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Abstract

  1. Top of page
  2. Abstract
  3. INTRODUCTION
  4. CMS AND HRM: THE CULTURE BURDEN
  5. HRM AND THE COMMITMENT MODEL
  6. NEW POLITICAL ECONOMY? FINANCIALISED CAPITALISM AND ITS CONSEQUENCES
  7. CONCLUSIONS: HR CHOICES AND CONSTRAINTS
  8. REFERENCES

The legitimacy of HRM is threatened by challenges to the impact of its core research programme and the centrality of its practices and function. If HRM is in crisis, what are the sources and perceived solutions? This article addresses the question of what a critical approach to HRM can contribute to the discussion of its troubles. That territory has often been occupied by adherents of critical management studies. However, such perspectives have shared with normative models the mistaken assertion that HRM is primarily a cultural construct that focuses on the creation of employee commitment. This article makes a case for a political economy approach that situates HR troubles within the constraints of the accumulation regimes of financialised capitalism. Among the outcomes is a strengthening of market discipline rather than commitment as a driver of high performance. While challenging the assumption that HRM is a distinctive mode of managing the employment relationship, it seeks to identify some common grounds for dialogue between mainstream and critical approaches.


INTRODUCTION

  1. Top of page
  2. Abstract
  3. INTRODUCTION
  4. CMS AND HRM: THE CULTURE BURDEN
  5. HRM AND THE COMMITMENT MODEL
  6. NEW POLITICAL ECONOMY? FINANCIALISED CAPITALISM AND ITS CONSEQUENCES
  7. CONCLUSIONS: HR CHOICES AND CONSTRAINTS
  8. REFERENCES

At the end of the recent film The Company Men– a tale of the motives and consequences of downsizing and restructuring – the HR director tells her ex-lover and senior management colleague that she is resigning, having come to the conclusion that she had not been able to make a difference to any of the harsh corporate policies. A review of the film for People Management observes with some understatement that ‘Generally the HR profession does not come out all that well’ (Sloman, 2011).

The sense that the profession is in some kind of crisis is widespread. Kochan begins a perceptive review by commenting that:

‘The human resource management profession faces a crisis of trust and a loss of legitimacy in the eyes of its major stakeholders. The two-decade effort to develop a new ‘strategic human resource management’ (HR) role in organizations has failed to realize its promised potential of greater status, influence, and achievement’ (Kochan, 2007: 599).

HRM is, therefore, ripe for radical critique, but who is to do it and how? We have had some explicit advice on that subject from prominent scholars recently (Delbridge, 2010; Delbridge and Keenoy, 2011). Delbridge berates HR research for its ‘conservatism’ and ‘irrelevance’. He attributes much of this weakness to the absence of interaction with critical HRM, and recommends engagement with ‘proximate social science disciplines and, in particular, critical management studies’ (CMS) (Delbridge, 2010: 21). One could hardly dispute the benefits of challenging the taken-for-granted, additional reflexivity and more emphasis on power and control. But part of my argument in this ‘provocation’ is that CMS is more part of the problem than the solution. It shares too many assumptions with the weakest parts of HR perspectives and has failed to engage with the parts, to use Delbridge's words, most proximate to standard social science. Having outlined the rationale for this view, the article will go on to discuss how a more productive critique and engagement can be generated, focusing on a political economy approach.

CMS AND HRM: THE CULTURE BURDEN

  1. Top of page
  2. Abstract
  3. INTRODUCTION
  4. CMS AND HRM: THE CULTURE BURDEN
  5. HRM AND THE COMMITMENT MODEL
  6. NEW POLITICAL ECONOMY? FINANCIALISED CAPITALISM AND ITS CONSEQUENCES
  7. CONCLUSIONS: HR CHOICES AND CONSTRAINTS
  8. REFERENCES

The ‘critical’ territory has largely been occupied by contributions from a radical organisation studies or CMS orientation. The starting point has largely been ‘that to understand the HR phenomenon it is necessary to treat it like a cultural construction comprised of a series of metaphors which constitute a “new reality” ’ (Keenoy and Anthony, 1992: 234). HRM is thus assumed to be centrally concerned with the management of the meaning of work relations and the ‘manufacturing’ of employees through normative interventions of various types. In Legge's (1995, 2005a) original and authoritative survey of the literature, she rightly observed that most HR models were primarily concerned with culture change as the central activity for HR departments. The HRM as discourse and ‘cultural artefact’ line is continued in Keenoy's (2009) later account of HRM and CMS.

