Managing people in turbulent economic times: A knowledge-creation and appropriat.

http://apj.sagepub.com/Human ResourcesAsia Pacific Journal of http://apj.sagepub.com/content/44/1 /25The online version of this article can be found at: DOI: 1 0.1 1 77/1 03841 1 1 06061 506 2006 44: 25Asia Pacific Journal of Human ResourcesKen N. Kamocheappropriation perspectiveManaging people in turbulent economic times: A knowledge-creation and Published by: http://www.sagepublications.comOn behalf of: Australian Human Resources Institute (AHRI) can be found at:Asia Pacific Journal of Human Resources Additional services and information for http://apj.sagepub.com/cgi/alertsEmail Alerts: http://apj.sagepub.com/subscriptionsSubscriptions: http://www.sagepub.com/journalsReprints.navReprints: http://www.sagepub.com/journalsPermissions.navPermissions: http://apj.sagepub.com/content/44/1 /25.refs.htmlCitations: What is This? - Apr 1 8, 2006Version of Record >> at COLUMBIA UNIV on April 1 5, 201 4 at COLUMBIA UNIV on April 1 5, 201 4apj.sagepub.comapj.sagepub.comDownloaded from Downloaded from Asia Pacific Journal of Human Resources 2006 44(1)Managing people in turbulent economic times: A knowledge-creation and appropriation perspectiveKen N. KamocheCity University of Hong Kong, Hong KongThe question of appropriation of knowledge has received scant attention in themanagement literature. We address this issue within the context of humanresource management (HRM) and advance the case for moving beyond currentconcerns with whether HRM adds value to a more incisive analysis of theprocesses in which knowledge is utilized and appropriated through themanagement of people. We frame these processes in terms of an ‘appropriationregime’ and explore the constitutive elements of appropriation and theproblematic nature of appropriation within the context of the employmentrelationship. With reference to three case-studies, we then analyse the trends that have been taking place in the appropriation regime in Hong Kong in anenvironment characterized by economic turbulence and uncertainty. Our findingsindicate the extent to which firms have tightened the appropriation regime as aresponse to external competitive pressures and internal efficiency pressures.Keywords: appropriation, economic turbulence, Hong Kong, human resources, knowledge managementIt is now widely held that human resources contribute to organizationalperformance (e.g. Welbourne and Andrews 1996). Our purpose is not tocontinue the debate in this vein, but to examine a somewhat neglected angle:how exactly do organizations benefit from the knowledge inherent in theirhuman resources (HR), and what factors influence the approach organizationsmight take in such an enterprise? We focus on the problematic nature of theappropriation of knowledge generated through human resources.We conceptualize appropriation in terms of how organizations go aboutsecuring the contribution of HR, how individuals in turn seek to retain thebenefits of their knowledge, and how both parties define the parameters for25Correspondence to: Ken N. Kamoche, Department of Management, City University of HongKong, Tat Chee Avenue, Kowloon, Hong Kong; phone: +852 2784 4904; e-mail:mgnkk@cityu.edu.hkAsia Pacific Journal of Human Resources. Published by Sage Publications (London, Thousand Oaks, CA andNew Delhi; www.sagepublications.com) on behalf of the Australian Human Resources Institute. Copyright © 2006Australian Human Resources Institute. Volume 44(1): 25–45. [1038-411 1] DOI: 1 0.11 77/1 038411 106061506APJHR_44_1_Kamoche. qxd 27/01/2006 2: 59 PM Page 25 at COLUMBIA UNIV on April 1 5, 201 4apj.sagepub.comDownloaded from creating and utilizing knowledge. Much of the current knowledge manage-ment literature assumes this is a smooth process untainted by conflict orpotential disagreement. We argue that not only is conflict inherent in theseprocesses, but also the relative bargaining power of the respective parties mayhinge critically on, inter alia, the economic climate. Hence, the economies of theAsian region in the late 1990s provide an excellent opportunity to examinetrends in appropriation within the HR domain.Appropriation has been tackled mainly in the strategic and innovationmanagement literature. This paper examines the nature of appropriation withparticular regard to the management of people, which has not received muchattention in the knowledge management debate as researchers tend to focuson the technical and structural aspects of knowledge creation and diffusion.There also seems to be an underlying assumption that appropriation is deemedto take place and the process through which it