1

PHRi
2023

Functional Area 02
HR Administration and
Shared Services

Professional in Human Resources – International

INTERNATIONAL HUMAN RESOURCE CERTIFICATION INSTITUTE

IHRCI ® | www.ihrci.org
 Professional in Human Resources – International (PHRi) Workbook

Module Two: HR Administration and Shared Services

2023 Edition

Copyright © 2023 by International Human Resource Certification Institute

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 3

Introduction
As a purchaser of the PHRi certification workbook serials, you have access to the
www.ihrci.org learning system. The system contains Glossary that provides a search box and
a description of the key terms in HR. Also, the system consists of over 900 practice exam
questions and answers with explanations in our database including pre-test, review-test, and
post-test:
Pre-test: It contains the same percentage of questions from each content area. Participants
can take a pre-test of that module to access their conceptual understanding of that specific
area of the PHRi Body of Knowledge. When the pre-test is completed, an overall correct
percentage is provided along with the number and percentage of questions answered
correctly. The answers with explanations to individual questions are also provided. Our
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Review-test: Every review test contains questions with explanations which help to
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naturally get access to the next section. Every new section helps construct on the earlier
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Post-test: Once you complete with all the knowledge areas, have a post-test through the full
length simulated practice tests under the same testing conditions as the actual exams. With
115 questions covered during the 2.75 hours test. These tests are designed to help you get
the feel of the final PHRi Exam, with similar format and question types. Practice till you are
near to 80% correct answers in the post-test. This helped you in understanding areas where
you have improved since the last test as well as list down topics for which you needed more
revision.
Access to the learning system is valid for twelve (12) months from the date of purchase to
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This workbook is not a textbook. These materials include workbooks and practice exams are
intended for use as an aid to preparation for the PHRi Certification Exam conducted by the
HR Certification Institute. By using all of the preparation materials, you will be well-versed in
the six key functional areas that make up the HR Certification Institute PHRi body of
knowledge. Studying these materials does not guarantee, however, that you will pass the
exam. These workbooks are not to be considered legal or professional advice.
4

Table of Content
Introduction ................................................................................................................................ 3
Table of Content ......................................................................................................................... 4
Part One: HR and Organization .................................................................................................. 9
1. Organization ................................................................................................................... 9
1.1. Span of Control .................................................................................................... 9
1.2. Chain of Command ............................................................................................ 10
1.3. Bureaucracy ....................................................................................................... 10
1.4. Type of Structures ............................................................................................. 11
1.5. Organizational Charts ........................................................................................ 13
1.6. Levels of Management ...................................................................................... 13
2. Group Dynamic ............................................................................................................. 14
2.1. Forming.............................................................................................................. 15
2.2. Storming ............................................................................................................ 15
2.3. Norming ............................................................................................................. 16
2.4. Performing ......................................................................................................... 16
2.5. Adjourning ......................................................................................................... 16
2.6. Group vs. Team .................................................................................................. 16
3. Organization Climate and Culture ................................................................................ 18
3.1. Type of Culture .................................................................................................. 18
3.2. Layers of Culture ................................................................................................ 19
3.3. Values in Culture................................................................................................ 19
3.4. Culture Analysis ................................................................................................. 20
3.5. Culture and Climate ........................................................................................... 21
4. Organizational Life Cycle .............................................................................................. 22
4.1. Start-Up Stage.................................................................................................... 23
4.2. Growth Stage ..................................................................................................... 24
4.3. Maturity Stage ................................................................................................... 25
4.4. Revival Stage ...................................................................................................... 26
4.5. Decline Stage ..................................................................................................... 27
5. Vision, Mission, and Value ............................................................................................ 27
5.1. Vision (big picture idea of what you want to achieve) ...................................... 27
5.2. Mission (general statement of how you will achieve your vision) .................... 27
5.3. Value (how you will behave during the process) .............................................. 28
6. Strategy and Organization ............................................................................................ 28
6.1. Mission .............................................................................................................. 29
6.2. Strategic Objectives ........................................................................................... 29
6.3. Situation Analysis (SWOT Analysis) ................................................................... 29
6.4. Strategy Formulation ......................................................................................... 30
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6.5. Strategy Implementation................................................................................... 32

