High Commitment Human Resource Management

Published Date: 02 Nov 2017

High commitment human resource management is the management of employees based on trust, which emphasizes on the regulation of oneself rather than being controlled by external pressure. Studies have been carried out to investigate whether best practice or high commitment HRM may lead to improvements in organizational performance or improvements in a worker. The idea that particular human resource practices can contribute to improved worker behaviors and attitudes, reduce levels of absenteeism and labour turnover, increased levels of productivity, quality and customer care. It is argued that this has the ultimate effect of increased profitability.

However, not all studies report a positive connection between best practice HRM and performance, there are doubts about the HR practices that comprise high commitment, about their supposed connection with one another, about the workers and employers attraction to it, and about its universal application. Even if there is a link between high commitment HRM and performance, questions are raised about the processes and about the direction of cause that drive and underpin this connection (Marchington and Wilkinson 2005).

Components of best practice/ high commitment HRM include; employment security and internal labour markets, selective hiring and sophisticated selection, extensive training, learning and development, employee involvement and information sharing, team work, high compensation contingent on performance, reduction of status differentials/ harmonization (pfeffer J. 1998)

Employment security and internal labour markets

It is not realistic to expect employees to offer their hard work, ideas and commitment without some assurance of job security and concern for their future careers. The contribution a psychological contract that’s positive makes to employment relationship that are open and trusting (Holman et al 2003), and the notion of mutuality in partnership agreements is seen as a key component both relate to this. For example the managers and employees recognize that the store cannot run without their support.

Obviously there are limits to how much job security can be guaranteed. It doesn’t mean that workers should stay in the same job or life, nor does it prevent dismissing workers who fail to perform to the level required or a collapse in the market of the product that necessitates the labour force to be reduced should not be seen as an undermining principle. A high commitment HR practice is that employment reductions will be avoided whenever possible, and that employees will maintain their jobs with the company. Workers should not be treated as a variable cost but as a critical asset in the long term success and viability of the company. As (Pfeffer 1998) notes, laying off people readily is a cost for the company that have that have taken time in job selection, training and development of their workforce. Layed off employees are important assets on the streets for the competition to employ. The measurement of job security varies considerably, depending on whether information is sought about practice or policy. Pfeffer (1998, p183) notes that downsizing and compulsory layoffs undermine job security the following as alternatives: (1) reduce working hours proportionately to spread the pain of decreased employment costs across the workforce; (2) reduce payments to decrease the labour costs; (3) prevent overstaffing by freezing recruitment; and (4) engaging production employees into sales to build up demand.

It is clear that job security will not reduce company profits. The employee’s financial flexibility is maintained by increasing employee workloads and by ensuring that payments are related to performance in the event of a downturn of demand.

Selective hiring and sophisticated selection

An effective way of achieving sustained competitive advantage is by recruiting and retaining outstanding workers and ‘capturing a stock of exceptional human talent’ (Boxall 1996, pg66-67). Although recruiters want to hire the best people available, it is systemized by the use of sophisticated hiring techniques and taking great care when recruiting. Organizations are looking for employees who have a range of interpersonal, teamwork and social skills in addition to technical ability. Wood and Albanese(1995) found out that the major facets sought by organizations were commitment and trainability.

Proxies for measuring ‘selective hiring, vary widely. They include; (1) number of applicant that are as good as the company needs, (2) the proportion given an employment test before hiring, (3) sophistication of the selection processes and job previews (Guest et al 200b, 2003)

Different components of the hiring process are captured by these measures and whether the focus is on the overall approach taken by the managers or the techniques used. Moreover in terms of quality of those hired some employers place emphasis on inputs rather than outputs. Selective employment can lead to under-representation of groups being excluded from employment, especially if it focuses on how the new workers will fit with the existing company culture. If the organization is keen on promoting counterproductive, and diversity and initiative if market changes, an excess ‘cloning’ of workers could be a problem.

Central best practice HRM is seen as hiring committed and high qualityemployees, the use of structured interviews, sampling of work and psychometric tests will increase the validity of hiring decisions. Competencies sought at selection stage are drive and persistence, initiative, commitment and flexibility. Best practice selection should be integrated and systematic.

