performance. It is concrete, not abstract and it allows managers and individuals to take a positive look together at how performance can become better in the future and how any problems in meeting performance standards and achieving objectives can be resolved. Individuals should be encouraged to assess their own performance and become active agents for change in improving their results. Managers should be encouraged to adopt their proper enabling role: coaching and providing support and guidance. There should be no surprises in a formal review if performance issues have been dealt with as they should have been – as they arise during the year. Traditional appraisals are often no more than an analysis of where those involved are now, and where they have come from. This static and historical approach is not what performance management is about. The true role of performance management is to look forward to what needs to be done by people to achieve the purpose of the job, to meet new challenges, to make even better use of their knowledge, skills and abilities, to develop their capabilities by establishing a self-managed learning agenda, and to reach agreement on any areas where performance needs to be improved and how that improvement should take place. This process also helps managers to improve their ability to lead, guide and develop the individuals and teams for whom they are responsible. The most common practice is to have one annual review (65 per cent of respondents to the 2003 CIPD survey). Twice-yearly reviews were held by 27 per cent of the The process of performance management ❚ 509

respondents. These reviews led directly into the conclusion of a performance agreement (at the same meeting or later). It can be argued that formal reviews are unnecessary and that it is better to conduct informal reviews as part of normal good management practice to be carried out as and when required. Such informal reviews are valuable as part of the continuing process of performance management (managing performance throughout the year, as discussed in the previous chapter). But there is everything to be said for an annual or half-yearly review that sums up the conclusions reached at earlier reviews and provides a firm foundation for a new performance agreement and a framework for reviewing performance informally, whenever appropriate. Criteria for assessing performance The criteria for assessing performance should be balanced between: ● achievements in relation to objectives; ● the level of knowledge and skills possessed and applied (competences); ● behaviour in the job as it affects performance (competencies); ● the degree to which behaviour upholds the core values of the organization; ● day-to-day effectiveness. The criteria should not be limited to a few quantified objectives, as has often been the case in traditional appraisal schemes. In many cases the most important consideration will be the job holders’ day-to-day effectiveness in meeting the continuing performance standards associated with their key tasks. It may not be possible to agree meaningful new quantified targets for some jobs every year. Equal attention needs to be given to the behaviour that has produced the results as to the results themselves. The review may be concluded with a performance rating (see page 512). Conducting a performance review meeting There are 12 golden rules for conducting performance review meetings. 1. Be prepared. Managers should prepare by referring to a list of agreed objectives and their notes on performance throughout the year. They should form views about the reasons for success or failure and decide where to give praise, which performance problems should be mentioned and what steps might be undertaken to overcome them. Thought should also be given to any changes that have taken place or are contemplated in the individual’s role and to work and personal objectives for the next period. Individuals should also prepare in order 510 ❚ Performance management

to identify achievements and problems, and to be ready to asses their own performance at the meeting. They should also note any points they wish to raise about their work and prospects. 2. Work to a clear structure. The meeting should be planned to cover all the points identified during preparation. Sufficient time should be allowed for a full discussion – hurried meetings will be ineffective. An hour or two is usually necessary to get maximum value from the review. 3. Create the right atmosphere. A successful meeting depends on creating an informal environment in which a full, frank but friendly exchange of views can take place. It is best to start with a fairly general discussion before getting into any detail. 4. Provide good feedback. Individuals need to know how they are getting on. Feedback should be based on factual evidence. It refers to results, events, critical incidents and significant behaviours that have affected performance in specific ways. The feedback should be presented in a manner that enables individuals to recognize and accept its factual nature – it should be a description of what has happened, not a judgement. Positive feedback should be given on the things that the individual did well in addition to areas for improvement. People are more likely to work at improving their performance and developing their skills if they feel empowered by the process. 5. Use time productively. The reviewer should test understanding, obtain information, and seek proposals and support. Time should be allowed for the individual to express his or her views fully and to respond to any comments made by the manager. The meeting should take the form of a dialogue between two interested and involved parties, both of whom are seeking a positive conclusion. 6. Use praise. If possible, managers should begin with praise for some specific achievement, but this should be sincere and deserved. Praise helps people to relax – everyone needs encouragement and appreciation. 7. Let individuals do most of the talking. This enables them to get things off their chest and helps them to feel that they are getting a fair hearing. Use open-ended questions (ie questions that invite the individual to think about what to reply rather than indicating the expected answer). This is to encourage people to expand. 8. Invite self-assessment. This is to see how things look from the individual’s point of view and to provide a basis for discussion – many people underestimate themselves. Ask questions such as: – How well do you feel you have done? – What do you feel are your strengths? – What do you like most/least about your job? – Why do you think that project went well? – Why do you think you didn’t meet that target? The process of performance management ❚ 511

9. Discuss performance not personality. Discussions on performance should be based on factual evidence, not opinion. Always refer to actual events or behaviour and to results compared with agreed performance measures. Individuals should be given plenty of scope to explain why something did or did not happen. 10. Encourage analysis of performance. Don’t just hand out praise or blame. Analyse jointly and objectively why things went well or badly and what can be done to maintain a high standard or to avoid problems in the future. 11. Don’t deliver unexpected criticisms. There should be no surprises. The discussion should only be concerned with events or behaviours that have been noted at the time they took place. Feedback on performance should be immediate. It should not wait until the end of the year. The purpose of the formal review is to reflect briefly on experiences during the review period and on this basis to look ahead. 12. Agree measurable objectives and a plan of action. The aim should be to end the review meeting on a positive note. These golden rules may sound straightforward and obvious enough, but they will only function properly in a culture that supports this type of approach. Hence the importance of getting and keeping top management support and the need to take special care in developing and introducing the system and in training managers and their staff. RATING PERFORMANCE Most performance management schemes include some form of rating. This indicates the quality of performance or competence achieved or displayed by an employee by selecting the level on a scale that most closely corresponds with the view of the assessor on how well the individual has been doing. A rating scale is supposed to assist in making judgements and it enables those judgements to be categorized to inform performance or contribution pay decisions, or simply to produce an instant summary for the record of how well or not so well someone is doing. The rationale for rating There are four arguments for rating: 1. It recognizes the fact that we all form an overall view of the performance of the people who work for us and that it makes sense to express that view explicitly against a framework of reference rather than hiding it. Managers can thus be held to account for the ratings they make and be required to justify them. 512 ❚ Performance management

