THEME 1 – Black box debate
LECTURE – BLACK BOX DEBATE
HRM: management of people in the workplace. It is an inevitable process in very large (army) and for small organizations (local
flowerist). HRM is a fundamental activity in any organization in which human beings are employed.
Strategic HRM: a concern with the ways in which HRM is a critical to the film’s survival and to tits relative success (Boxall,
Purcell).
How would you describe organizational success? Marriott vs Google: customer satisfaction & innovation.
HRM and employees the key to organizational success
- ‘’if we take care of our people, they will take care of our customers, and the customers will come back” MarrioK
- ‘’Apart from; technological capabiliNes, innovaNve and efficient HR is the reason that it has acquired as much success
and fame. It differ from most others in terms of its focus on employees and their happiness’’ Google
Nonprofit organizations probably have other successes and goals they try to succeed.
è Employees are considered the organizaNons’ (most) important key to organizaNonal success, and therefore HRM is key
management task.
1955 one of the first HRM research on HR practices on employee skills and motivation (Huselid). Shows that the more
sophisticated your HR set, the higher the market value of your employees (better financial performance).
Link between HRM and contextualized performance
A. Set of HR pracNces (eg involving employees in decision making, training, service delivery. Appraisals) is associated with
an increase in service performance (Chuang & Liao). -> MarrioK
B. Training, inducNon, appraisal, teamwork are posiNvely associated with an increase in innovaNon (in products and
technical systems/producNon process) (Shipton). -> Google
Key aspects of HRM can have a significant positive impact on organizational success. However, there is considerable debate
about the nature of this relationship:
• How/why -> black box debate
• When -> conNngency perspecNve / best pracNce-best fit debate
• From whom -> dark-side perspecNve + differenNated workforce
• Who -> HR devoluNon
Learning goals of this course:
1. Indicate how (black-box debate) and under which condiNons (conNngency perspecNve) HRM can contribute to
organizaNonal performance.
2. Interpret the dark-side perspecNve of HRM and the differenNated workforce approach.
3. Discuss the role of the line-manager and the HR manager in the effecNve implementaNon of HRM (HR devoluNon).
4. Compare contrast key theories and research findings on the 5 challenges associated with the HRM-performance link
(i.e. black-box debate, best pracNce-best fit debate, dark side of HRM differenNated workforce and HR devoluNon).
Knowledge clips – Black box debate
Central to strategic HRM is the idea that adoption by organizations of a more sophisticated set of HR practices; covering key
aspects of the management of people in the workplace has a positive impact on organizational performance. The policies and
practices involved to cover a wide range of HR functions in the areas such as: recruitment and selection, training and
development, performance management, pay and benefits, participation, and communication. According to strategic HRM
theory, the more these HR practices are implemented in an organization the better the organizations’ performance. However,
our understanding of the processes by which HR practices affect organizational performance has been quite limited. Indeed, it is
unclear both how many steps there are in the link between each room and performance, and what the content of each step is.
This has been referred to as the black box debate in strategic HRM. In response there have been a number of efforts to model
the impact of HRM on organizational performance. Central to these models is the idea that employees place a key role in
explaining the impact of our practices on organizational performance.
3 theories that dominate the field of strategic human resource management.
LCT
1. How many boxes should be taken into account? (In order to achieve performance)
2. What should be the content of each box?
3. HRM sophisNcaNon table (HR pracNces on employee skills and moNvaNon, figure 2)
Unclear answer, it’s still under debate. 3 theories dominate the SHRM field:
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, 1. RBV (Barney, Boxall) -> idem
2. AMO framework (Appelbaum) -> workgroup about UNICEF and APPLE)
3. SHRM process model (Nishii & Wright)
Many more have been proposed.
Peccei & van de Voorde article
-> theoretical explanations for the HRM – performance link:
1. Research based view of the firm (RBV) LCT (Barney; Chadwick & Flinchbaugh): dominant theory. Broad, general
theory about why organizaNons are successful. The main assumpNon of this theory is that organizaNons can build a
compeNNve advantage based on resources that are: / Is a (tangible or intangible) resource.. VRIN characterisNcs LCT
- Valuable: capable of delivering superior compeNNve results. Client that you serve are served in the most opNmal way.
- Rare: scarcity of a resource, not many organizaNons have it because it is difficult to get; not easily obtained by
compeNtors; specific and special-> EG: star player in a football team.