7. HR’s Main Roles ............................................................................................................ 32
7.1. Becoming a Partner in Strategy Execution ........................................................ 33
7.2. Becoming an Administrative Expert. ................................................................. 34
7.3. Becoming an Employee Advocate / Champion. ................................................ 35
7.4. Becoming a Change Agent................................................................................. 36
8. HR Organization ............................................................................................................ 36
8.1. Service Centers .................................................................................................. 37
8.2. Corporate HR ..................................................................................................... 38
8.3. Embedded HR .................................................................................................... 38
8.4. Centers of expertise (CoE) ................................................................................. 39
8.5. Operational Executors ....................................................................................... 39
9. HR Outsourcing............................................................................................................. 41
9.1. Outsourcing ....................................................................................................... 42
9.2. Offshoring .......................................................................................................... 42
9.3. HR Outsourcing Services ................................................................................... 43
9.4. Cosourcing and Insoucing.................................................................................. 44
9.5. Outsourcing Process .......................................................................................... 44
Part Two: Employee Life Cycle .................................................................................................. 47
1. Employee Life Cycle Model .......................................................................................... 47
1.1. Buying ................................................................................................................ 47
1.2. Building .............................................................................................................. 48
1.3. Borrowing .......................................................................................................... 48
1.4. Bounding ........................................................................................................... 48
1.5. Bouncing ............................................................................................................ 49
1.6. Binding ............................................................................................................... 49
2. Onboarding ................................................................................................................... 49
2.1. Recruiting .......................................................................................................... 50
2.2. Orientations ....................................................................................................... 51
2.3. Support Tools and Processes ............................................................................. 51
2.4. Coaching and Support ....................................................................................... 52
2.5. Training .............................................................................................................. 52
2.6. Feedback Tools .................................................................................................. 52
3. Transferring................................................................................................................... 53
3.1. Reasons for employee transfers ........................................................................ 53
3.2. Drawbacks from employee transfers................................................................. 54
3.3. Types of Transfers .............................................................................................. 54
4.1. Voluntary Turnover ............................................................................................ 56
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4.2. Involuntary Turnover ......................................................................................... 57

4.3. Causes of Turnover ............................................................................................ 57
4.4. Functional or Dysfunctional Turnover ............................................................... 57
4.5. Turnover and “Churn” ....................................................................................... 58
4.6. Measuring Employee Turnover ......................................................................... 58
5. Termination .................................................................................................................. 59
5.1. Paper Trail .......................................................................................................... 59
5.2. Short, Clear Meeting ......................................................................................... 59
5.3. Explaining the Severance................................................................................... 60
5.4. Communicating with Staff ................................................................................. 60
5.5. Discharge, Layoff, and Resignation .................................................................... 60
5.6. Termination Tips ................................................................................................ 61
6. Exit Interview ................................................................................................................ 64
6.1. Who will conduct the interview? ...................................................................... 64
6.2. When do you conduct the interview? ............................................................... 64
6.3. What’s the purpose of the interview? .............................................................. 65
7. Employee Resignation .................................................................................................. 65
7.1. Whom to Notify ................................................................................................. 65
7.2. What to Communicate ...................................................................................... 65
7.3. Develop a Transition Plan .................................................................................. 66
7.4. Alert Clients ....................................................................................................... 66
8. Outplacement............................................................................................................... 66
8.1. Outplacement Services ..................................................................................... 67
8.2. Benefits to the employer ................................................................................... 68
8.3. Adjust to Retrenches’ Needs ............................................................................. 69
Part Three: Employee Attendance ........................................................................................... 71
1. Managing Attendance .................................................................................................. 71
1.1. Understanding absence ..................................................................................... 71
1.2. Measuring lost time .......................................................................................... 71
1.3. Creating an absence policy ................................................................................ 71
2. Managing Absence ....................................................................................................... 71
2.1. Short-term absence ........................................................................................... 72
2.2. Long-term absence ............................................................................................ 72
2.3. Continuous Period of Leave............................................................................... 72
3. Attendance Policy Template ......................................................................................... 73
3.1. Authorized absence ........................................................................................... 73
3.2. Unauthorized absence....................................................................................... 73
3.3. Procedure for reporting absence ...................................................................... 73
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3.4. Return to work (RTW)........................................................................................ 74