2. It is useful to sum up judgements about people – indicating who are the exceptional performers or under-performers and who are the reliable core performers so that action can be taken (developmental or some form of reward). 3. It is impossible to have performance or contribution pay without ratings – there has to be a method that relates the size of an award to the level of individual achievement. However, this is not actually the case: many organizations with contribution or performance pay do not include ratings as part of the performance management process (23 per cent of the respondents to the e-reward 2005 survey). 4. It conveys a clear message to people on how they are doing and can motivate them to improve performance if they seek an answer to the question: ‘What do I have to do to get a higher rating next time?’ Types of rating scales Rating scales can be defined alphabetically (a, b, c, etc), or numerically (1, 2, 3, etc). Abbreviations or initials (ex for excellent, etc) are sometimes used in an attempt to disguise the hierarchical nature of the scale. The alphabetical or numerical points scale points may be described adjectivally, for example, a = excellent, b = good, c = satisfactory and d= unsatisfactory. Alternatively, scale levels may be spelt out, as in the following example: ● Exceptional performance: exceeds expectations and consistently makes an outstanding contribution that significantly extends the impact and influence of the role. ● Well-balanced performance: meets objectives and requirements of the role, consistently performs in a thoroughly proficient manner. ● Barely effective performance: does not meet all objectives or role requirements of the role; significant performance improvements are needed. ● Unacceptable performance: fails to meet most objectives or requirements of the role; shows a lack of commitment to performance improvement, or a lack of ability, which has been discussed prior to the performance review. The CIPD 2004c survey found that the majority of organizations had five levels. Some organizations are settling for three levels, but there is no evidence that any single approach is clearly superior to another, although the greater the number of levels the more is being asked of managers in the shape of discriminatory judgement. It does, however, seem to be preferable for level definitions to be positive rather than negative and for them to provide as much guidance as possible on the choice of ratings. It The process of performance management ❚ 513

is equally important to ensure that level definitions are compatible with the culture of the organization and that close attention is given to ensuring that managers use them as consistently as possible. Problems with rating Ratings are largely subjective and it is difficult to achieve consistency between the ratings given by different managers (ways of achieving consistent judgements are discussed below). Because the notion of ‘performance’ is often unclear, subjectivity can increase. Even if objectivity is achieved, to sum up the total performance of a person with a single rating is a gross over-simplification of what may be a complex set of factors influencing that performance – to do this after a detailed discussion of strengths and weaknesses suggests that the rating will be a superficial and arbitrary judgement. To label people as ‘average’ or ‘below average’, or whatever equivalent terms are used, is both demeaning and demotivating. The whole performance review meeting may be dominated by the fact that it will end with a rating, thus severely limiting the forward-looking and developmental focus of the meeting, which is all-important. This is particularly the case if the rating governs performance or contribution pay increases. Achieving consistency in ratings The problem with rating scales is that it is very difficult, if not impossible without very careful management, to ensure that a consistent approach is adopted by managers responsible for rating, and this means that performance or contribution pay decisions will be suspect. It is almost inevitable that some people will be more generous than others, while others will be harder on their staff. Some managers may be inconsistent in the distribution of ratings to their staff because they are indulging in favouritism or prejudice. Ratings can, of course, be monitored and challenged if their distribution is significantly out of line, and computer-based systems have been introduced for this purpose in some organizations. But many managers want to do the best for their staff, either because they genuinely believe that they are better or because they are trying to curry favour. It can be difficult in these circumstances to challenge them. The methods available for increasing consistency are described below. Training Training can take place in the form of ‘consistency’ workshops for managers who discuss how ratings can be justified objectively and test rating decisions on simulated 514 ❚ Performance management

performance review data. This can build a level of common understanding about rating levels. Peer reviews Groups of managers meet to review the pattern of each other’s ratings and challenge unusual decisions or distributions. This process of moderation or calibration is timeconsuming but is possibly the best way to achieve a reasonable degree of consistency, especially when the group members share some knowledge of the performances of each other’s staff as internal customers. Monitoring The distribution of ratings is monitored by a central department, usually HR, which challenges any unusual patterns and identifies and questions what appear to be unwarrantable differences between departments’ ratings. Consistency at a price can also be achieved by forced distribution or ranking, as described later in this chapter. Conclusions on ratings Many organizations retain ratings because they perceive that the advantages outweigh the disadvantages. However, those businesses that want to emphasize the developmental aspect of performance management and play down, even eliminate, the performance pay element, will be convinced by the objections to rating and will dispense with them altogether, relying instead on overall analysis and assessment. DEALING WITH UNDER-PERFORMERS The improvement of performance is a fundamental part of the continuous process of performance management. The aim should be the positive one of maximizing high performance, although this involves taking steps to deal with under-performance. When managing under-performers, remember the advice given by Handy (1989) that this should be about ‘applauding success and forgiving failure’. He suggests that mistakes should be used as an opportunity for learning – ‘something only possible if the mistake is truly forgiven because otherwise the lesson is heard as a reprimand and not as an offer of help’. When dealing with poor performers, note should be made of the following comments by Risher (2003): ‘Poor performance is best seen as a problem in which the The process of performance management ❚ 515

employer and management are both accountable. In fact, one can argue that it is unlikely to emerge if people are effectively managed.’ This is another way of putting the old Army saying: ‘There are no bad soldiers, only bad officers.’ Managing under-performers is therefore a positive process that is based on feedback throughout the year and looks forward to what can be done by individuals to overcome performance problems and, importantly, how managers can provide support and help. The five basic steps required to manage under-performers are as follows. 1. Identify and agree the problem. Analyse the feedback and, as far as possible, obtain agreement from the individual on what the shortfall has been. Feedback may be provided by managers but it can in a sense be built into the job. This takes place when individuals are aware of their targets and standards, know what performance measures will be used and either receive feedback/control information automatically or have easy access to it. They will then be in a position to measure and assess their own performance and, if they are well-motivated and welltrained, take their own corrective actions. In other words, a self-regulating feedback mechanism exists. This is a situation that managers should endeavour to create on the grounds that prevention is better than cure. 2. Establish the reason(s) for the shortfall. When seeking the reasons for any shortfalls the manager should not crudely be trying to attach blame. The aim should be for the manager and the individual jointly to identify the facts that have contributed to the problem. It is on the basis of this factual analysis that decisions can be made on what to do about it by the individual, the manager, or the two of them working together. It is necessary first to identify any causes that are external to the job and outside the control of either the manager or the individual. Any factors that are within the control of the individual and/or the manager can then be considered. What needs to be determined is the extent to which the reason for the problem is because the individual: – did not receive adequate support or guidance from his or her manager; – did not fully understand what he or she was expected to do; – could not do it – ability; – did not know how to do it – skill; – would not do it – attitude. 3. Decide and agree on the action required. Action may be taken by the individual, the manager, or both parties. This could include: 516 ❚ Performance management

– the individual taking steps to improve skills or change behaviour; – the individual changing attitudes – the challenge is that people will not change their attitudes simply because they are told to do so; they can only be helped to understand that certain changes to their behaviour could be beneficial not only to the organization but also to themselves; – the manager providing more support or guidance; – the manager and the individual working jointly to clarify expectations; – the manager and the individual working jointly to develop abilities and skills – this is a partnership in the sense that individuals will be expected to take steps to develop themselves, but managers can give help as required in the form of coaching, training and providing additional experience. Whatever action is agreed, both parties must understand how they will know that it has succeeded. Feedback arrangements can be made but individuals should be encouraged to monitor their own performance and take further action as required. 4. Resource the action. Provide the coaching, training, guidance, experience or facilities required to enable agreed actions to happen. 5. Monitor and provide feedback. Both managers and individuals monitor performance, ensure that feedback is provided or obtained and analysed, and agree on any further actions that may be necessary. INTRODUCING PERFORMANCE MANAGEMENT The programme for introducing performance management should take into account the fact that one of the main reasons why it fails is that line managers are not interested, or they don’t have the skills, or both. It is important to get buy-in from top management so that their leadership can encourage line managers to play their part. To ensure buy-in, the process has to be simple (not too much paper) and managers have to be convinced that the time they spend will pay off in terms of improved performance. The demanding skills of concluding performance agreements, setting objectives, assessing performance, giving feedback and coaching need to be developed by formal training supplemented by coaching and the use of mentors. Excellent practical advice on introducing performance management or making substantial changes to an existing scheme was given by the respondents to the eReward 2005 survey. This is summarized below with quotations from respondents to illustrate their views. The process of performance management ❚ 517

