HUMAN RESOURCE MANAGEMENT JOURNAL, VOL 13 NO 3, 2003 3

Foreword

John Purcell, Editor, HRMJ

The first four articles in this issue were presented at a conference held at the

University of Bath in April 2002. This was a unique event, since most of the key

researchers from around the world came together to discuss the critical question

of the linkage between HR policy and practice and organisational performance. This

question, sometimes referred to as t̀he Holy Grail’, has dominated much of strategic

HRM research in the last decade. The reason is obvious. Increasingly, practitioners at

senior levels within organisations have been grappling with this issue, in part as

justi® cation for their work when confronted by sceptical colleagues and in part because

it holds the prospect of helping design appropriate HR systems closely coupled with

other functions. The Chartered Institute for Personnel and Development (CIPD), the

professional association for HR practitioners in the UK and Ireland, has actively

funded research on this question and funded the conference. Our thanks go to them. A

number of the papers were submitted to HRMJ and these went through the usual

rigorous refereeing process. Four are published here.

In the debate about the linkage between HR policy and practice and organisational

performance it is often noted that, while substantial progress has been made, there

remain signi® cant problems or weakness in three areas. First, methodological problems

relate to the difficulty of establishing causality, the use of single respondents in

questionnaires, the lack of employee opinions, the de® nition of performance and the

time period, or lag, between HR activities and performance outcomes. These are

explored fully in the ® rst part of the article by Wright, Gardner and Moynihan.

Secondly, while it may be possible to establish a robust relationship between the HR

input, seen in policy and practice, and performance outcomes, little work had been

done to explore and explain why this connection exists. This is known as the `black

box’ problem. It was this question that particularly exercised the CIPD since, without

clear understanding of the connections in both theory and practice, it was not possible

to generate sensible policy prescriptions.

Wright et al’s article provides convincing evidence and theory to open the black box to

inspection. They utilise a unique opportunity to study multiple sites of a company

where each site is allowed to choose its own HR policy but where product and service

provision is standardised. Through employee questions linked to site performance

records they are able to show how and why the experience of HR policy in practice has

an impact on performance one period later.

The third problem with much of the previous research is more profound since it

questions the largely American model on the nature of strategic choice. For good

reason; in terms of a research design that is parsimonious (ie focusing only on the key

input and output factors) the American model, which dominated research in the early

years, largely assumes that the organisation has free choice on how to structure its HR

4 HUMAN RESOURCE MANAGEMENT JOURNAL, VOL 13 NO 3, 2003

policy and practice, and that these choices are rationally made. Thus, each individual

® rm is assumed to be able to design its most appropriate HR system. This raises a host

of issues, many of which are explored in three of the articles published here.

Swart and Kinnie, in their study of medium-sized, knowledge-intensive ® rms, show

that the nature, intensity and volatility of these ® rms’ business-to-business relationships

with their clients deeply in¯ uences what they can do in designing and managing an

effective HR system. Far from being free agents, it is the way they cope with client

relationships and the uniqueness of their service (and thus the dependency of clients on

them) which establishes the key parameters in HR policy and its effectiveness.Thus:

Each of the firms found it hard to satisfy the internal pressure for

organisational identity, while encouraging or allowing employees to have

a professional identity based around the market value of [their] knowledge

¼ [while] powerful clients required a client identity to the extent that they

in¯ uenced the key features of the supplier’s HR system to ensure contract

compliance. No ® rm could achieve all three simultaneously.

Swart and Kinnie: 16

Paauwe and Boselie use their knowledge of the Dutch system of extensive

employment regulation to question the assumption of free agents able to design their

own HR system unfettered by external constraints. They note that quite a number of

the components of the `HR bundle’, the mix of practices required for a performance

enhancing effect, are established by legislation in the Netherlands or derived from and

enforced by collective bargaining and works councils. They reject the notion that this

could be seen as a distinctive European pattern of HRM. Rather, using insights from the

new institutional school, they argue that all HR systems are embedded in wider socio-

political behaviour and assumptions beyond the ® rm which shape HR policies and

practices to varying extents in different settings. Since many ® rms have the same HR

policies, the performance effect is more likely to be found in how well these are applied

and combined, ie organisation process advantage.

Boxall takes the best-® t approach ± where HR strategy is linked to the ® rm’s strategic

market position ± as his starting point in a model-building article focusing on the

service sector. Much earlier research has been in manufacturing, and in theory and

practice the service sector has proved more dif® cult to study. Taking three broad types

of competition, he questions the standard assumption that high performance work

systems (HPWSs) are appropriate only for high-skill ® rms which differentiate their

service, while mass service markets will have administrative or control-based HR for

low-skill workers. His argument is that the potential for higher value market

segmentation, not absolute high skills levels, is decisive in creating a rationale for

HPWSs ± or space for HR advantage. This is never easy and there are, he argues, ® ve

conditions which must hold for HPWSs to be feasible in ® rms operating in services.

Foreword