3.5. Medical appointments ...................................................................................... 74
3.6. Support .............................................................................................................. 74
3.7. Time-keeping ..................................................................................................... 74
3.8. Record keeping .................................................................................................. 74
3.9. Review ............................................................................................................... 75
4. Return-to-work (RTW) Program ................................................................................... 75
4.1. Definition of RTW .............................................................................................. 75
4.2. Reasons for RTW ............................................................................................... 76
4.3. Develop for RTW ............................................................................................... 77
4.4. RTW Arrangement ............................................................................................. 78
4.5. Best Practices of RTW ........................................................................................ 79
5. Work Time Management.............................................................................................. 80
5.1. General Definition ............................................................................................. 80
5.2. Common Types of Leave.................................................................................... 80
5.3. Overtime............................................................................................................ 81
5.4. Alternative Work Schedule ................................................................................ 82
Part Four: HR Documents and Records .................................................................................... 84
1. Document Development .............................................................................................. 84
1.1. Step 1: Establish need for a policy..................................................................... 84
1.2. Step 2: Develop policy content.......................................................................... 90
1.3. Step 3: Draft the policy ...................................................................................... 91
1.4. Step 4: Write the procedure .............................................................................. 92
1.5. Step 5: Review of the policy by key parties ....................................................... 93
1.6. Step 6: Approve the policy ................................................................................ 94
1.7. Step 7: Implement the policy ............................................................................ 94
1.8. Step 8: Policy review and update ...................................................................... 97
1.9. Step 9: Communication of changes to the policy.............................................. 98
2. Document Retention .................................................................................................... 98
2.1. Select a point person or create a steering committee. ..................................... 99
2.2. Assess and prioritize the DRP project scope. .................................................... 99
2.3. Consult with data management and IT personnel. ........................................... 99
2.4. Pinpoint what electronic and physical documents your business produces, and
assign ownership. ..................................................................................................... 99
2.5. Review laws and regulations. ............................................................................ 99
2.6. Detail instructions on storing, retaining, and preserving data.......................... 99
2.7. Set guidelines on destroying expired or useless data. .................................... 100
2.8. Train employees on the plan and communicate the processes. ..................... 100
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2.9. Clearly communicate the employee duty to follow protocol. ........................ 100
2.10. Review your document retention policy and update it periodically. ............ 101
2.11. Finding solutions for document management .............................................. 101
3. Employee Data Management ..................................................................................... 102
3.1. Type of Employee Data .................................................................................... 102
3.2. Recordkeeping Policy....................................................................................... 103
3.3. Maintain accurate records............................................................................... 104
3.4. Other Considerations ...................................................................................... 105
Reference........................................................................................................................ 107
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Part One: HR and Organization

1. Organization
A business organization is an individual or group of people that collaborate to achieve
certain commercial goals. Some business organizations are formed to earn income for
owners. Other business organizations, called nonprofits (Non-profit Organization, NPO),
are formed for public purposes. These businesses often raise money and utilize other
resources to provide or support public programs.

Structure is not simply an organization chart. Structure is all the people, positions,
procedures, processes, culture, technology and related elements that comprise the
organization. It defines how all the pieces, parts and processes work together (or don’t in
some cases). This structure must be totally aligned with strategy for the organization to
achieve its mission and goals. Structure supports strategy.

If an organization changes its strategy, it must change its structure to support the new
strategy. When it doesn’t, the structure acts like a bungee cord and pulls the organization
back to its old strategy. Strategy follows structure. What the organization does defines the
strategy. Changing strategy means changing what everyone in the organization does.

When an organization changes its structure and not its strategy, the strategy will change to
fit the new structure. Strategy follows structure. Suddenly management realizes the
organization’s strategy has shifted in an undesirable way. It appears to have done it on its
own. In reality, an organization’s structure is a powerful force. You can’t direct it to do
something for any length of time unless the structure is capable of supporting that
strategy.