Dos The most frequently mentioned ‘dos’ in order of frequency were to: ● consult/involve; ● provide training; ● communicate (process and benefits); ● get buy-in from senior management; ● align and ensure relevance to organizational/business/stakeholder needs; ● keep it simple; ● get ownership from line managers; ● ensure clear purpose and processes; ● monitor and evaluate; ● align to culture; ● plan and prepare carefully; ● align with other HR processes; ● run a pilot scheme; ● clarify link to reward; ● treat as a business process; ● be realistic about the scale and pace of change; ● define performance expectations; ● make process mandatory. Examples of comments ● You can never do enough training/coaching of both staff and line managers. You can never do too much communication on the new changes. ● Ensure the process is seen as a business one, not an HR process. ● Keep it simple and concentrate on the quality going into the process rather than the design of the process itself (although the design must be appropriate to the organization). ● Engage all managers in why it is important and ensure that they have the necessary understanding and skills to carry out the process. Get buy-in and tailor it to the specific needs of the organization. Get the support of key stakeholders such as the union from the start, and get them to work with you to sell the scheme. Agree the overall objectives and guiding principles with all concerned. Keep employees informed and ensure the message is consistent throughout. ● Understand clearly why you are doing it and the desired objectives. Engage others in the design of the scheme. Communicate purpose, etc clearly. 518 ❚ Performance management

Don’ts The most common ‘don’ts’ in order of frequency were: ● don’t just make it a form-filling, paper-intensive exercise; ● don’t make it too complicated; ● don’t rush in a new system; ● don’t underestimate the time it takes to introduce; ● don’t keep changing the system; ● don’t assume managers have the skills required; ● don’t link to pay; ● don’t blindly follow others; ● don’t neglect communication, consultation and training; ● don’t assume that everyone wants it. Examples of comments ● Don’t expect that staff will leap for joy at the prospect of another way they would see of criticizing them in their job. Start your change management process where you think the staff are, not where you’ve assumed they are. ● Don’t assume that what seems obvious and logical to you, as an HR manager, will also seem logical to other managers and staff. Don’t get caught up in HR-speak and become pedantic about the differences between ‘performance management’ and ‘appraisals’, or between a ‘personal development/learning plan’ and a ‘training plan’. As HR professionals we may be able to argue eloquently the subtle differences and merits of each – for most people the distinction is absolutely meaningless! ● Don’t just make it a form-filling exercise – you need to gain the belief from managers that the system is beneficial otherwise it won’t work. ● Don’t put in a lengthy complicated process – it will become a chore to do rather than a meaningful exercise. ● Don’t make HR own the initiative – it is a business improvement model and one that the business needs to manage. ● Don’t assume that managers have the requisite skills to manage performance fairly and equitably, embark upon such an initiative without clear goals and without the support of respected key players in the organization, set the wheels in motion until extensive briefings/training have been completed. ● Don’t underestimate the amount of work involved! ● Don’t expect it to work quickly. It takes a few years to embed performance management in the organization’s ethos. The process of performance management ❚ 519

360-degree feedback 360-degree feedback is a relatively new feature of performance management, although interest is growing. The Institute of Personnel and Development 2003 survey (Armstrong and Baron, 2004) found that only 11 per cent of the organizations covered used it, but the e-reward 2005 survey established that 30 per cent did. This chapter starts with a definition of 360-degree feedback and goes on to describe how it is used and operated and to discuss its advantages and disadvantages and methods of introduction. 360-DEGREE FEEDBACK DEFINED 360-degree feedback has been defined by Ward (1995) as: ‘The systematic collection and feedback of performance data on an individual or group derived from a number of the stakeholders on their performance.’ The data is usually fed back in the form of ratings against various performance dimensions. 360-degree feedback is also referred to as multi-source assessment or multi-rater feedback. Performance data in a 360-degree feedback process, as shown in Figure 34.1, can be generated for individuals from the person to whom they report, their direct reports, their peers (who could be team members and/or colleagues in other parts of the organization) and their external and internal customers. 34

The range of feedback could be extended to include other stakeholders – external customers, clients or suppliers (this is sometimes known as 540-degree feedback). A self-assessment process may also be incorporated using for comparison purposes the same criteria as the other generators of feedback. Feedback can be initiated entirely by peers (in a team setting) or by both peers and team leaders. It can also take the form of 180-degree or upward feedback where this is given by subordinates to their managers. Feedback may be presented direct to individuals, or to their managers, or both. Expert counselling and coaching for individuals as a result of the feedback may be provided by a member of the HR department or by an outside consultant. USE OF 360-DEGREE FEEDBACK 360-degree feedback is used for a number of purposes. Research conducted by the Ashridge Management Research Group (Handy et al 1996) found that typically, 360- degree feedback forms part of a self-development or management development programme. The 45 users covered by the survey fell into the following groups: ● 71 per cent used it solely to support learning and development; 522 ❚ Performance management Manager Individual Internal customers Peers Direct reports Figure 34.1 360-degree feedback model

● 23 per cent used it to support a number of HR processes such as appraisal, resourcing and succession planning; ● 6 per cent used it to support pay decisions. A 1997 survey by the Performance Management Group (unpublished) of 22 organizations using 360-degree feedback found that: ● 77 per cent either disagreed or strongly disagreed with the statement that it is ’a personal development tool and should not be used for wider HR or organizational purposes’; ● 81 per cent disagreed or strongly disagreed that ’the natural use of 360-degree feedback is to provide a basis for reward’. The research conducted by Armstrong and Baron (1998) for the IPD also found that the 51 organizations covered by the research predominantly used 360-degree feedback to help in assessing development needs, and as a basis for performance coaching. Only one-fifth of the respondents used it to determine a performance grade or pay award. RATIONALE FOR 360-DEGREE FEEDBACK The main rationale for 360-degree feedback has been expressed by Turnow (1993) as follows: 360-degree activities are usually based on two key assumptions: (1) that awareness of any discrepancy between how we see ourselves and how others see us increases selfawareness, and (2) that enhanced self-awareness is a key to maximum performance as a leader, and thus becomes a foundation block for management and leadership development programmes. London and Beatty (1993) have suggested that the justification for 360-degree feedback is as follows: ● 360-degree feedback can become a powerful organizational intervention to increase awareness of the importance of aligning leader behaviour, work unit results and customer expectations, as well as increasing employee participation in leadership development and work unit effectiveness. ● 360-degree feedback recognizes the complexity of management and the value of input from various sources – it is axiomatic that managers should not be assessing 360-degree feedback ❚ 523

behaviours they cannot observe, and the leadership behaviours of subordinates may not be known to their managers. ● 360-degree feedback calls attention to important performance dimensions which may hitherto have been neglected by the organization. 360-DEGREE FEEDBACK – METHODOLOGY The questionnaire 360-degree feedback processes usually obtain data from questionnaires, which measure from different perspectives the behaviours of individuals against a list of competencies. In effect, they ask for an evaluation: ‘how well does… do…?’ The competency model may be one developed within the organization or the competency headings may be provided by the supplier of a questionnaire. The dimensions may broadly refer to leadership, management and approaches to work. The headings used in the Performance Management Group’s Orbit 360-degree questionnaire are: ● leadership; ● team player/manage people; ● self-management; ● communication; ● vision; ● organizational skills; ● decision making; ● expertise; ● drive; ● adaptability. The leadership heading, for example, is defined as: ‘Shares a clear vision and focuses on achieving it. Demonstrates commitment to the organization’s mission. Provides a coherent sense of purpose and direction, both internally and externally, harnessing energy and enthusiasm of staff.’ Ratings Ratings are given by the generators of the feedback on a scale against each heading. This may refer both to importance and performance, as in the PILAT questionnaire which asks those completing it to rate the importance of each item on a scale of 1 (not 524 ❚ Performance management