In one of the few empirical case studies of HRM at workplace level, Karreman and Alvesson (2004) develop a variation on the theme in advocating a cultural-symbolic perspective. Examining core HR practices in a large international consulting firm, they argue that HRM works not because it is technically efficient, but as a rationality surrogate that focus on identity-constructing functions, which create feelings of belongingness and competency. Such arguments reflect the long standing cultural turn in organisational analysis, as Reed explains:

‘From the mid-1980s 1980onwards, the increasing emphasis on culturally-based forms or organizational control – in which symbolically-mediated bodies of regulation, monitoring and disciplining at work became the major concern . . .’ (Reed, 2010: 46).

As is well known, critical perspectives in the 1990s were given a Foucauldian twist. Soft HRM and corporate culture were linked to the shaping of employee subjectivity and production of various subordinate or seduced selves (Casey, 1995; du Gay, 1996). In Willmott's (1993) much-quoted piece, promoting employee commitment through cultural practices is held to extend management control by colonising the affective domain. At this stage of the debate, emphasis was put on new disciplinary regimes ‘founded on the internalization of self-regulation, calculation and control in which externally imposed authority and discipline becomes much less significant’ (Grant et al., 1998: 202). Much of this writing tends to fold HRM into a variety of new managerial discourses and practices. Townley's contributions at least have the merit of a specific focus on HRM, although the argument is a more or less straight exposition of HRM as a power-knowledge discourse: ‘. . . providing a nexus of disciplinary practices aimed at making employees' behaviour and performance predictable and calculable’ (Townley, 1993a: 538). Much of this is at a high level of generality, with talk of dividing practices, enclosure, partitioning and ranking. In a companion piece, however, she narrows down the ‘empirical case’ object to performance appraisal, or, more precisely, to ‘an analysis of appraisal documentation as “texts,” at British universities’ (Townley, 1993b: 226). Despite no means of ascertaining what the effects of any actual appraisals were, it is asserted that in many respects, they are the paper equivalent of panoptic discipline. Contemporary post-structuralist arguments are more likely to be focused on the regulation of employee identity through managerial discourses than culture change per se. However, there is an essential continuity of themes (managing the ‘insides’ of employees rather than their external behaviour) and mechanisms, including those associated with soft HRM, such as induction, training and promotion procedures (Alvesson and Willmott, 2002: 621). Although such efforts are recognised to be ‘precarious and often contested’, the authors are adamant that the ‘cultural mechanisms’ and management of identity become more salient to the employment relationship during ‘conditions of diminishing job security and employment durability’ (Alvesson and Willmott, 2002: 623).

Some insights are generated from such perspectives. HRM does have a symbolic dimension. For example, adoption or promotion of ‘best practices’ or being a ‘good employer’ can have an effect on reputation and even share price. There are also limitations, many deriving from an overinvestment in the normative and the conflation of academic or professional discourses with actual practices and outcomes. Indeed, there is a relative lack of interest in those everyday practices or a theoretically overdetermined reading of them that is stronger on high concept jargon than close attention to empirics. As Newton and Findlay (1996) note in their review of Townley and other writings on appraisal, actual studies show varied processes and outcomes, including ‘no consequences whatsoever’ (p. 53) for appraisers or appraisees. This certainly chimes with my experience of appraisal as manager and staff member at three British universities! Newton and Findlay go on to remark on ‘the need for caution in evaluating appraisal on the basis of textual analysis’ (Newton and Findlay 1996: 53).

In assuming that the functioning of HRM can be found in its discourse, both are largely disconnected from context. Those using post-structuralist and related perspectives have been content to marginalise any discussion of ‘empirical realities’ in favour of deconstructing the ‘internal logic of HRM’ (Keenoy and Anthony, 1992: 235). This is particularly true of the Foucauldian variations, where the ‘truth or falsity of discourse’ is dismissed, and ‘again, following Foucault, the analysis is not driven by considerations of what (the market, administration) or why (efficiency . . . , etc.), but how’ (Townley, 1993a: 525). If this line is followed, HRM (and any ‘power-knowledge discourse’) tends to be presented only as a will to knowledge and as texts to be ‘reread and reinterpreted’ with new languages for old practices.

