Theme 1:
Black-box Debate
• central idea of SHRM: if an organization adopts a set of sophisticated HR practices, it can
positively impact organizational performance
◦ examples of HR practices: recruitment and selection, training and development, performance
management, pay and benefits and communication and participation
◦ SHRM assumes that the more HR practices are implemented, the better the organizational
performance
◦ there is a moderately strong positive relationship between HRM and organizational
performance based on 2 dimensions:
‣ operational outcomes: focuses on productivity and quality
‣ financial outcomes: profit and market share
HR practices and their focus
• recruitment + selection and training + development focus on staffing
◦ staffing: process of acquiring, developing and retaining a workforce of sufficient quality and
quantity
◦ develop the knowledge, skills and abilities (KSA) of employees
• performance management and pay + benefits focus on motivating employees
◦ done through compensation, incentives and rewards
◦ performance management: set expectations for employees, measure and review results to
reward performance
• participation and communication focus on providing employees opportunities
◦ opportunities to increase their knowledge, skills and abilities and to invest effort in their work
◦ participation: being involved in decision making
◦ communication: ensuring employees have enough company information
Black-box debate
• black-box debate: it is unclear how many steps there are between HR practices and
organizational performance AND it is unclear what those steps look like
◦ two key questions:
1. how many steps are there between HR practices and organizational performance
2. what is the content of the steps between HR practices and organizational performance
, The Black-box debate can also be pictured like this:
notice that the boxes are different
colors, and that their contents are
unknown. The path between the
boxes are also unsure.
• figuring this out is called the search for the holy grail: finding the unique ways of managing
people to gain organizational success
Summary:
There is a moderately strong positive relationship between HR practices and organizational
performance, specifically operational and financial outcomes. The link between the two is unsure,
and called the black-box debate. There are several HR practices that focus on staffing (recruitment +
selection and training + development), motivation (performance management and pay + benefits)
and opportunities (participation and communication)
Knowledge intermission: write or think of a summary of what you learned/know
3 models that dominate SHRM
• these models explain the relationship of HRM on performance
• key idea concerning these 3 models: employees are key in understanding the link between HR
practices and organizational performance
Resource-based view:
• RBV comes from strategic management, which questions why some organizations outperform
others
• RBV focuses on the internal resources an organization has and how they can be used to gain a
competitive advantage
• RBV theory: organizations can gain a competitive advantage if its resources are valuable, rare,
non-substitutable (hard to replace) and costly to imitate (most important) --> (VRIS: valuable,
rare, inimitable and (non) substitutable)
◦ valuable: the resource gives some kind of advantage to the organization
◦ rare: difficult to obtain because you don't want other organizations having (easy) access to it
◦ non-substitutable: hard to substitute with other resources that will give the same result
◦ costly to imitate: competing organizations can't imitate the resource
‣ unique timing and learning: opportunities that don't repeat easily (a window of
opportunity for the organization)
‣ social complexity: coordination with everyone involved in the organization (internal and
external)
‣ causal ambiguity: the relationship between the resource and the organizations
Black-box Debate
• central idea of SHRM: if an organization adopts a set of sophisticated HR practices, it can
positively impact organizational performance
◦ examples of HR practices: recruitment and selection, training and development, performance
management, pay and benefits and communication and participation
◦ SHRM assumes that the more HR practices are implemented, the better the organizational
performance
◦ there is a moderately strong positive relationship between HRM and organizational
performance based on 2 dimensions:
‣ operational outcomes: focuses on productivity and quality
‣ financial outcomes: profit and market share
HR practices and their focus
• recruitment + selection and training + development focus on staffing
◦ staffing: process of acquiring, developing and retaining a workforce of sufficient quality and
quantity
◦ develop the knowledge, skills and abilities (KSA) of employees
• performance management and pay + benefits focus on motivating employees
◦ done through compensation, incentives and rewards
◦ performance management: set expectations for employees, measure and review results to
reward performance
• participation and communication focus on providing employees opportunities
◦ opportunities to increase their knowledge, skills and abilities and to invest effort in their work
◦ participation: being involved in decision making
◦ communication: ensuring employees have enough company information
Black-box debate
• black-box debate: it is unclear how many steps there are between HR practices and
organizational performance AND it is unclear what those steps look like
◦ two key questions:
1. how many steps are there between HR practices and organizational performance
2. what is the content of the steps between HR practices and organizational performance
, The Black-box debate can also be pictured like this:
notice that the boxes are different
colors, and that their contents are
unknown. The path between the
boxes are also unsure.
• figuring this out is called the search for the holy grail: finding the unique ways of managing
people to gain organizational success
Summary:
There is a moderately strong positive relationship between HR practices and organizational
performance, specifically operational and financial outcomes. The link between the two is unsure,
and called the black-box debate. There are several HR practices that focus on staffing (recruitment +
selection and training + development), motivation (performance management and pay + benefits)
and opportunities (participation and communication)
Knowledge intermission: write or think of a summary of what you learned/know
3 models that dominate SHRM
• these models explain the relationship of HRM on performance
• key idea concerning these 3 models: employees are key in understanding the link between HR
practices and organizational performance
Resource-based view:
• RBV comes from strategic management, which questions why some organizations outperform
others
• RBV focuses on the internal resources an organization has and how they can be used to gain a
competitive advantage
• RBV theory: organizations can gain a competitive advantage if its resources are valuable, rare,
non-substitutable (hard to replace) and costly to imitate (most important) --> (VRIS: valuable,
rare, inimitable and (non) substitutable)
◦ valuable: the resource gives some kind of advantage to the organization
◦ rare: difficult to obtain because you don't want other organizations having (easy) access to it
◦ non-substitutable: hard to substitute with other resources that will give the same result
◦ costly to imitate: competing organizations can't imitate the resource
‣ unique timing and learning: opportunities that don't repeat easily (a window of
opportunity for the organization)
‣ social complexity: coordination with everyone involved in the organization (internal and
external)
‣ causal ambiguity: the relationship between the resource and the organizations
