Understanding HRM in the context of organizations and ... and HRM (3-4).pdf · some unique...

IB 3-4 Innovation and HRM Week 1

IB Block 4 – Innovation and HRM Summary by Boris Nissen, 2001

Understanding HRM in the context of organizations and their environments (Jackson & Schuler) - empirical evidence begins to shed light on relationship between contextual conditions (internal & external)

and HRM � paper provides a literature review on the topic and suggest areas of future research - HRM � a) specific human resource practices such as recruitment, selection and appraisal; b) formal human

resource policies which direct and partially constrain development of specific practices; c) overarching human resource philosophies

- Paper: To understand HRM in context, we have to consider how the 3 components of HRM are affected by the internal and external environments of organizations

Theoretical perspectives relevant to understanding HRM in context - general systems theory: unit of analysis is understood as a complex of interdependent parts; an open system

is dependent on the environment for inputs, which are transformed to produce outputs that are exchanged in the environment � HRM as a control system (many specific theories assume that organizations function like open systems

- role behavior perspective: focus on roles as the interdependent components that make up an organization (social system is characterized by multiple roles, HRM is organization’s primary means for sending role information through the organization, supporting desired behaviors and evaluating role performances) o behavioral expectations of all role partners can influence the behavior of organization members

Theories developed in context of understanding large public bureaucracies - institutional theory: organization as social entities that seek approval for their performances in socially

constructed environments (legitimacy and acceptance) – research focuses on pressures emanating from the internal and external environments o results in a) resistance to change, b) pressures to become similar (imitative behavior)

- resource dependence theory: emphasis on resource exchanges as central feature of relationships

Theories developed in context of understanding business enterprises (efficiency is central) - human capital theory: productive capabilities of people can only be fully realized in cooperation with the

person – thus all costs related to elicit productive behavior are investments (contextual factors affect the costs)

- transaction cost theory: assumes that business enterprises choose governance structures that economize transaction costs associated with establishing, monitoring, evaluating, and enforcing agreed upon exchanges o assumes bounded rationality and opportunism – which have to be countered/used by implicit and

explicit contracts o contextual factors influence availability and costs of external and internal skills

- agency theory: contract between principal and agent � 1) conflicting goals; b) monitoring difficult and expensive – contextual factors affect both costs and potential gains associated with a particular human resource practice

- resource-based theory: organizations can be successful through competitive advantage (needs variable resources among competitors and immobile resources) – HRM influences an organization’s human and organizational resources and thus can be used to gain competitive advantage

Review of empirical research

HRM and the internal contexts of organizations - technology = processes for transforming inputs into usable outputs – can shape HRM, but also other way

round - structure = allocation of tasks and responsibilities among individuals and departments; nature and means of

formal reporting relationships as well as groupings of individuals o structural forms are associated with variety of internal and external forces – each form probably faces

some unique challenges that have implications for HRM o HRM has been shaped in functional departmentalization context, but teamwork requires new

approaches (job analysis, assessment, recruitment, socialization)



o considering international operations, the impact of structure on HRM becomes evident - size – institutional theory suggests larger org. should adopt more sophisticated and socially responsive HRM

activities; economic theory suggest economies of scale (size) needs to be reached for sophisticated HRM � HRM systematically varies with organization size

- life cycle stages – directs attention to the changing managerial priorities that characterize organizations in various developmental stages o research focused on matching employees to stages; as well as importance of staffing issues, etc. �

deterministic view: live cycle stages constrain and shape HRM - business strategy (Miles & Snow: prospectors, analyzers, defenders, reactors) – has effect on quantity and

pace of human resource flows � strategy is a contextual factor with important implications for HRM

HRM and the external contexts of organizations - legal, social and political environments – almost all aspects of HRM are affected by the legal and

regulatory environment, which is influenced by the social and political; becomes even more difficult in international context (institutional theory and resource-dependence theory appear to be useful guidelines)

- unionization: no longer black-and-white; differs internationally and MNEs have to take histories and institutions into account when developing company-wide HRM philosophies, policies and practices

- labor market conditions – considered along dimensions of unemployment level, labor diversity and labor market structure o e.g. recruitment strategies vary with unemployment level (consistent with transaction cost theory) o diversity have mostly been ignored by theory, but not so much by practice –substantial evidence

suggests that HRM systems differ across occupational groups o industry characteristics (only consider manufacturing vs. service) – intangibility, collaboration and

simultaneous production and consumption have far-reaching implications for HRM o national culture – culture may not explain all HRM differences, there is even evidence that some types

of HRM systems can be used effectively across countries that are culturally dissimilar (organizational and industry characteristics may be more important)

An integrative perspective for research on HRM in context (see Graph) - literature review has revealed how seldom research addresses horizontal linkages among HRM activities –

understanding of vertical linkages between HRM and contexts cannot proceed without attending to the horizontal interdependencies that exist among human resource policies and practices

- available theories are inadequate, each deals with pieces, but none addresses the whole domain of HRM in context

- needed is a shift in perspective: a) use social systems as a target for study; b) take a holistic approach to conceptualizing HRM systems; c) longitudinal study on multiple companies needed; d) search for fundamental features, not the best way

Human resources and sustained competitive advantage: a resource-based perspective (Wright, McMahan & McWilliams) - paper integrates theories and findings of micro-level organizational behavior/HRM research with the macro-

level resource-based view of the firm � HRs are an important potential source of sustained competitive advantage

- resource-based view of the firm links internal resources to strategy and performance – unlike other strategic analysis tools (e.g. Porter) have an industry environment focus, it has a firm focus � what specific resources are capable of serving as sustained competitive advantages, and in what circumstances are resources likely to generate a sustained competitive advantage

The resource-based view of the firm - resources = all assets, capabilities, organizational process, firm attributes, information, knowledge, etc.

controlled by a firm that enable it to conceive of an implement strategies that improve its efficiency and effectiveness � 3 categories: physical capital resources; human capital resources; organizational capital resources



- competitive advantage = occurring when a firm is implementing a value creating strategy not simultaneously being implemented by any current or potential competitors � requires resource heterogeneity and firm resource immobility

- sustained competitive advantage = exists only when other firms are incapable of duplicating the benefits of a competitive advantage – 4 criteria: 1) add value; 2) unique or rare; 3) imperfectly imitable; 4) cannot be substituted with another resource by competing firms

Human resources as a firm resource - human resources = pool of human capital under the firm’s control in a direct employment relationship - human resource practices = organizational activities directed at managing the pool of human capital and

ensuring that the capital is employed towards the fulfillment of organizational goals - 2 important aspects of human resources: 1) focus on knowledge, skills and abilities (KSAs) inherent in the

individuals; 2) characteristics of individuals do not provide value to the firm unless they are utilized through employee behavior (behavior is the mediator in the relationship between strategy and performance – KSAs are necessary, but not sufficient)

Sustained competitive advantage criteria and human resources - criteria of a sustained competitive advantage: valuable, rare, imperfectly imitable and non-substitutable - valuable: if both demand and supply were homogeneous, it would not be possible to create value through

investment in human assets, but both are rather heterogeneous and the variance in individuals’ contribution of value to the firm allows for value creation o utility analysis for human resource programs has provided a theoretical rationale and techniques to

estimate their effect � consensus that higher quality human resources result in higher financial value for firms

- rare: as jobs require skills which allow for variance in individual contributions and skills should be normally distributed in the population, high quality human resources are rare o cognitive ability is best predictor of performance in work organization (strong positive relationship with

individual job performance; evidence on stability and normal distribution) - imitability: requires ability to identify source of advantage and ability to duplicate the resource and the

circumstances under which the resource functions o unique history, causal ambiguity (link between resource and competitive advantage is imperfectly

understood – occurs in team production) and social complexity (by definition results from human interactions)� result in imitability of human capital resources in terms of their ability levels, but behaviors may still differ � competitive advantages stemming form culture or norms, team production or transaction-specific

human capital might be imitable if one were able to identify and replicate the exact historical occurrences and the interactions, programs and personalities within the firm – this hower s highly unlikely

o resource immobility – human resources are far from being perfectly or even highly mobile: 1) transaction costs are involved; 2) causal ambiguity or social complexity may make identification of exact source of competitive advantage difficult and surroundings are hard to transfer � immobility allows firms to create value form human resources, otherwise those could measure their contribution and make firms unable to capture rents

- non-substitutable: HR have potential to not become obsolete and are transferable across a variety of situations � they may be substituted in the short-term, but it is highly unlikely that the substitution could create competitive advantage (those that could substitute them would themselves be valuable, rare, inimitable and non-substitutable)

� HR meet criteria for being a source of sustainable competitive advantage

Top-management versus HR - most writing has focused on top managers as source of sustainable competitive advantage – but authors

argue that it s the larger pool of human capital that creates the advantage – as visibility of management action makes them highly imitable and highly mobile (managers capture the rents they generate and are not likely to be a source for sustained competitive advantage)

Human resources and sustained competitive advantage - way in which human resources provide a relative competitive advantage differ somewhat depending upon

the nature of the environment:



o static environment: higher levels of human capital should enable a firm to have productivity advantages o dynamic and complex environments: human capital pool can affect firm effectiveness through

increasing its capacity to adapt to particular environmental requirements � 3 essential components of strategy implementation are flexibility, communication and cohesion, they provide a competitive advantage through enabling a firm to: � sense critical environmental variables – high HC resources increase monitoring capability through

decentralization � develop strategies to react to those variables – sub-units develop the strategies and tactics

necessary � implement these strategies quickly and effectively

Human resource practices and sustained competitive advantage - research had main focus on HR practices to enable competitive advantage – however HR practices by

themselves are easily imitated or substituted – therefore the authors suggest that the source of sustained competitive advantage lies in the human resources themselves

- HR practices play an important role in developing sustained competitive advantage through 1) development of the human capital pool (attract, retain, invest) and 2) through moderating the relationship between the pool and sustained competitive advantage by affecting HR behavior

- once a high quality HR capital pool has been developed a firm has a fist mover advantage, but HR practices need to capitalize on the advantage through eliciting employee behavior

The role of mangers in developing human resources as a source of sustained competitive advantage - resource based view limits managers ability to manipulate all the characteristics of their firms - resource based view also makes clear that competitive advantage cannot be bought, but must be found in the

rare, imperfectly imitable and non-substitutable resources already controlled by a firm � role for manager is to recognize, develop and exploit the resources within the firm

Conclusion - When the supply of and demand for labor is heterogeneous, human capital characteristics are normally

distributed, firms have unique histories, work processes are characterized by causal ambiguity and social complexity and human capital is transferable across technologies, human resources have the potential to constitute a source of sustained competitive advantage for a firm.

- Resource-based view suggest need to integrate HR into strategy formulation – it provides a framework for examining the role of HR in competitive success and makes clear that costs incurred in HR interventions should be viewed as investments in future returns



Psychology and organizational innovation (Angle) - management of innovation is the management of people � chapter is concerned with ways in which

personal attributes interact with activities, experiences and social contexts to influence the development of innovative ideas over time

- 3 factors are necessary to understand organizational behavior: 1) what a person brings to a situation; 2) what he does there; 3) what happens to him

- innovative behavior is motivated behavior � motivation and ability are equally important; both come from within persons and the context, thus both are important; ability contains creativity as an important individual difference

Innovation: A matter of persons, situations, effort and ability - Proposition 1: Organizational innovation is a joint function of members’ personal attributes and the context

for innovation in their organization. - Proposition 2: Organizational innovation occurs in organizations that provide a context that contains both

enabling and motivating conditions for innovation; innovation will not occur where either factor is missing. o motivating conditions are those that lead people to try � extrinsic (come from outside the individual)

and intrinsic rewards (much more important, are received automatically as a result of relevant behavior) � behavior is a function of its consequences.

- Proposition 3: Organizational innovation is a function of the intrinsic and extrinsic rewards associated with innovative behavior.

- Proposition 4: Financial compensation, per se, is a relatively weak extrinsic reward for innovation. However, to the extent that it provides an effective means for organizations to express recognition, pay can help motivate future innovative behavior

- Proposition 5: The more individualized the reward system, the more effective will be the idea-generation process; the more collectivist the reward system, the more effective will be the innovation implementation process.

- Proposition 6: Individualized reward systems are better suited to motivation for radical innovation; group-based reward systems are more effective in motivating for incremental innovations.

- Proposition 7: Extrinsic motivation is necessary, but not sufficient for evoking spontaneous, innovative behaviors; it is at least equally necessary for organizations to create and sustain conditions that facilitate intrinsic motivation. Above all, a suitable balance needs to be struck between intrinsic and extrinsic motivation.

