The use of personnel control in the form of selection and placement in result-‐
oriented organizations
Christiaan Rozema s2042436
MSc BA Organizational and Management Control
Abstract:
Literature states that management control systems should complement each other in obtaining objectives. Additionally, literature states that personnel control in the form of selection and hiring of employees is frugal and an effective manner for organizations to obtain their objectives. However, empirical research to the use of personnel control in the form of selection and hiring of employees is scarce. Moreover, empirical research to the complementing role of personnel control is additionally scarce. This paper therefore makes an attempt to reduce this scarcity. In order to do so, employees of different Dutch home care facilities were interviewed: five workers in the nursing department and five workers in the HRM department. Moreover, vacancies from between ten and seventeen years old were compared to present time vacancies, in order to see to what extend a change is visible in the recruitment of new personnel. The results show that personnel control in the form of selection and hiring is moderately used in the Dutch home care.
Moreover, the selection and hiring of employees is used to attain a change towards a more result-‐oriented organisation and thus complements other forms of control. Future research should extend the knowledge about personnel control by doing research in other sector of the economy.
Supervisor: Dr. B. Crom Co-‐assessor: Dr. M.P. van der Steen
Date: 01-‐18-‐2016 Word count: 21.794
(including references and appendices)
Keywords: New Public Management, Management Control Systems, Personnel Control,
Selection and Placement, Home Care
Preface
The paper before you marks an important 'chapter' in my study career. I enjoyed working on this paper because it helped me better understand the working of personnel control and therefore management control systems. This paper would not have been as it is without the help of a number of people, which I would like to thank below.
Firstly, I would like to thank my supervisor Ben Crom for his great feedback during the writing process of this paper. Secondly, I would like to thank Jordi Visscher for his great linguistic feedback and advices. Thirdly, I would like to thank the respondents one by one. Without their great answers this paper had not been possible.
Fourth, Ludovico Einaudi and Mateo Pascual are thanked for the provision of great background music. And last, but definitely not least, I would like to thank Elsa Veurink for her great feedback as well as her (mental) support.
I hope you enjoy reading this paper.
Groningen, January 2016
Christiaan Rozema
Table of Contents
Preface ... 2
Introduction ... 4
Theoretical Background ... 7
Organizational Control and Management Control Systems ... 7
Framework of Management Control Systems ... 10
Personnel Control ... 12
Propositions ... 18
Methodology ... 20
Data collection ... 20
Reliability ... 24
Validity ... 25
The Dutch home care ... 26
Results ... 26
Interviews ... 27
Action Control ... 27
Results Control ... 28
Change in results and action control ... 34
Change in selection and placement ... 34
Training ... 36
Vacancies ... 36
Conclusion and Discussion ... 38
Conclusion ... 38
Discussion ... 39
Limitations and future research ... 40
References ... 41
Appendix 1 – Interview Protocol Medewerker Personeelszaken Nederlandse Thuiszorgorganisatie (Dutch) ... 46
Appendix 2 – Interview Protocol Personnel Manager Dutch Home Care Facility (English) ... 53
Appendix 3 – Interview Protocol Werknemer Nederlandse Thuiszorgorganisatie (Dutch) ... 60
Appendix 4 – Interview Protocol Employee Dutch Home Care Facility (English) ... 65
Appendix 5 – Geïnformeerde toestemming (Dutch) ... 70
Appendix 6 – Informed Consent (English) ... 71
Appendix 7 – Coding table of the interviews ... 72
Appendix 8 – Example of coding (Atlas.ti) ... 73
Appendix 9 – Kewords looked for in vacancies ... 74
Appendix 10 – Vacancy taken from “De Feanster” (april 10, 2001) ... 75
Appendix 11 – Vacancy from the present time ... 77
“If I would apply now for the same job, they probably would not hire me”
(Social worker in 2015) Introduction
Since 1980 a new trend emerged in the agencies of the public sector (Pollit, Van Thiel and Homburg, 2008). This trend is called New Public Management (NPM) and can be marked as a management idea which focusses on the reformation of the government and the public sector (Pollit et al., 2008). This management technique is based on implementing common practices of the private sector into the public sector. Therefore emphasis is laid on efficiency, effectiveness and quality and it tends to make public organizations more result-‐oriented (Noblet, Rodwell and Mcwilliams, 2006). Because of this emphasis, NPM makes use of control that are focused on results instead of processes and creates explicit standards and measures in order to measure performance (Hood, 1991). In addition, competitiveness between different companies in the public sector is being encouraged in order to obtain lower prices and better standards (Hood, 1991).
