Mykolas Romeris University, Sept 2006 1

Sustainability in Human Resource Management

Norbert Thom, Robert Zaugg, Adrian Blum

Presented by

Prof Dr Dr hc mult Norbert Thom

Director of the Institute for Organisation and Human Resource Management (IOP), University of Berne www.iop.unibe.ch

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Mykolas Romeris University, Sept 2006

Model of a sustainable human resource management

Culture  Attitudes  Values 2

Companies Individual

Work-Life-Balance Strategies  Objectives Instruments Processes   Methods  Structures (All diagrams and statistics from Zaugg/Blum/Thom 2001.) © IOP  University of Berne

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Three pillars of sustainability

Work-Life-Balance ♀: Growing importance of professional career ♂: Growing importance of private and family life Individual Responsibility Increased autonomy and self-determination in questions of professional development Employability Focus on continuous development and professional agility rather than specific activity © IOP  University of Berne

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The pillars in practice

4 Survey* of 1016 European companies. Aims: • Overview of state of the art of HRM in Europe • Determining conception and stage of implementation of sustainable HRM in European companies • Cross-country comparison *The project was kindly supported by the Swiss Federal Office of Personnel and the European Association of Personnel Management (EAPM).

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Sample

Country Questionnaire Mailed Questionnaires Returned Questionnaires

Switzerl.

Abs. % 3020 47

Germany

Abs. 749 73.7 45 % 4.4

Italy

Abs. 81 % 8

France

Abs. 42 % 4.1

Spain

Abs. 37 % 3.6

Netherl.

Abs. 37 % 3.6

Austria

Abs. 12 % 1.2

England

Abs. 500 7.8 500 7.8 500 7.8 500 7.8 500 7.8 400 6.2 500 13 % 7.8 1.3

Return rate 24.8% 9% 16.2% 8.4% 7.2% 6.8% 3% 2.6%

Total of mailed questionnaires Total of returned questionnaires

Total return rate

6420 1016 15.83% • Sectors: industry, service providers, trade, transport, public sector, IT, healtchcare, banking, construction, insurance • Company size: 40% >500 empl; 47% 50-500 empl; 13% <50 empl © IOP  University of Berne

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Objectives of HRM in European companies

Economic objectives Health 4 Employability 3 Social responsibility 2 Self-realisation 1 Compensation Pleasure at work 6 Social contacts Europe Quality of life Netherlands Individual responsibility France © IOP  University of Berne

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Central objectives of HRM in European companies

• Contributing to achievement of economic objectives • Promoting individual responsibility (90% of questioned companies!) • Ensuring adequate pay and promoting employee health • Enhancing employability French companies) (strong dispersion: 68% of Dutch vs. 22% of HRM is gaining in strategic importance.

Sustainability as defined by the model is an issue.

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Conception of sustainability in European companies

Keywords associated by HRM responsibles with sustainability in HRM: • HR development: training, continuous education, career planning • Employee characteristics: motivation, flexibility, responsibility • Leadership: consistency, social skills, MbO • Staff retention, incentives © IOP  University of Berne

Mykolas Romeris University, Sept 2006 Environment Culture / Structure / Management Progress / Innovation Strategy / Planning Stability Quality Development of company Controlling Information / Communication Incentives Human resource management (excl. HRD) Human resource development (HRD) Job Working conditions Leadership / Coaching Involvement / Loyalty Characteristics of employees Well-being of employees Relationships / Stakeholder Value orientation Others 0 9 52 94 126 43 63 69 42 58 96 123 308 26 45 126 55 245 36 67 50 120 144 100 150 200 250 300 350 © IOP  University of Berne 9

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Sustainability in European companies

10 „I am of the opinion that our company has a particularly innovative concept for sustainable human resource management .“ 40 35 30 25 20 15 10 5 0 23 37 4 agree entirely partly agree tend to agree 24 7 5 tend to disagree partly disagree do not agree at all © IOP  University of Berne

Mykolas Romeris University, Sept 2006

Major instruments of sustainable HRM

11 • Recruitment : requirement & job profiles; HR marketing; labour market research • Deployment : health management; staff composition (older employees!); advanced working-time management • Development : encouraging continuous education; career planning; promoting individual responsibility & participation • HR marketing ; image analysis & improvement • Retention : sophisticated incentive systems • Disemployment : exit interviews; outplacement • Management & Leadership : participative management styles; MbO; assessment of superiors © IOP  University of Berne

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The instruments in practice – selected results Deployment: health management

Effective health management rests on systematic collection of data on absences and health of employees.