- Proposition 8 (enabling): Innovation effectiveness is positively associated with frequency of communication among persons having dissimilar frames of reference.

- Proposition 9 (enabling): Innovation effectiveness is associated with a moderate amount of environmental uncertainty. At extremely high or low levels of uncertainty, innovativeness is reduced

- Proposition 10 (enabling): Competition with peer units in the organization for scarce resources is associated with reduced innovation effectiveness.

� It has been argued that an organization’s motivating and enabling conditions are importantly related to its

level of innovation. Not only must organizations motivate their members to attempt to innovate, they must also manage the environment so as to reduce inhibitory influences and to increase the number of facilitating factors. Both the try and the can of innovation are important.

People strive to make sense out of their world but are somewhat limited in their capacity to do so - Perception of the environment differs among people, as the human information processing capacity is

limited and as too much information is flowing in, perception is a selective process where people rationalize � people are rational, but imperfectly so, the filter out information and tend not to notice gradual changes in their envrionment

- Proposition 11: The level of innovation in an organization is positively associated with the existence of mechanisms for focusing members’ attention on changing conditions.

Creativeiy is not necessarily innovaiton - creativity = process that is extended in time and characterized by originality, adaptiveness and realization



- Proposition 12: Innovation effectiveness is positively related to the extent to which the organization is able to integrate creative personalities into the organizational mainstream. (as highly creative persons are assumed to be individualistic and antisocial) o creativity can be enhanced by selection or development, but org. environment is a key determinant

- Proposition 13: Particularly under conditions of environmental change and uncertainty, the level of organizational innovation is higher in organic organizations than in mechanistic organizations.

People are social animals and organizations are social systems - People also depend on others for ambiguity reduction � social construction of reality, which is

homogenized over time - Proposition 14: Assuming that newcomers bring new, useful ideas to the group, innovation effectiveness is

positively associated with a moderate amount of turnover in the innovation team. Too little turnover, like too much turnover, is dysfunctional.

- Proposition 15 (social influence on behavior and beliefs): The level of innovative activity in an organization is positively associated with the availability of innovation role models or mentors who enjoy high status in the organization and who are appropriately rewarded for their innovative contributions. o Behavior is also a function of expectations (self-fulfilling prophecy)

- Proposition 16 (psychological contract): The level of innovative activity in the organization is higher in organization where there is consensus between organization members that spontaneous, innovative behaviors are a legitimate part of the psychological contract.

- Proposition 17 (commitment): The level of innovative activity in an organization is positively related to members’ value commitment, but is not related systematically to these members’ commitment to stay.

- Proposition 18 (commitment): Innovation success is positively related to management’s ability to balance innovation team members’ commitment to the innovation and to the larger organization.

- Proposition 19: Innovation effectiveness is positively associated with group cohesiveness, provided that an open, confrontive climate for conflict resolution exists within the innovation team. Absent such a climate, cohesiveness is negatively related to the level of innovation of the team.

Dynamic interactions among people - Proposition 20: As people engage in an innovation over time, prevalent affective states tend to change; i.e.

form euphoria at first, to pain as the innovation develops: Post hoc evaluation of the experience are biased toward the positive, which interferes with organizational learning.

Conclusion - organizations need to establish conditions that enable innovation, just as they must provide the proper

motivation for innovation, neither is sufficient in itself. - inherent complexity of the innovation process make it difficult to reach unambiguous conclusions as to

results

Human resource policies for the innovating organization (Galbraith) - though revered, innovation is difficult to achieve for it is: 1) destructive; 2) a political process as it runs

against established ways of doing things; 3) requires an innovative organization specifically designed to produce commercially successful ideas � firms need 2 organizations, one for innovation, one for operation – both have different requirements

- innovating organization consists as operating organization of: task, structure, processes, reward systems and people, but as the task is fundamentally different (uncertainty and risk, longer time horizon, failure in early stages needed for learning), all other elements also differ

The structure of the innovating organization - there are 3 main roles in the commercialization of any new idea:

o idea generator (or idea champion) – well explored, but other roles needed as idea generator is usually a low-level person experiencing a problem and developing a solution, but he lacks authority and resources



o sponsor – every idea needs at least one sponsor to promote it, who discovers it and sees its business significance and then lends his authority and resources – therefore sponsors need to be generalists (usually middle managers, but it often takes multiple sponsors to launch a new idea)

o orchestrator – needed as innovations are usually destructive and orchestrator has to balance power; he protects idea people, promotes opportunities to try out new ideas and them backs them when tested � he is the one to legitimize the process (usually top managers)

- an effort is differentiated when it is separated physically and financially, and/or organizationally form the day-to-day activities � differentiation leads to greater likelihood of innovation, but the dilemma is that it causes transfer of the idea into the operating organization to become more difficult

- however, in all separating the initial efforts from the operating organization and its controls is necessary - reservations = organizational units totally devoted to creating new ideas for future business (safe learning

environments, either internal or external, permanent or temporary) - collectively, the roles of orchestrators, sponsors and idea generators working with an on reservations

constitutes the structure of the innovating organizations (some people play roles in both organizations) - people vary considerably in their innovating skills – recognizing the roles and developing or selecting

people for them and giving them opportunity to use their skills through key processes and rewarding innovating accomplishments, the organization can do considerably better

Key processes in the innovating organization - funding – explicit funding helps increase ability to innovate - idea getting – odds of match-ups can be improved by organization design (e.g. multidivisional careers or

formal events � make innovation legitimate and by that the odds of having sponsors find new ideas is increased)

- idea-blending – important is the blending of knowledge on the need and the means for satisfying a need; best is if this knowledge is combined in the minds of as few people as possible

- transmitting – most crucial process is the transition of an idea form a corporate reservation to an operating organization for implementation (this occurs stage wise)

- program management process – the idea generator hands over the innovation to a program manager at the time of implementation

Human resource policies I – reward system - innovating tasks is riskier, more difficult and takes place over longer time horizons � different rewards

needed to 1) attract and hold idea people; 2) motivate the extra effort needed; 3) reward successful performance

- rewards for idea generators � choice of reward system consists of encouraging internal motivation by providing opportunity to pursue one’s ideas, promotion, recognition, and special compensation (to signal the importance of innovation)

- rewards for sponsors - reward system should be as simple as possible!

Human resource policies II – staffing the innovating organization - assumption is that some people are better at innovating and not necessarily the same good at operating �

success can be increased by systematically developing and selecting those people who are better at innovating than others

- attributes of idea generators: high need for achievement and risk taking; irreverence towards the status quo; knowledge of industry, but not the religion of the industry + varied experience (variety creates the coupling necessary, idea generators are generalists, not specialists)

- attributes of sponsors and reservation managers: management style for idea people (need to be carefully guided), early experience in innovating (some idea generators and champions should become mangers), idea-generating capabilities (need to be able to generate a business idea or blend several partial ideas), skills at putting together deals and generalist business skills

Conclusion - by recognizing and formalizing the roles, processes, rewards and people practices, the organization is more

likely to generate innovations – a consistent set of policies is needed



Innovative genius: A framework for relating individual and organizational intelligences to innovation (Glynn) - intelligence = ability to solve problems or create products that are valued within one or more cultural

settings - organizational innovation = novelty that is useful - objective of article is to build a theory that explains the cognitive foundations of organizational innovation –

central idea is that intelligence is embedded in organizations and operates through both individual agents and institutionalized systems to affect organizational behavior – thus organizational innovation is based on individual and organizational intelligences, which are moderated by contextual factors

Intelligence in organizations – individual and organizational - individual intelligence = information-processing capability that is used to solve problems or meet task

challenges – fundamental to it is knowledge (declarative and procedural) � can be seen as a trait from a cognitive perspective or as a social product from a contextualist perspective o cognitive perspective – intelligence is individual’s overarching capacity for thinking and problem

solving o contextual perspective – individual intelligence is composed of a number of distinct abilities and thus

varies by specific domains o individual intelligence defined: Individual intelligence is defined as a person’s capability to process,

interpret, encode, manipulate and access information so as to acquire, retain and apply knowledge quickly and successfully to meet external challenges or solve problems in a particular domain or context.

- organizational intelligence – not identical, but related to individual intelligence o 3 assumptions: 1) organizations are information processing systems; 2) they are interpretative systems

and have adaptive capabilities; 3) network of shared meanings sustained by common language and social interactions

o organizational intelligence defined: Organizational intelligence is an organization’s capability to process, interpret, encode, manipulate and access information in a purposeful, goal-directed manner, so it can increase its adaptive potential in the environment in which it operates.

- 3 models relating individual and organizational intelligences: o aggregation model: individual members’ intelligence accumulates to become organizational

intelligence o cross-level model: individuals’ intelligence is transformed and codified as organizational intelligence –

model looks at transfer mechanisms (organizational roles, technology and social or political factors – e.g. permission of diversity of viewpoints)

o distributed model: organizational intelligence is embedded in the structured patterns of thought and action in which organizational members interact and engage

� an organization may be smarter than its individual members (e.g. has no limited capacity), however also the reverse is true when they fail to institutionalized intelligent ideas or do not recognize them

Influences of intelligence on organizational innovation - simplified seen, the process of bringing new, problem solving ideas into use can be divided into 2 stages –

initiation and implementation - Proposition 1 (dominant intelligence): Different dominant intelligences are associated with different stages

of the innovation process. The dominant intelligence of innovation initiation is technical knowledge that is relevant to the task domain or problem. The dominant intelligence of innovation implementation and adoption is social political, and/or interpersonal, which is specific to the organizational context. Both stages are characterized by procedural flexibility in the combining and recombining of factual (declarative) knowledge.

- Proposition 2 (levels of intelligence): There are different dominant intelligences at different levels of analysis that affect the initiation stage of organizational innovation. The dominant individual intelligence is domain relevant, whereas the dominant organizational intelligence is context specific.

- Proposition 3 (antecedent at individual level - creativity): Individual creativity is an antecedent of the initiation of organizational innovation.

- Proposition 4 (antecedent at individual level – enabling conditions): The initiation, idea generation of organizational innovation is dependent upon individual creativity; creativity results in innovation under the following enabling conditions: when there is opportunity for creative expression and an absence of



constraints, when there are adequate resources and support to develop ideas and when there are strong intrinsic incentives. o Individual creativity is driven by individual intelligence, which is moderated by individual

characteristics and the situational context - Proposition 5 (antecedents at individual level – intelligence and creativity): Individual intelligence results

in creativity when the dominant intelligence relates to the particular task domain (declarative knowledge) and when there is flexibility in combining rules for accessing and storing information (procedural knowledge).

- Proposition 6 (antecedents at individual level – individual and situational context of creativity): Individual intelligence results in creativity when individuals have high intrinsic motivation and a personal orientation toward creativity.

- Proposition 7 (antecedents at individual level – individual and situational context of creativity): Individual intelligence results in creativity when the task, problem, or circumstances are novel, unfamiliar, or heuristic and when an intelligent approach to problem solving is expected and valued.

- Proposition 8 (organizational antecedents): Organizational intelligence results in innovation under conditions of high organizational orientation to innovation and when situational factors favor the expression of organizational intelligence, that is when constraints are absent; the circumstances, problems or tasks are novel, unfamiliar, or heuristic; adequate support and resources are available; an intelligent approach is expected and valued and an organization has a high capacity for effective learning.