Such flaws highlight the third problem – a limited engagement with mainstream HR research. The latter's supposed obsession with proving the effectiveness of HR practices is glibly dismissed as either (or both) performativity and positivism. As we shall see later, there are acknowledged problems with operationalising core concepts and methods. But there is something faintly absurd about detailed CMS critiques of implausible causal claims concerning HR practices and performance from mainstream research, particularly when they go on to blithely repeat equally dramatic assertions about power–knowledge mechanisms that discursively constitute employee subjectivities and the like without any reflection about method and evidence (see Keenoy, 2009: 466). This absence of reflexivity is convenient because there is not much empirical support for the cultural impact thesis (see Thompson and Findlay, 1999: 176–179; Taylor, 2002; Leidner, 2006).

HRM AND THE COMMITMENT MODEL

  1. Top of page
  2. Abstract
  3. INTRODUCTION
  4. CMS AND HRM: THE CULTURE BURDEN
  5. HRM AND THE COMMITMENT MODEL
  6. NEW POLITICAL ECONOMY? FINANCIALISED CAPITALISM AND ITS CONSEQUENCES
  7. CONCLUSIONS: HR CHOICES AND CONSTRAINTS
  8. REFERENCES

What gives CMS-type critique some surface plausibility, however, is that they mirror some claims made from within the mainstream. This was particularly true of an earlier phase when professional HR discourses did indeed put considerable emphasis on culture change and other values-led practices in search of the holy grail of commitment and discretionary effort. The notion that ‘high commitment’ is the favoured intent and outcome is particularly associated with ‘universal’ or ‘normative’ conceptions of HRM. Organisation behaviour-influenced contributions, such as Walton (1985) and Harvard colleagues (Beer et al., 1984), contrasted commitment models to ones based on control and compliance. This contrast was also utilised by academics seeking to differentiate HRM from personnel or industrial relations theory and practices (Guest, 1987; Storey, 1992). As Wood and Albanese note, such claims focused on supposed moves to ‘create the conditions for employees to display internally self-driven initiative and take more responsibility for monitoring their own behaviour’ (Wood and Albanese 1995: 216). The identified practices included increased autonomy and functional flexibility through teamworking, direct communication and reduction in hierarchy, investment in human capital through recruitment, job security, and career ladders. Effort is seen as discretionary if it is directed from within rather than the result of sanctions or external pressure. The parallel with Foucauldian notions discussed earlier is obvious, but without the language of power–knowledge discourses and panopticons.

There was a sense in which HR claims were felt to be in line with other optimistic discourses about socio-economic change, and some academics still appear to endorse that with reference to ‘A wholesale shift in thinking and in practice relating to people management over a period of 20+ years’ (Salaman et al., 2005: 2). However, even enthusiasts recognise that there is far less talk and certainly less action concerning culture change and related ‘soft HR’ favourites. Its successor and emerging prominent theme is employer branding. While much of the orientation of this literature is towards management of corporate reputation, HR and organisation behaviour (OB) academics increasingly make the links to employees, whether attracting and retaining current and potential labour, or being encouraged to embrace a distinctive identity that employees value, engage and feel happy to promote to others (Martin et al., 2011: 1–2). Previous ‘critical’ commentators on organisational culture, such as Mary Jo Hatch, have also moved on to this territory with culture-driven models that emphasise ‘creating HR practices that express the corporate brand’ (Hatch and Schultz, 2008: 127).

It is too early for much empirical and conceptual critique of such perspectives. An exception is Cushen's ethnographic case study of Avatar, the Irish operation of a global information technology firm that has consistently been rated as a ‘great place to work’ (Cushen, 2009; Cushen and Thompson, 2011). Management of the employment relationship is structured around the promotion of ‘brand essence’ in which the powerful HR department is tasked with the implementation of the appropriate practices to achieve this, focused on an ‘employment deal’, with accompanying communication narrative and intensive socialisation processes. It did not work. Employees not only did not live the brand, they were sceptical and often downright contemptuous of it. They were quick to spot the discrepancy between the brand narrative and their experience of reward constraint and work insecurity. Moreover, they blamed HR for operating as a cheerleader for the board and brand, rather than an honest and fair regulator of the employment relationship.