~ 60% of questioned companies across countries charge at least 1 person or unit with employee health.

Health management more sophisticated in large (>500 empl) companies of the industry and construction sectors. Less common among service providers.

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Deployment: staff composition

Demographic and economic developments in Europe increase the significance of the potential of employees of advanced age.

Less than 5% of questioned companies indicate that they have recognised and made efficient use of the potential of older employees!

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Deployment: working-time

Flexible working-hour models are conducive to improved work-life balance. Especially so are • Job sharing • Sabbaticals • Telework • Long-term or lifelong working time schemes Flexible working hours are used in more than two thirds of the questioned companies, though mostly for individual cases only. Systematic implementation is still very rare.

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Advanced working-time schemes in European companies

15 © IOP  University of Berne

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Sabbaticals (long-term leaves)

16 © IOP  University of Berne

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Development: promoting individual responsibility

Participation and/or autonomy in decision-making is a crucial feature of sustainable HR development.

Around half of the companies interviewed report that their employees can directly participate in important decisions. Also roughly half claim to promote individual responsibility & partial autonomy of their employees.

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Individual responsibility

Europe In our company we specifically encourage our employees to develop a sense of responsibility (e.g. by providing them with course budgets that they can administer themselves) . 3,31 Spain England Italy France Netherlands Austria Germany Switzerland 1 2 2,98 2,80 3,22 3,54 3,89 3,75 3,16 3,35 3 4 5 © IOP  University of Berne 6

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Management & Leadership

Management and leadership styles contribute essentially to participation and individual responsibility on the part of employees.

~ 80% of European companies claim to be using participative management styles, and also MbO seems widely implemented. Far less widespread is superior assessment, which would provide an excellent opportunity for enhancing sustainability in HRM.

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Staff retention

Attractive non-material incentives are an essential element of sustainable HRM.* While around four fifths of the companies questioned claim to offer generous material incentives to their employees (compensation, fringe benefits, bonuses), 40% believe that non-material incentives are "rather not" or "not at all" attractive for employees.

*Cf. also Thom/Friedli 2003 © IOP  University of Berne

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Non-material incentives

Our company offers its employees attractive non-material incentives (scopes of decision-making).

Europe 4,25 Spain England Italy France Netherlands Austria Germany Switzerland 1 2 3 3,86 4,46 3,32 3,24 4,68 4,00 3,62 3,66 4 5 © IOP  University of Berne 21 6

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Disemployment

Sustainable HRM must take into account the needs of employees laid off or leaving on their own initiative in order not to harm the company image on labour and sales markets.

A large majority of European companies uses exit interviews systematically as a classic method of disemployment. However, a significantly lower percentage (61%) consider it important to give professional advice to employees during their leaving process.

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Conclusions

• • Sustainability in Human Resource Management is an issue in companies throughout Europe, though with local differences.

A considerable variety of specific instruments supportive of sustainable HRM is in use. However, these instruments so far have been implemented only restrainedly and unsystematically. Much more could and will have to be done to ensure and enhance employability, individual responsibility and a work-life balance that does justice to the societal changes of recent decades among European workforces.

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Further steps

The above conclusions suggest the following immediate recommendations to European HRM responsibles: • • • • Reconsider staff composition: make sure to fully exploit the potential of "minorities", esp female and elderly employees.

Do not underestimate the motivating effects of non-material incentives. There are many more of these besides having employees participate in decision-making. Include superior assessment in a comprehensive workforce assessment scheme.

Take better advantage of the great potential for flexibility in the area of working time schemes.

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Mykolas Romeris University, Sept 2006 25 … and always remember: Sustainable Human Resource Management concerns both the individual and her or his employer as equal partners: it is not simply a question of better satisfying the individual needs of employees, but stands in the service of corporate competitiveness – fully in agreement with the central purpose of HRM to support the achievement of the company's economic objectives.

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References

Zaugg, Robert J.; Blum, Adrian; Thom, Norbert (2001): Sustainability in Human Resource Management. Evaluation Report. Bern 2001.

Thom, Norbert; Friedli, Vera (2003): Retention. Case Studies on High Potentials. Bern 2003.

Further results to be published in: Zaugg, Robert J. (2006): Nachhaltiges Personalmanagement. Eine neue Perspektive und empirische Exploration des Human Resource Managements, Wiesbaden 2006 (in press).

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