Tài liệu Corporate Reputations, Branding and People Management 20 docx

goals. The key problem for these people is how to build an organ-
izational design and HR systems that allow managers to focus
on strategic responsibilities and to attain simultaneously cost
advantages, differentiation of their products and services and,
increasingly, to leverage learning from one part of the organi-
zation to another (see later discussion on developments in the
architectural approach). In the field of strategy, the classical
approach has been dominated by the military metaphor and by
industrial economics. The translation of such strategic think-
ing into the field of HRM, however, has been influenced by US
industrial and organizational psychologists who have moved
into business schools (Strauss, 2001). These psychologists have
in common with their economics colleagues a belief in the
power of rational choices and science to produce useful knowl-
edge on HR principles. As a consequence, much of their writ-
ing is heavily prescriptive rather than a description of how
strategy and HRM relate to each other in practice. At its best, it
can be very useful – witness the application of games theory to
economics and management, which has helped two econo-
mists win Nobel prizes (Economist, 2005b); at its worst it can be
almost otherworldly, either because the messages are so simple
as to not be worth recording, or because they are so compli-
cated and written in such obscure jargon that few practitioners
could be bothered reading them.
The two schools of strategic HRM that best exemplify this
tradition are the best practice and strategic fit schools and it is
to these schools we now turn.
Best practice HRM
As Boxall and Purcell (2000) have argued, the ideas of best
practice HRM have received most enthusiasm from American
practitioners and academics. Best practice models come in

three different guises (Wood, 1999). The first is high commit-
ment management, developed by Walton (1985) and others to
refer to a set of HR practices on job design, team working,
problem solving and minimum status differentials which were
associated with a managerial orientation of treating people as
174 Corporate Reputations, Branding and People Management
assets rather than costs and aimed at securing commitment
rather than compliance. The second, high involvement man-
agement, is usually associated with the work of Lawler et al. (1998).
It is broadly similar to high commitment management but with
a greater emphasis on developing skills and knowledge and on
paying people for performance and skills development. The
third is high performance management or high performance
work systems. The work of Huselid (1995) and Becker and
Huselid (1998) is best known for attempting to demonstrate
strong statistical links between HRM and financial outcomes.
The focus of their work, which was conducted throughout the
1990s, is on the links between targeted performance manage-
ment, work restructuring, skill development and contingent
pay practices, and organizational performance, this time not
working through attitudes and values but on how these practices
directly influence behaviour.
In the UK, David Guest’s writing (e.g. Guest, 1987) is best
known for his beliefs in the superiority of high involvement
HR and the importance of integrating HR systems into the
broader business strategy of the organization. Another major
study, by Patterson et al. (1997) in UK manufacturing industry
linked the use of (a) the comprehensiveness of the selection,
appraisal and development systems, (b) the extent of factors
such as job flexibility and team working and (c) the use of

quality improvement, high pay, performance-related pay and
harmonized conditions of employment to positive changes in
profitability and productivity over time. They also demon-
strated the greater power of such HRM practices to affect these
outcomes than changes in other practices, such as quality man-
agement, the adoption of advanced manufacturing, R&D and
strategy.
Two of the most accessible and best-researched exemplars of
this best practice tradition are by Jeffrey Pfeffer (1998), who
wrote seven practices of successful organizations, and the UK-
based, high performance work practices study (Sung and
Ashton, 2005 – see Box 5.2). Turning to Pfeffer first, his second
book became something of a standard introductory text on MBA
courses in the US for a period of time. Rather controversially,
however, Pfeffer’s work was (and remains) critical of US current
practice and he frequently looked to Europe for inspiration. The
Chapter 5 Four lenses on HR strategy and the employment relationship 175
recently up-dated list of best practices of high performing
cultures are (Pfeffer, 2005):
■ Employment security
■ Selective recruiting for talent
■ Self-managed teams or team working
■ High pay contingent on company performance
■ Extensive training
■ Reduction of status differentials and the tall poppy
syndrome
■ Shared information and the building of communities.
The CIPD in the UK often sponsors such research to help
practitioners learn from other companies, with one of the most
recent attempts being the high performance work practices