Managerial implications - article points to the vital role of an organization’s intellectual resources and the importance of managing

intellectual capital � managers have to place employees in jobs that fit their cognitive skills and abilities, but also attend to situational factors (absence of constraints, novelty of tasks, adequate resources and support, expectations of intelligent action; intrinsic motivation was said to be necessary for creativity, but extrinsic motivation will certainly also play a role in innovation implementation)

- visionary leadership is necessary



Recruiting and hiring the high-technology professional: Trends and future directions (Coombs & Rosse) - goal is to examine the current state of research into the recruitment and hiring processes utilized by high-

technology (HT) firms with respect to the technical professionals they require - technical professionals in the HT area are viewed as fundamentally different form other types of employees

and there is general agreement that they are critical to the survival of companies

Background - researchers have focused on compensation issues in HT, but it would seem important to better understand

the full range of HR practices used to attract and select the best possible technical personnel as it has been often stated that traditional personnel management techniques fail in HT

- specific HR practices in HT stem from: 1) need to recruit technical professionals in tight labor markets; 2) need to develop and maintain their commitment to the firm; 3) provide incentives and job security; 4) encourage productivity in innovation and the development of new products

HT and professionalism - HT workers appear to have different characteristics, expectations and career paths than their peers in more

traditional industries � concept of professionalism (engineers are treated like professionals) - by treating engineers as professionals they create a self-fulfilling prophecy as practices diffuse rapidly and

are then demanded - consequences of professionalization � 1) loyal to profession not firm; 2) feeling of superiority over other

technical personnel; 3) conflict between organizational objectives and professional goals and values - technical professionals perform better when managed by a technical expert; however technical personnel

promoted to management position lacks managerial skill - little research focused on recruitment and selection of technical managers � firms place emphasis on

technical skills - personal characteristics attributed to professionals � highly individualistic, intellectual risk-takes with a

somewhat prickly personality - technological obsolesce is also a problem

Recruitment - HR specialists only play a minor role - relationships with universities - most tangible factors in ability to recruit is salary, but intangibles (providing intrinsic motivation) are also

important - staffing concerns differ with growth status of the firm – but overall concern for recruitment and retention of

technical staff higher than in traditional industries - barriers to recruitment are that people sought and positions, rewards, etc. offered are similar - venture capitalists can also contribute - recruitment channels are used also to prescreen and are in general less formal and operate more through line

personnel - trend also to hire retirees

Selection - high reliance on technical professionals � individually-oriented system would be preferred – emphasis

should be placed on individual ability with recruitment and selection focusing on past achievement and achievement needs

- strategies associated with HT firms � organizationally-oriented system that should preferentially select for aptitude and future contribution

- empirical studies are rare – most commonly used selection techniques are interviews by line managers, reference checks, referrals form employees or college professors, interviews by HR staff � not as innovative and progressive as thought

- interviews present a dilemma – HR has not enough technical expertise; technical experts are not suited to assess fit to organization and their assessments not as reliable and valid in general



- selection standards are in a constant state of revision

Conclusions and recommendations for future research - conflict between assertions that HT firms use innovative or progressive HR techniques and the results

reported in the few empirical studies found - key issues that needs to be resolved first are whether there are identifiable differences in strategy among HT

firms and whether a finer grained approach is needed for the technical professional (differentiation between scientist and engineer, etc.)

- technical managers have received too little attention - interaction of compensation issues with other HR practices needs to be examined - longitudinal studies might also examine the shifts in HR practices needed to keep up with the changing

needs of the organization - basic question that also needs to be answered: are high-technology firms really as different as we all

assume?

Establishing the determinants of internal reputation: The case of R&D scientists (Jones & Sullivan) - paper discusses factors which determine the human resource reputations of science-based organizations –

reputation refers to the extent to which scientists regard the department in which they work as a good employer and implicitly a good place to practice science (thus internal reputation is looked at)

Importance of reputation - reputation derives from competitive process in which firms attempt to signal their key characteristics to

constituents (reputational rankings are a potentially significant and understudied form of normative control) - firms with good reputation are expected to attract better applicants and even decrease unit labor costs –

internal and external perceptions of an organization are closely related and external image is expected to follow internal image as the main agents of transmission are company employees

Determining and measuring reputation - nature of work and managerial style are hypothesized to be main determinants of departmental reputation

(as nature of work is of prime importance in attracting and motivating and self management a decisive factor in matching professional and work)

- corporate image (reputation) is a function of the operational arrangements within the firm – as HR reputation is the focus, the criteria considered are those at the interface of organizational policies and scientific employees

- 9 independent variables, plus 5 personal characteristics were considered to be relevant to the search for the determinants of departmental reputation – they create the scientists’ impression of departmental reputation o 9 key determinants: 1) nature of work; 2) managerial style; 3) promotional opportunities; 4)

organizational satisfaction; 5) compensation; 6) working conditions; 7) team work relationships; 8) innovatory climate; 9) job satisfaction

o personal characteristics (act as filter): 1) male/female; 2) educational qualifications; 3) age; 4) tenure; 5) number of employers

Results - innovatory climate and work conditions, along with team-work and promotional opportunities and age are

the main determinants of internal HR reputation o INNO (innovatory climate) – designed to establish whether or not individual scientists were encouraged

to be creative and innovative in their work – nature of the work and managerial style have an indirect effect on this variable

o Other indirect effects also exist (see figure 2) - however, results are statistical not sound (ARTICLE IS CRAP!!!)



Conclusion - favorable company culture and climate are important for achieving successful innovation – but this is an

under researched area - reason why work conditions are so strongly associated with departmental reputation remains unclear – that it

has more effect than the nature of the work may be due to the fact that scientific work in a commercial environment is in no case really challenging (however majority is satisfied, perhaps pay and other incentives compensate)

- further research: 1) actual dimensions of innovatory climate need to be established; 2) relationship between managerial strategies aimed at creating an innovatory climate and departmental reputation must be examined in considerable detail

- practical considerations: 1)establishing an innovatory climate seems essential; 2) working conditions are important and cover issues as physical working environment, communication policies, goals/objectives, availability of resources, opportunity to fulfill individual goals and objectives; 3) indirect relationship of nature of work and managerial style suggests not to use highly routinized work and authoritarian management

- reputation acts in a subtle manner on the motivation of existing employees and the attraction of high quality staff � IS NOT PROVEN AND NOT DEALT WITH IN ARTICLE



Rethinking rewards for technical employees (Gomez-Mejia, Balkin & Milkovich) - scarcity of technical (engineering and scientific) talent � difficult to recruit and retain them + high turnover

at all R&D levels � low rates of innovation, delays in marketing of new product + those former employees can become competitors

- chief reason for technical employees to be so fickle � feel that their contributions are not adequately rewarded and recognized

Inequitable rewards - traditional payment structure (fixed salary and benefits package) focuses on internal equity and consistency

and thus treats innovators as if they were generic employees � not rewarded according to their strategic role, motivation and morale tumble � payment system need to be rethought

- payment for technical talent should be strategic!

Flexible pay systems - dilemma: 1) preserve equitable pay relationships among employees; 2) keep up with going rates in the labor

market o stable market forces � pay policy can focus on salary equity among employees with jobs requiring

similar levels of effort, skill and responsibility = traditional lockstep compensation system based on job evaluation

o dynamic market forces (as with technical employees) � pay policy that permits flexibility and recognizes strategic and critical talent � firm selects position in market relative to competitors for critical skill groups; creative and innovative benefits and bonus packages help attract and retain talent � many firms employing scientists and engineers provide market adjustment to their pay in addition

to merit pay � make people less likely to be pirated

Rewarding key people - major problem: how to reward the top performers in proportion to value their contributions add – those

firms that succeed gain an edge over their competitors in recruiting and retaining top talent

Key contributors - key contributor = employees who demonstrated special skill or proprietary knowledge; who has made a

significant impact on firm’s performance; whose loss would pose a threat to the company (is unique and virtually impossible to replace � pay policies need to recognize achievements and provide incentive to remain with employer

- cash-rewards � given after the fact, used by many firms - equity (stock option or stock grant) – restrictions placed on exercise of options allow employer to retain the

key person for several years - budgetary discretion (less widely used) comes in 2 forms: 1) special budgets over which they have

discretion outside of normal accounting controls; 2) allowing them to grant salary increases to support staff and colleagues (they will reward those who contributed to their success and by that allowing them to become even more productive)

Penalties of hierarchy - hierarchical systems are based on theory that partitioning jobs into multiple components and making

rewards contingent on fine distinctions in the nature of the tasks being accomplished leads to a predictable and controllable work environment – this however can be highly counterproductive in a technical environment as it: o creates artificial barriers among people, fragmentation, an individualistic climate o counters the required team effort – where there should be no feeling of internal competition o enforces loyalty to the discipline, not the employer



The productivity paradox - paradox: high R&D capability, but little commercial success � can be explained by the managerial

obsession with specialization and hierarchy running counter to the need for interaction, coordination, reciprocity and inter-unit teamwork needed to commercialize innovations

- pay system provides management with substantial clout to align self-interests of scientists with those of other employees � combine fixed compensation with aggregate incentives o promoting team-elan – many successful firms use team-based incentives as a powerful tool (enhance

cohesiveness and focus attention on shared goal) o fostering a company-wide perspective – linking their fortunes to the company performance is a

powerful inducement to make them think like businesspeople and forces them to consider commercial success and cooperation (also risk sharing is introduced)

o rewarding long-term results – as team-based bonuses and profit sharing are directed at short-term accomplishments and R&D is important for the long-term an element inducing a long-term focus is needed � long-term compensation tied to e.g. the stock value tells employees which outcomes are valued and encourage employees to share a vision of the firm’s future financial success

Professional rewards - scientists/engineers quickly reach the top level and their technological knowledge quickly becomes obsolete

(pay actually gets less!) � they try to move into management positions with limited chances of success - dual-career ladder option – allow technical employees move up in a grade hierarchy separate form, but

parallel to, that of managerial employees � overly bureaucratic and mixed results (as it fragments jobs and equality is often not perceived as being achieved)

- alternatives to the dual-career ladder: o expand nature of the job – reduce boredom and professional stagnation (e.g. by cross-functional projects

where they can switch positions) o allow technical employees to set up new ventures – can experience thrill and challenges of

entrepreneurship, but are shielded and stay with the company o support new projects – allow them to follow their personal interests and provide financial backing o allow employees to pursue their own interests on company time

Reducing technical obsolescence - after 5 years half of the knowledge is obsolete � several solutions - educational benefits – provide reimbursement for employees taking up further education - sabbatical leaves – provides employees with opportunity for education or other meaningful activities (and

can prevent job burnout)

Encouraging innovations - pay policies that treat innovators as hired hands and reward them according to inflexible methods clash with

the interests of a firm and its scientists and engineers - rewards system needs to be in line with job designers and organizational structures - suggestions for designing pay system:

o price person, not job o provide a menu of pay incentive, so that total reward system for technical employees complements

goals and objectives of the organization o remove professional reward system for hierarchical structure o integrate pay system for technical employees with pay system for other employee groups

Conclusion - pay system is a crucial element, but only part of the total picture and needs to be aligned with the overall

strategy (selection and hiring, performance evaluation and feedback, discretion and flexibility of key contributors, job designs that facilitate innovation)

Competitive compensation strategies in high-tech firms (Masters, Tokesky, Brown, Atkin & Schoenfeld)



- high-tech firms � highly competitive environment, rapid growth, thrive for entrepreneurship and creativity, success is dependent on skills of few key persons � attract and retain right people is critical

- key element of people management in HT firms is compensation system, which should be in line with business strategy

- high tech firm: 1) leading edge technology product; 2) high priority on R&D; 3) innovations frequent and numerous; 4) high rate of R&D personnel turnover; 5) geographic concentration; 6) high mortality rates � compensation systems need to differ (particularly more reliance on incentive compensation)

� 1) need to attract and retain and motivate; 2) pay system needs to be right the first time � sound theory needed

Compensation strategies and motivational models - hedonistic utilitarian argument for motivation= compensation is seen as primarily servicing lower needs,

thus it might be limited as motivator, but one should not overlook possible symbolic value of compensation (argument of dual value of rewards)

- economic and/or bargaining theories = people are economic, rational being seeking to maximize utility - agency theory � reward outcomes if observation/specification of behavior is limited and performance may

be defined as an outcome; reward behavior to take a more long-term perspective (needs more knowledge, which may be costly)

- concept of organizational congruence – design of pay stem is dependent on organizational factors (technology, HR climate, task characteristics…)

- learning theory = past behavioral outcomes (rewards, punishment) influence future behaviors (effort, performance) � reward must be clearly associated to behavior

- expectancy theory = if anticipated rewards are positive, significant and valuable and have a high probability of being obtained (expectancy), the employee will presumably be motiveated to make an effort to perform � reward must be significant

- equity theory = people are motivated by the perceived fairness of rewards (compare input-outcome relationship with self-selected reference group) – external, internal and individual (in relation to peers) equity

Pay for performance - practitioner literature � retention of high performers, turnover of poor performers; higher individual

performance, employee trust, higher morale… - objections to pay-for-performance: 1) firms generally lack good performance measures; 2) competition may

be created within the firm; 3) some compensation to offset inflation is required for all employees

Pay for performance model - effort may or may not translate into performance – job variables and exogenous variables (over which the

employee has no control) as well as personal factors also influence it - performance does only lead to a pay increase if org. is willing and able pay - effort is not only affected by variable pay, but also other motivational factors – intrinsic or extrinsic to the

job - problematic is also that people have a general tendency to attribute success to internal factors, but blame

failures on external factors (attribution theory)

Types of pay for performance systems - 3 clearly different methods: 1) base salary merit pay system; 2) contingency pay programs with high base

salary; 3) contingency pay programs with low base salary ( possible 4) compensation programs designed for executives and key individuals)

