Human Resource Management

A Critical Approach

David G. Collings, Geoffrey T. Wood, Leslie T. Szamosi, David G. Collings, Geoffrey T. Wood, Leslie T. Szamosi, Geoffrey Wood

• Publisher: Routledge
• Year: 2018
• Print ISBN: 9781138237544
• eBook ISBN: 9781315299532
• Edition: 2
• Topic: Business
• Subtopic: Human Resource Management
• Index: Business

Despite over three decades of debate around the nature of human resource management (HRM), its intellectual boundaries and its application in practice, the field continues to be dogged by a number of theoretical and practical limitations.

Written by an international team of respected scholars, this updated textbook adopts a critical perspective to examine the core management function of HRM in all its complexity – including its darker sides.

Human Resource Management: A Critical Approach opens with a critique of the very concept of HRM, tracing its development over time, and then systematically analyses the context of HRM, practice of HRM and international perspectives on HRM. New chapters commissioned for this second edition look at HRM and the issues of diversity, migration, global supply chains and economic crisis.

This textbook is essential reading for advanced and inquisitive students of HRM, and for HRM professionals looking to deepen their understanding of the complexities of their field.

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Human resource management

A critical approach

David G. Collings, Geoffrey T. Wood and Leslie T. Szamosi

Introduction

In recent years, many countries – most notably the US and the UK – have had to contend with much economic and political turbulence and uncertainty. Bound up with this has been the issue of how firms employ, manage and reward their people. On the one hand, systematic failures to generate and maintain occupational and employment security and to provide decent livings in either employment or retirement for a significant proportion of the population have been blamed as one of the principal causes of populist backlashes (Wood and Wright 2016). Despite almost three decades of debate in the mainstream literature around the nature of human resource management (HRM), its intellectual boundaries and its application in practice, the field continues to be dogged by a number of theoretical and practical limitations. On the other hand, exponential increases in managerial pay, and a dislocation between pay and organizational well-being and sustainability, have been blamed on failures in managing and governing the reward systems aimed at senior managers. This book is intended to provide students with a relatively advanced and critical discussion of the key debates and themes around HRM as it is conceptualized and operationalized in the early part of the twenty-first century. Thus, the current contribution is intended to be in the tradition of Storey (2007) and Legge (1995) and aims to provide students with a well-grounded and intellectually rewarding critical overview of the key issues surrounding HRM from theoretical and practical perspectives that combine theory with practice. In doing so, we draw on contributions from leading scholars in the field who provide detailed discussions on key debates in their respective offerings.

In this introduction, we provide the context for the book though considering a number of overarching themes within which key debates in the field of HRM are situated. Specifically, we provide a summary discussion of the theoretical and intellectual boundaries of HRM, consider its emergence in historical context and identify some of the pervasive contradictions and limitations which prevail in the literature. Finally, we provide a short outline of the structure and content of this volume.

HRM defined

Our discussion begins by considering what HRM actually means. Although in the broadest sense it may be taken to denote all aspects of recruitment and hiring, planning, development and reward, the human side of the organization of work and of the employment contract, HRM has also been taken to incorporate a strategic dimension. In other words, it is not just about the choice and implementation of particular policies and practices towards the management of people but also the adoption of a dynamic and adaptive (as adverse to purely administrative) purpose, in line with wider organizational strategic choices (Wilkinson et al. 2014). Others have argued that HRM has an ideological dimension; recognizing people are an active resource may be superior to one that simply sees them as passive subjects. However, it also suggests that, as with any other resources, they should be deployed and dispensed with in line with perceived organizational priorities, rather than as individuals who should be treated with a degree of empathy, in both their interests and for the longer-term sustainability of the organization. Given the importance of definition in understanding the boundaries of a field, this issue is clearly an important point of departure. However, this question is more difficult to answer than one would expect, since from its emergence HRM has been dogged by the still largely unresolved ambiguity surrounding its definition. As Blyton and Turnbull (1992: 2) note, ‘The ways in which the term is used by academics and practitioners indicates both variations in meaning and significantly different emphases on what constitutes its core components’.