NPM can nowadays be seen in the healthcare sector in the Netherlands. Before 2006 the Netherlands had a two-‐tiered healthcare system where the majority of the population was participating in a government funded healthcare fund and people with a higher income bought their own insurance through private insurers (Perrot, 2008; Leu, Rutten, Brouwer, Matter and Rütschi, 2009). However, as is the case with many industrialized nations, the costs of healthcare are rising dramatically in the Netherlands (Perrot, 2008). In order to attempt to control these costs the Dutch implemented a new healthcare system, which could be seen as a regulated, free market system, replacing the two-‐tiered model (Perrot, 2008). The renewed model states that every citizen older than eighteen years should apply for basic health insurance by private insurers (Perrot, 2008). In turn, the insurers have to accept all applicants, without discrimination for this basic health insurance (Leu et al., 2009; Perrot, 2008). Each insurer can determine its own premium (Leu et al., 2009). It may, however, not vary between different applicants (Leu et al., 2009). As a result, a premium competition has commenced and insurers are competing by differentiating themselves in premiums (Leu et al., 2009). In addition, citizens can apply for supplementary healthcare policies in order to be insured for care that is not included in the basic health insurance (Perrot, 2008; Leu et al., 2009).
According to Perrot (2008) and Leu et al. (2009) health insurers in the Netherlands are nowadays able to negotiate 20 percent of hospital-‐provided care. In addition, Rosenau and Lako (2008) state that insurers have an incentive to negotiate with healthcare providers. Perrot (2008) states that these negotiations are forcing hospitals to increase their internal efficiencies. According to Perrot (2008) insurance companies are seeking out healthcare providers that meet the quality expectations together with being able to reduce efficiently and with lower costs. Perrot (2008) argues that these changes could be marked as an incentive for providers to increase the quality of care, reduce healthcare costs and improve efficiency. These aforementioned changes in the way the healthcare providers in the Netherlands ‘do business’ clearly mark a link with NPM, since NPM is focussed on results and goals used in the public sector (Hood, 1991).
Different management control system with greater emphasis on output control can be used in order to obtain this ‘result-‐and-‐goal-‐oriented system’ (Hood, 1991). That is, management control systems will shift focus from procedures towards results. One could state that a different mix of management controls systems is being implemented.
Groot and Budding (2008:11) state that “the recent NPM reforms have certainly changed the way the public sector operates and have become a permanent characteristic of public sector management”. In addition, they argue, “it still remains unclear how and to what extent specific (clusters of) NPM reforms actually changed public sector decision making, activities and performance” (Groot and Budding, 2008:11). Noblet et al. (2006) investigated how managers were able to deal with the consequences of NPM mainly on the level of the employee. Noblet et al. (2006:350) state that “NPM is a form of public sector management present in many countries' public sector agencies around the world and is increasing in its presence” and that “future research may wish to take this study [how managers can deal with the consequences of NPM on the level of the employee]
further and to investigate the impact on employees of varying degrees of NPM” (Noblet et al., 2006). Additionally, Noblet et al. (2006:336) state that “employees are central to the success of any organization, particularly service-‐oriented public sector agencies”.
Moreover, about 70 percent of the costs of a service-‐oriented organization are personnel costs (ZINN, 2015; Espria, 2015).
Research has been done on the effect of changes towards NPM from the employees’ perspective (Scharitzer and Korunka, 2010) and on the evaluation of NPM.
However, the effect of NPM on selecting and hiring of personnel has not been investigated. Therefore, research is needed which will extend our knowledge of the effect of NPM on personnel control, in the form of selection and hiring. This paper will make an attempt to extend this knowledge by examining the effect of a more result-‐
oriented management control system in ways of employee recruitment.
