Research Korner: Contemporary Management

HUMAN RESOURCE MANAGEMENT

HUMAN RESOURCE MANAGEMENT       INTRODUCTION                         The workplace today is in a state of metamorphosis with contemporary issues such as customer satisfaction, competitive advantage, revenue and expenditures, organizational culture, technological advancement, global markets, diverse customer demands and need for effective workforce with a global mindset penetrating every aspect of the organization. Effective workforce is crucial as it is the organization’s primary player in accomplishing goals and delivering service. According to  and  (2004) a firm’s human resource management (HRM) practices and the kind of workforce help attain organizational competitiveness (). HRM is the organizational function that enhances creativity, innovation, speed, flexibility, and efficiency of the workforce to transform them into organizational assets. Human resource management is now highly recognized as a strategic lever for the organization in creating value.   THE HUMAN RESOURCE MANAGEMENT FUNCTION                          and  (1995) state that human resource management is a system that attracts, strengthens, encourages, and maintains employees who are responsible for the successful functioning and survival of the organization and its members (). The key functions and components of Human Resource Management are human resource planning, recruitment and selection, employee motivation, employee performance evaluation, industrial relations, employee services and employee training, development and education ( 2006).             Human resource planning as cited by the  (2007) is the process by which an organization defines its manpower needs for every job position, forecasts its future needs for people, and evaluates the existing pool of manpower to determine its strengths and weaknesses. The process starts by analyzing the business needs of the organization, competitive pressures, and future manpower requirements. Business needs include increased revenue, profitability, quality of products, efficiency, security, and customer satisfaction. Business organizations are pressured to foresee how employees can contribute to the attainment of these elements ( and  2000, ). Secondly, competition puts pressure on the business.  and  (2004) state that competitive pressures encourage firms to copy the manufacturing processes, product features, technology, and delivery mechanisms of their competitors. However, human resources cannot be duplicated. Thus, firms must be able to promote an organizational culture that attracts valuable and competent people (). Thirdly, human resource planning involves forecasting the number and kind of employees required for the future. This includes assessing the strengths and weaknesses of personnel, anticipating resignation and retirements, identifying the functions wherein employees best fit, and determining the employees who have the potential to handle any kind of responsibility. One technique used in human resource planning is talent inventory which enables HR practitioners to gauge employees’ competencies, knowledge, and  potential, and establish an organizational baseline of human capital. Job analysis comes after talent inventory which is the method of specifying the performance parameters and skill requirements of each job. Information gathered from talent inventory and job analysis serves as basis for recruitment and selection activities ( and  2000,  ). Recruitment is the process whereby the firm determines, seeks, and attracts people to fill current and anticipated job vacancies necessary for organizational growth ( 2002, ). Selection, on the other hand, is the process of meticulously documenting and assessing the applicants’ information including skills, employment experience levels, trainings acquired, and salary levels in order to determine their congruency with the specifications of the jobs to be filled ( and  2001, ). Since human resource planning enables the establishment of a workforce profile which includes information on trainings acquired, significant work experiences, present functions, educational background, leadership potentials and so on, recruitment and selection activities are guided as to what kind of people are needed in the organization to enhance existing talents and fill knowledge gaps ( and  2000, ). Recruitment and selection are also assisted in discovering the most qualified people who can adapt to the existing organizational culture and can contribute to organizational outcomes, productivity and financial performance ( and  1999, ). Human resource planning, recruitment and selection are crucial for strengthening a firm’s competitive readiness and renewal abilities to contribute to organizational development ( and  2000, ).  (1998) states that employee motivation is crucial to organizational survival because motivated employees offer more commitment and productivity. Motivating employees entails the provision of material and psychological rewards such as good pay, interesting work, recognition or praise, job security, favorable working conditions, professional growth opportunities, and coaching ( 2006). However,  (2001) argues that employee motivation also results from the employee’s ability to do a certain job. For example, an employee who is not an accounting graduate cannot effectively perform basic administrative functions of debit and credit. Thus, human resource planning should correctly define job requirements, properly design job functions, and effectively match an employee’s abilities with the specifications of the job. Employees who find their functions to be clearly specified and patterned after their interests and skills would be motivated to perform at their best. Relative to employee motivation is employee retention. An organization cannot afford to lose competent staff due to poorly designed jobs and unfavorable working environment. Human resource planning plays a role in employee retention by anticipating future resignations and separations. This activity entails human resource personnel and managers to monitor the extent, reasons, and costs associated with resignation. Lack of awareness and understanding of the nature of resignation within the organization means that the firm is blind on how many competent employees are being lost. The result of forecasting in human resource planning enables the firm to adopt certain steps to address the issues of employee resignation and retention ( 1996). HRM also facilitates the performance evaluation of staff in order for the organization to take account of its manpower and assess its contributions to organizational goals. Specific reasons for conducting performance evaluation are: to strengthen overall organizational performance by improving the individual performance; to identify existing potential which can be utilized to either handle future higher position vacancies or other jobs for a better use of the abilities; and to provide a fair method of relating compensation to performance where there are no numerical criteria ( 2006). In addition, human resource management is responsible in seeing to it that organizational policies and procedures adhere to labor and social laws.  (1998) claims that the human resource management function upholds employee aspirations in light of societal and labor laws and at times is obliged to intervene when employees run into difficulties personally and professionally; serves as the organization's conscience by verbalizing any violations in the organizational values and ethics; and treats people with kindness, respect and affection ().  (2002) elaborates that human resource management personnel inform the management on the details of existing employment contracts and emerging trends and how to comply with them; administer the just implementation of wages and salaries; maintain the consistency of employer practices with definite policies; and implement an employee “voice mechanism” for complaints and grievances to reach the management (). Finally, HRM is concerned with employee training, development and education through a career development program and human resource development. The human resource planning activity of establishing a profile of the current and needed skills and competencies of an organization’s manpower renders much importance in training and development.  and  (2000) state that training and development entail the accumulation and thorough scrutiny of the actual work situation including job descriptions, task analysis and employee’s capacities. Human resource planning provides these things. Thus, training and development can only be effective after an analysis of the existing work situation has been done so that the kind of training is tailored after the real needs of the staff.  (2006a) states that employees undergo training, development and education to augment job satisfaction, strengthen the employees’ capability to handle new technologies and procedures, encourage innovation and strategies, and improve the employees’ skill proficiency.   PRINCIPLES OF TRAINING AND DEVELOPMENT               The training function of human resource management is contemporarily termed as human resource development. It is a systematic effort to facilitate employee acquisition of present and future job-related knowledge, skills, and attitudes or assist them to correct any shortcomings in their performance ( 2002, ).  