Human resource management a critical approach, second edition

“This book delivers detailed and engaging contributions by leading authors. An
important point of distinction for the book is the emphasis on critical analysis of
topics that matter in HRM. I recommend it for advanced students and managers
interested in HRM.”
– Helen De Cieri, Professor of Management,
Monash University, Australia
“This revised edition provides a much-needed critical reflection on HRM covering the field’s most up-to-date challenges. Questioning both content and
context, we are provided with a deeper understanding of HRM than hitherto
available to both professionals and scholars.”
– Elaine Farndale, Associate Professor, The Pennsylvania State
University, USA, and Tilburg University, The Netherlands
“This wide-ranging critical text places human resource management appropriately in its broader social scientific and historical contexts. It makes a distinctive
and accessible contribution to the field and will appeal to many of those who seek
a more reflective and critical approach to the subject.”
– Richard Croucher, Professor of Comparative Employment Relations,
Middlesex University Business School, UK, and Adjunct Professor,
Norwegian School of Economics, Norway



Human Resource Management

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.
David G. Collings is Full Professor of Human Resource Management and
Associate Dean for Research at Dublin City University Business School, Ireland.
Geoffrey T. Wood is Dean and Professor of International Business at Essex
Business School, UK.
Leslie T. Szamosi is Senior Lecturer and MBA Academic Director at the
University of Sheffield International Faculty, CITY College, Greece.



Human Resource
Management
A Critical Approach
Second Edition

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


Second edition published 2019
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN
and by Routledge
711 Third Avenue, New York, NY 10017

Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2019 selection and editorial matter, David G. Collings, Leslie T.
Szamosi and Geoffrey T. Wood; individual chapters, the contributors
The right of the David G. Collings, Leslie T. Szamosi and Geoffrey T.
Wood to be identified as the authors of the editorial material, and of the
authors for their individual chapters, has been asserted in accordance with
sections 77 and 78 of the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced
or utilised in any form or by any electronic, mechanical, or other means,
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or in any information storage or retrieval system, without permission in
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Trademark notice: Product or corporate names may be trademarks or
registered trademarks, and are used only for identification and explanation
without intent to infringe.
First edition published by Routledge 2009
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
Names: Collings, David G., editor. | Wood, G. (Geoffrey), editor. |
Szamosi, Leslie T., editor.
Title: Human resource management : a critical approach / edited by
David G. Collings, Geoffrey T. Wood And Leslie T. Szamosi.
Description: Second edition. | Abingdon, Oxon ; New York, NY :
Routledge, 2019. | Includes index.
Identifiers: LCCN 2018019061 | ISBN 9781138237544 (hbk) |
ISBN 9781138237551 (pbk)
Subjects: LCSH: Personnel management.
Classification: LCC HF5549 .H78414 2019 | DDC 658.3—dc23
LC record available at />ISBN: 978-1-138-23754-4 (hbk)

ISBN: 978-1-138-23755-1 (pbk)
ISBN: 978-1-315-29955-6 (ebk)
Typeset in Galliard
by Apex CoVantage, LLC


To Dad. The best pal a guy could wish for.
D.G.C.
To Vicky, Alice and the Labradors.
G.T.W.
To my dearest wife, Katerina, my three angels,
Maria-Lorna, Margarita and Dimitris, Dad (Gabor),
and Giagia (Maroula). You give me wings to
keep flying.
L.T.S.



Contents

List of figures
List of tables
About the editors
About the contributors
1 Human resource management: a critical approach

xii
xiii
xiv
xvi

1

D AVI D G . C O L L INGS , GEO FFREY T. WO O D A ND LESLIE T. SZ AMOSI

PART I

2 HRM in changing organizational contexts

25
27

P H I L J O H N S O N A ND L ES L IE T. S ZA MO S I

3 Strategic HRM: a critical review

49

J AAP PAAU W E A ND CO RINE BO O N

4 HRM and organizational performance

74

S TE P H E N W O OD

5 HRM: an ethical perspective

98

M I C K F R Y ER

6 HRM practices to diversity management:
individualization, precariousness and precarity

117

D ARRE N T. BA KER A ND EL IS A BET H K. KEL A N

7 Organizational outsourcing and implications for HRM
FANG LEE COOKE

135


x

Contents
8 Reconfiguration and regulation of supply chains
and HRM in times of economic crisis