- definitions of performance: 1) individual performance – either quantifiable or subjective; 2) small group performance; 3) organization performance

Alternative models - pay for job holding – pay is based on value of the job to the organization or the importance of the individual

to the organization - pay for membership – objective is to attract and retain with an emphasis on the individual (rather than the

job) - pay for skill or pay for knowledge – employees are paid according to hteir personal qualifications or their

educational credentials



A pay for contribution model - has 2 elements to compensation: 1) value of the job; 2) personal performance of the individual, within the

scope of the job (in reality 1 is likely to outweigh 2) - job analysis and evaluation and seeing to external equity will result in midpoints, around which individual

pay will vary based on personal performance - variable pay will motivate to increase skill and effort and to accept responsibility – as long as equity is kept

Motivational considerations in compensation systems design - compensation is only one of many influences on the individual employee and they all differ - pay has both economic (consumption value) and symbolic (recognition value) value, but it means different

things to different people – however, a minimum has always to be provided in order that it does not become a demotivator

- high pay can serve to attract and retain, but is counterproductive is job performance does not follow - authors suggest that pay is very much a motivator, both for economic and recognition reasons, but that it is

more of a reinforcing motivator than a driving motivator - is satisfaction is seen as somewhat learned, it might take more than one reward cycle to determine whether

or not a compensation program design was effective - behavior based rewards have the advantage of being able to reward both the short and the long-term

Pay for performance applied to high-tech firms - authors agree that innovation and risk-taking can be encouraged by highly variable rewards, but design and

delivery of the program is critical - success requires: 1) merit increase has to match performance measurement system; 2) employees must have

belief the program is equitable; 3) merit component must be significant (expectancy theory) - right scheduling of rewards can provide additional motivation (learning theory)

Note on performance appraisal - behavior-based appraisal systems have shown most promise in terms of reducing rating errors and in gaining

employee and management confidence – best systems are built upon performance criteria that are observable behaviors, relevant to the job, significant

- authors suggest a broad system of performance evaluation: 1) formal performance appraisal; 2) informal performance dialogue; 3) employee development program; 4) feedback provided by the merit pay system

Pay for contribution for the long haul - pure pay for performance systems are not quite possible, pay for contribution combines both pay for

performance and for job importance – this may even be more important over the long-run - pay for contribution systems are generally built upon use of job analysis and job evaluation to achieve

internal equity (jobs are ranked or valued according to their relative contribution to the organization) - disclosed pay systems are more appropriate – people have to perceive the fairness - bonus programs may be more powerful motivators than base salary merit pay systems – are more closely

tied to performance - considerations for developing a variable pay systems for high-tech firms: 1) compensation change should

support cultural change – not other way round; 2) compensation should be tied to business success; 3) sharing success important tool for aligning employees’ interest with company; 4) placing future increases at risk is a motivator, putting current pay at risk is a demotivator; 5) systems must be continually tested for understanding, credibility and fairness

Employee ownership programs and participative styles - employee ownership does not guarantee improved performance – should be combined with culture of

participation and worker autonomy - authors rise question if effects of variable pay can not be enhanced by increasing employee control over the

results that determine variable pay outcomes � compensation system needs to fit the culture - in all pay systems must be in concert with organizational factors, management style, the climate, group

size… - as firms grow mature, agency theory suggests a shift form an outcome-based system to a behavior-based

system



Facing a future of permanent white water: The challenge of training and development in high-technology organizations (Bentley) - training and development not only represent answers to dilemmas of change in HT, but can also be part of

the problem - generally, training and development programs are based on objectives and desired outcomes determined at a

certain point in time, however this has 2 major flaws: 1)goals and objectives may be connected to behaviors not values in the real organization; 2) any set of skills or behaviors to be learned runs risk of becoming rapidly outdated � in HT organizations training has to change as does the environment

The supermarket shelves - the safe, orderly world that HT firms have known and depended on is no more � pervasive, massive,

continuous change � training is one of the answers

Common models for training - Instructional Technology model = 3 stage model recognizing 1) needs assessment, 2) training and

development, 3) evaluation o Needs assessment � organizational analysis, task and KSA analysis, person analysis o Designing the training environment o Evaluation

- Assumptions of Instructional Technology model (unstated): o Entity can be reduced to sets of facts o Static, or at best, a slowly changing world (skills learned in present will continue to be appropriate for

the foreseeable future � organizational goals, mission, purposes… are static enough so training can be developed and executed

o KSAs needed can be taught and learned o KSAs thought will be relevant also for undiscovered or unknown tasks in the future � whether KSAs

can be made useful for the future

Permanent white water - future can be regarded as a permanent white water – managers do not only have to solve problems, they

have to manage messes � traditional models of training and development are not appropriate anymore

What is to be learned �� to be successful, the most important question to be asked is: “What is to be learned?” - several answers: - becoming intelligent – ability to respond to situations in a flexible manner is important, thus training has to

recognize this (ambiguity, contradictory messages…) - pathfinding – attitudes and abilities of pathfinding (getting the right questions, rather than the right answers)

is important for providing leadership, but mostly neglected in training - vigilant decision making - riding the waves – successful managers need to be able to ride the waves of change � 1) developing contextual

competencies; 2) managing complexity; 3) using IT as transformative force; 4) skills of remote management; 5) reading the environment; 6) proactive management; 7) leadership and vision; 8) HRM; 9) promoting creativity, learning and innovation

- managing paradox � if the answers to the question include such knowledge and abilities as managing paradox, managing

complexity, developing contextual competencies…, then the model for developing programs of training and development must reflect these sets of skills and attitudes

A PWW approach to training and development - training and development are no panacea, but the contribution they can make, will be severely limited unless

a more appropriate approach is developed and used � following are principles that could be used as a means of constructing a new and more relevant approach to training: o unlearning must precede learning – trainers have to begin at the beginning and accept the fact that the

cognitive maps that leaders carry around are inadequate and inappropriate



� once organizations learn to address a certain type of problems, their learning is transformed into routines – in changing environments, clinging to routine often leads to unmanageable crises � unlearn

o learning process must contain those attitudes, values or skills that are identified as desirable outcomes – if future is full of uncertainty, ambiguity, change, so must be the learning process

o learning experience will be suffused with relevant accurate helpful feedback – most learners lack helpful, timely feedback; many training programs limit their feedback to the content contained within the training design and ignore the future

o not only trying harder, but trying differently � trying hard is connected to toughness, but trying differently may be as important as trying harder,

but organizational inertia limit different trying to occur � trying different has to be built into the training programs (reframing, unfreezing, creativity,

innovation) o training experience must be powerful enough to ensure cognitive reorganization as well as increased

motivation for constant re-learning o learning that prepares leaders for permanent white water must happen outside the classroom � real

world experience; mentors o training for the future must move from personal competence to systems understanding � new key

assumption should be that by changing the system, individuals are changed as well – consider 2 elements of the system: � rules – every social environment develops rules by which action occurs, especially the unwritten

ones are often problematic � effective training must focus upon the nonproductive elements of social systems

� rewards – reword what is important and be aware that correct behaviors are often not even recognized (important is the alignment between rewards and performance)

o while learning is important, even more important is learning how to learn

Conclusion - Instructional technology, as an approach to training, assumes that the future will be enough like the past and

the present to specify goals and objectives and design learning experiences to attack problems that can be specified, usually by some process of diagnosis or needs assessment � not realistic in HT environment

- Alternative view is that not only is the future unknown, but also unknowable – only certainty is that it will be filled with unsettling and unpredictable change

The knowledge, skill, and ability requirements for teamwork: Implications for Human Resource Management (Stevens & Campion) - teams have become popular work design, but the support systems needed to manage the changes this design

brings have not been properly modified or developed � article takes look at HR management of work teams - cornerstone of most HR practices is a thorough understanding of the requirements of the jobs � determine

knowledge, skill and ability (KSA) requirements for teamwork - focus of the study is on: 1) KSAs rather than personality (as KSA based systems have better history in

prediction job performance and emphasize attributes that can be influenced); 2) team rather than technical KSAs; 3) individual in the team

The knowledge, skill and ability (KSA) requirements for teamwork

Interpersonal KSAs � team effectiveness depends heavily on the ability of individual members to successfully manage interpersonal

relations with one another; but problems from faulty interpersonal relations can originate from either extreme, thus an optimal level of emphasis must be placed on both interpersonal- and task-orientations:

- conflict resolution KSAs – conflict occurs when the actions of one or more members of the group are incompatible with, and resisted by, one ore more of the other group members



o constructive conflicts: recognize and encourage desirable, but discourage undesirable team conflict � conflict is inevitable and a moderate level may be required, however needs to be managed properly

o types and sources of conflict: recognize the type and source of conflict confronting the team and to implement an appropriate conflict resolution strategy

o negotiation or bargaining: employ an integrative (win-win) negotiation strategy rather than the traditional distributive (win-lose) strategy

- collaborative problem solving KSAs – needed because members are nearly always expected to participate in problem solving: o group participation in problem solving: identify situations requiring participative group problem

solving and to utilize the proper degree and type of participation � for disjunctive problems (only one solution) team performs as good as most capable member; for subjunctive problems team performs not better than least capable member; for additive problems at the average level

o obstacles to collaborative problem solving: recognize the obstacles to collaborative group problem solving and implement appropriate corrective actions � many factors can interfere with group problem solving (egocentrism, suboptimal compromises, inability to recognize better solutions…)

- communication KSAs o communication networks: understand communication networks and to utilize decentralized networks to

enhance communication where possible � networks differ along speed, accuracy and distribution of information; design of the network is not always under the control of the members, but knowledge is desirable so that they can implement them where possible

o communication style: communicate openly and supportively, that is to send messages which are 1) behavior- or event-oriented; 2) congruent; 3) validating; 4) conjunctive (equal opportunity to speak); 5) owned (taking responsibility for one’s own statements)

o listening skills: listen nonevaluatively and to appropriately use active listening techniques o nonverbal communication: maximize consonance between nonverbal and verbal messages, and to

recognize and interpret the nonverbal messages of others o small talk and ritual greetings: engage in ritual greetings and small talk and a recognition of their

importance

Self-management KSAs � teams have significant control over the direction and execution of tasks, thus they need the skills to perform

some essential managerial activities - goal setting and performance management KSAs

o specific, challenging and accepted goals: help establish specific, challenging and accepted team goals � goals need to be specific, challenging, but attainable and accepted by all parties

o performance monitoring and feedback: monitor, evaluate and provide feedback on both overall team performance and individual team member performance

- planning and task coordination KSAs o activity coordination: coordinate and synchronize activities, information and task interdependencies

between team members o task and role expectations: help establish task and role expectations of individual team members and to

ensure proper balancing of workload in the team

Implications of teamwork KSAs for HR management - personnel selection and staffing � include measures of teamwork KSAs in selection systems, focus of

today’s instruments is on basic learning KSAs or specific technical KSAs; in recruitment for teams focus on the KSAs o research issues: it has been suggested that teams should be heterogeneous, but does this also apply to

KSAs, and does it refer to the level or the type of KSAs; is it dependent on the task; what is the link between teamwork and technical KSAs; should employees with high teamwork KSAs be spread across teams or concentrated in a few teams???