Global organizations in the 21st century must compete with a much wider array of
companies than their domestic counterparts do, and have therefore evolved several
strategies to become as efficient and cost-effective as possible. The choice of
organizational structure reflects where decisions are made, how work gets completed, and
ultimately how quickly and cheaply the firm’s products can be made. Organizational
structure determines how the roles, power and responsibilities are assigned, controlled,
and coordinated, and how information flows between the different levels of management.

1.1. Span of Control

Span of control (span of management or span of authority) is an upper limit to the
number of subordinates who can be effectively supervised by one person. Beyond a
certain number of subordinates, the effectiveness and efficiency of supervision
decreases.

Flat organizational structures have relatively few levels from top to bottom. Thus, they
have wide spans of control. Flat structures provide fast information flow from top to
bottom of the organization and increased employee satisfaction. Tall organizational
structures have many levels between top and bottom. Hence, they have relatively
10

narrow spans of control. Tall structures are faster and more effective at problem
resolution than flat structures because of increased frequency of interaction between
superior and subordinate and the greater order imposed by the hierarchical structure.

1.2. Chain of Command

The delegation of authority creates a chain of command, the formal channel that
defines the lines of authority from the top to the bottom of an organization. Chain of
command specifies a clear reporting relationship for each person in the organization
and should be followed in both downward and upward communication.

Centralization is the retention of decision-making authority by a high-level manager.

Centralization concerns the concentration of authority in an organization and the
degree and levels at which it occurs. Decentralization is the process of distributing
authority throughout an organization. In a decentralized organization, an organization
member has the right to make a decision without obtaining approval from a higher-
level manager. Decentralization in the same way as delegation, that is, as a good way to
improve motivation and morale of lower-level employees. Neither centralization nor
decentralization is good or bad in itself. The degree to which either is stressed depends
upon the requirements of a given situation.

• Decisions cannot be decentralized to those who do not have necessary

information, e.g., knowledge of job objectives or measures for evaluation of job
performance.

• Decisions cannot be decentralized to people who do not have the training,

experience, knowledge, or ability to make them.

• Decisions requiring a quick response should be decentralized to those near the

action.

• Decentralization should not occur below the organizational level at which

coordination must be maintained (e.g., each supervisor on an assembly line
cannot be allowed to decide the reporting time for employees).

• Decisions that are of critical importance to the survival of the organization should
not be decentralized.

• Decentralization has a positive influence on morale.

1.3. Bureaucracy
Bureaucracy is a term applied by German sociologist Max Weber (writing in the 1900s)
to a type of organizational hierarchy characterized by clear rules, sharply defined lines
of authority, and a high degree of specialization. It represents authority and
responsibility within the organization.

Authority is the right or power assigned to a job holder in order to achieve certain
organizational objectives. It indicates the right and power of making decisions, giving
orders and instructions to subordinates. Authority is delegated from above but must be
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accepted from below i.e. by the subordinates.

Responsibility indicates the duty assigned to a position. The person holding the
position has to perform the duty assigned. It is his responsibility. The term
responsibility is often referred to as an obligation to perform a particular task assigned
to a subordinate. In an organization, responsibility is the duty as per the guidelines
issued.

Accountability is the liability created for the use of authority. Accountability is the
obligation of an individual to report formally to his superior about the work he has
done to discharge the responsibility.

Responsibility may be bestowed, but accountability must be taken. In other words,

responsibility can be given or received, even assumed, but that doesn’t automatically
guarantee that personal accountability will be taken. Which means that it’s possible to
bear responsibility for something or someone but still lack accountability.

1.4. Type of Structures

Developing an organizational structure involves defining the framework around which
the business operates and provides guidance to all employees by laying out the official
reporting relationships that govern the workflow of the company. It is therefore
important for every organization to have a well-structured organization chart indicative
of how an organization functions, how it is managed, how information flows and is
processed within an organization, and how flexible or responsive the organization is.