156

P H I L J O H N S O N, GEO FFREY T. WO O D, PA ULINE DIBBEN,
J O H N CU LL EN, JU L IA NA MEIRA , DEBBY BONNIN, LUIZ MIR ANDA,
G ARE TH CRO CKET T A ND CA RO L INE L INHAR ES

9 Knowledge and organizational learning and its
management through HR practices: a critical perspective

171

CL AI RE G U BBINS

10 HRM in small and medium-sized enterprises (SMEs)

194

TO N Y D U N D O N A ND A DRIA N WIL KINS O N

PART II

213

11 Recruitment and selection

215

RO S AL I N D H. S EA RL E A ND RA MI A L -S HA RIF

12 HR planning: institutions, strategy, tools and techniques

238

ZS U ZS A KI S PA L -VITA I A ND GEO FFREY T. WOOD

13 Performance management

262

AN TH O N Y MCDO NNEL L , PAT RICK GU NNIGLE AND

KEVI N R. MU RP HY

14 Reward management

280

S U ZAN N E RICH BEL L A ND GEO FFREY T. WOOD

15 Human resource development

295

I REN A G RUGU L IS

16 Industrial relations and human resource management

311

G I LTO N KLERCK

PART III

335

17 Human resource management in emerging markets

337

FRANK M. HORWITZ AND KAMEL MELLAHI

18 Comparative HRM: the debates and the evidence
CH RI S B REWS T ER A ND WO L FGA NG MAY RHOFER

358


Contents
19 International human resource management

xi
378

D AVI D G . C O L L INGS , HU GH S CU L L IO N A ND DEIR DR E CUR R AN

20 HRM in crisis

396

J I L L RU B ER Y A ND MAT H EW JO HNS O N

Index

412


Figures

3.1
3.2
3.3

3.4
8.1
12.1
13.1
13.2
18.1
20.1

The Harvard approach
The Michigan approach – the human resource cycle
Aspirational framework for strategic HRM
The contextual SHRM framework
Reconfiguration and regulation of supply chains and HR
practices
The human resource planning process
Stages of a typical performance management system
Unanticipated side effects to performance measures
Units of analysis in comparative HRM and their social
complexity
Change in output in the 2008–2009 recession

54
54
64
66
163
243
265
268
364

398


Tables

1.1
2.1
3.1
3.2
3.3
7.1
7.2
10.1
10.2
10.3
10.4
12.1
15.1

Definitions of HRM
Bureaucracy and post-bureaucracy compared
Thee modes of strategy synthesis
Outside-in versus inside-out perspective
The content of HRM bundles
Summary of main motives/reasons and theoretical explanations
of outsourcing
Implications of outsourcing for HRM in outsourcing client
and supplier organizations
From small is beautiful to bleak house
People management strategies in large and SME firms (%)

Employee communication channels in SMEs (%)
New HRM in SMEs (1998–2004)
Strategies for managing shortages of surpluses in the workforce
Approaches to workforce development

7
39
52
56
57
136
140
197
199
203
206
257
300


About the editors

David G. Collings is Professor of HRM and Associate Dean for Research at
Dublin City University Business School in Ireland. Prior to joining DCU,
he held faculty positions at the National University of Ireland, Galway and
the University of Sheffield. He has held visiting positions at King’s College
London, Nanyang Business School in Singapore and Cornell University as a
Fulbright Scholar. He is a leading international expert on talent management
and global mobility. His current research explores issues such as the shifting
nature of employment and managing performance in organizations. He has

been named as one of the most influential thinkers in the field of HR for four
consecutive years by HR Magazine (2014–2017). He has published numerous
papers in leading international outlets, including Human Relations, Industrial
& Labour Relations Review, Journal of Management and Journal of Vocational
Behaviour, and eight books; his work is regularly cited in media and other
outlets. His most recent project, The Oxford Handbook of Talent Management,
with Wayne Cascio and Kamel Mellahi, was published in 2017. He sits on
multiple editorial boards, including Academy of Management Review, Journal of Management and the Journal of Management Studies, and is currently
joint Editor-in-Chief at the Journal of World Business and former editor of the
Human Resource Management Journal and the Irish Journal of Management.
He is also permanent chair of the European Institute for Advanced Studies in
Management’s workshop on talent management. Twitter @collingsdg
Geoffrey T. Wood is Dean and Professor of International Business at Essex Business School. Previously he was Professor of International Business at Warwick
Business School, UK. He has authored/co-authored/edited 16 books, and
over 160 articles in peer-reviewed journals. He holds honorary positions at
Griffith and Monash University in Australia, and Witwatersrand and Nelson
Mandela Universities in South Africa. Geoff’s research interests centre on
the relationship between institutional setting, corporate governance, firm
finance, and firm-level work and employment relations. Wood is Editor-inChief of the British Journal of Management, the Official Journal of the British
Academy of Management (BAM). He also serves on the BAM Council. He is
also Co-Editor of the Annals of Corporate Governance and Associate Editor


