Strategic HRM and Performance Management at Aviva Plc.: A Case Study

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MANAGING HUMAN RESOURCE
Aviva Plc.

Contents
Introduction...........................................................................................................................................0
Aviva Plc Overview............................................................................................................................0
Task 1.....................................................................................................................................................0
Task 2.....................................................................................................................................................0
Task 3.....................................................................................................................................................0
Task 4.....................................................................................................................................................0
Conclusion.............................................................................................................................................2
References.............................................................................................................................................0

Introduction
The human resource management is referred to the process of developing the people
strategies combined with the business strategies must ensure that the cultural, value,
and structure and motivation of its member contribute in achieving the Aviva Plc
objectives and goals. The tradition HRM is concerned with the activities that were
performed by the personnel managers. Understanding about hard and soft HRM is
required. The hard approach of management is concerned with aligning the HRM policy
with the business strategy of the Aviva Plc.
Aviva Plc Overview
The Aviva Plc. is UK based insurance company that provides products and services such
as life insurance, health insurance, accident insurance and general insurance. Aviva Plc.
currently the company has 33 million customers across 16 countries. The company also
provide asset management services. The company has its business presence in UK,
Ireland, Poland and most of Asian countries. The company uses various different
techniques for distribution of its products and services. Aviva is the largest insurance
provider company of UK (AVIVA PLC et al., 2019).

Task 1
The HR manager implementing the hard approach of management thinks that the
employee works to achieve the financial benefits, while the soft approach of
management is concerned with the improving the loyalty and commitment of
employees towards the Aviva Plc. The managers that belief in a soft approach to
management is more compassionate towards the employees. The soft approach
managers trust its employees. The manager believes that the employees come to work
to impress and progress (Cascio, 2015).
Guest Model
Guest model of Human resource management is developed by David Guest in 1997.
According to the model, HR managers can use specific strategies that can be
implemented in order to achieve the outcomes (Noe, 2017). The outcome includes the
behaviour, performance and reward. The Gust model of HRM focused on six
components;
 HR Strategy
 HR Practices
 HR outcomes
 Behavioural outcomes
 Performance Results
 Financial outcomes
The employee’s performance is related to Aviva Plc profits. The performance is linked to
the employee’s behaviour. The Guest model of HRM states that human resource
management is totally different from personnel management. The behavioural outcome
is depended on the employee’s commitment, quality and flexibility (Zhang, 2012). The
behaviour of the employee within the organization is depended on the HR practices of
the Aviva Plc. Guest suggests that the HR practices of the Aviva Plc should be aligned
with the HR strategies of the organization. The Guest model of HRM is regarded as the
most superior model of HRM because it clearly outlines the input and outcomes (Guest,
2011).
Difference between Personnel Management and HRM

The human resource management has grown from the welfare and maintenance to the
top level management role at the Aviva Plc. There are companies that say that they want
to transform their old fashioned HRM function to the new form of HRM. But these
companies continue to manage their people management by old personnel management
activities. There are many reasons that can lead to this kind of behaviour for the
organization, but the major one is the lack of understanding of the difference between
the HRM and Personnel management (Iles et al., 2010).
Storey model of HRM presents the 27 areas of people management
Dimensions Personnel Management and
IR
HRM
Contract More emphasis on written
contracts
The HRM aims to go
beyond the contracts
Rules Personnel management
gave more importance to
devising clear rules.
The modern HRM follows
the “can do” approach.
There is less emphasis on
implementing rules.
Management Actions The management actions
are more concerned with
the procedure.
The HRM functions are
based on achieving
business objectives.
Behaviour Deals with general
practices
The behaviour is based on
the value and mission of the
Aviva Plc.
Management of employees Personnel management is
concerned with the
monitoring
The HRM is concerned with
their growth. Therefore it
provides nurturing to its
human capital.
Conflicts Conflict is a major issue
concerning the PM and IR
The HRM discourages
conflicts. It adopts
measures by which
conflicts are managed and
controlled

