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Samenvatting HR Business Game (761008-B6)
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- Tilburg University (UVT)
Samenvatting Module 1,2,3,4,8,10 en 11
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Module 1: The Basic Principles of Evidence-Based ManagementSummarize the basic principles of evidence-based management.
What is Evidence-Based Management?
The basic idea of evidence-based management is that sound quality decisions require both critical
thinking and use of the best available evidence. Of course, all practitioners use evidence in their
decisions. But few pay attention to the quality of the evidence and tend to base their decisions on only
one source. The result is decisions that rely on unfounded beliefs, fads and fashions, and the
unsupported though popular ideas of management gurus. The bottom line is bad decisions, poor
outcomes, and little understanding of why things go
wrong.
Evidence-based management seeks to improve the way
decisions are made. It is an approach to decision-making
and day-to-day work practice that helps practitioners to
critically evaluate the extent to which they can trust the
evidence they have at hand. It also helps practitioners
identify and evaluate additional evidence relevant to their
decisions. In this course, we use the following definition
of evidence-based management. This definition is adapted
in part from the Sicily statement of evidence-based
practice. [ 1] It not only provides a clear statement of what
evidence-based management means but also describes the
main skills required to practice in an evidence-based way:
Evidence-based management is about making decisions through the conscientious, explicit, judicious
use of the best available evidence from multiple sources by…
ASKING: Translating a practical issue or problem into an answerable question
ACQUIRING: Systematically searching for and retrieving the evidence
APPRAISING: Critically judging the trustworthiness and relevance of the evidence
AGGREGATING: Weighing and pulling together the evidence
APPLYING: Incorporating the evidence into the decision-making process
ASSESSING: Evaluating the outcome of the decision taken
. . . to increase the likelihood of a favourable outcome.
What counts as Evidence?
When we say evidence, we basically mean information: facts or data supporting (or contradicting) a
claim, assumption, or hypothesis. It may be based on numbers, or it may be qualitative or descriptive.
Evidence may come from scientific research suggesting some relatively generalizable facts about the
world, people, or organizational practices. Evidence may also come from local organizational or
business indicators, such as company metrics or observations of practice conditions. Even professional
experience can be an important source of evidence, such as when an entrepreneur learns from having
launched a variety of businesses that one particular approach seems more likely to pay off.
Think of it in legal terms. In a court of law, evidence from many different sources is presented,
including eyewitness testimony, forensic evidence, security camera images, and witness statements.
All this evidence may help a judge or a jury to decide whether a person is innocent or guilty. The same
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,is true for management decisions. Regardless of its source, all evidence may be included if it is judged
to be trustworthy and relevant.
Explain the need for evidence-based management
Why do we need Evidence-based management?
Practitioners use many sources of evidence when making decisions, including intuition, personal
experience, knowledge acquired through formal education, insights provided by experts, advice
from a colleague, management literature, scientific research, and others.
Most management decisions are not based on the best available evidence. Instead, practitioners often
prefer to base decisions solely on their judgment derived from personal experience. However,
personal experience alone is not a reliable source of evidence because it is highly susceptible to
systematic errors. We have cognitive and information-processing limits that make us prone to biases
that have negative effects on the quality of the decisions we make.
Even practitioners and industry experts with many years of experience perform poorly when making
forecasts or calculating risks when relying solely on their personal judgment, whether it concerns the
credit rating of bonds, the growth of the economy, political developments, or medical diagnoses.
Another heavily used source of evidence seems to be what other organizations are doing. Through
benchmarking and so-called best practices, practitioners sometimes copy the methods and procedures
of other organizations without critically evaluating whether those practices are actually effective and,
if they are, whether they are also likely to work in a different context. Benchmarking can demonstrate
alternative practices, but it is not necessarily a good indicator in itself of what would work in a
different setting.
At the same time, there are many barriers to evidence-based practice. Few practitioners have been
trained in the skills required to critically evaluate the trustworthiness and relevance of the information
they use. In addition, important organizational information may be difficult to access, and what is
available can be of poor quality. Finally, practitioners are often unaware of the current scientific
evidence available on key issues in the field. For example, a survey of 950 American HR practitioners
showed large discrepancies between what practitioners think is effective and what the current
scientific research shows. This study has been repeated in other countries with similar findings. More
educated managers do, however, show somewhat greater knowledge of scientific findings.
These results suggest that most practitioners pay little or no attention to scientific or organizational
evidence. Instead, the typical practitioner seems to place too much trust in low-quality evidence such
as personal judgment and experience, best practices, and the beliefs of corporate leaders. As a result,
billions of dollars are spent on management practices that are ineffective or even harmful to
organizations, their members, and their clients.
To give evidence-based management the best chance at success, we need to increase the capacity of
managers and organizations to prioritize quality evidence over unfounded personal opinion and to
incorporate what the body of evidence indicates into their better-informed professional judgment.
EXAMPLE: GOOGLE
For years, the US technology company Google believed that technical expertise was the most
important capability for their managers. The company’s leaders thought that the best managers left
their people alone as much as possible, focusing instead on helping them with technical problems
when people got stuck. When the company examined what employees valued most in a manager,
however, technical expertise ranked last among eight qualities. More crucial were attributes such as
asking good questions, taking time to meet employees, and caring about employees’ careers and lives.
Managers with these qualities led top-performing teams and had the happiest employees and lowest
turnover. These attributes of effective managers, however, also are well established in scientific
studies, so Google’s improvement efforts could have started years earlier.
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,Identify the four sources of evidence, and provide examples of each.
What sources of Evidence should be considered (1)?
