Assignment: Capella University Keeping Momentum Going While Implementing Change Paper

Assignment: Capella University Keeping Momentum Going While Implementing Change Paper

Assignment: Capella University Keeping Momentum Going While Implementing Change Paper

Question Description
Human Resources: Keeping Momentum

One of the biggest challenges for leaders is to keep momentum going while implementing change. Particularly when the culture of an organization is strong, it can be quite difficult to fully implement the change before the momentum disappears. Sustaining momentum is therefore critical, or employees will eventually go back into their “old ways.” Some leaders are too quick to move on to the next challenge without making sure that the change is embedded in the culture, people, and structure of the organization. In other words, you must make sure that all parts of the organization are aligned with the new strategy.

Respond to the following, in a 2-3 page paper:

Why do you think many new changes at the organizational level quickly fizzle out?
What do you think is most important for HR professionals to know in order to avoid this?
Be specific, and provide examples with references to the literature.
BY DAY 7
Resources:

Gardner, T. M., & Wright, P. M. (2009). Implicit human resource management theory: A potential threat to the internal validity of human resource practice measures. International Journal of Human Resource Management, 20(1), 57–74.

Kotter, J. P. (2005). Change leadership. Leadership Excellence, 22(12), 3–4.

Maxwell, G. G., & Beattie, D. R. (2004). The ethics of in-company research: An exploratory study. Journal of Business Ethics, 52(3), 243–256.

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Implicit human resource management theory: a potential threat to the
internal validity of human resource practice measures
Timothy M. Gardnera
* and Patrick M. Wrightb
a
Vanderbilt University, Nashville, USA; b
Cornell University, Ithaca, NY, USA
Since the publication of Huselid’s (1995) paper examining the relationship between HR
practices and firm performance, there has been an explosion of published papers examining
the empirical relationship between HR practices and various measures of firm performance.
This study examines the possibility that informants typically providing data about
organizational HR practices may be biased by an implicit theory of human resource
management. Our findings suggest the responses from subjects typically providing data about
HR practices may be biased in their reporting by the performance of the organization.
The generalizability of these results is considered and implications for future studies of the
HR-firm performance relationship reviewed.
Keywords: construct validity; mental models; research methods; strategic human resource
management
Recent research in the field of Strategic Human Resource Management (SHRM) has explored
the substance and impact of organizational human resource strategies. This research has
examined both the impact of individual HR practices on firm outcomes, such as compensation
(Gerhart and Milkovich 1990) and employee selection (Terpstra and Rozell 1993), and the effect
of sets of human resource practices on firm performance (Huselid 1995; MacDuffie 1995; Delery
and Doty 1996; Ichniowski, Shaw and Prennushi 1997; Ngo, Turban, Lau and Lui 1998; Shaw,
Delery, Jenkins and Gupta 1998; Hoque 1999; Guthrie 2001; Paul and Anantharaman 2003).
This stream of research has documented statistically and practically significant relationships
between various measures of human resource practices and business unit and/or firm outcomes.
Effect sizes in these studies typically indicate that a one standard deviation increase in the
use/quality of a set HRM practices is associated with approximately a 20% increase in profits
(return on assets) (Becker and Huselid 1998; Gerhart, Wright, McMahan and Snell 2000b;
Paauwe and Boselie 2005).
While extremely promising, this research, with few exceptions, has relied on survey
responses from one knowledgeable informant per company to measure the content and quality of
firms’ human resource management systems. Reliance on just one informant makes the
measurement of the human resource management construct susceptible to excessive random (i.e.,
unreliability) and systematic (i.e., bias) measurement error. Research by Gerhart (1999), Gehart
et al. (2000b) and Gerhart, Wright and McMahan (2000a) points to the potentially problematic
nature of the construct validity of measures of HR practices, particularly with regard to random
measurement error. Gerhart et al. (2000a) replicated a typical SHRM study and estimated that
ICC(1,1), a measure of the reliability of a single informant, to be 0.16; significantly lower than
Nunnally and Bernstein’s (1994) recommended minimum of .70. Wright et al. (2001a) examined
ISSN 0958-5192 print/ISSN 1466-4399 online
q 2009 Taylor & Francis
DOI: 10.1080/09585190802528375
http://www.informaworld.com
*Corresponding author. Email: tim.gardner@vanderbilt.edu
The International Journal of Human Resource Management,
Vol. 20, No. 1, January 2009, 57–74
the interrater reliability of HR practice measures using data from three different SHRM studies
and observed an average item ICC(1,1) of 0.25.
Thus, every study that has examined measurement error in measures of HR practices has
demonstrated that significant amounts exist, particularly when the measure is taken from a single
respondent. Random measurement error leads to a downward bias in observed relationships.
If the bulk of the measurement error is random, this would imply that the ‘true’ impact of HR
practices on firm financial outcomes may be significantly greater than current empirical research
suggests. However, the measurement of human resource constructs is also susceptible to
systematic measurement error. Systematic error is a consistent bias in a measure, and it can
either inflate or deflate an observed relationship. This type of error may occur if respondents
report HR practices based not on accurate and valid estimates, but rather based on an implicit
theory of human resource management. For example, an implicit theory that high performing
firms are engaged in progressive HR practices while low performing firms are not engaged in
such practices, if it affects subjects’ responses to HR surveys, could produce an artificially high
correlation between HR practices and firm performance. However, to date, no empirical data
exists suggesting that respondents might hold such an implicit theory, nor that this implicit
theory might impact their responses.
Thus, the purpose of this study is to examine if one form of systematic bias, implicit human
resource management theory, can impact measures of HR practices. We seek to answer two
specific questions; (1) Do typical respondents to HR practice surveys in a field setting hold
implicit theories regarding the nature of human resource practices? (2) Can implicit theories
affect how research subjects describe organizational human resource practices? In order to
answer these questions we first review the theoretical rationale and empirical evidence for the
impact of implicit theories on subjects’ responses in other areas of management research.
Review of the literature
Implicit theories and their impact in organizational research
The most commonly considered form of systematic bias in organizational research is perceptpercept inflation. Percept-percept inflation results when subjects provide information for the
independent and dependent variables at the same point in time (Gerhart 1999). This type of bias
is less of a threat to the research on HR practices and firm performance because, with only a few
notable exceptions (see, for example, Delaney and Huselid 1996; Bae and Lawler 2000; Guthrie
2001), most of the major SHRM studies have collected information regarding firm performance
from a source different than the respondent providing information regarding HR practices.
However, a second, and less frequently considered possible source of systematic bias is the
implicit theories of the informants. Informants, such as researchers, have implicit theories of
human resource management. As organizational research is rarely fully counterintuitive,
informant theories of HRM are likely quite similar to researchers’ theories (Staw 1975). When
responding regarding the characteristics of the organization on a survey, implicit theories may
bias the recall of information in a way consistent with the theory the researcher is trying to test.
Below we examine the theory underlying the role of implicit theories in organizational research.
Attribution theory and implicit theories
Attribution theory (Kelly 1973) attempts to explain how people make causal explanations of the
world around them and the consequences of these beliefs on behavior. The theory assumes that
all individuals behave as naı¨ve scientists seeking to understand the causes of salient outcomes.
Possible causes that appear to covary with the effect of interest over time are attributed as likely
58 T.M. Gardner and P.M. Wright
causes of the effect. The final choice of a cause or causes is based on the subject’s experience in
observing cause-and-effect relationships, quasi-experiments in which subjects manipulate
possible causal factors, and from implicit and explicit teachings of the causal nature of the world
(Kelly 1973, p. 115).
There is a strong conceptual basis for believing that implicit theories affect the responses
subjects provide in management research. Completing a survey for management research
involves a complex sequence of information processing events. Whether providing objective
information or subjective evaluations, subjects must be exposed to the stimulus of interest,
attend to the stimulus, encode, and store the information. There is usually a gap between the time
the information is stored and retrieved for the purpose of completing a survey. Once retrieved
from memory, the information is recorded on the questionnaire. It is unlikely informants encode,
store, and retrieve the desired information with perfect accuracy. Even in the absence of memory
decay, the entire process poses substantial information processing demands. To reduce these
demands, subjects rely on implicit theories to cue the salient information, structure it into
coherence, and fill in gaps of missing information (Rush, Thomas and Lord 1977). Thus, when
informants retrieve subjective or objective information about their organization that corresponds
to an implicit theory of firm performance, the information is likely to be biased consistent with
this theory in the direction of the (perceived) performance of the firm (Eden and Leviatan 1975;
Downey, Chacko and McElroy 1979; Martell and Guzzo 1991; Martell, Guzzo and Willis 1995;
Gerhart 1999).
This chain of events is especially likely to affect subjects providing information on measures
for which it is extremely difficult to gather information such as HR practices. Typically, SHRM
researchers are interested in the degree of enactment of actual HR practices as opposed to the
existence of stated policies (Huselid and Becker 2000). In small organizations (100 to 200
employees), asking the senior HR person about the percentage of managerial, professional, and
non-supervisory employees actively managed with customized sets of HR practices will be
information that is readily accessible as this person is likely directly responsible for the
firm-wide administration of these policies. However, as organizations grow larger (in terms of
number of employees) and more complex (in terms of more job categories, more sites, and more
business units/divisions), these practices are administered by corporate HR specialists and
division specific generalists and thus become less readily accessible to top HR officers (Gerhart
et al. 2000b; Scott 1995).
Consider the difficulty for the top HR executive for a 1000-employee firm with three
divisions and six job groups to answer the question “What proportion of the workforce is
promoted based primarily on merit (as opposed to seniority)?” with a response option asking for
proportion of exempt and non-exempt employees (Huselid and Becker 2000, p. 844). First,
the respondent would have to know what promotion practices were used for each job in
each division. Second, they would need to know the number of employees in each job in each
division. Finally, they would have to calculate two weighted averages across all job groups to
summarize this information into the proportion of exempt and non-exempt employees managed
by the practice. The calculations become exponentially more difficult as the number of divisions,
locations, and job groups increase. This process would need to be repeated for each question. It is
highly unlikely this information is embedded or easily accessible in firms’ HRIS systems
(Tansley and Watson 2000). Short of a large scale survey of HR specialists, generalists, line
managers, and employees, in all likelihood executive respondents are influenced by an implicit
theory to deduce the answers to the survey questions.
Thus, theoretically and conceptually, one can easily understand how and why an implicit
theory of HRM might impact respondents reports of HR practices. This conceptual justification
is bolstered by empirical data from other areas of management research. The following
The International Journal of Human Resource Management 59
discussion examines how implicit theories have been shown to induce response bias in other
areas of macro- and micro-organizational research.
Impact of implicit theories in macro-organizational research
There is extensive theoretical and empirical support for the proposition that implicit theories
systematically bias results in macro organizational research. Lawrence and Lorsch (1967)
concluded that firms have higher performance when managers align the properties of the
organization with the properties of the environment. Suspecting bias, several researchers
attempted to replicate the methodology used in their study and came to the conclusion that there
is a lack of convergent validity among managers’ perceptions, archival measures, and outsiders’
perceptions of firm-specific environmental uncertainty (Boyd, Dess and Rasheed 1993; Downey,
Hellriegel and Slocum 1975; Tosi, Aldag and Storey 1973). Numerous studies have suggested
that managers’ communications to outside stakeholders about the external environment are a
function of the performance of the firm. Managers in less successful organizations report their
environment as unpredictable, while managers in more successful organizations report
their environment as more stable (Bettman and Weitz 1983; Salancik and Meindl 1984; McCabe
and Dutton 1993).
One stream of strategy research attempts to document the correlates of corporate reputation
and its economic value to the firm. There is strong evidence that outsiders’ perception of
reputation is a function of firm financial performance. Every year since 1983, Fortune magazine
has published a list of the most admired corporations based on ratings of such attributes as
quality of management, quality of products/services, innovativeness, and ability to attract,
develop, and keep talented people. These ratings are provided by 8000 outside executives,
directors, and market analysts. Although the raters have access to a plethora of archival and
insider information with which to develop accurate evaluations, firm financial performance
appears to explain 39% to 59% of the variance of these measures (Brown and Perry 1994). It is
not such a great leap to believe that if external experts’ evaluations of company policies and
practices are strongly biased by firm performance, internal informants’ responses are also likely
to be biased (Gerhart 1999).