happens is treated as unprob-lematic. Where it is recognized, it is viewed through lenses such as ‘increasingproductivity’, ‘reducing costs’ and so forth. We argue that the concept ofappropriation offers a more robust perspective for observing this phenomenonbecause it sheds light on the underlying managerial rationale for increasingproductivity, cutting costs and so forth. Our main contribution is the criticalexamination of how the appropriation regime changes when subjected tointernal efficiency and external competitive pressures.Appropriation is one of the constitutive elements of the resource-basedview (RBV). Though we do not intend to discuss the RBV in detail (seeColbert 2004), we recognize that the HRM debate has engaged with the RBVin recent years. Developments in the RBV opened up new opportunities toinvestigate the nature of ‘resources’ within HRM (e.g. Boxall and Steeneveld1999; Lado and Wilson 1994; Kamoche 1996; Wright, Dunford and Snell2001). The incorporation of the RBV within HRM helped to demonstrate how human resources can serve as a source of competitive advantage. Theargument drew from Penrose’s (1959) observations that the configuration ofresources differs across firms, rendering each firm unique and the totality offirms heterogeneous. RBV theorists maintain that for resources to confer acompetitive advantage, they must be rare, inimitable, non-substitutable andappropriable (e.g. Barney 1991; Grant 1991a). Thus, Coff (1999) points out thatthe RBV identifies when firms will appropriate rents, not who will appropriaterents. It means that the RBV specifies the contextual circumstances that facil-itate the generation of rents which, following the unitarist perspective, the firmsubsequently appropriates.The above inference is based on the underlying assumption that theorganization will appropriate rents, and ignores the possibility that there maybe other factors that impinge on the appropriation regime. These factorsinclude: lack of structures through which the knowledge of employees can betapped into; the existence of weak retention mechanisms which result invalued people walking away with critical knowledge; the possibility that dissat-26Asia Pacific Journal of Human Resources2006 44(1 )APJHR_44_1_Kamoche. qxd 27/01/2006 2: 59 PM Page 26 at COLUMBIA UNIV on April 1 5, 201 4apj.sagepub.comDownloaded from isfied employees are unwilling to give of their best; and finally, the possibilitythat high-performing individuals can identify the proportion of rents attrib-utable to themselves and thus make substantial compensation demands. Thelatter includes the astronomical wages paid to star sports personalities, financialsecurities traders and fund managers, and so forth. Taking these factors intoaccount, it becomes clear that the contribution of the RBV does not go farenough in terms of unveiling the problematic nature of the appropriationprocess with particular regard, for our purposes, to the stock of knowledgepossessed by organizational members.Although ‘knowledge management’ has become a buzzword in the manage-ment lexicon today, there is not much consensus about what it means withinthe context of HRM. In fact even within the context of organizations moregenerally, there is no commonly held model of knowledge creation, embodi-ment and dissemination (Clark 2000). Nonaka’s (1994) spiral of knowledgecreation is a useful model for capturing the processes through which variousconceptions of knowledge undergo transformations in task accomplishment.Nonaka defines these transformations as the continuous dialogue between tacitand explicit knowledge. Examples include tacit to tacit: learning by observa-tion, and explicit to tacit: learning by doing. Clearly, these activities haveimportant implications for HRM to the extent that the processes throughwhich learning is taking place – the technical, social, cognitive, affective andso forth – involve people and how people direct their efforts towards theachievement of individual and organizational goals. The idea of tapping intoand managing the knowledge that resides in people should be a key responsi-bility for HR managers as well as line managers and corporate executives.Much of the knowledge management debate has concerned itself with so-called knowledge workers, from the earlier phase of the emergence of a tech-nocracy in the postindustrial society (e.g. Galbraith 1967; Bell 1973), to thework on knowledge-intensive firms (e.g. Starbuck 1992; Alvesson 1993). Forthe sake of argument, we take Starbuck’s (1992, 716) definition of knowledgeas ‘a stock of expertise’, as opposed to ‘a flow of information’. This definitionappears