360-degree feedback ❚ 525 important) to 6 (essential), and performance on a scale of 1 (weak in this area) to 6 (outstanding). Data processing Questionnaires are normally processed with the help of software developed within the organization or, most commonly, provided by external suppliers. This enables the data collection and analysis to be completed swiftly, with the minimum of effort and in a way that facilitates graphical as well as numerical presentation. Graphical presentation is preferable as a means of easing the process of assimilating the data. The simplest method is to produce a profile as illustrated in Figure 34.2. Some of the proprietary software presents feedback data in a much more elaborate form. Feedback The feedback is often anonymous and may be presented to the individual (most commonly), to the individual’s manager (less common) or to both the individual and the manager. Some organizations do not arrange for feedback to be anonymous. Whether or not feedback is anonymous depends on the organization’s culture – the more open the culture, the more likely is the source of feedback to be revealed. Gives useful feedback Established good working relationship Open to new ideas Values others’ opinions Recognizes achievements 1 23 4 56 Figure 34.2 360-degree feedback profile

526 ❚ Performance management Action The action generated by the feedback will depend on the purposes of the process, ie development, appraisal or pay. If the purpose is primarily developmental, the action may be left to individuals as part of their personal development plans, but the planning process may be shared between individuals and their managers if they both have access to the information. Even if the data only goes to the individual, it can be discussed in a performance review meeting so that joint plans can be made, and there is much to be said for adopting this approach. DEVELOPMENT AND IMPLEMENTATION To develop and implement 360-degree feedback the following steps need to be taken: 1. Define objectives – it is important to define exactly what 360-degree feedback is expected to achieve. It will be necessary to spell out the extent to which it is concerned with personal development, appraisal or pay. 2. Decide on recipients – who is to be at the receiving end of feedback. This may be an indication of who will eventually be covered after a pilot scheme. 3. Decide on who will give the feedback – the individual’s manager, direct reports, team members, other colleagues, internal and external customers. A decision will also have to be made on whether HR staff or outside consultants should take part in helping managers to make use of the feedback. A further decision will need to be made on whether or not the feedback should be anonymous (it usually is). 4. Decide on the areas of work and behaviour on which feedback will be given – this may be in line with an existing competency model or it may take the form of a list of headings for development. Clearly, the model should fit the culture, values and type of work carried out in the organization. But it might be decided that a list of headings or questions in a software package would be acceptable, at least to start with. 5. Decide on the method of collecting the data – the questionnaire could be designed inhouse or a consultant’s or software provider’s questionnaire could be adopted, with the possible option of amending it later to produce better fit. 6. Decide on data analysis and presentation – again, the decision is on developing the software in-house or using a package. Most organizations installing 360-degree feedback do, in fact, purchase a package from a consultancy or software house. But the aim should be to keep it as simple as possible. 7. Plan initial implementation programme – it is desirable to pilot the process, preferably at top level or with all the managers in a function or department. The pilot

scheme will need to be launched with communications to those involved about the purpose of 360-degree feedback, how it will work and the part they will play. The aim is to spell out the benefits and, as far as possible, allay any fears. Training in giving and receiving feedback will also be necessary. 8. Analyse outcome of pilot scheme – the reactions of those taking part in a pilot scheme should be analysed and necessary changes made to the process, the communication package and the training. 9. Plan and implement full programme – this should include briefing, communicating, training and support from HR and, possibly, the external consultants. 10. Monitor and evaluate – maintain a particularly close watch on the initial implementation of feedback, but monitoring should continue. This is a process that can cause anxiety and stress, or produce little practical gain in terms of development and improved performance for a lot of effort. 360-DEGREE FEEDBACK – ADVANTAGES AND DISADVANTAGES The survey conducted by the Performance Management Group in 1997 (unpublished) revealed that respondents believed the following benefits resulted from using 360-degree feedback: ● Individuals get a broader perspective of how they are perceived by others than previously possible. ● Increased awareness of and relevance of competencies. ● Increased awareness by senior management that they too have development needs. ● More reliable feedback to senior managers about their performance. ● Gaining acceptance of the principle of multiple stakeholders as a measure of performance. ● Encouraging more open feedback – new insights. ● Reinforcing the desired competencies of the business. ● Provided a clearer picture to senior management of individual’s real worth (although there tended to be some ‘halo’-effect syndromes). ● Clarified to employees critical performance aspects. ● Opens up feedback and gives people a more rounded view of performance than they had previously. ● Identifying key development areas for the individual, a department and the organization as a whole. 360-degree feedback ❚ 527

● Identify strengths that can be used to the best advantage of the business. ● A rounded view of an individual’s/team’s/the organization’s performance and what its strengths and weaknesses are. ● It has raised the self-awareness of people managers of how they personally impact upon others – positively and negatively. ● It is supporting a climate of continuous improvement. ● It is starting to improve the climate/morale, as measured through our employee opinion survey. ● Focused agenda for development. Forced line managers to discuss development issues. ● Perception of feedback as more valid and objective, leading to acceptance of results and actions required. But there may be problems. These include: ● people not giving frank or honest feedback; ● people being put under stress in receiving or giving feedback; ● lack of action following feedback; ● over-reliance on technology; ● too much bureaucracy. These can all be minimized if not avoided completely by careful design, communication, training and follow-up. 360-DEGREE FEEDBACK – CRITERIA FOR SUCCESS 360-degree feedback is most likely to be successful when: ● it has the active support of top management who themselves take part in giving and receiving feedback and encourage everyone else to do the same; ● there is commitment everywhere else to the process based on briefing, training and an understanding of the benefits to individuals as well as the organization; ● there is real determination by all concerned to use feedback data as the basis for development; ● questionnaire items fit or reflect typical and significant aspects of behaviour; ● items covered in the questionnaire can be related to actual events experienced by the individual; ● comprehensive and well-delivered communication and training programmes are followed; 528 ❚ Performance management

● no one feels threatened by the process – this is usually often achieved by making feedback anonymous and/or getting a third-party facilitator to deliver the feedback; ● feedback questionnaires are relatively easy to complete (not unduly complex or lengthy, with clear instructions); ● bureaucracy is minimized; ● 360-degree feedback is not limited to pay – its main purpose is developmental, not financial reward. 360-degree feedback ❚ 529

Human resource development Human resource development (HRD) is concerned with the provision of learning, development and training opportunities in order to improve individual, team and organizational performance. HRD is essentially a business-led approach to developing people within a strategic framework. This part considers human resource development under the following headings: ● Strategic human resource development – definition, aims and activities. ● Organizational learning – the process of organizational learning and the concept of the learning organization. ● How people learn – a review of learning theory as it affects individual learning. ● Learning and development – how organizations make arrangements for appropriate learning and development to take place by various means, including training. ● E-learning – the use of electronic methods of supporting learning. ● Management development – improving the performance of managers, encouraging self-development and giving them opportunities for growth; the concept of emotional intelligence and its relevance to the development of effective managers. ● Formulating and implementing learning and development strategies. Part VIII