Before making an important decision, an evidence-based practitioner starts by asking, “What is the
available evidence?” Instead of basing a decision on personal judgment alone, an evidence-based
practitioner finds out what is known by looking for evidence from multiple sources. According to the
principles of evidence-based practice, evidence from four sources should be taken into account:
1) Evidence from the scientific literature: Findings from published empirical studies
2) Evidence from the organization: Data, facts, and figures gathered from the organization
3) Evidence from practitioners: The professional experience and judgment of practitioners
4) Evidence from stakeholders: The values and concerns of people who may be affected by the
decision
1) Evidence from the Scientific Literature
The first source of evidence is published research findings. When we use the term scientific evidence,
we mean the evidence from scientific research published in academic journals. Over the past few
decades, the volume of management research has escalated dramatically. Topics range from evaluating
the success of mergers and the effects of financial incentives on performance to improving employee
commitment and recruitment. In addition, much of the research from outside the management
discipline is still highly relevant because many of the problems managers face are not so different
from those people would experience in any situation — how to make better decisions, communicate
more effectively, or manage conflict. When it comes to tackling these issues in management practice,
it makes sense to consider relevant scientific findings from any discipline. Although many
practitioners learn about research findings in their education or professional courses, new research
findings are produced regularly, and these findings can often change our understanding. To include
up-to-date scientific evidence in your decisions, it helps to know how to search for studies and to be
able to judge how trustworthy and relevant they are.
EXAMPLE:
The board of directors of a large Canadian law firm has plans for a merger with a smaller firm nearby.
The merger’s objective is to integrate the back offices of the two firms (IT, finance, facilities, etc.) in
order to create economies of scale. The front offices and legal practices of the two firms will remain
separate. The board has been told by the partners that the organizational cultures of the two firms
differ widely, so the board wants to know whether the differences are likely to create problems for the
merger. Partners of both firms were asked independently about their professional experience with
mergers. Those who had been involved in one or more mergers stated that cultural differences matter
and can cause serious culture clashes between professionals.
How did scientific evidence help?
A search conducted in online scientific databases yielded a meta-analysis based on 46 studies with a
combined sample size of 10,710 mergers and acquisitions. The meta-analysis confirms the partner’s
judgment that there is a negative association between cultural differences and the effectiveness of the
post-merger integration. However, the study also indicates that this is only the case when the intended
level of integration is high. In mergers that require a low level of integration, cultural differences are
found to be positively associated with integration benefits. In the case of the two law firms, the
planned integration concerns only back-office functions, making the likelihood of a positive outcome
higher.
2) Evidence from the Organization
A second source of evidence is the organization itself. Evidence from the organization, whether a
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, business, a hospital, a governmental agency, or a volunteer organization, comes in many forms. It can
be financial data, such as cash flow or cost, or business outcomes, such as return on investment or
market share. It can come from customers or clients in the form of customer satisfaction, repeat
business, or customer recommendations. It can also come from employees through information about
retention rates or levels of job satisfaction. Organizational evidence can consist of hard numbers such
as turnover rates, medical errors, or productivity levels, but it can also include soft elements, such as
perceptions of the organization's culture or attitudes toward the senior leaders. Knowing the
organizational evidence is essential in deciding whether a problem exists that requires managers’
attention. It is also essential in identifying the likely causes of a problem, plausible solutions, and what
is needed to implement these solutions.
EXAMPLE:
The board of a large insurance company plans to change its regional structure to a product-based
structure. According to the board, the restructuring will secure the company’s market presence and
drive greater customer focus. The company’s sales managers strongly disagree with this change,
arguing that ditching the region-based structure will make it harder to build good relationships with
customers and will therefore harm customer service.
How did evidence from the organization help?
Analysis of organizational data revealed that the company’s customer satisfaction is well above the
industry average. Further data analysis showed a strong negative correlation between the account
managers’ monthly travel expenses and the satisfaction of their customers, suggesting that sales
managers who live close to their customers score higher on customer satisfaction.
3) Evidence from Practitioners
A third source of evidence is the professional experience and judgment of managers, consultants,
employees, staff, and other practitioners. Different from intuition, opinion, or belief, professional
experience is accumulated over time through the feedback received on the outcomes of similar actions
taken in similar situations. This type of evidence is sometimes referred to as tacit knowledge.
Professional experience differs from intuition and personal opinion because it reflects the specialized
knowledge or expertise acquired by repeated experience and practice of technical activities, such as
playing the violin or making a cost estimate. Many practitioners take seriously the need to learn
thoughtfully and critically from their experiences. Their knowledge can be vital for determining
whether a management issue really does require attention or whether the organizational data available
are trustworthy. Thoughtful practitioners also use their experience to judge whether research findings
apply in a particular situation or a proposed solution is likely to work in a particular context. If
relevant and trustworthy, experiential evidence plays a key role in the decision-making process.
EXAMPLE
A Dutch university hospital has decided to implement personal development plans for all its nurses.
These plans would include a statement of the nurse’s aspirations and career priorities. The HR director
points out that according to Maslow’s hierarchy of needs, a well-known motivation theory, basic
levels of needs (such as health and safety) must be met before an individual can focus on his or her
higher-level needs (such as career and professional development). The nurses at the emergency
department are increasingly exposed to serious safety hazards, from offensive language to physical
violence. The HR director therefore recommends excluding these nurses from composing a personal
development plan until the safety hazards are under control and significantly reduced.
How did evidence from practitioners help?
Experienced managers and nurses were asked independently about their view on the director’s
recommendation. Most of them disagreed and indicated that their in their professional experience, the
opposite often is true: nurses who work in difficult circumstances tend to be strongly interested in
professional development and self-improvement. In addition, a search was conducted in online
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