and  (1998) report that training and development revolves around three areas – individual employee development, career development and performance improvement (). Individual employee development aspires to develop the employee’s knowledge, competence and motivation necessary for improving job efficiency and performance. In order to do this, the trainor must follow eight steps in the conduct of the training: solicit the attention and interest of the employee, orient the employee on the objectives of the training, determine prior knowledge on the concepts of the present training, explain the contents of the training as well as the skills that it wants to impart, provide the parameters for coaching, encourage the trainee to participate, assess employee’s learning while in the training process and encourage the employee to incorporate his learning to actual work situations (  2007). Secondly, the key objective of career development is to help employees analyze their abilities and interests and decide to enter in a career development program. First, the human resource personnel and managers must develop a helping relationship with the employee. There is a need to encourage the employees to openly discuss their career goals, strengths, and areas of improvement in order to determine the kind of career development to provide. The employee’s interest must also be obtained since this would determine the success of the training. Human resource personnel must talk with the employees on the need for providing the training. When the employee agrees to participate in a career developmental process, the manager or human resource personnel should advice them to work and participate well. After the career development program, the supervisors and human resource personnel must be able to monitor employee performance to evaluate the effectiveness of the training provided ( 2007). Finally, training and development must be aimed at performance improvement ( and 1998)  Many business firms use training to facilitate learning, improve performance, ensure continuous learning and enable sharing of knowledge. Employees engage in training and development to learn and practice self-efficacy, effective customer service, tolerance for diversity, teamwork, and technical skills. Training is also a part of continuous learning strategy which is the long-term process of acquiring knowledge, skills, attitudes and motivations for personal and organizational development. Finally, the essence of training and development in performance improvement culminates in the willingness and ability of employees to interact and share ideas to improve production processes, group decision-making, product and service delivery, and inter-department functions ( 2002,        ).   HUMAN RESOURCE MANAGEMENT TERMS Job analysis – This is the process of defining the work, activities, tasks, products, services, or processes performed by an employee. Well-defined jobs help the employees to systematize their performance; enhance communication because the employees know what they are supposed to do and can readily share ideas and knowledge; help managers to assess an applicant’s ability to perform the specific tasks of the job; make performance evaluation easier as the definition of tasks would determine what needs to be done and if the employee is able to do it;  establish relative skills levels among the jobs for compensation decisions; serve as the basis for needs analysis in training program development; and assist organizations to identify core functions that must be maintained and the skills required to carry out these functions when confronted with issues of workforce  reduction or expansion ( 1994, ). Job description – Job description in an outline of the general functions and responsibilities of a specific position. Sometimes job descriptions also include the name of supervisor whom the position should report to, the qualifications required for the job, and salary range. Basically, job descriptions are utilized by the firm to advertise vacant and open positions, determine the appropriate compensation commensurate to the responsibilities of the job, and as a basis for performance evaluations ( 2006). Job evaluation – Job evaluation is a practical process of breaking down jobs into specific tasks and helping employees to judge the size of a certain job in comparison to others. The process develops the foundation for internal ranking of jobs. The two primary methods of job evaluation are whole job ranking wherein jobs are ranked against each other in their entirety; and awarding points for various areas of the job such as education, training and experience. Job evaluation entails the assessment of jobs, not the people. It is a contributory factor for problem solving as it helps determine duplication of tasks and inconsistencies between jobs and specific functions ( 2005). Performance Appraisal – Performance appraisal is the process wherein supervisors evaluate an employee's performance to identify strengths and areas of improvement. Supervisors look into specific employee actions which may include volunteering for a task or activities that are not formally part of the job; taking extra effort/responsibility; suggesting improvements; displaying initiative; demonstrating functional participation; complying with organizational procedures, policies and rules; advocating organizational objectives; demonstrating loyalty and obedience, civic virtue, and conscientiousness; helping and cooperating with others; using the firm’s resources prudently; and demonstrating flexibility and problem-solving ability ( 2003, ). Performance appraisal provides an opportunity for the employees’ efforts to be recognized and thus improve their motivation. It also offers a chance for supervisors and staff to identify and agree on training needs as well as a basis for managers to assess the effectiveness of the recruitment and hiring strategies. Most importantly, performance appraisal assists employees and supervisors to adopt a new direction for better performance ( 2006). Job Rotation – It is a management development practice wherein a person is moved through a series of assignments to provide him/her an opportunity to gain exposure to and experience the general operations of the firm as well as allow employees to thoroughly understand organizational processes and encourage greater job satisfaction through varied responsibilities. Job rotation among senior managers is a strategy of succession planning which is the process of developing a pool of people capable of assuming an existing job when necessary. For the lower management, job rotation answers the purposes of promotability or improvement of skills ( 2006). Job Enlargement - Job enlargement is a process of extending the scope of a particular job through additional tasks that call for the same level of responsibilities and skills. It is facilitated to prevent boredom among employees. This strategy opposes the principles of specialization and the division of labor wherein jobs are broken down into smaller units, each of which is performed repetitively by an employee. Some motivational theories claim that boredom and alienation through the routinary and repetitive performance advanced by division of labor can cause efficiency to weaken. Accordingly, job enlargement aims to motivate employees through additional tasks that do not greatly deviate from their current responsibilities. Some examples are replacement of assembly lines with modular work wherein a worker does not repeat the same step on every product; rather he/she handles numerous tasks on a single product ( 2007; 2006). Job Enrichment - Job enrichment is a job redesign approach that expands individual jobs by adding more tasks and requiring other kinds of skills and competence to handle the additional tasks. The purpose is to fine tune the division of labor within the firm and improve organizational efficiency. Enriched jobs allow employees to realize their personal goals and evoke work behavior congruent with the objectives of the firm. Job enrichment can correct ineffective work designs, enhance managerial control systems, abolish or lessen the need for labor, and intensify the work process ( 1986, ). Job Satisfaction – Job satisfaction reflects the conscious attitudes toward one's job. Job satisfaction can be achieved through clear and just organizational policies; supervisors who appreciate employee efforts and outputs as well as guide ineffective performance; appropriate compensation for the job; a corporate culture that allows socialization, camaraderie, and coordination; pleasant working conditions which include individual work areas, sufficient office supplies, ventilated office, and clean health and sanitary facilities; meaningful tasks; freedom to decide and carry out actions; and reward for loyalty and remarkable performance (, , &  1999).  and  (2004) claim that job satisfaction has been linked to critical organizational outcomes such as employee absenteeism, tardiness, intentions to turnover, actual turnover, job performance, organizational citizenship behavior, burnout, physical and psychological well being, creativity, productivity, loyalty to company and life satisfaction (). Management Development – Management development recognizes the vitality of managers in the survival of the organization. Thus, a program designed for the continuing education of managers on new management techniques, strategies and approaches is imperative. Contemporary management development programs make use of three approaches: one that focuses on the characteristics, knowledge, and experience of managers and attempts to provide special programs to address their needs; another underscores the improvement of managers as members of a class or a set of classes with overlapping membership; and the last emphasizes a specific organization which results to programs designed to enhance the functioning of a particular organization, with a given manpower and resources faced with distinct situations and problems ( and  1998, ). Career Planning – Career planning is a lifelong process of identifying, planning, pursuing and maintaining or changing a career. It entails choosing a specific occupation based on a person’s interests and skills, being employed for the job, developing within the job, changing careers when necessary and finally retiring. This process involves five steps. First, the person has to assess the kinds of interests, values, skills, knowledge, and developmental needs that he possesses and the work environment that he prefers. After these things are determined, the person has to explore all options available to him. These options may range from internships, volunteer works, academic materials, or full time employment. Afterwards, there is a need to identify possible jobs that the person can capably handle, assess the desirability of these jobs, analyze alternatives, and select short term and long term options. The fourth step requires the person to prepare for hiring requirements to the chosen job. Finally, the person has to successfully perform job requirements and learn everything that he can while on the job to maintain development of expertise which may be needed for future career plans and changes ( 2007).                                             REFERENCES

