The Trouble with HRM

Research Seminar
Sociology Institute, University of Stockholm
September 2011
Paul Thompson
Department of Human Resource Management, University of Strathclyde
‘After over two decades of extensive research, we are still
unable to answer core questions about the relationship
between human resource management and performance’
(Guest 2011: 3)
‘The human resource management profession faces a crisis
of trust and a loss of legitimacy in the eyes of its major
stakeholders. The two-decade effort to develop a new
“strategic human resource management” (HR) role in
organizations has failed to realize its promised potential of
greater status, influence, and achievement’. (Kochan 2006)
Ripe for critique, but on what basis?
Delbridge: HRM research can address ‘its conservatism and
its irrelevance’...’through engagement more directly and
productively with proximate social science disciplines and, in
particular, critical management studies’ (2010)
Legge: Most HRM models emphasise the organisation’s culture as
the central activity for senior management – with HR departments
as primary agents of change
 HRM is treated as a cultural construction seeking to refine the
meaning of work relations between employees and the
organisation: ‘a medium for manufacturing meaning in the process
of culture management’ (Keenoy and Anthony 1992: 237)
 Alvesson and Karreman – a cultural-symbolic perspective
 HRM works not because it is technically efficient, but as a rationality
surrogate that creates ascription of positive meaning and suspension of
‘From the mid-1980s onwards, the increasing emphasis on
culturally-based forms or organizational control – in which
symbolically-mediated bodies of regulation, monitoring and
disciplining at work became the major concern…’ (Reed 2010)
Soft HRM and corporate culture were linked to the shaping of employee
subjectivity and production of various ‘designer’ (Casey, 1995);
‘engineered’ (Kunda, 1992) or ‘enterprising’ selves (du Gay 1996)
Emphasis on new disciplinary regimes ‘founded on the internalization of
self-regulation, calculation and control in which externally imposed
authority and discipline becomes much less significant’ (Grant et al, 1998:
Townley and HRM as a power-knowledge discourse: ‘HRM’s role in
providing a nexus of disciplinary practices aimed at making emplyees’
behaviour and perfromance predicatble and cacluable..’ (1993: 538)
Moving on from culture change, but the cultural techniques associated
with soft HRM continue to be associated with the supposedly successful
regulation of employee identity
 ‘Identity regulation encompasses the more or less intentional effects of social
practices upon processes of identity construction and reconstruction. Notably,
induction, training and promotion procedures are developed in ways that
have implications for the shaping and direction of identity’ (Alvesson and
Willmott, 2002: 621).
HRM does have a symbolic dimension, e.g. adoption or
promotion of ‘best practices’ or being a ‘good
employer’ can have an effect on share price (Palmer
and Hardy 42)
 Assumes that the functioning of HRM can be found in
its discourse, and those discourses and technologies
are largely disconnected from context – as a will to
knowledge : the ‘re-reading of HRM’ (Townley 537) is
largely new languages for old practices
 One result – a complete lack of interest in the actual
effectiveness of the ‘tools’ of HRM or the ‘truth or
falsity of discourse’ and therefore with ‘mainstream
 Limited engagement does not mean absence of
connection to mainstream HRM
‘Soft HRM’ and mutuality models, where commitment and
investment in human capital is seen as central to competitive
advantage (Appelbaum et al, 2001; Pfeffer 1994, 1998)
 Universalistic, best practice models - commitment model the
defining feature of HRM. It replaces the control or
compliance model: ‘’create the conditions for employees to
display internally self-driven initiative and take more
responsibility for monitoring their own behaviour’ (Wood
1995: 216).
 Culture declines, branding emerges; geared primarily
towards corporate reputation, but employees encouraged to
‘live the brand’
 ‘The identity of the firm as an employer. It encompasses the firm’s
value system, policies and behaviours toward the objectives of
attracting, motivating, and retaining the firm’s current and
potential employees’ (Ainspan and Dell, 2001: 3).
Strategic HRM and high performance work practices –
a different take? Best practices – lists and clusters
A difference between commitment-seeking and
commitment generating practices that ‘energise
employee commitment’ (Kaufman 2010)
A difference between high involvment work practices
and high commitment employment practices?
The underpinning human capital narrative: labour as
asset not cost, at least to the core rather than
contingent workforce (hard HRM)
 RBV – ‘human capital represents one of the last and best
sources of competitive advantage’ (Kaufman 2010)
 HR tools manage human capital pool. Commitment aligns
interests and mobilises discretionary effort
The unproven link between high commitment (and other HRM effects)
and high performance
The empirical critique: minority of firms, minority of practices: emphasis
on form not content; but doesn’t tell us much, if anything about
 ‘ would appear that, on average, the full adoption of the paradigm may not
yield outcomes that are appreciably more positive than those yielded by
pratices that have long been associated with good management, including
professional personnel practices (e.g. job ladders, employment security,
gievance systems, formal training, above-market pay), group work
organization, information sharing and accomodative union relations’ (Godard
2005: 162)
The historic weakness of HRM discourse is its attachment to the concept
of human capital.
