People Management and Performance

Citation

Keith, K. (2009), "People Management and Performance", Personnel Review, Vol. 38 No. 3, pp. 339-341. https://doi.org/10.1108/00483480910943377

The people and performance link

How and why do human resource practices link to organisational performance? Often referred to as the “Black Box” of strategic approaches to HRM and even as the “holy grail” of HRM (Legge, 2005); this issue has been the subject of extensive research and hot debate for two decades. This has however resulted in few definitive answers. Edited by a highly respected team of academic researchers, this book offers a comprehensive and skilful weaving of academic theory with practice‐focussed case studies. It presents an “HR‐causal chain model” andhighlights employee attitudes such as affective commitment and the discretionary behaviours understood to characterise high performance. Their aim is to theorise the “how”; that is, the sequence of processes involved in the practice of HRM, which are applicable across a range of contexts. In doing so this book provides much needed clarity, through exploration and evaluation of how HRM and performance may most helpfully be conceptualised and the implications for understandings of the practice of HRM. Targeted at final year and post‐graduate students of HRM but also at HRM practitioners, this book therefore “seeks to steer a course between the highly sophisticated analyses which are almost impenetrable to the layperson and more journalistic accounts” (Purcell et al. p. xv). This is much needed and is therefore both a valuable addition to the burgeoning literature on this complex topic, but it is also a tall order.

A significant strength of the book is the clarity and logic of its structure. It comprises four main sections and begins by considering the irony of a growing consensus about the association between HRM and performance in theory, whilst in practice HRM practitioners potentially face marginalisation. The suggestion is that trends towards outsourcing, e‐enabled HRM and devolving of the day‐to‐day practice of HRM to first line managers, as well as increasingly flexible models of the firm, all threaten to dilute the role of HR practitioners. However, such developments also help explain the appeal of the so‐called “business partner” role for HRM practitioners and the significance of ongoing attempts to understand the ways in which HRM practices influence individual and organisational performance. The challenge has been to develop robust theoretical explanations of the “how” and the “why” of the HRM‐performance linkage capable of withstanding academic critique, enhancing the credibility of HRM in the eyes of sceptics and which have relevance to practice.

Two overarching questions inform this volume: What are the links between strategic HR and business performance? and How and why are HR practices linked to performance? The approach adopted in answering them is clearly explained and is aided by effective use of visual representations, particularly at the beginning of the book. The first section offers discussion and evaluation of existing research and outlines the main methodological and theoretical issues. This establishes the background to and context of the causal chain model, which they then present. Next, a detailed exposition of this model is developed which includes its relevance for practice and is based around considerations of context, practices, processes and the outcomes of HR practice. Third, a range of case studies drawn from the extensive CIPD research conducted since 1997 by Purcell and colleagues as well as other sources, to demonstrate the relevance of this model to different organisations and a range of business sectors. They conclude with a detailed discussion of the possible implications for practice and for future research.

The chapters consider each of the links in this proposed causal chain model in turn, including the importance of organisational culture and values, intended versus enacted HR practices and the crucial role of first line managers. While several of the topics have been explored in prior work by Purcell and his colleagues, an important development in this book, is the more overt emphasis upon employee attitudes and behaviours as the crucial linking mechanisms within the causal chain. This approach places employee perceptions at the very heart of the HRM‐performance issue; rightly so, in the opinion of this researcher. This view is endorsed by CIPD research (Purcell et al. 2003) and other in‐depth, longitudinal case studies, which have highlighted the significance for performance, of how HRM practice is actually received by employees (Hope‐Hailey et al., 2005). The book also emphasises the ways in which research into employee perceptions of the state of the psychological contract are highly relevant to theorisations of the HRM‐performance link. Particular emphasis is accorded throughout, to the role of first line managers in the day‐to‐day enactment of the various HR practices which together may optimise performance; maximising the ability, motivation and opportunity to perform (AMO) of employees. The aim is to build the feelings of trust, job satisfaction and organisational commitment associated with how employees' engage with organisational goals and with positive perceptions of the psychological contract.

However, the chapter devoted specifically to employees' perceptions, attitudes and discretionary behaviour proved somewhat disappointing. The case organisation data presented highlights considerable variations in employees' satisfaction and motivation levels as self‐reported in different branches of a single retailer, where identical HR practices were in use. Although the significance of the psychological contract and of context is clearly acknowledged by the authors the extent of the emphasis upon the role played by managers in eliciting motivation and discretionary effort, underplays other factors that may also be at work. For example the exercise of human agency has been proposed as a significant dimension of employees' behaviours, impacting upon organisational dynamics (Hesketh and Fleetwood, 2006) and is supported by recent research into the psychological contract. Research by Seeck and Parzefall (2008) for example, demonstrates the active role played by employees in constructing employment relationships, rather than simply responding to employer behaviour. Such possibilities are not considered in the highly management‐centred perspective offered here.

Nevertheless this is an excellent book and well worth purchasing at just under £25. It will almost certainly be of interest to academics as well as students of HRM. A final question remains, however, as to the extent to which it will prove truly accessible to practitioners. For while this comprehensive and meaningful exploration of a crucial HRM issue, offers a simple framework to explain the “how”, the “why” is inevitably more complicated, but yet is essential to real understanding of how HR practitioners can ensure that intended HRM practices do not result in significant unintended consequences.