- training � if teamwork KSAs are important to job performance, then HR management must consider whether such skills can be trained and if so, how they can be trained o research issue: how to train them without formal off-the-job programs

- performance appraisal � should be modified to reflect teamwork KSAs needs an organization-specific job analysis determining the precise nature of the behavioral and performance ramifications of the teamwork KSAs o research issues: is the dimensionality of job performance affected?…



- career development � KSAs may become more important to both internal and external career mobility – shift in promotion criteria

- compensation � if teams increase the KSA requirements of jobs, they should be reflected in job evaluation systems

- job analysis � if jobs change their KSA requirements, then job analyses must consider these changes o research issue: research changing dimensionality of work



The Influence of supervisory promotion and network location on subordinate careers in a dual ladder RD&E setting (Katz, Tushman & Allen) - longitudinal study examining the structural (supervisory reporting relationships and supervisory promotion

paths) and informal (gatekeeper status of supervisor and communication networks) effects on the career outcomes of technical subordinates in a dual ladder system � supervisors and their roles have a significant effect on the chances of an individual’s promotion along each track (technical/managerial)

- other research focuses more on impact of selection, testing and ability or job rotation and formal training on promotion patterns

- underlying the perspectives of the authors is idea that professional career paths are linked to informal communication and socialization processes

Literature Review - informal socialization and work experiences are strong predictors of career progress � situational view of

advancement: professionals build definitions of their careers through the information and cues they encounter within their particular work setting

- engineers and scientists are often socialized into their technical occupations with career aspirations that are at odds with the rewards and structures of formal managerial hierarchies, but not all are alike in their orientations � dual ladders: formalizing promotions along 2 parallel hierarchies (managerial and technical), promising equal status and rewards (but not equal power) � secures motivation

� present research extends understanding of management of both technical professionals and dual ladders by showing how particular reporting relationships can lead to differences in communication networks that can account for significant variations in one’s chances of promotion to the management or technical ladder

Hypotheses - additional to the hypotheses, age is a moderating variable - H1: Technical professionals working for project supervisors promoted along the managerial ladder will

have a higher likelihood of managerial promotion than those reporting to project supervisors promoted technically. Similarly, professionals working for project supervisors promoted along the technical ladder will have a higher likelihood of technical promotion. o Reason: Project supervisor plays a critical role in defining how subordinates become accepted as

contributors – they shape their subordinates’ outlooks and opportunities and select them in line with their own views

o Partial support – as only for the technical side supported – however when only taken for the primary age group of managerial promotion (27-34) the reverse is the case

- H2: Technical professionals working for gatekeeping supervisors will have a higher probability of managerial promotion than professionals reporting to nongatekeeping supervisors. o Reason: Gatekeepers are strongly networked to both internal and external sources of critical

information, they capability to translate technical information into terms that are meaningful to managers, etc. makes them highly influential

o Supported – also the reverse seems to be true, that assignment to a gatekeeper hinders promotion along the technical path

o Gatekeeper status seems relatively more influential for managerial promotion than the promotional path of the gatekeeper himself

- H3A: Project task characteristics will moderate the effect that gatekeeping supervisors have on the managerial promotional rates of technical subordinates – the influence being more significant in development than in research or technical service projects. o Background: RD&E tasks differ and can be categorized along a continuum ranging from research over

development to technical service o Reason: Gatekeepers should be particularly influential in development projects where they effectively

connect their technical colleagues to external sources of information (this is not needed so much in the 2 other categories)

o Supported - H3B: Project task characteristics moderate the effects of supervisory promotion path on subordinate

promotion. Supervisory technical promotion will impact the technical promotion of subordinates most



significantly in research areas while supervisory managerial promotion will impact the managerial promotion of subordinates most significantly in development and technical service areas. o Supported with respect to managerial promotions

- H4A: Technical professionals reporting to gatekeeping supervisors will have significantly more communication with laboratory and corporate domains than professionals reporting to nongatekeeping supervisors. These differences will be accentuated in development projects. o Supported – for both development projects and technical service projects (communiction had no impact

on communication networks of subordinates in research projects) - H4B: Technical professionals reporting to supervisors promoted managerially will have significantly more

intraorganizational communication but also significantly less external professional communication than professionals reporting to supervisors promoted technically. o Not supported

Discussion - research demonstrates the strong influential effects of supervisory-subordinate relationships in shaping

promotional dynamics within dual ladder reward systems - but this may exacerbate the barriers between the technology and business domains, as technical contributors

may choose work that is even less organizationally dependent - gatekeeper status was relatively more important than supervisory managerial promotion in augmenting

subordinates’ chances for a managerial career – answer may lie in the enhanced hierarchical and cross-functional contacts facilitated (gatekeepers provide better access to information, more opportunities for visible, significant work, more balanced and accurate understanding of organization’s technical and commercial focus) � not assignment of engineers to gatekeepers per se may enhance one’s chances of managerial promotion,

but the stronger linkages that are established within the organization as a consequence of working for a gatekeeping supervisor

Implications and conclusion - reporting relationships affecting promotions along dual tracks could work to constrain the promotional

opportunities of younger professionals and provide insight into how barriers might emerge between research and development areas (research pulls up technical ladder, development pulls up the managerial ladder)

- promotion of gatekeepers to both tracks is very critical to balancing the power within a dual ladder reward system and consequently its long-term viability

The transition into management by scientists and engineers: A misallocation or efficient use of human resources (Roberts & Biddle) - often nonacademic scientists and engineers reach a stage in their careers when they move into managerial

and administrative positions � difficulties with the transition as often argued: o commonly argued that they move because in most organization the technical career path is truncated

(it is the only route to rise upward) o move can be viewed as wasteful abandonment of investment in knowledge o often argued that they prefer to stay in technical jobs and are more oriented toward technical or

professional objectives o lack the managerial skills (especially interpersonal skills required) � conflict between professional orientation and the jobs firms offer � organizations motivate good

technical workers to become possibly mediocre managers - alternative view: the transition is an effective HR promotion strategy, it may be a rational attempt to deal

with the problems of identification of the levels and areas of competence of recently hired employees and the motivation of employees to be as productive as possible in an atmosphere in which direct monitoring of productivity is not feasible � justifications for the sacrifices to be made: o certain minimal amount of technical ability is required to manage the work of technical employees o problem of monitoring and motivation – management of a technical oriented firm wants to create an

environment in which technical professionals can be counted on to monitor themselves � suggested is



to create a tournament-like environment (rank of management can be viewed as a prize designed to motivate and make technical workers embrace goals of the firm in the early years of their careers)

Questions associated with the transition to management - Who gets promoted? � are chances of promotion in some systematic way to performance on technical jobs

related? – this would be necessary for it to function as a motivational tool, but is dependent on perceived relationship between technical and managerial ability

- Do good technical workers make good managers? � if yes promotion is a matter of efficient human resource allocation (intuition behind it is that supervision of technical professionals requires high levels of technical competence)

- Do those who leave the technical track ever return to it? � to serve as a strong incentive to good performance there must be clear and significant differences between the compensation and prestige available on the managerial track and that available on the technical track – discourages transition back, but has negative aspects if people do not perform as expected in a managerial task

- Are the best technical workers leaving the firm because of limitations on upward mobility? � evidence against efficiency of conventional policies (promotion into managerial ranks) would be turnover among talented technical professionals

Answers to the 4 questions - Managers and supervisors come from among the better technical workers � there is a positive

relationship between the performance evaluations received while still in a technical position and the probability of becoming lower level supervisor o Also amount of managerial training received while in technical positions increases probability

(technical and supervisory training had no impact, but most probably due to the exclusive, early management detection scheme of the company surveyed)

- Better technical workers tend to make better managers and supervisors � although it may be hard to predict how well a technical worker will perform as a manager, the odds favor choosing the better technical worker (compare correlations between evaluations)

- Managers and supervisors seldom return to the technical track � move out of a technical job can be characterized as a unidirectional move (consistent with the tournament explanation), however there is quite a bit of mobility among the nontechnical jobs (most probably because firm observed has separated promotion levels and position in hierarchy)

- Limitations on upward mobility are not driving the best technical workers from the organization � it is the less able technical workers who quit (probably linked to ongoing heavy investment into training of the firm observed)

Implications for human resource management - article has presented different interpretation of mobility of technical employees into management jobs – this

mobility pattern actually represents a fairly efficient allocation of resources (from the firm’s perspective) - practical questions:

o Do promotion policies motivate technical workers? � managerial promotion as a reward o Do they help provide good managers? � even an able technical worker’s performance may suffer just

after the transition to management (train and give them time for the transition) o Do they foster low productivity among those who do not get promoted? – look at turnover results, are

those the company values retained? o If promotion policies are performing valuable screening and motivation functions for the organization,

are they doing so at too high costs? o Also consider carefully the incentives other than pay to which different types of employees respond o Investing in employees through continued training can mitigate performance problems and reduce

unwanted turnover among employees who do not expect to rise in the organizational hierarchy



Organizing and leading “Heavyweight” Development Teams (Clark & Whelwright) - effective product and process development requires the integration of specialized capabilities – this is

difficult, especially in large, mature firms with strong functional groups, extensive specialization, large numbers of people and multiple ongoing operating pressures

- functional organizations create distance between people in the organization - article focuses on one of four types of team structures, the “heavyweight” project team – which the authors

see as particularly promising in a fast paced environment Types of development project teams - functional team structure � people are grouped principally by discipline and projects are passed on

sequentially o strength: responsibility and authority are aligned; evaluation done by same managers responsible for

promotion; specialized expertise on the key technical issues o weaknesses: project must be divided into specific tasks at the beginning; contributions to development

tend to be judged largely independently of overall success; components are defined by technical parameters in the areas of their expertise, thus overall system characteristics or requirements may not be achieved

- lightweight team structure � each functional area designates a liaison person to represent the function on a project coordinating committee (add-on to functional organization) o project manger is lightweight (usually middle or lower level) as he has little status or influence, the

control of resources remains within functions, however some level of coordination can be achieved as communication and coordination are improved (often not realized)

- heavyweight project teams (more than a new structure, require a fundamentally different way of working) � project manager (senior level) has direct responsibility over full-time assigned team members of a core team, only career development is not his responsibility o usually co-located o advantage: improved communication; stronger identification and commitment; focus on cross-

functional problem solving, but difficult to manage/create - autonomous team structure � individuals form different functional areas are formally assigned, dedicated

and co-located to the project team; their team lead is given full control (within limits set only very broad) o do not have to adhere to organizational practices and procedures – however, are fully accountable for

the final results of the project o provides focus, but may run out of control and senior managers also become nervous delegating so

much control The heavyweight team structure – the challenges - nature of heavyweight teams: product/process focused, needing strong, independent leadership, broad skills

and cross-functional perspective, and clear missions - heavyweight teams may conflict with the functional organization – even the advantages carry possible

disadvantages: o teams may expand definition of their role and the scope of their project o problems with allocation of support resources – support activities are particularly vulnerable to an

excess of ownership and commitment � challenge is to balance the needs of the individual project and needs of the broader organization

o problems with depth in technical solutions – some individual components or subassemblies may not attain the same level of technical excellence, as a system focus is taken with the use of generalist skills, this is often countered by more extensive quality controls and reviews by expert specialists

Managing the challenges of heavyweight teams - tensions between heavyweight teams and functional groups, where much of the work gets done, arises �

requires mechanisms and practices that reinforce the team’s basic thrust (ownership, focus, system architecture, integrity) – and yet improve its ability to take advantage of the strengths of the supporting functional organization (technical depth, consistency across projects, senior management direction)

- six categories of management action: o project charter � every heavyweight project team needs a clear mission; joining the team includes

accepting the charter established by senior management



o contract book = defines in detail the basic plan to achieve the stated goal – developed by the team itself; contains work plan, estimates of resources required, outlines of the results to be achieved against which the team will be evaluated against

o staffing – typically the core-team of dedicated members has one representative form each primary function � individual core team members represent their functions and provide leadership for their function’s

inputs to the project to fit into the overall picture (coordination and integration) � physical co-location of the core team is preferable, as is the full-time assignment

o project leadership � the project leader leads, managers and evaluates the others, who report to him; his is the champion

of the basic concept and has to insure the integrity of the final product/process – his actions differ from a lightweight project manager in that they are more communication and action oriented than desk oriented

� he performs 5 roles: 1) direct market interpreter; 2) multilingual translator; 3) direct engineering manager; 4) program manager in motion; 5) concept infuser (concept champion)

o team member responsibilities – team members have both functional responsibilities (as representatives of their function) and team responsibilities (as a member of the team they have to share the achievements of the team and beyond this accountability, they also are responsible for the division of task and the organization of their efforts, which is one of the most difficult parts)

o executive sponsor – senior managements link to the team (who has quite a bit of accountability delegated to it), which is needed for guidance, but at the same time this should not run contrary to the empowerment of the team � sponsor becomes coach and mentor and seeks to maintain close, ongoing contact with the team’s

efforts � sponsor acts as a liaison – is the contact for other senior managers to the team

The necessity of fundamental change - heaviness is not only a matter of structure and mechanism, but also of attitudes and behaviors � firms need

to make deep changes to realize the power a heavyweight team can have - if these changes are made, the firm can enjoy substantial advantages of focus, integration and effectiveness

Demography and design: Predictors of new product team performance (Ancona & Caldwell) - studies suggest that distribution of demographic variables within a team is of importance � study integrates

group demography with other aspects of group theory to predict perceived performance at the team and management level

Demographic variables and product development teams - 2 variables are of particular importance: 1) homogeneity of tenure and 2) mix of functional specialties

o tenure – those who join an organization at the same time develop similar understandings of its events and of technology for accomplishing work

o functional mix – gives access to expertise and facilitates transfer of new development into functional organization, but difficult to establish a shared purpose and effective group processes

Processes that mediate the demography performance relationship - task processes = behaviors aimed at organizing members to get work done as opposed to those that influence

affect or the team’s ability to maintain itself as a group over time (though by authors to be more predictive of group performance than cohesiveness)

- demographic diversity is thought to increase conflict, reduces cohesion, complicates internal communication and hampers coordination within the team.

