HRM Notes – Anna Sonnenschein (Q2)
Q2 – Human resources management (HRM) – Comprehensive notes
1) HR cycle focus: from vacancy to recruitment
Idea of HR management in practice: when a vacancy exists, the goal is to fill it with the best candidate. The process starts by communicating externally that there is a vacancy, followed by selection, and then job analysis activities to define what is needed.
Supervisors’ inputs are essential: supervisors must describe who they are looking for and what the new hire will do. The HR department writes the job advertisement (job ad) based on inputs from supervisors.
Job analysis yields two linked products:
Job description (JD): tasks and responsibilities associated with the job; includes purpose, duties performed, and how the job fits in the organization.
Job specification (JS): the profile needed to perform the job effectively; includes knowledge, skills, abilities, traits, and other characteristics (KSAOs).
Job analysis is a systematic process to collect information on important work-related aspects of a job.
Supervisors must provide details for BOTH JD and JS; without this, HR cannot recruit effectively.
Key content elements for JD/JS include: purpose of the job, required education and experience, special skills, location in the organizational hierarchy, interests, personality, leadership expectations, tasks, responsibilities, and equipment used.
2) Recruitment: why it’s challenging and future-oriented
Leaders often err by focusing on the present (the person who left) rather than the future needs of the organization. Each turnover is an opportunity to renew the organization and redefine job contents.
Example: Bob did x, y, z. If you hire a clone of Bob, you may miss future needs (e.g., new tasks like virtual reality storytelling for staff cohesion). Jobs evolve; a magazine role may become obsolete.
Consequently, job ads should describe intended future needs, not current tasks. Each turnover warrants a new job analysis and refreshed job content.
3) Job evaluation and pay structure (Chapter II)
Job evaluation: determining pay for a job, often done by HR management; involves salary decisions, checks, company cars, etc.
Two main structures:
Job group structure: hierarchy based on job difficulty; groups jobs by similar difficulty levels.
Salary structure: wage hierarchy with minimum and maximum pay per job group; provides flexibility when you cannot find a perfect match.
How it works:
Rank jobs by difficulty to justify pay differences.
Group together similar-difficulty jobs into job groups.
Within a job group, pay ranges (min to max) are defined so not every hire must exactly match a predefined profile; you can reward additional competence/training within the range.
Example: functionaries in Belgium are paid according to a letter corresponding to education level; e.g., an A group includes all with a master’s or PhD; within a group, promotions don’t automatically yield more pay.
Pay flexibility: even within a group, different individuals may receive different pay based on fit and additional training.
4) External comparison of salary levels and efficiency wage theory
External salary comparisons emphasize transparency: make publicly visible what is paid and how.
Government effects: if the sector pays more, private firms may struggle to attract talent, so several fixes are used:
Rename the job title (e.g., IT Manager to Head of IT) to alter external comparisons.
Add structural layers to create more job stability and security (even with lower fixed pay).
Provide non-salary incentives (e.g., company car).
Increase all wages to market levels (costly for the firm).
Provide promotions with long-term commitments (e.g., promotion to IT Officer with a retention clause, e.g., a 2-year non-leave clause).
This touches on the broader topic of compensation of staff and turnover management.
A central theory here is the Efficiency Wage Theory: paying higher wages can boost productivity because workers feel more motivated and valuable, attracting top talent (and reducing shirking).
Core idea: higher pay improves effort, reduces turnover, and attracts better applicants; the higher cost is offset by productivity gains and reduced recruiting/training costs.
Classic implication: pay substantially above market can yield a competitive edge in talent quality and organizational performance.
Basic intuition: if competitors pay W{comp} and you pay W > W{comp}, you attract the best; over time, profits should reflect the productivity gains.
Limitations/real-world caveats of efficiency wages include:
Self-selection and a market for lemons: higher wages attract workers who are primarily motivated by money, not alignment with company values, risking lower overall commitment.
Market for lemons (Akerlof): when information is imperfect, high-wage signals can backfire if you recruit workers who are not truly a good fit; you may end up with low-lasting productivity gains.
Low standard of performance and no effective commitment: some high-paid workers do the minimum if benefits-costs are balanced; pay alone does not guarantee engagement.
Positive wage spiral: continuously raising wages to outbid competitors can erode profits as more firms raise wages in response.
The theory predicts top talent recruitment but has notable practical downsides; reality often shows a mixed picture.
5) Signalling, fixed wages, pay-for-performance, and tournament wages
Signalling and wage policy: pay can signal a firm’s value proposition to the market and potential hires; wages also signal the level of commitment expected from employees.
Fixed wages vs pay-for-performance:
Startups may offer a low fixed wage plus a commission on sales to align incentives and signal high upside potential.
Example: fixed wage = 1000; commission = 10% of every sale; potential earnings can reach 5000 or more, depending on performance.
This setup creates self-selection: more confident, higher-performing individuals apply, while weaker performers opt for firms with fixed wages.