to be consistent with Penrose’s (1959) view that the value of a resourceis seen in terms of its potential to yield a service. We argue, therefore, that thestock of expertise employees bring to the organization confers on them apotential to yield services (which includes the capacity to create products). Thestock of expertise includes tacit and explicit skills, talents, abilities, creativity,as well as the motivation and initiative to apply such expertise towards produc-tive activities. The question therefore is how do organizations appropriate suchknowledge or ‘stock of expertise’?The question of appropriation, in particular knowledge appropriation,remains a thorny issue within the HRM domain, though many researchersManaging people in turbulent times27Knowledge appropriation and HRMAPJHR_44_1_Kamoche. qxd 27/01/2006 2: 59 PM Page 27 at COLUMBIA UNIV on April 1 5, 201 4apj.sagepub.comDownloaded from appear to treat it as relatively unproblematic. This is evident in the tendencyto focus attention on the links between HRM and strategy. Kamoche andMueller (1998) advocate an ‘appropriation-learning’ perspective to fathom theunderlying ethos as to why organizations seek a ‘contribution’ from organiza-tional members. They argue that the traditional approach to appropriation,whether recognized as such or not by managers, has relied on skill-formation,the cultivation of integrative cultural values, commitment to the organization,and the use of formally constituted governance structures. The traditionalperspective reflects the dominant logic in strategic management which seesappropriation in terms of organizations retaining the benefits of the utiliza-tion of resources ‘for their own use’ (e.g. Kay 1993).An understanding of appropriation must recognize that there may beincentives for the two parties to act in competition as well as in co-operation,which echoes Grant’s (1991b, 112) observation that appropriation is about ‘thedivision of rents between the firm and the owners of the resources’, which, byrecognizing the existence of a plurality of stakeholders, goes beyond theunitarist position referred to above. Learning in particular offers employeesan opportunity to achieve real, sustainable benefits which in turn providefurther incentives for them to make a contribution to organizational perform-ance. The opportunity to learn and consolidate one’s knowledge, coupled withmeaningful rewards for effort, can also serve as a viable employee motivationalforce. An appropriation regime which serves both the interests of the organ-ization and the employees is an important mechanism for leveraging humanresources for organizational performance.We argue that both the individual and the organization are engaged inefforts to maintain some relative control over competencies and knowledge.Where both parties agree, tacitly or otherwise, that control lies with the organ-ization, any contest over such rights is either non-existent or remains latent.However, there are situations when the issue of control comes to the surfaceand both parties begin staking their claims for ‘rents’ and for the distributionthereof. Each would be trying to achieve an edge, or some relative leverage.Such contests have in the past been characterized in various ways, such aswithin the context of labour-union relations and wage bargaining, equitytheory, organizational justice and so forth. For our purposes, the commonthread running through these literatures is perceptions regarding the distri-bution of rights, obligations, control, rewards and benefits. We bring theseconcerns together under the more comprehensive framework of the ‘appro-priation regime’.Appropriation is not treated here merely in terms of a contest over so-called rents. In fact it goes beyond the notion of ‘capturing’ rents and, fromthe individual’s point of view, it embraces issues like empowerment and thekind of discretion individuals have in the way their work is designed andstructured, and over career decisions. The appropriation regime thus includesa process of knowledge creation and utilization, generation of rents and other28Asia Pacific Journal of Human Resources2006 44(1 )APJHR_44_1_Kamoche. qxd 27/01/2006 2: 59 PM Page 28 at COLUMBIA UNIV on April 1 5, 201 4apj.sagepub.comDownloaded from outcomes, and the distribution of these among relevant stakeholders. At eachof these levels, both the individual and the organization are involved in a seriesof contests, actual or latent. This perspective is consistent with a view ofknowledge creation as contested, distributed and mediated (e.g. Blackler 1995;Orlikowski 2002). We attempt to capture the scope of the