About the editors

xv

of Academy of Management Perspectives. He is also editor of the Chartered
ABS Journal Ranking list. He has had numerous research grants, including
funding councils (e.g. ESRC), government departments (e.g. US Department

of Labour; UK Department of Works and Pensions), charities (e.g. Nuffield
Foundation), the labour movement (e.g. the ITF) and the European Union.
Leslie T. Szamosi is Senior Lecturer and Academic Director of the MBA programme at the International Faculty of the University of Sheffield, CITY
College and Founder and Co-Director of the Laboratory for Strategic People
Management. He is a member of the International Faculty of the Association of MBAs (AMBA) and is an evaluator and assessor of European Union
and various nationally funded projects. He has worked as a private consultant
across North America and Europe, including diverse organizations such as
the European Union (KOMVER II Project), Digital Electronics (now part
of Compaq Computers), Human Resources Development Canada, Industry
Canada and KPMG Management. He is a highly sought-after speaker and
workshop leader in the areas of HRM, specializing in change management
and organizational development, and has presented to companies such as
Heineken, Deutsche Telecom, MTel, the International Finance Corporation and the World Bank. His current research areas are in the area of HRM,
organizational change, resistance to change, knowledge management and
population groupings and brain drain (e.g. Generation X, Generation Y).
He has published in leading journals in the area, including the International
Journal of Human Resource Management, British Journal of Management and
International Business Review.


About the contributors

Rami Al-Sharif is at the University of Coventry.
Darren T. Baker is Assistant Professor in Business in Society, University College
Dublin, Ireland.
Debby Bonnin is Associate Professor, University of Pretoria, Pretoria, South Africa.
Corine Boon is Associate Professor of HRM, University of Amsterdam, the
Netherlands.
Chris Brewster is Professor of International Human Resource Management at
Henley Business School, University of Reading, in the UK; and at Nijmegen

University in the Netherlands.
David G. Collings is Full Professor of Human Resource Management and
Associate Dean for Research at DCU Business School, Dublin CIty UNiverity, Ireland.
Fang Lee Cooke is Professor of HRM and Chinese Studies at Monash University,
Australia.
Gareth Crockett is Research Associate, Sheffield University Management School,
University of Sheffield, UK.
John Cullen is Professor of Management Accounting, Sheffield University Management School, University of Sheffield, UK.
Deirdre Curran is Lecturer in HRM at J.E. Cairnes School of Business and Public Policy National University of Ireland, Galway, Ireland.
Pauline Dibben is Professor of Employment Relations, Sheffield University
Management School, University of Sheffield, UK.
Tony Dundon is Professor of HRM & Employment Relations, Alliance Manchester Business School, the University of Manchester, UK.
Mick Fryer is Teacher in Business Ethics and Business Environment at Cardiff
Business School, Cardiff University, UK.


About the contributors xvii
Irena Grugulis is Professor of Work and Skills, Leeds University Business School,
University of Leeds, UK.
Claire Gubbins is Associate Professor of HRM and OB, Dublin City University
Business School, Dublin City University, Ireland.
Patrick Gunnigle is Professor of Business Studies, Kemmy Business School,
University of Limerick, Ireland.
Frank M. Horwitz is Professor of International Human Resource Management – Emerging Markets, Cranfield School of Management, University of
Cranfield, UK.
Mathew Johnson is at Alliance Manchester Business School, the University of
Manchester, UK.
Phil Johnson is Professor of Organisation Studies, Sheffield University Management School, University of Sheffield, UK.
Elisabeth K. Kelan is Professor of Leadership, Cranfield School of Management,
Cranfield University, UK.

