Human Resource Management in the Service Sector

Review of the course

2

Overview

Course examines the HRM challenges in the knowledge-intensive service sector

1. Introduction: characteristics of the service sector and identifying the knowledge-intensive section of this sector (1 week)

2. Develop theoretical frameworks and perspectives for analysing the HR challenges (2 weeks)

3. Investigation of HR challenges in four types of organisations in this sector: call centres, management consulting, law and creative (8 weeks)

Summary and review (second half of final week)

3

Course design

HRM challenges theory

Call centres

Theory

Management consultancies

Theory

Law Firms: theory and case

Creative Firms: Theory and case

Managing knowledge workers

Call centres

Case

Management consultancies

Case

Law Firms: theory and case

Creative Firms: Theory and case

Cha

ract

eris

tics

of t

he s

ervi

ce s

ecto

r

Sum

mar

y an

d re

visi

on

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Literature focus for the course

HRM & knowledge-intensive services

Services sector Professional Services

5

Week 1: Introduction to the service sector: objectives

• Outline the importance of the service sector in modern economies

• Identify the key characteristics of service work and the areas of the sector for detailed study: knowledge intensive work

• Outline the research in the area• Introduce the HRM challenges posed by

knowledge based service sector working

6

Converting Human Capital into Intellectual Capital

Human Capital

Employee Knowledge Skills Experience

Conversion Process

Intellectual CapitalHuman Capital

Role of HR practices in this

conversion process

Products and services which have market value

7

Implications for HRM

Intangible

Knowledge based

Customised

Professional

Measurement

Standardisation

Performance management/reward

Training and Development

Recruit and retain

Staff allocation

Renewal

Organisational commitment

Nature of Work Managerial problem HRM issue

(Drawn from Suddaby and Greenwood (2006) Maister (2003) and Batt (2006))

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Week 2: HR practices in knowledge intensive firms: objectives

• To understand the distinctive characteristics of knowledge intensive service firms

• To identify the key resources (forms of capital) that knowledge intensive firms draw on for their success

• To identify the challenges for managing people and managing knowledge faced by knowledge intensive firms

• To explore the ways in which HR strategy, structure, delivery and practices can be used to create valuable products and services

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Pressures on knowledge intensive firms

Product market - Customers and clients

Financial success – short and long term

Employment market – needs of employees

KIF

(Maister, 2003)

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IntellectualCapital

Human capital

Social capital

Structural capital

NetworkCapital

Client Capital

OrganizationalCapital

Forms of CapitalKnowledge skills and experience of staff

Knowledge embedded in values, culture and relationships

Ways of structuring work

Procedures, policies and processes

Knowledge of and relationships with clients

Knowledge of and relationships with network members

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Human capital

Social capital

Structural capital

NetworkCapital

Client Capital

OrganizationalCapital

IntellectualCapital

Resourcing

Job and

Work D

esign

Trai

ning

and

Dev

elop

men

t

Pay and Reward

Perform

ance

Managem

ent

Invo

lvem

ent

Delivery

Strategy Structure

The HR Wheel

Kinnie et al 2006

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Week 3: Managing knowledge workers: objectives

• Define a knowledge worker• Identify the characteristics of knowledge workers and

understand the human resource management challenges presented by them

• Explain how knowledge workers are managed• Identify and discuss the dilemmas associate with the

management of knowledge workers• Understand how social identity can resolve some of the

tensions involved in the management of knowledge workers

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Managerial challenges• How can organisations retain and develop their

professionals?• Presents three dilemmas that sit between the

employee and the organisation

Retention Employability

Organisation specific

Transferable

Value capture Ownership of value

Mult

iple

Identi

ty

pers

pect

ive

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Multiple sources of identity

Organisation

Client

Professional

Team

EE

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Weeks 4 and 5: Call Centres: objectives

• Define call centres and understand the reasons for their growth

• Identify the key characteristics of the nature and management of call centres

• Analyse their forms of human capital and consider the implications for HR especially recruitment, selection and retention

• Examine recent changes in call centres especially the moves towards outsourcing and off-shoring

• Apply the 4 ID model to gain insights into the nature of work in call centres – with reference to the Norwich Union case

(Refs: Deery and Kinnie, 2004; Korczynski, 2002, Frenkel et al, 1999, Homan, 2004)