appropriation regimein figure 1, which depicts the characteristics of the appropriation regime(described below), and how these are affected by the interests of the individualand the organization.Kamoche and Mueller (1998, 1054) suggest that ‘the HRM debate shouldrefocus interest on knowledge-creation and more importantly, how to utilizeknowledge in the organizational activities through continuing processes ofabsorptive learning beneficial to the individual and the organization’. Theynote that the extent to which organizations can absorb ‘HR value’ will increas-ingly depend on whether people can also appropriate such value throughopportunities to acquire and utilize knowledge, as well as the equitable distri-bution of benefits arising therefrom. We argue here that the appropriationregime needs to be elaborated to take account of two important dimensions.The first one is the role that individuals play in creating knowledge in thefirst place, since much of the current literature appears to treat the emergenceof knowledge as relatively unproblematic, almost as though knowledge mate-rializes from thin air. In particular we are referring to the kind of discretionindividuals have over the work process. Typically, appropriation refers to thedistribution of ‘rents’ with little debate as to how such rents are generated in thefirst place. In reality, it is about the contests, real or latent, that the individual(s)Managing people in turbulent times29The changing face of the appropriation regimeFigure 1The appropriation regime in HRM Organizational discretionary pressures Creation and utilization of knowledge Contests over processes Generation of ‘rents’ and other benefits Contests over mechanisms Distribution of ‘rents’ and other benefits Contests over ‘outcomes’ Individual discretionary pressures APJHR_44_1_Kamoche. qxd 27/01/2006 2: 59 PM Page 29 at COLUMBIA UNIV on April 1 5, 201 4apj.sagepub.comDownloaded from and organization engage in, for discretionary control over the knowledgemanagement process, which includes how benefits from knowledge creationare distributed. In figure 1, we refer to these as ‘discretionary pressures’. Wecontend here that the appropriation regime begins with the processes throughwhich knowledge is created, hence the ‘front end’ or the ‘how’ question in theappropriation regime. In figure 1 we refer to these as ‘processes’. The ‘frontend’ includes employee autonomy and discretion in decision-making (including‘empowerment’), individual innovativeness and, where appropriate, choice overthe use of tools and technologies. Innovativeness is particularly importantbecause it provides for voluntary individual input and though its realizationmight depend on a facilitatory organizational culture, it does entail an elementof choice on the part of the individual.The second important dimension relates to what it is people are actuallyappropriating – i.e. the ‘what’ question at the ‘back end’, which we describeas ‘outcomes’. Kamoche and Mueller (1998) frame this issue in terms ofperceived opportunities to acquire and utilize knowledge, achieve sustainablelearning and the equitable distribution of benefits, which typically includecompensation and associated employment benefits. We suggest that the scopeshould be extended to include a wider range of claims the employees mightbring to the employment relationship, including the need for fair treatmentand job security. Between these two tiers we include the ‘mechanisms’ throughwhich rents and other back end ‘outcomes’ are generated, which refers to howexactly work is organized and the knowledge management process structured,including job design, and how people are managed.We do not conceptualize the appropriation regime and the associatedemployment relationship simplistically as a zero-sum game. However, we donot rule out a role for opportunism and self-interested behaviour among therelevant parties. Hence we differ from Nahapiet and Ghoshal (1998) whopropose a sharp distinction between transaction cost theory and knowledgemanagement. We argue here that the terrain upon which claims and counter-claims (be they tacit or explicit) are traded becomes more contested in aneconomic downturn when the threat of unemployment intensifies and firmsface the risk of knowledge spillage resulting from involuntary employeeturnover. From the point of view of the organization, it becomes critical toachieve the selective retention of high performers while those perceived asunderperforming are likely to see their positions sacrificed through cost-cutting. Thus the organization’s comparative discretion in the appropriationregime is enhanced because the majority