Strategic
Relations Personnel management is
the major responsibility in
personnel management and
IR
The HRM is concerned with
the customer’s relations.
Plan The corporate plan is
marginal
The HRM develops a
central plan
Decision-making speed The decision-making
process is slow
The decision-making
process of HRM is fast
Implications for line managers and employees of developing a strategic approach to
HRM
There are many benefits of using the line managers in HRM
 The line managers are expert in people management they should be used for
managing the HRM of Aviva Plc
 They can manage the operations effectively. They have specialized in cost-
effective management.
 The managers can apply technical skills where required
 The managers allocate work to the employees
 They have the responsibility of monitoring the HRM processes
 They carry out the performance management
 They are the responsibility of checking the quality
 They also communicate and deals with customer’s
Implications for Employees
The employees are an important part of organizations. They are the key asset to the
Aviva Plc. Highly motivated employees are responsible for high productivity (Collings et
al., 2018).
The leaders have the responsibility for motivating the employees. The executive leaders
should set targets and build a strategy that can build commitment among employees.
The leaders have a greater responsibility in HRM. The support for innovation can help
in improving productivity. The employee’s collaboration and best HRM practices help in

improving the efficiency of the employee (CHUANG and Liao, 2010). Human resource
management understands the effectiveness and importance of the reward system.
Better reward systems motivate the employees for improved performance.
Communication is a vital part of any HRM policy. The employees should be encouraged
to communicate with other employees. An effective feedback strategy can help in
reducing frustration and stress at work (Zott and Amit, 2010).

Task 2
1. Explain how a model of flexibility might be applied in practice
Flexible firm model
Figure 1: The flexibility firm model
Source 1: Businessballs
The flexible firm model was proposed by John Atkinson in the year 1986. He believed
that modern organizations need flexibility for facing business challenges and achieving
business objectives. Atkinson gave emphasis on differentiating the level of importance
of certain groups to an organization. The model was created for understanding how
these different groups should be managed and organized within the organizations. The
flexible firm model is an organizational and workplace management technique (Ketkar
and Sett, 2010). The model uses various types of flexibility techniques that can improve
the employee's performance and productivity. That can result in optimized human
resource. According to the model, the employees can be divided into two segments, the

core group and the peripheral group. This division is based on the functional, financial
and numerical flexibility. The core employees are expert and skilled in performing their
job. Due to this, core employees cannot be easily replaced (Mesu et al. , 2012). On the
other hand, peripheral workers can easily be replaced. The Aviva Plc utilizes the
peripheral employees during the peak periods. The peripheral employees are the less
skilled workers. These workers can easily be found in the labour market. The peripheral
workers are further divided into the first peripheral group and second peripheral
group. The first PG consists of the low skilled, part-time and flexible workers. The
second PG consists of the short term contract, agency staff and outsourced contract
workers.
Atkinson proposed the three major types of flexibility for the organizations;
 Functional Flexibility- It is concerned with high skilled core workers. The
functional flexibility allows relocating the core workers in multiple tasks.
Developing functional flexibility requires training and flexible working hours.
 Numerical Flexibility- the numerical flexibility is concerned with peripheral
workers, It related to the number of low skilled workers available in the market.
The numerical flexibility provides important insights about the Aviva Plc
workforce and its demand. The numerical flexibility can be achieved by short-
term workers, outsourcing and temporary workers.
 Financial Flexibility- It is referred to as the capability of the organization to
adjust the price of labour according to supply and demand. The financial
flexibility also includes the financial contract that the Aviva Plc receives at the
time of employment termination. Thus it can be concluded that financial
flexibility is related to the functional and numerical flexibility.
2.3 Assess the use of flexible working practices from both the employee and the
employer perspective
Atkinson also proposed two dimensions in which flexibility can be applied these are
flexibility in employment and flexibility in work.
Flexibility in Employment: It is concerned with the labour market. The employers are
taking innovative measures that can help them in Aviva Plc in making the compensation

