Digital HR

A Critical Management Approach to the Digitilization of Organizations

Amelia Manuti, Pasquale Davide de Palma

• Publisher: Palgrave Macmillan
• Year: 2017
• Print ISBN:
  9783319602097
• eBook ISBN:
  9783319602103
• Topic: Business
• Subtopic: Digital Marketing
• Index: Business

This book draws on recent debate surrounding the emergence of cognitive intelligence in organizations, exploring the redefinition of the labor market and consequently, employment. With a particular focus on Human Resource Management (HRM), the authors analyse the socio-cultural transformation of  traditional practices and methodologies that are ocurring in the workforce. Digital HR presents detailed case studies and interviews with HR managers of large multinational companies, providing comprehensive empirical evidence for academics and students interested in the development of HRM in today's digital landscape. The book will also be valuable to practitioners and managers looking to adapt the role of HR in their own companies or organizations.

© The Author(s) 2018

Amelia Manuti and Pasquale Davide de PalmaDigital HRhttps://doi.org/10.1007/978-3-319-60210-3_1

Begin Abstract

1. The People-Based Approach in Human Resource Management

Amelia Manuti¹ and Pasquale Davide de Palma²

(1)

University of Bari Aldo Moro, Bari, Italy

(2)

Das HumanKapital, Molfetta, Italy

Amelia Manuti (Corresponding author)

Email: [email protected]

Pasquale Davide de Palma

Email: [email protected]

Abstract

Within the last decades, the idea that the competitive advantage of organizations can be driven by the accumulation of high quality human resources has affirmed in the scientific literature. The focus on human capital as a source of competitive advantage has led organizations to compete in the talent war and to adopt a strategic management of people mainly defined resource-based. This perspective has emphasized the role played bu human resources as an intagible though valuable, rare, and non-substitutable asset of the organization. Human resources are precious because they are scarce, specialized, and hold tacit knowledge. The chapter goes into detail of this perspective in light with the results coming from a corpus of interviews with some of the most representative HR managers in Italy (Elica, Insiel and NH—Hotel). These case studies will show the crucial role played by people in organizations.

Keywords

Human capitalCompetitive adavantagePeople-based approachHuman resource management

End Abstract

1 Introduction

Almost 20 years ago, Jeffrey Pfeffer, Professor of Organizational Behavior at the University of Stanford, published a book titled “The Human Equation. Building Profits by putting People first”. This book, following another manuscript published four years earlier (Competitive Advantage Through People), marked a milestone in debate surrounding management approaches.

In view of the increasing evidence portraying the negative impact of scientific and rationalistic organizational models, Pfeffer advocated a more participative approach to management, suggesting that a company could gain sustainable competitive advantage by treating employees as its most valuable resource. Pfeffer’s most important contribution was his critical analysis of the most common misconceptions about organizational economical success, includingl the belief that cost-cutting is the only way to increase profitability. Adopting an evidence-based approach, Pfeffer showed the risk of relying on downsizing as a means of increasing profits by arguing that employees could become distrustful and uncommitted to a company that considers them a disposable commodity.

By reviewing studies from different kinds of industries (e.g. automobile, steel, apparel manufacturing, semiconductor, oil refining, and service firms) Pfeffer identified several key dimensions to increase profitability through people. Among them areemployment security and information sharing. According to common managerial rhetoric, employees should be encouraged to develop their skills enabling them to be employable. Therefore, HR practices often support the idea that employment security is a thing of the past, represented by the growing number of short-term and on-call employees. Yet, this assumption could actually be based on a greater need to avoid making such guarantees to employees due to the possibiblity that organizations may decide to downsize. However, even more recent empirical evidence indicated that the decision to downsize often creates negative consequences for people, and of course for organizations that sometimes cost to the latter more in terms of performance and quality (Quinlan and Bohle 2009).

In view of this, employment security has become a crucial variable in the development of the person-organization relationship, and thus greatly influences performance management (Coyle-Shapiro and Kessler 2000). Pfeffer made a comparison between the employer/employee relationship and a personal relationship. It would seem paradoxical to ask for someone’s committment and loyalty at a point when you no longer value them. This would clearly not elicit a positive response in the relationship, nor would it elicit a positive response within a work environment. Pfeffer asserted that a workforce which is commited to its company will be more productive and act in harmony with the organization.