HUMAN RESOURCE MANAGEMENT

HUMAN RESOURCE MANAGEMENT INTRODUCTION The workplace today is in a state of metamorphosis with co...

Does existing theory and research in work psychology help with the successful management of people at work? If so, in what ways? If not, why not? You should base your answer on "Attitude at work" or "Personality at work".

Does existing theory and research in work psychology help with the successful management of people at work? If so, in what ways? If not, why not?     Introduction                 Theories and research on work psychology provides management teams with models for understanding the different factors influencing the work of workers such as attitude at work as well as provide guidelines for efficient supervisory programs and activities directed towards the improvement of work output and work relations. The extent of help that theories and research has contributed to the management of people at work is seen from the historical development of management theories and research reflecting the congruent changes in understanding of the characteristics of individuals making up business organizations.   Work Psychology               Work psychology traces its roots to the development of theories and psychological research focused on the management of the behaviour of people at work. Work psychology is the study of people’s behaviour in the workplace with the objective of deriving methods to assist workers and organizations ( 2002). The measure used in work psychology studies includes psychological testing to learn about the knowledge, skills and abilities of people relative to an employment-related purpose such as hiring, promotion, training and determination of employee satisfaction. Other characteristics of people affecting their work also form part the research such as the attitudes that people have in the workplace and the effect of these attitudes to the dynamics of the work environment and the accomplishment of the desired output. Personality at work is also another worker characteristic that influences other workers, the overall working environment and the accomplishment of target output.                         The predecessor of psychological testing is job analysis that involves a thorough study of the qualifying characteristics for a particular position and looking for these characteristics in applicants. Methods of conducting job analysis include interviewing previous and incumbent supervisors, floating questionnaires to the organization or to the management team, observing the work practice and attitudes of previous and incumbent managers deemed as model employees, and researching on background information of the position based on industry standard classification specifications and duty statements. Job analyses result to a determination of the duties, tasks and responsibilities attached to the position as well as the discovery of working conditions ideal to the performance of these tasks. Job analyses focus more on the material or physical requirements for a position such as the training and skills in accomplishing the tasks related to a position based on interview and observation. The need to look into the psychosocial factors influencing the ability to perform a task led to the development of psychological testing applied in work psychology.               Work psychology evolved from the previous terms, industrial and organization psychology, to be differentiated as a field of study encompassing the individual and organizational level of analysis covering the areas of selection and assessment for different types of jobs, identification of training needs, job performance appraisal, change and development of the organization, analysis of work equipment and environmental design, career development and counselling, interpersonal skills, enhancing equal opportunities, reduction of occupational safety and health, motivational work design, attitude surveys and the investigation of well-being of workers. ( 2002)               According to (2005), work psychology developed from two principles. One principle promotes the cyclical process of fitting a man to a particular job and fitting a job to a particular man. This works by matching a job to a person focusing more on the person. This means that business organizations applying this principle designs a task, provides equipment and develops working conditions suitable to the physical and psychological attributes of the chosen person. Research on this management principle focuses on the demands of workers during the two world wars. The 1948 research of Vernon showed the concern of business organizations towards extended hours of work in the munitions factories because of its negative effect on workers. It was also during the world wars that aviation qualifications were imposed for the selection of pilots meeting the physical and psychological qualifications of the job. Psychologists were increasingly sought to develop qualifying tests. The practice of obtaining the services of psychologists to assist in the management of organizations and to conduct research persists until today. According to the research of in 1982, psychologists and consultants were increasingly involved in the studies on the relationship of people to their work.                 Another principle, termed as human relations, focused on the relationship among individuals, individuals and the organization, and individuals, organization and work. This developed as a response to the limited scope of the previous principle that relates individuals to their work. Human relations incorporate social factors to research. In the Hawthorne studies made in the 1920s on the Western Electric Company to measure the influence of the level of illumination to productivity, results showed that factors other than illumination affects the productivity of employees. As a follow-up, the Relay Assembly Test Room Study resulted to the finding that productivity increased after every change in the work conditions. However, after the experiment productivity returned to normal because the increased productivity was attributed to the knowledge of the participants that they are a part of a work-related experiment motivating them to perform well. Subsequent studies served as critiques of these previous studies so that the research trend towards valuing human relations. The research conducted by  in 1951 showed that introducing technology changing the structure of the social relations of employees negative affected productivity. ( 2005)               Work psychology evolved by integrating the principle of matching personnel qualifications with the requirements of position and vice versa as well as the importance of human relations in managing the organization. It was through the pioneering research on business organizations and the subsequent response to these researches that propelled the development of people management principles integrating the different theories that are effective, on the aggregate, in helping organizations manage the hiring, promotion, training of employees as well as work and environment design, motivation, employee relations and employee satisfaction. Attitude at work is one of the research and management areas covered by work psychology.        Attitude at Work               Attitude at work is one of the important aspects of work psychology because this is recognized as an influential aspect at the workplace both with regard to work output and employee relationship dynamics. Similar to work psychology, the modern definition and importance of attitude traces its roots to the evolving theories and research findings in the past decades. The modern conception of attitude at work is its composition of subjective experiences. This means that attitudes in the workplace cover particular beliefs about an object or issue, evaluated experiences of an object or issue, and evaluation-based judgments regarding an object or issue. The subjective nature of attitude means that people may develop different and conflicting attitudes because of the difference in their beliefs about an object or issue and the manner that they evaluate the object or issue. Attitudes emerge in peoples’ interaction towards other at work implying that attitude inevitably relates to social behaviour. ( 2002)               Research on attitude at work started as a the study of attitudes to come up with generalizations such as stereotypes in order to predict the behaviour of different people having similar attitudes towards a single object or issue. Stereotype research targets groups of workers. By manipulating certain stereotypes labels, researchers measured the effect of these labels towards the self-esteem of the individual members of the group and the presence of exclusionary behaviour patterns or hostility towards other individuals or work. The core concepts studied by stereotype researches are self-esteem, prejudice, relevance of labels and group cohesion, and the cognitive impact of stereotyping to the memory and information processing of the participants of the study. ( 1989)               However, stereotype research draws generalizations about group attitudes without determining the specific attitudes of individuals, necessary in explaining the influence of attitude to work output and the dynamics of employee relations. Research shifted towards individual attitudes towards work, co-workers and the organization due to the recognition that understanding the individual is crucial to developing management strategies for the organization. Attitude was understood as a subjective belief and experience about an object or issue. The areas of research on attitude at work widened due to the possibility of studying attitude towards any object or issue without initially considering group attitude. Attitude research measured the beliefs, experiences and evaluations of individuals towards something. The core concepts of these researches focused on the strength of attitude towards an object or issue, the presence of personal prejudice, classification of evaluations into positive and negative, and change in attitude and the factors influencing the change.               The evolution of theories and research on attitudes focused on linking individual beliefs and experiences to overt action in order to establish that studying the actions or behaviour of an individual is equivalent to predicting the expression of the beliefs, experiences and evaluations of the individual about an object or issue. In this case, observations about the work behaviour of individuals become a viable measure for work attitude, which is an important consideration in the management plan of the organization.                (1934) conducted a study on attitudes and actions by gathering data on the hospitality extended towards Chinese workers. Results showed that there was no relationship between the reported attitudes of the participants and their corresponding documented behaviour.  In the succeeding research by  (1976) on the relationship of attitude and behaviour showed that there is a weak link between the two concepts. However, in the research of (1980) results showed that behaviour is linked to the inclination of individuals to act a particular behaviour or their behavioural intentions, which are in turn determined by the attitudes of the individual. The research allowed attitudes towards an object or issue to be studied based on the important beliefs that the individual has towards an object or issue. Moreover, the research also suggested that in order for attitude to become a predictor of behaviour, these factors must be studied in a given context or time.               The results of the research by  became the basis of contemporary research on attitude since even if attitude and behaviour may vary, it is recognized that there is a relationship between the two concepts relative to context and time. This is important to business organizations because predicting behaviour based on an understanding of a person’s attitude is significant to management decision regarding the selection, training and task allocation, promotion and workplace dynamics.               The changes in theories and the areas of research also brought about the development of several models in understanding the relationship of attitude and behaviour.  (1960) came up with the three-component view of attitude as a research design. Utilizing this research design shows that measurable independent variables comprise stimuli, such as individuals, situations or social groups, influencing attitudes. There are intervening variables, which are affect, cognition, and behaviour resulting to the measurable dependent variable that is the outcome. However,  (1980) criticized this model stating that the study of the different components does not provide an adequate explanation for the low relationship between attitude and behaviour because separating the different variables into different components will not improve behavioural prediction. As an alternative model,  (1988) came up with the theory of planned behaviour. The model suggests that understanding the attitude-behaviour relationship requires the initial consideration of the individual’s evaluation of beliefs on the consequences of behaviour, beliefs about other people’s view of a particular behaviour and the compulsion to comply with these views, and the perception on behavioural control. These factors lead to the development of attitudes towards behaviour and subjective norms resulting to the intention to act. Intentions together with perceptions on control determine behaviour. This model provides a better explanation of the difference between attitude and behaviour because it considers the factors influencing a person’s attitudes and the resulting intention.   Conclusion               Theories and research helped in the contemporary management of people at work by providing workable definitions and models in understanding different work-related concepts as guides to the formation of sound and viable work-management policies. Theorizing and research continue to evolve, enhancing previous knowledge of managing people at work.