of employees would be happy just tohave a job in times of high unemployment.The organization is also likely to step up efforts to contain dysfunctionalknowledge spillage, e.g. through a move toward needs-based, firm-specifictraining, increased surveillance, and codification of knowledge to reducereliance on individual high performers. These resource and mobility barriers(see also Teece 1986) are also likely to result in more use of teamwork and the30Asia Pacific Journal of Human Resources2006 44(1 )APJHR_44_1_Kamoche. qxd 27/01/2006 2: 59 PM Page 30 at COLUMBIA UNIV on April 1 5, 201 4apj.sagepub.comDownloaded from absorption of knowledge within organizational routines. Individuals thereforefind they have to work more closely with team members and no one particularindividual has discretion over an entire process or knowledge base. Thisinvolves the use of isolation mechanisms to prevent knowledge spillage(Liebeskind 1997). We theorize that by gaining more control over the how‘front end’ of the knowledge creation process, the organization strengthens itsappropriative capability at the what ‘back end’. The operational interdepend-ence between team members coupled with highly codified work practicesensures that the individual’s comparative discretion and ipso facto that of theorganization are realigned in such a way as to enhance organizational appro-priation. We analyze the changing configuration of the constitutive elementsof the appropriation regime with particular reference to the management ofHR during the economic downturn in Hong Kong.In the mid-1990s, GDP in Hong Kong grew by an annual average of 5%and above. At the height of the economic turbulence (late 1990s and the firstcouple of years into the new millenium), it remained stagnant at slightly above0%, or negative. During that time, unemployment was as high as 7–8%, afterdecades of full employment, and the precarious dependence on the USeconomy through trade and a currency peg meant that the vicissitudes of theUS economy impinged directly on Hong Kong’s economic prospects. HongKong inherited an economic and business infrastructure from the Britishcolonial administration which rested on high property and wage costs which,in the face of the global recession, made it extremely expensive to do businessin Hong Kong. As a result, many businesses relocated altogether or transferredtheir factories and other operations to cheaper locations like mainland China.These are some of the factors that fueled the economic turbulence in theterritory. The concomitant external competitive pressures and the internalpressures for efficiency continued to impact heavily on the very survival ofmany Hong Kong businesses, forcing managers to re-evaluate their approachto the management of people. In an analysis of three case-studies, we examinehow organizations pursued a realignment of the appropriation regime throughchanges in human resource practices.This paper reports on part of a larger study which began in 1999 and whichsought to characterize, inter alia, the challenges of managing people andknowledge appropriation in the turbulent and uncertain environment in theSouth China region. For this discussion we focus on Hong Kong and selectthree case-studies of the most usable data. Though fairly diverse contextually,these case-studies provide a fascinating opportunity to capture the dynamicsof knowledge appropriation in addition to the theme of managing in turbulenttimes. Due to the nature of the phenomenon under investigation, coupled withthe fact that much of the knowledge in question is tacit, it was decided to adoptManaging people in turbulent times31MethodAPJHR_44_1_Kamoche. qxd 27/01/2006 2: 59 PM Page 31 at COLUMBIA UNIV on April 1 5, 201 4apj.sagepub.comDownloaded from a detailed case-study approach allowing the use of qualitative techniques inorder to gain in-depth knowledge of a process as opposed to capturing a snap-shot at a point in time (see also Ragin 1994). This marks a departure from HRstudies which place more emphasis on the quest for statistical correlations andhypothesis testing. However, an analysis of the results of many of these typesof studies found them to be far from conclusive (e.g. Wright and Snell 1998).One possible reason for this ambiguity is that many of the measurementmethods in use tend to focus unduly on financial measurement systems andstandard transaction-based accounting, rather than the ultimate purpose(Boudreau and Ramstad 1997).The choice of cases is representative of the major industries in theterritory, and the specific companies were first identified opportunisticallythrough trusted contacts. This is