Zsuzsa Kispal-Vitai is Associate Professor, University of Pécs, Hungary.
Gilton Klerck is Head of the Department of Sociology, Rhodes University,
South Africa.
Caroline Linhares is Teaching Fellow in Accounting, University of Leicester
School of Business, University of Leicester, UK.
Wolfgang Mayrhofer is Professor at Interdisciplinary Unit for Management and
Organisational Behaviour, WU Wirtschaftsuniversitaet Wien, Austria.
Anthony McDonnell is Professor of Management, Cork University Business
School, University College Cork, Ireland.
Juliana Meira is Lecturer in Management Accounting, Sheffield University Management School, University of Sheffield, UK.
Kamel Mellahi is Professor of Strategy, Warwick Business School, University of
Warwick, UK.
Luiz Miranda is Professor of Accounting, Federal University of Pernambuco,
Recife, Brazil.
Kevin R. Murphy is Kemmy Chair of Work and Employment Studies, Kemmy
Business School, University of Limerick, Ireland.
Jaap Paauwe is Professor of HRM at Tilburg University, the Netherlands.
Suzanne Richbell was Senior Lecturer in HRM at Sheffield University Management School, UK.


xviii

About the contributors

Jill Rubery is Professor of HRM, Alliance Manchester Business School, the University of Manchester, UK.
Hugh Scullion is Professor of Organisational Behaviour and HRM at Hull University Business School, University of Hull, UK.
Rosalind H. Searle is Professor in Human Resource Management and Organisational Psychology, Adam Smith Business School, Glasgow University, UK.
Leslie T. Szamosi is Senior Lecturer, CITY College, International Faculty of the
University of Sheffield, Thessaloniki, Greece.
Adrian Wilkinson is Professor and Director, Centre for Work, Organisation and

Wellbeing and the Department of Employment Relations, Griffith Business
School, Griffith University, Australia.
Geoffrey T. Wood is Dean and Professor of International Business, Essex Business School University of Essex, UK.
Stephen Wood is Professor of Management, University of Leicester School of
Business, University of Leicester, UK.


1

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.


2

David G. Collings et al.

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 Y 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


Human resource management

3

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


4

David G. Collings et al.

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


Human resource management

5

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.


6

David G. Collings et al.

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 that much HR work really concerns the administration of systems governing the administration of pay, promotion and
recruitment procedures, etc. In turn, this would imply that HR managers are
likely to lack power within the organization and have little say in setting real
organizational strategies.
Finally, HRM may be defined broadly in terms of including all aspects of
managing people in organizations and the ways in which organizations respond
to the actions of employees, either individually or collectively. The value of this
catch-all term is that it describes the wide range of issues surrounding the employment contract, situations where an employment contract has yet to be agreed on
(recruitment and selection) and ways in which employees may be involved and
participate in areas not directly governed by the employment contract to make
working life more agreeable and/or to genuinely empower people. In other
words, it goes beyond simply ‘industrial relations’ or ‘employment relations’. The

terms ‘personnel administration’ or ‘personnel management’ would not provide a
totally accurate label, given their administrative and non-strategic connotations.
Although this would be in line with the pragmatic strand of soft HRM, this
approach is somewhat broader in that it does assume that any type of relationship
between employers and employees is optimal.
Some insights into the different ways HRM has been conceived were provided
by the Keele University affair in 2007–2008. A conservative university administration resolved to restructure business and management studies in the university
through the simple device of making academics that had formally specialized in
‘industrial relations’ redundant. In many respects, this was a surprising decision,
given robust student numbers and the fact that industrial relations research was
one area where Keele had gained an excellent reputation. Backed up by the findings of a committee of external ‘experts’, university administration implied that
industrial relations academics were likely to be less capable of teaching HRM,
and, by implication, had skills sets not relevant to modern business education.
Tellingly, a petition signed by many leading HRM and industrial relations academics in Britain in response to this decision included a statement that HRM
could not be separated from industrial relations, and that the skills necessary to
teach industrial relations could broadly be applied to understanding HRM. In
other words, HRM was simply a collective noun describing work and employment relations in the broadest possible sense and was not really about special new
skills or a new and different agenda (see www.bura.org.uk).
The preceding discussion highlights the ambiguity around the boundaries
of HRM. These differences are summarized in Table 1.1. The tension around
definition persists in the literature, and a central theme in this volume is highlighting the contradictions between these two broad understandings of HRM.