Does existing theory and research in work psychology help with the successful management of people at work? If so, in what ways? If not, why not? You should base your answer on "Attitude at work" or "Personality at work".

Does existing theory and research in work psychology help with the successful management of people at work? If so, in what ways? If not, ...

Health Care Management Report

Health Care Organization And Delivery Mt371 Unit 9   Final Project     By             QUALITY HEALTHCARE MANAGEMENT   Introduction Quality as a means of creating and sustaining a competitive advantage has been widely adopted by both public and private sector organizations (1999). In the healthcare system recent decades have observed a remarkable changes even an evolution in the quality management in the healthcare system, (1997).   Before such revolution, the quality assurance of care had been assessed by professional evaluation, most often this is done in a subjective manner on individual patients (I1996). However, the accountability for quality in healthcare is no longer in the exclusive reality of physicians.  The national health authorities, governmental agencies as well as accrediting bodies and other institutions are staking a claim to improve the quality of the healthcare system.  The main goal of this paper is to discuss different factors or driving forces that influence the quality improvement of healthcare management.  The factors include the emergence of information technologies and information systems, customer or patient satisfaction, increasing healthcare costs, demand for quality form purchasers of healthcare, variations in patterns of care, the existence of managed care, the emergence and growth of healthcare industries devoted to healthcare quality, ensuring quality service, gaining competitive advantage and, having effective management system .    Driving Forces for Quality Healthcare Management The current preoccupation with quality assurance is symptomatic of a far wider concern with modern management methods and contemporary management speaks and their application to the health care field. This has, in part, been driven by the relatively new competitive and contractual climate in health care delivery and in part by the need to provide effective and efficient services and programmes.   The factors that have been mentioned above are not independent from each other. These factors are integrated to establish a powerful force   Emergence of Information Technologies and Information System The complexities of achieving management success through increased efficiency, effectiveness and competitiveness, combined with innovative applications of modern technology, has heightened the awareness of both Technology and organizational managers towards more strategically oriented approaches for planning and management of any industry (1993). The existence of information technologies can e considered as an important aspects that cuts across all other elements that have influenced changes into the quality management of healthcare. In this manner, the advancement of information technologies and information systems, as well as communications systems and computer technologies made it easier, cheaper and faster for those people involved in healthcare to accumulate and assess multiple types of information (1997). Furthermore, the emergence of the internet has been able to allow patients to become perceptive customers of healthcare.  In this manner, patients who have become well informed or probably misinformed thru the internet medical sources have become a major influence to change the physician-patient relationship.  Since, patients are more informed of different facts about healthcare, they are able to question the decisions of the attending physicians based upon the details on their diseases which was previously unavailable to the average patient. In addition, thru this, the patient is able to gather data on the performance of healthcare givers, efficiently handling one aspect of healthcare quality responsibility to the patients.   Customer or Patient Satisfaction             With the occurrences of changes in both methods and modalities of healthcare management, patients nowadays perceive a number of plausible medical options beyond conventional medicine.  Progressively, insurance organizations are willing to take the expenses of non-traditional healthcare system.  With this, patients are given the chance to choose medical practices in healthcare environment.  Hence, it is important that satisfactions are given to these patients.  Patients’ satisfaction is similar to any form of customer satisfaction.  (1992) stated that customer satisfaction has been deemed directly to affect customer retention and companies’ market share. In addition, there are researchers who discuss the links between satisfaction, loyalty, and profitability (1994; 1994). They are proponents of the theory called service management, which argues that “customer satisfaction is the result of a customer’s perception of the value received in a transaction or relationship relative to the value expected from transactions or relationships with competing providers. Pertaining to this theory,  (2004) stated: “Loyalty behaviors, including relationship continuance, increased scale or scope of relationship, and recommendation (word of mouth advertising) result from customers’ beliefs that the quantity of value received from one service is greater than that available from other service providers” . They continued: “Loyalty, in one or more of the forms noted above, creates increased profit through enhanced revenues, reduced costs to acquire customers, lower customer-price sensitivity, and decreased costs to serve customers familiar with a firm’s service delivery system” (2004). Accordingly, patient satisfaction is the cognitive assessment or judgment of an emotional reaction to the provided healthcare service ( 1993). Furthermore, satisfied patients represent the notion to which a patient has received quality service.  If patients are not satisfied with the service, they decide to seek the services of another healthcare provider. Hence, the healthcare community has a vested interest in increasing the satisfaction of patients thru the use of the quality healthcare management.   Increasing healthcare costs             Just like information technologies, the healthcare cost is also a common interconnected theme among the driving forces which led to the change of healthcare management in terms of improving the quality of the service.  The demand for controlling cost ahs come from the major payers of healthcare which compose of government and the employers.  In the phase of aging customers which will avail a larger proportion of the federal budget as beneficiaries of Medicare benefits, the national government has an interest in cost control. In addition, the evolution of global market competitions, more employers’ desire cost control as an effective way to reduce the cost of products and services that they give. From this notion, the variability of the healthcare services delegates’ suboptimal quality and the likelihood of overuse or sometimes misuse of such services, hence, improving quality of the healthcare management can reduce cost ( 1999).    Demand for Quality from Purchasers of healthcare,             The government and national authorities, with the existence of medical insurances became actively involved in analyzing the details of medical and healthcare practices (1997).  Due to the concept of cost-containment and quality assurance, national health authorities have formed different types of agencies to address healthcare management quality (2000). Similarly, other established purchasers of healthcare services like unions and employers, have paid more attention with population-based measures of quality and measuring performance of the healthcare system. In this manner, purchases are utilizing such measures to examine the performance of healthcare plans and the also the providers (1996). Responsibility for quality of the purchasers in line with the healthcare management is now a certainty.             