KNOWLEDGE OUTCOMES

1. KNOWLEDGE OUTCOMES • Determine the context of HRM • Challenges in formulating HR Goals within an organisational context • Critique of HRM models • Coverage of HPWS • Limitations of HPWS

2. Human resource management and business performance Defining human resource management(HRM): ‘All those activities associated with the management of employment relationships in the firm.’ Boxall, Peter and Purcell, John,(2003) ‘Strategy and Human Resource Management’,pp.1, Palgrave Macmillan. ‘distinctive approach to employment management management…..seeks to achieve competitive advantage through the strategic deployment of a highly committed and capable workforce, using an integrated array of cultural, structural and personnel techniques.’ Storey, John,(1995) Human Resource Management:a Critical Text,London:Routledge.

3. Human resource management covers three main areas: Work relations - the way work is organised and the deployment of workers around technologies and production processes; Employment Relations the arrangements governing such aspects of employment such as recruitment, training, job tenure and promotion, and the reward of workers; Industrial Relations – the representational systems which exist within an enterprise: in the British context this has often meant management – union relations and the process of collective bargaining. Gospel,H.,(1992) Markets, Firms, and the Management of Labour in Modern Britain. Cambridge:Cambridge University Press

4. ‘We believe that a set of basic assumptions can be identified that underlie the policies that we have observed to be part of the HRM transformation. The new assumptions are: • proactive, system-wide interventions, with emphasis on fit , linking HRM with strategic planning and cultural change • People are social capital capable of development • Coincidence of interest between stakeholders can be developed • Open channels of communication to build trust, commitment, • Goal orientation • Beer, M. and Spector,B.,(1985) Corporate wide transformations in human resource management’, in R.E. Walton and P.R. Lawrence (eds), Human Resource Management, Trends and Challenge, Boston; Harvard Business Press, 219 - 53

5. Critical HR Goals Desired types and levels of:  Labour productivity(cost effectiveness)  Organisational flexibility  Social legitimacy(employment citizenship) CRITICAL GOALS IN HRM: a basic framework Ultimate business goals  Viability with adequate returns to shareholders  Sustained competitive advantage? Critical non-HR Goals Desired outcomes for: Sales Market share Return on capital employed Social legitimacy(environmental practices) Source: Boxall, Peter and Purcell, John,(2003) ‘Strategy and Human Resource Management’,pp.7, Palgrave Macmillan.

6. Outer context PESTLE Inner context Business strategy context Strategic Change and HRM Culture Structure Politics / leadership Task –technology Business Outputs Objectives Product –market Strategy and tactics HRM context Role Definition Organisation HR outputs HRM content HR flows Work systems Reward systems Employee relations Source:Hendry,C. and Pettigrew,A.,(1990) Human resource management:an agenda for 1990’s, International Journal of Human Resource Management, 1(!):17-44

7. Conceptual critique of strategy models • Assumes the classical rationalistic approach to strategy(top down) • It ignores the systemic approach – numerous stakeholders / multi level / function /stage, iterative, ‘messy’ and political(Hendry and Pettigrew,1990)

8. The empirical critique • Some evidence that organisational strategy is linked to HR practice: Selection(Cohen and Pfeffer,1986) Compensation(Balkin and Gomez – Mejia,1987) However, none of these studies have related these linkages to firm performance. 2. Research design has limitations. 3. Low response rates 4. Lack of longitudinal in-depth case studies in the American work.

9. High performance work systems AMO theory of performance: Performance is a function of employee ability, motivation, and ‘opportunity’. P = F(A,M,O)

10. Improved company performance Expanded employee potential and increased discretionary effort HR practices and operating systems designed and ‘bundled’ to enhance  ability  motivation  opportunity High –performance work systems:commonly hypothesised linkages Improved systematic response to employee effort Improved worker outcomes Supportive company, industry and societal context Source: Source: Boxall, Peter and Purcell, John,(2003) ‘Strategy and Human Resource Management’,pp.21, Palgrave Macmillan.

11. THE PERFORMANCE LINK 1. The greatest support appears to be for a universalistic model:that the greater the extent to which the characteristics of the HCM/HPWS model are adopted, the greater the association with organizational performance[US /UK studies](Batt,2002;Delaney and Huselid,1996;Guest et al., 2003 and MacDuffie,1995) 2.Problems centre on methodological concerns with research design(Becker and Gerhart,1996;Legge,2001) 3. Validity (Purcell,1999 – large scale postal to single respondent). and reliability(Gerhart,2000) of measures of HR practices(Purcell,1999).

12. Balkin, D.B. and Gomez – Mejia,L.R., (1987) ‘The relationship between organizational strategy, pay strategy and compensation effectiveness’, Working paper, University of Colorado at Boulder Batt,R. (2002) ‘Managing customer services:human resource practices, quit rates, and sales growth’, Academy of Management Journal, 45(3):587-97 Becker,B.E. and Gerhart, B.(1996) ‘The impact of human resource management on organizational performance:progress and practice’, Academy of Management Journal, 39(4):779 – 801 Beer, M. and Spector,B.,(1985) Corporate wide transformations in human resource management’, in R.E. Walton and P.R. Lawrence (eds), Human Resource Management, Trends and Challenge, Boston; Harvard Business Press, 219 - 53 Boxall, Peter and Purcell, John,(2003) ‘Strategy and Human Resource Management’,pp.1, Palgrave Macmillan. •Cohen,Y and Pfeffer,J.,(1986)’Organizational hiring standards’,Administrative Science Quarterly,31(1):1-24 Delaney,J.T. and Huselid,M.A.,(1996;) ‘The impact of human resource management practices on perceptions of organizational performance’,Academy of Management Journal, 39(4):241 –6 Gospel,H.,(1992) Markets, Firms, and the Management of Labour in Modern Britain. Cambridge:Cambridge University Press Gerhart,B. et al (2000)’Measurement error in research on human resources and firm performance:how much error is there and how does it influence effect size estimates?’ Personnel Psychology, 53(4): 803-34 Guest et al., (2003) ‘Human resource management and corporate performance in the UK’, British Journal of Industrial Relations, 41(2):291-314 Hendry,C. and Pettigrew,A.,(1990) Human resource management:an agenda for 1990’s, International Journal of Human Resource Management, 1(!):17-44 Legge, K., (2001) ‘Silver bullet or spent round? Assessing the meaning of the “high commitment management” /performance relationship’, in J. Storey(ed.), Human Resource Management, A Critical Text (Second edition), London:Thomson Learning, 21 -36 MacDuffie,J.P.,(1995) ‘Human resource bundles and manufacturing performance: organizational logic and flexible production systems in the world auto industry’, Industrial and Labour Relations Review, 48(2): 197-221 Purcell,J. (1999) ‘Best practice and best fit:chimera or cul-de-sac?, Human Resource Management Journal, 9(3): 26-41