Literature Organisational Behaviour 2021 | Joyce Rommens
Literature week 1: Introduction organisational behaviour and human resource
management
1.1 Paauwe & Farndale (2017) - Strategy, HRM, and performance: a contextual
approach – chapter 5
HRM systems: bundles of HRM practices rather than individual practices.
Common method bias: when both the independent and dependent variables are collected from the
same respondents, as well as potentially being collected at a single point in time.
A black box can be defined as an unclear
mechanism going on between the input and
the output of a relationship. If we want to say
something about the HRM performance
relationship and the black box that occurs in
between, we must distinguish between micro,
meso and macro levels of analysis.
The micro level of HRM is related to the fields of organizational behaviour and industrial and
organizational psychology and is focused on the individual employee and his/her attitude and
behaviours. The meso level of HRM examines the impact of HRM practices at the organizational
level. The macro level of HRM is concerned with issues outside the organization and the influence of
this external context.
HPWSs: bundles of HRM practices designed to improve firm performance
1.2 Paauwe (2014) - HRM and Performance. Achieving long term viability – chapter 4
1
, Literature Organisational Behaviour 2021 | Joyce Rommens
This model shows the individual and organisational level of the relationship. HRM activities will lead
to HRM outcomes in terms of e.g., improved attitude, motivation. Those HRM outcomes will lead to
more aggregated outcomes at organisational level (e.g., climate). The individual outcomes will lead
to organisational performance, such as productivity.
These relationships are influenced by contingencies at organisational level (e.g., age, size) and
individual level (e.g., age, gender).
Reverse causality: in the relationship between HRM and performance. If organisations perform well,
they are likely to have more money to spend on HRM activities.
Literature week 2: HRM and context
2.1 Paauwe & Farndale (2017) - Strategy, HRM, and performance: a contextual
approach – chapter 6
2
, Literature Organisational Behaviour 2021 | Joyce Rommens
The Contextually Based Human Resource Theory (CBHRT)
Two predominant dimensions in a firm’s
environment are argued to dominate the crafting of
SHRM, moderated by other internal factors. First,
SHRM is determined by competitive mechanisms,
which consist of demands arising from relevant
product- market combinations and appropriate
technology. They are aimed at achieving certain
desirable organizational capabilities (efficiency
etc.). This dimension represents the tough
economic rationality of competition. The
competitive market is embedded in a system of
institutional mechanisms. Prevailing values and
norms and their institutionalization channel alter
the outcomes of competitive market forces. The
goal is achieving legitimacy: the acceptance of
organizations in the wider society in which they operate, to ensure access to necessary resources
from potential exchange partners (= relational rationality). The configuration dimension may be
considered the outcome of past strategic choices interacting with the organizational structure and
culture that they engendered. It is the influence of structures, methods, competencies, and values
that originated in the past. We then see the role of active human agency (through the dominant
coalition) in the decision-making process. All the actors have their own values, norms, and attitudes,
shared with others to a greater or lesser degree. The leeway (room for manoeuvre) is available for
the actors to make their own strategic choices. The dominant coalition is involved in shaping and
selecting an HRM strategy, based on aligning with different internal and external forces. The shaping
of the HRM strategy is aimed at generating HRM outcomes, which in turn contribute to the
performance of the organization.
The Contextual SHRM Framework
There are two sides in this framework: the
context side
and the SHRM side. The outcomes of the
three mechanisms have been made more
explicit. These describe how the firm is
dealing with its reality, often describing a
desired state. There are 4 types of fit:
- Organization fit: fit between the
organizations heritage and its
SHRM system
- Strategic fit: fit between the
competitive mechanisms and the
SHRM system
- HRM system aligned with the business strategy effective implementation of
strategy
- Vertical fit
- Environmental fit: fit between the SHRM system with the institutional environment
- Internal fit: fit between the various components present in the SHRM system
- Horizontal fit
The key decision makers are responsible for devising a strategic HRM system. There is a greater
emphasis on a holistic sense of firm performance, balancing financial performance and employee
well-being, both of which affect broader societal well-being. Societal well-being emphasizes that the
3
Literature week 1: Introduction organisational behaviour and human resource
management
1.1 Paauwe & Farndale (2017) - Strategy, HRM, and performance: a contextual
approach – chapter 5
HRM systems: bundles of HRM practices rather than individual practices.