Extensive training, learning and development

Organizations should ensure that the employees hired stay at the forefront of their field, in terms of product knowledge and expert professionalism and also through team work and interpersonal relations. Boxall (1996, pg67) one element in organizational process advantage is the idea that managers aim to synergy what exceptional and talented workers are contributing. There has been a growing recognition of the advantage of individual workers and organizational learning as a source of advantage over other competitors as workers introduce skills-specific techniques of training and experience.

Use of the word ‘learning’ by the employer shows employer willingness to facilitate and encourage development instead of just providing specific training to cover short term crises. Development of employees and programs assessments or interpersonal skills, task- based training and learning companies that are fully fledged are the different types of measures that have been used.Number of training days received by employees, number of trained employees, the training budget- these is all time and effort that is devoted to learning opportunities.

It is important to plan how mush resources and time organizations are willing to invest in formal training, and whether it covers the entire workforce, it is also important to identify the type of training required and will be responsible for managing this. Many studies have looked at the financial aspect of time and money spent in training and ignored the relevance of the training provided.

Employee involvement, information sharing and worker voice

The reason why employee involvement is essential in the paradigm of high commitment is; first, it ensures employees are informed about company issues through communication about financial performance, operational matters and strategy, it also sends a message that the employees should be trusted and treated in a positive way. Second, for team work to be a success employees need information to provide a basis from which to offer their suggestions and contribute to improve in company performance. Third, employee participation provides the management with legitimate reasons for any action taken on the grounds that the ideas had been put forward by the employees before decisions were made (Marchington and Wilkinson 2005). Even if an organizations management has more power than workers, the relationship of employment is not complete and defined legally but open to disagreement and interpretation over how it is enforced on a daily basis.

Information sharing is designed to increase the involvement of individual workers in the organization. The mix of employee involvement techniques are depended on the circumstances, but the measures used and involvement definition are confusing. Many studies restrict this to communication from management to the workers which measure the frequency of disclosure of information, whether there is regular team briefing or to which extent workers are informed about company operations or performance. Meaningful employee contribution is unlikely; employee involvement is only information from the management. The objective of team briefings is to reinforce the supervisor as a disseminator of information who adapts information to suit specific operational requirements. This one way version of information sharing can easily be interpreted as controlling, emasculating and indoctrinating rather than being seen as empowering, liberating and educative (Marchington and Wilkinson 2005). It is essential that employees have the opportunity to express their grievances independently and openly, in addition to being able to contribute to management decision-making in work-related issues.

Self-managed teams/team working

Team work has been identified by managers as a fundamental component of company success (Marchington 1999). It is also what organizations look for in new employees. Teamwork is seen to lead to good decision making and achieving creative solutions (Pfeffer 1998, p76). Employees who practice teamwork have generally reported high levels of satisfaction than employees who individually, though they also report that that they work hard as well.

Team work refers to the number of workers in the team, use of formal teams or the design of work to make use of employees’ abilities. However, these measures can’t tell us whether these teams act as autonomous groups or they are self-managed and a lot depends upon decisions concerning the choice of team leader, responsibility for organizing work schedules and quality control (Frobel and Marchington 2005).

There is a perspective that suggests that the implementation of a self-managed team is difficult and that they are intrusive, and they serve to strengthen management control. It is also not possible to introduce teamwork when employees are not able to enlarge their work to embrace high level skills or where there is safety, technical or legal reasons that hinder employees from making decisions. Teamwork is limited where there is a rotation of low-level jobs which means that a boring job is swapped for another boring job on a regular basis. In such situations teamwork only serves to make work stressful and intrusive. This form of organization is flawed because it gives the impression of control; self-managed teams shift the center of control from management to employees ‘concertive control’. The consequence of this is that rational rules and peer pressure combine and create an iron cage which is invisible to the employees it incarcerates. The negative impact of team work may be a problem especially for low skilled employees.

High compensation contingent on performance

The two elements in this practice are performance related reward and higher than average compensation – though both elements send a message to the employees that they deserve to be rewarded for superior contributions. For this to be effective it needs to be at a level in excess comparable to employees in other organizations so as to retain and attract high-quality labour. Rewards should show the different levels of employee contribution; despite performance pay being criticized it has been included in best practice. It is wise to include the whole package so that it is not restricted to pay alone, it can relate to worker contributions to performance- whether it is as a team, individual or department basis.