project, co-sponsored with the Department of Trade and
Industry (see Box 5.2). This work has identified three sets or
‘bundles’ of practices that were related to positive outcomes,
though these were found to be slightly industry-dependent
(Sung and Ashton, 2005) and which is more resonant with the
best fit approach discussed next.
176 Corporate Reputations, Branding and People Management
Box 5.2 High performance work practices (HPWPs)
in the UK
This study was carried out for the CIPD and UK government’s Depart-
ment of Trade and Industry on good HR practices (HPWP) employed
in cases drawn from a sample of The Sunday Times 100 best companies
to work for and a survey of 294 organizations facilitated by the CIPD.
HPWPs were defined as a set of complementary practices covering
three areas. In total, 35 HR work practices were allocated to so-called
‘bundles of practices’ on the following basis:
■ High employee involvement practices, e.g. self-directed teams,
quality circles, sharing access to company information, continuous
improvement teams, internal engagement surveys etc.
■ Human resource practices, e.g. sophisticated recruitment and selec-
tion, competency assessment, induction, performance appraisal,
coaching and mentoring, work re-design, etc.
■ Reward and commitment practices, different types of financial
rewards, including performance pay for all or some, stock options,
family-friendly practices, flexible hours, job rotation, etc.
As we have noted, much of this literature has a good ground-
ing in evidence-based practice. Furthermore, it is difficult to
argue against the idea that there are some practices with near
universal relevance from which most organizations would bene-
fit, such as selective hiring of talent and training, and others

that would be desirable under favourable conditions, such as
guarantees of employment security (Boxall and Purcell, 2003).
Such practices, though, deserve little more than a label of ‘prom-
ising’ or good practice (the CIPD’s preferred term) rather than
best practices, since context is very important in determining
Chapter 5 Four lenses on HR strategy and the employment relationship 177
The key findings were:
1 The level of HPWP adoption, as measured by the crude number of
practices adopted, is linked to organizational performance. This is
especially true for the adoption of employee involvement in deliv-
ering more effective training, motivating staff, managing change
and careers, having more people earning in excess of £35 000 a
year and fewer people earning less than £12 000 a year is also linked
to organizational performance.
2 The cases illustrated a relationship between the objectives of the
organization (its strategic goals), the industry sector it operated in,
how product market strategy is used to achieve goals, and the range
of HPWPs used. For example, innovative organizations used differ-
ent bundles from others.
3 There was also some evidence that some bundles of practices
worked better than others in generating specific outcomes, e.g. to
enhance organizational competitiveness, reward and commitment
practices seemed to fit better than others.
4 Different bundles of practices were associated with different sec-
tors, e.g. financial services made more use of financial incentives,
whereas manufacturing and business services with a more quality-
oriented strategy made more use of high involvement practices.
5 Training and development was taken as a given, the ‘table stakes’,
and not a differentiating factor.
6 Leadership was ‘crucial in creating, shaping and driving practices’;

HPWP organizations tended to be leaders in their industry and to
be consistently re-inventing practices to refresh themselves.
Source: Based on Sung and Ashton, 2005
the success of practices, as the embedded systems perspective
points out (Leseure et al., 2004). For example, the question has
to be raised, ‘best practice in whose interests?’. Clearly, the
answer to this will depend on whether you are asking employees
who have experienced frequent layoffs in the past, managers
whose bonuses and stock options are based on increasing share-
holder value, as in the case of Enron, or on increasing employee
identification with the business, as is increasingly the case in
firms valuing their brands. It will also vary according to whether
you value individualism, as is the case in the US and, to a lesser
extent, the UK, or whether you value collectivism and high levels
of employee representation in decision-making, as is currently
the case in Germany and the Nordic countries.
An equally damaging criticism of the best practice solution is
the implied answer to the question, ‘if the medicine is so
potent, why isn’t everyone taking it?’. The answer to this lies in
the lack of competitive advantage in following the herd, which
is the problem to which the ‘best fit’ school addresses itself.
Best fit HRM
Best fit approaches have tended to dominate the academic,
rather than practitioner, literature on HRM, reflecting the port-
folio planning/life cycle approaches in marketing during the
1970s and the competitive positioning work in the emerging
field of strategy in the 1980s. Perhaps the best known of these
best fit approaches was Schuler and Jackson’s (1987) attempt to
locate appropriate HR strategies and their behavioural implica-
tions in the competitive strategy framework developed by