- Non-subsHtutable: resource is hard to replace, hard to neutralize with other resources which will meet the same ends.
- (Imperfectly) inimitable: resources are hard to copy, it is not easy to do the same as the compeNtor: unique Nming and
learning; social complexity; causal ambiguity. Most important criterion. Can be achieved by several factors:
o Unique Hming and (historical) learning: can act as a barrier to e.g. newcomer. StarNng point is the chain of
past events, incidents and choices the organizaNon makes. Building upon capabiliNes in the past.
o Social complexity: complex paKerns of teamwork and coordinaNon within and outside the organizaNon.
PaKerns of teamwork and coordinaNon.
o Causal ambiguity: hard to figure out why a certain organizaNon is successful and how successful it really is. It is
not completely clear; and hard to copy. Hard to figure out why successful.
When having good VRIN, company is more easily gaining competitive advantage.
Example: Volkswagen. Work life balance agreement (2011) (causal ambiguity); Emission scandal (unique timing and historical
learning), violating clean air act (2015); leadership crisis and new CEO (social complexity). -> hard to see if causal ambiguity leads
to how they do in comparison to others.
Organizations have different type of resources including:
a. OrganizaHonal resources (structure, planning within organizaNon)
b. Physical resources (plans, equipment)
c. Human resources (experience, intelligence, relaNonships between workers)
These are all potential sources for organizational success.
Building upon this RBV proposes that human resource advantage LCT can consist of the following: human capital advantage (a
situation where there is a stock of exceptional human talent working within the organization, whose knowledge abilities and
skills match the strategic needs of the firm) and human process advantage (the presence of difficult to imitate historical evolved
processes within the organization, such as an intense form of cooperation between people).
A. Human capital advantage – a situaNon where there is a stock of excepNonal human talent working within the
organizaNon, whose knowledge, abiliNes and skills match the strategic needs of the firm. A stock of excepNonal human
talent.
B. Human process advantage – the presence of difficult-to-imitate, historically evolved processes within the organizaNon,
such as intense forms of co-operaNon between people. A funcNon of difficult to imitate, historically evolved processes
within the organizaNon, such as co-operaNon. How workers cooperate, communicate etc. within an operaNon and how
this develops.
EG: hospital: relationships between HR practices and performance works through a process of interactions between
communication and relationships that are carries out for the purpose of integrating care tasks. Different experts in the field
(doctor, nurse, case manager) work together to improve the quality of care. Plus there is coordination among physicians, nurses,
physical therapists, social workers, etc. to achieve short hospital stay and high level of care, teamwork is required. So everyone
is working interdisciplinary in order to perform better than other hospitals (shorter stay = better care); with security etc. all
working together in JBZ. LCT
EG: Dutch national soccer team consisting individual talents with exceptional skills that others don’t have. However, with
individual talents only, you’re not automatically a team. Collaboration, teamwork, and practice is needed to make tactics come
together and get resource advantage.
EG: Red bull team Max Verstappen. They need a very good driver with exceptional talents and a good team with exceptional
knowledge and skills; with good cooperation within these components. LCT
As such, the research-based theology provides rational for how HR practices positively affect organizational performance by
building a better human capital pool and by stimulating better processes within the organization.
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,Rooted in Strategic Management literature: why do some companies outperform others?
According to the industrial organizational / traditional views: the industry (external
factors) determine organizations competitive advantage. Resources are considered
homogeneous and mobile, implying that all of the organizations within an industry can
develop/get the resources they need to gain a competitive advantage. In such industries,
it’s hard to compete based on internal resources as they can only make a short-term
impact. RBV: organizations internal resources determine their competitive advantage.
Sustained competitive advantage can be achieved more easily by exploiting internal rather
than external factors. Resources are heterogeneous and immobile, and can be a source of
competitive advantage.
è RBV differs from the tradiNonal strategy viewpoint in that it examines resources within the organizaNon. This reasoning
starts from within the organizaNon and not with the external factors surrounding the organizaNon.
RBV: How can organizations distinguish from others in terms of EG value and rareness of the content?
EG: Disney+ (focusses on specific content, engaging particular value in order to distinguish from Netflix) vs Netflix (first to
develop successful movie platform)
EG inmitability: Canon produces one of the best cameras, a very expensive product. People buy them because Canon invests a
lot in developing digital cameras, which requires technologies, and also stick to what they are good at. They produce high
quality, traditional cameras.