One of the dominant definitions (in the UK at least) has been to see HRM as a contested domain, with rival soft and hard approaches. The soft approach to HRM is generally associated with the Harvard School and in particular the writings of Michael Beer and colleagues, and with a later tradition of UK scholarship, associated with the Human Resource Management Journal (see Beer et al. 1984; Beer et al. 2015; Beer and Spector 1985; Walton and Lawrence 1985). As with the hard school, the soft school emphasizes the importance of aligning HR policies with organizational strategy, but it also emphasizes the role of employees as a valuable asset and source of competitive advantage through their commitment adaptability and quality, rather than being treated simply in instrumental terms (Legge 1995; D’Art 2002; Wood and Vitai 2014). It stresses gaining employee commitment to the organization through the use of a congruent suite of HRM policies. Soft HRM may itself be divided into two sub-strands. The first strand, soft HRM, draws on behavioural sciences in particular, building on strong resonance with the Human Relations school. The latter emphasized the importance of communication and recognizing the need to give employees the opportunity to grow while the concept of human growth, which is central to its theory, echoes ‘all-American’ theories of motivation, from McGregor’s Theory ϒ to Maslow’s Hierarchy of Needs (Legge 1995). Hence, it is sometimes conceptualized as ‘developmental humanism’ (Storey 1989; Legge 1995). HRM is operationalized in terms of strategic interventions designed to develop resourceful employees and to elicit their commitment to the organizational goal (Storey 1992). Critics have charged that it assumes that a lot of problems can be solved by good communication and through reducing the space for misunderstandings, and discounts the impact of pay on productivity and motivation and, indeed, any benefits that might flow from giving employees a genuine say in the running of the enterprise (Wilkinson et al. 2014). HRM is operationalized in terms of strategic interventions designed to develop resourceful employees and to elicit their commitment to the organizational goal (Storey 1992). However, sceptics have conceptualized soft HRM as the ‘iron fist in the velvet glove’, suggesting that it could be argued that this theory of soft HRM

reduced… the complex debate about the role of people in work organizations to the simplistic dogma of an economic model which even its ‘creator’ Adam Smith would probably not have wished applied in such an indiscriminate manner.

(Hart 1993: 29–30)

Another uncharitable definition of soft HRM is that it constituted a desperate rear-guard action by liberal academics and practitioners, mostly writing in the United States, to sell more humane forms of managing people to essentially conservative owner interests that have in increasing numbers ruthlessly pressed for a maximization of short-term profits, regardless of the cost to both employees and the long-term good of the organization (Wilkinson et al. 2014; Mellahi et al. 2010). In other words, soft HRM is about trying to encourage firms to be ‘nicer’ to their people, on the basis that such ‘niceness’ is likely to translate into greater commitment and productivity and, hence, even more profits. As such, moral issues are ignored. A second sub-strand of soft HRM has been one associated with a body of scholars rooted in the industrial relations tradition (which, in turn, focused on the employment contract, the inherent tensions around the amount employees are paid and how the contract is enforced) (Wilkinson et al. 2014). This strand is inherently pragmatic; rather than rejecting the notion of HRM on the basis that it is management (rather than employee) centred, it accepts that HRM has become the main broad framework through which firms manage and engage with their people. This approach seeks to synthesize the traditional industrial relations tradition (with its interest in the nature and extent of workplace tensions and imbalances, the role of unions and the interplay between conflict and compromise) with the insights provided by empirical research on other aspects of people management, for example, human resource development and planning (Brewster et al. 2012). The result is an analytical framework that seeks to draw connections between different areas of HR policy and practice (for example, between the degree of training and employment security provided). This approach would recognize the possibility of providing solutions to particular issues and challenges, without denying inherent tensions and imbalances.

Soft HRM stands in contrast with the hard variant. Hard HRM is generally associated with the Michigan School (Forbrun et al. 1984). Its emphasis is on the use of human resource (HR) systems to ‘drive’ the attainment of the strategic objectives of the organizations (Forbrun et al. 1984). While soft HRM emphasizes the human element of HRM, the emphasis of the hard approach is very much on the resource as a means of maximizing shareholder value over the short term. The duty of managers is quite simply to make money for owners, and a focus on other issues such as employee rights is simply a distraction: rather, by focusing on returns, the organization will perform most efficiently, which ultimately is in the interests of all.

It has been argued that, in the tradition of Taylorism and Fordism, employees are viewed as a factor of production that should be rationally managed and deployed in quantitative and calculative terms in line with business strategy (Tyson and Fell 1986; Storey 1992). However, rather different to classic Taylorism or Fordism, job security in the new hard HRM is seen as an unnecessary luxury, while pay rates are to be kept to the lowest level the external labour market would permit. There is little mention in the literature illustrating how hard HRM echoes Henry Ford’s famous commitment to a (then very generous) 5 dollar/day wage (however hardline Ford was towards trade unions and, indeed, concerned with managing the personal lives of employees). In other words, hard HRM is far removed from past notions of paternalist management, which, while assuming that decision-making should be centralized in the hands of senior management, also acknowledged that the firm had long-term responsibilities to its workers. However, hard HRM also embodies an element of sophistication. For example, it would allow for quite sophisticated reward systems to ensure senior managers genuinely follow the interests of shareholders (Wood and Vitai 2014). Again, there is an implicit assumption of trickle down (a prosperous organization will be better equipped to provide jobs and have the capacity to pay genuinely hardworking and effective employees well), and there is a basis for enthusing employees around this (Brewster et al. 2011). Indeed, many employers associated with hard HRM – such as McDonald’s and Walmart – set great store around collective employee expressions of enthusiasm, whether those marshalled are happy or not (cf. Smith 2011). In contrast, under the traditional sweatshop model, there would be no such underlying assumptions nor any commitment to developing or refining HR systems; rather, the main focus would be around ensuring the maximum amount of labour is extracted from employees, and pay is kept as low as possible.