With the existence of industries which adheres to the notion of quality management, other healthcare providers are trying to adapt such concept to ensure that their management system will be effective.   Variations in Patterns of Care             In the emergence pf the quality management techniques were flourishing in other economic sectors, the healthcare organization has shown patterns of variability of patient care showing the medical decisions made by physicians or healthcare workers depends more on the resources which came from local institutions and on existing local styles than on the context of science (1998). In lieu with the increasing healthcare costs, such variability was not only regarded to be a sign of varying quality, but also an indicator of insignificant practices. This influence the realization of the healthcare authorities to imposed a quality healthcare management system.   Existence of Managed Care             The notion of managed care has increased in large part due to increasing demands to contain costs.  The managed care industries use several approaches to contain costs and many of these mechanisms give emphasis on the reduction of overused resources of healthcare (2004).  The consequence of the style has been concern that the uses of healthcare services can be lessen to the point that the quality of care is reduced.  Since the existence of managed care has become well-known, there also exist some public concerns regarding the idea of whether the managed care is delivering care that is expected by individuals ( 1998). The existence of the notion of managed care had pushed healthcare organizations to streamline their management system and adhere to the needs of having quality healthcare management.   Emergence and Growth of Accrediting Bodies Devoted to Healthcare Quality             Another factor that influences healthcare providers to implement quality management is the emergence and growth of accrediting bodies in healthcare.  In response of healthcare management to the public concern about quality of care provided in managed care organization and to the assumption that the government and national health authorities might soon develop another institution that would monitor healthcare providers, different nations have developed accrediting agencies.  These agencies are responsible for inspecting a certain healthcare providers to determine if such provider executes quality management. Realizing that the assessment of accrediting agencies is important for the organization, many healthcare providers adhere to the needs of imposing quality management in healthcare.   Ensuring Quality Service             According to (1994), implementing a quality management system has become the preferred approach for improving quality and productivity in different organizations including the healthcare organizations. The concept of quality management, which has been adopted by different healthcare organizations, is a participative system empowering all employees to take responsibility for improving quality within the organization (1994). Instead of using traditional bureaucratic rule enforcement, quality management calls for a change in the corporate culture, where the new work climate has the following characteristics: an open, problem-solving atmosphere; participatory design making; trust among all employees (healthcare workers, managers); A sense of responsibility for goal achievement and problems solving; and, self-motivation and self-control by all healthcare workers and providers ( 1994). The quality management approach involves more than simply meeting traditional rejection rate standards. The end result of quality management within healthcare system is the efficient and effective use of all organizational processes in providing consistent quality to make the patients and consumers satisfied.   Gaining Competitive Advantage             Winning s strategies such as the utilization of quality management approach are grounded in sustainable competitive advantage.  It is said that a healthcare organization has competitive advantage whenever it has an edge over its competitors in attracting customers and defending against competitive forces. Competitive advantage is derived from external factors or positional advantage and internal factors or resources and assets used. The latter is the effect of the competencies of the firm (1991). Thus, a definition of competitive advantage might be: competitive advantage is a measure of the ability of the company to deliver value to the customer or patients divided with the resources used relative to the competitors.  This measure of competitive advantage is not an operational measure and should not be taken as such. However, it does focus attention on two different issues that must be seen in connection in quality management: the position enjoyed by the healthcare organization and the internal competencies of the firm, which together form the basis for judging the competitive advantage of the firm. Evidently, both measures must be taken relative to the competitors of the company (1985). Any firm is interested in competitive advantage; actually it may be said to be the very purpose of quality management, especially if the advantage proves to be sustainable. (1995, 135) defines this as, “…companies have sustainable competitive advantage when they consistently produce service systems with attributes which correspond to the key buying criteria for the majority of customers in their targeted market…” Thus, if a company has sustainable competitive advantage, customers will prefer its product offerings to those of the competition; that is, external and internal productivity will be greater than that of other firms in the targeted market.   Having effective management system             Lastly, it is said that healthcare organizations tries to utilize a quality management healthcare system because they want to initiate an effective management system which will be helpful in adhering to quality assurance.  The implementation of the concept of quality assurance enables the health care system determine the focus of work, directions and content of healthcare activities and the cost effectiveness priorities of the person involved.  The need of the healthcare system may be determined in a variety of ways but typically through the judicious use of focus groups using rapid appraisal techniques or through standard questionnaires as assessment instruments. QA can be built into the needs assessment strategy by developing post-intervention methods that rely on, for example, critical incident techniques. This allows members of the community to assess explicitly whether a health care programme has met and satisfied the identified need. This application of QA to the process of an interventions life has to have standards in order to measure the quality. These standards, which should be quantifiable, need to provide a precise indication of consistency. They should initially be based on best existing practice with the cooperation of practitioners, and have a temporal dimension which allows them to improve over time. Standards can be sub-divided into criteria and indicators, depending on how precise the QA process is to be.   Conclusion             The factors or driving forces mentioned above are just some of the influencing factors that influence healthcare industries to apply and implement the concept of quality healthcare management system.  Whatever the techniques employed by the healthcare organization does not matter as long as such technique adheres to the needs of quality assurance.