flexible. Using part-time, contract workers must help in reducing compensations and
pay.
Flexibility in work: This concept is concerned with the organizational culture, flexible
work timings and group works. The adoption and implementation of the modern
production technology and techniques allow the Aviva Plc in quickly change according
to the markets chance and composition of the workforce.
The Atkinson model of flexible working can be utilized by the managers of the Aviva Plc.
The managers can take important decisions and measure according to the state of the
market. The Flexibility model provides important guidelines about the human capital
need of the Aviva Plc. It gives guideline when the Aviva Plc needs to cut the workforce,
but also retaining the skilled workforce in order to remain competitive. Firstly there
will be a reduction in peripheral workers because these employees are not the
permanent workers of the Aviva Plc and are contracted for specific tasks. If the Aviva
Plc is planning to further cut cost then the Aviva Plc will target the less experienced
workers such as the part-time workers. Companies can utilize the zero hour contracts in
order to cut the wage of peripheral workers while retaining the employee contract. This
can put pressure on other staffs as they will have to complete more tasks. The Aviva Plc
should do a careful analysis of the number of employees need to be removed. The core
group is generally safe as they are considered as the core employees of the Aviva Plc. If
the Aviva Plc is forced to lay off their core group then it indicates that the Aviva Plc is
suffering from major financial difficulty.
2.2. Discuss the types of flexibility which may be developed by an organisation
The technological era, have resulted in the use of the latest communication tools for
managing the HR process of the Aviva Plc. In order to remain competitive thee
companies are adopting flexible work policy form their organization. There are various
methods of implementing the flexibility at the Aviva Plc. It differs for organizations to
organizations.
Telecommunication: The telecommunication can help the employees in better
communication with the managers and their colleagues. A telecommunication system
can be used for communicating with the remote workers of the Aviva Plc. The
employees can utilize this telecommunication and they can work from any location.

Advantages – There are many advantages of telecommunication technology to the
employee. The telecommunication can save time and money for the employees. It is also
beneficial for employers. The research shows that using telecommunication technology
for remote working can save around $11,000. Employers can save on office space,
computer equipment and electricity cost.
Disadvantages – Implementing the telecommunication strategy is tough. Initially, the
employers will face challenges in implementing the strategy. The employers that like to
have face to face communication with their employees cannot find the
telecommunication strategy effective. The employer might not like the fact that he is no
longer able to control its employees.
Flexible Scheduling – Flexible scheduling is referred to as the concept of allowing the
employees to work on a flexible schedule. A flexible work schedule helps employees in
managing their responsibility in better ways.
Advantages: The employees have a personal life as well. The employee can be a parent,
or caring for aged parents or is disable and cannot commute to the office daily. The
flexible schedule offers them an opportunity to work and take care of personal issues.
Disadvantages: The flexible working environment has benefits for both employee and
the employer. But managing the employees can be a difficult task. The employers need
to remember each employee work timings and dates. Employers can use
communication tools that can help in managing employees effectively. It can also help in
improving employee performance and productivity.
Part- Time: A part-time worker works for less than 35 hours per week. Part-Time
working is becoming popular among workers.
Advantages: Many workers are nowadays not interested in fulltime work. They need
flexibility in their job. Generally, they are not interested in 9 to 5 jobs. The job seekers
are looking to find a job that will help in paying the bills and get time to do what they
love.
Disadvantages: The disadvantages associated with this type of work are that employers
need to provide training to new employees on a regular basis. The Aviva Plc has to
invest in training programs for new employees.

Freelancing: The freelance worker is generally hired for a specific job role. They are
skilled and knowledgeable in performing their job. A freelancer can also be hired for a
part-time or full-time job role.
Advantages of freelancer workers: Freelancing has become very popular.
Communications tools and online services have made the freelancing an easy and
efficient way of doing a job. Freelancing provides flexibility to employees. They can hire
a freelancer at any time a get their job done by an expert. This can save a lot of money as
the employers do not have to bring or hire a permanent worker.
The disadvantage of freelancing: The major disadvantage of freelancing is that it is
difficult to communicate as there can be a time difference. It is difficult to manage a
remote freelancer worker.
2.4 Discuss the impact that changes in the labour market have had on flexible working
practices
Another advantage associated with the freelancing is that the Aviva Plc can hire a
remote or a local freelancer. Also, freelancers manage multiple projects at the same
time, so there might be a possibility that the Aviva Plc projects get delayed. To overcome
this issue the hiring managers should discuss the milestones and time required for
delivering the finished project. Due to online tools such as the Microsoft teamwork,
Skype and Slack working remotely have become simple and productive. There are
multiple apps coming to the markets that can be used for managing freelance workers
efficiently. Companies are investing in flexible work culture. Proper understanding of
the best tools and techniques will help the Aviva Plc in making the right decision.