In order to examine this effect, this paper will make use of the following research question: “To what extent is personnel control, in the form of selecting and hiring of personnel, being used as a management control system in order to attain a change towards a result-‐oriented organization?”
Qualitative research is executed in order to attain an answer to the above-‐stated research question. This qualitative research is realized by conducting semi-‐structured interviews at Dutch home care facilities in the nursing department. Personnel managers and personnel of these facilities are interviewed. Additionally, vacancies in the Dutch home care sector are checked in order to see whether or not there is a visible shift in the recruitment of personnel which shows that personnel is nowadays recruited for being result-‐oriented. The Dutch home care sector has been subject to change for many years, and as a result commercialization appears in this sector (Geerts, 2006; Kunneman and Slob, 2007). This commercialization is characterized by situations where people are talking about ‘production’ and where targets seem to be more important than the humanity of home care (Geerts, 2006; Kunneman and Slob, 2007). This sector therefore makes an excellent opportunity to examine a change towards a more result-‐oriented organization.
This research serves three objectives. Firstly, an attempt is made to create a better view of the deployment of personnel control in the form of selecting and hiring, and therefore to create a better view of the use of this personnel control (Merchant and Van der Stede, 2012). Secondly, it serves the field of management control systems since personnel control is a form of management control systems (Merchant and Van der Stede, 2012). Lastly, effects of NPM towards the selection and hiring of personnel are researched. Additionally, this paper will therefore make a contribution to the effects of NPM towards personnel control and thus towards management control systems.
Although, the hope for this paper is to be a great contribution to the field of management control systems as well as to the field of NPM, this contribution will merely be a the
start. Therefore, it will be needed that subsequent studies are executed in order to extend this research.
The following structure is used throughout the paper: first, definitions and explanations of the most important concepts of this paper are given in order to clarify the main content of this paper. An extensive section on the subject of personnel control is included in this section in which theoretical as well as empirical work is stated, making clear what is already known on the subject. In addition, propositions are developed. Thirdly, the research methods are explained. In this section is made clear how the empirical evidence for this research is acquired and how the research is executed in order to create a reliable and controllable research. In the fourth section the results of the interviews and the examination of the vacancies are indicated. Lastly, the concluding section is stated. In this section an answer on the research question is given.
Additionally, limitations as well as suggestions for further research are indicated.
Theoretical Background
This paper will elaborate on the used concepts, making sure that these terms are clear and to create a complete image of the field that is discussed.
Organizational Control and Management Control Systems
In order to generate a complete image of what personnel control contains it is first needed to have a proper view on management control systems. In order to do this, this paper will first elaborate on the concept of organizational control, whereupon it will describe the concept of management control systems (MCSs). The enlightenment of these concepts is built on former written literature.
Ouchi (1979:833) states “the problem of organization is the problem of obtaining cooperation among a collection of individuals or units who share only partially congruent objectives.” With this statement Ouchi describes the problem of organizational control. Flamholtz, Das and Tsui (1985:36) define organizational control as: “attempts by the organization to increase the probability that individuals and groups will behave in ways that lead to the attainment of organizational goals.” Additionally, they state, “its [control] intent is to influence people to take actions and make decisions
which are consistent with organizational goals” (Flamholtz et al., 1985:36). Moreover, Anthony (1965) uses the term management control to define a mostly similar phenomenon. Anthony (1965:17) states “management control is the process by which managers assure that resources are obtained and used effectively and efficiently in the accomplishment of the organizations objectives.” It can thus be said that control has an orientation on goal congruence (Flamholtz et al., 1985; Anthony, 1965; Ouchi, 1979).