Impact of implicit theories in micro-organizational research
Numerous lab and field experiments have documented how implicit theories impact results
in micro-organizational research. Psychologists first suspected that implicit theories biased
subjects’ responses during early testing of the factor structure of personality measures.
Researchers (Norman 1963) noted that similar personality factor structures emerged whether
raters had known ratees for a long time or only a few moments. Eden and Leviatan (1975)
suspected that implicit theories may also affect organizational research subjects. To verify their
hypothesis, the authors instructed a large group of undergraduates to complete the leadership
scales of a version of the Survey of Organizations for a fictitious organization for which they
were given no information. Factor analysis resulted in the same four factor solution found in
studies using the scale with subjects of actual organizations. The authors concluded the similar
factor structures reflected a homogeneous implicit theory of leadership.
A stream of lab research followed Eden and Leviatan’s (1975) study attempting to document
the effect of implicit theories on subjects’ pattern of responses to surveys in leadership and group
process research. Specifically, scholars hypothesized that subjects with information about the
performance of a group or leader would provide biased descriptive and evaluative information
consistent with a common, implicit theory of performance. Typically, leadership researchers
60 T.M. Gardner and P.M. Wright
would first present subjects with either a written description of a leader (Rush et al. 1977), an
audio or videotape of a person leading a small group (Mitchell, Larson and Green 1977), or
allow the subjects to participate in a small group with a leader (Mitchell et al. 1977). They would
then provide subjects with (bogus) information about the performance of the leader, and have
the subjects complete standard leader behavioral questionnaires. Group process researchers
typically presented subjects with a video of a group engaged in a problem solving activity (Lord,
Binning, Rush and Thomas 1978; Rush and Beauvais 1981; Martell and Guzzo 1991; Martell
et al. 1995) or allowed subjects to participate in a group activity (Staw 1975). They provided
(bogus) performance information, then the subjects completed questionnaires asking them about
group behaviors (objective questions) and processes (evaluative questions). Across all studies,
subjects given positive performance information provided more positive evaluations of leaders
and group processes and ‘recalled’ the leader or group engaging in more positive behaviors
than subjects with negative performance information. Several studies, varying the above
methodology, have demonstrated the robustness of these findings and eliminated experiment
characteristics and other artifacts as easy alternative explanations (Rush and Beauvais 1981;
Lord et al. 1978; Martell et al. 1995).
Hypotheses
The previous discussion suggests that organizational research subjects hold implicit theories
about organizational phenomena and that these implicit theories affect subjects’ responses to
questionnaires. In past research, the impact of implicit performance theories has been
demonstrated by showing that information regarding the focal phenomenon’s performance
impacts the level of ratings provided by knowledgeable subjects. Our study uses a simple
simulation exercise to examine the existence of implicit theories regarding sets of human
resource practices and examines whether these theories influence subjects’ responses to a typical
survey of HR practices.
The above literature review suggests that implicit theories impact subjects’ responses to
questionnaires measuring HR policies and practices. Given that a plethora of research has shown
that information about performance (whether individual or organizational) influences subjects’
reports of processes, we propose:
Hypothesis 1: Subjects given positive cues about firm performance will estimate greater usage
of HR practices than subjects given negative cues about firm performance.
Hypothesis 2: Subjects given positive cues about firm performance will estimate greater
effectiveness of the HR function than subjects given negative cues about firm
performance.
If implicit HR theories indeed exist and affect subjects’ responses, one would expect they
would systematically vary according to experience. As mentioned above, implicit theories are
developed and reinforced through the observation of cause and effect relationships, quasiexperiments in which people are able to manipulate possible causal factors, and from explicit
and implicit teachings of the causal nature of the world (Kelly 1973). Such experiences could
moderate the impact of implicit theories regarding the relationship between HR and firm
performance in two ways. First, managers with first-hand experience managing people and
using/implementing HR services might have different implicit theories than naı¨ve subjects
(i.e. those who have little or no experience in working for real organizations in higher level
decision making positions). One might expect that naı¨ve subjects, lacking experience to test
implicit theories against real world outcomes might overestimate the relationship between HR
practices and firm performance. This leads to:
The International Journal of Human Resource Management 61
Hypothesis 3: Cues about firm performance will have a stronger impact on subjects with little
work experience relative to subject with significant work experience. Subjects
with little work experience will report greater differences between high
performing and low performing firms on both the estimated extent of usage of
human resource practices and evaluation of the human resource function relative
to subjects with significant work experience.
Finally, the functional background of the respondents might also moderate the impact of
implicit theories on the relationship between HR and firm performance. Subjects coming from
an HR background are likely to have both a self-serving bias and stronger identification with the
dominant mental models associated with ‘professionalized’ occupations such as human resource
management thus believing that HR practices and the HR function are integrally related to firm
performance (Melone 1994; Walsh 1995). However, respondents who are not immersed in the
HR ideology may believe that HR has less or even no impact on firm performance. Thus we
expect that persons with training and/or experience in the field of human resource management
will have stronger implicit theories regarding the covariation of HR practices and firm
performance.
Hypothesis 4: Cues about firm performance will have a stronger impact on subjects with a
background in HRM relative to subjects without such an occupational or
educational background. Subjects with a background in HRM will report greater
differences between high performing and low performing firms on both the
estimated extent of usage of human resource practices and evaluation of
the human resource function relative to subjects without such a background.
Methods
Subjects
Data were gathered from four sub-samples of individuals. First, 55 senior HR executives were
contacted by fax through a human resource research institute housed in a large university in the
northeast United States to explain the purpose and procedure of the study, and asking them to
volunteer to participate. Institute sponsors are virtually all large Fortune 500 firms. Executives
representing these companies typically hold the title of Senior Vice President or Vice President
of their respective corporations, and in most cases are the persons that would receive a survey
regarding corporate HR practices. Executives from 26 (47%) firms agreed to participate in the
study themselves along with one or more of their direct reports and one or more of their (peer)
top line executives. Each HR executive was mailed an appropriate number of survey packets
for themselves and participating colleagues. Of the 26 firms whose HR executives agreed
to participate, surveys were received from that HR executive, a direct report and/or a line
executive from 19 (73.1%) of them. In total, we received 32 surveys from HR executives and
16 surveys from line executives.
Fifty-six predominately first-year MBA and graduate engineering students were asked to
complete surveys in class during the first week of a manufacturing management class resulting in
a 100% completion and return rate. A further 38 first year graduate students in HRM were asked
to complete surveys in-class during the first week of a training and development class. The same
researcher provided an identical explanation and collected the completed surveys again resulting
in a 100% return rate.
Fully completed surveys usable for analysis were collected from 26 HR executives 14 line
executives, 42 MBA/graduate engineering students, and 31 HR students. The difference
62 T.M. Gardner and P.M. Wright
between the number of surveys completed and the number available for analysis was due to
missing data.
Procedure
Subjects were contacted as noted above. HR and line executives received packets with a cover
letter explaining the general purpose of the study as well as all of the experimental materials.
The survey itself asked subjects to read a scenario of a high (low) performing company, respond
to a survey regarding the HR practices of this hypothetical company, turn the page, read a
similarly worded scenario describing a low (high) performing company and complete an
identical survey regarding HR practices. The first 11 items were highly similar to or the same as
11 of 13 items used in the Huselid (1995) study. Questions 12 through 16 assessed participants’
evaluation of the HR functions’ contributions to firm performance. These questions were drawn
from a study of line and HR managers’ perceptions of the effectiveness of the HR function
(Wright, McMahan, Snell and Gerhart 2001b). The order of the presentation of the high and low
performing company scenario was counterbalanced across subjects. The entire survey can be
found in the Appendix. Executive respondents returned the surveys in self-addressed, postage
paid envelopes, while student respondents handed their surveys in directly to the second author.
Dependent variables
Huselid (1995) identified two distinct factors utilizing 11 items of a 13-item scale and used these
factors in his original study; each factor had similar effects on firm performance. Later studies
combined all the items into one index (Becker and Huselid 1998; Guest, Michie, Conway and
Sheehan 2003). Thus, in testing Hypotheses 1 through 4, we aggregated the 11 questions asking
respondents to estimate the proportion of employees managed with the listed practices into one
scale called HR Practice Usage by calculating of the mean of the 11 items for both scenarios for
each respondent. Coefficient alpha for this scale was 0.76 for the high performing company
scenario and 0.79 for the low performing company scenario.
Items 12 through 16 asked the subjects to estimate the contribution of the HR function to
strategic and financial outcomes. We aggregated these items into a scale called HR Effectiveness
by calculating the mean of the five items. Cronbach’s alpha for this scale was 0.83 for the high
performing company scenario and 0.91 for the low performing company scenario.
Independent variables
As mentioned above, subjects came from pools of graduate HR students, MBA students,
graduate engineering students, HR executives, and line executives. Experience was
operationalized by whether the respondent was from the student or the executive sample.
The executive sample represented subjects with significant work experience. Graduate students
were used to represent inexperienced subjects as they typically have brief professional work
histories. We didn’t have parallel experience measures to confirm that the experienced
(executive) subjects had significantly greater experience than the inexperienced (student)
subjects. Two available measures suggested experience differences were significant. The average
age of our experienced sample was 44.3 years (sd ¼ 9.0) while the average age of our
non-experienced subjects was 26.6 years (sd ¼ 5.6); this difference was statistically significant
(p , .001). Additionally, for the experienced subjects we had the number of years with the
current firm; average was 16.6 (sd ¼ 10.8). For the inexperienced subjects we had number of
years of post-bachelor’s work experience; average was 4.1 (sd ¼ 4.5). The difference between
The International Journal of Human Resource Management 63
these two values was significant at the .001 level of significance suggesting the experienced
subjects in our sample had significantly more experience at one firm than the entire work
experience of inexperienced subjects.
Functional Background was operationalized by whether the respondent was in HR (either
within their organization or as a major) or some other functional area of business. Performance
served as the within-subjects factor and was operationalized as to whether the responses were
associated the high or low performing firm scenario.
Subjects varied in the order in which they evaluated the high and low performing companies.
Thus, Order was operationalized as to whether the subject was presented with the high or low
performing firm scenario first. This was only coded to ensure that Order did not confound the
results. Thus the study examined the impact of Experience, Functional Background, and
Performance on ratings of HR practices in a 2 £ 2 £ 2 design.
Analyses
Testing these hypotheses involved the use of MANOVA with repeated measures. MANOVA
was necessary due to the use of multiple dependent variables (HR practice usage and evaluation
HR function effectiveness). As ANOVA reduces the inflation of Type 1 error due to making
multiple comparisons of treatment groups, MANOVA reduces the error associated with testing
the significance of multiple dependent variables (Hair, Anderson, Tatham and Black 1998).
Second, repeated measures analysis was necessary as the same subjects provided information
for the same measures under two different experimental conditions. Without this type of
analysis, the assumption of the independence of the error terms is violated potentially biasing the
effect size and direction estimates (Hair et al. 1998).
Results
The means, standard deviations and intercorrelations of the variables tested in Hypotheses 1 to 4
are presented in Table 1.
As Order of Presentation might confound the results, we investigated the effects of Order on
the dependent variables (not shown). The multivariate results (MANOVA with repeated
measures) examining whether Order has a significant between- or within-subjects main or
interaction effect on the dependent variables indicated that Order was not a significant factor.
Thus we concluded that the Order variable could be dropped from the remainder of the analyses.
Table 1. Correlations and descriptive statisticsa
.