Porter (1985). This approach suggested that quite different
bundles of HR practices would be relevant to the strategies of
differentiation, focus and cost leadership. For example, encour-
aging innovative behaviour in firms following a differentiation
strategy would require distinctive motivational policies from
those that invoked the kinds of behaviours required for cost
reduction.
However, best fit is not only concerned with this external fit
between HR systems and strategy, but also with internal fit.
178 Corporate Reputations, Branding and People Management
Internal fit comes in two varieties. The first is the degree of coher-
ence among HR policies and practices themselves, to create pow-
erful combinations and avoid deadly paradoxes. For example,
in attempting to develop an external fit with the CSR agenda, a
potentially deadly cocktail of HR practices would be team work-
ing and rewards based on individualized, performance-related
pay. The illustration of the bundles of practices in Box 5.2 is an
attempt to map internal fit. The second kind of fit we shall exam-
ine in a moment. Before doing so, let’s look at some of the criti-
cisms of fit approaches.
Schuler and Jackson’s work is still influential but, naturally
enough, has suffered from the same criticisms levelled at Porter’s
rather static, outside-in and either/or approach to strategy. Thus
whilst few would claim that innovation and cost leadership
require different role behaviours and HR policies, these tend to
be a little more complicated than a simple reading-off exercise
as implied by the Schuler and Jackson model. Using our frame-
work in Figure 5.3, at least two lines of criticism can be made,
which tend to apply to most strategic fit approaches. The first is
that by locating HR policies and role behaviours in rather static

models of competitive positioning, if followed to the letter, these
are likely to become self-fulfilling prophecies. So, for example, if
cost reduction HR strategies are followed, there is a possibility at
least, if not the certainty, of creating a vicious circle that limits
future innovation. First, vital knowledge resources may be made
redundant (see the evolutionary, market perspective); second,
the reputation of a firm as a good employer may be damaged,
doing little for its ability to recruit in the future (Cascio, 2005).
Nor are differentiation HR strategies without their negative con-
sequences. For example, by increasing variance into the organi-
zation through recruiting innovative people, some companies
have found to their cost that it is difficult to establish control
when the nature of the market changes. This was one of the prob-
lems associated with Apple in the mid-1980s, though it is inter-
esting to see how Stephen Jobs, the founder and originator of
this policy, has had to re-invent Apple as a digital music producer
to become a more creative company. It was also one of the causes
of the demise of Enron: remember the approach to talent man-
agement and rewards which, some would say, caused a culture of
greedy individualism.
Chapter 5 Four lenses on HR strategy and the employment relationship 179
As this last example shows, these kinds of models tend
to neglect the changing nature of organizations, reflected in
dynamic and reciprocal relationships between strategy and
HR, and the dangers of confusing static ‘maps with territories’
(Weick, 2001). Devising and implementing HR strategies on
the basis of crude maps, without regard for the subtleties and
variations on the ground (e.g. different businesses within busi-
nesses, variations among employee competences, desires,
needs, etc.), can be a recipe for failure. It is for these reasons

that more recent thinking on strategy and HRM has turned to
‘local’ segmentation or architectural approaches (Paauwe and
Boselie, 2005), which we shall now explore in discussing the
second type of internal fit.
Segmentation approaches
This second type of internal fit focuses on creating synergies
between HR policies and practices themselves and between HR
systems and other organizational systems. One of the most recent
of these is the ‘architectural’ approach associated with some
academics based at Cornell University’s well-known Center for
Advanced Human Resource Studies (CAHRS). Though the ideas
have been around for a long time in the labour economics and
management literature on the flexible firm, the HR architecture
approach (Lepak and Snell, 2002; Kang et al., 2003) is, perhaps,
the most thorough of the best fit arguments for HR strategy and
provides the intellectual basis for current practice in segmenting
internal employee labour market (Huselid et al., 2005).
This framework is based on the RBV discussed in Chapter 2
and on two central propositions. The first is that different
kinds of human capital are more or less valuable to an organ-
ization, e.g. people with specialist skills who have to be trained
in an organizationally specific way of doing things versus people
who may have specialist skills but these skills are not specific to
the organization. The second is that managing human capital
stocks (the supply to the firm) and flows (through a firm over
time) is at the heart of everything an organization does. The
architectural metaphor is used to connote a potential for
180 Corporate Reputations, Branding and People Management
designing organizations by identifying bundles of HR practices,
employment modes and employment relationships for different