A typical comment was:

“I suppose they want to sell their brand to you so you can go and sell it on, they want you to understand what you're trying to achieve and what they're trying to achieve and how you fit into that big plan. But drawing it up and saying this is what we do really well is bullshit [. . .]. When they're ignoring I suppose some of the core issues [. . .]” (employee quoted in Cushen, 2009: 109)

Such evidence reinforces what we know from earlier studies of (the limits to) culture change and normative interventions – that workers are knowledgeable agents negotiating choices and constraints rather than cultural dupes or identity-seeking idiots. This evidence also confirms what has become obvious from wider trends in which it has become increasingly difficult to sustain optimistic HR narratives through periods of downsizing, financial re-engineering and perpetual restructuring. Organisations are increasingly dominated by the principles of ‘market rationalism’, and normative interventions promoting commitment and focusing on cultural change are becoming less relevant or marginalised (Thompson, 2003; Kunda and Ailon-Souday, 2005).

Unpicking commitment

It is important to recognise that mainstream research – particularly the extensive studies on the HRM–performance link – uses commitment in a number of different ways. As Francis and Keegan noted in this journal, ‘For the past decade, research in HRM has focused on the take-up and impact of commitment seeking “high performance” HR practices that are argued to lead to improved employee and organisational performance’ (Francis and Keegan, 2006: 231). Unpicking the terminology, we find that among the various lists or clusters of best practices is an underlying difference between commitment-seeking and commitment-generating practices. When the term ‘high-commitment’ model is used, it may refer to the significance of particular normative goals and mechanisms, or the effects of a wider range of ‘high performance’ practices (HPP) (Wood and Albanese, 1995). Some commentators on the HPP debate also make a useful distinction between work and employment practices (Godard, 2004; Boxall and Macky, 2009). The former (e.g. alternative job design, teamworking) may generate involvement without necessarily commitment. The latter (e.g. contingent pay systems, job security) are more conducive to securing commitment, but cannot be assumed to do so or to generate higher performance. The combination of work and employment practices is sometimes referred to as a high-performance work system (HPWS).

However, there are still so many unproven or weak links between high commitment (and other ‘HR effects’) and performance outcomes that it is difficult to know how far minor conceptual reconfigurations can take us. As Guest makes clear in a thoughtful and detailed review in this journal, ‘the research is riddled with error with respect to data on HRM and on outcomes’ (Guest, 2011: 11). Beyond the detail of methodological inconsistencies and uncertainties, these observations confirm what we already know from other sources of ‘internal critique’ (see Godard, 2004; Legge, 2005b; Kaufman, 2010) that HPP are a minority of policies and are utilised in a minority of firms; are mostly formal categories that reveal little about actual content, and do not tell us much, if anything, about commitment, identifying associations but not causation with respect to performance.

Elsewhere, I have described dominant HR discourse as based on naive optimism (Thompson and Harley, 2007). Part of this derives from the underpinning human capital narrative that treats labour as asset not cost, at least to the core rather than contingent workforce. In ‘soft HRM’ and mutuality models, commitment and investment in human capital has long been seen as central to competitive advantage (Pfeffer, 1994; Appelbaum et al., 2000). Such views have been reinforced by the resource-based view of the firm that has come to dominate strategic HRM (Barney, 1991). Here, as Kaufman notes, ‘human capital represents one of the last and best sources of competitive advantage’ (Kaufman, 2010: 292). Within such frameworks, HR tools manage the human capital pool, while commitment aligns interests and mobilises discretionary effort.

This naïve optimism also stems from neglect of context. Guest's (2011) qualified defence and persistent preference for universal models reflects the continuing influence of social psychology models and methods, including ‘The need to link organisation, unit, group and individual level climates, inputs and outcomes requires a complex research methodology and sophisticated statistical analysis’ (Guest, 2011: 6). Structural equation modelling cannot compensate for the absence of any serious account of the structural constraints of changing forms of capitalist political economy operating on HR practices in the workplace. Universal models do sometimes have a conception of the environment as driver, but it tends to be a weak one, sometimes not going far beyond vague assertions about ‘constancy of change’ and ‘competitive pressures’ in the ‘modern world’ (see Wood and Albanese, 1995: 217).