� H1: Variation in organizational tenure and functional diversity are negatively related to internal task processes.

- external communication is a second mediator – diversity provides the group with a broad set of external network and with low group cohesion members may turn more to outsiders

- H2: Variation in organizational tenure and functional diversity are positively related to communications with outsiders.

Demography, group process, and performance



- performance often has multiple dimensions and ratings vary across constituents � authors set up alternative models to predict team-member and managerial ratings of performance, using multiple dimensions of performance (use subjective decisions because those are used to make budgets and promotion decisions)

- use innovativeness and buget and schedule as measures of management –rated performance measures - as groups have to finally transfer their work, success should depend on processes both inside the group and

with outsiders; also do the amount and patterns of communication within and to the outside relate to performance

- H3: Internal task processes are positively related to team-rated performance but not to managerial-rated performance

- Studies indicate managers more closely link external communications and performance - H4: External communications are positively related to managerial-rated performance but not to team-rated

performance. - input factors such as group demography have direct as well as indirect effects on group performance: - H5: Tenure diversity is positively related to team-rated and management-rated performance. - H6: Functional diversity is positively related to team-rated and management-rated performance Hypotheses summary - Study investigates direct and indirect effects (through task processes and external communication) of group

heterogeneity on ratings of new product team performance - The link between demography and performance may not be as straightforward as the hypotheses indicate �

homogeneity may simultaneously improve and dampen performance Results - team—member ratings of performance and management ratings of budget and schedule are distinct, the

complete model for budget and schedule however was insignificant � 2 models were significant: the one explaining management ratings of innovation and the one with team-member based ratings of performance

- H1: not supported – tenure is related positively to effective task processes - H2: partially supported – functional diversity associated with high levels of external communication - H3: supported - H4: supported � tenure indirectly influences team-rated performance through its impact on internal processes, while

functional diversity indirectly influences innovation through its impact on external communications - H5: not supported – effect is actually negative - H6: not supported – effect is actually negative � indirect effects are dwarfed by direct effects, often in opposite direction to them - homogeneity in tenure is associated with achieving budget and schedule when resource availability is

introduced as controlling variable (only change with a number of controlling variables tested) Discussion - how should teams be formed � 3 results: 1) tenure diversity and functional diversity each has its own

distinct effects; 2) study suggests that internal task processes and external communication also mediate the link between demography and performance (not only cohesiveness); 3) direct effects of diversity are greater than the mediated effects and are negative

- demographic variables: o the more heterogeneous the group in terms of tenure, the greater the clarity of the group’s goals and

priorities � clarity is associated with higher overall performance, but tenure diversity ahs a significant negative direct effect on budget and schedule

o greater functional diversity leads to more external communication which is linked to higher managerial ratings of team innovation, but functional diversity has a significant negative effect on team-rated performance and management-rated innovation

- direct versus indirect effects: direct effects of diversity on performance are all negative � possible explanations: o diverse groups bring more creative potential, bu8t have less flexibility and capability for teamwork for

implementation o high levels of external communication cannot be effectively used as social integration is too low o better processes and linkages within the organization increase visibility and may open team up to

political and goal conflict existing between functions o diversity may also allow downstream activity to take place earlier in the product development cycle –

thus team has more activities to handle and may appear inefficient Applications and limitations



- team must find a way to garner the positive process effects of diversity and reduce the negative direct effects � 1) at team level, training and facilitation in negotiation and conflict resolution; 2) at organization level, team may need to bee protected form external political pressures + rewards

- diversity may slow progress in the short term, but foster innovation and speed over the full development cycle

Managing High Performance R&D teams (Katz) - problem with critical advances or technological leaps is not identifying what the possibilities might be, but

getting the business organization commit to one while there is considerable uncertainty - empowered, self-directed, cross-functional teams have become a major way to successful transformational

change, but they succeed only in a limited number of cases - research has concentrated on identifying the characteristics of high performing groups by looking at the

interpersonal and work-related processes within the groups themselves (leadership, common purpose, clear vision, commitment to the vision, not playing it safe all the time) � however, this cannot tell us how such teams are created and managed over time, it only portrays a snapshot view of high performance team characteristics (not how or why these are created)

- insights the author has to offer – using the example of the Alpha team at Digital: o team do not occur in an organizational vacuum, but are formed by the organizational environment o self-selection to work towards a single-minded objective o not team-playing individuals, but were willing to work together as a team o eager to commit to a very aggressive set of goals and willing to accept risks o singular purpose and common motivational interests � little in-fighting o organizational success however needs more, the technical goals of the team need to be aligned with the

company’s strategic business interest o team must learn how to become politically effective o marshaling events can significantly influence the motivational behaviors � leads to focused leadership o high-performance projects do not seem to originate in a top-down fashion o management must do more than encourage risk taking, they have to actively sponsor technologist to

come together to work on far out ideas o management must not only plan and focus on those projects that are needed to meet expected changes,

but also strategize by working with the technical part of the organization to plan and sponsor those developments that could shape environmental changes

o over time a strong partnership feeling must develop between the technical and management parts of the organization

o management also has to plan for the long-term of the employees working on projects (career plans, future assignments…)



The Challenge of innovation implementation (Klein & Sorra) - innovation implementation = process of gaining targeted employees’ appropriate and committed use of an

innovation – fails if the employees use the innovation less frequently, less consistently or less assiduously than required for the potential benefits

- failure to achieve benefits can be attributed to implementation failure or failure of the innovation itself – former is increasingly identified to be the primary cause, however studies on it are rare

- authors present an integrative model of the determinants of the effectiveness of organizational implementation – primary premise is that implementation effectiveness is a function of a) an organization’s climate for the implementation of a given innovation and b) targeted organizational members’ perception of the fit of the innovation to their values � see figure 1 (p. 1056)

Key terms - stage models are commonly used to describe the innovation process: 1) source-based stage models = trace

creation of new products from idea to marketing of final product; 2) user-based stage models = trace innovation process from the user’s awareness of a need or opportunity for change to the incorporation of the innovation in the user’s behavior

- implementation = transition period during which targeted organizational members ideally become increasingly skillful, consistent and committed in their use of an innovation

- innovation use is depicted as a continuum from avoidance (nonuse), over meager and unenthusiastic use (compliant use), to skilled, enthusiastic and consistent use (committed use)

- implementation effectiveness = consistency and quality of targeted organizational members’ use of a specific innovation

- innovation effectiveness = benefits an organization receives as a result of its implementation of a given innovation (implementation is an antecedent, but not sufficient condition for effectiveness)

Level - authors conceptualize implementation effectiveness as an organizational-level construct, though it can also

be defined at the group or individual level - the construct is, as the construct fro implementation climate a homogeneous one, while innovation-values fit

(which may vary between individuals, between groups or between organizations) is not; in this one authors focus on between-organization and between-group differences

Climate for implementation - implementation policies and practices = array of innovation, implementation, organizational and managerial

policies, practices and characteristics that may influence innovation use � to highlight the collective influence, authors introduce the construct of an organization’s climate for implementation of an innovation

- climate for the implementation of a given innovation = targeted employees’ shared summary perception of the extent to which their use of a specific innovation is rewarded, supported and expected within their organization – the perceptions are the result of shared experiences and observations, information and discussions about their organization’s implementation policies and practices (it is not employee satisfaction with the innovation, organization…, and not their perception of the organization’s openness)

Climate’s influence - the more comprehensively and consistently implementation policies and practices are perceived by targeted

employees to encourage, cultivate and reward their use of a given innovation, the stronger the climate for implementation of that innovation � a strong implementation climate fosters innovation use by: o ensuring employee skill in innovation use o providing incentives for innovation use and disincentives for innovation avoidance o removing obstacles to innovation use

- however, climate’s influence is limited by the employees commitment (innovation-values fit) o an good innovation-value fit leads to an internalization - commitment and enthusiasm o if innovation is perceived as means to get rewards/avoid punishment, compliance is the result

- 3 levels of fit: 1) good: highly congruent; 2) poor: highly incongruent; 3) neutral: moderately (in)congruent with low-intensity values



Effects of implementation climate and innovation-values fit on innovation use – fit is homogeneous - good fit, strong climate (ideal): employees are enthusiastic, skilled, consistent and commited - good fit, weak climate: situation is not sufficient to produce skillful and consistent use; employees will be

frustrated and disappointed - poor fit, strong climate: results in employee resistance (employees are forced to use an innovation they

oppose) - poor fit, weak climate: users will be pleased (relieved and innovation will not be used) - neutral fit, strong climate – targeted users are indifferent, but innovation will be adequately used - neutral fit, weak climate – employee disregard, essentially no use

Effects of implementation climate and innovation-values fit on innovation use – fit differs - horizontal groups (no opposing group has power over the other)

o strength of organization’s implementation climate determines the winner, but process may be slow - vertical groups (one opposing group has formal power over the other)

o strength of the organization’s implementation climate determines the winner – if values fit is good for the higher authority group, they will strengthen the climate; if fit is poor for the higher authority group, they will try to undermine the implementation climate

The outcomes of innovation implementation: exploring consequences for implementation climate and values - implementation outcomes, 3 possible scenarios, influence an organization’s subsequent implementation

climate and values: o implementation is effective � climate is strengthened, values may be affected in that there are if

congruent before reinforced, or shifted if not o implementation is effective (but des not enhance performance) � climate is weakened, values may e

affected in that poor fit is reinforced, good fit is challenged – may lead to pessimism o implementation fails � climate weakened further

Research implications - climate for implication – recognize equifinality - innovation-values fit - implementation effectiveness and innovation effectiveness

Additional topics for research - managers and the creation of a strong implementation climate – why do their fail to give the necessary

support (possible answers: 1) decisions made by higher levels; 2) lack understanding and delegate) - upward implementation of innovations – in most organizational form nonmanagers have relatively little

influence in creating a strong environment - implementing multiple innovations - fostering innovation-values fit – what can an organization do? (possible: 1) participative decision making; 2)

educating employees on need for innovation; 3) convince them by success)

An agency perspective on new technology champions (Lawless & Price) - internal technology champions = members of organizations presenting outside technology to an audience

of fellow organizational members who are potential users - existing descriptions of technology adoption predominantly interpret champions as representatives of new

technology; this paper takes a new perspective by interpreting champions as agents of potential technology users



The technology champion as agent - compared to current perspective of a champion persuading the users, the agency perspective sees the

champion as a user representative – thus search for new technology is proactive and initiated by users, which are no longer seen as unaware of the need to change

- notion of proactive users is compatible with evidence that is situations of uncertainty expert assistance is search; also research suggests that champions feel accountable to individuals who seek advice

The problem of control - much important knowledge is not directly available to users; critical information is likely to reside only with

the champions � are value added but their interests may not be in line with those of the users � monitoring/performance evaluation problem

- optimal type of contract in agency perspective depends on 1) nature and cost of information on performance and 2) risk preference of principal and agent

- behavior-based evaluation – easily observable behavior (risk accrues to the principal) - outcome-based evaluation – behavior difficult to observe, risk accrues to agent - 2 feature of technological innovation limit users’ ability to control champions’ performance: 1) champion is

specialized purveyor of new technology; 2) technology uncertainty � users are left to rely on reputation and second opinions

Technology champion as a specialized purveyor - champion is a unique source with few substitutes � information asymmetry: effective monitoring requires

that users incur learning costs, which reduces champions’ value - P1: Information asymmetry and costly monitoring may allow champions to impose their preferences on

users. - Lack of substitutes � higher information costs and greater threat of opportunism - P2: Volunteer agency and champions’ specialized knowledge and skills will jointly lead to user perception

that internal technology champions are difficult to replace. - P3: The less users perceive ready substitutes for the current technology champion, the less willing they will

be to impose sanctions for unsatisfactory performance. (reversal of control between principal and agent)

Technology uncertainty and reputation - technological changes can differ with regard to predictability and organizational consequences (lack of costs

and outcomes as well as alternatives) � technology users are forced to rely on reputation and second opinions

- P4: The greater the level of technological uncertainty, the less likely users will be to evaluate champions’ performance based on behavior. Other things equal, the more likely users will evaluate performance on the outcomes of technology adoption.