Variables b Mean b s.d. 1 2 3 4 5 6
1. Order of scenario presentationc .45 .50
2. HR or non-HR backgroundd .50 .50 2.03
3. Experienced .65 .48 2.07 2.22* 4. HR practice usage (H) 68.92 12.55 2.11 .13 2.33*** 5. HR practice usage (L) 25.42 13.43 .11 2.14 .18 .01
6. HR effectiveness (H) 4.20 .53 2.06 .26** 2.25** .48*** 2.26**
7. HR effectiveness (L) 1.94 .68 .01 2.14 .13 2.26** .35*** 2.40***
Notes: a
Correlations calculated between two categorical variables were estimated using the phi-coefficient. Correlations
calculated between categorical and continuous variables were estimated with the point-biserial correlation; b
Variables
followed by ‘H’ are for the high performing scenario; ‘L’ for the low performing scenario; c
Coded as 1 or 0; low
performing company first ¼ 0, high performing company first ¼ 1; d
Coded as 1 or 0; Non HR or non-student ¼ 0; HR or
student ¼ 1; *p , .05. **p , .01. ***p , .001.
64 T.M. Gardner and P.M. Wright
Hypothesis 1 predicted that subjects would rate the objective descriptions of HR practices
of the company with high performance higher than the company with low performance.
Hypothesis 2 predicted that the estimated HR Effectiveness of the high performing company
would be higher than the estimated effectiveness of the low performing company. Hypotheses 3
and 4 proposed that experience and functional orientation (HR vs. non-HR) would moderate
these relationships. Support for Hypotheses 1 and 2 would be demonstrated by a significant
within subjects performance-scenario effect in the MANOVA results. Support for Hypotheses 3
and 4 would be demonstrated by significant Experience x Performance and Function £
Performance interactions, respectively.
The multivariate results can be seen in Table 2. As can be seen from the top half of Table 2,
no between subjects effects were significant. This indicates that any differences across groups
were likely due to the experimental manipulation of the performance scenarios and not an
overall difference in responses across the groups.
The bottom half of Table 2 shows the results of the multivariate test of within subject effects.
The results give preliminary confirmation of Hypotheses 1 and 2 as the results indicated a
significant performance effect (F ¼ 402.90; p , .001; h2 ¼ .88). To determine which of the two
dependent variables were responsible for the significant main effect of Performance identified in
the multivariate test, we conducted two separate univariate tests of the effect of the Performance
scenarios on the usage of HR practices and the evaluation of the HR function (not shown).
To reduce the inflation of Type 1 error associated with multiple univariate tests, we adjusted our
alpha by dividing it by the number of univariate tests for a new alpha of .025 (.05/2). Results
indicated both dependent variables were significantly different in the low performance condition
than the high performance condition (p , .001 for both). Referring to the means of these
variables in Table 1, one can see the values are consistently higher for the high performing
company than the low performing company as predicted by Hypotheses 1 and 2.
The multivariate results provide preliminary support for Hypothesis 3 as a significant
Experience £ Performance interaction was observed (F ¼ 6.87, p , .01; h2 ¼ .11) (see
Table 2). To determine which of the variables were causing the interaction effect identified in the
multivariate test, we ran two univariate ANOVAs with repeated measures of the interaction
effect of Performance Scenario and Experience for each of the variables (not shown). As before,
to prevent the inflation of Type 1 error associated with multiple univariate tests, we adjusted our
alpha by dividing it by the number of univariate tests for a new alpha of .025. It appears that both
HR Practice Usage ( p , .001) and HR Effectiveness ( p , .020) contributed to the multivariate
results. Figure 1 graphs the interaction effect for HR practice usage and HR function
effectiveness respectively. The interaction appears to be ordinal indicating that although the
Table 2. Summary of multivariate between and within subjects effects.
Variable Exact F a h2
Between subjects
HR status .17 .00
Experience .63 .01
HR status £ experience .18 .00
Within subjects
Performance 402.90*** .88
Performance £ HR status 1.56 .03
Performance £ experience 6.87** .11
Performance £ HR status £ experience .37 .01
a
Degrees of freedom for all tests were 2 for hypothesis and 108 for error; *p , .05. **p , .01. ***p , .001.
The International Journal of Human Resource Management 65
effect of Performance on these variables is dependent on Experience, the main effect of the
Performance Scenario is consistent for both groups (Hair et al. 1998). In other words,
experienced and non-experienced subjects rate both variables higher in the high performance
company than the low performance company, but contrary to expectations, experienced subjects
rated the high performance company higher, and low performance company lower, relative to
the non-experienced subjects.
Finally, as can be seen in Table 2, no support was shown for Hypothesis 4, as the Function x
Performance interaction failed to reach significance (F ¼ 1.56; p , .22). These results indicate
no differences in implicit theories between those with an HR and those without an HR functional
background.
Discussion
Typical HR–Firm Performance studies use one respondent per corporation to indicate HR
practices for employees scattered across multiple locations, divisions, and job groups.
The information processing requirements in such research designs invite both excessive random
and systematic measurement error resulting in questionable estimates of the relationship
between HR practices and firm performance. Gerhart et al.’s (2000a, 2000b) and Wright et al.’s
(2001b) studies document unacceptably high levels of measurement error across a variety of
organizational settings using the single informant research design. This study sought to examine
the possibility that systematic measurement error is also associated with the same research
Figure 1. Performance £ Experience interaction for hr practice usage and evaluation of HR function.
66 T.M. Gardner and P.M. Wright
design and found support for the idea that implicit performance theories can influence ratings of
HR practices in both field and research settings.
We hypothesized: (1) individuals hold implicit theories about human resource management
practices and that these theories affect the responses provided by both naı¨ve and knowledgeable
informants; and (2) the content of these implicit theories associate the greater use of HR
practices with higher levels of firm performance. The results of this study provide clear support
for the main hypotheses put forth.
Our results suggest that among the subjects in our sample, performance cues influenced
estimates of the use of organizational HR practices and effectiveness of the HR function.
Specifically, subjects’ implicit theories are consistent with the notion that greater usage of human
resource practices and evaluations of the effectiveness of the HR function are associated with
firm performance. This finding is consistent with a long line of research suggesting that
performance cues affect respondents’ objective descriptions of a variety of organizational
phenomena, including: leader behavior and effectiveness (Mitchell et al. 1977; Rush
and Beauvais 1981); work group behaviors and effectiveness (Martell and Guzzo 1991); and
organizational behaviors and contexts (Bettman and Weitz 1983; Salancik and Meindl 1984;
Tosi et al. 1973).
Note that these results do not necessarily suggest that past research is flawed. All research
requires tradeoffs in order to be conducted, and at this point in time, surveys of key informants
seem to be the most plausible methodology for examining the impact of HR practices on firm
performance. While problems with this methodology, such as low interrater reliability have
been noted, there is still reason to believe that future research will and should continue using it.
As will be discussed below, using multiple informants can reduce both random and systematic
error.
In addition, in this study, respondents had little information or experience from which to
respond, so only implicit theories guided their responses (i.e. all of the variance was error
variance, and none was true variance). While this situation is common in policy capturing
studies, respondents in past field research had significant experience with the firm and
knowledge of the HR practices (i.e., there is a significant amount of true variance in the total
variance). Thus, while implicit theories may bias subjects’ responses in field settings, it is
unlikely to fully determine them to the extent observed here.
However, one must also keep in mind that while the estimates of dollar value impact of HR
practices are quite high (e.g. Huselid 1995), the effect sizes are generally quite small. For
instance, the benchmark HR-firm performance study (Huselid 1995) demonstrated that HR
practices explained an additional 1% or less of the total variance in economic and accounting
measures of performance, clearly a small effect size. Guthrie’s (2001) study found that HR
practices only explained an additional 3 to 6% of the variance in employee and organizational
outcomes (even though HR and performance information were collected from the same person).
So even if the implicit performance theory accounted for a small amount of total variance, it is
possible that it could account for almost all of the observed effect sizes in previous field research.
We are not suggesting that this is the case; only that such a hypothesis certainly deserves
additional empirical attention.
The results also suggest the moderating effect of experience in the impact of implicit
theories. Subjects with less experience tended to report smaller differences between high and
low performing firms relative to experienced subjects. This ran counter to our hypothesis.
We expected that the naı¨vete´ of subjects with little or no work experience would cause them to
overestimate the impact of HR on firm performance. On the contrary and surprisingly,
experienced subjects indicated a significantly greater impact of HR on firm performance relative
to the inexperienced subjects. Rather than a naı¨vete´ in overestimating the importance of people
The International Journal of Human Resource Management 67
issues in organizations, it appears that non-experienced subjects may have underestimated their
importance.
Anecdotal support for this interpretation came from an HR professor who taught (as part of a
team) in a field-based manufacturing management course. The MBA and Engineering students
completed the survey during the first week of the class. They expressed at the end of the semester
that there was ‘too much HR.’ This perception could not have come from the ‘in-class’ time
because the formal structure of the class was such that the amount of class time devoted to HR
was equal to the other functional areas. However, on the numerous site visits during the
semester, the issues that company (mostly line) executives discussed inevitably involved people
and HR issues, thus, possibly accounting for their perception that HR was overly emphasized.
This may simply indicate that most real organizational issues are people issues with HR
implications, and that students simply cannot comprehend that until they spend a significant
amount of time in an organization.
Somewhat surprising was the failure to find any differences between those from an HR
background/orientation relative to those who are not from HR. Given the frequent anecdotal data
from HR executives complaining that their line executive counterparts do not seem to ‘get’ the
importance of HR, we fully expected to see less of an effect among the non-HR sample.
However, this effect simply was not observed, and this may be explained by 3 reasons. First,
given the human capital shortage firms face and the increasing importance that people play in
firm success, it may be that line executives are increasingly recognizing the importance of HR
practices and activities. Wright and colleagues (2001b) found that when asked to rate how
critical a variety of HR practices/services were to their firms’ competitive advantage, line and
HR executives gave equal importance ratings. Second, while the covariation perceptions may be
shared by those both inside and outside of HR, it may be that the causal direction differs.
In essence, it may be that HR people believe that it is the HR practices that are driving the firm to
perform, while the line people believe that high performing firms have resources to invest in
developing state-of-the-art HR practices. Third, the failure to find a difference may be an artifact
of the study methodology. By using a senior-level HR executive as the contact within the
organization, it opens the possibility that the line executives asked to participate were those who
already held a positive view of HR.
These results imply that caution should be taken in the measurement of firms’ HR practices
and systems. Our recommendations are structured to reduce the sources of random and
systematic error, reduce the cognitive demands of informants providing HR information,
and develop more theoretically interesting research questions. Drawing on the findings of
Gerhart et al. (2000a, 2000b) and Wright et al. (2001a) there is ample evidence that the reliability
of a single person providing information about HR practices is very low. The easiest way to
reduce random error and thus boost reliability and measurement precision is to collect the HR
measures from multiple informants then average the scores for each question across respondents.
This process cancels out random error and creates a mean score better representative of the
“true score” (Whitely and Doyle 1976; Larson 1979). Wright et al. (2001a) showed with three
different samples that the use of multiple raters produced reliability estimates within acceptable
guidelines.
The use of multiple informants also reduces or eliminates systematic error. Martell and
Leavitt (2002) examined the role of groups in reducing performance cue bias in evaluations of
workgroup performance. As expected, individuals were strongly influenced by performance cue
information in their observations and evaluations of workgroups. Groups of raters were
unaffected.
Future strategic HR researchers, whenever possible, should use multiple informants per
establishment to measure HR practices. At the very least, multi-informant responses should
68 T.M. Gardner and P.M. Wright
be gathered from multiple subject matter experts (i.e. line supervisors, employees) and used to
corroborate the information provided by the single informant. Furthermore, we argue that the
difficulty for one person to locate and collect information about the enactment of HR practices
across multiple divisions, establishments, and job groups at large (1000 þ employee)
organizations places an extremely high burden on informants’ cognitive capabilities leading
to greater reliance on implicit theories. Thus, we would discourage the collection of HR practice
information at the corporate level and encourage future research collecting information at the
division, establishment and/or job group level.