Does best fit make for better explanation?

Of course, such observations are not foreign to internal HR debates. Boxall and Macky argue that ‘Approaches to constructing the independent variable in HPWS in which researchers aggregate their perceptions of “best practices” without regard to a specific context are therefore fundamentally contentious’ (Boxall and Macky, 2009: 7). Marchington and Grugulis (2000) set out a variety of reasons why best practice is not universally applicable, including when labour costs are not a major proportion of total costs. Legge gives a hypothetical illustration, ‘it might be argued that, in capital-intensive manufacturing, a HPWS model is preferable as labour costs are a small proportion of total costs and high quality, committed labour can facilitate the optimum exploitation of high-cost plant and materials’ (Legge, 2005b: 229). Some HR academics have extended such insights to popularise ‘best fit’ arguments in which it would be economically rational for managers in particular circumstances to pursue low-road choices (Boxall et al., 2007). This is a version of what Kaufman (2010), in a convincing account of the expanding field of strategic HRM, describes as a ‘strong contingency’ perspective. Such perspectives tend to undermine claims concerning ideal type positive associations between business strategy (external fit) and cohesive ‘bundles’ of HR or HPP (internal fit). They are also compatible with institutional arguments about the embeddedness of employment systems within varieties of capitalism (Paauwe, 2004; Boxall et al., 2007). There are even post-structuralist versions of best fit in which normative interventions are projected as more likely and more effective among knowledge-intensive firms and workers (see Alvesson, 2001).

Standard strategic HRM perspectives show some signs of adjustment to variation in strategies and practices. Delery and Doty (1996), for example, distinguish between choices to externalise HR practices, such as hiring and training to the market, and internalisation strategies that are clearly more conducive to job security and commitment. Elsewhere, leading authors have moved towards an acceptance of a ‘differentiated workforce’ in which talent management is based on targeted rather than generalised investment in human capital, leading to an emphasis on ‘employee of choice’ rather than ‘employer of choice’ (Becker et al., 2009).

The extent to which such moves are compatible with differentiating HRM as a conceptual and practical field is open to question, but moves towards a more realistic understanding of the presence of and possibilities for high commitment are welcome at an analytical level. Unfortunately, strong contingency is not realistic enough. The externality is still focused largely on product market variation. Yet as we shall see in more detail later, competition in product markets plays a declining role in firm profitability and behaviour. Strategic HRM is almost silent on the role of capital markets in structuring that behaviour. This reinforces a naivety about cost minimisation, in which the language of best fit gives the impression that there are industries where successful firms are not under pressure to demonstrate ‘cost leadership’. Evidence shows that high performance in the labour process does not necessarily protect any firm or group of workers, including those of a knowledge-intensive character, from restructuring, closure and insecurity (Konzelmann and Forrant, 2003; Froud et al., 2006). Kaufman (2010) also bemoans overoptimistic assumptions about employment and organisational trends in the contemporary economy. He argues that the prospects for ‘high-road’ approaches are getting worse, rather than simply lagging behind best practice: ‘in the real world of competitive business the only metric of “best practice” and “high performance” that has long-run survival value is “most profits” ’ (Kaufman, 2010: 304–305). For these and other reasons, he argues mainstream strategic HRM is management centric, underestimates potential conflicts of interest and methodologically fraught with mis-specification.

There is an interesting endnote in the Boxall and Macky piece where, talking about the need for a broader context, they say that ‘A political economy approach would, of course, take this even further’ (Boxall and Macky, 2009: 19). It is my contention that such an approach is or should be the primary characteristic of a critical engagement with HRM. I do not claim any great originality for this observation. In possibly the most rigorous critique of the HPPs literature, Godard (2004) uses the same term to underpin a persuasive set of hypotheses about the constraints to such practices. I have no problem with any of the hypotheses, but the ‘political economy approach’ is confined to a view of the employment relationship as marked by subordination, divergent interests and resultant distrust and conflict. This perspective is widely and rightly shared among industrial sociology and industrial relations academics. A political economy approach, in my view, also has to foreground the constraints and choices offered by what regulation theorists would call the ‘regime of accumulation’– that particular configuration of the circuits of capital that provides the framework in which employment relations systems and actors operate. This was the intent underlying my (now widely cited) disconnected capitalism thesis (DCT) (Thompson, 2003), which sought to explore the conditions under which employers were failing to sustain their ‘high-performance’ bargains. The next section expands on this and related argument and evidence.