- P5: Specialized purveyor characteristics and technological uncertainty will interact the greater both are, the more users will rely on champion reputation and second opinions in performance evaluation

Alignment of champion and user preferences - informal nature of preference alignment between users and technology champions complicates control of

champions’ performance and makes it problematic to arrive at an optimal contract - nonmonetary incentives: champions are typically regarded as self-motivate; informal incentives affect the

conduct of champions and are important in aligning the interests of parties to a transaction – even monetary incentives can involve informal signaling (liturgy, appointment)

- P6: Nonmonetary rewards and sanction, dispensed by organizations and their members, can enhance the availability and performance of champions.

- P7a: The stringer the influence of a common organizational culture, the more influential are users’ nonmonetary rewards and sanctions on champions.

- P7b: Champions’ extra-organizational orientation is moderated by cultural norms. - P7c: Perceptions of users’ power by both champions and users are greater the longer duration of a

relationship between champions and users. Nonmonetary incentives and reputation effects are stronger in the longer term.

Implicit contracts



- chief problem in contracting is to structure an optimal agreement between agent and principal, producing the preferred result at lowest cost

- P8a: Where terms of relations between champions and users are implicit, champions will perceive users’ potential sanctions as more severe than will users.

- P8b: Under implicit contracts with looming penalties, champions take fewer risks (e.g. support less innovative technology) than otherwise.

- P8c: Under implicit contracts with looming penalties, users have incomplete information on their options to reward and sanction and exert less control over champion behavior than is possible.

Self-interest and conflicting goals - existing studies found that goals of technology champions do not always match (champions prefer stat-of-

the art, while users may be more concerned with minimizing implementation costs, than maximizing benefits over the long-term to the organization)

- P9: Champions’ and users’ preferences are likely to diverge due to personal orientations and perceived net benefits from technology implementation.

- However, self-interest can be brought into closer alignment by employment screening, indoctrination and the influence of organizational culture

- P10: Divergence of champion and user self-interest is moderated by organizational form and practice. Norms embodied in hiring, training, socialization and compensation systems reduce preference divergence between champions and users.

1 article missing here!!!



Innovators and noninnovators: A comparison of demographic, psychological, behavioral and role factors (Duchon, Ashmos & Dunegan) - paper examines an approach to selection and development by looking at innovators (special subset) – study

compares innovators and noninnovators in terms of demographic, psychological, behavioral and role perception factors which might indicate risk taking

Background - importance of identifying innovators � organizations must be innovative in order to survive; innovation

requires willingness and capacity to change, but this is not the case in most organizations, therefore they try to identify people, who are able to ignore or resist the forces of excessive rationalism and bureaucracy

- innovators and their roles � innovators are generally seen as dreamers, creative ones and risk takers and are believed to differ from their noninnovative counterparts in personalities and behaviors o innovators also need an innovator role to which they are fit (innovative activity will ultimately depend

on the interplay of the innovator and the organizational environment, his role) o the role will be different depending on size and complexity of the organization involved, however there

are 5 generic roles: 1) idea generator; 2) entrepreneur/product champion; 3) project leader; 4) gatekeeper; 5) sponsor (no single individual is well suited for all)

- innovators as risk takers � risky situations are those where the outcome is uncertain and there exists a potential for loss o while popular management literature assumes innovators as risk takers, in academic research is divided

– there may be no such creature as a transcendent risk taker (risk taking is situational), if this is true, it is a vain hope to select innovators because they appear to be risk takers

Method - sample was divided by executives of organization into innovators and noninnovators and demographic,

psychological and behavioral data was collected from the observed individuals themselves - psychological indicators: classification into adaptors (risk avoiders – do things better) and innovators (risk

takers – do things differently) - behavioral indicators: scenario and asked if they would fund the described project and what probability of

success they would require to fund it - role indicators – role or task demands have been demonstrated to be a potent factor in eliciting risk taking

behavior – people might be seen by their superiors to be risk takers because of role requirements o task uncertainty (analyzability/variety) – innovators expected to see work environment as uncertain o independent, sequenced or independent events – innovators often seen in role of loner

Results - only demographic difference is gender (more females in innovator group) - study did succeed in differentiating innovators from noninnovators with both psychological measures and

role perception measures � psychologically the innovators might be considered risk takers but, in a role sense, the innovators see themselves to be operating in somewhat uncertain environments and, as a result, may have the opportunity for risk taking not available to their noninnovative colleagues and work interdependently (so not as popularly thought independently)

- 2 additional consideration of person/role match: 1) consider the risk taking requirements built into roles; 2) what is conventionally thought of as risk taking may in fact be a capacity to operate in uncertain circumstances

- 2 considerations about studying risk taking: 1) difficult to predict what people will do based on what we/they think they are; 2) we need to articulate more precisely what we mean by risk taking



Employee creativity: Personal and contextual factors at work (Oldham & Cummings) - little is known about the conditions that promote the creative performance of individual employees in

organizations - authors examined the independent and joint contributions of characteristics of individual employees and

their organizational contexts (i.e. job complexity and supervisory style) to 3 indicators of creativity in an organizational setting (i.e. patent disclosures written, contribution to an organization suggestion program, and supervisory ratings of creativity)

Background - creative performance (is individual level) = products, ideas or procedures that satisfy 2 conditions: 1) novel

or original; 2) potentially relevant for, or useful to, an organization � differs from innovation, which refers to the successful implementation of these outcomes at the organizational level

- personal characteristics and creativity � stable set of core personal characteristics (e.g. broad interests, attraction to complexity, intuition, aesthetic sensitivity, toleration of ambiguity, self-confidence) relate positively to measures of creative performance o authors use Creative Personality Scale (CPS) developed to rate individuals on these characteristics o H1: An employee’s score on the CPS will relate positively to employee creative performance.

- Organizational context and creativity � context in which an individual performs a task influences his or her intrinsic motivation, which in turn affects creative achievement (situations that encourage exploration and persistence should increase the likelihood of creative performance) o 2 contextual characteristics (job complexity and supervisory style) drawn from previous research that

promote or support intrinsic motivation to enhance creative achievement o job complexity � complex challenging jobs are expected to support and encourage higher levels of

motivation/creativity (use Motivating Potential Score, MPS) o H2: A job’s score on the MPS index will relate positively to employee creative performance. o supervisory style � a supportive style is expected to enhance creative achievement, as it promotes

employees’ feelings of self-determination and personal initiative at work, which should boost levels of interest in work activities

o H3: Supportive supervision will relate positively to employee creative performance. o H4: Controlling supervision will relate negatively to employee creative performance.

Joint contributions of personal and contextual characteristics - previous hypotheses discussed possible independent contributions, now focus shifts to the possibility that

the personal and contextual factors combine and interact - independence has been proven, as well as their frequent interaction to affect outcomes such as satisfaction

and work performance - H5: Creativity-relevant personal characteristics and contextual conditions will interact in such a way that

creative performance will be highest when employees score high on the CPS index, work on high-MPS jobs and are supervised in both a supportive and noncontrolling fashion.

- additional the contributions of the characteristics to 2 traditional outcomes (work performance & intention to quit) has been studied, but direction of effect cannot be hypothesized, but may run counter to the one on creativity

Results H1: only partially supported, CPS only positively correlated with patents (no other significant relationships) H2: partial support, MPS correlates positively with only rated creativity (also positively with rated performance and negatively with intentions to quit) H3: no support (but does relate significantly to rated performance and intention to quit) H4: partial support, noncontrolling supervision correlates only positively with rated creativity H5: supported – creative performance is highest when employees had appropriate creativity relevant personal characteristics and worked under conditions expected to foster intrinsic motivation – specifically when jobs were complex and supervisors supportive and noncontrolling, CPS was strongly and positively associated with rated creativity; however when scores were low on one or more of the contextual conditions, CPS had little relation to creative achievement

Discussion



- contextual characteristics alone contributed independently to the performance and intentions to quit outcomes

- interactive combinations of the CPS and the context measures contributed significantly to each of the creativity outcomes

- management should consider both personal and contextual factors o the same contextual conditions should be implemented cautiously, if at all, for individuals with few

creativity-relevant personal characteristics – however, not installing the same for all, may complicate efforts to simultaneously with creativity maximize general performance effectiveness or to minimize turnover in a work unit (both of which were positively influenced by the same set of variables as creativity)

- further research should examine the effects of context manipulations on employees’ creativity-relevant personal characteristics (role!!!)

Making Teamwork work: Boundary Management in Product Development Teams (Ancona, Caldwell) - support throughout the organization for a new product requires more than the use of concurrent engineering

techniques or a cross-functional team – the team has to learn to manage across traditional lines of function and authority (communications across group boundaries)

- past research has identified different functions and roles necessary, but it has not investigated the full range of activities � need to develop understanding of things team members do to establish and maintain connections with others o gatekeepers – broad connections to external, technical information sources; serve to refine knowledge

and direct it to other members of the team o organizational and laboratory liaisons o 5 work roles: idea generating; championing; project leading; gatekeeping; sponsoring

Research & Patterns - goal of research was to describe the types of things group members do when they interact with outside the

group & identify patterns among activities, as well as determine how these activities are related to the overall performance of the team

- 3 dimensions underlie the specific actions: o ambassador – representing the team to others and protecting the team from outside interference

(primarily vertical in nature) o task coordinator – coordinating the team’s effort with others (lateral connections) o scouting – general scanning for ideas and information about the market, the competition or the

technology; building general awareness and knowledge base, rather than addressing specific issues

Boundary activities and the product development team - the nature of external activities is related to teams’ performance

o frequency of external interaction and problem solving is related to ultimate success, but not interim evaluations

o scanning is critical before work begins, but can be disruptive once work has begun o teams devoting a great deal of effort to managing upward (ambassador) were initially viewed as

successful form top, but this fades o team’s own assessment and that of management are not correlated

- neither frequent communications nor cross-functional teams are a substitute for effective boundary management o communication and cross-functional teams do not lead to performance, but if correctly managed they

help provide some basis for helping the team effectively complete the ambassador and task-coordination activities that facilitate team performance

- the importance of boundary management is independent of most characteristics of the project, but the nature of boundary activities changes under the life of the project (ambassador important at beginning and end) & individual characteristics somewhat relate to responsibility for boundary management activity

- 4 distinct strategies for performing boundary activities: o ambassadorial – low level of task coordination & scouting o researchers – high levels of scouting, moderate of task coordination, low of ambassador



o isolationists – low on all o comprehensives – high on ambassador & task coordination, low on scouting

Managing the team’s boundaries - selection & development � an explicit criterion for (at least some) team members’ assignment should be

boundary management o paradox: encouraging groups to build effective relations with outsiders contributes to high

performance, but at the same time may reduce the cohesiveness and sense of accomplishment of the group

- reward system � cross-functional work must be rewarded



Human Resource Systems and Sustained Competitive Advantage: A competency-based perspective (Lado & Wilson, 1994) - behavioral psychology perspective – researchers argued that HRM practices can contribute to competitive

advantage through shaping role behaviors resulting in lower costs/differentiation – but is externally oriented and disregards human volition and internal cognitive processes, which makes the source (roles) mobile/duplicable

- authors take a resource-based view to examine the role HR systems play in facilitating or stifling the development of organizational competencies enabling sustained competitive advantage o take systems perspective o assumptions: 1) open systems view; 2) managers are responsible for success/failure

The resource-based view of strategic management - resource based view of the firm � organizational resources and capabilities that are rare, valuable (capable

of yielding economic benefits), immobile, nonsubstitutable and imperfectly imitable form the basis of a firm’s sustained competitive advantage (and small number of firms for a particular competitive environment possess them) o HR systems can contribute to sustained competitive advantage through facilitating development of

competencies that are firm specific, produce complex social relationships, are embedded in a firm’s history and culture and generate tacit organizational knowledge; conversely they can inhibit the mobilization of new competencies and destroy existing ones and thus contribute to organizational vulnerability and competitive disadvantage

o Fundamental premise: organizational competencies are heterogeneous and immobile (arises from inability to duplicate economic benefits associated with them – e.g. unique historical conditions, specialized assets, causal ambiguity)

- organizational capabilities = dynamic, nonfinite mechanisms that enable the firm to acquire, develop and deploy its resources to achieve superior performance relative to other firms / firm-specific resources and capabilities that enable the organization to develop, choose, and implement value-enhancing strategies

Organizational competencies - Managerial competencies: determine acquisition, development and deployment of resources, conversion of

resources into outputs, delivery of value to stakeholders � potent sources of managerial rents and thus sustained competitive advantage o articulating a strategic vision – is source as it is inherently tacit, socially constructed and grown in

historical context o enacting organizational environment (shaping it)