employee cohorts, based on the degree to which their human
capital is strategically valuable to the organization. This is a bit of
a mouthful, but can be summed up in three propositions:
1 The value and uniqueness of human capital to organ-
izations differ, i.e. talent matters. Value refers to the ben-
efits that such people can add over their costs to
customers. So, for example, good HR people can cre-
ate lots of added value if they can address the key stra-
tegic drivers of the organization by contributing to
external reputations and brands. Uniqueness refers to
the idea that human capital is more or less firm-
specific; organizations may have to make significant
investments in recruiting, developing, engaging and
retaining certain people while being able to secure the
services of others on the open market, e.g. HR strat-
egists and business partners who have an intimate
knowledge of the business versus valuable, but general-
ist HR consultants in selection, training and develop-
ment, employment law, etc.
2 Cohorts of human capital can also be distinguished by
their employment modes, which can be either inter-
nally focused on a contract of service, or externally
focused, usually on a contract for services.
3 Cohorts of human capital can also be distinguished
according to the different psychological contracts with
the organization. For the sake of simplicity, we can point
to transactional versus relational contracts, discussed
in Chapter 4.
Combining these three dimensions and reworking the original
model a little (see Figure 5.4), we can create a picture of seg-

mented human capital in organizations fitting into at least four
different modes, with different implications for reputations
and branding:
■ Core knowledge/creative employees, who add high
reputational value (e.g. senior managers, financial
analysts and fund managers, senior design engineers,
Chapter 5 Four lenses on HR strategy and the employment relationship 181
senior medical staff, etc.) have both uniqueness (high
firm-specific talents) and create high added reputa-
tion/brand value/celebrity status (or pose significant
reputation/brand risk) to their organizations. They are
also likely to be central to innovation, knowledge gener-
ation and flows agenda. The typical employment rela-
tionship is based on either relational or even ideological
psychological contracts, high levels of organizational
identification and strong individual – organizational
linkages/trust relations. The mode of employment is
internal, focused on a long-term career, job security and
based on benefits that are likely to keep employees
inside the organization and committed to its cause, such
as stock options, continuous development, flexible ben-
efits and working, and family-friendly policies, etc. It is
mainly to such employees that organizations look to
help them create (or avoid damaging) reputations and
brands, and to whom they direct their employer of
choice/employer branding policies and risk manage-
ment efforts.
■ Compulsory, traditional human capital (e.g. mainten-
ance workers, technicians, software engineers, mid- to
low level managers, administrators, core operations

employees, including new-style call centre sales staff,
etc.). These people are similar to core employees
because they are important for adding high value
beyond their costs and enhancing reputation, but are
not unique because the types of skills can be readily
bought on the external labour market and transferred
in from other organizations, nor are they central to
innovation, knowledge generation and flows agenda.
The employment relationship tends to be more trans-
actional, with less emphasis on organizational identifi-
cation, commitment and the need to invest in high
trust relations, though the mode of employment is
usually of a full-time contract of employment variety.
The focus of rewards and relations is on short-term
productivity, performance-related pay, with appraisal
and development emphasizing short- and long-term
results.
182 Corporate Reputations, Branding and People Management
■ Idiosyncratic human capital/alliance of business part-
ners: these people have highly unique skills and, often,
are important in bringing in new ideas; consequently,
they are difficult to find on the open labour market.
However, they are not consistently core to the reputa-
tions and branding of the organization, e.g. certain kinds
of HR professionals in recruitment and employment law,
accountants, financial engineers, etc., though this idea
may be changing as companies increasingly compete on
the basis of leveraging partnerships or business ecosys-
tems beyond the firm, e.g. Nike, Microsoft and Cisco.
The employment relationship tends to become external-

ized through high investment in building relationships
with individuals in these functions across the business,
but does not extend to investing in their skills/careers.
Such employees are prime candidates for outsourcing,
but usually as long-term strategic partners since they
have unique talents. Examples, here, might include
consultants, project managers, engineers and even aca-
demics. Sometimes, such people are self-selecting, with
careers that follow a highly idiosyncratic pattern, often in
the form of portfolios of contracts, where they will work
for more than one employer (Barley and Kunda, 2006).
They tend to have a professional (cosmopolitan), rather
than firm (local), orientation to careers.
■ Ancillary human capital/contract workers: in situations
where human capital is not unique and creates less
added-value, reputation capital or poses little reputa-
tion risk to the core business, employees are increas-
ingly employed on a contract for services basis, either
through outsourcing or, if remaining on a contract
of employment, on a strict basis of payment-for-work
done. Work tends to be standardized, with little discre-
tion and with performance management limited to
ensuring that employees meet targets. There is little
investment in human resource development beyond
that which is essential to meet basic job and legal
requirements. Such employees tend to be located in
relatively low skilled, production, service or administra-
tive roles, and are prime candidates for reductions in
Chapter 5 Four lenses on HR strategy and the employment relationship 183