Tournament wages (a middle ground between bonuses and commissions):
Bonus model: reach 100 sales, get a fixed bonus (e.g., 5000) but the incentive drops after the target is reached.
Commission model: every sale increases earnings by a percentage (e.g., +10% per sale) and keeps motivating after targets.
Tournament wages combine both ideas: the top performer may win a fixed prize (e.g., 5000) while ongoing commissions drive ongoing performance; this structure allows cost predictability but creates competition among staff.
Pros: predictability of total payout costs; cons: high competition, potential instability, and pressure on individuals.
Cultural consequences: intense competition among staff can create a warm vs cold organizational culture. A cold culture emphasizes competition and may discourage collaboration; a warm culture emphasizes support and collaboration but may dampen extreme performance incentives.
The Matthew effect: “the rich get richer” dynamic where already-advantaged workers gain more opportunities and rewards, often creating cumulative advantages for top performers and making mobility harder for others.
Practical implication: while high pay and competitive incentives can attract top talent, they can also hurt collaboration, increase turnover of lower-ranked staff, and lead to a winner-takes-all dynamic.
6) Recruitment concept, two-sided view, and employer branding
Recruitment definition: activities aimed at creating awareness about vacant jobs and attracting applicants.
Two sides of recruitment:
The organization (recruiter): provides JD, JS, and job valuation; searches for best alignment between candidate and job demands.
The applicant: performs self-analysis and decides whether to apply based on personal preferences (profession, organization, education requirements, geography, salary, and career prospects).
Employer branding and employer of choice: organizations should cultivate an attractive image to entice applicants even before vacancies arise; branding affects applicant pool and perception.
The applicant’s self-analysis checklist (4–6 items) commonly cited:
1) Choice of profession; - 2) Choice of organization; - 3) Educational level; - 4) Geography; - 5) Salary levels; - 6) Career perspective.
The first supervisor’s impact on career trajectory is crucial; a poor match at entry can have long-term effects on development and retention.
7) Recruitment context: the tide of labor markets and recruitment pressures
In a tight labor market, recruiters feel pressure (e.g., “recruitment tempo” when 1 of 3 workers leaves, etc.). Delays in recruiting can force colleagues to compensate, increasing workload and risk burnout.
Early-stage recruiting often uses younger or junior recruiters (recruital positions); concerns about whether they genuinely understand the organization and whether targets tempt them to misrepresent the job to applicants.
“Selling” a job with attractive descriptions vs. truthful “telling” about the job can undermine trust; the balance between appealing branding and honest communication is critical.
8) Psychological contract: explicit vs implicit promises
Psychological contract concept (Robinson 1996; Rousseau 1998; rooted in Argyris 1960): the implicit and explicit expectations employees believe the organization has promised them and what they believe they owe the organization.
Two facets:
Formal contract: the written, legally enforceable agreement.
Psychological contract: employee’s perception of what the employer promised (and what the employee promised in return). The employee’s point of view is central because it drives behavior.
Explicit promises (concrete): e.g., a promotion after 5 years; implicit promises (soft): e.g., being considered “the best worker” with a future reward without a formal guarantee.
Narrow vs broad sense:
Narrow: focuses on explicit and implicit promises, often ignoring expectations.
Broad: includes expectations as driving forces behind behavior.
Impact: breaking the psychological contract can reduce work performance, affective commitment, and loyalty; maintaining alignment requires open communication and regular checks (informal mid-evaluations, coffee-machine conversations) to understand what staff expect.
Practical takeaway: supervisors should regularly assess and align employees’ expectations and promises to maintain trust and performance.
9) Recruitment process: external and internal recruitment paths
Internal recruitment (passive internal advertising): uses referrals and internal mobility; often includes a “bring your friend” program.
Referral mechanism: employees refer individuals they know; advantages include potentially higher-quality hires and reputational benefits for the referrer; disadvantages include risks to diversity and potential for nepotism.
Advantages of referrals:
Often better-informed candidates who understand the organization’s expectations and culture; higher likelihood of good fit; reduced risk of psychological contract breaches.
Referrers’ reputations are tied to the candidate; successful referrals enhance the referrer’s standing.
Disadvantages of referrals:
Diversity concerns: a homogenous referral pool can reduce workforce diversity; risk of perpetuating existing demographics.
Bias and “like-me” effects can lead to poorer long-term diversity and inclusion.
Positive action and diversity policies (Amsterdam directives):
Positive action allows encouraging underrepresented groups to apply, but it cannot reserve jobs in the recruitment phase for a specific group.
After the selection phase, if two candidates are equally qualified, you may favor the candidate from a minority group; you cannot preserve jobs for a group in the recruitment phase.
The policy aims to align organizational demographics with societal demographics without creating formal discrimination against majority groups.
Diversity policy context and potential misinterpretations:
Positive action is about encouraging diverse applicants rather than setting fixed quotas during recruitment.
Policies must avoid reverse discrimination and should be used only when candidates are similarly qualified.