- Input-based competencies (influence and are influenced by managerial vision): physical resources, organizational capital resources, human resources, knowledge, skills and capabilities that enable a firm’s transformational process – competitive advantage depends on firm’s ability to utilize existing stocks of resources and ability to accumulate new ones more efficiently and effectively than the competition o exploiting imperfections in the labor market – unique abilities, knowledge, foresight may let firm

achieve superior economic benefits o creating an internal labor market – facilitate the exchange and utilization of resources that are firm

specific (human asset specificity) – internal mechanisms are presumably superior the external or spot market in facilitating the efficient allocation and utilization – can create imitation barriers

o investing in firm-specific human capital – as firms face a heterogeneous demand and supply of human resources, firm-specific human capital is valuable and not widely available in the external labor market (cannot be substituted readily without replacement costs)

- Transformational competencies: capabilities are required to advantageously convert inputs into outputs o harnessing innovation and entrepreneurship – innovation allows for supranormal returns o fostering organizational learning – single-loop learning may lead to routines and inertia, thus double-

loop learning holds a greater potential for sustained competitive advantage – gives flexibility o promoting organizational culture – may enhance profitability by reducing uncertainty and ambiguity

inherent in strategic decisions and actions; unifies and regulates behavior and actions; reduces transaction costs



- Output-based competencies: all knowledge-based, invisible strategic assets, such as corporate reputation or image, product or service quality and customer loyalty

Competence-enhancing human resource systems - utilization/development of managerial competencies – HRM can play key role in articulation of strategic

vision; formation of organizational capital and enactment of beneficial firm-environment alignment o strategic vision: middle managers (HR department) can contribute to the articulation/champion HR-

related business issues o formation of organizational capital: exert influence through passing knowledge and information

upwards about possible productivity - acquisition and mobilization of input-based competencies – HRM influence through recruitment;

exploitation or imperfections I labor market; developing internal labor markets; fostering formation of firm-specific human capital o strategic selection and staffing – holistic approach fitting the whole person with the whole company

may enhance competence formation by attracting employees with more KSAs than required for immediate jobs

o imperfections in external labor market: emphasize careful resource planning so as to minimize costs o idiosyncratic jobs – foster productivity o investment in firm - specific human capital

- development/utilization of transformational competencies o harnessing innovation and entrepreneurship – elicit and reinforce role behaviors related to creativity,

innovation, long-term orientation, cooperation, trust, risk taking, tolerance of ambiguity o foster and facilitate accumulation of organizational knowledge

- developing and exploiting output-based competencies – HR can facilitate through eliciting employee involvement and commitment to the firm, fostering idiosyncratic exchanges between firm’s internal and external stakeholders (based on particularistic or symbolic resources – creates win-win situations), building a positive reputation

Competence-destroying human resource systems - inhibiting managerial competencies – HR philosophy buiding Hr policies, functions and practices may

hinder development of organizational competencies; while a facilitation or accumulation philosophy helps, a utilization philosophy (emphasis on short-term gains and operational efficiencies) hinders

- inhibiting/destroying input-based competencies – prevention to the extent that recruitment and selection system results in hiring of individuals without requisite firm-specific KSAs, or incongruent values/beliefs (results in vicious circle) o problems of lemons in market with information asymmetries

- inhibiting/destroying transformational competencies – a system focusing on standardization, task specialization, formalization, work routinization… may inhibit development by promoting and reinforcing defensive routines o ethically ambivalent HR systems (reinfoce behaviors/values/norms contradictory to and inconsistent

with espoused behaviors… of organizational stakeholders) may frustrate capacity of members to develop and exploit competencies

- inhibiting/destroying output-based competencies - emphasis on quantification of HR-related outcomes may lead to disregard of real problems; control-oriented approach to HR management may lead to organizational rigidities

Propositions - P1: Firms with HR systems that facilitate the development and exploitation of managerial, input-based,

transformational and output-based organizational competencies will have a greater likelihood of achieving competitive advantages than firms that have HR systems that destroy these competencies and /or prevent their exploitation

- Competencies must be continually replenished, upgraded and developed, but do not necessarily lead to a competitive position (argument of immobility, causal ambiguity, uniqueness)

- P2: Firms with configuration of competence-enhancing HR system attributes that are unique, causally ambiguous and synergistic will have sustained competitive advantage over firms that have HR system configuration that are typical, causally determinate and non-synergistic.

- P3: Firms with HR systems that are reciprocally integrated with their strategic suprasystems will be more effective in the development and exploitation or organizational competencies (and thus in achieving



sustained competitive advantage) relative to firms with HR systems that are either sequentially linked to or decoupled from their strategic suprasystems.

- P4: Firms with self-renewing HR processes will more likely generate competencies at a higher rate (and, thus, will more likely achieve sustained competitive advantage) than firms with HR processes that are self-maintaining. o Self-renewing processes (in open systems) rely on positive feedback to amplify the deviation between

actual and expected performance, while self-maintaining processes rely on negative feedback to reduce the deviation

Conclusion - HR systems may contribute or inhibit/destroy the formation/maintenance of sustained competitive

advantage by facilitating/preventing the development/utilization of organizational competencies (managerial, input-based, transformational, output-based

- however, conditions in external and internal environment may enable/constrain capacity of HR systems to develop and exploit organizational competencies

- over time competency patterns may change – thus, continuous monitoring is necessary

Competences as resources in firms (Nordhaug & Groenhaug, 1994) - focus of article is on primary type of human resources, competences carried by individual employees and

work teams (contrary to previous work they take this micro focus) – productive utilization of other resources requires relevant competences (precondition!)

Competences - competences can be found in different fields: managerial competences (focus here on psychological aspects

of competences and their implications for execution of managerial tasks); core competences (importance of competences for strategic management; aggregate capabilities (see resource-based theory of firm)

- resource based perspective of the firm: unique heterogeneous capabilities (technical know-how, managerial ability) may create sustained competitive advantage (that is distinctive competence and superior organizational routines in one or more of the value-chain functions enables firm to generate rents from resource advantage � competences allow them to make better use of their resources)

- competence = work-related knowledge, skills and abilities (KSAs) o individual competence – may be gained through education (general) and experience (specialized –

linked to the firm) o actual competence – competence needed to perform a certain task o formal competence – skills and knowledge as evaluated through examinations (proxy for certain skills;

indicate level of competence; foundation for recruitment – thus education fulfills a filtering or screening function)

The competence portfolio - competence portfolio = firms embrace individuals with different competences, who need to be coordinated

and utilized – they way they are affects performance � can be described in terms of: o relevance for task performance o degree of uniqueness – if time consuming to develop and protected, are a source of potential advantage o visibility – when competences are not applied (latent) they are of little or no immediate value o domain specificity – relevant only to single task, or many in the entire industry; if difficult to acquire,

possessing the specific knowledge may represent an important competitive advantage (e.g. experts have detailed domain-specific knowledge)

- manner in which a competence is utilized/applied determines organizational performance (i.e. how it manifests itself in the firm’s value activities) o configuration of competencies – how are they combined o creating synergies is important o social dimension – way in which people interact can contribute to producing new, collective

competencies o role of management is critical in regard to the interpretation, planning and employment off the firm’s

applied and potential competence



Distinctive competence - core competences – to identify them it is essential to analyze competences (helps in further protecting and

developing the core competences) - if relevance and uniqueness is present a potential for competitive advantage is present, but for it to be

realizable, the competence base must be protected (protectable) - competences residing with individuals are far more difficult to protect than those that are linked to

collaboration between individuals (composition is more stable and observing, decomposing and duplicating is more difficult for competitors)

Competence mobility - competence base’s generation of durable competitive advantages is closely linked to the degree to which it

represents a barrier for competitors � o low barriers � company can adapt to a new competence base or configuration easily, but protecting the

base is difficult and thus profitability is usually limited o low barriers for individual competence, but high for collective ones � very difficult to imitate o high barriers

- situations differ also on whether or not firms have the needed competence at their disposal and the degree of transferability and mobility of the particular competence � in case of high mobility, there is only modest potential for advantages if it is possessed, and else it is easy to obtain; in case of low mobility adjustment is difficult, even if resource is owned strategy might need to follow the resource (and not the other way round as usual!!!)

Competence alliances - individual firms do not need to possess all the competences it needs, as competence portfolios can be

expanded through forming competence alliances with other organizations (synergies can also be created through generation of unique skill combinations)

Implications for practice - HRM should take a more strategic role, be proactive in anticipating emerging and future needs, take over the

role of a primary function (as all build up on what it provide), expenses for training and development should be seen and treated as investments, recruitment should not only focus on technical best qualification but fit to the task as a whole; competences should not only be searched in-house, but in extended alliances � should be a senior function (top management!)



Engineers, Management and Work Organization: A comparative analysis of engineers’ work roles in British and Japanese electronics firms (Lam) - the manufacturing success of Britain’s major competitors (Germany, Japan) is often attributed to the greater

presence of engineers in management – in Britain the failure of engineers to enter the managerial hierarchy is said to have generated an anti-technological bias among British management

- common proposition is that more professional engineers should penetrate the senior levels of management so as to bring a technological culture and productivist orientation to the center of British management

- 3 explanations why British engineers have failed to compete for senior management positions: o management education deficiency: managerial potential is incapacitated by narrow and over-specialized

technical education o status deficiency: low social status of engineers and ambiguous occupational identity make engineers

unsuitable candidates o anti-productivist culture thesis: British economy has historically evolved to favor such management

activities as the search for long-term finance and strategic marketing over product and process improvement

- Paper argues that the whole engineers into management debate in Britain has neglected the work organization dimension of the problem and most of the policy solutions have been misdirected. The main problem in Britain is not simply that engineers are numerically under-represented in management, as compared with other successful industrial economies. It is also, perhaps more significantly that many engineers who do become managers often have to disengage form technical work early on in their careers and find their technical expertise unused. The split between technical and managerial expertise in British firms is a far more serious and fundamental problem. An understanding of the problem requires a close analysis of how work is organized an engineers’ skills are deployed at the enterprise level. Work organization is a critical factor determining the patterns of division of labor between engineers and managers, it influences the location of ownership of technical and managerial expertise, determines the structure of authority and control and shapes the role competence of its members. � paper essenti8ally explores how the organization of work affects the skills and role competence of engineers and the degree of technical and managerial career split in British and Japanese firms.

� for a good comparison see table II (page.

Background - general problem is how to apply highly specialized expertise involving a large number of people and yet

achieve coordinated effort � organic and mechanistic organizational forms o functional specialization leads to a separation between technical and organizational knowledge and a

vertical polarization between technical and managerial roles - design of the approach to product development also has a profound impact on the role of project managers

and the relationship between technical and managerial work � overlapping versus sequential - role of the project manager differs; any successful product developments needs effective integration across

different engineering activities and functional groups, but decision is to either invest in a vertical information system or more lateral communication � role behavior of project managers differs along: o nature of tasks performed � strategy development vs. day-to-day coordination role o degree of involvement in technical wok � technical involvement vs. early move into supervisory role

and divorce form technical work (hands-on vs. arm’s length management) o relationship with engineers � information sharing and trust relationship vs. information control of

information to retain power position (engineers then lack broad picture which aggrevates distrust)

Work organization, skills and role competence of engineers - contrasting forms of work organization have major effect on skills and role competence of engineers and the

extent of their full utilization in product development - British form (mechanistic…) tends to produce narrow single-skilled technical specialists � little wider

organizational problem-solving skills and thus unpromising candidates form senior management o Split between technical and managerial functions drives engineers early to follow management careers

(but then they lack technical competence) and focus more on development of managerial competences



and are unlikely to bring an engineering culture into management as they abandon their technical identity and expertise early on

- Japanese form (organic…) fosters high degree of shared division of labor and collective learning and spread of information; most important is encouragement of learning of wide range of non-technical or organizational skills (also in more formal and spontaneous manner in groups and not individual; and all generally oriented)

Conclusion - study has demonstrated importance of work organization in determining the location and ownership of

technical and managerial expertise and the degree of knowledge sharing in the management of product development & illustrated the effects of work organization on the skills and role competence of engineers and explored how this might influence the extent to which engineering expertise can penetrate the managerial hierarchy

- mechanistic structure and functional segmentation contribute to a vertical polarization between technical and managerial roles, inhibits knowledge sharing and leads to a gross under-utilization of engineers in product development and innovation

- under-representation of engineers in British management is thus only a symptom and not the root cause of the problem � needed is more integration between technical and managerial expertise (engineers have to acquire contextual skills) � old approaches will not work (e.g. rising social status)

Understanding HRM in the context of organizations and ... and HRM (3-4).pdf · some unique...

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