Two measures are included in this factor: the number of the workforce has access to organization incentive schemes and the number whose compensation is determined by performance appraisals. Performance appraisal has an impact on performance, the number of organizations covered by performance-related reward was not widespread in the public sector than in private (Guest et al 2000a, pg. 16).

Reduction of status differences/harmonization

Manifestations of egalitarianism in Japanese organizations are meant to inform manual workers and office staff of a lower grade that they are valuable assets who should be treated the same as their senior counterparts.it is seen as a way to encourage workers to offer ideas within the management culture. This can be seen through shared canteen, car-parking facilities and staff uniforms which are egalitarian symbols, but it is also underpinned by the harmonization of condition and terms of payment – such as pensions, sick-pay schemes and hours of work(IRS employment review 784a 2003). The point to moves from single status to harmonization is that it encourages and supports teamwork and flexibility. Employee ownership that is effectively implemented can align the goals of workers with those of shareholders by making the workers shareholders too.

Human resource practices are not well implemented in places of work, few places of work have put in place an understood range of practices that is commonly associated with high performance or high commitment HRM. This is not good for high commitment HRM because it would seem to offer a pleasant and stimulating work environment than it would be experienced in a traditional regime. The opportunity to earn wages that are above average , employment security and being rewarded performance is enticing, and the chance to have extensive training is desirable. Most workers want to have information about their company and a chance to influence and contribute to decisions that affect their working lives, as well as the removal of status among different categories of employees.

HRM and performance

Huselid (1995) divided high commitment practices into two groups: worker motivation and worker skills and organizational structure. The latter is concerned with number of employees participating in attitude surveys, number of hours trained in the previous year and the number of employees that are required to take an employment test as part of the hiring process. The former includes the number employees with performance appraisals linked to compensation and the applicants where hiring took place most frequently. Turnover of labour, corporate financial performance and productivity are output measures. Huselid (p667) concludes the magnitude of investment returns in high performance is substantial.High performance increases workers job satisfaction, trust and commitment and no work intensification and high levels of stress. Employee discretion and effort is enhanced when they have the opportunity to participate. Human resource management has a great impact on profits and productivity than a range of other factors. Pfeffer(1998, pg306) agrees that high commitment HRM has a positive impact on all companies, irrespective of size, sector or state. Companies only need managers who possess insight and courage to produce large economic gains that are available from best practice HRM.

HR effectiveness

HR practices

Financial performance

Quality of goods and services

Productivity

Business Strategy

HR outcomes employee: competence commitment flexibility

HR strategy

Model of a link between HRM and performance

To compete in the ever changing environment, characterized by globalization and deregulation of product market, changing investor and consumer demands and the ever increasing competition organization must constantly improve their performance by improving their product and processes and by reducing costs. The HRM system as a strategic system has implications for both the effects and characteristics of such a system. Strategic assets are the set of resources and capabilities that bestow the company’s competitive advantage. A HR system that is properly aligned is an asset to the firm that will create value when it is functional in the operational systems of the company and that it enhances its capabilities. The two key factors that might make it difficult to copy HR strategies in an organization are casual ambiguity and path dependency. It is difficult to get the precise mechanisms which the interplay of HR practices generates value. To have a good system one must understand the interaction of the elements. Are the effects multiplied or added, or is complex nonlinearities involved?

HR systems are path dependent. It is consisted of policies that have developed over time and cannot be bought in the market by competitors. A competitor understands that a system is valuable but cannot make immediate imitation by the time that is required for it to be fully implemented that is assuming his employees have understood the system.

HR practices do influence the creation of value, whether these practices are rare and inimitable to create competitive advantage depends on the nature of the configuration and fit.The idea that is not consistent with emphasis on internal fit in the view of the firm that is resource based. This view of the company suggests that the notion that individual practices or policies have a limited ability to generate a competitive advantage in isolation but when they are combined they can enable a firm to reach its full competitive advantage. Because of the complexity and high dependence that is between systems in a tightly coupled system, it may break in the least expected ways and it may not be able to adapt to change. People become homogenous overtime because they tend to recruit in their own image and this is rein-forcing. Although it may work well given certain contingencies, a change to those contingencies may result in the homogenous company having adaptation difficulties due to lack of diversity in competencies. This suggest that flexibility must be one of high performance HR must be one of the elements under changing circumstances.Even if companies employ HR practices, it doesn’t mean that they are effectively applied or whether they have any impact on the employees. For example it’s important to be aware whether an employee is making use of regular appraisals or whether the employee provides information about performance targets. This will give the management no clue whether the appraisal made any difference or is the information supplied in a timely and meaningful fashion. Human resources practices that were least effective are those are related to financial flexibility, appraisal and job design. HR effectiveness both the practices and of the personnel department increases the strength of the relationship between performance and human resource management.