Referral program caveats:
While referrals can yield high-quality hires, they can also create dependency on the referent and reduce long-term stability if the referent leaves.
Practically, some firms separate the referent and referree into separate departments to promote broader integration and stability.
10) Recruitment dynamics: geography and location strategy
Geography matters in recruitment and location strategy:
In Belgium, Brussels as a central hub offers national reach; peripheral locations may limit labor pool but reduce commuting burdens.
Commuting time and work-life balance influence where people are willing to work; many prefer not to move far from home to work.
Traffic and congestion in Brussels and Antwerp influence location decisions; peripheral sites with good highway access can attract applicants more effectively.
Firms strategically choose locations to maximize candidate reach while balancing commuting considerations.
Practical implication: location strategy should consider commute times, accessibility, highway proximity, and the ability to attract talent from a broad geography.
11) The recruitment decision framework: what makes an organization attractive
Beyond salary, candidates evaluate:
Work-life balance (geography and commuting time impact).
Career opportunities and advancement prospects.
The organization’s reputation and image as an employer of choice.
The alignment between organizational values and the candidate’s own values.
The stability and predictability of career progression and promotions (e.g., KUL’s promotion structure).
The supervisor’s role in recruitment and career development is critical; initial impressions strongly influence long-term engagement and retention.
12) The psychology of promises, expectations, and burnout risks
The literature distinguishes between promises, expectations, and the psychological contract:
Promises are commitments made by the employer (explicit or implicit).
Expectations are what employees believe will happen as a consequence of staying with the organization.
If expectations are unmet, employees experience disappointment or burnout; this can lead to disengagement or turnover.
Managers should avoid promising what they cannot deliver and should manage expectations through regular, transparent communication.
The risk of burnout is higher when employees work toward unfulfilled expectations (e.g., promotions that never materialize). Honest communication can help prevent disengagement.
13) Types of recruitment in practice – a summary
Internal recruitment:
Passive internal advertising; referral mechanisms; advantages include higher candidate quality, better cultural fit, and improved reputation for the referring employee.
Disadvantages include potential diversity bias and the risk of creating a monoculture; and the possibility that strong internal networks limit fresh external ideas.
External recruitment:
Expands the candidate pool; can introduce new skills and perspectives; often necessary when internal options are insufficient.
Important policy considerations:
Maintain a diversity policy to prevent biased selection.
Use positive action in recruitment to encourage applications from underrepresented groups, but avoid reserving jobs for groups in the recruitment phase.
Ensure that recruitment communications are honest and do not misrepresent job reality (avoid selling rather than telling).
14) Summary of key psychological and organizational implications
HR decisions involve a mix of quantitative pay structures and qualitative expectations management.
A well-designed job analysis and recruitment process aligns future organizational needs with candidate capabilities, reducing the risk of a mismatch between job content and organizational goals.
Compensation strategies (efficiency wages, fixed vs performance pay, tournaments) have complex implications for attraction, motivation, collaboration, and financial performance. Theoretical advantages must be weighed against practical risks like self-selection, market dynamics, and organizational culture.
Psychological contracts require ongoing management: clear communication, regular check-ins, and alignment of promises with actual practices to maintain performance and commitment.
Diversity and positive action policies are essential but must be implemented carefully to avoid unintended biases or reverse discrimination; they should be embedded in a broader strategy for inclusion and fairness.
15) Connections to foundational principles and real-world relevance
The material integrates foundational HR concepts: job analysis, job design, recruitment, selection, compensation, and organizational behavior.
Real-world relevance includes: the importance of employer branding, the evolving nature of jobs and skills, and the need to balance cost, efficiency, and fairness in compensation.
Ethical implications: transparency in pay, accuracy in job ads, avoidance of discriminatory practices, and ensuring that employee perceptions of fairness (psychological contracts) are honored.
Practical implications for managers: continuously update job content to reflect organizational needs, design compensation systems that align incentives with desired outcomes, and maintain open communication about expectations and opportunities for growth.
16) Quick reference: key terms to memorize
JD: Job Description
JS: Job Specification
KSAOs: Knowledge, Skills, Abilities, and Other characteristics
Efficiency Wage Theory: higher wages can improve productivity and reduce turnover
Market for Lemons (Akerlof): information asymmetry can lead to adverse selection
Psychological Contract: employee’s perceptions of promises made by employer and employer’s promises in return
Positive Action: policies to encourage underrepresented groups to apply, without reserving jobs during recruitment
Referral: internal recruitment method relying on employees to recommend candidates
Tournament Wages: compensation structure combining fixed pay, bonuses, and commissions to drive performance within a competitive framework
Warm vs Cold Organization: cultures that emphasize collaboration vs competition
Matthew Effect: self-reinforcing advantage for already-advantaged employees
This set of notes captures the major and most of the minor points raised across the transcript, including mechanisms, examples, ethical considerations, and the implications for practice in HRM.