Hard human resource policies in the hard variant are designed to be both internally consistent and externally aligned with the organizational strategy. These interventions are designed to ensure full utilization of the labour resource, not just in terms of physical output but also in ensuring that employees excel (Wood and Vitai 2014; Storey 1992). It is legitimized by and finds its impetus from a market-responsive frame of reference (Storey 2007). At the extreme, implicit contracts regarding pensions and tenure are seen as hampering effective management; these should, if possible, be jettisoned, with employee rights being pared back as much as possible. Critics of this point of view have argued that such a focus is likely to make for higher staff turnover rates, with the inevitable loss of job-specific skills and accumulated wisdom, low trust, low levels of organizational commitment and, hence, higher transaction costs (see Marsden 1999). Cascio’s (2006) comparison of Walmart, an archetype of hard HRM, with Costco, a company defined by high ethical standards and a softer approach to HRM, confirms the limitations of the former approach. Walmart, a company that prioritizes shareholders as stakeholders and maximum amount of labour extracted from employees, has been consistently outperformed by Costco over the past number of decades (Blinn 2013; Cascio 2006; Ton 2014). This translates into significantly better sales and profit per employee and shareholder returns. Similar results are evidenced in organization such as QuikTrip, Mercadona and Trader Joe’s, where investment in employees means larger labour budgets but translates into stellar operational execution and higher sales and profits. Employees also work more efficiently and find work more fulfilling while delivering improved customer service (Collings 2014; Ton 2014). In other words, hard HRM is likely to make organizations less efficient, and in practice, differences from the sweatshop model are not always clear-cut. It could be argued that most successful incrementally innovative high value-added manufacturing firms have shunned hard HRM. In contrast, hard HRM has been more widely deployed in more volatile areas of economic activity, such as financial services, and across the service economy, although, in the case of the latter, it often appears to degenerate towards the sweatshop model.

A second and simpler way of viewing things is that the soft/hard divide in the narrow sense can be defined as a strategic approach to managing employees, which came to the forefront in the liberal market economies, particularly the US and the UK, in the 1980s. While having both soft (‘people friendly’) and hard (‘people as a resource to be deployed, utilized and, if need be, disposed of’) variations, common to this approach was an emphasis on optimal shareholder outcomes, with enhancing outcomes for other stakeholders being at best a secondary objective and, at worst, an unnecessary distraction. This ‘two sides of the same coin’ point of view argues that, since the end of the long boom that lasted from the post–World War II period up until the 1970s, there has been a period of erratic and unstable growth and recession. This period has been characterized by employers gaining the upper hand over employees, on account of the very much weaker bargaining position of the latter (cf. Kelly 1998). Given this, managers – particularly in the liberal market economies such as the US and UK, where workers have historically had fewer rights under both law and convention – have taken the opportunity to fundamentally change the way they manage people. This has taken the form of systematic attempts to undermine collective bargaining with unions, replacing this with weak forms of consultation with individual employees. Collective employment contracts – where workers performing similar jobs are rewarded according to a pre-agreed pay scale – are replaced with individual ones, with employees being rewarded on the basis of regularly appraised performance and/or through pay rates simply being linked to outputs. In other words, the role of the employee in the firm is not a dynamic and, in some sense, negotiated relationship, but rather simply the deployment of a resource, in the same way a firm would deploy other physical resources such as raw materials.

A third way of looking at things is to simply conceptualize HRM as little more than a renaming of personnel management. In this vein, writers such as Armstrong (1987) describe HRM as ‘old wine in new bottles’, while Guest (1987) pointed to the fact that many personnel departments changed their names to HRM departments, with little evidence of any change in role. In practice, this would suggest th...

Table of contents

• Cover
• Title
• Copyright
• Dedication
• Contents
• List of figures
• List of tables
• About the editors
• About the contributors
• 1 Human resource management: a critical approach
• PART I
• PART II
• PART III
• Index