Our final recommendation suggests that more theoretically interesting research questions
will reduce the methodological difficulties identified above. As discussed by Dyer and Reeves
(1995) it is highly interesting but not theoretically productive to find relationships between HR
practices and stock price. There is no question of the value of the studies conducted by Huselid
(1995) and Huselid and Becker (1996) in estimating the value of HR investments and inspiring
additional research. However, dozens of similar studies finding a (possibly inflated) correlation
between a single informant’s rating of HR practices and firm performance measures does not
help us understand how to maximize the impact of HR investments and why they might be
effective. We suggest that research beginning with questions about the mechanisms by which
HR practices impact firm performance will force researchers to use more rigorous
methodologies and thereby reduce problems with excessive systematic and random error
(Boselie, Dietz and Boon 2005).
A framework for developing more interesting questions can be developed by examining a
robust definition of human resource management: Managing the knowledge, skills, behaviors,
outcomes, and attitudes of the employees flowing into through, and out of the organization
(Beer, Spector, Lawrence, Mills and Walton 1984). Rather than focusing exclusively on the
association between HR practices and distal organizational outcomes (profit, stock price, etc.)
this definition provides a framework for considering the processes that lead from HR practices to
organizational outcomes. Researchers could examine if and how sets of HR practices impact
the collective knowledge, skills, behaviors, outcomes and attitudes of employees. One might
also consider disaggregating the effects of the flow of employees into, through, and out of the
organization on employee and organizational outcomes. Alternatively, researchers may consider
focusing on how collective knowledge, skills, behaviors, outcomes, and attitudes affect
organizational performance. Finally, researchers may find it theoretically and practically useful
to understand better the non-HR manager mental models that lead to resources being allocated to
the development of HR systems (Stubbart 1989; Jenkins and Johnson 1997).
Limitations
Finally, some limitations must be noted. First, in comparison to the wealth of information
available to typical respondents to HR surveys the information available to our subjects may
seem unnecessarily limited. We suggest our methodology is consistent with the purpose of our
study and past research on mental models. Broadly, policy capturing can be used to understand
the configuration of the mental models of subject matter experts and the biasing effect of
different types of information. The purpose of the policy capturing portion of our study was not
to develop detailed mental maps of HR executives but assess the susceptibility of subjects
typically providing information to HR surveys to performance cues: HR managers, line
managers, and employees. Second, simulations with low levels of realism are commonly used in
studies examining the biasing effect of mental models in organizational research. Eden and
Leviatan (1975) and Weiss and Adler (1981) gave subjects no information about the focal
organization but told subjects to use their imaginations. Rush et al. (1977) had subjects read brief
The International Journal of Human Resource Management 69
descriptions of the behavior a supervisor. Mitchell et al. (1977) had subjects listen to an audio
tape of an actor leading a group meeting. Lord et al. (1978), Rush and Beauvais (1981), and
Martell and Guzzo (1991) had subjects view brief videotapes of actors portraying work groups
before completing their questionnaires. Finally, Staw (1975) and Downey et al. (1979) had
subjects participate in brief experiential exercises before completing questionnaires. This review
suggests past mental model studies did not use subjects fully knowledgeable about the
phenomena of interest but purposefully presented little information to assess the impact of
mental models better.
Second, there may be a concern that all of our subjects were not VPs of HR. First, as noted
above, we used subjects commonly providing data to HR practice questionnaires, HR managers,
line managers, and employees. All of the previously cited mental models studies used
undergraduates as research subjects while ours used subjects much more likely to be familiar
with organizational practices: executives and graduate students with significant work experience.
Third, because the subjects were not randomly selected, generalizability to the larger
population cannot be guaranteed. However, Mook (1983) questioned the assumption that
generalizability is the goal of all research. He noted that some research is designed to test a theory
rather than to generalize to some population. The purpose of our study was to: (1) provide the
theoretical and conceptual rationale suggesting that implicit theories might bias the responses of
SHRM subjects in the field; and (2) empirically explore whether these theories can bias responses
in SHRM research, not to demonstrate that they do affect these responses. Future research will be
needed to document the direction and intensity of implicit theory bias in field settings.
An additional limitation is the potential for alternative explanations for the findings. For
example, hypothesis guessing or acquiescence might also account for results (Cook and
Campbell 1979). Given that subjects were informed that the study was about ‘HR practices
and firm performance’ and was being conducted by HR researchers, they could have guessed
that the researchers were hoping to find a positive relationship and attempted to answer the
questions accordingly. In order to examine if this was the case, we performed two analyses. First,
since the Order of presentation was counterbalanced, we had a group of participants who saw the
scenario of the high performing group first and another group who saw the low performing group
first. Given that at the point they saw these scenarios they had no idea there was a second similar
scenario, we compared the two groups’ responses in a between subjects design. The results were
almost exactly the same. The performance scenario had a significant main effect (F ¼ 65.67;
p , .001; h2 ¼ .79). There was a significant interaction effect for experience and performance
scenario (F ¼ 2.15; p , .05; h2 ¼ .11). Performance scenario and HR status did not interact
(F ¼ 1.12; p , .36).
Second, as respondents were aware to some extent of the study’s purpose (it was stated as
examining the relationship between HR practices and firm performance), this might have
influenced their responses. Thus, we took another group of 29 graduate HR students and
presented half with the high and half with the low performance scenario absent any description
of the study’s purpose. They were simply asked to complete the questionnaire. These results
were consistent with the above. The multivariate results indicated the effect of the performance
scenario was significant (F ¼ 15.28; p , .001; h2 ¼ .84). Two univariate tests indicate both
dependent variables (HR Practice Usage and HR Effectiveness) were responsible for the
multivariate results. Responses for the high performing scenario were higher than responses for
low performing scenario. Clearly, these results do not eliminate hypothesis guessing or demand
characteristics as possible influences; but they seem to indicate that these explanations are less
likely to be responsible for the results we observed.
Finally, some studies of the HR practice – firm performance relationship measure HR
practices in a time period earlier than the performance measures. While this method of data
70 T.M. Gardner and P.M. Wright
collection may reduce some of the impact of bias from implicit theories, the strong
autocorrelations between accounting and market based measures of firm performance ensures
that performance information biasing subjects responses to HR surveys at T1 will still inflate the
HR – firm performance correlation at T2, even if the lapse of time between the two measurement
periods is substantial (Morton 1998; Chunchi and Xu-Ming 2000).
Conclusion
Philosophers of science tell us that theory building requires that empirical observations
accurately represent theoretical constructs but also the elimination of alternative hypotheses
(Kerlinger 1973; Rush et al. 1977). This study poses a serious alternative explanation for the
relationship observed between HR practices and firm performance. We found that under
conditions of information ambiguity, knowledge of the firm’s performance can influence
respondents’ reports of the prevalence of HR practices and the effectiveness of the HR function.
This response bias may inflate the estimates of the relationship between HR practices and firm
performance, but by how much is not known. Future research should attempt to ascertain the
extent to which this bias exists in traditional field surveys in order to more accurately estimate
the dollar value that firms can gain by investing in sophisticated HR practices.
Acknowledgements
We would like to thank the Center for Advanced Human Resource Studies at Cornell University for
generous financial and other assistance in the completion of this project. We would also like to thank Barry
Gerhart and Don Schwab for comments on an earlier draft of this article.
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Appendix
You work for a relatively large (25,000 employee, $4 billion in sales) organization as the Vice President of
Human Resources. Your firm is thought of as highly successful within the industry. It has established a
reputation for being among the BEST in both quality and service, and it has developed and taken to market
a consistent stream of innovative products. The result has been that over the past 5 years it has been among
The International Journal of Human Resource Management 73
the TOP firms in the industry in market share, revenue growth, profitability, earnings growth and total
return to shareholders.
You work for a relatively large (25,000 employee, $4 billion in sales) organization as the Vice President
of Human Resources. Your firm is thought of as not very successful within the industry. It has established a
reputation for being among the WORST in both quality and service, and it has developed and taken to
market very few innovative products. The result has been that over the past 5 years it has been among the
BOTTOM firms in the industry in market share, revenue growth, profitability, earnings growth, and
total return to shareholders.
Assume you just joined the organization and received the following survey. Answer the questions
based on the limited information you have.
What proportion of the managerial/professional/technical workforce:
1. has their merit increase or other incentive pay determined by a performance appraisal?
2. receives formal performance appraisals?
3. is promoted based primarily on merit (as opposed to seniority)?
4. is eligible for bonuses based on individual performance or productivity/profitability?
5. is regularly administered attitude/satisfaction surveys?
6. is administered an aptitude, skill, or work sample test prior to employment?
7. has access to a formal grievance procedure/complaint resolution system?
8. receives more than 40 hours of formal training per year on a regular basis?
9. receives sensitive information on the company’s operating performance (costs, quality, etc.)?
10. What proportion of non-entry level jobs have been filled from within recently (i.e. past 5 years)?
11. For the five positions that your firm hires most frequently, how many qualified applicants do you
have per position (on average)?
How effective do you think the HR function is with regard to:
12. providing input into the firm’s strategy;
13. providing HR systems that support the business strategy;
14. making a value added contribution to the firm;
15. contributing to the firm’s competitive position;
16. contributing to bottom-line profitability.
74 T.M. Gardner and P.M. Wright

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leadershipchange
Change Leadership
Man y star t bu t fe w finis h well .
by John P. Kotter
T ORGA.NIZAT1ONS
.have a leadership
deficit because they
ignore leadership potential and don’t
offer training or relevant role models.
Great leaders get others to move in
a direction that is sensible for themselves, the business, and community.
Today, we need more leaders who can
help groups come up with visions that
aren’t self-serving—visions that serve
the entire enterprise.
Historically, great leaders are selfconfident people who have extraordinary capacity to make decisions when
others crumble. They are confident,
but not arrogant. In fact, great leaders
are often described as having humility
and vulnerability. I’m often struck by
the extraordinary’ arrogance of some
leaders—an arrogance that basically
says, “I’m above the game. I’m smart
and accomplished. Therefore, I know
what’s best, yet I have to put up with
stupid rules set by small-minded people. It’s only natural that I maneuver
around those rules.” You don’t find
that same arrogance in great leaders.
For change to be good, it’s got to be
in a positive direction. Initial stages of
transformation are usually positive,
but the change effort gets perverted as
it becomes successful and as executives become more arrogant. Change
isn’t the issue; arrogance is. As some
leaders start running into problems, in
their arrogance they say, “No problem. We can handle all this. We can
cut corners and make our own rules.”
In organizations with a strong
brand, if you don’t have senior leaders who are humble and vigilant, you
develop an arrogant culture. The single biggest challenge in managing
change is not strategy, structure, or
culture, but just getting people to
change their behavior. One reason
why that is so challenging is that we
rely on giving logical reasons for
change but fail to present people an
emotionally compelling case. People
change their behavior only when they
are motivated to do so, and that happens when you speak to their feelings.
You need something visual that produces the emotions that motivate people to move toward the vision. Great
leaders tell stories that create pictures in
our minds and have emotional impact.
Martin Luther King Jr. had a dremn, not
a strategy or goal, and he slimced us his
dream, his picture of the future. People
change when they see something visual
(the vision) that touches their feelings,
challenges their thinking, and incites
actions. People may realize the need
for change, but not do anything differently because they lack the passion to
break out of routines or habit patterns.
The momentum of “how we’ve done
things” tends to make our future look
like our past.
Overcoming complacency—so vital
at the start of change initiatives—often
requires a bit of surprise, something
that grabs attention at an emotional
and intellectual level. You need to surprise people and disrupt their view
that everything is perfect. Successful
change leaders show people what the
problems are and how to resolve the
problems. They use images that people
can see, hear, or touch. This may mean
showing a video of an angry customer
rather than a report of a customer survey. Change leaders make their points
in ways that are emotionally engaging
and compelling. They tell and retell
vivid stories. You don’t have to spend
a million dollars and six months to
prepare for a change effort. You do
have to touch people emotionally.
The ability to move people emotionally is a special gift. Few of us are
born with it, but we can learn it. In
writing The Heart of Change, we found
many people who had learned this
skill. Some didn’t look like leaders, but
somewhere along the way, they
learned to speak to people’s feelings.