The definition of Flamholtz et al. (1985) of organizational control and Anthony’s (1965) definition of management control are practically the same. Both definitions state that something needs to be influenced in order to enhance goal congruence. The main difference is that Flamholtz et al. state that organizational control is about influencing people, whereas Anthony states that management control is about obtaining the right resources and using them in a constructive way for the organization. One would however argue that people are a form of resources. In this light this paper defines organizational control as the process used by the organization to enhance goal congruence among individuals and groups working for an organization in order to enhance the accomplishment of organizational goals (Ouchi, 1979; Anthony, 1965;
Flamholtz et al., 1985). Organizational control thus mainly has an orientation on goal congruence (Flamholtz et al., 1985; Anthony, 1965; Ouchi, 1979)
Flamholtz et al. mark that control systems can be used for the attainment of this goal congruence. They state that “control systems are techniques and processes to achieve goal congruence and may be designed for all levels of behavioural influence:
individuals, small groups, formal subunits and the organization as a whole” (Flamholtz et al., 1985:36). In addition, they state, “the raison d'etre of control systems is to increase the likelihood that people will internalize organizational goals and thus behave in ways which lead to the achievement of these goals” (Flamholtz et al., 1985:36).
Malmi and Brown (2008:290) state that “those systems, rules, practices, values and other activities management put in place in order to direct employee behaviour should be called management controls. If these are complete systems, as opposed to a simple rule, then they should be called MCSs.” In addition, they state that “management controls include all the devices and systems managers use to ensure that the behaviours and decisions of their employees are consistent with the organization's objectives and strategies, but exclude decision-‐support systems” (Malmi and Brown, 2008:290).
In a similar way, Abernethy and Chua (1996:573) define an organizational control system as “a system that comprises a combination of control mechanisms designed and implemented by management to increase the probability that organizational actors will behave in ways consistent with the objectives of the dominant organizational coalition.”
Lastly, Merchant and Van der Stede (2012:6) state that “designed properly, MCSs influence employees' behaviours in desirable ways and consequently, increase the probability that the organization will achieve its goals. Thus, the primary function of management control is to influence behaviours in desirable ways. The benefit of management control is the increased probability that the organization's objectives will be achieved.”
Although Flamholtz et al. (1985) use the term control systems, Malmi and Brown (2008) use the terms management control systems and management controls, Abernethy and Chua (1996) use the term organizational control system and Merchant and Van der Stede (2012) use the term management control systems, their definitions are mostly similar to each other and thus it can be said they all describe the same phenomenon. This paper therefore makes use of these above-‐stated definitions in order to create a definition of this phenomenon, which is called ‘management control systems’
throughout this paper.
All of the above-‐stated definitions have a couple of aspects in common. Firstly, all of them name the objectives (or goals) of the organization as the main subject. Secondly, the above-‐stated definitions all state that behaviour of organizational actors (employees) is influenced in order to attempt attaining these above-‐mentioned objectives. Lastly, an attempt is made to create goal congruence among the organizational actors in the direction of the organizational goals. So, based on the above-‐
mentioned aspects, this paper defines management control systems as systems which attempt to increase the probability that the goals of the organization will be accomplished by influencing the behaviour of the organization’s actors in the direction of the achievement of the organizational goals (Flamholtz et al., 1985; Malmi and Brown, 2008; Abernethy and Chua, 1996; Merchant and Van der Stede, 2012).
So, in summary, it can be said that organizations have a problem in obtaining goal congruence among individuals working in the organization towards the organizational goals. This is called the problem of organizational control. In order to deal with this
problem of goal congruence organizations are creating management control systems (Ouchi, 1979; Flamholtz et al., 1985; Anthony, 1965;, Malmi and Brown, 2008;
Abernethy and Chua, 1996; Merchant and Van der Stede, 2012).
Framework of Management Control Systems
Defining the concepts of ‘organizational control’ and ‘management control systems’ is not enough to create a complete image of what comprises management control systems, since management control systems exist in many forms (Malmi and Brown, 2008;
Merchant and Van der Stede, 2012; Ouchi, 1979; Chenhall, 2003; Merchant and Otley, 2007). Many authors have created typologies or frameworks of management control systems (Merchant and Otley, 2007; Merchant and Van der Stede, 2012, Ouchi, 1979, Malmi and Brown, 2008 and Simons, 1995). However, not all frameworks include personnel control, which is the focus of this research, as an exclusive form of control (Malmi and Brown, 2008; Simons, 1995; Ouchi, 1979). This paper will therefore make use of the framework developed by Merchant and Van der Stede (2012), since this framework does include personnel control as an exclusive form of control. This framework will be explained below.