NEW POLITICAL ECONOMY? FINANCIALISED CAPITALISM AND ITS CONSEQUENCES

  1. Top of page
  2. Abstract
  3. INTRODUCTION
  4. CMS AND HRM: THE CULTURE BURDEN
  5. HRM AND THE COMMITMENT MODEL
  6. NEW POLITICAL ECONOMY? FINANCIALISED CAPITALISM AND ITS CONSEQUENCES
  7. CONCLUSIONS: HR CHOICES AND CONSTRAINTS
  8. REFERENCES

The DCT sought to move debate away from the content to the sustainability of HPWS. In other words, it accepted in principle that both employers and workers could gain from investment in human capital and that positive effects on performance might follow. However, shifts in the dynamics of capital accumulation meant that even firms that develop track records of high performance, creativity and commitment were finding it harder to sustain the stable conditions that are a prerequisite for such ‘bargains’ to work. In fact, there was growing evidence of employers breaking bargains, social settlements, psychological contracts or whatever language commentators choose to use. The thesis picked up on early (i.e. pre-global financial crash) arguments about the trend towards financialisation of the economy (Froud et al., 2000). These highlighted the shift from managerial to financial capitalism, in which the extraction and realisation of value was driven by the requirements of capital markets, subordinating conventional product market competition. In an equally telling academic shift, Batt and Appelbaum recently argued that:

‘Under the shareholder model of financial capitalism, then, the focus of investment activities shifted – from that of investing in productive enterprises to that of extracting money from companies for further trading activities, which yielded higher returns’ (Batt and Appelbaum, 2010: 7).

Large firms have become players in financialised practices, whether through independent financial trading or heavy involvement in bond and equity trading on the back of successive waves of takeovers (Lapavitsas, 2011). The general trend has been associated with downsizing and delayering as firms seek ways of cutting costs to improve financial performance. Taking labour out and extracting greater labour effort remains a focal point of restructuring activities. As a consequence, dominant growth strategies for firms in many sectors militate against continuity and employment stability. As Blackburn notes, ‘From the standpoint of the “pure” investor, the corporation itself is an accidental bundle of liabilities and assets that is there to be re-arranged to maximise shareholder value . . . The corporation and the workforce are, in principle, disposable’. (Blackburn, 2006: 43)

Why disconnected capitalism? There are two dimensions. First, a disconnect between employer objectives in work, and employment spheres. In the former, they are still pressing for discretionary effort, or, more accurately, full utilisation of employee labour power; while in the latter, they are shifting the burden of risk from capital to labour. Employees observe and experience that tension, resulting in a growing ‘crisis of attachment’ (McCann, 2010). Second, there is a disconnect of managerial agents. Local, unit and functional managers are tasked with responsibility for pursuing high performance from labour, but they ultimately lack the capacity to sustain the enabling conditions. Corporate agents, tied to financialised practices through measures, such as stock options, and distanced from their local consequences, control the key levers (Beynon et al., 2002) This raises severe doubts about some of the assumptions of ‘best fit’ models because the managerial agents making ‘economically rational’ decisions are largely disconnected from the circumstances of HPP.

After the credit crunch and its repercussions, such arguments have been falling on more receptive ground. Others have followed through on the thesis, notably work by Clark (2009) and colleagues on the growth and impact of private equity firms. He seeks to ‘open out underdeveloped dimensions of the disconnected capitalism thesis by focusing on particular dynamics within the circuits of capital in an increasingly financialized economy and their potential impacts on employment relations within national business systems’ (Clark, 2009: 276). Survey evidence is used to show that plc firms governed by private equity business model (PEBM) (8 per cent in US/UK) have higher leverage, have a shorter term focus and requirement to service debt, and are more likely to sell and downsize assets (including business units and pension schemes) by around 10 per cent. Of course, financialisation is not the only trend affecting the workplace. Other key developments include systemic rationalisation, whereby firms increasingly seek profitability across the whole value chain (Altmann and Deiß, 1998; Wright and Lund, 2003), fragmented employment systems (Marchington et al., 2005), and introduction of markets and private sector management techniques, such as lean working, into the public (Carter et al., 2011). None is conducive to stable employer investment in human capital.