Common method bias: when both the independent and dependent variables are collected from the
same respondents, as well as potentially being collected at a single point in time.
A black box can be defined as an unclear
mechanism going on between the input and
the output of a relationship. If we want to say
something about the HRM performance
relationship and the black box that occurs in
between, we must distinguish between micro,
meso and macro levels of analysis.
The micro level of HRM is related to the fields of organizational behaviour and industrial and
organizational psychology and is focused on the individual employee and his/her attitude and
behaviours. The meso level of HRM examines the impact of HRM practices at the organizational
level. The macro level of HRM is concerned with issues outside the organization and the influence of
this external context.
HPWSs: bundles of HRM practices designed to improve firm performance
1.2 Paauwe (2014) - HRM and Performance. Achieving long term viability – chapter 4
1
, Literature Organisational Behaviour 2021 | Joyce Rommens
This model shows the individual and organisational level of the relationship. HRM activities will lead
to HRM outcomes in terms of e.g., improved attitude, motivation. Those HRM outcomes will lead to
more aggregated outcomes at organisational level (e.g., climate). The individual outcomes will lead
to organisational performance, such as productivity.
These relationships are influenced by contingencies at organisational level (e.g., age, size) and
individual level (e.g., age, gender).
Reverse causality: in the relationship between HRM and performance. If organisations perform well,
they are likely to have more money to spend on HRM activities.
Literature week 2: HRM and context
2.1 Paauwe & Farndale (2017) - Strategy, HRM, and performance: a contextual
approach – chapter 6
2
, Literature Organisational Behaviour 2021 | Joyce Rommens
The Contextually Based Human Resource Theory (CBHRT)
Two predominant dimensions in a firm’s
environment are argued to dominate the crafting of
SHRM, moderated by other internal factors. First,
SHRM is determined by competitive mechanisms,
which consist of demands arising from relevant
product- market combinations and appropriate
technology. They are aimed at achieving certain
desirable organizational capabilities (efficiency
etc.). This dimension represents the tough
economic rationality of competition. The
competitive market is embedded in a system of
institutional mechanisms. Prevailing values and
norms and their institutionalization channel alter
the outcomes of competitive market forces. The
goal is achieving legitimacy: the acceptance of
organizations in the wider society in which they operate, to ensure access to necessary resources
from potential exchange partners (= relational rationality). The configuration dimension may be
considered the outcome of past strategic choices interacting with the organizational structure and
culture that they engendered. It is the influence of structures, methods, competencies, and values
that originated in the past. We then see the role of active human agency (through the dominant
coalition) in the decision-making process. All the actors have their own values, norms, and attitudes,
shared with others to a greater or lesser degree. The leeway (room for manoeuvre) is available for
the actors to make their own strategic choices. The dominant coalition is involved in shaping and
selecting an HRM strategy, based on aligning with different internal and external forces. The shaping
of the HRM strategy is aimed at generating HRM outcomes, which in turn contribute to the
performance of the organization.
The Contextual SHRM Framework
There are two sides in this framework: the
context side
and the SHRM side. The outcomes of the
three mechanisms have been made more
explicit. These describe how the firm is
dealing with its reality, often describing a
desired state. There are 4 types of fit:
- Organization fit: fit between the
organizations heritage and its
SHRM system
- Strategic fit: fit between the
competitive mechanisms and the
SHRM system
- HRM system aligned with the business strategy effective implementation of
strategy
- Vertical fit
- Environmental fit: fit between the SHRM system with the institutional environment
- Internal fit: fit between the various components present in the SHRM system
- Horizontal fit
The key decision makers are responsible for devising a strategic HRM system. There is a greater
emphasis on a holistic sense of firm performance, balancing financial performance and employee
well-being, both of which affect broader societal well-being. Societal well-being emphasizes that the
3