One story involves people who realized that they had to start changing
their own behavior. Many managers
skip this part and start with, “Here’s
how you need to change” because it’s
easier to tell other people that they are
acting incorrectly than to admit that
you’re not perfect. Executives, as they
become more successful, get less feedback or information showing how they
are a part of the problem. Many of
them have never learned the principle,
always start with yourself first—and then go
from there. It is a great rule of thumb.
Personal example is a powerful
method of influence that can affect
feelings and facilitate change.
However, when leaders don’t examine
their own actions, they might give the
wrong example, something that is
inconsistent with what they are saying
to people. People pay attention to
deeds more than words.
All ot us, deep in our hearts, want to
be heroes, at least to our children or
team members. Today we need heroes
at every level. More people need to step
up and provide change leadership.
Most of this leadership will be modest.
It might be a young sales rep who sees
a new business opportunity or puts
together a vivid demonstration of a
problem. The sum of all these heroic
actions—large and small—enables
organizations to change in big ways.
People need more positive examples
of what works. In stories of what works,
1 never find a theme of selt’-preservation. Change leaders aren’t self-centered people. When focused only on
yourself, you won’t stick your neck out
or lead the team to new glory or create
a shared win. You need a larger vision
beyond saving your own skin.
If you’re frustrated and powerful,
you tend to fall back on fear to motivate people. You say, “I know the right
thing to do here, and you’ll either do it
or be fired.” While using fear may be
natural, it’s usually ineffective. The only
lesson your people leani Ls that you have
power, and they ne^id to fear being
fired. They learn nothing about the
enterprise, its challenges, and the need
to do things differently. Fearful people
don’t listen carefully to customers.
They hide or come up with schemes to
protect themselves. Fear can’t drive
transformation. However, fear may be
used effectively as a surprise element.
It’s the “hit them upside the head with
a board” approach to get attention. But
then you’ve got to quickly convert it
into something positive or you get the
drawbacks of fear.
Even if people are n:iotivated to
change, they are often blocked by a
feeling or belief that they can’t change.
Pessimism creates an emotional block
to change. Effective change leaders use
inspirational stories to bring out the
natural optimism in everybody. They
know how to inspire confidence, even
in tough circumstances where people
are depressed. They paint a hopeful
picture in such a credible way that it
soothes people and leads them to get
out of the trenches to do something.
The change has to seep into the culture. The new behavior must maintain
itself for a few weeks and show that it
works. Then, the culture must support
the change. For the new way of doing
things to take hold, one change agent
or leader can’t support it all. People
need to see the right behavior producing the right results. Too often leaders
assume that once they start the change
effort, they’re done. They must make it
part of the culture; otherwise, when
they leave, the old way creeps back in.
How can people stay focused long
enough to create short-term wins and
change the culture? This is where
vision helps. If you have clarity in
your mind and heartfelt commitment
to a vision, you stay focused. Again,
the vision has to be something you
can see clearly—not some blur or list
of unrelated items. So many strategies
and statements of values, visions, and
goals boil down to lists of unrelated
items, making it hard to stay focused.
Your focus bounces from one item to
another because you lack a framework to guide you. You might let
something else that is not on the list
blow over you and push you in
another direction.
You might carefully select two areas
where you can achieve short-term successes and have one team focus on one
item and another team focus on the
other. People need to see that the
changes are not oddball ideas being
pushed by the boss. They need to see
short-term wins that vahdate the
change vision. If the win is clear, visible, and valuable to people, then they
will likely make change happen, LE
John P Kotter is an award-winning expert on leadership al Hanwd
Business School and speaker at top management meetings. In addition to The Heart of Change, lie has authored John T. Kotter
on What Leaders Really Do, Matsuhita Leadership,
Leading Change, The New Rules, aiid other works. This nrlick is adapted from Leader to Leader. wn’uil2h.org
ACTION: Achieve a visible win.
changeinnovation
Strategic
Innovation
Forget, borrow, learn.
by Vijay Govindarajan and Chris Trimble
H
o w DO YOU SUSTAIN GROWTH AND
profitability in an age in which
rivals quickly erode most any competitive advantage? One option is to
launch entirely new businesses.
Consider how some companies have
redefined their customer, the value
offered, and the delivery
method—a process we call
strategic innovation.
In 1996, Genera] Motors
formed a new business
unit, OnStar, to commercialize an integrated information, safety, and
communications system. In
2001, Procter & Gamble
launched Tremor, a new
marketing service for other
companies. In 2003, the Walt Disney
Company introduced Moviebeam, a
wireless, no-hassle, in home video
rental store.
We’ve followed several such innovation stories—each a tale of a new
businesses (NewCo) within established
and successful organization (GoreCo).
We were less interested in where the
path-breaking ideas came from than
how companies managed the process
of going from idea to profitability. Nurturing creativity within an organization
usually merits a great deal of attention,
but the need for creativity is high only
at the beginning of NewCo’s life. Once
a business plan is in place, the need for
creativity begins to decay rapidly.
An entirely new approach is needed
—one that emphasizes neither the creativity that inspires NewCo’s launch nor
the discipline that GoreCo demands to
deliver bottom-line results.
Three Challenges
NewCo iaces three distinct challenges
in its journey from idea to profitability:
1. Forgetting: NewCo’s business
model is invariably different from
GoreGo’s model. The answers to the
most fundamental business questions—Who is the customer? What
value do we offer? How do we deliver
it?—are dramatically different. The
essence of the forgetting challenge is
ensuring that GoreCo’s success formula is not imported to NewGo.
2. Borroiving: NewGo’s biggest
advantage over its competition is the
wealth of resources and assets within
CoreGo. The essence of the borrowing
challenge is gaining access to these
resources, and doing so in a way that
does not damage CoreCo’s own commitment to excellence.
3. Learning: NewGo’s business is
highly uncertain. It must systematically resolve the specific unknowns
within its approach as quickly as possible, and zero in on the best possible
approach. Learning requires an entirely
different approach to planning.
All three challenges naturally create
tensions. To forget, NewCo
must be distinct from
CoreCo. At the same time,
to borrow, NewCo must be
linked to GoreGo. At points
of interaction, stress naturally arises directly because
of the differences in business models, values, styles,
and priorities. Learning
also leads to stress, because
it requires an analytical
discipline—much different fron:i the
operational discipline of execution
and performance.
These are the types of tensions that
can be healthy for NewGo, and when a
corporation manages them well, the
journey from idea to profitability is a
smooth one.
But is it worth the risk? Gonsider
the risk of the alternative—sticking to
the knitting—a choice that inevitably
leads to decay. Without growth, GEOs
lose jobs, employees stagnate, organizations become stale, and competitiveness stagnates. Strategic irmovation,
on the other hand, can deliver breakthrough growth and generate new
life-cycle curves. It enables companies
to stay ahead of change by creating,
growing, and profiting from new business models. LE
Vija\t Govindarajan has been named a Top Ten Projessor of
Executive Education by Business Week and a Top Eive Executive
Coach by Forbes. Chris Trimble was named an Emerging TItinker
by Optimize, T)ie au6ior% wIm boft teach at Sie Twcfc Sehod ef
Business at Dartmoutli. liaiv fust published 10 Rules for
Strategic Innovators—from Idea to Execution (Haruard
Business School Press.) u’umfystcompaiiy.co’n
ACTION: Anticipate innovation-related tensions.

attachment_3

The Ethics of In-company Research:
An Exploratory Study
G. Maxwell
D. R. Beattie
ABSTRACT. This paper seeks to advance ethical practice in business and integrate ethics with management
curricula. It focuses on the ethical dimensions of incompany research conducted by human resource practitioners who are part time students on a postgraduate research degree award (M.Sc. in HRM). These dual roles of
academic researcher in HRM and HR practitioner can
become blurred and present particular ethical considerations. Beyond ethical perspectives of HRM, the paper
investigates the ethics of in-company research in terms of
conceptual and operational factors. The main conclusion
is that ethical guidelines need to be developed for M.Sc.
in HRJVI students. Draft guidelines are offered as the basis
for development.
Gillian Maxwell’s research interests centre on strategic human
resource management issues and developements, principally in
the service sector. She is currently working on two research
projects funded by the European Social Fund, one on worklife balance, the other on gender balance in management. Her
2003 publications are on managing diversity (in Employee
Relations and the Journal of Human Resource Developement
Intemational) and organisational commitment (in the International Journal of Contemporary Hospitality Management),
Fourthcomming journal publications are on work-life balance
(in the Journal of Retailing and Consumer Services) and line
manager’s HR responsibilities (in the European Journal of
Industrial Training and in the British Journal of Occupational Learning).
Rona Beattie is Head of the Human Resource Management and
Development Division at Glasgow Caledonian University.
Her research interests include voluntary sector management,
management developement, workplace learning, line managers and ethics in HRD. Recent and forthcomming publications include articles in Policy and Politics, Regional
Studies, Public Management Review, Employee Relations
and the International Journal of Training and Development.
She has also published chapters in New Frontiers in Human
Resource Developement and Understanding Human Resource Developement: A research-based approach, both published by Routledge. Rona also teaches Human Resource
Development at undergraduate and postgraduate levels.
KEY WORDS: management ethics, HRM researchers,
HRM practitioners, in-company research
Introduction: ethics in management and
education
According to Fisher and Lovell (2003, p. ix) “business ethics is an important subject”. It is also one
where there is a significant gap between theory and
practice (Bartlett, 2003). The dubious ethics of
companies like Enron and WorldCom (Barlett,
2003; Harrison and Kessels, 2004) highlight the
theory—practice divergence in an extreme way. On a
less extreme note Bartlett (2003, p. 224) points out
that it has been argued that “the field of business
ethics as an academic discipline has failed to recognise the complexity and disorder of real-hfe management practice” and that business school curricula
have neglected the study of business ethics. While
this failure does not compare to that of Enron and
Worldcom it is nevertheless an indictment for education and, conceivably, adds to the conditions that
lead to ethical crises like Enron and Worldcom.
Thus advancing ethical practice in business and
incorporating ethics in business curricula are
worthwhile aims. Indeed there is a cogent argument
that the two are hnked in that individual ethical
behaviour in organisations is rooted in education
generally (Cordeiro, 2003; Mamburg, 2003; Procario-Foley and Bean, 2002) and in “behaviours that
adhere to values” (Cordeiro, 2003).
Attempting to address the complexity of management ethics in education may be hampered,
however, by the complexity of organisational ethics
literature according to Bartlett (2003). When discussing work values, moral reasoning and ethical
Journal of Business Ethics 52: 243-256,2004.
© 2004 Kluwer Academic Publishers. Printed in the Netherlands.
244 G. Maxwell and R. Beattie
decision-making highlights he cites Conrad’s (1993)
work which describes two dominant paradigms. The
first concentrates on individual ethical systems,
whilst the second concentrates on organisational
culture and its influence on ethical behaviour.
Arguably the two paradigms are related as the former
may represent formal organisational rhetoric while
the latter may represent informal organisational
practice. Therefore both are important in the ethics
of management practice. Not only is ethics literature
complex, but ways in which to incorporate ethics in
management education are contested (Rossouw,
2002). Developing ethics in management and education can then be seen to represent a challenge.
This article seeks to rise to this challenge in
advancing ethical practice in business and integrating
ethics with management curricula in a modest way.
It addresses the development of ethics in human
resource management (HRM) practice in focusing
on in-company research conducted by HRM practitioner students.
Ethical perspectives of HRM
Within the field of HRM specifically it has been
argued that “raising ethical awareness and sensitivity
is the main task for both HR academics and professionals” (Winstanley and Woodall, 2000, p. 5),
with Harrison and Kessels (2004, p. 205) arguing
that “HR professionals must be confident that their
approach is based on sound ethical principles, and is
set within a convincing ethical framework”. Ethics,
therefore, is a contemporary and exigent issue in the
arena of HRM which may merit a higher profde
(Woodd, 1997).
It is also a questionable subject in HRM (McKenna and Beech, 2002). For the role of HRM with
regards to ethics owes more to opacity than perspicuity. Its role can be considered in two dimensions:
the ethics of the function of HRM itself and the
ethics of HRM activities. As it is not the preoccupation of this paper to evaluate HRM as a line of
philosophical inquiry (Hke, say, Barrett, 1999), an
outline of the ethics of HRM is given in these two
dimensions.