Universal models do have a conception of the environment as driver, but
it is a weak and impoverished one
‘Approaches to constructing the independent variable in HPWS in which
researchers aggregate their perceptions of “best practices” without
regard to a specific context, are therefore fundamentally contentious’
(Boxall and Macky 7)
Economically rational low road choices
 ‘…it might be argued that, in capital-intensive manufacturing, a HPWS model is
preferable as labour costs are a small proportion of total costs and high quality,
committed labour can facilitate the optimum exploitation of high-cost plant and
materials’ (Legge, 2005b: 229).
 Cost minimisation /leadership strategies
External fit may undermine internal fit
Acceptance of a ‘differentiated workforce’: talent management, targeted
investment in human capital, ‘employee of choice’ rather than ‘employer of
choice’ (Becker, Huselid and Beatty 2009)
The post-structuralist version of best fit
 ‘because knowledge workers have so much autonomy in how they apply their skills,
organisations must increasingly focus on enacting effective normative structure to
shape employees’ subjective identity and orient it towards the achievement of
organisation goals’ (Alvesson 2001)
Better, but not adequate: external fit based on product market variation;
naivety about cost minimisation; ‘competitive pressures’ neglect of capital
markets in constructing market discipline
High performance does not necessarily protect any firm or group of workers
A political economy approach, but which one?
Divergent interests and mutual gains in the
employment relationship
 Employment relations actors as purposeful and
knowledgeable, constrained actors not identityseeking idiots
 HRM and the agency relationship
 A different line on commitment: ‘There is a danger in
treating the normative as a separate category. All
control practices have normative dimensions. Even if
not explicitly designed to engage with ‘hearts and
minds’, their operation and effects will do so’.
(Thompson and van den Broek 2010: 6)
The shift from managerial to financial capitalism, from extraction and
realization of value in capital rather than (the management of labour in)
product markets
The promises of private equity
 Cost cutting and work intensification
Financial intermediaries, owners and local managers: levers and agents,
who is making ‘economically rational’ decisions?
Disconnected capitalism: impact on local bargains. Divergence of work
and employment systems
Applebaum and Batt: the turnaround
 ‘Under the shareholder model of financial capitalism, then, the focus of
investment activities shifted – from that of investing in productive enterprises
to that of extracting money from companies for further trading activities,
which yielded higher returns’ (2010, 7)
Organisations are increasingly dominated by the principles of ‘market
rationalism’ and normative interventions promoting commitment and
focusing on cultural change are becoming less relevant or marginalised
(Kunda and Ailon-Souday, 2005; Thompson, 2003).
Financialization as a variant of market discipline
Can we explain performance outcomes without HCM?
 Capelli and the ‘frightened worker model’
 Old and new forms of insecurity: ‘overall, the results provide
reasonably good evidence that employees exert high levels of
effort in insecure conditions’ (McGovern et al)
▪ Consistent with the ‘dark side’ of HRM and lean production perspectives
from labour process research
 Weakness of capacity to resist, compliance as a substitute for
commitment and trust: to what extent is effort discretionary?
 Market individualism and the ‘free worker’
So, why HPWP? ‘more intensive investment in raising the
performance of existing employees’ (McGovern et al, 145).
It does extract effort and in a variety of (selective) ways
and contexts.
In ‘marketized’ systems is HRM necessary? Trends towards
outsourcing and HR service centres
 Structural isolation and disappearance from shop floor
 ‘You are so out of touch, so out of touch! You’re meant to be in
charge of the human beings in this company. You’re actually
meant to be in charge of the people, not the profit or the margin
or whatever else, you’re actually meant to be in charge of the
actual human beings in the building’. (Avatar employee)
Kochan: HR from steward of the social contract to business
partner and handmaiden to corporate elite
 Nobody wants to be employee champion (Francis and
Keegan 233); employees know where HR stands and they
don’t like it
 A more professional, more ethical, more reflexive and
balanced HR – don’t hold your breath.
The romance of human capital, self-interest of the profession
 SHRM is fraught with mis-specification…. Is a management-centric theory
oriented towards a commitment/ILM type of employment model that gives
over-emphasis to psychological factors’ (Kaufman 2010: 16)
There is no realistic path to internal reform of HRM; regulation of
employment systems
Is there any sense in which ‘people are our most important asset’ is true?
An asset with value rather than a valued asset.
The commitment chimera, commitment to what?
 ‘For employers there is a need to recognise that the promise of the high
performance paradigm may be false one. It may make better sense for most
to adopt what have always been good management practices, possibly with
some alternative work practices grafted on. These practices may not yield the
high levels of commitment promised by the high performance paradigm, but
they be expected to yield reasonable levels of consent and realistic levels of
performance’ (Godard 2005: 170)
Abandon the idea that HRM is a distinctive approach to managing people
at work. This is consistent with Boxall and Purcell’s preference for
‘analytic HRM’
Who should be engaging with whom? The blind alley of ‘critical HRM’
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