The DCT is a particular type of political economy argument. It is worth considering whether there are more general considerations that might help further illuminate issues of performance and commitment. This question is pertinent because the emphasis in the thesis is primarily on corporate agents (capital market intermediaries, executives) and the structural constraints on local managerial agents (including HR managers). With this observation in mind, it might be helpful to treat financialisation as a variant of market discipline whose effects obviate the need for high commitment management. The concept of market discipline is utilised by McGovern et al. (2007) as part of their discussion of how or why employees are going along with work intensification. Shifting the emphasis from internal (including HR practices) to external mechanisms, they observe that ‘financial markets are as important for market discipline as product markets and labour markets’ (McGovern et al., 2007: 133). Drawing on survey data and other arguments, notably Cappelli's (1999) ‘frightened worker model’, McGovern et al. identify insecurity resulting from perpetual restructuring and downsizing as the explanation of ‘evidence that employees exert high levels of effort in insecure conditions’ (p. 141).

With this in mind, Guest's question (Guest, 2011: 7) –‘If not a form of high commitment HRM, then what other ways of managing the workforce lead to high performance and other positive outcomes?’– has potential answers. In the above circumstances, compliance can substitute for commitment as a driver of ‘high’ performance and ‘discretionary’ effort. This is consistent with a previous set of what Legge (2005b) refers to as critical perspectives on HR practices, predominantly from labour process researchers. Utilising in-depth case studies (e.g.Rinehart et al., 1997; Delbridge, 1998), the effectiveness of lean production was associated with management-through-compliance and insidious controls (Legge, 2005b: 232). Many of these studies were of the car industry, but evidence for performance through market discipline and compliance can be found in the previously mentioned study of Avatar (Cushen and Thompson, 2011). Despite winning awards as a ‘great place to work’, Avatar workers exhibited very low levels of organisational commitment and manifested high levels of anger with management, especially the HR department. Such anger appeared not to be a barrier to ‘efficient’ work performance, although this may have been a result of commitment to professional identities, as well as compliance with market conditions.

If varieties of market discipline can substitute for commitment as a driver of performance, why bother with HPP or indeed HRM at all? Many employers clearly do not, as evidence of the at best mixed and uneven take up of the relevant ‘bundles’ of practices indicates (Godard, 2004; McGovern et al., 2007). As the latter note, this is indeed a question that some managerial commentators have been asking. Nevertheless, they argue that intensive investment in raising the performance of employees can pay off in some circumstances, particularly when it takes place in a variety of partial and selective ways. In sum, it is possible and plausible to explain performance outcomes without reference to HCM. As Godard observes:

‘For employers there is a need to recognise that the promise of the high performance paradigm may be false one. It may make better sense for most to adopt what have always been good management practices, possibly with some alternative work practices grafted on. These practices may not yield the high levels of commitment promised by the high performance paradigm, but they be expected to yield reasonable levels of consent and realistic levels of performance’ (Godard, 2004: 371).

CONCLUSIONS: HR CHOICES AND CONSTRAINTS

  1. Top of page
  2. Abstract
  3. INTRODUCTION
  4. CMS AND HRM: THE CULTURE BURDEN
  5. HRM AND THE COMMITMENT MODEL
  6. NEW POLITICAL ECONOMY? FINANCIALISED CAPITALISM AND ITS CONSEQUENCES
  7. CONCLUSIONS: HR CHOICES AND CONSTRAINTS
  8. REFERENCES

HRM is indeed in trouble, both theoretically and practically. Its core claims and professional self-image have become so entwined with the human capital narrative and the performance pot of gold at the end of the best practice rainbow for it to be any other way. As HR practices have adapted to shareholder value logic in the private sector and marketised measures in the public, the gap between that narrative and actual experience has become progressively sharper. Labour may be an asset with value, but talk of ‘people are our most important asset’ nowadays is likely to bring merely hollow laughter.

