Hrm and Business Performance, and the Case for Big Science
The Romance of HRM and Business Performance, and the Case for Big Science
Toby D. Wall and Stephen, J. Wood
Institute of Work Psychology
University of Sheffield, UK
The Romance of HRM and Business Performance: The Case for Big Science
Abstract
It is often assumed that research over the last decade has established an effect of human resource management (HRM) practices on organizational performance. Our critical assessment of existing studies finds that, while collectively they have opened up a promising line of inquiry, their methodological limitations make such a conclusion premature. We argue that future progress depends on using stronger research methods and design, that in turn will require large-scale long-term research at a level of magnitude that probably can only be achieved through partnerships between research, practitioner and government communities. We conclude that progress so far justifies investment in such big science.
Key words: Human resource management (HRM), high performance work systems, high performance work organization, company performance, organizational performance.
Picture the scene. A leading scholar, specializing in human resource management, is called to court as an expert witness by an international company that has brought a case against a firm of consultants. The company has paid several hundred thousand pounds in consultancy fees, and invested many times that amount in its personnel function, to introduce the ‘performance-enhancing’ human resource management (HRM) practices recommended by the consultants. Three years on there is no evident return on their investment. The company is suing the consultants on the grounds that they created misleading expectations of the effect of HRM practices on performance. The expert witness is asked to prepare a report addressing two questions: (a) whether it was reasonable of the consultants to assume an effect of HRM practices on performance on the basis of both
Toby D. Wall and Stephen, J. Wood
Institute of Work Psychology
University of Sheffield, UK
The Romance of HRM and Business Performance: The Case for Big Science
Abstract
It is often assumed that research over the last decade has established an effect of human resource management (HRM) practices on organizational performance. Our critical assessment of existing studies finds that, while collectively they have opened up a promising line of inquiry, their methodological limitations make such a conclusion premature. We argue that future progress depends on using stronger research methods and design, that in turn will require large-scale long-term research at a level of magnitude that probably can only be achieved through partnerships between research, practitioner and government communities. We conclude that progress so far justifies investment in such big science.
Key words: Human resource management (HRM), high performance work systems, high performance work organization, company performance, organizational performance.
Picture the scene. A leading scholar, specializing in human resource management, is called to court as an expert witness by an international company that has brought a case against a firm of consultants. The company has paid several hundred thousand pounds in consultancy fees, and invested many times that amount in its personnel function, to introduce the ‘performance-enhancing’ human resource management (HRM) practices recommended by the consultants. Three years on there is no evident return on their investment. The company is suing the consultants on the grounds that they created misleading expectations of the effect of HRM practices on performance. The expert witness is asked to prepare a report addressing two questions: (a) whether it was reasonable of the consultants to assume an effect of HRM practices on performance on the basis of both