Learning goals of this course
1. Students can indicate how (black-box debate) and under which conditions (contingency
perspective) HRM can contribute to organizational performance.
2. Students can interpret the dark-side perspective of HRM and the differentiated workforce
approach.
3. Students can give a reasoned opinion of the role of the line-manager and the HR manager in the
effective implementation of HRM (HR devolution).
4. Students can compare and contrast key theories and research findings on the five challenges
associated with the HRM-performance link (i.e. black-box debate; best practice – best-fit debate;
dark side of HRM; differentiated workforce and HR devolution).
5. Students can combine information obtained in organizations about the HRM performance
relationship, with academic literature on SHRM, in order to evaluate this link and to make
suggestions for improving it.
1. What is HRM? - All the activities associated with the management of people and work.
Skill enhancing policy domain
• Careful recruitment and selection
• Extensive training and development
Motivation enhancing policy domain
• Extensive performance management
• Extensive pay and benefits
Empowerment enhancing policy domain
• Encouragement of participation
• Extensive communication
2. Strategic HRM- achieving the goals of the organization. It is critical to the firm survival and to
its relative success. Strategic perspective on HRM research: emphasizes bundles of HR
practices, often referred to as high-performance work systems (HPWS), high involvement
work systems and high commitment work systems, in examinations of the effects of HRM
and organizational outcomes.
Organizational success- employees are considered the organization’s most important key for
success
Relative success- if your loses are smaller than those of your competitor=you achieve relative
success
HR analytics- link to the business units
3. Key aspects of HRS can have a significant positive impact on organizational success.
The black box debate (L2) 3.10.2016
1) Jiang, K., Lepak, D. ., Hu, J. & Baer, J. (2012). How does human resource management influence
organizational outcomes? A meta‐analytic investigation of mediating mechanisms
Three theories dominate the SHRM field
1. Resource based view of the firm (Barney, 1991 / Boxall, 1996)
2. AMO-framework (Appelbaum et al., 2000 / Jiang et al., 2012)
3. SHRM process model (e.g., Nishii & Wright, 2008)
Use of HRM practices intended to enhance employees’ knowledge, skills and abilities, motivation,
and opportunity to contribute is associated with positive outcomes such as greater commitment,
lower turnover, higher productivity, etc. Organizational outcomes are multidimensional, they have
been categorized into three primary groups related to HRM:
1
, HR outcomes: those most directly related to HRM in an organization, such as employee skills
and abilities, employee attitudes and behaviours and turnover.
Operational outcomes: those related to the goals of an organizational operation, including
productivity, product quality, quality of service and innovation.
Financial outcomes: reflect the fulfilment of the economic goals of organizations, like sales
growth, return on invested capital and return on assets.
2) Peccei, R. & van de Voorde, K. (2014). HRM and performance
The effectiveness of HR practices is realized when employees act in ways that are needed for
implementing strategies and achieving various business objectives.
I. Resource-based view : provides insights as to why human capital can help firms to
outpace competitors and proposes that organizations obtain a competitive advantage
from resources that are rare, valuable, inimitable (Unique timing and learning, Social
complexity, Causal ambiguity) and non-substitutable.
a) Outside in- Industrial organization view; Resources are considered homogeneous and mobile
b) Inside out- RBV- conditions that make your resource competitive; Resources are
heterogeneous and immobile
Make a link between outside in and inside out!
RBV paradigm SHRM – Boxall (1996), Human resource advantage:
1. Human capital advantage (a stock of exceptional human talent)
2. Human process advantage (a function of difficult to imitate, historically evolved processes within
the organization, such as co-operation)
II. AMO-framework (What can you do to increase the performance of an employee?) This
framework argues that bundles of HR practices positively influence organisational
performance by enhancing employee skills, competencies and abilities (A), by
stimulating employee motivation and commitment (M), and by providing skilled and
motivated employees with the opportunity to perform (O). Employee performance is a
function of three essential components:
Ability –Human capital theory: human capital (the composition of employee skills, knowledge and
abilities) is a central driver of organizational performance when the return on investment in human
capital exceeds labour cost.
Motivation – Social exchange theory: When employees receive positive treatment and inducements
from the organisation, they will repay the organisation.
Opportunity to perform – Job design theory: Empowerment theory: Feelings of empowerment and
involvement.
2
, Meta-analysis: A,M and O enhancing HR practices (Jiang et al., 2012)
• Skill-enhancing HR practices are more positively related to human capital than motivation- and
opportunity- enhancing HR practices;
• Motivation- and opportunity- enhancing HR practices are more positively related to motivation
than skill enhancing.
HR practices: … we encourage organizations to maximize the return on their investment in HRM by
using appropriate HR practices…
HRM- performance debate- the individual employee.
How to differentiate between A, M and O enhancing HR practices? The different dimensions of HR
systems may have unique relationships with specific organizational outcomes. First, if all three
dimensions of HR systems have unique effects on organizational outcomes, failure to include any
dimension may compromise the overall impact of HR systems on organizational outcomes or at least
lead to inaccurate results. Moving forward, Jiang et al. encourage researchers to include all three HR
dimensions in their measures of HR systems. The three HR dimensions are better viewed as three
distinct but related components of HR systems rather than interchangeable indicators of HR systems.
III. SHRM model- in essence, we have failed to explicitly recognize the many ways in which
individuals may experience and respond differently to HR systems within organizations…
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