The framework of management control systems developed by Merchant and Van der Stede (2012) makes a distinction between results, action, cultural and personnel control and is called the object-‐of-‐control framework (see table 1 for an overview) (Merchant and Otley, 2007; Malmi and Brown, 2008;).
According to Merchant and Van der Stede (2012) ‘results control’ is often a great part of the management control systems of an organization and focuses on the results of the work done by the employees of an organization. So instead of focusing on the employees’ decisions and actions, results control focuses on the desired outcome and employees are encouraged to make those decisions and take those actions that achieve the best possible outcome for the organization (Merchant and Van der Stede, 2012).
Results control thus influences the decisions of the employees by making them aware of the outcome of their actions and decisions.
Where results control focuses on the outcome and the emplyees’ action and decision themselves, ‘action control’ does (Merchant and Van der Stede, 2012).
Merchant and Van der Stede state that action control is used by organizations in order to
make sure that employees do perform the desired actions and do not perform the undesired actions. This form of management control is thus focusing on the actions of the employees and the object of control is therefore the actions.
Merchant and Van der Stede (2012) argue that ‘cultural control’ is maintained by organizations in order to have the employees of an organization influence and control each other’s activities. They state that this is done by peer pressuring employees who do not exactly behave according to the culture of the organization. That is, peer pressure is exerted on those employees that do not act conform the values and norms of the group.
By doing this, the organization tries to influence the behaviour of its employees (Merchant and Van der Stede, 2012).
Lastly, Merchant and Van der Stede (2012) argue that ‘personnel control’ is created in a way that makes sure that employees will achieve their tasks on their own.
With properly created personnel control this will be achieved because employees get a certain amount of satisfaction from doing their work and because they are hard-‐working and experienced employees (Merchant and Van der Stede, 2012). In addition, Merchant and Van der Stede state that personnel control can help the employees understand what it is the organization needs and it can help creating the right resources for each employee. Moreover, personnel control can enhance the probability that employees apply “self-‐monitoring”. Self-‐monitoring means that an employee wants to execute its job properly (Merchant and Van der Stede, 2012). Since personnel control is the main subject of this paper it will be explained in more detail below.
According to Merchant and Van der Stede (2012), Ouchi (1979) and Abernethy and Brownell (1997) not every form of control is evenly well applicable in the same situation or organization. That is, for example, results control can be effective in a manufacturing organization, while personnel control may be less effective in the same organization.
Control system Description Example
Results control Focuses on the results of the work done by employees;
employees' work is measured through
Pay-‐for-‐performance;
evaluation based on production; budgets
outcomes.
Action control Focussed on actions and decisions of employees;
used to make sure that employees do (not) perform the (un)desired actions.
Limited access to certain areas; restriction on decision making authority
Cultural control Employees of an
organization influence and control each other's
behaviour done by peer pressure.
(un)written rules;
organizational values; codes of conduct
Personnel control Makes sure that employees achieve their tasks on their own because they are experienced and have the right capabilities.
Traineeship (training);
screening
Table 1: Object-‐of-‐control framework (Merchant and Van der Stede, 2012) Personnel Control
According to Merchant and Van der Stede (2012) personnel control is created in order to increase the probability that employees perform their tasks by themselves. This is done by employing individuals who have a good understanding of what their job contains and because these employees attain a certain amount of satisfaction from doing their job (Merchant and Van der Stede, 2012). Merchant and Van der Stede argue that personnel control can be implemented by three mechanisms, namely the selection and placement of employees, the training of employees and the design of the job in combination with the provision of the right resources. They state that these mechanisms will increase the probability that the job will be done correctly. These mechanisms are elaborated below.
Selection and placement of employees. Merchant and Van der Stede (2012) state that the selection and placement of employees is mainly about the conformity of the
right skills with the job requirements. In addition, they argue that organizations dedicate ample time and effort in acquiring the right employees. They state that much literature has come up with different possible predictors of job success, such as the former experience of the applicant, education, personality and social skills. Additionally, they mark that the processes to acquire the right person for a job could be expensive, however this will be much less than the costs incurred by hiring the wrong person.