not an unusual way to seek access in HongKong where the high-pressure business environment does not typically permitthe sort of access sought through random sampling, especially where theresearch involves interviewing and observation. According to Easterby-Smith,Thorpe and Lowe (1994), a small number of cases is adequate when theresearcher seeks generalizability at the level of theoretical propositions ratherthan populations/universes. The analysis was guided by replication rather thansampling logic (Dyer and Wilkins 1991; Eisenhardt 1989; Yin 1994), andsought to critique and extend existing theory with particular regard to thenature of knowledge appropriation within the HRM domain.We triangulated data through multiple research methods consistent withcase-study research. These included in-depth interviews based on a semi-struc-tured questionnaire, analysis of documentary and other archival materials andwhere appropriate, observation of employees at work. This approach strength-ened the grounding of theory while enhancing the reliability of the data(Eisenhardt 1989). Interviews were conducted with senior and middle levelexecutives as well as with line managers, and at least one HR executive in eachfirm. The target was at least three informants per organization. Respondentswere asked questions about the effect of the economic downturn on decision-making and management style; HR initiatives and activities (e.g. changes incompensation and training); organizational culture and its effects on HRpractices. No questions were asked about appropriation. Using standard case-study protocol, respondents were asked open-ended questions followed byprobing questions. The interviews lasted about 60 to 90 minutes each. Theywere taped and transcribed. Field notes were made during the interviews as aback-up in the event of equipment failure as well as to record other emergentimpressions. From the interview transcripts, informants’ views were corrob-orated against each other, and double-checked against the field notes, thushelping to further ensure the integrity of the data. For a period of time afterthe fieldwork, contact was maintained with the informants in order to obtainfurther information and clarification as appropriate. The data were analysedusing inductive techniques in which the transcribed responses were coded by32Asia Pacific Journal of Human Resources2006 44(1 )APJHR_44_1_Kamoche. qxd 27/01/2006 2: 59 PM Page 32 at COLUMBIA UNIV on April 1 5, 201 4apj.sagepub.comDownloaded from case, interview number and type of question, which facilitated the depictionof common themes and insights as a distinct and unique picture emerged ofthe key characteristics in each case. These characteristics were iterativelychecked against the data to ensure consistency. The three cases and the insightsthey generated are summarized below.The three companies discussed below are taken from the pharmaceutical,banking and textile industries. All three cases share in common a distinct shiftfrom a more traditional appropriation regime which appeared to favour theindividual, to a new regime in which the organization is the main beneficiary.In the analysis that follows we find that this transition was triggered by acombination of internal pressures for efficiency and external competitivepressures, the key features of which are depicted in figure 2.Managing people in turbulent times33Figure 2The shift in the appropriation regimeCase Prior appropriation regime Trigger for changeNew appropriation regimeCompetence modelCommunication of company goalsCodified procedures for HR andstandardization of processesPower taken away from fiefdoms‘Innovative/energetic’ cultureCorporate image revampStandard HR procedures and firm-specific trainingComputerization to eliminate subjectivity Search for ‘open-minded’ and adaptable staffTeamwork as an alternative toindividual-based networksAppropriation through persuasion‘The system’Formalized teamwork to replaceoperations through personal relationsCodified knowledge into process andtransaction recordsSystematic knowledge sharing toenhance interdependencyFirm-specific on-the-job trainingLoss of managerialcontrol over fiefdomsHeightenedcompetitive pressuresIll-advised investmentsDisillusionment withthe conservativeculture in the face of the economicdownturnLoss of key personnelLoss ofcompetitiveness due to knowledge spillageand economicdownturn‘Traditional system’ ofrelationship managementDecisions and power evolvedround key individuals andtheir acolytes‘Excessive’ individualautonomy Networks and personalaffiliationsConservative culture Low-trust climateAuthoritative leadershipDecision-making