Taking the ethics of HRM per se first, it is worth
pointing out that in all the debate (e.g. Beer and
Spector, 1985; Guest, 1987; Storey, 1992) and
criticism (e.g. Armstrong and Long, 1996; Keenoy,
1990; Legge, 1989) that surrounded the emergence
of HRM, the role of ethics has been more implicit
than explicit. Legge (2000, p. 2) supports this
assertion in her statement that “bundles of practice
that represent ‘best practice’ HRM, by inference,
(represent) an ethical way of managing people at
work.” Key signals of ethics can be seen in the
discussion that centred on the principles of HRM. A
focus on the individual, mutuality and commitment
have arguably emerged as defining principles of
HRM. These principles feature in Guest’s (1987)
stereotypes of HRM. Each of them implies an ethical undertaking from employer to employee. In
practice, the reality of HRM for many employees
may well fall short of its ethical principles (Ackers,
2001). Thus the founding principles of HRM may
be idealistic but nevertheless can raise ethical
expectations of the function and those HR practitioners who represent it. The HRM function and
practitioners can carry the weight not only of employee expectations but also of the organisation’s
image of collective conscience. This is reflected for
example in the reference to HR practitioners in
knowing what is “right” or fair and consistent in
grievance and disciphnary matters, employment law
and best practice, and even policies on ethics as
Pickard (1995) notes. Further – and more powerfully
– the responsibility of HRM for ethics can be a
response to consumer expectations of ethical
employment (Legge, 2000).
Secondly, as Winstanely and Woodall (2000, p.
278) assert, “all areas of HRM policy and practice
have an ethical dimension.” The most obvious
expression of ethics in HPJVl activities is where
employment law exists to prevent or reduce disadvantage to typically marginalised groups. Thus equal
opportunities is a clear example of HRM activity
with specific, sometimes detailed, legal obligations
that are themselves manifestations of wider social
views on the ethics of workplace fairness. Equal
opportunities is a particular consideration in
recruitment and selection generally, and more specifically in employment interviewing (Spence, 2000)
and psychometric testing (Baker and Cooper, 2000).
The emergence of managing diversity approaches
that extend beyond equal opportunities legislation
(e.g. Kandola and Fullerton, 1994; Kirton and
Greene, 2000) is a further example of a potential
The Ethics of In-company Research 245
Table I
Dimensions of HR ethical codes
CIPD (2003)
Fairness
Confidentiality
Justice
AHRD (2003)
Fairness
Confidentiality
Equal treatment
Wiley (2000)
Confidentiality
Legality
Proficiency
Integrity
Loyalty
ethical aspect of HRM. Perhaps less obvious is that
ethics also permeate HRM (Beattie and McDougall,
2002; Woodall and Douglas, (2000)), flexible
working (Stanworth, 2000), performance management (Winstanley, 2000) and employee participation
and involvement (Claydon, 2000). For McKenna
and Beech (2002, p. 280), “the developmental side
of HRM – encouraging mutuahty, investing in
people and rewarding them appropriately” is fundamental ethics in HRM. Therefore, it can be seen
that ethics permeate through a range of HRM
activities (Winstanley and Hartog, 2002).
What the ethics of HRM and constituent activities mean, in short, in the context of this paper is
that the researchers, being HR practitioner managers, arguably have a raised awareness of and sensitivity towards ethics in their in-company research.
They may be mindful too of the code of conduct of
their professional body in the UK, the Chartered
Institute of Personnel and Development (CIPD),
which has the principles of fairness, confidentiality
and justice as its hallmarks. All M.Sc. in HRM
students are members of the CIPD so bound by its
code of conduct. The American Academy of Human Resource Development (AHRD) also has an
ethical code that is influential in the U.K. It lays
emphasis on fairness, equal treatment and confidentiality, combined with setting an example to
others (Hatcher and Aragon, 2000). Also, professional codes of ethics in HR have to be considered.
Wiley (2000) identifies five recurring principles
founded on integrity, legahty, proficiency, loyalty
and confidentiality. Table I above sets out these
ethical dimensions. It highlights that fairness and
confidentiality are common themes, while justice,
equal treatment and legahty may be connected
ethical themes in the U.K. context. The evidence
suggests that elements of, and priorities in, ethics
may differ in other countries, as Gopalan and Neal
(2003) and Kaptein (2003) emphasise. Moreover,
ethics may be differentiated by management function (Cowton, 2002). Ethics therefore have to be
framed by national contexts and functional specificity to inform actions. As Harrison and Kessels
(2004, p. 221) argue:
Unless [HR] professionals develop their own understanding of business ethics and apply that understanding to their professional activity, they will fmd it
difficult to response appropriately and convincingly to
ethical dilemmas.
It is on this background that the M.Sc. in HRM
students at Glasgow Caledonian University in the
U.K. conduct their dissertation empirical research
into a strategic HRM topic. The M.Sc. in HRM is a
research degree; examples of topics, some of which
focus on sensitive subjects, include discrimination
and diversity, mental health issues, the role of line
managers in HR, reward systems and work-life
balance. Almost universally, the students carry out a
qualitative case study analysis on some strategic HR
topic in their employing organisation. This case
work often incorporates elements of ethnography,
given their active engagement with the researched
organisation.
The ethics of in-company research
Conceptual factors
Ethnography is a legitimate approach to the study of
human activities, according to Baszanger and Dodier
(1997). It is “that form of inquiry and writing that
produces descriptions and accounts about the ways
of life of the writer and those written about”
(Denzin, 1997, p. xi). Further, ethnography is an
approach to management research that has recently
“aroused increased interest” as it can make empirical
research more penetrating (Alvesson and Deetz,
2001, p. 199). Robson (1999, p. 148) supports the
view that ethnography can yield in-depth “real
world” research: “the intention is to provide a rich,
or ‘thick’ description which interprets the experiences of people in the group from their own perspective.”
246 G. Maxwell and R. Beattie
The main focus of ethnography is the study of the
manner in which people interact with each other in
observable and regular ways (Gill and Johnston,
1997). It also involves participation in “people’s
daily lives over an extended period of time, watching what happens, listening to what is said and asking
questions” (Hammersley and Atkinson, 1983, p. 2).
Watson (1994, p. 8) extends the description of
ethnography and relates it to wider human and
management behaviour, whilst drawing parallels
between the actions of researchers and managers, in
profihng the work of both “crafts”:
Both crafts involve close attention to language, formal
and informal, speaking and writing as well as observing. And it is through language, formal and informal,
official and unofficial, that the bulk of the business of
management is conducted. It is through speaking to
each other that all of us make sense of the worlds we
move in, whether we are trying to makes sense of
things as managers, as researchers or as part of our
ordinary lives.
In this way, the roles of managers and researchers are
generally similar. For the part time M.Sc. students
they are more than similar: they are simultaneous in
that they assume, not either role, but both roles in
the course of their professional life and dissertation
research. The fusion of professional, managerial roles
and research roles can become confusing for these
students. Added to their professional ethical considerations as outlined above, the question of role
primacy can arise. Is their prime position as a manager trying to relate their company to research
scrutiny or as a researcher trying to relate their research topic to their company? In other words do
they conceptuahse their in-company research from
the inside-out or outside-in? The empirical work on
which this paper is based seeks to address this
question. It also investigates contiguous operational
factors involved in in-company research which may
involve elements of ethnography, particularly with
the main method associated with it, namely participant observation.
The M.Sc. in HR students may seek to address
their practitioner/researcher role confusion by considering Nielson and Repstad’s (1993) notion of
researching in one’s employing organisation, cited
by Coghlan and Brannick (2001, p. 120), as being “a
journey from nearness to distance and back”.
Coghlan and Brannick (2001, p. 120) offer the following expansion of this rather obhque analogy:
In terms of maintaining distance, they [Nielson and
Repstad] advise that you [the researcher] be aware of
your preconceived ideas and prejudices about the
organisation and fmd rational theories to explain the
organisation as a way of distancing yourself
Alternatively, the students could try to address their
role confusion by drawing from field role taxonomies that centre on participant observation. Easterby-Smith et al. (1991) identify four types of
participant observation roles. Firstly the “researcher
as employee” model adopts the role of employee,
which may or may not be declared. This is appropriate where the researcher needs to be fuUy immersed and experience the work or situation
directly. Secondly they identify the “researcher as
exphcit” role. Here the researcher has negotiated
their entry and can move around, interview and
participate in work as appropriate. The third role is
“interrupted involvement.” In this role the researcher moves in and out of the organisation to deal
with other work or to carry out other forms of
complementary data collection, such as interviewing. There is little actual participation in the work of
the organisation. The final role is that of “complete
observer.” This last role has little to offer in case
study work that seeks to understand the world of
those being studied.
Each of these roles assumes the role of researcher
first. For the M.Sc. in HRM students their first role,
in chronological and economic terms, is as an employee who has a background in and history with
their employing case organisation. This presents a
flindamental challenge in investigating their
employing organisation objectively. Chia (1996, p.
55) alludes to this point his view that “all perceived
regularities in human affairs presuppose the existence
of some enduring organisational codes which regulate thought and action.” The first role is therefore
not appropriate for the M.Sc. in HRM students.
Moreover, if the student’s research work is covert,
the second role is inappropriate. The third role too
seems to be of limited value because, although students may have “interrupted involvement” in both
their professional occupation and research work,
they are always with the organisation. Consequently
Tlte Ethia of In-company Research 247
it seems that Easterhy-Smith et al.’s (1991) typology
has hmited value for the particular professional/researcher dichotomy facing part time M.Sc. in HRM
students.
This is not to say however that participant
observation should he rejected as an appropriate
research approach. It does have notahle advantages
including close scrutiny, flexibility and the ability to
develop more trust with research informants, all of
which deepen the research, as indicated earher. Instead it is to suggest that there is a need for greater,
conceptual role clarity for in-company researchers
using participant observation.
Of course the disadvantages of participant observation have to be acknowledged as well. Gill and
Johnson (1997) cite the following: the closeness to
unique events may Umit their classification and any
generalisability, “intimate” research informants may
be an atypical sample, the presence of the researcher
may influence behaviour, and unusual events may be
viewed as nonnal by the researcher. Coghlan and
Brannick (2001) add that participant observation can
result in a super-abundance of data. Also, maintaining records of observations may be challenging
for students with busy professional hves.
It is the balance of advantages and disadvantages in
relation to the dissertation aim, combined vwth ready
access to and sometimes business need in their
organisation, that usually steers the M.Sc. in HRM
students to in-company research. Participant observation is usually integral to in-company research for
these students. It is also arguably the aspect that
presents most ethical challenges because it is in
participant observation, as part of in-company research, that the roles of practitioner and researcher
become the most fused. Hence participant observation is a focus of this study of in-company research
for part time M.Sc. in HRM students.
Operational factors
Beyond role clarity in conceptual terms, a number of
operational factors have to be considered in incompany research. Robson (1999) levels that complex ethical issues thread through in-company
research work, from initial conception, through
empirical work, to responsibility for the knowledge
generated by the research. CresweU (1998, p. 61)
asserts that there are a “complex array of fieldwork
issues facing ethnographers who venture into an
unfamihar cultural group or system.” Arguably
M.Sc. researchers wiU not be venturing into wholly
unfamiliar territory in their organisations, but nevertheless it is conceivable that they wiU venture into
new aspects of their organisation. By adopting a
research stance, it is entirely possible that HR
practitioners will see further and wider into their
organisations, often penetrating a formal layer of
what happens to unearth what happens informally.
This is reflected in Knowles (1984, p. 97) assertion
that organisations “teach by everything they do and
often teach opposite lessons in their organisational
operation from what they teach in their educational
programme.” Practitioner-researchers may uncover
sub-optimal and anti-managerialist behaviour for
example and be faced with hard decisions both on
presenting such data for research and on using it in
their practitioner mode. “There may also be some
tension between organisational and academic
objectives in research” (Beattie and McDougall,
2002, p. 270) which can add another layer to the
ethical considerations inherent in-company research.