Training of employees. Training can give employees information about what is expected of them and how their tasks can be performed in the best possible way, according to Merchant and Van der Stede (2012). They state that training may help employees in better understanding the contents of their job. And, therefore, training can have an additional positive motivational effect, since employees are more interested in a job they have better understanding of (Merchant and Van der Stede, 2012). Training thus enhances both the employees’ skills as well as their motivation. Merchant and Van der Stede state that training can be executed in two ways, through formal training (e.g.
classes) and informal training (e.g. mentoring).
Job design and the provision of the right resources. The last mechanism of personnel control that Merchant and Van der Stede (2012) describe is that of job design and provision of the right resources. They argue that this is done by designing a job in such a way that employees have a high probability of success in doing their job. That is, for example, the degree of complexity of a job. In addition, organizations can provide their employees with all kinds of job-‐specific resources in order to have the employees do a decent job (Merchant and Van der Stede, 2012). See table 2 for an overview of the forms of personnel control according to Merchant and Van der Stede (2012).
Form of personnel control Description Example
Selection and placement of employees
Corresponding the right skills with job
requirements.
Screening, headhunting
Training of employees Gives information about job tasks and how they can be performed; can be executed in two ways: formal and
Traineeship, classes, mentoring
informal training.
Job design and the provision of the right resources
Designing a job in a way that generates a high probability of success;
provision of resources in order to help employees do a decent job.
Decreasing the level of complexity of a job;
provision of equipment
Table 2: Forms of personnel control (Merchant and Van der Stede, 2012)
Merchant and Van der Stede (2012) state that there are three causes for the use of management control systems, which are called control problems. These can be classified as lack of direction, motivational problems and personal limitations. When employees simply do not know what is expected of them it can be argued that they have a lack of direction. In this case it is likely tasks are not performed as they should be, because employees do not know what they should be doing. Motivational problems occur because the organizational objectives are often different from the objectives of the employee due to self-‐interest of the employee. As a consequence employees sometimes act in their own interest while damaging the organization they work for. Lastly, employees can have certain limitations, which are specific to their personality. That is, employees can have a deficiency in, for example, competence, persistence or expertise.
These are called personal limitations.
Merchant and Van der Stede (2012) state that personnel control can deal with all of the above-‐stated control problems. However, not all forms of personnel control can equally deal with all the control problems. According to Merchant and Van der Stede the selection and placement of employees is able to deal with all of the above-‐stated control problems. That is, by hiring experienced employees a lack of direction can be counteracted and by hiring motivated people an organization is able to deal with the problems in motivation. Moreover, they argue that personal limitations can be worked with through the selection of employees who do not have any limitations in their specific line of work. The training of employees is able to deal with a lack of direction and personal limitations according to Merchant and Van der Stede. That is, with the right training provided to the employees an organization is able to easily give direction to tasks and make clear what is expected of its employees. In addition, by training
employees in the right manner training can provide them with valuable competences to work with and can in this way overcome personal limitations. Lastly, Merchant and Van der Stede state that job design and the provision of the right resources is only able to deal with one control problem: personal limitations. With the provision of the required resources some of the limitations that employees experience can be lessened (see table 3 for an overview of the above-‐stated).
Form of personnel control Control problem
Lack of direction Motivational
problems
Personal limitations
Selection and placement of employees
X X X
Training of employees X X
Job design and provision of the right resources
X
Table 3: Personnel control forms in relation with control problems (Merchant, 1998:130) Merchant and Van der Stede (2012) continue by stating that personnel control alone can be marked as satisfactory for an organization, since personnel control can by itself provide the right management control. They argue that personnel control can be used in ample situations and their costs are often lower than the costs of results or action control. In addition, personnel control creates fewer side effects, since it can be marked that they are less noticeable than other forms of control. Personnel control can thus have important advantages above results or action control. However, Merchant and Van der Stede conclude by saying that personnel control is seldom sufficient for an organization and that it is often needed to complement personnel control with other forms of control, such as results and/or action control, dependent on the situation.
