FOUR CASE STUDIES
The process of knowledge creation can be seen in the following four illustrations drawn from the 25 audits of HR functions conducted by the author in 1997 and 1998. The audit process was conducted on the basis of completion by the organisation of a lengthy questionnaire, and a visit to the organisation to audit the answers through a series of interviews with management and employee representatives, and the analysis of written data such as attitude and climate surveys for the organisation. The following four examples show how the changes to HRM, which reflect the integration of HR with the business, lead to the development of specific forms of knowledge.
The integration of HR with business strategy widens rather than deepens HR knowledge. The determining factor is the relevance of HR knowledge to the business need. One of the examples here is an Edinburgh-based life assurance and financial services company with 7,000 employees which initiated new performance management, development and reward strategies through a phased change programme. The first phase of the OD plan in 1996 delegated salary planning to the line, and set up a 'contribution management' (appraisal) system. The second, 1997, phase introduced an upward feedback process for the top 150 managers, market pricing, broad-banding reward structures, with 360o feedback for all managers in 1998/99. However, the purpose of all these activities, which largely passed HR procedures back to the line, was to support the total customer satisfaction strategy on which the business objectives were based, which required a more flexible workforce, more customer-focused staff with better leadership, improved retention of key personnel and faster staff development. The training and development part of HR took the major responsibility, and conducted research resulting in the identification of nine key behavioural competencies which were used to support all the HR policy areas including rewards. The employee development strategy was the powerful driving force behind the HR strategy; this entailed working on experiential learning with line management, and resulted in pushing learning responsibility out to the individuals concerned. All the HR activities were reported in detail alongside the business plans in the annual planning round, and were monitored quarterly, with wide communication to all staff. The criteria for deciding HR knowledge were therefore driven entirely by the needs of the business as expressed in the business strategy, in particular the customer service plan, which included new technology for paperless offices. We can see from this case that the move to a new approach in 1996 produced a need for a new knowledge base for HRM. The second case demonstrates how the speed of change and its continuous and pervasive nature has reduced the value of bureaucratic knowledge: what matters now is flexibility and responsiveness, and the capacity to manage change itself. One strong example is a large retail chain, employing 4,500 people, which retails entertainment products in a highly competitive market. This company had recently been part of a merger, and was owned by a joint venture. The number of large stores had been growing, while some of the smaller stores had been sold or closed. Despite this growth, there was a possibility that the company would be sold by one of its owners. The uncertainty of the organisation's position was reflected in its approach to HRM. Business values underpinned the principles of the HR plan, namely, enterprise, confidence and honesty, individuality and commitment. The objective from the perspective of HR management was to help the business create and sustain an enterprise culture. The HR function was expected `to move away from being technicians to developers and consultants'. The role of the HR team was to develop as HR consultants in the business as a whole.