Health Care Management Report

Health Care Organization And Delivery Mt371 Unit 9 Final Project By QUALITY HEALTHCAR...

Intellectual Capital: More Than the Interaction of Competence x Commitment

Intellectual Capital: More Than the Interaction of Competence x Commitment Abstract: Ulrich (1998) has suggested that intellectual capital is a product of competence and commitment. This broad proposition, though intuitively appealing, does not identify theoretical links between these variables, and has little empirical foundation. This paper draws on organisational behaviour theory to propose a model that specifies mechanisms, intermediate linkages and boundary conditions that predict intellectual capital. In doing so, we respond to a recent call for research that is specific about human resource management–firm effectiveness relationships. Moderated relationships between competence, commitment and control are proposed as predictors of intellectual capital. Implications for future theory and practice are highlighted. Keywords: INTELLECTUAL CAPITAL; COMPETENCE; COMMITMENT; CONTROL. 1. Introduction The advance  resource-based view of the firm suggests that intellectual capital and the potential to transform it into skilled action provides firms with competitive advantage (Drucker 1999; Prahalad & Hamel 1998). Ulrich (1998) has proposed an innovative formula based on Human Resource Management (HRM) principles: intellectual capital = competence x commitment. Ulrich however, does not offer theoretical or empirical causal links between the variables in the formula (Burr & Girardi 2001), nor does he include situational influences that may have an impact on intellectual capital. Ferris, Hochwarter, Buckley, Harrell-Cook & Frink (1999) suggest that our discipline has numerous under-developed or specified constructs, leading to the criticism that the ‘black-box’ phenomenon prevails in our understanding of HRM effectiveness. Ferris et al. (1999) suggest some new directions for HRM research, which could heighten the impact of Ulrich’s formula in terms of both HRM research and practice. First, they recommend that HRM research should be specific about what HRM effectiveness criterion is being measured. There is very little in the literature at present that clearly evaluates the impact of HR practices on the firm’s holdings of intellectual capital. There is a need therefore for research that specifically links HR practices from an organisational behaviour perspective with the value of a firm’s intellectual capital. Ulrich’s formula provides a useful conceptual basis for measuring intellectual capital as the outcome of effective HR practices. It also avoids the use of accounting principles, which are currently used to calculate intellectual capital (Flamholz 1999), but omit individual and psychological factors. Second, Ferris and his colleagues highlight the need for research that unpacks the ‘black-box’ by specifying psychological mechanisms: the intermediate linkages among these mechanisms and the boundary conditions that underpin HRM—firm outcome linkages. Ulrich’s formula (1998) does indeed draw on psychologically based, cognitive explanations for predicting a company’s intellectual capital. However, it is not specific about the psychological mechanisms associated with competence and commitment (both of which are multi-faceted), and their impact on intellectual capital. Nor does it take into account boundary conditions that can activate, appreciate or depreciate stocks of intellectual capital as a result of high competence and commitment. In this paper, we extend Ulrich’s model based on organisational behaviour research and theory to suggest that intellectual capital is determined by factors in addition to specific facets of competence and commitment and discuss implications for future research and practice. 2. Intellectual Capital Defined Current definitions of intellectual capital are ambiguous. At present it is no one particular entity, but a rather broad and vague concept that needs to be supported by and composed of a variety of interrelated elements (Bukh, Larsen & Mouritsen 2001). A widely used definition describes intellectual capital as the knowledge, information, intellectual property and experience that can be put to use to create wealth (Stewart 1997). It is the future earning potential from a combination of human capital (brains, skills, insights), and the potential of an organisation’s people (Edvinsson 2000). Intellectual capital, which is a sub-set of an organisation’s market capital, is generally categorised into two elements (see figure 1): human capital and structural capital (Edvinsson 1997; Stewart 1997; Sveiby 1997). Human capital has been described as being made up of four facets: ability, behaviour, effort and time (Davenport 1999), all of which are owned and controlled by workers. It is at the worker’s discretion to use personal initiative at work (Frese, Kring, Soose & Zempel 1996) and decide when, what, where and how they will use the skills they possess to add value to the firm’s operations. Structural capital on the other hand has been described as ‘the backbone of the organisation’, and includes not only intellectual property but also infrastructure consisting of an organisation’s strategies, processes and policies (Dzinkowski 2000). Ulrich’s definition of intellectual capital focuses solely on human capital and does not take into account any of its structural dimensions. Edvinsson, Kitts and Beding (2000) specifically state that intellectual capital is about a fit between essential state variables (market and customer value) and free parameters (e.g. competence and commitment in Ulrich’s formula and organisational processes, systems and structures), which are adjustable variables that can be changed through managerial intervention. Like Ulrich, Edvinsson, Kitts and Beding (2000) believe that the systematic transformation of human capital into value requires structural capital as a multiplier, to realize sustainable earnings potential for the organisation. Converting knowledge into something that has value creates intellectual capital (Drucker 1999; Dzinkowski 2000). This implies that knowledge is only useful for what it does, how it is used and acted upon. In order to sustain the value of knowledge as an internal good, it has to be put to use or activated through opportunities provided by the work system and the individual’s willingness to apply their abilities and skills (Roselander 2000). Therefore, value creation results from the interaction of the human and structural components of intellectual capital. The conclusions to be drawn from the definition of intellectual capital is that it is a product of: • Capacity which is the knowledge, skills, abilities, information and experience of people; • Willingness of people to apply capacity; and • Opportunity provided by the work system to activate stocks of intellectual capital. Capacity reflects the competence component of the Ulrich (1998) formula, and willingness mirrors commitment. The opportunity element however, is missing in Ulrich’s conception of intellectual capital. Our aim is to extend the Ulrich model to include this missing element. Our discussion proceeds in three steps. The first step specifies psychological mechanisms and their intermediate linkages which underpin the components of human capital covered in Ulrich’s model. The second step identifies boundary conditions (or structural capital) in the form of job control as an additional element in the model. The third step draws together a model that presents intellectual capital as the outcome of the interaction of competence and commitment with job control. Figure 1 Components of Market Capital Intellectual Property Intangible Assets Innovation Capital Process Capital Customer Capital Organisation Capital Human Capital Structural Capital Financial Capital Intellectual Capital Market Capital 3. Unpacking Ulrich’s Formula Competence is a multi-dimensional construct. The rationalist