Additionally, Ouchi (1979) mentions the control system of personnel control. He does not, however, refer to it as personnel control and only refers to two forms of personnel control described above, i.e. the selection and placement of employees and the training of employees. Regarding the selection and placement of employees he states that there are two ways to create good control over people. An organization can either
search and select the people whose skills fit the requirements of the job and company exactly, or it can select anyone that applies for a job and maintain a more noticeable form of control (e.g. action control) in order to get these people to do what is expected of them. He continues by marking that the search and selection of people may cost money.
However, if these people are selected properly they will be able do their job without any instruction and if these people are also selected for their motivation, they will probably be working hard without tight control. Both of these advantages will eventually save the organization money according to Ouchi. Additionally, he states that an organization that operates with a control system, mainly based on selecting and acquiring the right people, could expect high commitment of these people. Thus, it could be said that if the employees are selected based on their motivation and skills and the organization does a good job, there would be no need for other more noticeable control methods, since the employees and the organization have the same objectives, sharing goal congruence (Ouchi, 1979).
Regarding the training of employees, Ouchi (1979) states that organizations can only depend on the selection and placement of employees to a certain degree. Therefore, organizations need to utilize training programs. Ouchi defines two forms of training, namely formalized training programs and scholarships, which are executed during the performance of the job. The training of employees can be costly. However, when training becomes routinized, employee turnover becomes less of a problem. That is, employee turnover may be costly due to high costs associated with the search and selection procedures of employees. However, if an organization is able to hire all applicants, due to routinized and, therefore straightforward, training programs, employee turnover does not have to be very costly anymore. All in all, Ouchi thus mentions the same forms of personnel control as Merchant and Van der Stede (2012), with the exception of job design and provision of the right resources.
Another study that did research on the use of personnel control is that of Abernethy and Brownell (1997). Abernethy and Brownell empirically studied what the roles are of both accounting (e.g. results and action control) and non-‐accounting (e.g.
cultural and personnel control) forms of control in a setting that is characterized by research and development. They state that personnel control is a form of self and group control in an organization and that this form of control influences the type of individuals who work in an organization. Abernethy and Brownell mark that this can be done
through the selection and placement of people. They conclude their study by stating that management control systems in the form of personnel control enhance organizational effectiveness. This is particularly true in a situation that is not suitable for the use of accounting methods as a form of management control, due to the task characteristics, according to Abernethy and Brownell (see below for an elaboration on this).
Additionally, they argue that results and action control are not well applicable in situations where the number of exceptions in the tasks is high.
Abernethy and Brownell (1997) executed their study by drawing on a model developed by Perrow (1970) in order to analyse the influence of task characteristics on the effectiveness of different forms of control, including the personnel form of control.
The model developed by Perrow (1970) consists of two dimensions: ‘task analysability’
and ‘number of exceptions’ (Abernethy and Brownell, 1997). That is, tasks with a high analysability are tasks that have known procedures. On the other hand, tasks that have a high number of exceptions are tasks that have a high level of variety or have a certain amount of uniqueness to them. Tasks that have high task analysability as well as a low number of exceptions (e.g. a production plant producing standardized products) are expected to be easily controlled through formal administrative (accounting) controls (Perrow, 1970; Abernethy and Brownell, 1997). Thus, in terms of this paper, that would mean that the use of results and/or action control is a good way to maintain control in this situation. The complete opposite situation is one where the task analysability is low and the number of exceptions is high (Perrow, 1970; Abernethy and Brownell, 1997). In this situation control systems in the form of results and action control will not work.
However, control through the selection and training of personnel will be a good control mechanism in this situation. So, a management control system in the shape of personnel control would work as a good control system in a situation where the task analysability is low and the number of exceptions is high (Perrow, 1970; Abernethy and Brownell, 1997). Abernethy and Brownell do, however, not state that personnel control is not possible in a situation where the task analysability is high and the number of exceptions is low, they only state that results and/or action control are well-‐suited control systems to use in this situation.
Meerveld and Mast (2004) argue that employees who are employed in the field of home care work with protocols, (quality) guidelines and have a manner of work that could be described as systematic. This would thus imply that home care in the
Netherlands can be characterized by much routine and a low number of exceptions, otherwise it would not be possible to work systematically with protocols and guidelines.