A principal ethical issue in operationalising participant observation is whether or not the role of
researcher is declared within the case organisation
(Robson, 1999). Creswell (1998) is adamant that
ethnography in any form should not mean the
practising of any deception. Given the ethical
responsibilities that are attached to HR practitioners,
as oudined earher, avoidance of deception in
declaring a research interest seems important for the
M.Sc. in HRM students. Further considerations
include the researcher’s impact on and relationships with those being observed (Coghlan and
Brannick, 2001), objectivity/subjectivity in interpreting observations, professional/personal style to
be adopted in observation, recording of field notes
and negotiation of any further access within the
company. Easterby-Smith et al. (1991, p. 82) highlight that research participants themselves may also
have ethical concerns: “the ethical issues relating to
individual respondents concern the ‘micro-politics’
of the organisation.” Lastly, issues of confidentiality,
anonymity and disclosure, always important in research into human activities, have heightened
importance in in-company research. In extreme
248 G. Maxwell and R. Beattie
Tahle II
Common ethical aspects of qualitative research
Miles and Huberman
(1994)
Flinder and Mills
(1993)
Coghlan and Brannick
(2001)
Robson (1999) hased on Kemmis and McTaggert (1981)
Informed Consent Informed Consent
Privacy, confidentiality Confidentiality
and anonymity
Honesty and trust
Use and misuse of results;
research integrity and quality
Ownership of data and
conclusions
Negotiating access with
authorities and participants
Promising confidentiality of
information, identity and data
Keeping good faith by showing
you are someone who can be
trusted and always checking
with others for any misunderstanding
Negotiating with those concerned
how you will publish descriptions
of their work and points of view
Maintaining your own
inteUectual property rights
Getting permission to use
documentation which was
produced for other institutional
purposes
Ensuring participants [of] the right
not to participate in the research
Keeping relevant others informed
Obtain explicit authorization
hefore you observe
Accept responsibility for maintaining confidentiality
Observe protocol; make your
principles of procedure binding
and known
Negotiate accounts of other
points of view; obtain explicit
authorisation before using quotations
Retain the right to report your
work
Obtain explicit authorisation
before you examine files, correspondence or other documentation
Negotiate with those afFected
Report progress; negotiate reports for various levels of
release
Harni and risk Avoidance of harm
instances, whisde-blowing may potentially raise its
head.
Miles and Huberman’s (1994) framework for
ethical qualitative research provides a very useful
checklist that can be apphed to participant observation. Similarly, Fhnders and Mills’ (1993) ethical
framework and aspects of research offer guidance,
especially in the utilitarian dimension. Here the
principles of informed consent, avoidance of harm
and confidentiality are cited. Whilst both Miles and
Huberman, and Flinders can help frame the planning
and conduct of participant observation in ethical
terms, this help is levelled in quite an abstract way. It
does not, for example, take obvious, concrete account of any subsequent issues in sifting and
implementing research findings that derive from
sensitive research findings (Beattie, 2002).
Coghlan and Brannick’s (2001, p. 3) ethical issues
in the context of managing organisational pohtics in
research, in contrast, are very practically orientated.
In addition, Robson (1999, pp. 33-34) adopts a
practical perspective in his adaptation of Kemmis and
McTaggart’s (1981) ethical principles in “real
world” research. Both of these practical perspectives
are of potential value to the M.Sc. in HRM students.
However, they are limited in that they do not focus
expressly on the nature and demands of in-company
HR research so may include superfluous points or
omit significant points. One significant omission
may be dealing with sensitive findings and outcomes
of the research. Denzin (1997, p. 33) alludes to this
point when he states that quahtative research texts
“carry news from one world to another”, that is
cross the internal organisational boundary into the
external research sphere.
Table II above provides an overview of related
ethical aspects extracted from the range of ethical
frameworks for qualitative research delineated
Hie Ethics of In-company Research 249
above. Two aspects of ethics permeate all four
models, namely informed consent and confidentiality, so these are arguably the most important.
Clearly with the range and nature of operational
factors inherent in in-company research, ethical
parameters – or a code of ethical conduct (Cordeiro,
2003) – needed that are exphcitly practicable for
M.Sc. in HRM students. The empirical work on
which this paper is based seeks to inform the
development of greater role clarity and practicable
ethical parameters for in-company research in order
to promote ethics in HR management and education.
Empirical research methods
The basis of the questions for the empirical data
capture is the literature review above. The views
of key stakeholder groups in research for M.Sc.
in HRM dissertations were sought on the main
dimensions of the literature review in late 2002
and early 2003. Thus the empirical work is an
exercise in phenomenological research, focusing on
four constituent groups, namely prospective and
current M.Sc. in HRM students, M.Sc. in HRM
graduates and academic supervisors. Multiple
methods of data capture were utilised as outlined
below.
Semi-structured interviews were used in this
study with three self-selected graduates who had
completed the M.Sc. in HRM and five academic
supervisors, two of whom are the authors of this
paper. The interview questions were designed to
understand the meanings respondents attached to
issues and situations in contexts and terms that are
not imposed a priori by the researchers (EasterbySmith et al., 2002; Fontana and Frey, 1994; Jones,
1985). The interview design focused primarily on a
range of open questions, with some prompt points as
foUow-up questions, designed to ehcit responses
from graduates and supervisors regarding their views
of ethical considerations relative to in-company
research. However, part of the interview also included a structured section where respondents were
required to select issues they thought were important
from hsts developed by the authors from a range of
ethical models. Following the first two interviews
Coghlan and Brannick’s (2001) list was removed as
the interviewees found the number of lists was too
long.
Focus groups were utilised with self-selected
prospective and current M.Sc. in HRM students, 13
in total in two meetings, to consider the importance
of ethical issues in conducting in-company research
from their perspectives. Again, the questions comprised open enquiries, some follow-up prompts and
some structured questions on ethical models. The
prospective students have already gained recent
experience of conducting in-company research
having undertaken a management report as part of
their postgraduate diploma in HRM. The
researchers felt that this method was appropriate
given the exploratory nature of this research (see
Easterby-Smith et al., 2002). The advantages of this
approach include respondents being able to exchange views, debate issues and build on each other’s
contributions. Potential disadvantages of focus
groups are that “social pressures can condition the
responses gained, and it may be that people are not
willing to air their views pubhcly” (ibid, p. 106).
These were not perceived to be issues in this context
as the respondents were all volunteers and had been
well used to free exchange of ideas, experiences and
opinions with each other (see Creswell, 1998) for
two years during their diploma studies. There was
therefore a high degree of trust between respondents, and with the researchers.
Where research informants were unable to take
part in interviews or focus groups, they were sent a
questionnaire version of the questions, with prompts
noted. One more M.Sc. in HRM graduate and four
Table III
M.Sc. in HRA4 research participants
Prospective students Current students Graduates Supervisors
10
250 G. Maxwell and R. Beattie
more continuing students contributed in this way.
All research participants gave permission for their
responses to be included in this paper under the
banner of their constituent group. A commitment
has been made to all informants that they will receive
copy of the paper on request. Table III below sums
up the number of research participants by constituent group.
The main limitation of the research design centres
on the apparently relatively modest scale of the research, with 26 respondents. The total populations of
the constituent groups are around 40 for the prospective students and current students, 25 for M.Sc.
in HRM graduates and 10 for academic supervisors.
However, when these populations are filtered by
students’ individual circumstances, known place of
work and, for supervisors, experience of completed
dissertations, the sum of the total populations is 33.
Thus the response rate of 26 actually constitutes a
very respectable proportion. Moreover, there is no
reason to believe there is any response bias, hence the
participants may be representative of the total – but
notional – population. Further, the research is not
claimed to be definitive, only exploratory. Additional
research is planned, and this will include informants
from the case organisations themselves. Therefore,
overall, the empirical work is considered suitably
robust for the nature and stage of the wider, longitudinal research project. The primary data yielded
from the first stage of the research has been analysed
to identify common themes across the respondent
groups to assist in the development an ethical
fi-amework for M.Sc. in HRM students utilising incompany research.
Empirical results
As explained above, the research informants comprise four constituent groups: prospective, current
and graduate M.Sc. in HRM students, and M.Sc. in
HRM supervisors. Their feedback is grouped together around the empirical question themes that
are derived from the review of theoretical perspectives above. Quotes, attributable to particular constituencies, are used to illustrate and exemplify
key points, together with adding texture to the
findings.
Ethics in management and education
All student and graduate research participants in the
public sector and some in large companies in the
private sector concurred that ethics generally in their
organisations now has a higher profile than previously. The National Health Service is a conspicuous
example of where a high value is placed on ethics.
Most of these participants consider HR practitioners
have an active role in their organisational ethics due
to the nature of their function, reflecting Legge’s
(2000) view. The supervisors also acknowledged a
role for students in ethics as HR practitioners in their
organisations.
One volunteered that a focus on ethics in the
M.Sc. in HRM “may increase awareness of ethical
issues more generally which is desirable for effective
HR practitioners of standing, particularly given recent unethical development, for example in Enron.”
Consequently, there is an implicit need for ethics to
be included in the curricula of management programmes generally and HRM programmes in particular.
Ethics in HRM
In terms of views on the ethical considerations in the
specific HR practitioner roles of the students, there
is consensus. All prospective, current and completed
M.Sc. in HRM students believe ethical considerations are very important to them, whereas the
supervisors ranked them as important to students.
The unanimity and strength of the student perspective reflects Winstanely and Woodall’s (2000)
assertion on the primacy of ethical awareness for HR
professionals. One prospective student summed their
ethical standpoint as being infiuenced by their “own
personal sense of what is fair and just, you will always
bring that into your role as a practitioner.” This
position can be compared to Conrad’s (1993) individual focus on ethics. In general, the supervisors
consider that ethics are important to the students,
though they do not feel as strongly about this as the
students. One encapsulates the basis of the importance of ethics to the students: “ethics are reasonably
important due to their HRM roles involving the
need for confidentiality and respect for people
inherent in the HR role, rather than the researcher
The Ethics of In-company Research 251
role.” Another supervisor advanced the point that aH
supervisors “should promote ethical awareness to
their supervisees.”
Ethics of in-company research
Similarly, aU of the research constituencies recognise
the importance of using employer case studies in the
M.Sc. in HRM dissertation research, underHning
Baszanger and Dodier’s (1997) view on the relevance of in-company research for studying human
activities and Robson’s view (1993) on the depth of
research. Two supervisors highlight that the ethics of
in-company research span “protection issues” for
the students, their informants and the supervising
university. Several informants, for example those
working in the health service and poHce force, made
the point that they have ethics committees in their
organisations which raises their awareness of their
own responsibilities in this area, reflecting Conrad’s
(1993) organisational culture paradigm. One prospective student who recognises the ethical considerations of in-company research was concerned for
example about commercial sensitivities, particularly
around financial data, and about how to use such
data externally. The other informants readily
acknowledge that using their employing organisation for their research has inherent, general ethical
considerations. It was recognised by research participants from all four constituencies that some research topics, such as workplace stress, bring with
them more need for ethical considerations than
others, indicating an understanding beyond basic
duaHsm.
The M.Sc. graduates record that they would
recommend students use their employers for research due to the ready access of primary data and
dissertation benefit to the employing organisation.
However, both note that they found using their
organisation for their research quite challenging.
With echoes of Nielson and Repstad’s (1993) notion
of researching in one’s employing organisation, one
M.Sc. in HRM graduate reports that his experience
was quite chaHenging because he found himself
“looking at the (M.Sc.) issues firom a different perspective, thinking out with the box.” Whilst a
prospective student acknowledged that it would be
“quite challenging to suspend your own view of the
topic and trying to distance yourself from what
happens day to day, and to take a more neutral,
academic point of view.”