Little consistency in the human resource practices: Wood (2003, pg 280) says it is important to focus on an orientation that is underlying for a management that is integrated or high commitment human resource management that will be reflected in different types of practice rather than spending time to identify practices that will be appropriate across all workplaces.

Variations in the proxies used to measure high commitment human resource management: the difference in the way that practices are numbered as absent or present has a major effect on construction of the overall bundle, and its rare for an explicit discussion to be there as why certain levels have been set. The absence or presence of a HR practice is irrelevant because what is important is how it was used and the impact it has on the employees and on the organization. This is seen in that knowing that an employee has been trained for a week per annum is not evidence of high commitment HRM if they were trained in how to adhere to strict rules and procedures. Problems arise when scores of high commitment HRM are compiled in deciding whether each practice should be weighed equally. It will be a problem when there are more measures of an item than others. It’s possible that the situation overall measure will give one factor too much weight compared to other factors.

Variations in the proxies used to measure performance: the major problem is the different types of performance measure that are used, measures of organizational performance for example profitability have a very little link to the efforts of individual employees, and this is what ultimately what matters to companies. In multiplant organizations within the same industry this will be a problem, and more complicated in conglomerates that operate across arrange of countries and sectors, and in private-public partnerships and in inter-organizational networks where it’s difficult to establish boundaries between them. Questions are also raised about the measures used to assess performance are appropriate. Employers usually overestimate the performance of their companies in relation to their competitors. Some employee outcome measures are less easy to interpret but simple to quantify.

Dangers in relying on self-report scores from human resource managers:depending on the expertise of the person who completes the questionnaire for the organization differences will arise. Purcell (1999) notes that this may not get us far in the establishment of what factors make a difference to worker commitment or organizational performance. More problems arise because personnel specialists, often lack knowledge that is detailed about competitive strategies that are utilized by their companies and the number of sales that has been derived from these strategies. A team of experts that are independent could assess how schemes were working rather than relying on internal evaluations alone.

Doubts about how much autonomy organizations have in decision-making: it is assumed that organizations are free agents and are able to choose which human resource practice they want to employ without consideration of the forces that are beyond their organizational boundaries. Any organization is subject to forces that will shape its human resource practices, in institutional and legal arrangements or through pressure that is exerted by clients. Organizations that compete against cheap foreign imports or have no interest in having enthusiastic, committed employees who want to exercise their discretion to increase performance, the high commitment model offers a few advantages. Even among organizations that implement the high commitment model in relation to their employees, good profits may be made at the subcontractors expense whose low profit margins mean the chance to invest in high commitment HRM is little even if they wanted to (Marchington et al 2004c).

Ramsay et al (2000) proposes an alternative, process of labour explanation that suggests that high levels of organizational performance are attained not by progressive recruitment practices but instead through intensification of work. Both best practice and the process of labour versions agree that a distinct set of Human resource practices contribute to improved levels of organizational performance. However it’s at this point that those two approaches part company. Critiques of the labour process holds that while work systems of high performance may provide discretion enhancements, these comes to the workers at the expense of intensification of work, job strain and stress, the latter being an explanatory key factor in an organizational performance that is improved. Ramsey et al (2000) also includes other factors in the analysis that is related to intensification of work and job strain. Their conclusions are at odds with those of high commitment school, in that they find little support for the notion that positive performance outcomes flow from positive employee outcomes. They suggest that best practice approach has been implemented without sufficient analysis of whether or not workers do prefer such regimes. At the same time little support is found for the process of labour interpreted either. While acknowledging that the lack of support for either of the model may be because of problems with the methodology, they conclude that neither bears much resemblance to reality. This is because of the inability of managers to implement thinking strategically- either to treat employees as humans that are resourceful or as minimized costs.

Mick Marchington and Adrian WilkinsonHuman resource management at work 2005

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