Source: Daft, R.L. (2012). Organization Theory and Design. Cengage Learning.
12

1.4.1. Functional Structure

Functional structure is set up so that each portion of the organization is grouped

according to its purpose. In this type of organization, for example, there may be a
marketing department, a sales department and a production department. The
functional structure works very well for small businesses in which each department can
rely on the talent and knowledge of its workers and support itself. However, one of the
drawbacks to a functional structure is that the coordination and communication
between departments can be restricted by the organizational boundaries of having the
various departments working separately.

1.4.2. Divisional Structure

Divisional structure typically is used in larger companies that operate in a wide

geographic area or that have separate smaller organizations within the umbrella group
to cover different types of products or market areas. For example, the now-defunct
Tecumseh Products Company was organized divisionally--with a small engine division, a
compressor division, a parts division and divisions for each geographic area to handle
specific needs. The benefit of this structure is that needs can be met more rapidly and
more specifically; however, communication is inhibited because employees in different
divisions are not working together. Divisional structure is costly because of its size and
scope. Small businesses can use a divisional structure on a smaller scale, having
different offices in different parts of the city, for example, or assigning different sales
teams to handle different geographic areas.

1.4.3. Process Structure

The process structure divides up the organization around processes, such as research,
manufacturing and sales. Unlike a purely functional structure, a process-based
organization considers how the different processes relate to each other and the
customer. The sales process doesn't begin until the manufacturing process produces
something to sell; manufacturing, in turn, waits on research and development to create
the product. Process-based structures are geared to satisfying the customer -- the end
result of all the processes -- but they only work if managers understand how the
different processes interact.

1.4.4. Matrix Structure

The third main type of organizational structure, called the matrix structure, is a hybrid
of divisional and functional structure. Typically used in large multinational companies,
the matrix structure allows for the benefits of functional and divisional structures to
exist in one organization. This can create power struggles because most areas of the
company will have a dual management--a functional manager and a product or
divisional manager working at the same level and covering some of the same
managerial territory.

A matrix structure is a blend of functional and project based organizations that

maximize the strength of each structure. There are three types of matrix organizations:
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weak, strong and balanced. Weak organizations are characterized by projects that have
part-time members, limited control over authority, budget and decisions and multiple
lines of responsibility. Strong matrices have dedicated resources, internal control of
budget, and moderate levels of control over assets, resources and decision making
authority. Balanced matrix organizations represent shared leadership between
functional managers and project managers.

In this structure, decision making is decentralized and an employee participating in a

project may have two bosses: one from the product side and one from the geographic
side. The matrix structure requires a great deal of communication and coordination
among managers because lines of authority are not always clear.

1.5. Organizational Charts

An organizational chart is the most common visual depiction of how an organization is
structured. It outlines the roles, responsibilities and relationships between individuals
within an organization. An organizational chart can be used to depict the structure of
an organization as a whole, or broken down by department or unit.

Organizational charts can be used to represent the organizational structure diagram

showing reporting relationships a graphic representation of how authority and
responsibility is distributed within a company; includes all work processes of the
company.

1.6. Levels of Management

In organizations, there are generally three different levels of managers: first-level
managers, middle-level managers, and top-level managers. These levels of managers
are classified in a hierarchy of importance and authority, and are also arranged by the
different types of management tasks that each role does. In many organizations, the
number of managers in every level resembles a pyramid, in which the first-level has
many more managers than middle-level and top-level managers, respectively. Each
management level is explained below in specifications of their different responsibilities
and likely job titles.

1.6.1. Top-level managers

Typically consist of board of directors, president, vice-president, chief executive

officers, etc. These individuals are mainly responsible for controlling and overseeing all
the departments in the organization. They develop goals, strategic plans, and policies
for the company, as well as make many decisions on the direction of the business. In
addition, top-level managers play a significant role in the mobilization of outside
resources and are for the most part responsible for the shareholders and general
public.

1.6.2. Middle-level managers

These personnel typically consist of general managers, branch managers, department

14

managers. These individuals are mainly responsible to the top management for the
functioning of their department. They devote more time to organizational and
directional functions. Their roles can be emphasized as executing plans of the
organization in conformance with the company's policies and the objectives of the top
management, they define and discuss information and policies from top management
to lower management, and most importantly they inspire and provide guidance to
lower level managers towards better performance. Some of their functions are as
follows:

• Designing and implementing effective group and intergroup work and

information systems.