Likewise, the supervisors all highlighted, albeit in
different ways, the challenge for students in “distancing themselves from their organisations and
job roles in conducting their research”, as one puts
it. Another supervisor considers that students
“probably find it quite difficult to stand back and
take an independent and objective role in
researching their company.” A third supervisor
emphasised that role confusion for students can
become acute in the presentation and evaluation of
their primary work in particular. AU five supervisors
are of the opinion that the students tend to conceptualise their M.Sc. research as a practitioner
relating their company to research, that is insideout, rather than as researchers relating their research
topic to their company, that is outside-in. This
perspective is captured in a supervisor’s comment
that “they think of themselves as practitioners first
and the research is an add-on.” For supervisors, this
can present issues in the direction and integrity of
the research. AU supervisors concur that combining
practitioner and research roles can be chaHenging for
the students too, albeit in different ways. One
supervisor opines that the basis of the difficulty may
be that the research role “takes them out of their
normal work role and may put them in a difficult
position of asking questions of individuals when
their coHeagues and superiors wiH know that have
access to that information.” The students’ perspectives on the primacy of their roles, perhaps unsurprisingly, is more mixed. Most, but not all, of the
prospective and current students consider themselves primarily as researchers, with one reporting
that the “ideal would be the academic perspective
first, but the first reaction tends to be ‘what do I
know about this already?’ based on an organisational
perspective.” The M.Sc. in HRM graduates are
divided in their opinions on this question. Clearly,
for the students there is an element of role confusion
in conducting in-company research for their M.Sc
in HRM.
This confusion is most marked for the prospective
student group, one of whom used a metaphor to
articulate his uncertainty on his roles in doing a
dissertation: “it’s Hke reading the instructions to
build something … you don’t reaUy know how to
252 G. Maxwell and R. Beattie
build it until you start doing it, then you understand
what you know.” Thus role confusion can be
apparent at conceptual and practical levels. A further
expression of practitioner/researcher role confusion
lies in the outcomes of the dissertation research, as
signalled by Beattie and McDougall (2002) and reported by a supervisor:
Students may need to ensure the “right” outconie in
terms of research methodology. For example there
may be a tension between their research interest and
the individual’s interest. The supervisor therefore
needs to ensure that they are giving the right advice
for the research project and the individual’s career
interests.
Moreover, there may be occasions when practitioner
and researcher roles have to be inter-changeable in
the course of the empirical research. Examples of
incidences when a practitioner role has had to take
precedence is provided by an M.Sc. in HRM
graduate. Twice this graduate had to assume her
professional role whilst conducting fieldwork within
her employing organisation. The first occasion involved a member of staff breaking down into tears as
a consequence of work related stress. The researcher
had to stop the interview and adopt a professional
role to provide counselling to the individual concerned. The second occasion arose when she
uncovered evidence of a manager bullying a staff
member. Consequently, the manager was disciphned. Such significant examples underline the need
for greater role clarity for M.Sc. in HRM students in
their in-company research.
In terms of the research methods utilised in incompany research, all four groups of research participants readily identify that interviews and focus
groups were common methods of data capture,
possibly together with questionnaires. Interestingly,
only one graduate and three of the supervisors initially cited participant observation as part of the case
study work. Arguably this is because of the proximity of participant observation and managing at
work (Watson, 1994), combined with the role
confusion outhned above. One prospective student
did recognise the interaction between both roles –
“If you are just observing someone you’re more
remote, but you’re managing them you’re more
involved.” In contrast, there is unanimity among
the research informants that it very important to
declare the research role in their company as declared by one prospective student – “If you don’t
declare it you must be up to something … research
should be honourable.” This finding is consistent
with the opinions returned on considerations of
the ethics inherent in-company, HRM research
as noted earlier, but inconsistent with the selection of overt or covert roles in participant observation. When prompted to consider participant
observation as a research method, however, the
research informants acknowledge that they may
use it or are using it, depending on the constituent
group. This finding suggests observation is viewed
subconsciously and, if so, points to some role confusion. Once raised explicitly, the research informants could readily anticipate/identify with issues
involved in participant observation. These responses
resonate with those outlined earlier (Coghlan and
Brannick, 2001; Gill and Johnson, 1997), namely:
exposure to more informal events/behaviour at
work; witnessing negative/obstructive behaviour;
accessing atypical samples/events; influencing people in the research role; tension in research and
practitioner roles; maintaining an appropriate balance of objectivity/subjectivity in interpreting
observations; maintaining records of observations;
generating too much primary data; generahsing
from data; adopting a professional/personal style in
observation; negotiating access; confidentiality/
anonymity/disclosure; trust and whistle-blowing.
The range and significance of these potential issues
reinforces the need for ethical parameters, particularly for students.
Ethical guidelines
The research informants were all asked to identify and
prioritise relevant aspects of three ethical frameworks,
those of Miles and Huberman (1994), Fhnders and
Mills (1993) and Robson (1999), as deHneated in the
hterature review. Three emergent findings in respect
of these are significant. Firstly, elements of each
framework are evidently important to the respondents, but no framework in its entirety is consistently
identified as important. The most highly ranked
features centre on honesty and trust; confidentiality;
and harm and risk, reflecting both ethics in HRM
The Ethics of In-company Research 253
generally and a common element of the qualitative
research frameworks, as discussed earlier. One
supervisor posited that these features are “metaconsiderations.” Several graduates and students recorded that some behaviours, for example trust,
confidentiality and credibility “must be demonstrated
by the researcher.” Therefore it appears that an
abridged, specific framework is required for M.Sc. in
HRM students in their in-company research. Secondly, prospective M.Sc. students identify more aspects of the frameworks as important than the other
respondent groups, pointing to a differential degree of
insight, probably founded on less experience than the
other constituent groups. Thirdly, in general the
student and graduate perspectives differ from those of
the supervisors. This finding raises the possibility
of different expectations/needs from any ethical
framework.
In contrast there is consensus in opinions on the
importance of having practical, ethical guidelines: all
respondents think this is very important. A graduate
adds that this importance is “to ensure that confidentiality is maintained and the M.Sc. is progressed
on the basis that it benefits rather than harms the
company/organisation.” Another explains the importance is “because of in-house relationships both
during and after the research and to maintain the
integrity of the researcher and the dissertation itself.”
In a similar vein, a third graduate levels that it is
essential that ethical guidelines “are adhered to by the
researchers as their credibility is crucial to the study.”
For the continuing students, it was generally agreed
that it is very important for the “case study organisations to know the ethical rules too.” For the prospective students having a set of guidelines for
personal direction is seen as important; one especially
insightful member of this group levelled that any
guidelines are important as “they could affect the
quahty of the data that can be acquired.” From the
supervisors’ perspective, the following comment on
practical, ethical guidelines is representative: “It’s not
an aspect which immediately comes to students’
minds, so an explicit treatment/highhght would be
beneficial.”
Conclusions
The evidence presented in this paper reinforces the
argument that ethics are an important consideration
for M.Sc. in HRM students as practitioners, in the
context of recently raised awareness of ethics in
business. Therefore conducting in-company research has important ethical considerations as an
extension of their HRM role. Further, there is a
corresponding requirement for the curriculum of the
M.Sc. in HRM to embed ethical considerations such
as those included in the draft guidelines (refer to
Appendix A).
Given that most students consider themselves
first as HR practitioners and second as researchers –
though there is some role confusion on this as
discussed – there is a challenge for students and
supervisors ahke in balancing practitioner/researcher roles. A particular challenge hes in the discovery that the majority of students do not
recognise that they almost always use participant
observation as a part of their in-company research.
It is therefore argued here that the development of
more explicit role clarity and ethical parameters for
M.Sc. in HRM students is very important in this
respect too.
The framework for the development of ethical
guidelines should evidently incorporate external,
general ethical considerations and internal, organisation-specific considerations using elements of
existing frameworks. Key elements of this would
include having an explicit research declaration in the
host organisation and the development of appropriate guidelines to inform all stages of research
activity from the development of conceptual
frameworks, through to research design, primary
data collection, data analysis and presentation of
findings. Distilling the findings fi-om the exploratory
study, the authors offer the draft guidehnes included
in Appendix A.
Such a framework may also be valuable to
supervisors and host organisations in helping to
clearly delineate the ethical parameters of research
conducted by M.Sc. in HRM students. Moreover,
the development of the guidelines through debate
with students will possibly enhance HR student
and practitioner understanding of ethical decisionmaking. In turn these individuals may influence their
non-HR managerial colleagues and the culture of
their organisations in a way that extends ethics in
practice (Cordeiro, 2003; Mamburg, 2003; Procario-Foley and Bean, 2002) and encourage “behaviours that adhere to values” (Cordeiro, 2003).
254 G. Maxwell and R. Beattie
The next stage of this ongoing longitudinal
study is to conduct wider empirical work on
the same basis of that conducted for this paper, in
order to amend or validate the ethical framework for the M.Sc. in HRM research students. This
stage wiH incorporate two other stakeholder groups,
host organisations and the employees on whom
HRM research is carried out. In the long-term
the research team also intend to carry out a comparative study utiHsing the experiences of part-time
MBA students whose ethical awareness of the
issues and consequences of in-company research
may be even less weH developed than that of
HRM students. This research wiH contribute further to broadening ethics in business and business
curricula.
Appendix A: Ethical guidelines: In-company Research (draft)
Introduction
These guidelines are intended primarily for M.Sc. in HRM students conducting case study work with their employing
organisation for their dissertation. It is the responsibility of the research student to bring these guidelines to the attention of
the case organisation/s and informant employees. Any deviation from these guidelines should be discussed with both the
dissertation supervisor and host case study organisation/s.
Values
The guidelines are predicated on the core values derived from the codes of practice of the significant professional bodies in
human resource management, namely the CIPD and Academy of Human Resource Development. The values reflecting
professional HR practice and indicating the approach to in-company ethnography are fairness, confidentiality, justice and
equal treatment.
Roles
Research students are advised to identify their main roles and responsibilities in conducting their in-company ethnography
research at both conceptual and practical levels.
1. Conceptual level
• Are you an HR practitioner using your employer for case study research?
If so, your primary responsibility is towards your employer. Your research role is secondary.
• Are you an HRM student accessing a case study organisation/s where you are not an employee for your research?
If so, your primary role is your research activity. Your responsibility towards your case organisations is a secondary role.
Wherever your role primacy is located, your research requires that you consider your primary data objectively and
within the context of any company specific protocols brought to your attention for your research (e.g. ethics committees).
2. Operational level
It is strongly advised that all in-company research methods are declared to the participating case organisations and
individuals, i.e. that the primary work is conducted in an overt manner. Research methods may include some/all of the
following: interviews, focus groups, participant observation, questionnaires, use of company material (e.g. reports). All
research informants must have given their explicit, informed consent to their participation in your research. Further,
informants should only be named and/ or quoted directly with their express permission. Similarly, case organisations
should only be cited with the express permission of a senior person in the organisation.
Behaviours and considerations
In conceiving your case research, generating and presenting case data, drawing overall conclusions from case work, and
making recommendations from case study work, the behaviours noted below should be observed.
Demonstrating honesty and building trust: e.g. about the purpose of the research and balanced treatment of the case
findings.
Maintaining confidentiality: e.g. maintaining confidentiality and anonymity where requested and assured; respecting
informants’ privacy.
The Ethia of In-company Research 255
Avoiding harm and risk: e.g. the treatment of any sensitive information unearthed in the process of the case research
should be agreed in advance with the host organisation; the accuracy and representation of case data should be verified by
case informants.
Demonstrating integrity: e.g. in treating case findings objectively; in assuming ownership of the case research work as a
whole.
Demonstrating ownership of primary data: e.g. consideration of the impact of researcher role in data collection and, if
appropriate, dissemination; acceptance of responsibility to objectively interpret and report data.
Summary
The hallmarks of ethical in-company research, as outlined above, are: fairness, confidentiality, justice and equal treatment,
objectivity, company specific protocols, overt research, explicit and informed consent, express permission, honesty and trust, harm and risk,
integrity, ownership of primary data.
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G. Maxwell
Division of HRM & Development,
Caledonian Business School,
Glasgow Caledonian University,
Cowcaddens Road,
Glasgow G4 OBA,
U.K.
E-mail: g.maxwell@gcal.ac.uk