Strategic human resource development STRATEGIC HRD DEFINED Strategic human resource management was defined by Hall (1984) as: ‘The identification of needed skills and active management of learning for the long range future in relation to explicit corporate and business strategy.’ A later definition was provided by Walton (1999) as follows: Strategic human resource development involves introducing, eliminating, modifying, directing and guiding processes in such a way that all individuals and teams are equipped with the skills, knowledge and competences they require to undertake current and future tasks required by the organization. As described by Harrison (2000), strategic HRD is ‘development that arises from a clear vision about people’s abilities and potential and operates within the overall strategic framework of the business’. Strategic HRD takes a broad and long-term view about how HRD policies and practices can support the achievement of business strategies. It is business-led and the learning and development strategies that are established as part of the overall strategic HRD approach flow from business strategies and have a positive role in helping to ensure that the business attains its goals. 35

STRATEGIC HRD AIMS The fundamental aim of strategic HRD is to enhance resource capability in accordance with the belief that the human capital of an organization is a major source of competitive advantage. It is therefore about ensuring that the right quality people are available to meet present and future needs. This is achieved by producing a coherent and comprehensive framework for developing people. The specific objectives of strategic HRD are to develop intellectual capital and promote organizational, team and individual learning by creating a learning culture – an environment in which employees are encouraged to learn and develop and in which knowledge is managed systematically. Although strategic HRD is business-led, its policies have to take into account individual aspirations and needs. The importance of increasing employability outside as well as within the organization is an important HRD policy consideration. COMPONENTS OF HRD 534 ❚ Human resource development Human resource development Organizational learning Blended learning Training Knowledge management Self-directed learning Workplace training Learning organization E-learning Formal offthe-job training Coaching Mentoring Figure 35.1 Components of human resource development Management development Individual learning and development

HRD AND HRM HRD policies are closely associated with that aspect of HRM that is concerned with investing in people and developing the organization’s human capital. As Keep (1989) says: One of the primary objectives of HRM is the creation of conditions whereby the latent potential of employees will be realized and their commitment to the causes of the organization secured. This latent potential is taken to include, not merely the capacity to acquire and utilize new skills and knowledge, but also a hitherto untapped wealth of ideas about how the organization’s operations might be better ordered. THE PROCESS OF LEARNING AND DEVELOPMENT Learning and development was defined by the CIPD (2001) as follows: The organizational process of developing people involves the integration of learning and development processes, operations and relationships. Its most powerful outcomes for the business are to do with enhanced organizational effectiveness and sustainability. For the individual they are to do with enhanced personal competence, adaptability and employability. It is therefore a critical business process in for-profit or not-for-profit organizations. The elements of this process are: ● Learning – defined by Bass and Vaughan (1966) as ‘a relatively permanent change in behaviour that occurs as a result of practice or experience’. ● Education – the development of the knowledge, values and understanding required in all aspects of life rather than the knowledge and skills relating to particular areas of activity. ● Development – the growth or realization of a person’s ability and potential through the provision of learning and educational experiences. ● Training – the planned and systematic modification of behaviour through learning events, programmes and instruction, which enable individuals to achieve the levels of knowledge, skill and competence needed to carry out their work effectively. Strategic human resource development ❚ 535

STRATEGIES FOR HRD Strategic priorities The strategic priorities for human resource development as defined by Harrison (2005) are to: ● raise awareness of the need for a learning culture that leads to continuous improvement; ● develop the competence of managers to become actively involved in learning that leads to knowledge creation; ● expand learning capacity throughout the organization; ● focus on all the organization’s knowledge workers, not just the key personnel; ● harness e-learning to knowledge sharing and knowledge creation. Development steps The steps required to develop a learning and development strategy as described by Harrison (2005) are: 1. Agree on the strategy-making team. 2. Clarify organizational mission. 3. Explore core values. 4. Identify the strategic issues facing the organization. 5. Agree on strategy and strategic plan. Models for the delivery of the strategy Carter et al (2002) suggest that the following models are available to deliver HRD strategy: ● centralized – all learning and development activities are conducted and controlled from the centre; ● key account holder – a small corporate centre is responsible for career management and management development processes; key account holders are responsible to the centre for delivering learning and training in business units; ● devolved – all learning and development activities are devolved to business units; ● business partner – key account holders report to business unit; 536 ❚ Human resource development

● shared service – business units share common learning and development services and specify what they want to the corporate centre; ● outsourced – training outsourced to providers by corporate centre or business units; ● stakeholder – small corporate centre engages in transformational learning activities, separate shared service facilities are used, learning and development practitioners act as business partners and specialized learning is outsourced. HUMAN RESOURCE DEVELOPMENT PHILOSOPHY A human resource development philosophy could be expressed in the following terms: Strategic human resource development ❚ 537 We believe that: ● Human resource development makes a major contribution to the successful attainment of the organization’s objectives and that investment in it benefits all the stakeholders of the organization. ● Human resource development plans and programmes should be integrated with and support the achievement of business and human resource strategies. ● Human resource development should always be performance-related – designed to achieve specified improvements in corporate, functional, team and individual performance, and make a major contribution to bottom-line results. ● Everyone in the organization should be encouraged and given the opportunity to learn – to develop their skills and knowledge to the maximum of their capacity. ● Personal development processes provide the framework for individual learning. ● While we recognize the need to invest in learning and development and to provide appropriate learning opportunities and facilities, the prime responsibility for development rests with the individual, who will be given the guidance and support of his or her manager and, as necessary, members of the HR department.

Organizational learning and the learning organization Organizational learning theory is concerned with how learning takes place in organizations. It focuses on collective learning but takes into account the proposition made by Argyris (1992) that organizations do not perform the actions that produce the learning; it is individual members of the organization who behave in ways that lead to it, although organizations can create conditions which facilitate such learning. The concept of organizational learning as discussed in the first section of this chapter recognizes that the way in which this takes place is affected by the context of the organization and its culture. The concept of a learning organization, which is often associated with that of organizational learning, has been defined by Scarborough and Carter (2000) as one ‘that is able to discover what is effective by reframing its own experiences and learning from that process’. The notion of the learning organization is sometimes confused with the concept of organizational learning. However, Harrison (2002) points out that it is often assumed that ‘the learning organization’ and ‘organizational learning’ are synonymous processes, yet they are not. 36

