Chapter 1 (3)

Set of Strategic Human Resource Practices

Employee-focused studies are a welcome occurrence, due to this apparent lack of investigation into the effect that HRM practice has on employees (Grant and Shields, 2002). Recent studies in employee centered literature have focused primarily on bundles of HRM (and non-HRM) employment practices (Grant and Shields, 2002).

The study of these bundles indeed provides good insight into the general effect that HRM practices have on employees; however the effects of individual practices on their own have not been investigated. Therefore, the purpose of this study is to do just that, by focusing primarily on the reactions that employees have towards strategic human resource management. This paper will critically analyze the research conducted on the reactions employees have towards strategic human resource management in an attempt to ascertain whether or not SHRM is indeed useful. Prior to delving into the literature, it is important for the purposes of this paper to determine how the organization develops the practices and also to highlight what these practices constitute. There are many labels given to this area of HRM. The predominant labels include “high performance management” (White, Hill, McGovern, Mills and Smeaton, 2003), “high involvement management” (Lawler, 1986) and ‘high commitment management” (Wood and deMenezes, 1998). “High involvement” is used by some to emphasize the importance of enhanced opportunities for employees to make decisions and exercise discretion. Others, as highlighted, prefer to use the term ‘high commitment’ to highlight the role of effective management in enhancing employee commitment and thereby reducing the need for managerial control. Nonetheless, there remains considerable overlap between the practices associated with each approach.

For the purposes of this study, and given the nature of its aim to collate themes that arise from employee reactions, the term HPWS (high performance work systems) will be used on the basis that it is sufficiently broad enough to encompass the range of practices by different approaches (Ramsay, Scholaries and Harley, 2000). Prior work on withdrawal behavior has examined the determinants of both individual employees’ departures and aggregate organizational turnover (Huselid, 1995). Previous research concluded that perceptions of job security, the presence of a union, job satisfaction, organizational tenure, demographic variables such as age, gender, education, and number of dependents, organizational commitment, whether a job meets an individual’s expectations, and the expressed intention to search for another job were all predictive of the employee’s decision to leave (Arnold and Feldman 1982; Cotton & Tuttle, 1986).

High performance work systems aim at reducing turnover, absenteeism and costs through a reduction in the need for control and monitoring (Ramsay et al., 2000). Furthermore, so-called HPWS create high trust, high involvement, high intrinsic satisfaction, and high skill and control and as a result, high commitment (Scholarios and Ramsay, 1999; Harley, 1999). With these “objectives” as they may be termed, it is important to analyse the actual effect of HPWS on organizational commitment.

“Taken together, the studies reviewed show that specific practices such as training, alternative pay systems, and employee involvement often are correlated with higher productivity. These, and other practices are associated with even greater productivity improvements when implemented together in systems” (Kling 1995: 32). The implementation of HRM systems is more important than individual characteristics because there are synergies and complementarities in HRM practices (Kandel and Lazear, 1992; and Milgrom and Roberts, 1995).

Although, researchers have made strong theoretical arguments for bundling human resource practices, conceptualization and measurement of a configuration remains inconsistent and problematic (Becker and Gerhart, 1996; Dyer and Reeves, 1995).