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Weeks 6 and 7: Management Consulting: objectives

• To understand the characteristics of the management consulting industry– History– Types of organisations– Types of consultancy activities

• Typology of human capital – According to the client interface process – Career structures within management consultancy– The role of consultants as knowledge brokers

• Typology of client capital– The consulting firm – client relationships

• The HRM practice focus:– Recruiting human capital– Managing across boundaries

Human capital

Social capital

Structural capital

NetworkCapital

Client Capital

OrganizationalCapital

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

Clients Facilitators

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Facilitator network: HC viewpoint

External pool of facilitators

Focal Practice Group

Regions

Other Practice Groups

Clients

Clients

Clients

ClientsFacilitators

within clients

External skill experts

External skill expertsExternal skill experts

HC boundary

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Weeks 8 and 9: Law Firms: objectives

• Understand the basic characteristics of the sector• Identify the traditional model of organising and

management of HR• Consider some of the key changes in the sector

and the responses of law firms• Identify the challenges this presents for HRM and

for knowledge management• Focus on the key issue of remuneration and

reward, especially variable reward• Analyse a practical case drawing on our knowledge

of theory

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Traditional HR practices ‘Up or Out’

Elite recruitment

Apprenticeship model

Partner in 6 years – or leave the firm

High reward for equity partners

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‘High Trust’

• Local law firm - medium sized and growing fast• Strong emphasis on culture and values inclusive

and mutual respect – building social capital – sharing work and knowledge

• Issue of how to reward their staff who contribute to the success of the firm while reinforcing their values

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Weeks 10 and 11: Creative Firms: objectives

• Understand the basic characteristics of the sector and establish our focus on advertising/marketing agencies

• Identify the key forms of capital present in these firms

• Identify the challenges this presents for HRM especially the development and retention of staff

• Draw contrasts between two practical cases on the way they manage these HR challenges

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Building network capital

Client

Marketing manager

Agency

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Key challenges and tensions facing HRM in marketing agencies

• External Resourcing– Attraction and retention of staff valuable to the firm and to existing and potential clients– Recruiting for internal development – recruiting experienced staff

• Internal Resourcing– Promotion and career building – efficient allocation of staff– Rotation of staff - building and maintaining client and network relationships

• Training and Development– Developing human capital - developing client capital– Importance of coaching, feedback and development – importance of serving client needs

• Reward– Intrinsic rewards linked to development – extrinsic rewards linked to client success– Longer term rewards through promotion – shorter term linked to targets

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

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Revision

• Essential to understand the basic theoretical frameworks underlying the course (weeks 2 and 3 especially)

• Need to be able to apply these to the four sectors studied (eg how does the reactor model apply to creative firms)

• Facility to move between theory and practice (to understand the theory in practice and the practice in theory)

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Revision continued

• Cases studied in class are important along with other cases and your own experience

• Key is to build up your understanding of the issues – at a sector level and at a macro/cross sector level

• Use the frameworks and models to guide your analysis – to help you understand the issues/problems/cases

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Examination structure and rubric

• Unseen paper in 2 hours no additional materials

• 6 questions – one from each sector studied plus two others

• Answer three questions

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Sample questions

• What are the most important external pressures on the managers of knowledge intensive firms? How might HR strategy and practice help to manage these pressures?

• How might the concept of multiple identities help managers of HR contribute to the creation of organisational value in professional service firms?

• With reference to the ‘High Trust’ case study discuss the problems associated with designing a variable reward system in law firms. How might these problems be resolved?

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Expectations

• Demonstrate your learning and your understanding of the theory and the practice

• Answers which directly focus on the question (basic descriptive answers will get a low pass)

• Explicit references to previous research (you will get credit for this)

• Good use of practical examples to illustrate points (credited)

• Highlight conflicts and tensions where they exist• Develop an argument which is supported by theory and

evidence (illustrates higher level understanding)

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Advice

• All the basics apply: plan your answer/focus on the question/refer to relevant theory and examples/pull it together

• Thorough revision – understanding not rote learning – test yourself out – use the models to analyse cases; use the cases to ask: what is this an example of?

• See links between the models and sectors• Use contemporary examples if you can – shows

engagement with the material