Nor in many cases is HR doing itself any favours. Even where HR departments have a presence inside organisations, there is evidence of structural isolation and disappearance from the shop floor (Francis and Keegan, 2006: 244). This was true of the Avatar case, where the impossible task of reconciling brand essence to employment policies was delegated to hapless line managers. Trends towards outsourcing and HR-shared service centres also seem to be a classic case of a function promoting its own marginalisation. The ‘profession’ has of course allowed itself to be seduced by the glittering prize of becoming a ‘business partner’. While in principle there are a plurality of roles, as a Chartered Institute for Personnel and Development (CIPD) adviser observes in reality, ‘Nobody wants to be employee champion’ (quoted in Francis and Keegan, 2006: 233).

Kochan (2007) is surely right in observing that the change of emphasis from steward of the social contract to handmaiden of the corporate elite has significantly diminished HR's legitimacy. Employees do not expect a ‘champion’, but within the constraints of the capitalist employment relationship and organisational power structure, they would prefer to not be fed crap in the name of communication and to be treated with a degree of fairness (distributive justice) and transparency (procedural justice). The paradox is that recognition and regulation of employee interests is a source of potential strength for the HR function, which is gradually draining away. HRM will always be a balancing act, and within constraints, there are still choices. If HR is an agency relationship with employers, it is agency that has to be achieved not simply assumed. The extensive rumblings of discontent within the mainstream are reflected in calls for a more professional, more ethical, more reflexive and balanced HR. I will not be holding my breadth. In liberal market economies dominated by shareholder value logic, there is no realistic path to internal reform of HRM (Cushen and Thompson, 2011). It will only behave differently if it is compelled by external regulation of employment systems to do so.

In the article referred to earlier, Guest (2011) accepts that two decades of extensive research have failed to provide anything resembling definitive answers on HRM and performance. Yet the struggle apparently needs to continue. While greater methodological sophistication or variation is welcome, it is unlikely in itself to rescue a failed project. It would be better to abandon the theoretical and practical obsession with HPP. Godard again:

‘it would appear that, on average, the full adoption of the paradigm may not yield outcomes that are appreciably more positive than those yielded by practices that have long been associated with good management, including professional personnel practices (e.g. job ladders, employment security, grievance systems, formal training, above-market pay), group work organization, information sharing and accommodative union relations.’ (Godard, 2004: 363)

Such practices have a much better possibility of generating commitment than explicit normative interventions. As I have argued elsewhere, ‘There is a danger in treating the normative as a separate category. All control practices have normative dimensions. Even if not explicitly designed to engage with ‘hearts and minds’, their operation and effects will do so’ (Thompson and van den Broek, 2010: 6).

I would also go further and argue for abandoning the idea that HRM is even a distinctive approach to managing people at work. This is probably a step too far for most in the field, even those with a preference for ‘analytical HRM’ (Boxall et al., 2007), or, if you prefer, ‘pragmatic–realist critical–analytical HRM’, (Watson, 2010). However, it would encourage greater dialogue between varieties of mainstream and critics. What would be disastrous is the construction of special domain of ‘critical HRM’, already promoted by an acronym – CHRM. Delbridge and Keenoy (2011) are right to observe that mainstream HRM pursues a narrow and often myopic range of issues. But the same could be said of CMS, with its distorted emphasis on identity and the management of culture. Performance and its management do matter. We should be less worried about ‘managerialism’ and more focused on what management actually does or does not. To problematise the idea of best practice, Marchington and Grugulis (2000: 1121) call for a focus on ‘the somewhat broader concept of HR architecture’. A useful term, but HR managers are increasingly not the main architects of key work and employment trends. A critical political economy approach seeks to situate managerial regimes within relevant comparative corporate and capitalist contexts. At workplace level, greater attention to the nuts and bolts of HR practices or what some call ‘hard HRM’– particularly on issues such as performance management, sickness and absence and work intensity – will provide a potentially useful basis for dialogue among social scientists with an interest in the workplace than any critical ghetto, no matter how large and convinced of its own righteousness.

REFERENCES

  1. Top of page
  2. Abstract
  3. INTRODUCTION
  4. CMS AND HRM: THE CULTURE BURDEN
  5. HRM AND THE COMMITMENT MODEL
  6. NEW POLITICAL ECONOMY? FINANCIALISED CAPITALISM AND ITS CONSEQUENCES
  7. CONCLUSIONS: HR CHOICES AND CONSTRAINTS
  8. REFERENCES
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