Speaking in the terms of Perrow (1970) and Abernethy and Brownell (1997), the home care in the Netherlands can be characterized by high task analysability and a small number of exceptions. Taking the above-‐stated model of Perrow into account, it could therefore be argued that the Dutch home care will not make much use of personnel control, but is expected to be focused on the use of results and action control in order to control its employees instead, since these forms of control are well suited in this situation. However, the use of personnel control is not expelled, as stated above.
Propositions
The above-‐stated explanation derived from Abernethy and Brownell (1996) and Perrow (1970) in combination with Meerveld and Mast (2004) thus suggests that the Dutch home care sector is not making use of personnel control. However, the above-‐stated explanations of Merchant and Van der Stede (2012) and Ouchi (1979) suggest that organizations should devote a considerable amount of attention to the selection and placement of employees, since the right selection and placement of employees can be a relative frugal way to gain control over people in comparison with results and action control. This therefore results in a discrepancy.
Additionally, Malmi and Brown (2008) and Gerdin (2005) suggest that management control systems can complement each other. Moreover, Otley and Flamholtz (as mentioned in Haustein, Luther and Schuster, 2014) find that results and action control are only usable when they are complemented with personnel and/or cultural control. That is, results and action control can only be used effectively when they are used in combination with personnel and/or cultural control. All in all, according to Abernethy and Brownell (1996) and Perrow (1970), it could be argued that the Dutch home care section is only using results and action control and does not use any personnel control and therefore does not emphasis on selection and placement of employees. However, Merchant and Van der Stede (2012) and Ouchi (1979) suggest that the use of a strong process in the selection and placement of employees can be an inexpensive way to gain control over employees, which could be marked as the main goal of the Dutch home care section (Kunneman and Slob, 2007; Geerts, 2006).
Additionally, some authors found that management control systems could and should complement each other (Malmi and Brown, 2008; Gerdin, 2005; Haustein et al., 2014). It could therefore be argued that the Dutch home care facilities are using personnel control in the form of selection and placement as a form of management control in order to gain control over employees in an thrifty way and to complement their results and action control. The following propositions are used in order to find an answer to the research question stated in the introduction (proposition 1-‐4 are also depicted in figure 1):
Figure 1:The conceptual model of this paper
Proposition 1: The Dutch home care makes use of results and action control in order to obtain certain objectives.
Proposition 2: Task certainty increases the use of results and action control in order to obtain certain objectives.
Proposition 3: The Dutch home care makes use of personnel control in the form of selection and placement of employees in order to obtain objectives in an economical way.
Proposition 4: The Dutch home care makes use of personnel control in order to complement their results and action control.
Proposition 5: The emphasis on results and action control, as well as an orientation of results in the selection and placement of employees is stronger than fifteen years ago.
Since not much literature has been written about personnel control as a form of control, this paper will make an attempt to extend this knowledge by only researching the selection and placement of employees as a form of control. This is only a start, so further research is needed in order to investigate the other forms of personnel control.
In order to find to what extent these propositions are true, research is carried out. The next section describes how this research was conducted.
Methodology
The following section describes the methodology for this study. Firstly, the collection of the data is discussed along with the kind of research. Additionally, the measurement of the concepts is considered in this section. Secondly, reliability as well as validity are discussed. Moreover, the measurement of the concepts is considered in this section.
Thirdly, the Dutch home care is being elaborated on, in order to create a complete image of the field of research and the developments in this field.
Data collection
This study attempts to empirically find an answer to the research question stated in the introduction, “to what extent is personnel control, in the form of selecting and hiring of personnel, being used as a management control system in order to attain a change towards a result-‐oriented organization?” In order to do so, this study tends to empirically research to what extent the above-‐stated propositions are true.
To be able to study to what extent the above-‐stated propositions are true, qualitative research is done. This qualitative research is executed in three ways. One way to attain this qualitative research is by conducting interviews with personnel managers of different home care facilities in the Netherlands. In this way a perspective of the organization is obtained. Secondly, in order to review the perspective of the employee, interviews are conducted with employees of different home care facilities in the Netherlands. It is the attempt to reach employees who were hired a substantial time