RBV reflection: organizations need a human capital pool and aligned processes to achieve a competitive advantage.
RBV logic: building a better human capital pool and stimulating better processes.
RBV limitation: research that tests the RBV’s core concepts remains scarce, because it is hard to test all these assumptions.
There is a study that examined the impact of human losses in HRM investments. -> Shaw (paper): role of HRM investments in
impacting workforce productivity and turnover rates. RBV is an organizational level theory which assumes that organizations can
possess HR. But organizations don’t own their human capital, individuals do. Individuals themselves decide how to behave at
work, causing an increasing consensus that employee behavior should be an important component of SHRM. -> What about the
individual employee?
2.AMO framework LCT by Applebaum; Chadwick & Flinchbaugh: the idea that people perform well if they have the
ability, moHvaHon, and opportunity to do so. -> Theory pays aKenNon to employees’ feelings and behaviors.
Bringing the worker back into SHRM was a central issue since the 90s. OrganizaNonal success can only be
achieved via employees/individual workers. Paper disNnguishes worker characterisNcs (skills, feelings at work); and
how they behave at work (withdraw). These HR outcomes can be linked to the performance of the organizaNon (Guest,
Wright, Boswell).
EG: studies show that HR pracNces can posiNvely impact work aotudes -> collecHve commitment: the more
commiKed, the higher the level of individual performance; posiNvely related to producNvity of the organizaNon.
è HRM implemented at organizaNonal level impacts individual feelings and behaviors and these impact organizaNonal
performance.
a. Ability means the employee can perform well on the job because he or she possesses the necessary knowledge and
skills. This is linked to human capital theory. These in turn can be influenced by HR pracNces for example by
providing training opportuniNes.
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, b. MoNvaNon means employees perform well on the job because they want to perform well. HR pracNces such as
internal career opportuniNes and extensive rewards, moNvate employees to perform well. This is linked to social
exchange theory.
c. Having the opportunity to perform well. HR pracNces such as enabling employee parNcipaNon in decision making,
can empower employees to show good performance. This is linked to the empowerment theory. (Job design
theory)
In sum of the AMO model provides rational for how which are practices impact performance, by increasing employee’s
ability, motivation and opportunity to produce high performance.
A. Human capital theory (Snell, Dean): superior knowledge, skills and abiliNes increase individuals’ performance.
E.g.: recruiNng and finding the right people and select the right people. People then have the abiliNes for the right
work.
E.g.: providing training, workshops and courses to help people get beKer in doing their work, thus enhancing
abiliNes.
B. Social exchange theory (Blau): when employees receive posiNve treatment (career opportuniNes, self-
management, demonstrate management, training) and inducements form the organizaNon, they will repay the
organizaNon.
E.g.: performance management, assessing performance of workers by having conversaNons about their goals and
possible promoNon etc.
E.g.: compensaNon, more salary, rewards, benefits.
C. Empowerment theory (Bowen & Lawler): feelings of empowerment and involvement enhanced causing beKer job
performance.
E.g.: Job design; level of control, autonomy they have at their work.
E.g.: Decision making and parNcipaNon; people feel heard and cared about.
Depends on argumentation if it facilitates A, M or O.
è Explain why HR pracNce is part of the A, M or O and theory. LCT
So HR practices can support and stimulate these 3 dimensions in order to increase employee performance.
Jang
A. Skill-enhancing HR pracNces: designed to ensure skilled employees: EG: comprehensive recruitment system; rigorous
selecNon; extensive training.
B. MoNvaNon enhancing: implemented to enhance employees’ moNvaNon: EG: developmental performance
management; compeNNve compensaNon; incenNves and rewards; extensive benefits; promoNon and career
development; job security.
C. Opportunity enhanced: designed to empower the employees. EG: flexible job design; working in teams; employee
involvement; informaNon sharing.
All these 3 dimensions relate to human capital and commitment.
Implications: suggests that organizations should focus more on practices like recruitment, selection and training when they
want to enhance employee skills/their human capital. In contrast, when organisations aim to improve employee motivation,
they should consider how to appraise employee performance, how to compensate for their work, how to make jobs meaningful
and interesting, and how to involve employees in work teams and decision making.
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