Back to the future with Philpott

HR professionals do not just exist to make their employers more
successful.  Effective people management
can make the world a better place.  Stephen
Overell investigates John Philpott’s ‘Third Way’ HR

In 1913, when the Welfare Workers’ Association (ancestor of the Chartered
Institute of Personnel and Development (CIPD)) was born, the intention was to promote
the well-being of employees and ‘goodwill’ in industrial relations. Then in the
early 1980s, personnel, or human resource management as it became known,
rebelled against its pinko past, and went all titanium-edged and
business-focused. Everyone pretended to know what people strategy meant while
asserting the manager’s freedom to manage. And now the future of the HR
profession isÉ well, what exactly?

In an intriguing answer to this question, a new essay* by the CIPD’s chief
economist John Philpott has come up with the managerial equivalent of the Third
Way: effective people management not only makes organisations more successful,
but improves the quality of working life – "in the process raising the
material, social and psychological standard of living". HR, he asserts, is
about "the common good", not just the bottom line. It is concerned
with "shared-interest capitalism", not just the interest of

On all kinds of intractable social problems – such as productivity, the
gender pay gap, wage inequality, stress and discrimination, not to mention the
general social malaise – Philpott argues that people management has a
contribution to make that benefits the wider public interest. By aggregating
the actions of everyone involved in people management (line managers and HR
specialists), the common good emerges.

"What is significant from a common good perspective, is that the kind
of management needed to make the most of human assets also scores highest on
all the indicators that are found by economists and psychologists to make
workers happy: autonomy and scope for discretion, control over the pace of
work, a supportive climate, mutual trust, a dynamic atmosphere and
participation in decision-making," says Philpott.

The essay takes an eye-raising position on regulation. HR directors usually
feel that relationships at work are a matter for employees and employers, not
the state. By contrast, Philpott argues "the existence of market failures,
poor practice or downright bad practice provides a justification for government
action". Not too much, mind. It must be "proportionate and
appropriate". Yet he is keen to distance the HR profession from the grumpy
huffing and puffing on public policy of most business cabals in favour of a
more intelligent involvement. Thus he says the regulation of working time has
gone far enough; the way work is structured and the intensity of it are more
significant. Legislation on information and consultation may "bring
benefits", but should not hinder constant interaction between managers and

Essays are a form in which authors give free reign to their thoughts. And
this is provocative stuff. How will the institute’s nomenclature feel about
viewing the HR profession not just as helping organisations improve their
performance, but also as acting as custodians of the quality of working life?
How will practitioners – some of whom are still trying to lose the ‘welfare’
tag – feel about re-muddying their purpose in life?

The traditional problem with shared-interest capitalism was the question of
what happens when the interests of employers and the interests of employees
part company – as they so often do. Life is easier if you simply serve the
people who pay your salary. Isn’t it a bit too feel-good to be true that in the
routine business of producing goods and services you might also be gratifying
some fearsome abstraction called the common good? The messiah complex is a
dangerous delusion.

Nevertheless, restating the role of HR in indirectly aiding social policy
goals is a necessary development. There was a sense that the profession’s twin
hobbyhorses – being ‘strategic’ and proving the link between people management
and the bottom line – were cantering towards the end of the road. They were
making HR seem narrow and obsessive. The theory elaborated here is that the
miserably low take-up of combinations of high-performance work practices
explains many of the UK’s labour market problems – both the ‘business’ ones,
such as low productivity, and the more ‘social’ ones, such as the gender pay
gap. In fact, the essay suggests this distinction is false: the solution to
both is effective people management.

Philpott’s predicted future is a compelling one. It is patently obvious to
anyone who works that good management has a massive influence on how happy and
fulfilling working life can be. It is less obvious, but just as true, that the
attitudes of those who shape the broad culture of work can contribute to
progressive liberal democracy. It is time this dimension of HR was whispered once

An example? OK, how about disability? Smugness is the enemy of progress, so
it would not do to overstate things. But I think it is fair to say that it is
because of the Disability Discrimination Act, campaigning bodies such as the
Employer’s Forum on Disability, union agitation, the CIPD adopting a
pro-diversity stance and, most of all, HR professionals themselves insisting
that sensible questions are asked of candidates (ie, ‘do you have the skills to
do this job’) that a rapid shift in the culture of employing people with
disabilities has taken place.

So it’s back to the future, then. The good souls of the Welfare Workers’
Association will be twinkling from their graves.

*Perspectives: People management and the common good by John Philpott, CIPD,
Spring 2003.

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