ORGANIZATIONAL LEARNING Organizational learning is defined by Easterby-Smith and Araujo (1999) as an ‘efficient procedure to process, interpret and respond to both internal and external information of a predominantly explicit nature’. Organizational learning is concerned with the development of new knowledge or insights that have the potential to influence behaviour (Mabey and Salaman, 1995). It takes place within the wide institutional context of inter-organizational relationships (Geppert, 1996), and ‘refers broadly to an organization’s acquisition of understanding, know-how, techniques and practices of any kind and by any means’ (Argyris and Schon, 1996). Organizational learning theory examines how in this context individual and team learning can be translated into an organizational resource and is therefore linked to processes of knowledge management (see Chapter 12). Organizational learning has been defined by Marsick (1994) as a process of ‘coordinated systems change, with mechanisms built in for individuals and groups to access, build and use organizational memory, structure and culture to develop longterm organizational capacity’. It is emphasized by Harrison (2000) that organizational learning is not simply the sum of the learning of individuals and groups across the organization. She comments that: ‘Many studies (see for example Argyris and Schon, 1996) have confirmed that without effective processes and systems linking individual and organizational learning, the one has no necessary counterpart with the other’. Outcomes of organizational learning Organizational learning outcomes contribute to the development of a firm’s resourcebased capability. This is in accordance with one of the basic principles of human resource management, namely that it is necessary to invest in people in order to develop the intellectual capital required by the organization and thus increase its stock of knowledge and skills. As stated by Ehrenberg and Smith (1994), human capital theory indicates that: ‘The knowledge and skills a worker has – which comes from education and training, including the training that experience brings – generate productive capital’. Pettigrew and Whipp (1991) believe that the focus of organizational learning should be on developing ‘organizational capability’. This means paying attention to the intricate and often unnoticed or hidden learning that takes place and influences what occurs within the organization. ‘Hidden learning’ is acquired and developed in the normal course of work by people acting as individuals and, importantly, in groups or ‘communities of practice’ (Wenger and Snyder, 2000). 540 ❚ Human resource development

The process of organizational learning Organizational learning can be characterized as an intricate three-stage process consisting of knowledge acquisition, dissemination and shared implementation (Dale, 1994). Knowledge may be acquired from direct experience, the experience of others or organizational memory. Argyris (1992) suggests that organizational learning occurs under two conditions: first, when an organization achieves what is intended, and second, when a mismatch between intentions and outcomes is identified and corrected. He distinguishes between single-loop and double-loop learning. These two types of learning have been described by West (1996) as adaptive or generative learning. Single-loop or adaptive learning is sequential, incremental and focused on issues and opportunities that are within the scope of the organization’s activities. As described by Argyris (1992), organizations where single-loop learning is the norm define the ‘governing variables’ – what they expect to achieve in terms of targets and standards – and then monitor and review achievements, and take corrective action as necessary, thus completing the loop. Double-loop learning occurs when the monitoring process initiates action to redefine the ‘governing variables’ to meet the new situation, which may be imposed by the external environment. The organization has learnt something new about what has to be achieved in the light of changed circumstances, and can then decide how this should be achieved. This learning is converted into action. The process is illustrated in Figure 36.1. Organizational learning and the learning organization ❚ 541 Define expectations Take action Single-loop learning Double-loop learning Decide on corrective action as necessary Redefine expectations as necessary Monitor and review Figure 36.1 Single- and double-loop learning

Argyris believes that single-loop learning is appropriate for routine, repetitive issues – ‘it helps get the everyday job done’. Double-loop learning is more relevant for complex, non-programmable issues. As Pickard (1997) points out, double-loop learning questions why the problem occurred in the first place, and tackles its root causes, rather than simply addressing its surface symptoms, as happens with singleloop learning. Organizational learning takes place in a learning cycle as shown in Figure 36.2. 542 ❚ Human resource development Agreeing Working with others to explore learning needs Reviewing and consultation By considering broader organizational implications and changing practices Implementation By all parties fulfilling their part of the agreement Modelling Identifying with other types of learning opportunities to help respond to Questioning Exploring with others the outcomes and behaviour required Negotiation To agree rights and opportunities to support personal and team change Figure 36.2 Managing learning to add value; the learning cycle (Source: New Learning for New Work Consortium, Managing Learning for Added Value, IPD, 1999)

Principles of organizational learning Harrison (1997) has defined five principles of organizational learning: 1. The need for a powerful and cohering vision of the organization to be communicated and maintained across the workforce in order to promote awareness of the need for strategic thinking at all levels. 2. The need to develop strategy in the context of a vision that is not only powerful but also open-ended and unambiguous. This will encourage a search for a wide rather than a narrow range of strategic options, will promote lateral thinking and will orient the knowledge creating activities of employees. 3. Within the framework of vision and goals, frequent dialogue, communication and conversations are major facilitators of organizational learning. 4. It is essential continuously to challenge people to re-examine what they take for granted. 5. It is essential to develop a conducive learning and innovation climate. THE LEARNING ORGANIZATION The philosophy underpinning the learning organization concept, as expressed by Garvin (1993), is that learning is an essential ingredient if organizations are to survive; that learning at operational, policy and strategic levels needs to be conscious, continuous and integrated; and that management is responsible for creating an emotional climate in which all staff can learn continuously. Definition of a learning organization Senge (1990), who created the term, described a learning organization as one ‘where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning how to learn together’. There have been many other definitions of a learning organization, all of which are aspirational in the vein of Senge. Pedler et al (1991) state that a learning organization is one ‘which facilitates the learning of all its members and continually transforms itself’. Wick and Leon (1995) refer to a learning organization as one that ‘continually improves by rapidly creating and refining the capabilities required for future success’. Garvin (1993) defines a learning organization as one which is ‘skilled at creating, acquiring, and transferring knowledge, and at modifying its behaviour to reflect new Organizational learning and the learning organization ❚ 543

knowledge and insights’. He believes that learning organizations ensure that they learn from experience, develop continuous improvement programmes, use systematic problem-solving techniques, and transfer knowledge quickly and efficiently throughout the organization by means of formal training programmes linked to implementation. As Burgoyne (1994) has pointed out, learning organizations have to be able to adapt to their context and develop their people to match the context. Many individual jobs could be learnt by processes of ‘natural discovery’ rather than formula learning. His definition (1988a) of a learning organization is that it channels the career and life-planning activities of individual managers in a way that allows the organization to meet its strategic needs. This is done by encouraging the identification of individual needs, organic formulation of business strategy with inputs from training departments on current skills, and continual organizational review and learning from experience. In 1999 he suggested that a learning organization ‘provides a healthy environment for natural learning’. Key principles of the learning organization Miller and Stewart (1999) propose the following key principles of the learning organization: ● learning and business strategy are closely linked; ● the organization consciously learns from business opportunities and threats; ● individuals, groups and the whole organization are not only learning but also learning how to learn; ● information systems and technology serve to support learning rather than control it; ● there are well-defined processes for defining, creating, capturing, sharing and acting on knowledge; ● these various systems and dimensions are balanced and managed as a whole. Corporate universities provide one way of putting these principles into effect - they offer an educational experience tailored to the specific needs of the organization, the emphasis being on employees constantly engaging with learning and on educators designing courses that will continuously motivate them, usually and sometimes wholly in a virtual environment. The emphasis is on employees learning continuously and on transferring knowledge quickly. 544 ❚ Human resource development

