‘Human resource management is a distinctive approach to employment management which seeks to
obtain competitive advantage through the strategic deployment of a highly committed and skilled
workforce, using an array of cultural, structural and personnel techniques’ (Storey, 1995)
Pfeffer (1998): best practices
- High performance work system (HPWS)
- Employment security/stability; selective hiring of new personnel; self-managed
teams/decentralisation; high compensation contingent on organisational performance;
extensive training; reduced status distinctions; extensive sharing of information, selection, etc.
The HRM environment matters! This course examines changes in the HRM environment!
Perspectives on HRM (Martin-Alcaraz et al., 2008)
1. Configurational perspective
HRM practices are combined in specific ways that create synergy → They work together to enhance
each other.
VB: Company uses a combination of selective hiring and intense training to create a
highly specialized workforce.
2. Contingent perspective
There are intervening variables that affect the outcome of HRM practices → Effectiveness of HRM
practices depend on specific conditions(contingencies) like company size, market, culture etc.
VB: The success of a high-performance work system (HPWS) might depend on the
economic environment or the industry context. What works in a tech startup might not
work in a manufacturing company.
3. Contextual perspective
The context in which the organization operates is critical, and HRM decisions are heavily influenced
by external and internal factors.
→ This perspective sees the context not just as a variable but as a framework.
VB: In a country with strict labor laws, HR policies must be adapted to ensure compliance. Or
in a highly competitive industry, the context might push a company to offer higher
compensation to attract top talent.
Summary:
● Configurational: Focuses on internal HR systems and how different HR practices work
together.
● Contingent: HR practices depend on external factors (e.g., market conditions,
organizational strategy) to be effective.
● Contextual: HR practices are shaped by the broader organizational context (e.g., culture,
laws, external environment).
,Philosophy of the course: 4 Theoretical models
Best Fit vs. Best Practices
Best practice perspective:
● Existence of a set of HRM practices that leads to superior organizational performance
● Related to so-called High Performance Work Systems:
○ Ideal combination of practices
Best fit perspective:
● Importance of fit between HRM practices and internal and external context
● Effect of HRM practices dependent on for example fit with organizational strategy
The Six Component model (Boselie, 2014)
Provides a framework for understanding how HRM (Human Resource Management) operates within
organizations.
1. HRM Philosophy / Intended HR practices
○ This refers to the underlying beliefs and values of the organization about people
and their management. It addresses the organization's overall perspective on how
people should be managed and how HRM contributes to organizational success.
○ Example: A company might believe that empowering employees through
decision-making autonomy leads to better performance. This belief would guide how
HR policies are created and implemented.
2. HRM Policies / Actual HR practices
○ These are the formal guidelines and procedures established by the organization
regarding its workforce. They are the written rules that guide decision-making and
define acceptable practices within the organization.
○ Example: Policies regarding promotion, compensation, recruitment, and training.
, 3. HRM Practices / Perceived HR practices
○ These are the actual actions and activities that take place within the organization.
Practices operationalize the policies and ensure they are carried out.
○ Example: The processes of recruitment, performance evaluations, employee training,
and career development are specific HR practices.
4. HRM Outcomes
○ This component looks at the results of HRM practices in terms of their impact on the
workforce. It assesses whether the HR activities lead to desired outcomes.
○ Example: Employee engagement, satisfaction, motivation, and retention rates are
examples of outcomes. Positive outcomes reflect the effectiveness of HR practices.
5. HRM Contributions / Critical HR goals
○ This examines the contribution that HRM makes to organizational performance. It
looks at how HRM impacts the overall goals of the organization, such as increasing
productivity, innovation, or competitiveness.
○ Example: HR practices that improve employee skills and satisfaction could lead to
better customer service and, in turn, improved company performance.
6. Stakeholders / Ultimate Business goals
○ HRM is influenced by a variety of stakeholders who have interests in how people are
managed. This includes employees, management, unions, government, and even
customers.
○ Example: Employees want fair pay, management wants performance, and
governments might require certain labor standards. The model emphasizes
considering these different interests when making HR decisions.
Summary of the Model:
The Six Component Model suggests that HRM is a system composed of interconnected parts:
● Philosophy shapes the policies, which are enacted through practices.
● These practices lead to specific outcomes, which in turn contribute to the organization’s
performance.
● Throughout this system, stakeholders influence and are affected by HR decisions.
By looking at all six components, organizations can assess how their HRM system is designed,
implemented, and whether it supports the organization's goals effectively.
Example in Practice:
Imagine a company with a philosophy that values employee well-being. This philosophy will lead to
policies promoting work-life balance. The practices could include flexible work hours and remote
working options. The outcomes might be higher employee satisfaction and reduced turnover, and the
contribution to the organization could be increased productivity and lower costs. Meanwhile,
stakeholders like employees and managers will influence how these policies and practices evolve.
Contextually Based HRM Theory (Paauwe, 2004)
The main idea of this theory is that HRM practices cannot be viewed in isolation from the broader
context in which an organization operates. Context includes both internal (culture, strategy, size) and
external (economy, regulations, culture) factors that affect how HRM functions. The theory
emphasizes the importance of adapting HR strategies to fit this context to ensure they are effective.
, Strategic Fit with Context:
● Paauwe’s theory highlights the importance of fit between HRM practices and both the
internal and external context. If there is a good fit, the HR practices will support the
organization’s success; if not, the practices might be ineffective or even counterproductive.
● Example: In a tech company with a fast-paced and innovation-driven culture, offering flexible
work arrangements and creative freedom to employees would likely align with the internal
context. If the same practices were applied in a traditional manufacturing setting, they might
not have the same positive impact.
Institutional Pressures:
● According to Paauwe, organizations are influenced by institutional pressures to conform to
certain norms and practices, particularly if they want to achieve legitimacy in their industry or
society. This concept ties in with Institutional Theory (covered in other slides).
● Isomorphism (which is the idea that organizations become more similar over time) is a key
concept here. It explains how companies may adopt similar HR practices due to pressures
from laws, industry standards, or competitor practices.
● Example: A multinational company might adopt certain HR policies (like diversity initiatives)
to align with global norms and ensure it maintains its reputation in various countries, even if
the internal context varies between locations.
Implication for HRM:
● The main implication of Paauwe’s theory is that HR managers must constantly analyze and
adapt their HR strategies based on both internal organizational factors and the broader
external environment.
● There is no one-size-fits-all solution in HRM because the context always matters. What
works in one organization or industry may not work in another.
Institutional Theory (Paauwe, 2004)
A framework for understanding how organizations behave within a broader institutional
environment. It suggests that organizations are not only influenced by internal factors (like strategy
or resources) but also by the external rules, norms, and expectations that exist in their
environments.
Example: A healthcare organization might adopt very strict health and safety HR policies, not just
because it’s efficient, but because of regulatory pressures and societal expectations around patient
safety.
Goal of legitimacy:
○ The theory posits that organizations seek to achieve legitimacy in their institutional
environment. Legitimacy means being viewed as appropriate, acceptable, and
aligned with the norms and rules of society, the industry, or regulatory bodies.
○ Organizations that conform to institutional norms are more likely to survive and
succeed because they are trusted and accepted by stakeholders like customers,
employees, and governments.
Example: A company that implements sustainability initiatives (e.g., Green HRM) may do so to gain
legitimacy in an increasingly environmentally-conscious market.
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