A second strategic dimension debated by Pfeffer is information sharing. He indicated the importance of sharing financial and performance information with the personnel. Actually, one of the problems with organizations is that management often fail to align business practices with stated goals. Management should determine what types of employee management processes will work to achieve corporate goals. If a company wants to achieve its goals, management needs to have the support of the employees. This goal can be achieved through management practices that support participation and people enhancement. Likewise, this dimension finds support even in most recent studies confirming the strategic relevance played by the alignment between employees’ values and organziational goals (Paarlberg and Perry 2007).

A generation has passed and it is quite amazing to note the absolute modernity of such assumptions, that are even more important in the turbulent and fragmented economical and cultural scenario of the present labour market .

Accordingly, the radical transformation of employment and the discontinuity of career paths have led organizations to reconsider their traditional organziational models and have pushed individuals to consequently restructure their employment relationship. Issues such as career attitudes, psychological contracts and organizational behavior have been widely investigated within the last decades showing that traditional theory and HR practices are no more sufficient to explain what is going on at present (Gerber et al. 2012).

In view of this, the aim of the present chapter is to introduce a people-based perspective to human resource management in light with the results coming from a corpus of interviews with some of the most representative HR managers in Italy (Elica, Insiel and NH—Hotel). These case studies will show the crucial role played by people in organizations.

2 Turning Organizations Inside Out: The Theoretical Origins of a People-Based Approach

Within the last decades, the idea that the competitive advantage of organizations can be driven by the accumulation of high quality human resources has affirmed in the scientific literature (Noe et al. 2006). The focus on human capital as a source of competitive advantage has led organizations to compete in the talent war and to adopt a strategic management of people mainly defined resource or people-based.

This perspective has emphasized the role played by human resources as an intagible though valuable and potentially rare, and non-substitutable asset of the organization . Human resources are precious because they are scarce, specialized, and hold tacit knowledge (Fernandez et al. 2000; Lepak and Snell 2002; Lepak et al. 2003; Ray et al. 2004; Wright et al. 2003).

As showed earlier, the value of people inside organizations is not a recent discovery. Its orgins can be found in Elton Mayo’s investigations at the Hawthorne Plant of the Western Electric Company in 1949 where he initiated the so-called Human Relations School.

Actually, Mayo gave a great contribution to the debate about the relationship between people and working context, ouvertly conflicting with the dominant scientific view of organizations. He was the first to underline that organizations cannot be seen simply as phisical contexts where people go to work , they cannot be considered as mere containers of people accomplishing a task. Individuals invest most of their cognitive and affective resources in what they do at work and of course parallel to this they engage in formal and informal relationships that shape their professional experience. Far from being a mere technical component (as Taylor defined them), people at work are resources, subjectivities, persons.

This perspective proposed a renewed vision of the working organization and greatly emphasised the subjective dimension implied in the working experience.

Some years later, this awareness has been further amplified by the important contribution of social constructionism, namely a theory of knowledge developed in social sciences that basically state that human beings rationalize their experience by creating models of the social world and share and reify these models through language (Berger and Luckman 1966).

Applied to the organizational research, this perspective flows into what is called ‘relational constructivism’ (Hosking 2004, 2011), a theoretical proposal that radically changes the way organizations are approached and investigated.

Moving from the authoritative work by Weick (1979), the organizational context is completely redefined as a dynamic system of organizing pr...

Table of contents

• Cover
• Frontmatter
• 1. The People-Based Approach in Human Resource Management
• 2. The Cognitive Technology Revolution: A New Identity for Workers
• 3. The Cognitive Technology Revolution: A New Role of HR Practices?
• 4. Social Networks as Strategic Ally of HRM Practices in the Cognitive Technology Era
• 5. How to Develop Digital HRM Practices in the Cognitive Technology Era: Evidences from a Case Study
• 6. Conclusion
• Backmatter