• Defining and monitoring group-level performance indicators.

• Diagnosing and resolving problems within and among work groups.

• Designing and implementing reward systems that support cooperative behaviors.

1.6.3. First-level managers

Typically consist of supervisors, section officers, foreman, etc. These individuals focus
more on the controlling and direction of management functions. For instance, they
assign tasks and jobs to employees, guide and supervise employees on day-to-day
activities, look after the quantity and quality of the production of the company, make
recommendations, suggestions, and communicate employee problems to the higher
level above, etc. In this level, managers are the "image builders" of the company
considering they are the only ones who have direct contact with employees.

• Basic supervision

• Motivation

• Career planning

• Performance feedback

2. Group Dynamic
In organizations, most work is done within groups. A group can be defined as several
individuals who come together to accomplish a particular task or goal. In organizations,
you may encounter different types of groups. Informal work groups are made up of two or
more individuals who are associated with one another in ways not prescribed by the
formal organization. For example, a few people in the company who get together to play
tennis on the weekend would be considered an informal group. A formal work group is
made up of managers, subordinates, or both with close associations among group
members that influence the behavior of individuals in the group.

Forming a group takes time, and members often go through recognizable stages as they
change from being collections of strangers to united groups with common goals. American
organizational psychologist Bruce Tuckman first came up with the memorable phrase
 15

"forming, storming, norming, and performing" in his 1965 article, "Developmental

Sequence in Small Groups." He used it to describe the path that most groups follow on
their way to high performance. Later, he added a fifth stage, "adjourning" (which is
sometimes known as "mourning").

Adjourning
Performing The group
Norming The group conducts an
People feel assessment of
Storming works in an
part of the the year and
Forming Members start to open and implements a
Group communicate team and trusting
realize that plan for
acquaints and their feelings but atmosphere
still view they can transitioning
establishes where
ground rules. themselves as achieve work roles and
flexibility is recognizing
Formalities are individuals rather if they accept
than part of the the key and members’
preserved and other
members are team. They resist viewpoints. hierarchy is contributions.
treated as control by group of little
strangers. leaders and show importance.
hostility.

Source: mindtools.com

2.1. Forming
In this stage, most group members are positive and polite. Some are anxious, as they
haven't fully understood what work the team will do. Others are simply excited about
the task ahead. As leader, you play a dominant role at this stage, because group
members' roles and responsibilities aren't clear. This stage can last for some time, as
people start to work together, and as they make an effort to get to know their new
colleagues.

2.2. Storming
Next, the group moves into the storming phase, where people start to push against the
boundaries established in the forming stage. This is the stage where many groups fail.
Storming often starts where there is a conflict between team members' natural working
styles. People may work in different ways for all sorts of reasons, but if differing
working styles cause unforeseen problems, they may become frustrated.

Storming can also happen in other situations. For example, group members may
challenge your authority, or jockey for position as their roles are clarified. Or, if you
haven't defined clearly how the group will work, people may feel overwhelmed by their
workload, or they could be uncomfortable with the approach you're using.

Some may question the worth of the group's goal, and they may resist taking on tasks.
Group members who stick with the task at hand may experience stress, particularly as
they don't have the support of established processes, or strong relationships with their
colleagues.
16

2.3. Norming
Gradually, the group moves into the norming stage. This is when people start to resolve
their differences, appreciate colleagues' strengths, and respect your authority as a
leader. Now that the group members know one-another better, they may socialize
together, and they are able to ask each other for help and provide constructive
feedback. People develop a stronger commitment to the team goal, and you start to
see good progress towards it. There is often a prolonged overlap between storming and
norming, because, as new tasks come up, the group may lapse back into behavior from
the storming stage.

2.4. Performing
The group reaches the performing stage when hard work leads, without friction, to the
achievement of the team's goal. The structures and processes that you have set up
support this well. As leader, you can delegate much of your work, and you can
concentrate on developing team members. It feels easy to be part of the group at this
stage, and people who join or leave won't disrupt performance.