Developing a learning organization One approach to the development of a learning organization, as advocated by Senge (1990), is to focus on collective problem-solving within an organization using team learning and a ‘soft systems’ approach whereby all the possible causes of a problem are considered in order to define more clearly those which can be dealt with and those which are insoluble. Garratt (1990) believes that managers have to develop learning abilities as individuals, and work and learn as teams. He advocates the use of development activities such as job enlargement, job enrichment, monitoring, and various forms of team and project-based work. The learning organization and knowledge management Learning organizations are very much concerned with developing and sharing the knowledge that is critical to their strategic success. The problem is that it is hard to capture tacit knowledge in the form of the deeply embedded amalgam of wisdom and know-how that competitors are unable to copy. Methods of sharing knowledge were described in Chapter 12. One approach, as advocated by Wenger and Snyder (2000), is to encourage the development of ‘communities of practice’ in which people with similar concerns exchange ideas and knowledge and discuss shared problems. Wenger and Snyder claim that a community of practice could be treated as a ‘learning ecology’ with a life of its own in which there is scope to reflect jointly on experience so that it can be converted into learning. Scarborough and Carter (2000) suggest that although the concepts of the learning organization and organizational learning have offered some valuable insights into the way in which knowledge and learning are fostered by management practice, they have been overshadowed, at least in terms of practitioner interest, by the explosive growth of knowledge management activity. They comment that: This may be attributable to the problems of translating their (knowledge management and organizational learning) broad, holistic principles into practice. Knowledge management initiatives by contrast, are often more specifically targeted and can therefore be identified more closely with business needs. Problems with the concept of the learning organization The notion of the learning organization remains persuasive because of its ‘rationality, human attractiveness and presumed potential to aid organizational effectiveness and advancement’ (Harrison, 1997). But the concept has been criticized by Harrison Organizational learning and the learning organization ❚ 545

(2005) because, ‘as usually defined, it suggests that organizations have a life of their own and are themselves capable of learning, which is not the case’. Scarborough et al (1999) argue that ‘the dominant perspective (of the learning organization concept) is that of organization systems and design’. Little attention seems to be paid to what individuals want to learn or how they learn. The idea that individuals should be enabled to invest in their own development (a fundamental theme of human capital theory) seems to have escaped learning organization theorists, who are more inclined to focus on the imposition of learning by the organization, rather than creating a climate conducive to collaborative and self-managed learning. Viewing organizations as learning systems is a limited notion. Argyris and Schon (1996) contend that organizations are products of visions, ideas, norms and beliefs so that their shape is much more fragile than the organization’s material structure. People act as learning agents for the organization in ways that cannot easily be systematized. They are not only individual learners but also have the capacity to learn collaboratively (Hoyle, 1995). Organization learning theory analyses how this happens and leads to the belief that it is the culture and environment that are important, not the systems approach implied by the concept of the learning organization. Argyris and Schon (1996) refer to the practice-orientated and prescriptive literature of the learning organization, which is quite different from the concerns of organizational learning theorists about collaborative and informal learning processes within organizations. The notion of a learning organization is somewhat nebulous. It incorporates miscellaneous ideas about human resource development, systematic training, action learning, organizational development and knowledge management, with an infusion of the precepts of total quality management. But they do not add up to a convincing whole. Easterby-Smith (1997) argues that attempts to create a single best-practice framework for understanding the learning organization are fundamentally flawed. Prescriptions from training specialists and management consultants abound but, as Sloman (1999) asserts, they often fail to recognize that learning is a continuous process, not a set of discrete training activities. Burgoyne (1999), one of the earlier publicists for the idea of a learning organization, has admitted that there has been some confusion about the concept and that there have been substantial naiveties in most of the early thinking: ‘The learning organization has not delivered its full potential or lived up to all our aspirations’. He also mentioned that after a decade of working with the notion of the learning organization there are distressingly few, if any, case studies of success with the idea on a large scale. He believes that the concept should be integrated with knowledge management initiatives so that different forms of knowledge can be linked, fed by organizational learning and used in adding value to goods and services. This, he states, will 546 ❚ Human resource development

replace the ‘soft’ organizational development tools of the 1970s that were pressed hurriedly into service; ‘The learning organization ran ahead of the methods available to implement it and into this vacuum were sucked traditional approaches such as teamworking, leadership and personal development.’ At least, however, the learning organization movement has helped to emphasize the importance of knowledge management as a practical proposition for promoting organizational learning. In added-value terms, this is likely to provide more benefit to organizations than pursuing the will-o’-the-wisp of the learning organization as originally conceived. Organizational learning and the learning organization ❚ 547

How people learn An understanding of how people learn is necessary if learning is to take place effectively in an organization. The aims of this chapter are to: ● define the concept of learning; ● describe the process of learning; ● summarize the different ways in which people in general learn (learning theory); ● describe how individuals learn – their learning styles and ‘learning to learn’; ● examine the concept of the learning curve – how people achieve required skill levels; ● discuss the key topic of the motivation to learn; ● describe the practical implications of these theories, concepts and approaches; ● set out the conditions for effective learning. LEARNING DEFINED Learning has been defined by Kim (1993) as the process of ‘increasing one’s capacity to take action’. As explained by Reynolds et al (2002) it should be distinguished from training: ‘Learning is the process by which a person acquires new knowledge, skills and capabilities whereas training is one of several responses an organization can take to promote learning.’ 37

A distinction was also made between learning and development by Pedler et al (1989), who see learning as being concerned with an increase in knowledge or a higher degree of an existing skill, whereas development is more towards a different state of being or functioning. Argyris (1993) makes the point that ‘Learning is not simply having a new insight or a new idea. Learning occurs when we take effective action, when we detect and correct error. How do you know when you know something? When you can produce what it is you claim to know.’ THE LEARNING PROCESS A number of leading authorities on learning in organizations (Honey, 1998) have declared that ‘learning is complex and various, covering all sorts of things such as knowledge, skills, insights, beliefs, values, attitudes and habits’. Individuals learn for themselves and learn from other people. They learn as members of teams and by interaction with their managers, co-workers and people outside the organization. People learn by doing and by instruction. The ways in which individuals learn differ, and the extent to which they learn depends largely on how well they are externally motivated or self-motivated. The effectiveness of learning will be strongly influenced by the context in which it takes place. This includes the values of the organization. Is it truly believed that learning is important as a means of developing a high performance culture and achieving competitive advantage? Is this belief confirmed by actions that encourage and support learning? Is the approach to learning delivery in line with the belief of Birchall and Lyons (1995) that ‘For effective learning to take place at the individual level it is essential to foster an environment where individuals are encouraged to take risks and experiment, where mistakes are tolerated, but where means exist for those involved to learn from their experiences’? LEARNING THEORY There are a number of learning theories, each of which focuses on different aspects of the learning process as applied to people in general. The main theories are concerned with: ● reinforcement; ● cognitive learning; ● experiential learning; ● social learning. 550 ❚ Human resource development

Reinforcement theory Reinforcement theory is based on the work of Skinner (1974). It expresses the belief that changes in behaviour take place as a result of an individual’s response to events or stimuli, and the ensuing consequences (rewards or punishments). Individuals can be ‘conditioned’ to repeat the behaviour by positive reinforcement in the form of feedback and knowledge of results. Gagne (1977) later developed his stimulus-response theory, which relates the learning process to a number of factors, including reinforcement, namely: ● Drive – there must be a basic need or drive to learn. ● Stimulus – people must be stimulated by the learning process. ● Response – people must be helped by the learning process to develop appropriate responses; in other words, the knowledge, skills and attitudes that will lead to effective performance. ● Reinforcement – these responses need to be reinforced by feedback and experience until they are learnt. Cognitive learning theory Cognitive learning involves gaining knowledge and understanding by absorbing information in the form of principles, concepts and facts, and then internalizing it. Learners can be regarded as powerful information processing machines Experiential learning theory People are active agents of their own learning (Reynolds et al 2002). Experiential learning takes place when people learn from their experience by reflecting on it so that it can be understood and applied. Learning is therefore a personal ‘construction’ of meaning through experience. ‘Constructivists’ such as Rogers (1983) believe that experiential learning will be enhanced through facilitation – creating an environment in which people can be stimulated to think and act in ways that help them to make good use of their experience. Social learning theory Social learning theory states that effective learning requires social interaction. Wenger (1998) suggested that we all participate in ‘communities of practice’ (groups of people with shared expertise who work together) and that these are our primary sources of learning. Bandura (1977) views learning as a series of information processing steps set in train by social interactions. How people learn ❚ 551