approach couches competence in terms of the personal attributes of workers such as education level, which is often used as an objective measure of intellectual capital (Dzinkowski 2000). This approach is fairly narrow. A broader and more common definition of competence in organisational settings is that it includes an individual’s demonstrated knowledge, skills and abilities (Ulrich, Brockbank, Yeung & Lake 1995). Sandberg (2000) expressed concerns that the rationalist approach defines competence in indirect terms, as these descriptions do not indicate whether the worker uses these attributes. Sandberg advocates the use of an interpretative approach to discover the workers’ definition and understanding of their jobs. In Sandberg’s view, this interpretation determines the workers’ definition of job competence and therefore the range of skills they utilise at work. Bandura (1986) also suggested that knowledge and skills possessed are not enough. One must also consider a worker’s efficacy beliefs about being able to mobilise these skills for successful performance. Self-efficacy is described as the ‘beliefs in one’s capabilities to mobilise the motivation, cognitive resources and courses of action to meet given situational demands’ (Bandura & Wood 1989, p. 408). Efficacy beliefs are strongly linked to learning and organisational performance (Stajkovic & Luthans 1998), through their motivational properties. The conception of competence therefore needs to extend beyond capacity defined as knowledge, skills and abilities (KSAs) to include more dynamic elements such as skill utilisation and efficacy beliefs, which convert KSAs into true intellectual capital. This leads to our first proposition: Proposition 1: In valuing intellectual capital, competence needs to be measured as a function of rationalist measures of capacity (KSAs), interpretative measures (skill utilisation, determined by the worker’s understanding of job requirements) and cognitions of capability (efficacy beliefs). Commitment is also a multi-faceted construct. It has been defined as a job attitude or belief that reflects ‘the relative strength of an individual’s identification and involvement in a particular organisation’ (Steers 1977, p. 46). A frequently used operationalisation of organisational commitment is the three-factor model developed by Meyer and Allen (1992). The factors are continuance commitment, normative commitment, and affective commitment. Ulrich not only fails to discriminate between these facets of commitment but also does not take into consideration the differential impact of the three facets on intellectual capital as discussed below. Affective commitment is the most studied dimension (Dunham, Grube & Castaneda 1994). Affective commitment is often described as loyalty to the organisation, demonstrated by emotional attachment and identification with organisational goals (Meyer & Allen 1984). This type of commitment therefore reflects the willingness of people to provide discretionary effort. Continuance commitment is attachment to the organisation induced by recognition of the costs of leaving the firm. Continuance commitment is therefore essential for retention of intellectual capital. The final component of organisational commitment is normative commitment, which reflects the employees’ feelings of obligation to remain with the organisation. These obligations are compiled through identification with the organisation’s values and culture. This facet of commitment ties in with elements of structural capital, which are the organisation-based sources of intellectual capital such as organisational processes, systems, culture, values and management philosophy (Dzinkowski 2000). This leads to our second proposition: Proposition 2: Affective, continuance and normative commitment should all be included when valuing intellectual capital. Ulrich (1998) suggested that commitment is gained by engaging employees’ emotional energy, avoiding burnout and stress through high involvement work practices based on high levels of employee autonomy, and self-regulation (job control). Ulrich therefore acknowledges that structural variables have an impact on commitment, but does not include them in his model. Similarly, there is a growing body of research that highlights that competence can be influenced by structural factors, specifically job control (Burr & Cordery 2001; Parker & Wall 1998). The next part of the discussion therefore examines job control as a major boundary condition that influences both the capacity and willingness elements of the Ulrich formula. 4. Job Control as a Boundary Condition Empirical and theoretical research supports the proposition that job design (a structural capital variable) and in particular job control or work autonomy (Hackman & Oldham 1976), has the potential to activate value-creating intellectual capital mechanisms. Within the dominant job design paradigms, job control is viewed as allowing individuals to act directly on the environment so as to produce desired outcomes or avoid negative ones (behavioural control) and/or allowing a choice among several possible actions, outcomes, or tasks (cognitive control) (Wall, Corbett, Martin, Clegg & Jackson 1990). A series of job redesign studies within advanced manufacturing systems by Wall and colleagues (Jackson & Wall 1991; Wall et al. 1990; Wall, Jackson & Davids 1992), has provided evidence that significant performance improvements within high control job designs arose not due to employees working harder, but rather as a result of the development of new knowledge, which enabled the prevention of errors. These findings closely approximate the propositions of the demand-control model of job design that mastery outcomes are engendered by active, high control jobs (Karasek & Theorell 1990). Evidence substantiating this ‘active learning’ finding is emerging in other work environments. For example, job control has been found to influence skill utilisation (Girardi 1999), job related efficacy beliefs (Burr & Cordery 2001; Parker 1998; Speier & Frese 1997), and job crafting (Wrzesniewski & Dutton 2001) in work settings as diverse as process control, the knowledge work environment and in the service industry. High Performance Work Systems (HPWS) (Huselid 1995; Lawler, Mohrman & Ledford 1995), predicated on high control-based job design, have also been shown to contribute to the development of intellectual capital. Emerging evidence shows that HPWS are instrumental in creating committed, long-term employee relationships, which have an impact on firm performance (see Lawler et al. 1995; Pfeffer 1998). Broad justifications for these outcomes are based on principles of worker empowerment ( Spreitzer 1995; Thomas & Velthouse 1990). However, HPWS have been demonstrated to be effective only when three pre-conditions exist (Macduffie 1995). First, employees must be competent and possess knowledge and skills valued by the firm. Second, employees must be willing and motivated to apply these skills through voluntary effort. Third, employees must have the opportunity to contribute to the firm’s business or production strategy through discretionary effort. It is evident therefore that an interaction of individual competence, willingness (commitment) and opportunity (via job control) is needed if positive outcomes are to be recognised from systems that were designed to enhance intellectual capital (Huselid 1995). This leads to our third proposition: Proposition 3: Job control will moderate the impact of competence and commitment on intellectual capital. 