throughpersonal relations andprivileged informationRampant job-hopping leadingto knowledge spillageDisruption of customerrelationsUnreliable and fragmentedstock of knowledge123Three illustrative case-studiesAPJHR_44_1_Kamoche. qxd 27/01/2006 2: 59 PM Page 33 at COLUMBIA UNIV on April 1 5, 201 4apj.sagepub.comDownloaded from Case 1The case 1 company is in the vision, surgical and pharmaceutical industry,providing vision care, eyewear and a wide range of concomitant products. Ithas been established in Hong Kong since 1970. The company is a marketleader and has previously enjoyed increasing market penetration. However,during the economic downturn, competition has intensified and although thecompany thinks of its products very much as necessities, growth has slowed.The economic downturn definitely brought about a new discipline to keepoperational costs down, save money and improve efficiency.Management style was previously characterized as ‘a traditional systemof relationship management’ where everything revolved around key individ-uals and the network of relationships among them. This system permittedindividuals an inordinate amount of discretion and power which was notalways applied in the interests of the organization. Managers did not, at thetime, mind because networks generated results, although they were not neces-sarily efficient, and were often difficult to control. So long as they generatedprofits, these in-group networks were virtually left to their own devices. Fromthe point of view of our conceptual model, these networks enjoyed a relativeadvantage in the appropriation regime but were tolerated by managementbecause they delivered results. As one respondent said:People had a lot of autonomy. We didn’t bother them or try to control themtoo much … in fact some managers were very hands-off. But now we findclose networks and too much autonomy create their own problems and thestyle has to change, otherwise the company loses, because we can’t controlwhat they are doing, and we don’t know what the real costs are.The ‘traditional approach’ came to be seen as inadequate and manage-ment introduced a competency model in the mid-1990s. Managers wererequired to identify various core competencies that were to be used to improveselection decisions. The idea was to move away from the tendency to relyprimarily on education and experience as selection criteria. Depending on thejob, these competencies range from account management and businessmanagement to adaptability and flexibility, and apply to the professional levels,from supervisor and above. Managers are also now required to prepare a‘performance plan’ for every subordinate, spelling out their performanceexpectations for the following year. This plan also serves as a tool of commu-nication, development and career growth.The HR department also began to formulate the questions to be usedduring selection interviews and performance appraisals in order to eliminatesubjectivity and facilitate the codification of knowledge. This is an improve-ment on the previous practice in which interviews followed no particularformat and the questions asked were often at the whim of the recruiting34Asia Pacific Journal of Human Resources2006 44(1 )APJHR_44_1_Kamoche. qxd 27/01/2006 2: 59 PM Page 34 at COLUMBIA UNIV on April 1 5, 201 4apj.sagepub.comDownloaded from manager. The current standardization is seen as a way to eliminate wastefulpractices, harmonize selection practices and improve the quality of new hires.An additional important outcome of the economic downturn is that managersare now compelled to provide detailed and accurate feedback on performanceappraisal, aiming at both improving performance and facilitating personneldecision-making. The HR manager reported that in the previous era of abooming economy, line managers saw little reason to make tough decisionsbecause the company was making money anyway. She reported that: ‘In thepast, managers did not give candid feedback to poor performers because theydid not want to look like bad guys. Managers tried to be nice, very lenient,grading everyone good, or excellent’.They also avoided giving negative feedback in order not to affectworkplace relations or create animosity among the networks of acolytes whocirculated around high performers. The performance plan is also expected todrive changes in the training practice which was previously largely absentbecause managers did not believe employees would be committed to attendingtraining programs (except for sponsorship to certain approved courses thatemployees themselves identified, including the occasional MBA). The fact thatin the past there was ...