LEARNING STYLES Learning theories describe in general terms how people learn, but individual learners will have different styles – a preference for a particular approach to learning. The two most familiar classifications of learning styles are those produced by Kolb and by Honey and Mumford. Kolb’s learning style inventory Kolb et al (1974) identified a learning cycle consisting of four stages as shown in Figure 37.1. He defined these stages as follows: ● Concrete experience – this can be planned or accidental. ● Reflective observation – this involves actively thinking about the experience and its significance. ● Abstract conceptualization (theorizing) – generalizing from experience in order to develop various concepts and ideas which can be applied when similar situations are encountered. ● Active experimentation – testing the concepts or ideas in new situations. This gives rise to a new concrete experience and the cycle begins again. 552 ❚ Human resource development Observations and reflections Testing implications of concepts in new situations Concrete experience Formation of abstract concepts and generalizations Figure 37.1 The Kolb learning cycle

The key to Kolb’s model is that it is a simple description of how experience is translated into concepts which are then used to guide the choice of new experiences. To learn effectively, individuals must shift from being observers to participants, from direct involvement to a more objective analytical detachment. Every person has his or her own learning style, and one of the most important arts that trainers have to develop is to adjust their approaches to the learning styles of trainees. Trainers must acknowledge these learning styles rather than their own preferred approach. Kolb also defined the following learning styles of trainees: ● Accommodators who learn by trial and error, combining the concrete experience and experimentation stages of the cycle. ● Divergers who prefer concrete to abstract learning situations, and reflection to active involvement. Such individuals have great imaginative ability, and can view a complete situation from different viewpoints. ● Convergers who prefer to experiment with ideas, considering them for their practical usefulness. Their main concern is whether the theory works in action, thus combining the abstract and experimental dimensions. ● Assimilators who like to create their own theoretical models and assimilate a number of disparate observations into an overall integrated explanation. Thus they veer towards the reflective and abstract dimensions. The Honey and Mumford learning styles Another analysis of learning styles was made by Honey and Mumford (1996). They identified four styles: ● Activists who involve themselves fully without bias in new experiences and revel in new challenges. ● Reflectors who stand back and observe new experiences from different angles. They collect data, reflect on it and then come to a conclusion. ● Theorists who adapt and apply their observations in the form of logical theories. They tend to be perfectionists. ● Pragmatists who are keen to try out new ideas, approaches and concepts to see if they work. However, none of these four learning styles is exclusive. It is quite possible that one person could be both a reflector and a theorist, and someone else could be an activist/pragmatist, a reflector/pragmatist or even a theorist/pragmatist. How people learn ❚ 553

LEARNING TO LEARN People learn all the time, and through doing so acquire knowledge, skills and insight. But they will learn more effectively if they ‘learn how to learn’. As defined by Honey (1998), the process of learning to learn is the acquisition of knowledge, skills and insights about the learning process itself. The aims, as described by Honey, are to: ● provide a basis for organizing and planning learning; ● pinpoint precisely what has been learnt and what to do better or differently as a consequence; ● share what has been learnt with other people so that they benefit; ● check on the quality of what has been learnt; ● transfer what has been learnt and apply it in different circumstances; ● improve the learning process itself so that how people learn, not just what people learn, is given constant attention. THE LEARNING CURVE The concept of the learning curve refers to the time it takes an inexperienced person to reach the required level of performance in a job or a task. This is sometimes called the experienced worker’s standard (ESW). The standard learning curve is shown in Figure 37.2, but rates of learning vary, depending on the effectiveness of the learning process, the experience and natural aptitude of the learner, and the latter’s interest in learning. Both the time taken to reach the experienced worker’s standard and the variable speed with which learning takes place at different times affect the shape of the curve, as shown in Figure 37.3. Learning is often stepped, with one or more plateaux while further progress is halted. This may be because learners cannot continually increase their skills or speeds of work and need a pause to consolidate what they have already learnt. The existence of steps such as those shown in Figure 37.4 can be used when planning skills training, to provide deliberate reinforcement periods when newly acquired skills are practised in order to achieve the expected standards. When a training module is being prepared which describes what has to be learnt and the training required to achieve the required levels of skill and speed, it is often desirable to proceed step by step, taking one task or part of a task at a time, reinforcing it and then progressively adding other parts, consolidating at each stage. This is called the progressive parts method of training. 554 ❚ Human resource development

THE MOTIVATION TO LEARN People will learn more effectively if they are motivated to learn. The motivation to learn can be defined as ‘those factors that energise and direct behavioural patterns organized around a learning goal’ (Rogers, 1996). As Reynolds et al (2002) comment, ’The disposition and commitment of the learner – their motivation to learn – is one of How people learn ❚ 555 EWS Performance Time Figure 37.2 A standard learning curve EWS Performance Time Figure 37.3 Different rates of learning

the most critical factors affecting learning and training effectiveness. Under the right conditions, a strong disposition to learn, enhanced by solid experience and a positive attitude, can lead to exceptional performance.’ Two motivation theories (described in Chapter 18) are particularly relevant to learning. Expectancy theory states that goal-directed behaviour is driven by the expectation of achieving something the individual regards as desirable. If individuals feel that the outcome of learning is likely to benefit them, they will be more inclined to pursue it. When they find that their expectations have been fulfilled, their belief that learning is worthwhile will be reinforced. Goal theory states that motivation is higher when individuals aim to achieve specific goals, when these goals are accepted and, although difficult, are achievable, and when there is feedback on performance. Learning goals may be set for individuals (but to be effective as motivators they must be agreed), or individuals may set their own goals (self-directed learning). THE IMPLICATIONS OF LEARNING THEORY AND CONCEPTS The practical implications of the learning theories and concepts described above are summarized in Table 37.1. 556 ❚ Human resource development EWS Performance Time Figure 37.4 A stepped learning curve

How people learn ❚ 557 Theory/concept Content Practical implications The process of Learning is complex and is Different learning needs require different learning achieved in many different ways. learning methods, often in combination. The context is important Learning effectiveness depends on the extent to which the organization believes in learning and supports it Reinforcement Behaviours can be strengthened Reinforcement theory underpins theory by reinforcing them with positive training programmes concerned with feedback (conditioning) developing skills through instruction. In these, the learner is conditioned to make a response and receives immediate feedback, and progress is made in incremental steps, each directed to a positive outcome Cognitive Learners acquire understanding The knowledge and understanding of learning theory which they internalize by being learners can be enriched and exposed to learning materials internalized by presenting them with and by solving problems learning materials (eg e-learning). Case studies, projects and problem solving activities can also be used for this purpose. Self-directed learning, personal development planning activities and discovery learning processes with help from facilitators, coaches or mentors are underpinned by cognitive learning theory Experiential People learn by constructing Learning through experience can be learning theory meaning and developing their enhanced by encouraging learners to skills through experience reflect on and make better use of what they learn through their own work and from other people. Self-directed learning and personal development planning activities with help from facilitators, coaches or mentors are also underpinned by experiential learning theory, as is action learning Table 37.1 The implications of learning theory and concepts continued