5. The Extended Model The discussion so far has highlighted two issues. First, there is a need to decompose the broad elements of Ulrich’s existing formula for valuing intellectual capital to include specific psychological mechanisms. Second, the formula needs to be expanded to include job control as a boundary condition. An expanded formula for valuing intellectual capital is therefore proposed: Proposition 4: Intellectual Capital = Competence x Commitment x Control In which: Competence = Rationalist measures of capacity (KSAs), interpretative measures (skill utilisation) and cognitions of capability (efficacy beliefs); Commitment = Affective, continuance and normative commitment; and Control = Work autonomy. There are a number of organisational behaviour models that support this three-way interaction. For example, Amabile’s (1988) multiplicative componential model of creativity and innovation in organisations includes organisational components similar to control (resources, motivation to innovate, management practices) and individual components similar to competence and commitment (skills in creative thinking and the task domain, motivation). Another example is Wrzesniewski and Dutton’s (2001) job crafting model that proposes that interactive relationships between ability, motivation and opportunities provided by job control determines job crafting or role redefinition in response to dynamic job requirements. Similarly, Blumberg and Pringle (1982) proposed a simple model in which job performance is the outcome of the moderated relationships between the willingness and capacity of individuals and the opportunity provided by the organisation to perform. 6. Implications for Future Research and Practice The debate about valuing intellectual capital has been dominated by practitioners to date (Bukh et al. 2001; Larsen, Bukh & Mouritsen 1999). It is fitting therefore to draw out the practical implications of the proposed model first and then the agenda for future research. The accounting profession has long been interested in assigning monetary value for intellectual capital, in spite of its intangible nature. However, it is recognised that existing assessments such as the difference between the firm’s market and financial or book value, the Tobin’s q ratio, and the calculated intangible value (CIV) measure are not useful indicators of intellectual capital (Dzinkowski 2000; Larsen et al. 1999). It has been suggested as a result, that intellectual capital has to be defined on its own terms (Larsen et al., 1999). In this paper we have proposed an organisational behaviour theory-based formula to do this. While it may be difficult to assign financial value to intellectual capital using the proposed formula, we believe that it adds structure to efforts towards the development of intellectual capital statements (Bukh et al. 2001; Larsen et al. 1999) elsewhere. Such statements describe activities that management might apply in order to mobilise intellectual capital and specify how it is drawn upon to produce organisational benefits. In keeping with the proposed formula, intellectual capital statements make connections between intellectual resources, the motivation directed towards use of these resources, and activities that draw upon them (Bukh et al. 2001). HPWS are one set of management activities that can enable the utilisation of capabilities based on employee commitment and empowerment (Tomer 2001). The message therefore for organisations interested in increasing their intellectual capital, is that they need to pay attention to all the different facets of competence, commitment and control and put into place complementary ‘bundles’ of HRM practices. In doing so, the visible consequences of how these three intellectual capital elements interact can be observed and can collectively provide a clearer definition of intellectual capital. This responds to Ferris et al.’s (1999) suggestion that HRM research should be specific about what HRM effectiveness is being measured for—in this case valuing intellectual capital. The research agenda is determined by Ferris et al.’s second suggestion, which highlights the need for research that unpacks the ‘black-box’ by specifying psychological mechanisms, intermediate linkages between them and boundary conditions that underpin HRM—firm outcome linkages. This paper has sought to address this suggestion in the development of an expanded interactive model for valuing intellectual capital, which serves as a framework for future research. There is a need for empirical research, to test the intermediate linkages both between and within the elements of the expanded intellectual capital formula. It is expected that when levels of job control are high, and competence and commitment are high, intellectual capital will be maximised. However, how do the various facets of control, commitment and competence influence this maximisation? In order to answer this question, two avenues need to be explored. The first is to deal with the validation and/or development of measures for the constituents of competence, commitment and control. Whilst psychometrically sound measures of job control (e.g. Jackson & Wall 1991) and commitment (Meyer & Allen 1992) are available, measures of competence need further refinement (Sandberg 2000). The second is to empirically test for an interaction effect. Although methodological limitations regarding interaction analysis exist (Jaccard, Turrisi & Wan 1990), and must be acknowledged, the theoretical and practical importance of moderated relationships exceed these concerns (Baron & Kenny 1986; Karasek & Theorell 1990). Some of the main methodological obstacles are: the issue of multicollinearity between the formula variables; the impact of measurement error which can result in biased estimates and lead to statistical power problems thereby undermining significance tests; and that effects sizes reported in interaction studies in industrial and organisational psychology tend to be small (Jaccard & Wan 1996). However recent developments in testing interaction effects with structural equation modelling (Schumacker & Marcoulides 1998) provide avenues to overcome some of these difficulties. A preliminary empirical test of Ulrich’s formula (Burr & Girardi 2001) has found support for the two-way interaction between competence and commitment in predicting intellectual capital. The agenda for future research to test the three-way interaction includes the development of innovative methodologies in addition to conventional statistical methods. One suggestion is to follow the methodology adopted by the Danish Intellectual Capital Project (Bukh et al. 2001). This project is testing the use of a combination of quantitative and qualitative measures such as statistical information, internal ratios, measurement of effects and improvements, knowledge narratives, stakeholder reports and gap analysis to identify optimum stocks of intellectual capital and its firm-specific components of intellectual capital and management challenges. The field of accounting for intangible assets (Lev 1997), and development of measures such as the intellectual capital multiplier (Åberg & Edvinsson 2001), also provides opportunities for cross-disciplinary research for quantifying the human and structural components of the intellectual capital formula. Other approaches such as Mayo’s (2001) Human Capital Monitor and Sveiby’s (1997) Intangible Assets Monitor measure intellectual capital as a metric that incorporates human asset value, human resource costs and revenue. Future research will benefit from using such objective measures of intellectual capital as the dependent variable. Empirical tests of the predictive validity of our expanded formula against each of these measures of intellectual capital will be challenging. However it is an area worthy of research efforts if it highlights the contribution of organisational behaviour and HRM in the valuation of a firm’s intellectual capital. References Amabile, T.M. 1988, ‘A model of organisational innovation’, in Research in Organisational Behaviour, eds. B.M. Straw & L. L. Cummings, vol. 10, pp. 123–67, JAI Press, Greenwich. 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Intellectual Capital: More Than the Interaction of Competence x Commitment

Intellectual Capital: More Than the Interaction of Competence x Commitment Abstract: Ulrich (1998) has suggested that intellectual c...