2.5. Adjourning
Many groups will reach this stage eventually. For example, project teams exist for only a
fixed period, and even permanent teams may be disbanded through organizational
restructuring. Team members who like routine, or who have developed close working
relationships with other team members, may find this stage difficult, particularly if their
future now looks uncertain. As a team leader, your aim is to help your people perform
well, as quickly as possible. To do this, you'll need to change your approach at each
stage.

2.6. Group vs. Team

The words 'group' and 'team' are, for the most part, interchangeable - at least most
people use them that way. While all teams are groups of individuals, not all groups are
teams. The key properties of a true team include collaborative action in which, along
with a common goal, teams have collaborative tasks. Conversely, in a group, individuals
are responsible only for their own area.

The use of teams began to increase because advances in technology have resulted in
more complex systems that require contributions from multiple people across the
organization. Overall, team-based organizations have more motivation and
involvement, and teams can often accomplish more than individuals. Groups differ
from teams in several ways:

2.6.1. Task orientation

Teams require coordination of tasks and activities to achieve a shared aim. Groups do
not need to focus on specific outcomes or a common purpose.

2.6.2. Degree of interdependence

 17

Team members are interdependent since they bring to bear a set of resources to
produce a common outcome. Individuals in a group can be entirely disconnected from
one another and not rely on fellow members at all.

2.6.3. Purpose

Teams are formed for a particular reason and can be short- or long-lived. Groups can
exist as a matter of fact; for example, a group can be comprised of people of the same
race or ethnic background.

2.6.4. Degree of formal structure

Team members' individual roles and duties are specified and their ways of working
together are defined. Groups are generally much more informal; roles do not need to
be assigned and norms of behavior do not need to develop.

2.6.5. Familiarity among members

Team members are aware of the set of people they collaborate with, since they
interact to complete tasks and activities. Members of a group may have personal
relationships or they may have little knowledge of each other and no interactions
whatsoever.

There are several types of temporary teams. An example of a temporary team is a task
force that is asked to address a specific issue or problem until it is resolved. Other
team may be temporary or ongoing, such as product development teams. In addition,
matrix organizations have cross-functional teams in which individuals from different
parts of the organization staff the team, which may be temporary or longstanding in
nature. Virtual teams are teams in which members are not located in the same
physical place. They may be in different cities, states, or even different countries.
Often, virtual teams are formed to take advantage of distributed expertise or time—
the needed experts may be living in different cities.

Top management teams are appointed by the chief executive officer (CEO) and, ideally,
reflect the skills and areas that the CEO considers vital for the company. There are no
formal rules about top management team design or structure. The top team often
includes representatives from functional areas, such as finance, human resources, and
marketing, or key geographic areas, such as Europe, Asia, and North America.
Depending on the company, other areas may be represented, such as legal counsel or
the company’s chief technologist.

Self-managed teams are a new form of team that rose in popularity with the Total
Quality Movement in the 1980s. Self-managed teams are empowered teams. The team
manages itself but it still has a team leader. Research has shown that employees in self-
managed teams have higher job satisfaction, increased self-esteem, and grow more on
the job. However, self-managed teams may be at a higher risk of suffering from
negative outcomes due to conflict, so it is important that they are supported with
training to help them deal with conflict effectively. Special forms of self-managed
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teams are self-directed teams. The team makes all decisions internally about
leadership and how work is done.

Designing an effective team means making decisions about team composition (who
should be on the team), team size (the optimal number of people on the team), and
team diversity (should team members be of similar background, such as all engineers,
or of different backgrounds). Answering these questions will depend, to a large extent,
on the type of task that the team will be performing. Teams can be charged with a
variety of tasks, from problem solving to generating creative and innovative ideas to
managing the daily operations of a manufacturing plant.

A key consideration when forming a team is to ensure that all the team members are
qualified for the roles they will fill for the team. This process often entails
understanding the knowledge, skills, and abilities (KSAs) of team members as well as
the personality traits needed before starting the selection process.

