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Hpws Notes

Economics and Management Notes > Employment Relations Notes

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HPWS notes A critical assessment of the High-Performance Paradigm - Goddard?When compared with traditional personnel practices (eg formal training, grievance systems), group work organsation, information sharing and accommodative union relations policies, the high performance paradigm may yield marginal performance gains while having ambiguous/negative effects for workers and unions. Conflicts embedded in the structure of the employment relation may substantially limit the effectiveness of the high performance paradigm for employers, rendering it highly fragile and explaining its variable adoption. Might only be in the interest of a minority of employers to adopt the high performance paradigm fully, and even when it is may not have positive implications for workers or their unions. Shows there may not be a universal coincidence of interests, so we need state policies, laws etc that promote good management practices.

Best practice and best fit: chimera or cul-de-sac? - Purcell???

Appears to be a model of best practice in HRM. Huselid - "all else being equal, the use of high performance work practices and good internal fit should lead to positive outcomes for all types of firms". Thompson - "high performing establishments, as measures by value added per employee, tend to use a wider range of innovative HR practices covering a high proportion of employees. There is clear evidence that adopting these innovative practices is associated with more effective organisational performance." Since we all gain by adopting HCM - no need for state intervention, labour market regulation or trade unions, both profits and employee welfare can be maximized. High Commitment Management universally applicable = 2 main problems. Need to identify components in the HR bundle, the way the policies reinforce each other, and diffusion. In 1992 82% of textile manufacturers were using a Taylorist system still despite high injury rates, little career mobility, poor economic performance. Why? Isomorphism. Modular manufacturing hasn't diffused rapidly, relationship between choice of human and non human resources - if non-human investments are not deemed worthwhile, HR best practice won't necessarily be implemented.

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Wood and de Menezes - control or cost minimization type of human resource management can be equally successful in performance terms. How do firms choose between a high commitment style and a control style?
Problems weakening utility of studies:
- single respondents answering quick questions. Reliance on one respondent to represent the whole firm, and reliance on a design of questions where the respondent just needs to tick a box rather than find the answer. Considerable overestimate - 1990 WIRS questions were asked of the firm's performance relative to its competitors, large majority reported it better than average.
- Hard-to-measure items get ignored, literature on work and management processes side-stepped because it cannot fit the research design. Too much is assumed.
- Which employees are included and who is included in the boundary of the firm? No outsourced, agency, temps, short term etc.
- Causality. It is logically possible to assert that there is either no causal connection between high commitment practices and economic performance or similar. Statement too bold. More plausible to argue that instead of 'systems of HR determine productivity', it is the appropriateness of the HR system that is key, and inappropriateness that may have negative performance consequences more often than the HCM bundle has positive superior outcomes. Best fit school - possible to model the type of HR needed for a given type of business and the conditions necessary for this to be adopted in a wide number of firms in similar circumstances. Limitations to the current research on the link with strategy.
- business strategy. Porter's categorization used. In practice many companies are caught in the middle between differentiation and cost reductions. How to identify? Huselid asked managers to provide an estimate of a firm's competitive strategy by indicating the proportion of its annual sales derived from each of those strategies. Who would be able to give these estimates?! Ignores complexity of multi-divisional, multinational and multi-product organizations where corporate managers have limited knowledge of divisional activities. Arthur supports the best fit model, '90% of the mills following a low-cost business strategy have a cost reduction industrial relations system, and 60% of the mills following a differentiation business strategy have a commitment-maximising industrial relations system'. 8 of the 9 mills with poor fit had been subject to a takeover preceding the research. Disincentive to invest in HCM unless some other contingent factor such as technological change spurs an HR policy reappraisal -Pil

-and MacDuffie - some US and Canadian motor vehicle plants continued with traditional work practices because they remained successfully focused on building a single model at relatively high volumes, reaping EOS. Operational strategies. Tendency to overlook the most obvious fact that HRM is about the operational performance of people in the work environment now and in the future, so is directly connected to work organization inside the firm in all its forms. Analysis can't rely just on business strategies. Eg in technology, where cost minimization is key a technological strategy of high capital investment allowing via continual processing and automation, fewer people who are more likely to have to use skills and knowledge working in teams, with all the policies of HCM. Happened at the Pirelli Cable Greenfield site in Aberdare, and the key intervening strategy between business strategy and HRM here is the technological strategy. Applies to services where a distinction is made between relationship and transactional markets and therefore marketing. Relationship-based customer service requires most sophisticated HR systems. Problem with linking HR systems to operational strategies is the huge difficulty in modeling all of the factors and estimating their interconnection, and coping with change. Contingency analysis also complicated by causal ambiguity and path dependency. Mueller - 'corporate prosperity typically rests in the social architecture that emerges slowly and incrementally over time, and often predates the tenure of current senior management' ? culture points to uniqueness, no one best path, the precise right mix of HR systems can never be predicted. Managers have to make choices in HRM based on inadequate info and incomplete knowledge, not sufficient to justify individual policies on equality, health and safety etc on the basis of their contribution to profitability. Resource view of strategy. How can the universalism of best practice be squared with the view that only some resources and routines are important and valuable by being rare and imperfectly imitable. Turns HR back into an isolated operational matter. Not all of the organisation's employees constitute the org's resource strength, Grant's analysis of Hanson - strength lay in the ability of the corp acquisition team to 'rigorously prune the cash and assets', around a quarter of the workforce. Strength was held by a tiny fraction of the enterprise workforce. Need distinctive policies and practices to max performance of these core worker and a simulataneous differentiation with non-core peripheral workers. RBV leads to prediction that there is sharp differentiation between firms and within firms. Solves

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