When deciding team size, a good rule of thumb is a size of two to twenty members.
Research shows that groups with more than 20 members have less cooperation. The
majority of teams have 10 members or less, because the larger the team, the harder it
is to coordinate and interact as a team. With fewer individuals, team members are
more able to work through differences and agree on a common plan of action. They
have a clearer understanding of others’ roles and greater accountability to fulfill their
roles. Some tasks, however, require larger team sizes because of the need for diverse
skills or because of the complexity of the task. In those cases, the best solution is to
create sub-teams in which one member from each sub-team is a member of a larger
coordinating team.

Team composition and team diversity often go hand in hand. Teams whose members
have complementary skills are often more successful, because members can see each
other’s blind spots. One team member’s strengths can compensate for another’s
weaknesses. Diversity in team composition can help teams come up with more
creative and effective solutions. The more diverse a team is in terms of expertise,
gender, age, and background, the more ability the group has to avoid the problems of
groupthink.

3. Organization Climate and Culture

Culture has a pervasive impact on the management of human resources. Culture
influences how blue- and white-collar workers respond to pay and non- pay incentives,
how international firms are organized, the success of multinational work teams, and even
how executives compose and implement business strategies.

Culture may be defined as a shared system of values, beliefs, and attitudes. It affects our
own actions and the way we perceive the actions of others.

3.1. Type of Culture

3.1.1. National Cultures
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National cultures comes a host of differences in assumptions, outlook, and rules that
can challenge communication and comprehension.

3.1.2. Subcultures

There can be significant distances between subcultures within the same national
culture. Subcultures may be defined by ethnicity, geographic region, race, religion, or
class.

3.1.3. Organizational/Corporate Cultures

Organizational culture is defined by all of the life experiences, strengths, weaknesses,

education, upbringing, and so forth of the employees. While executive leaders play a
large role in defining organizational culture by their actions and leadership, all
employees contribute to the organizational culture.

3.1.4. Industry Cultures

Industry cultures have shared assumptions based on technological and social histories
of the industry.

3.1.5. Professional or Functional Cultures

Professional and functional cultures have shared assumptions based on specifics as

they relate to a special function or occupation.

3.2. Layers of Culture

3.2.1. Level 1-Artefacts: Described as being the ‘easiest’ level to observe, called explicit
culture.

3.2.2. Level 2-Espoused Values: To better understand and to help decipher why the
initial observations in Level 1 are taking place, one needs to ask ‘insiders’ of the
organization to try and explain.

3.2.3. Level 3-Shared Tacit Assumptions: To help understand this ‘deeper’ level of
culture, one needs to investigate the history of an organization.

3.3. Values in Culture

The word "value" means worth. It also refers to an ethical precept on which we base
our behavior. Values are basic convictions that people have regarding what is right and
wrong, good and bad, important or unimportant. Values are shaped by the culture in
which we live and by our experiences. However, there are values that are held high by
most cultures. These include fairness and justice, compassion and charity, duties and
rights, human species survival and human well-being.
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Organizational culture and values are closely related because organizations are
generally founded with certain values in mind. These values tend to influence the
organizational structure, but they may change over time as different people take on
different roles in the organization and the overall culture changes. Organizational
culture and values, then, both affect each other over time and tend to change if a
conflict exists between them.

3.4. Culture Analysis

Three important levels of cultural analysis in organizations are: observable culture,
shared values, and common assumptions. These levels may be envisioned as layers.
The deeper one gets, the more difficult it is to discover the culture.

External Organizational Climate

OBSERVABLE CULTURE

SHARED VALUES

COMMON ASSUMPTIONS

Internal

Source: Schemerhorn, J., Hunt, J., & Osbom, R. (2008). Organizational Behavior.
Hoboken, NJ: John Wiley & Sons.

3.4.1. Observable Culture

The first level concerns observable culture, or “the way we do things around here.”
These are the methods the group has developed and teaches to new members. The
observable culture includes the unique stories, ceremonies, and corporate rituals that
make up the history of a successful work group.

3.4.2. Shared Values

The second level of analysis recognizes that shared values can play a critical part in
linking people together and can provide a powerful motivational mechanism for
members of the culture.

Many consultants suggest that organizations should develop a “dominant and coherent
set of shared values.” The term shared in cultural analysis implies that the group is a
whole. Every member may not agree with the shared values, but they have all been
exposed to them and have often been told they are important. At Hewlett-Packard, for